Economic theory can sponsor disastrous national development policies.

Evidence

Political circumstances—while not sufficient to account for the scientific value of these theories—also provide one of the conditions of existence for theory, and have effects for its implementation and appropriation. This has clearly been the case, even if restricted (as is done for a good section of this paper) primarily to Latin America and the Caribbean. The dual sector model—based on an export-led, import-substitution, foreign investment supported type of economic development—sponsored a long and disastrous period of national economic development, which further undermined the economic position of one country after another in the region. The theory of modernization was for long the economic cutting edge of alliance-for-progress strategies in the continent. — Hall, Stuart, Essential Essays, Volume 1, 583

Categorization

• QUESTION: Worth chasing: what country-level evidence shows the dual-sector model actively worsening Latin American positions rather than merely failing to help?