Revista del CEI - Centro de Economía Internacional

Not surprisingly, the instability that followed the 1930 constitutional breakdown had an impact on theinstitutional organisation, particularly on the design and implementation of policies, civil liberties, civicbehaviour, the role of the state, the degree of professionalism and stability in civil service and the country’sintegration into the international community. The change from one government to the next and theirfrequently antagonistic goals and actions undermined popular trust and eroded the bureaucracy, whichfailed to establish itself as the administrative and advisory support for the management of public affairs.The State started to gradually lose its role as a mediator between social demands and the interests ofeconomic actors, a situation that was particularly grave during the last de facto government, between 1976and 1983, which brought about serious long and mid-term consequences for institutions, society and theeconomic development of the country.The reconstruction of democracy beginning toward the end of 1983 has been complex and painful giventhe constraints imposed by the deterioration of the productive structure and the burden of the foreign debtaccrued during the military government, apart from the persistence of pressures on the civil sector by themilitary until well into the nineties. Notwithstanding these circumstances, and in spite of the seriouseconomic crises of 1989 and 2001, the democratic system was able to face the situation and live up toexpectations that the country’s governance would be restored. Over the years that followed the economiccrisis of late 2001 and part of 2002, the power of the state became more established and grew in strengthto face the challenges related to institutional rebuilding and modernisation, governmental efficacy,economic recovery and the search for social equality.c) Economic evolution1. The Open Trade ModelAs from the second half of the nineteenth century, two events give rise worldwide to the generation of adevelopment model based on the exploitation of the comparative advantages of the production of rawmaterials.On the one hand, we find the consolidation of the colonised and emancipated territories as markets,joining international commerce with policies characterised by the absence or limited degree of barriers.On the other hand, in industrialised countries, the second industrial revolution takes place, characterisedby its international projection. Technical progress derived from capital accumulation in the manufacturingindustry allows for production levels beyond the capacity of national consumption and requires a greatermarket to persist. At the same time, the growth in economic activity does not parallel the geometric growthrate of productivity as a consequence of technical progress, generating chronic domestic excess labour,worsened by the flow of unemployed population from the agricultural sector, whose costs make it unableto compete with import substitutes.The policy of raw material import liberalisation is, on the one hand, instrumental to lowering the cost ofliving in central countries, favouring the containment of labour costs’ incidence on industrial costs and,thus, the accumulation of capital. On the other hand, the purchasing power such said policy generates inthe new exporting territories gives rise to new poles, able to absorb the manufactured goods from thecentres and to attract, through emigration, their excess labour.The economy of the United Kingdom provided the foundation on which the above-mentioned model wasbased; by the year 1900 the UK was absorbing 18% of world exports, mainly food and raw materials, andacting as the axis of the multilateral payments system. To the UK, this meant an abundance of financialresources, which were channelled as loans and investment for the development of foreign-trade-relatedinfrastructure and services in countries exporting raw materials.Another important factor was given by the parallel increase in the demand for both manufactured goodsand raw materials, growing from a starting point marked by a low income level in central countries which