New directions in Latin American Structuralism : a three-gap model of sustainable development

Sustainable development implies reducing the gap in GDP per capita between center and periphery, increasing equality and protecting the environment. In this paper, we present a simple model within the Structuralist tradition that combines these three dimensions of sustainable development. We define three rates of growth: the minimum required to reduce inequality and eradicate poverty ( y S ); the maximum compatible with external equilibrium ( y T ); and the maximum compatible with a global carbon budget ( y L ). Estimations of these rates of growth for Latin America suggest that y S > y T > y L . We argue that a combination of industrial and technological policies, along with a major effort at income redistribution, is necessary for having y S = y T = y L , which defines a sustainable development path.