erstand how these regions have developed along different lines, this research will first lay out the tensions and conflicts of Latin American development. Next, the unique historical experience of South Korea will be examined, followed by a discussion of the many different factors that have affected development in that nation. The model of dependent development will then be applied to the Latin American experience and contrasted with the experience of South Korea. Finally, a model of economic development will be analyzed that provides a more comprehensive explanation for the South Korean experience.
The Second World War left a permanent imprint on Latin American economies--an imprint that often had contradictory repercussions. By the mid-1940s, the major Latin American countries had accumulated large foreign exchange reserves which were the largest they had ever held. Demand for investment goods was significantly delayed as was demand for foreign consumer goods, and a large industrial work force. Inflation rates during the war had caused a decline in real wages in most Latin American countries, but many of these governments used war emergency powers to repress the demands of workers for better conditions and wage increases. In most major Latin American countries, except perhaps Argentina, price inflation had far exceeded similar trends in the United States during the war period, while exchange rates stayed nearly fixed. This made American imports seem relatively cheap in terms of the value of domestic currency. As a result, conditions were ripe for several of the familiar problems of postwar Latin American economies: foreign exchange reserves would soon become quickly depleted, intense wage disputes were driven by spiraling inflation, and the economies were shaped according to the import- substitution model based heavily on trade protectionism and state subsidies, rather than a reliance on relative price effects and market ...