Abstract

Spain’s remarkably high rates of economic growth over the decade and a half between the implementation of the Fund-supported Stabilization Plan of 19592 and the onset of the oil crisis in the mid-1970s were largely made possible by a change in the orientation of its economic policies, which had theretofore promoted self-sufficiency in an increasingly interdependent world. Prior to 1959, Government policy had sought the rapid development of an industrial base through a high degree of protection and official intervention in the economy. Rigidly enforced quantitative restrictions on imports and strict export licensing, widespread price controls, and a large body of legislation regulating virtually every aspect of productive activity ranging from procurement and distribution to investment3 were the main characteristics of what is now referred to as Spain’s period of autarky. Policies aimed at promoting self-sufficiency in turn introduced a number of rigidities in the Spanish economy that were to hamper severely the development process. Describing some of the strains on the economy brought about by autarky, Wright (1977) states: