Peru 1890-1977: Growth and Policy in an Open Economy

Rosemary Thorp and Geoffrey Bertram wrote this study of the Peruvian economy across nearly a century, and it became a standard work in Latin American economic history. Their subject is why an economy with successive export booms failed to convert them into sustained development.

Their analytical concept is returned value: the share of export earnings that remains in the domestic economy as wages, taxes, locally purchased inputs and reinvested profit, rather than accruing abroad to foreign owners or being spent on imports. They trace this across Peru's export cycles in guano, sugar, cotton, oil, copper and fishmeal, and show that the share retained domestically varied enormously by commodity and by ownership structure. Locally owned export sectors generated linkages that foreign-owned enclaves did not, and the political economy determined which arrangements prevailed.

The book combines detailed quantitative reconstruction with political analysis of the Peruvian elite's choices. Its argument was influential in the structuralist and dependency debates, though the authors are more empirical than most participants in those arguments. It ends in 1977, before the debt crisis, the hyperinflation of the 1980s, the Fujimori period and the mining boom of the 2000s. The returned value framework remains directly applicable to any resource economy and to the current arguments about local content requirements.