Portugal’s Growth Paradox, 1870-1950 - wps.fep.up.pt.pdfVIP

WORKING PAPERS Investigação - Trabalhos em curso - nº 135, Dezembro de 2003 Portugal’s Growth Paradox, 1870-1950 Pedro Lains FACULDADE DE ECONOMIA UNIVERSIDADE DO PORTO www.fep.up.pt Faculdade de Economia do Porto - R. Dr. Roberto Frias - 4200-464 - Porto - Portugal Tel . (351) 225 571 100 - Fax. (351) 225 505 050 - http://www.fep.up.pt * P ’ , 1870-1950 ORTUGAL S GROWTH PARADOX PEDRO LAINS Instituto de Ciências Sociais, Universidade de Lisboa Av. Aníbal Bettencourt, 9 1600-189 Lisboa - Portugal pedro.lains@ics.ul.pt ABSTRACT From 1870 to 1913, the Portuguese economy expanded slowly and diverged from the European core. Contrarily, in the interwar period, Portugal achieved higher growth and partially caught-up to the levels of productivity of Western Europe. Higher growth in Portugal after World War I occurred in a framework of protection, increasing state intervention, and capital deepening. Agriculture responded more positively than manufacturing, revealing important changes in its structure which favored output with higher levels of factor productivity. Portugal’s pattern of growth across 1870-1950 was not unique within the European periphery, but it contrasted with Latin America’s experience. Keywords: economic growth, Europ ean p erip hery, state intervention, p rotectionism.