What are the solutions of dependency theory by ECLA?

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The solutions proposed by ECLA dependency theorists sought to alter the production and trade patterns between the industrialized north and underdeveloped south in order to foster the latter's economic development through industrialization.

The theorists believed that as long as the peripheral economies of the south depended on raw material and commodity exports in order to pay for higher value-added imports from the core industrialized economies of the north, the south would be on the losing end of an asymmetric economic relationship.

Even though there were positive-sum gains from such trade, as neoliberal trade theory suggested, what if the benefits accrued were grossly unequal in terms of long-run profitability? Were not agricultural exports subject to diminishing marginal returns, while advanced manufactured goods were subject to increasing marginal returns?

The ECLA dependency theorists saw the way out of this unequal relationship through state promotion of industrialization....

(The entire section contains 2 answers and 751 words.)

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