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Author: Johanna Gautier 


Raúl Prebisch 


Key works

  • El desarrollo económico de la América Latina y algunos de sus principales problemas (The economic development of Latin America and its principal problems) 1948

  • Desarrollo económico de la Argentina (Economic development of Argentina) 1949

  • Pagos multilaterales en una política de Mercado Común Latinoamericano 1958

  • Commercial policy in the underdeveloped countries, from the point of view of Latin America, 1958

  • El falso dilema entre desarrollo económico y estabilidad monetaria (Economic development or monetary stability: the false dilemma) 1961

  • Marcha hacia el Mercado Común Latinoamericano 1961

  • Hacia una dinámica del desarrollo latinoamericano (Towards a dynamic development policy for Latin America) 1963

  • Introducción a Keynes (Introduction to Keynes) 1965

  • Inversión privada extranjera en el desarrollo latinoamericano (Role of foreign private investment in the development of Latin America) 1969

  • Trasformación y Desarrollo: la gran tarea de América Latina (Change and Development: Latin America’s Great Task) 1971

  • Desarrollo económico, planeamiento y cooperación internacional (Economic development, planning and international co-operation) 1973

  • A critique of peripheral capitalism, 1976

  • Biósfera y desarrollo (Biosphere and Development) 1979

  • Las teorías neoclásicas del liberalismo económico (The neoclassical theories of economic liberalism) 1979

  • Hacia una teoría de la transformación (Toward a theory of transformation) 1980

  • Capitalismo periférico: crisis y trasformación, 1981

  • Un recodo histórico en la periferia latinoamericana, 1982

  • La periferia latinoamericana en la crisis global del capitalismo, 1985

  • Power relations and market laws, 1985

Raúl Prebisch

The Economist and the Central Banker in the First Great Crisis of Global Capitalism

Born in Tucuman, Argentina, in 1901, Prebisch earned a doctorate in economics from the Universidad Nacional del Centro de Buenos Aires in 1928. During this period, he also held several positions in the Argentine public sector, including deputy director of the Argentine Department of Statistics (1925-1927). Soon after graduating, he became director of Economic Research at the National Bank of Argentina (1927-1930). By that time, the Argentine economy was thriving and increasingly integrated into an interdependent world economy. The stock market crash of 1929 and the Great Depression hit the country at full force, and Prebisch excelled in dealing with the banking and monetary crisis. He was immediately appointed Under-Secretary of Finance (1930-1932) and the first Director-General and co-founder of the Central Bank of Argentina (1935-1948). The work of Adriana Calcagno emphasizes the seminal influence of the Great Depression and his mission at the newly created Central Bank on Prebisch’s thinking about the word financial and monetary system and the need for countercyclical policies to contain economic fluctuations.[1] In the 1920s he was a staunch supporter of neoclassical theories, but became disillusioned by the inability of these theories to convey the lived experience of economic reality in Latin America. He became an international economic thinker when the slowdown in international trade revealed the asymmetric dependence of Latin American economies on industrialized countries. From then on, his conception of development and global integration evolved, as he said, “under the influence of a changing reality and the broadening of [his] own experience.”[2] The longevity of his thinking allows to speak of several phases reflected in his successive positions on the international scene. Exiled by Juan Perón after World War II, he became the most influential Latin American official at the United Nations, leading CEPAL (1950-1963) and UNCTAD (1965-1969).

International Economic Thinking

Manifesto 1949

During the Great Depression, not only did the Latin American economies seem defenseless against the backdrop of the protectionist wave in the industrialized countries, but the intellectual tools for analyzing the situation also seemed woefully inadequate. In his programmatic 1949 essay El desarrollo económico de América Latina y sus principales problemas (The Economic Development of Latin America and Its Main Problems), Prebisch argued that economists responsible for Latin American development needed to be trained locally, since knowledge acquired abroad would not help them understand the concrete problems and structures of Latin American economies and societies. His main argument was that European and North American economic theories based on concepts such as the international division of labor or the Ricardian principle of comparative advantage, while providing an adequate intellectual framework for industrialized countries, were unable to explain the role of Latin American economies in the (pre-Wallerstein) world system. In his view, these “dogmatic generalizations” misled the world monetary system. The monetary rules developed after the Depression for the North American and European economies were inadequate to manage the currencies of peripheral countries that were already suffering from dollar shortages less than five years after the Bretton Woods agreements. The urgency to produce and disseminate adequate economic knowledge and analysis therefore required the collection of new data, the development of alternative ways of thinking, and the training of new generations of economists.


The ”Latin American Keynes”

Through his institutional commitment, his writings, and the legacy of his ideas and leadership, Raúl Prebisch embodies the essence of the international economic thinker of the twentieth century. His Introduction to Keynes, published in 1947, served his critique of laissez-faire capitalism and his advocacy of state interventionism in the monetary, fiscal and international spheres. Although Prebisch went beyond and against Keynesian theories to develop his own, the influence of Keynes on his work had earned him the reputation of being “the Latin American Keynes” (Pérez Caldentey and Vernengo, 2016). The history of macroeconomics indeed often views the 1940s-1960s as the era of the Keynesian consensus, both in terms of analytical methods and their policy application. This consensus was challenged by Marxists and monetarists in the 1970s, when Keynesianism was no longer able to solve the twin problems of soaring unemployment and runaway inflation (Hicks, 1974; Pilling, 1986). This narrative is extremely Western-centric. Prebisch’s challenge to Keynesianism from the 1930s onwards sheds light on an entirely different story of the “specter of Keynes” in international economic thinking.[3]



Prebisch first joined CEPAL in 1948 as the Executive Secretary, where he played a crucial role in shaping the organization’s research and policy agenda. During his tenure at CEPAL, Prebisch developed the influential Prebisch-Singer thesis, which argued that terms of trade between primary commodity-exporting countries and industrialized countries tend to deteriorate over time, exacerbating global inequalities. 

In 1963, Prebisch left CEPAL to become the Secretary-General of UNCTAD, a newly established United Nations body that aimed to promote the interests of developing countries in international trade negotiations. At UNCTAD, Prebisch continued to advocate for the interests of developing countries, focusing on issues such as trade, investment, and development policies. 

He however never cut ties with CEPAL and created the CEPAL Review/Revista de la CEPAL, an academic peer-reviewed journal published by the CEPAL. Henceforth freed from his executive responsibilities, he could expand his thinking into more theoretical views on the evolutions he had witnessed over three decades, and the shortcomings of economic ideas that had been turned into policies, orthodoxies, or scientific principles, including his owns. His economic thinking increasingly evolved into historical thinking about capitalism, the historicity of ideas, and the future of the global economy.[4]


Central ideas and concepts

The pioneering ideas of Raúl Prebisch in the 1950s—similar to those at the same time of German economic thinker Hans Singer—introduced the notion of a hegemonic industrial center and an agrarian, dependent periphery as a framework for understanding Latin America’s role in the international division of labor.[5] The Prebisch-Singer thesis states that the terms of trade between primarily commodity-exporting developing countries and industrialized countries tend to deteriorate over time. According to this thesis, the prices of primary goods (such as agricultural products or raw materials) that developing countries primarily export decline relative to the prices of manufactured goods that they import from developed countries. This theory challenged the prevailing notion that international trade would lead to convergence and equal benefits for all nations.

1. structural inequality: the international economic system perpetuates structural inequality between developed and developing countries. He emphasized that the unequal exchange between the producers and exporters of primary commodities and the producers and exporters of manufactured goods leads to a deterioration of the terms of trade and a disparity in demand elasticity at the expense of emerging market economies. This critic highlighted the uneven international dissemination of technology and the hyper-concentrated rip of its benefits. 

2. dependency and underdevelopment: this unequal exchange has created a cycle of dependency and underdevelopment for developing countries: they become dependent on primary goods exports and vulnerable to commodity price fluctuations, which hinders industrialization and economic diversification. These inequalities highlighted the fact that Latin American countries were part of a system of international economic relations—a global economic “constellation” that formed a “center-periphery” system that benefited to the industrialized nations, at the center, to which raw material producers and exporters depended but in an isolated manner. The “periphery” was scattered, heterogeneous and incorporated in the system to different degrees. The propagation of technological progress to the peripheries was uneven and actually led to greater inequalities rather than greater integration. Since “the penetration and propagation of technical progress in the countries of the periphery was too slow to absorb the entire labor force in a productive manner, … the concentration of technical progress and its fruits in economic activities oriented toward exports became characteristic of a heterogeneous social structure in which a large part of the population remained on the sidelines of development”.[6] This outward-oriented economic expansion thus aggravated dependency toward consumer markets in industrialized countries and did not encourage structural, social development within producer countries.

3. import substitution industrialization (ISI): Prebisch thus advocated import substitution industrialization as a strategy to overcome dependency. This approach involved promoting domestic industries and reducing import dependence through protective measures such as tariffs and trade barriers. He encouraged the stimulation of exports of manufactured and primary goods among Latin American countries, dreaming of preferential arrangements that could lay the foundations of a common market.[7] He conceptualized a regional protectionism that would favor infantile industries. Import substitution by protection, according to him, would favor industrialization and an increase productivity in primary production.[8] One key character in his thinking about protectionism in the peripheries was transnational companies and their role in reinforcing the international division of labor. By contrast, he attacked protectionist measures in the countries of the center that reinforced their hegemony over the world economy. 

4. government intervention: Prebisch emphasized the role of government intervention in the economy. He advocated countercyclical measures such as fiscal and monetary measures to manage aggregate demand and stabilize the economy during recessions. Industrialization also required massive investment in infrastructure to accelerate growth and planning. There was also a need to intensify the rate of internal capital accumulation and coordinate international financial resources.[9]

5. Income distribution and social welfare: Prebisch stressed the importance of addressing income inequality and promoting social welfare. He realized in the early 1960s that a decade of rapid growth had not benefited the majority of the low-income population, while a small percentage of the social structure became increasingly wealthy. He had thought at first that market forces would have corrected this widening gap on the long-run. There were some classical explanations that could be found in the excessive concentration of land ownership, excessive protection, and inflation.[10] But Prebisch evolved towards a more proactive solution and advocated progressive taxation and the creation of a social safety net to ensure a fair distribution of wealth and opportunities. 

6. International cooperation: Aware that countries on the periphery of the world economic system were heterogeneous, but had a lot of common denominators, Prebisch increasingly worked towards greater international cooperation among them to participate in a North-South dialogue with more leverage. His work at UNCTAD crowned years of efforts in that sense. He conceived a series of concrete solutions to address developing countries’ issues with developing countries’ solutions.[11] But on the long-run, he considered his endeavor a failure since countries of the Global North were reluctant to let raw material producers gain their autonomy.[12]

One of the specificities of the thinking that produced these international economic ideas was that Prebisch “diagnosed” problems and simultaneously suggested alternative policies from those generally offered by orthodox thinking. When he reflected on his long career, two years before he died, he considered that experience taught him that the ideal solution to fix the world economic system should be “a synthesis of both socialism and genuine economic liberalism” that would “restore that essential philosophic unity of economic liberalism with political liberalism”—the only path, in his view, to meet the “tremendous historical responsibility” towards the future world. 


Internatioanl recognition

Prebisch was granted the Jawaharlal Nehru award for International Understanding (1974), the Dag Hammarskjold honorary medal of the German U.N. Association (1977), the Third World Prize by the Third World Foundation (1981). 



Adriana Calcagno (2021), The Roots and History of the Structuralist Development Theory Through the Prism of Raúl Prebisch and ECLAC, Ph.D. dissertation, dir. Ariane Dupont-Kieffer and Juan Flores Zendejas, University of Geneva.

Pérez Caldentey, Esteban and Matías Vernengo (2016), “Reading Keynes in Buenos Aires: Prebisch and the Dynamics of Capitalism,” Cambridge Journal of Economics 40 (6): 1725-1741.

Edgar J. Dosman (2008), The Life and Times of Raúl Prebisch, 1901-1986, Montreal: McGill-Queen’s University Press

Manuel Fernández López (2001). Biografía de Raúl Prebisch. La Gaceta Económica, Buenos Aires, April and May.

Aldo Ferrer, Julio Olivera, Enrique Iglesias. Discursos pronunciados en el homenaje a Raúl Prebisch con motivo de conmemorarse el centenario de su nacimiento (Speeches at the Raúl Prebisch tribute, held to commemorate one hundred years since his birth). Buenos Aires. April 2001.

Armando Di Filippo, ‘Prebisch’s ideas on the world economy’, CEPAL Review 34 (1988): 153-164.

Joseph Hodara, Prebisch y la CEPAL: sustancia, trayectoria y contexto institucional (México: Colegio de México, 1987).

Joseph L. Love (1980), “Raúl Prebisch and the Origins of the Doctrine of Unequal Exchange,” Latin American Research Review, 15 (3): 45-72. 

Joseph L. Love (2005), “The Rise and Decline of Economic Structuralism in Latin America: New Dimensions,” Latin American Research Review 40 (3): 100-125.

Leopoldo Solís, Raúl Prebisch at ECLA: Years of Creative Intellectual Efforts (San Francisco: International Center for Economic Growth, 1988).

Revista de la CEPAL Nº 75 (CEPAL Review No. 75).

Prebisch biographic notice at UNCTAD:

Raúl Prebisch y los desafíos del siglo XXI:



[1] Adriana Calcagno (2021), The Roots and History of the Structuralist Development Theory Through the Prism of Raúl Prebisch and ECLAC, Ph.D. dissertation, dir. Ariane Dupont-Kieffer and Juan Flores Zendejas, University of Geneva. 

[2] Raúl Prebisch, “Five Stages in My Thinking on Development”, in Pioneers in Development: A World Bank Publication, eds. Gerald M. Meier and Dudley Seers (New York: Oxford University Press, 1984), 175. 

[3] Guilherme Sampaio, “The Spectre of Keynes—An Analysis of John Maynard Keynes’s Interactions with International Organisations (1919–1946)”, forthcoming working paper.

[4] “A Critique of Peripheral Capitalism,” CEPAL Review, no. 1 (1976); “Socioeconomic Structure and Crisis of Peripheral Capitalism,” CEPAL Review, no. 6 (1978); “Towards a Theory of Change,” CEPAL Review no.10 (1980); “The Latin American Periphery in the Global System of Capitalism”, CEPAL Review 13 (1981); “Dialogue on Friedman and Hayek from the Standpoint of the Periphery”, CEPAL Review no.15 (1981); Capitalismo Periférico: Crisis y Transformación (Mexico City: Fondo de Cultural Económica, 1981). 

[5] Hans W. Singer (1950) “The Distribution of Gains between Investing and Borrowing Countries,” American Economic Review 40 (2): 473-485; Raúl Prebisch, The Economic Development of Latin America and Its Principal Problems (Lake Success, NY: UN Department of Economic Affairs, 1950). 

[6] Prebisch, “Five Stages in My Thinking on Development”, 177. 

[7] Raúl Prebisch, El Mercado Común Latinoamericano (New York: United Nations, 1959). 

[8] Raúl Prebisch, Commercial policy in the underdeveloped countries, from the point of view of Latin America, 1958. 

[9] Raúl Prebisch, Inversión privada extranjera en el desarrollo latinoamericano (Role of foreign private investment in the development of Latin America) 1969; Desarrollo económico, planeamiento y cooperación internacional (Economic development, planning and international co-operation) 1973.

[10] Raúl Prebisch, El falso dilema entre desarrollo económico y estabilidad monetaria (Economic development or monetary stability: the false dilemma) 1961; Hacia una dinámica del desarrollo latinoamericano (Towards a dynamic development policy for Latin America) 1963.

[11] Raúl Prebisch, Towards a New Trade Policy for Development: Report by the Secretary-General of UNCTAD (New York: UNCTAD, 1964); Towards a New Global Strategy for Development: Report by the Secretary-General of UNCTAD (New York: UNCTAD, 1968); Change and Development: Latin America’s Great Task (Washington DC: Inter-American Development Bank, 1970). 

[12] Prebisch, “Five Stages in My Thinking on Development”, 183. 

Reference anything from this site as: Gautier, Johanna (2023) 'International Economic Thinkers-Profile: Raul Prebisch, ECOINT IET Profile #5, available at:




Dr Johann Gautier

ECOINT Postdoc

johanna.gautier AT

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