Operation Bootstrap,Industrial Autonomy,and a Parallel Economy for Puerto Rico

Abstract

Puerto Rico's Operation Bootstrap began to stagnate around 1970, leaving high unemployment. Structural weakness of the economy will continue to inhibit growth, and the historical strategy appears unlikely to succeed. This paper proposes a policy for the development of autonomous exports and import substitution entailing moderate structural reorganization of the economy. However, this policy, in line with international development experience, is frought with difficulty. Therefore, the development of a parallel economy is proposed in order to reduce unemployment, increase productivity, and encourage a restructuring of the economy.