Exceptional Argentina Di Tella, Glaeser and Llach - Thomas Piketty

CHAPTER FOUR
Argentine Trade Policies in the XX Century:
60 Years of Solitude
Irene Brambilla
Universidad de La Plata and NBER
Sebastian Galiani
Washington University in St. Louis
Guido Porto
Universidad Nacional de La Plata
Abstract
At the turn of the last century, the Argentine economy was on a path to prosperity that never
fully developed. International trade and trade policies are often identified as a major culprit. In
this paper, we review the history of Argentine trade policy to uncover its exceptional features
and to explore its contribution to the Argentine debacle. Our analysis tells a story of bad trade
policies, rooted in distributional conflict and shaped by changes in constraints, that favored
industry over agriculture in a country with a fundamental comparative advantage in
agriculture. While the anti-export bias impeded productivity growth in agriculture, the import
substitution strategy was not successful in promoting an efficient industrialization. In the end,
Argentine growth never took-off.
1. Introduction
At the turn of the last century, the Argentine economy was on a promising path to prosperity, a
prosperity which, in the end, never fully materialized. Argentina failed in many dimensions
and various concurrent factors—addressed in different chapters of this book—help explain this
debacle. Often, directly or indirectly, a major culprit is international trade. 1 This is the focus of
our paper. We have two broad objectives: to uncover the exceptional features of the history of
Argentine trade policy; and to assess the contribution of these exceptional features to the
economic performance of Argentina.
In our analysis, we follow a descriptive approach based on two major sources of data: a
compilation of quantitative and qualitative accounts from 1890 to 1966 taken from the
literature on Argentine history, and a comprehensive (i.e., disaggregated) trade policy dataset
(on imports and exports) from 1966 to 2006 that we put together for this project. These data are
used to document the high degree of anti-export bias of Argentine trade policy. We emphasize
two manifestations of such bias: the burden imposed by economic policies on the agricultural
export sector; and the benefits granted to manufacturing sectors that typically competed against
1 The chapter by Taylor in this volume shows that international trade can account for around 25 percent of the
income gap between Argentina and the developed world.