Exceptional Argentina Di Tella, Glaeser and Llach - Thomas Piketty

Office classifies the share of manufacturing value added accounted for medium and high
technology production. 14 In 2005, 25.7 percent of Argentina’s manufacturing value added came
from these more sophisticated operations as opposed to 41 percent in Canada and 61 percent in
Germany. The share of medium and high technology production in manufacturing exports in
2005 was 31 percent in Argentina, 57 percent in Canada and 72 percent in Germany.
Of course, this theory then requires an explanation for why Argentina failed to save or develop
new technologies. This could reflect initial conditions (as in hypothesis one) where low levels of
initial schooling led to less schooling and less technology later on, or bad political outcomes, or
other events that are specifically economic. In the first two cases, this hypothesis is really an
extension of hypothesis one (initial wealth was illusory) or hypothesis two (bad politics and
policy). Only if these economic events were independent does this become a true-stand alone
hypothesis.
IV. The Plan of the Book
This volume has four sections, examining different aspects of Argentina and of the hypotheses
discussed above. We begin with two essays about Argentina at the dawn of the twentieth
century—these attempt to understand the pre-conditions that might have set Argentina on a
different path than the other wealthy nations of the west. We then include three chapters on
Argentina’s place in global economy. These essays describe the changes in Argentine trade,
explore why those changes occurred and then discuss how much this mattered for growth.
The third section of the book explores Argentine politics, particularly Perónism, income
inequality and the relative degradation of Argentine institutions over the twentieth century. We
end with an essay about growth in incomes over the last 20 years.
The two chapters on Argentina in the early 20 th century apply two different perspectives to the
country’s economy. Lucas Llach’s essay, the next chapter in the volume, contains a widespread
examination of Argentina’s economy before 1930. The core point of the chapter is that Argentina
was rich, but not really developed. Like Middle Eastern oil economies over the last 30 years,
Argentina enjoyed the prosperity brought by enormous natural resources, but did not have other
attributes, like education and machinery. Llach, however, also shows that investment was
increasing during the 1920s, which suggests that without the global downturn of the 1930s,
Argentina might have ended up far more like the United States or Canada.
The following Campante and Glaeser essay applies different methods but arrives at roughly
similar conclusions. That essay contains two different parts. The first part focuses on two
cities—Buenos Aires and Chicago. These two places looked extremely similar in 1900 and
played similar functions in the economies of Argentina and the American Midwest. Yet there
were significant differences in the two cities, even in 1900, for Chicago was far more educated,
far more capital intensive and clearly on the world’s technological frontier.
The paper’s second section is a coarse statistical exercise that asks whether Argentina’s
economic growth between 1900 and 2000 can be “explained” by the country’s attributes as of
14 https://www.onudi.org.ar/fileadmin/user_media/Publications/IDR_2009_print.PDF