Ecuador's truncated development trajectory: the rise and fall of developmentalism in the early 21st century

Isabel Estevez and Andrés Arauz

Chapter 20 in The Elgar Companion to the Economies of Latin America and the Caribbean, 2025, pp 416-433 from Edward Elgar Publishing

Abstract: Ecuador—a commodity dependent, middle-income country of 16 million—is widely recognized as one of the most interesting cases of 21st century Latin American developmentalism and of the so-called “Pink Tide” that swept Latin America in the beginning of the 21st century. We find that many of the policies implemented during this period strongly contributed to the expansion of human development—particularly public investment, social, macroeconomic and regulatory policies—by breaking with the policy regime of Ecuador's Washington Consensus period. In the realm of industrial transformation however, the government fell short of the speed and ambition required to achieve a significant change in its commodity-dependent pattern of productive specialization. While creative and impactful industrial policy experiments were implemented, particularly in the realm of public procurement and non-tariff technical regulations, these began in earnest toward the end of the ten-year period and were quickly dismantled by the subsequent return to neoliberal policies. Ecuador's upward development trajectory was thus curtailed by the inability to quickly surmount neoliberal development models that had erased industrial policy from the development policy toolkit. In the years since, industrialized countries have strongly embraced ambitious industrial policy, but Ecuador, like many of its Latin American neighbors, remains trapped now outdated paradigms that continue to embrace the laissez-faire prescriptions.

Keywords: Development; Institutions; Industrial policy; Procurement; Public investment; Pink Tide; Structural transformation (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035317196
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