A humanist perspective on economic policy : Ecuador's economic reforms and industrial policy, 2007-2017

This dissertation assesses Ecuador's economic policies during the Correa administration (2007 - 2017) from the perspective of human development. It aims to accomplish two objectives -one conceptual and one empirical. At the conceptual level, it brings together two intellectual traditions that are often seen as antagonistic: on the one hand, classical development theory with its focus on structural transformation as the central concern of development and, on the other hand, the humanist development tradition, which asserts the centrality of human wellbeing as the ultimate objective of policy interventions. Combining the normative gaze of the human development approach with classical development theory's insights about the centrality of industrial policy as tool for achieving sustained per capita growth, I build a framework for evaluating economic policies in general, and Ecuador's economic policies in particular, in terms of their direct and indirect contributions to human wellbeing. At the empirical level (Part II), I apply the framework developed in Part I to analyze Ecuador's economic policies during the Correa administration. Though my analysis identifies manifold successes and failures, it concludes that -with some notable exceptions- the administration's economic policies were largely conducive to enhancing economic and human development. Moreover, many of the policies that most effectively contributed to the expansion of human development -particularly public investment, macroeconomic and regulatory policies- were those that most markedly broke with the policy regime of Ecuador's Washington Consensus period (1982-2006). However, in the realm of industrial policy, the government notably fell short of the speed, scale and precision required to achieve a significant change in its commodity-dependent pattern of productive specialization. This prevented the country from achieving a level of diversification that could have provided a buffer against the boom and bust cycles of commodities markets and stimulated long-term development of higher-value added productive capabilities. As a result, when the price of oil suddenly fell, the government was unable to sustain the public investments that enabled its upward development trajectory. Thus, the ineffectiveness of the Correa administration's industrial policy truncated a successful process of expansion of human development that could have become sustainable had the imaginations of policy makers been able to escape the ideational constraints of orthodox economic prescriptions and standard human development discourse, which either directly undermine or neglect industrial policy. Ecuador's experience highlights the risks of seeing development policy as little more than a collection of measures for 'getting along with a little assistance' and underscores the need for developing countries to take more proactive structural measures to achieve sustained improvements in economic and human development.