Entrepreneurship, knowledge and employment

Economic development and development thought in Portugal, 19th-21st

Bastien Carlos, Universidade de Lisboa - Lisbon School of Economics and Management
Nunes Ana Bela, Universidade de Lisboa - Lisbon School of Economics and Business

The main goal of this paper is to contribute to the understanding of the evolution of the Portuguese economy and its relation to development thought over the past two centuries. During the first half of the 19th century Portugal endured the effects of resilient political, economic and financial problems. Theoretical and doctrinal approaches on economic development were very limited. The second half of the 19th century brought along the implementation of a modernization policy under a liberal blueprint. Then, an eclectic economics emerged as well as a minority approach following the ideas of List. In 1910, the Republican Party took over, and a new liberal blueprint was implemented, relying mostly on the development of public education and of the colonies. The eclectic cannon was the dominant theoretical approach. In this period the emergency of a “developmentalist” supply-side doctrine emerged, basically designed by engineers-economists. During the 1930s a corporative economic blueprint implemented in the context of an authoritarian, autarkic and interventionist regime did not centred on economic development. Only after WW2 did Portugal accomplish a process of industrialization and sustained growth and a catching up process. Keynesianism became an important framework to the development policy. After revolutionary period in 1974-1975, when Marxist socialism became a relevant theoretical and doctrinal guideline, resilient short-term economic problems were faced in the late 1970s and early 1980s, bringing about stand-by arrangements under the IMF. A basic needs strategy for development was designed but, very soon, under the pressure of the process of the Portugal integration into the EC some liberal reforms were set. In the new context of the EMU and the impact of the Great Recession, Portugal faced again the need for international financial help, which was conditional on liberal reforms, reinforcing the neoliberal blueprint but not development.

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Keywords: Portugal, economic policy, economic thought, development

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