Exceptional Argentina Di Tella, Glaeser and Llach - Thomas Piketty

nationalized railways and banks, took public control over the grain trade, engaged in
protectionism and chose not to join international institutions like the General Agreement on
Tariffs and Trade. In 1955, he was ousted in yet another military coup.
The period from 1955 to 1983 was marked by frequent switches from military to civilian rule.
The periods of military rulers were 1955-1958, 1966-1973 and 1976-1983. There were elected
leaders during the other periods, although typically terms were short and occasionally still
dominated by military influence, which tended to suppress labor (the labor share typically dips
after a military coup). Often the policies continued to emphasize economic independence over
export-led growth. Sometimes, as under President Frondizi, policies encouraged economic
openness. But the combination of restrictions on the labor movement and burgeoning
nationalism with a set of governments that were not fully democratic called into question the
legitimacy of the system. An attempt to co-opt a pragmatic faction of the union leadership under
the notion of “Perónism without Perón” ended with a radicalized opposition. In 1969, a riot in
the city of Córdoba left 14 casualties and created a crisis in the military leadership. An urban
guerrilla movement that reached 5,000 at its zenith in 1975 became increasingly violent (see, for
example, the estimates presented in Moyano, 1995). Political assassinations, kidnappings of
businessmen, intimidation, and chaos became common as the “dirty war” began. In 1975, one
political death took place every 19 hours (Goti, 1996). After 1976 coup, the military repressed
the insurgents through illegal means which included torture and the forced disappearance of
approximately 9,000 people without trial. 13 The economic performance of the military
administration was also poor. Market reforms were introduced and a stabilization plan led to a
massive overvaluation of the exchange rate. An economic crisis ensued as Argentina joined the
Latin American debt crisis in 1982.
Since 1983, Argentina has functioned as a stable democracy, with perhaps the exception of the
2001-2002 period where political change was set off by widespread riots. Three figures—
Alfonsin, Menem and Kirchner—have dominated much of the last 30 years. Yet despite these
significant political improvements, policies have continued to oscillate, with Menem presiding
over a set of privatizations and market reforms that were somewhat reversed by the subsequent
administrations. While growth has picked up during parts of this period, the overall performance
remains lackluster. Given this background, a reasonable hypothesis is that political instability has
directly affected performance (Diaz Alejandro (1988) makes a similar point on Argentina's
performance during 1970s). And others (see the contributions in this volume by Taylor,
Brambilla, Galiani and Porto and by Di Tella and Dubra) have argued that instability led to
policy choices which diverged from those selected in more advanced countries (either because
political beliefs differed or because choices were constrained by the particular Argentine political
configuration, as in Galiani and Somaini).
Shocks, external and internal
13 This is the estimate provided in the report by The National Commission on the Disappearance of Persons
(Comisión Nacional sobre la Desaparición de Personas, CONADEP). Given the absence of legal, documented
trials, these estimates are often questioned.