Applying comprehensive Neo-Schumpeterian economics to Latin American economies
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The dichotomy of development economics between market-driven and state-led development approaches has recently been complemented by a third strand which focus on knowledge and capabilities-based development models. Our paper aims to make a first step towards a Comprehensive Neo-Schumpeterian theory of Development (CNSD) allowing synthesizing the three mentioned development approaches and putting the agents into the centre of interest. The theoretical part of this paper identifies (i) freedom of the actors and social welfare (ii) the capacity to create, implement, diffuse and imitate knowledge and innovations and (iii) an open, efficient and future oriented economic structure as mutual interconnected and reinforcing objective classes of development. In the empirical part we apply multivariate statistics to a data set with 44 indicators representing the future orientation of 20 Latin American countries in the three objective classes of CNSD. The results show that indeed different patterns and structural bottlenecks for development can be identified. While in some countries knowledge is the main bottleneck for future oriented development, other countries suffer from inefficient economic structures or the exclusion of large parts of the population from participating in development and innovation processes. It becomes obvious that just an appropriate combination of the interconnected and mutually reinforcing factors knowledge, freedom and future-oriented economic structure may lead to qualitative change and sustainable economic development in the long run.