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Please explain the structuralist theory of development.

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Structuralist development theory, dating to the 1950s⁠–⁠1960s, is associated with the contributions of Latin American scholars, especially those working in the Economic Commission for Latin America and the Caribbean, or ECLAC, more often known by the Spanish acronym CEPAL. It is both a political and an economic theory. Pointing out...

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Structuralist development theory, dating to the 1950s⁠–⁠1960s, is associated with the contributions of Latin American scholars, especially those working in the Economic Commission for Latin America and the Caribbean, or ECLAC, more often known by the Spanish acronym CEPAL. It is both a political and an economic theory. Pointing out the existence of strong inequalities among different nations, proponents of the theory argue that major structural changes are needed in government as well as business in less-developed countries. What were then called underdeveloped countries are linked to developed countries in a fundamentally colonialist relationship that did not differ significantly after the former colonies became independent. The underdeveloped countries continued to have a large precapitalist sector, which provides a large potential labor pool that in turn keeps wages down. The technology need for the economy to develop is imported, rather than produced domestically, which exacerbates inequality. As this cycle continues, industrial growth never advances in the underdeveloped country.

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The structuralist theory of development argues that the governments of developing countries must intervene to ensure that their economies will be able to become fully modernized and industrial.  If governments do not do this, they will be doomed to remain in a colonial relationship with the rich world.

This theory was mainly applied to Latin America.  It argued that Latin American countries would be used by the US as sources for raw materials and cheap labor unless their governments took steps to prevent that.  Structuralist theory argued that governments had to protect "infant industries" in their countries from foreign competition.  The most usual was to do this was through tariffs that would be placed on imports.  By increasing the cost of imported goods, the government would allow new domestic industries to develop until they would be able to compete on their own with industries from the rich world.

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