“Advances in Economic Dynamics”

1. “Advances in Economic Dynamics” Cambio Estrutural e Desenvolvimento no América Latina Dr. James Martín Cypher Profesor-Investigador (Economía) Doctorado en Estudios del Desarrollo Universidad Autónoma de Zacatecas (México) [Professor Emeritus, California State University] Um trabalho apresentado no Seminário Internacional ADVANCES IN ECONOMIC DYNAMICS AND DEVELOPMENT UNIVERSIDAD FEDERAL DO PARANÁ [ECONOMIA] Outubro 13-15 2010

2. ADVANCES IN ECONOMIC DYNMACS • “The principal characteristic of structuralism is that it takes as its object of investigation a ‘system’, that is, the reciprocal relations among parts of a whole, rather than the study of the different parts in isolation. In a more specific sense this concept is used by those theories that hold that there are a set of social and economic structures that are unobservable but which generate observable social and economic phenomena.” • (Palma 1989: 316)

3. ADVANCES IN ECONOMIC DYNAMICS • Los elementos estructurales son • 1. la estructura productiva en términos del poder economico/politico y en términos de las capacidades • (K, K/L, tecnología, I/Y, etc.) • Ej. Poder difusivo (modelo Marshalliano) • Poder concentrado (oligopolía/monopolio) • Estructura atrasada/moderna • 2. distribución de la tierra • Ej. Junker/yeoman • latifundista/minifudista

4. Concentrated Economic and Political Power: Mexico’s Conglomerates • The Mexican stock market facilitated the trading of shares of 170 large companies—with the 10 largest non-financial, family controlled companies accounting for 61 percent of the entire stock market capitalization (World Bank 2003, 1). These companies, and the next ten largest companies in Mexico, are all 100 percent family controlled (Guerrero, López-Calva & Walton 2006, 9). • In the 10 largest companies, the top 3 shareholders owned a total of 64 percent of the capital of these companies (World Bank 2003, 1-2). The World Bank added the following summary: “In many firms, one class of shares gives full voting rights to the family controllers, while others have limited or no voting rights. Financial and industrial groups have been key in Mexican economic development.” • Business groups are characterized by vertical, horizontal, or conglomerate integration. Holding companies make most key decisions, including financing, dividend policy, fixed assets, and hiring of top managers” (World Bank 2003, 2). Known as the national power groups or simply “los grupos”. This term would encompass more than the top 20 firms—perhaps as many as 30 or more, each of which would, in turn, own and/or control numerous other major firms. A “typical” grupo thus might own or control as many as 10 or 15 relatively large firms. • Measured by sales, 8 of the top 20 private sector firms were Mexican grupos in 2008, the remainder being transnational firms, and Mexican-owned non-conglomerate firms such as CEMEX. • “large firms” inMexico—some 3,051 firms—constitute only 0.3 percent of all companies but they own 74 percent of all business assets, pay 69 percent of all salaries and wages, employ 52.3 percent of the (formal) workforce and produce 74 percent of all value added (Maria y Campos, et. al., 2009, 88-89). Four hundred and three of these large firms account for 75 percent of all of Mexico’s exports (González G. 2009, 24). • Mexico’s top 400 firms, with sales income equivalent to 41 percent of the annual Gross Domestic Product, pay on average only a 1.7 percent tax “burden” on their income according to a study conducted by an agency of the Mexican treasury (Posada y Zuñiga 2009, 32). Meanwhile common citizens pay a 16 percent value added tax on all consumer purchases, excluding food and medicine. • Concentrated economic power has since the mid-1970s increasingly been transferred into the arena of public policy primarily through the agency of the large, and well-organized peak business associations (Ross Schneider 2002).

5. Advances em la dinámica económica • Que más es la estructura? • 3. Composición del Estado • Ej. Estado colonial/poscolonial • Estado Instrumentalista/Captada • Estado Desarrollista • Estado Intermedio • Estado Depredadoro

6. Advances in economic dynamics and development • Hay más en la estructura? • 4. Historia, formación y ideología de las capas altas • Ej. Instrumental o Ceremonial • Instinct of Workmanship vs. Predatory Animus (Veblen)

7. Developmental State Formation = Power + Purpose + Capacity • ↓ ↓ ↓ cohesive ability to: mobilize a competence ↔embeddedness development vision ↓ ↓ • direct & prioritize a development project ↓ civil service industry-state boards •demand performance SLI &/or ELI • merit-based ↓ compliance (autonomy) (policy) • rule-based production/knowledge base • maintain an alliance • inter-agency ↓ with business elite coherence technical, managerial, labor • directing and prioritizing a development project = coherence • to demand and achieve performance compliance = discipline capability

8. Seminario internacional: advances in economic dynamics • Grandes Cambios Estructurales - I • 1. Decolonialización/Hegemonización Britianica • 2. Hegemonización de los EE. UU. • 3. Gran Depressión/ISI • 4. Golpe del Estado/Crises de Deuda Ext. • 5. Hegemonización Neoliberal/ renovación de los sectores rentistas (bancos/bolsas/bienes raices, intereses mercantiles etc.)

9. Seminario internacional: avances en dinámicas y desarrollo • Grandes Cambios Estructurales – II • 6. Programas de Ajuste Estructural/CW • 7. Programas de Ajuste Institucional PAEs de la segunda etapa: medianos de los 90s Modelo de Crecimiento liderado por las exportaciones, basada en ventajas comparativas estaticas y exportaciones no-tradicionales (soya, flores, frutas, legumbres con alta elasticidad de demanda del ingreso [brocoli, etc.])

10. Mexico: GDP and exports, 1950-2007 Log scales. Export do not include oil; 1980 prices. For the convenience of the graph, before transforming the data into log the original data were first made into a 3-year moving average and then into index-numbers with 1981 as a base (equal to 20.09; the natural logarithm of this number is 3). Source:ECLAC’s Statistical Database

11. Regional averages: export and GDP growth, 1980-2006 EA*= NICs-1 and NIC-2 (excluding China); LA* = Latin America (excluding Brazil, Mexico and Venezuela); dLA = interactive dummy for Latin American countries; mena= North Africa and the Middle East; oecd = average of high-income OECD countries; SA*= South Asia (excluding India); SSA*=Sub Arian Africa (excluding South Africa). Br = Brazil; Mx = Mexico; and ZA = South Africa. Source: Gabriel Palma: Constructed by the author using data from WDI (2007)

12. Export and GDP growth for developing regions, 1980-2006

13. Seminario internacional: avances en dinámicas económicas y desarrollo • Cambio Estructural: Según CEPAL 1. Hay que aumentar el C&T/PIB 2. CyTI como nuevo paradigma (C. Perez) 3. Nueva Heterogeneidad Industrial: Productividad  Empleo ↓, Desplazamiento de los MyPes 4. Economía Informal ↑ 5. Política Industrial (ligero) [fallas del mercado]

14. Seminario internacional: avances en dinámicas económicas y desarrollo Cambios Estructurales Desarrollista (visión critica) • Política Industrial (Profunda) [Sectores Priorizadas con Reciprocidad] • Vinculación del SNI con redistribución [∆ oferta + demanda agregada] • Construcción del Estado Desarrollista • Reducción del poder autónoma de la Oligarquía

15. avances en económica dinámica y desarrollo Cambios Estructurales Regresivos Primarización/Auge de Commodities (Patrón de acumulación-nuevo rentismo) A. Nuevo Extractivismo B. Restructuración Agribusiness/Disarticulación C. Maquilización D. Informalización [hasta 40-60% PEA] E. Estados Minimizados, sin capacidades de absorpción F. Migración/Remesas [drenaje de capacidades] G. Deindustrialización de firmas nacionales

16. Seminario internacional: avances en dinámicas económicas y desarrollo Latin America and the Caribbean: terms of trade • 2002 96.6 (2000= 100) • 2003 98.6 • 2004 103.7 • 2005 108.8 • 2006 115.3 • 2007 118.0 • 2008 121.4 • Source: ECLAC 2009, Table A-12.

17. ADVANCES IN ECONOMIC DYNAMICS

18. Table. At the roots of different East Asian and Latin American performances: divergences in national systems of innovation and production in the 1980s and 1990s (first part)

19. Table. At the roots of different East Asian and Latin American performances: divergences in national systems of innovation and production in the 1980s and 1990s (second part)

20. “Advances in Economic Dynamics and Development” • Paradigmas Tecnológicos • I-. Son formaciones sociales temporales con una interdependencia fuerte entre actividades tecnológicas y económicas. • II-. Son trayectorias tecnológicas del progreso que forma la dirección de actividades de “resolución d problemas” y que tienen su propio momento. • Ej: El paradigma Mecánico • Manufactura de la Revolución Industrial

21. “Tecnología y Diseño al sur del Mundo” • Paradigmas Tecnológicos • 1-. Formasde conocimiento • Usado para resolver problemas • 2-. Una visión especifica de la manera de “hacer cosas” • (Conceptos Cognitivos colectivamente compartidos) • Conocimiento tácito encarnado en individuos. • 3-. Modelos Básicos de artefactos que son mejorados y • modificados con el paso del tiempo. Especificas Irreversibles Contingentes

22. “avances en economía dinámica y desarrollo” Rendimiento económico (Privado, Público) Contribuciones al crecimiento/desarrollo Sistema Nacional de Innovación Instituciones Vinculadas/Involucradas Contribuciones Complementarias • Competencia • Capacidades • Técnicas I+D +i, IED (negociado) Educación • - Organizacional

23. “avances en economía dinámica y desarrollo” • SNI (Sistema Nacional de Innovaciones) • Las instituciones complementarias son: • Empresas Privadas Funcionales • -Universidades • Laboratorios Públicos de Investigación • Consultorías Privadas • Asociaciones Industriales de Investigación • Instituciones Publico/Privadas • ( e. g. Fundación Chile, Sematec) De emprendedor Organizativa (I+D + i profundo)

24. Avances en economía dinámica

25. Avances en económica dinámica La Política Industrial Colaboración estratégica entre el sector privado y el sector publico A-. Con el fin de revelar los obstáculos críticos a la reestructuración. B-. Con el fin de determinar cuales tipos de intervenciones serian posibles y preferibles para resolver estos obstáculos.

26. Avances en economía dinámica • Dani Rodrik has argued: The right model for industrial policy is not that of an autonomous government applying [optimal] taxes or subsidies, but of strategic collaboration between the private sector and the government with the aim of uncovering where the most significant obstacles to restructuring lie and what type of interventions are most likely to remove them.

27. Avances en economía dinámica y desarrollo Correspondingly, the analysis of industrial policy needs to focus not on the policy outcomes—which are inherently unknowable ex ante—but on getting the policy processright. We need to worry about how we design a setting in which private and public actors cometogether to solve problems in the productive sphere, each side learning about the opportunitiesand constraints faced by the other, and not about whether the right tool for industrial policy is,say, directed credit or R&D subsidies or whether it is the steel industry that ought to be promotedor the software industry. Hence the right way of thinking of industrial policy is as a discovery process—one where firms and the government learn about underlying costs and opportunities and engage in strategic coordination. The traditional arguments against industrial policy lose much of their force when we view industrial policy in these terms (Rodrik 2004)

28. Avances en economía dinámica y desarrollo Auge de Commodities ↓ ↓ Staples Trap Staples Theory (dependencia del sendero) ↓ ↓ ↓ ↓ Caída eventual de falacia de vínculos atrás vínculos adelante los términos del composición Intercambio ↓ ↓ desplazamiento de sectores diversificación del base prod. com vinculos hacía atras y “upgrading” hacía adelante (Ej. caso Chileno actividades de alto valor TFP = 0.0 2004-20008) (Ej. casos Canadá, Finlandia)

29. Avances en economía dinámica y desarrollo Caso Brasil (optimista) ↓ SNI ↓ Staples Theory ↔ Política Industrial (sector agroindustrial)(sobre la industria) (USO CONSTRUCTIVO DEL EXEDENTE) ↓ • convergencia de capacidades en aumento por lado de la oferta • con mejoramiento en la distribución del ingreso • Estado Desarrollista (fin de autónomia del BC) • Nuevo trato con los TNCs • Nueva política del empleo/participación syndical [visión de Furtado]