The son of Spanish immigrants to the US, he learned English as an adult, which inspired his interest in the practical aspects of foreign language learning. With Charles Fries, he was involved with the University of Michigan's ELI (English Language Institute), which researched the best methods of foreign language teaching for military purposes during WW2, particularly teaching English to Spanish speakers in Latin America. They developed the contrastive analysis hypothesis and the Army method, which later developed into the Audio-Lingual Method (ALM).
The ALM was founded on Lado's assessment of the main difficulty of foreign language learning, based on the notion of transfer:
Individuals tend to transfer the forms and meanings, and the distribution of forms and meanings of their native language and culture to the foreign language and culture-- both productively when attempting to speak the language and to act in the culture, and receptively when attempting to grasp and understand the language and the culture as practised by natives.
Lado was a pioneer in the field of language testing, developing discrete point pencil-and-paper tests of language ability. He founded Georgetown University's linguistics department in 1960. The Lado English Series for ESL learners is still in print, as is his English Pattern Practices with Charles Fries published in 1958.
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