This article discusses the potential Argentina had in 1914. At that time, the country enjoyed higher GDP per capita than France, Germany, and Italy, as well as higher growth rates than the US. The author blames Argentina's failure to add value to their commodities (such as making their high-quality beef into "Argentine steak") as a large factor. Also, throughout the 20th and 21st centuries, Argentina has been plagued with extremely populist policies, combined with lots of governmental mismanagement and crony capitalism.
Chile and Uruguay have both been able to pull ahead of Argentina because they embraced more free market policies in the 1970s and 1980s. "Children from both those countries—and Brazil and Mexico too—do better in international education tests." Cristina Fernández, current President of Argentina has been embracing similar policies as her predecessors, taxing imports and agricultural exports. The article also points to the overall Argentine political system and weakness of its institutions as leading reasons why its economy has yet to emerge to its potential. The author concludes by offering the lesson learned by Argentina: "good government matters." The article points out some of the things we have discussed in class. How large of a role should the government play? Are there effective ways to eradicate corruption?
http://www.economist.com/news/leaders/21596515-there-are-lessons-many-governments-one-countrys-100-years-decline-parable
2 comments:
Corruption in governments can ruin the wellbeing of the population for the benefit of a sole individual, it is extrememly selfish.
Why would the government ever tax farm exports? This does not give incentives to workers to try to export more. Exporting more can bring up a country, maybe even Argentina but if the government stays corrupt it will not be able to be successful. It is too bad that crony capitalism still exists, will it ever be taken off the map?
Post a Comment