For most of the first century after independence, all republics in Latin America followed an economic policy of export-led growth based on primary-product exports. The tremendous economic crisis of the 1930s that had a crushing and widespread impact on Latin America; precipitated by the global economic depression, forced Latin American nations to re-evaluate this exogenous economic growth model and to transform their economic policies in the direction of long-neglected diversification of the economy, particularly toward an endogenous model oriented to industrialization.

In order to understand the economic growth model shift from export-led to industrialization through the substitution of imports (or import-substituting industrialization) it is important to have some historical context in relation to Latin American dependence on the former export-led growth model and the degree to which the global economic crisis of the 1930s impacted Latin America.

It is generally accepted that, beginning in the 1930s and continuing...