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Latin American Theories of Development and Underdevelopment Essay

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Updated: Dec 10th, 2019


Latin Americans today are striving to achieve a more equitable and free society conditioned by the influence of Christianity, Marxism and liberalism.

However, all these efforts have been met with sheer frustration since most Latin countries have been unable to find lasting solutions to the problems that they have been facing.

The situation is further contrasted by the fact that the South American Continent is vast with rich natural resources which if well exploited, can stimulate an economic boom in the continent.

With this awareness still lingering in the minds and hearts of Latin Americans, a blame game has ensued over who or what is responsible for the failure of the continent to acquire a more developed continental status like the rest of Europe and North America( Foroohar,2001).

One end of this blame game has it that the reason for underdevelopment in Latin America despite its vast resources has been caused by American and European imperialism.

The proponents of the American Imperialism argue that the United States of America is entirely responsible for siphoning the vast continent’s resources of South America which would have otherwise been used to fuel development programs in the continent.

The argument is that North America’s rich status came at the expense of the South’s poverty. Many feel that North America is rich because the South is poor, that is, one had to pay the cost for the other and in this case it was the South that did (Rangel, 1987).

This argument has gained a widespread appeal as a gospel truth that explains the current state of affairs in a continent that is still trying to find its footing and kick start serious economic and development agendas.

The anti-imperialism slogan has become revolutionary to an extent that it is fueling animosity and outbursts of anger against the Northern Hemisphere. Some political establishments are openly becoming anti-American and are heavily criticizing the United States’ policy on their continent.

They view this policy as being merely an extension of the exploitation the continent has witnessed since the Northerner’s first set foot on the Southern Continent.

On the other hand, critics of the proponents of American Imperialism are of a different opinion with some arguing that North America’s contribution to the Southern Hemisphere’s development agenda has always remained positive and non-exploitative.

Critical Analysis

In order to establish the truth on this subject matter, we need to sincerely and rationally conduct a scientific examination of the influence the North has dispensed on the Southern Hemisphere.

At the same time, we need to maintain an open mind that indeed the US might have made a positive contribution to the Latin America’s economic, social and political agendas.

In order to do this, we will enumerate and take into account all the damage that the policies and actions of the United States of America have done to South America. Similarly, we will also weigh the positive contributions that the North has made to its struggling Southern neighbor.

Putting the two sides on the weighing scale, we will be able to come up with a clear answer to this probing issue (kay, 1989). To begin with, it is important to point out that the political and social systems of most of Latin America are model led around the North American system.

Many Latin Americans have a great admiration for the North’s principles and ideals such as democracy (Oxaal et al, 2011). In fact, many strive to emulate these principles and ideals and try to customize them to their own situation.

A good example is Argentina which has modeled its constitution close to that of the United States of America. The Argentinean Constitution has borrowed a lot from the North’s, a fact that highlights the South’s Admiration for North American principles and ideas.

It is an undeniable fact that the US has played a very vital role in stimulating development and modernization in the South. In fact, the guardian role of the North has cushioned the South from falling prey to the European colonialists at the onset of the nineteenth century.

It can still be argued that the presence of European colonialists before the First World War was in itself a barrier to the development of South America and therefore contributing greatly to the imperialistic problem in the South American Continent.

However, this argument will not hold any water because the First World War ended nearly a century ago and since then, the South American countries have only been under British and French colonial influences. Therefore, if they had employed the right principles and remained focused, the South Americans would have achieved massive economic development.

The looting of South America’s massive natural resources by the Western colonialists was minimal compared to the natural resources that remain unexploited to date (Ferraro, 1996).

In addition, the colonialists were also a blessing in disguise since they re-energized the quest for modern civilization in the South American Continent which was still lingering in a dark cloud of under-civilization long after the departure of their Spanish colonialists.

The South failed to capitalize on the expertise that the European colonialists had brought to the continent and therefore, Latin America has continued to lag behind in development. It is also interesting to note that the economic growth rate of South America today is far much greater than that of the most advanced capitalist nations during the nineteenth century.

Capitalist countries had an annual growth rate of approximately 2% while the Latin America’s was 4.2% in the period between 1935 and 1953. However, it rose to a promising 4.9% between 1945 to 1955. In addition, after the discovery of oil in Mexico, Ecuador and Venezuela, the economic growth rate of South America made another giant leap.

However, the gains attributed to the growth were lost in an unbalanced distribution of wealth, mismanagement of resources and an outburst of population. The rapid population growth made the economic growth gains marginal and therefore suppressed the growth of the overall GNP (Rangel, 1987).

This problem was not as a result of Western imperialism, but the failure of the South American countries to properly plan and utilize their resources and opportunities wisely and effectively.

Case studies

It is evident that individual countries in South America that have had close ties to the so called imperialist countries have been able to show greater developmental track records as opposed to the ones that have not.

Countries like Uruguay, Argentina and Chile have maintained close ties with Europe since 1914 and are clearly some of the most advanced in the American Continent today.

Mexico’s development record has also been impressive and this can be attributed to the fact that it is right next to the US. Venezuela on the other hand has shown remarkable growth since the discovery and exploitation of oil by the West. Otherwise, some argue that the country would have remained at the level of countries like Honduras.

However, Venezuela has experienced remarkable economic, social and political development. In addition, the country is working hard to ensure its neighbors receive better prices for raw materials on the global market (Rangel, 1987).

Another typical example is Puerto Rico, which has no substantial natural resources like copper, bauxite, oil or tin. However, the country’s economy has received substantial support from the United States since 1898 and therefore, it has had a remarkable growth which is quite extraordinary for a country of its economic background.

Its income per capita stands at 2000 dollars, twenty times that of Haiti and five times that of Honduras, Dominican Republic, El Salvador and Guatemala. However, it is interesting to note that even after achieving such economic gains; its citizens are the most vocal in criticizing the US as an imperialistic state.

If the economic, social and political gains are the indicators with which to measure the progress of any country, then the criticism is unwarranted. In addition, proponents of the imperialism fail to connect or identify special hindrances or problems that have been fueled by the West’s imperialistic agenda (Horowitz, 2011).

It would be insincere therefore, to argue that imperialism is the sole contributing factor to the underdevelopment of Latin America. However, we have to acknowledge two possible reasons for North America’s contribution to the growth and development of the Southern continent.

First and foremost, the Northern neighbor‘s helping hand might have come as a result of creating a means in which it can establish a market for its products and services. If this argument is true, then the Northern neighbor though being dishonest in its approach, it would still have contributed effectively to the economic growth in the South rather than becoming an obstacle.

Furthermore, the US would have tried to expedite on serious reforms in the South in order to speed up economic, political and social development and therefore pave way for a greater market for its economic surplus.

The second scenario is the argument that the US was generously and sincerely offering a helping hand to its Southern neighbors in order to develop and industrialize. Foreign aid from the North is therefore a gesture of goodwill and selflessness (Horowitz, 2011).

This second view point still fails to link imperialism as the deterring factor to the economic, political and social development in Latin America. Either way, the economic aid from the West should have had a positive impact on the economy of the South irrespective of the fact that the giver might have had other ulterior motives.

Recent research by Baker highlights that unlike popular belief, many Latin Americans appreciate the economic aid that the North has provided the South over the years. However, it is the North’s policies themselves that many Latin Americans find hard to appreciate.

In one end, they admire and appreciate their overpowering Northern neighbors for their helping hand while on the other; they loathe them for their infamous policies on the South American Continent (Baker, 2012). Others take the US as an economic powerhouse worth being emulated.

The Dependency Theory

One theory that clearly demonstrates the state of underdevelopment in Latin America is the dependency theory. The theory was developed by Raul Prebisch, the Director of the United Nations Economic Commission for Latin America in the 1950s.

Mr. Raul Prebisch first identifies the cause of underdevelopment and then continues further to give the antidote. He makes a strong argument that poor countries (in this case Latin America) sell off their raw materials to the developed countries like the US and the European Continent who in turn produce superior goods which are then sold back to the poor countries at higher prices( Faria,2011).

As a result of this, the poor countries will never manage to have enough foreign exchange reserves which are sufficient to pay for these imports and therefore, the poor countries remain in a state of poverty.

However, the solution to this problem was simple and straightforward in that poor countries need to start doing the value addition themselves and then export their products to the rich countries. That way, they will have broken the circle of dependence on the rich countries.

However, the achievement of this noble goal will only be possible if the poor countries will marshal up economies of scale that will enable them to transform the raw materials to finished goods and services. Secondly, they will need to have the political will to undertake such a constructive venture (Ferraro, 1996).

By carefully analyzing these facts, we are able to note that the two factors that hold the key to the success of the poor countries are not pegged at all to imperialism but rather are within the control of the poor countries.

Although economies of scale are quite an uphill task to achieve, the political will falls directly in the hands of the ruling class in the poor countries. If the ruling class is in favor of economic development, then it will be willing to take the necessary steps towards this direction.

This means that the ruling class should be willing to set up the appropriate policies which will ensure that the poor countries have developed the necessary economies of scale in order to spur growth and development and hence break the cycle of dependence on the rich nations.

Success will come with a sacrifice and therefore the political establishment of Latin America needs to be willing to pay for the price (Baker, 2012).


In conclusion, it is worth noting that though Europe and North America have had their bad effects on Latin America’s growth and development, they are certainly not the reason for the underdevelopment in the continent.

It has been noted that the continent has vast resources that still remain untapped. It is also important to propose that if the untapped resources are exploited and well utilized, the resources will stimulate an economic turnaround even for the most dormant economies (Wiarda, 1992).

The South needs to rise to the occasion and work hard. Instead, the South American Continent needs to be inspired by the exploits that the developed countries have managed to achieve even with minimal natural resources.

The problem of underdevelopment in the Southern Hemisphere can only be solved by the people of Latin America themselves and no solutions can be fabricated and imported to them.

Therefore, the South needs to take stock of its current state and clean up the economic mess without blaming the Western economic powers for its woes.


Baker, Understanding Anti-Americanism in Latin America: Economic Exchange, Foreign Policy Legacies, and Mass Attitudes toward the Colossus of the North. Lansdowne Press, Sydenham, 2012.

Faria, C, The Origins of Economic Inequality between Nations: A Critique of Western theories on development and underdevelopment, Oxon Press, Oxford, 2011.

Ferraro, V, Dependency Theory: An Introduction to imperialism, Louisiana University Press, Louisiana, 1996.

Foroohar, M, The Catholic Church and Social Change in Nicaragua, State University of New York Press, Albany, 2001.

Horowitz, I, The Long Night of Dark Intent: A Half Century of Cuban Communism, New Jersey Press, New Jersey, 2011.

Kay, C, Latin American Theories of Development and Underdevelopment, Routledge Press, London, 1989.

Oxaal et al, Beyond the Sociology of Development: Economy and Society in Latin America, Oxon Press, Oxford, 2011.

Rangel, C, The Latin Americans: Their Love-Hate Relationship With the United States, New Jersey Press, New Jersey, 1987.

Wiarda, H, Democracy and Its Discontents: Development, Interdependence, and U.S. Policy in Latin America, Maryland Press, Maryland, 1992.

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