A post on FT.com blogs "beyondbrics" wonders, "What happenned to Argentina?", which is based on this NBER paper. It notes that, as late as 1914, Argentina was a very rich country, with per-capita GDP about 70-80% of the advanced industrialized countries.
I do not pretend to understand everything, or even most of the things in the paper, but here is my understanding. The explanation is twofold:
a) Argentina was quite open to world trade in 1914, but during the World Wars and the Depression, the loss in world trade due to protectionist policies of the world hit the economy quite hard. It forced Argentina to use autarkic policies (trying to be self-sufficient), in the short term. This was continued even in the post war period.
b) The second explanation is the low marginal product of capital, which in turn means that capital accumulation and investment is low in Argentina, and Argentina finds it hard to mobilize capital.
Now, what is the reason for the autarkic policies and the low investment and capital accumulation? It is an economics paper, and not a politics paper, though it does make some guesses about the political situation. It dismisses "empire" as a factor since it only considers the pre-1914 colonial interferences.
But surely, any serious discussion of the post WW2 era must include a reference to the military coups, often supported by the US. There was the Dirty War in Argentina during with many thousands were killed, which was a part of a larger operation in Latin America - Operation Condor.
These factors are not mentioned in the paper, but surely they are relevant. It would seem to be a simpler explanation for the puzzle of Argentina: turning from a rich to a relatively poor nation.
I do not pretend to understand everything, or even most of the things in the paper, but here is my understanding. The explanation is twofold:
a) Argentina was quite open to world trade in 1914, but during the World Wars and the Depression, the loss in world trade due to protectionist policies of the world hit the economy quite hard. It forced Argentina to use autarkic policies (trying to be self-sufficient), in the short term. This was continued even in the post war period.
b) The second explanation is the low marginal product of capital, which in turn means that capital accumulation and investment is low in Argentina, and Argentina finds it hard to mobilize capital.
Now, what is the reason for the autarkic policies and the low investment and capital accumulation? It is an economics paper, and not a politics paper, though it does make some guesses about the political situation. It dismisses "empire" as a factor since it only considers the pre-1914 colonial interferences.
But surely, any serious discussion of the post WW2 era must include a reference to the military coups, often supported by the US. There was the Dirty War in Argentina during with many thousands were killed, which was a part of a larger operation in Latin America - Operation Condor.
These factors are not mentioned in the paper, but surely they are relevant. It would seem to be a simpler explanation for the puzzle of Argentina: turning from a rich to a relatively poor nation.
