State-led Industrialisation: The Evidence on Paraguay, 1852–1870

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Abstract
In the last three decades, the economic history of Paraguay has been subject to an intense reexamination. It has been claimed that the state in Paraguay led a ‘spectacular industrialisation effort’ in the second half of the nineteenth century and that this effort was prematurely truncated by war. One author, for example, has stated that From 1852 on, free circulation on the river Paraná permitted a rapid increase of exports, mostly under state control. The resources thus freed were devoted to the development of the modern manufacture of industrial goods and plant: iron and steel, engineering, shipbuilding, brickmaking, etc. A railway and a telegraph were installed without incurring an external debt. The experiment was nevertheless spoiled by the war with the ‘Triple Alliance’ (1864–1870), which opposed Brazil, Argentina, and Uruguay to Paraguay, and resulted in the demographic and economic collapse of the country.