The Backwardness of Nations: Development challenges in the theories of Evgeny Preobrazhensky and Raúl Prebisch

Abstract

This article surveys the views on economic development of two protagonists of developmental policy in the former Union of Soviet Socialist Republics (USSR) and Latin America: Russian economist Evgeny Preobrazhensky (1886-1937) and Argentine economist Raúl Prebisch (1901-1986). Although the two thinkers started from different analytical premises and developed their theories in diverse social and political settings, there is a basic commonality between the two since the examination of the nature and causes of economic backwardness became the mainstay for stepping up their own economic policies to trigger a developmental process. Each in his own way advanced the idea that backwardness is not a necessary first step of economic development, to be overcome only through economic policies that encourage thriftiness and entrepreneurship and avoid excessive state interference in the economy. To the contrary, for them, backwardness is a result of the dependence of a capital-poor economy on the world economic system. Their studies of backwardness highlighted not only economic, but also political and social obstacles that the peripheral countries must face in their strategies to move toward sustainable development.