Exceptional Argentina Di Tella, Glaeser and Llach - Thomas Piketty

More documents

Recommendations

Info

CHAPTER SIX Peronist Beliefs and Interventionist Policies Rafael Di Tella Harvard Business School, NBER and CIfAR Juan Dubra Universidad de Montevideo Abstract We study the logic of Peronist interventionist polices and the beliefs that support them. Instead of a comprehensive approach, we focus on three elements. First, we study beliefs and values about the economic system present in Peron’s speeches during the period 1943-55. Second, we study survey data for the 1990’s on the beliefs of Peronist and Non Peronist voters in Argentina and Democrat and Republican voters in the US. While income and education suggest that Peronists (in relative terms) look like the American Democrats, their beliefs and values suggest that Peronists are the Argentine equivalent of the Republicans. Third, given that these beliefs are non-standard (for economists) we present a model formalizing some of their key aspects (for example, the idea that there is something more than a material exchange in labor relations). _____________________ * Rafael Di Tella, Harvard Business School, Boston, MA 02163, US. rditella@hbs.edu Juan Dubra, Universidad de Montevideo, Montevideo, Uruguay. Dubraj@um.edu.uy. We thank Esteban Aranda for suggestions and exceptional research assistance and Andres Velasco for introducing us to Acario Cotapos. We also thank Juan Carlos Torre, Torcuato Di Tella, Lucas Llach, as well as participants at the Argentine Exceptionalism seminar in Cambridge 2009, for helpful comments and discussions. For support, Di Tella thanks the Canadian Institute for Advance Research.
I. Introduction In a seminal study, Diaz Alejandro (1970) blamed Argentina’s relative decline to the low rates of capital accumulation which followed the replacement of the export-oriented, market friendly policies by populist, interventionist policies around the time of the great depression (see also Taylor, 1994). In this account, broadly, Argentina’s relative decline during the 20 th century can be attributed to the prevalence of populist policies supplied by leaders who often exploit a mass of uneducated, poor voters. Peron and his followers play a prominent role in such narratives of Argentina’s exceptional underperformance. There are interesting variations in this basic account. For example, it is often claimed that policymaking, even during relatively centrist administrations, was complicated enormously by the presence of a populist party demanding government intervention. And that political instability arising from attempts at suppressing the Peronists, particularly since the 1960’s and until the 1980’s, has been responsible for the low levels of private investment and weak overall economic performance of the country. In other words, in this account the problem has been Argentina’s populist tradition which has fueled bad policies and political instability. A troubling aspect of this account, however, is that it does not explain why voters find populist policies appealing. As stated, this narrative soon has to conclude that democracy is not a reasonable way to elect the country’s leaders. Paradoxically, it should somehow also question the benefits that can be expected from free markets because the judgment of market participants cannot really be trusted. Indeed, humans in this account must have some type of dual type of rationality: on the one hand they are able to make reasonable use of information so that markets are in fact quite efficient, but on the other hand they are unable to see that the leaders they elect are bad for them. Rationality in this account of democratic capitalism is a bit like the Cheshire cat of Alice in Wonderland: now you see it, now you don’t. In brief, while it is clear that populist policies play a big role in Argentine exceptionalism by interfering with capital accumulation, it is less clear in this narrative what the logic of populist policies is and what explains their popularity. Our study is concerned with these questions. Economists have not made significant progress in understanding Latin American populism because they tend to find the interest group theory of policy quite compelling. In the standard account, bad policies are put in place by special interests and voters would get rid of them if only they cared to vote or were able to organize. Interestingly, however, voters do vote in large numbers (by and large, voting is compulsory in Latin America), so the empirical appeal of the interest group theory of policy formation, at least in its simplest form, is low. A more promising approach accepts that populist policies are in fact appealing to (at least some group of) voters and tries to explain this appeal within a rational model (by which we mean a model where agents try to do the best they possibly can, given their objectives –which may be broader than material payoffs). That is, broadly, the strategy we adopt here. The demand for populism is central to the political and economic legacy of Peronism which has marked the period going from Peron’s
Page 1 and 2:
Exceptional Argentina Di Tella, Gla
Page 3 and 4:
A third explanation of Argentina’
Page 5 and 6:
Maddison's "Western Offshoots" by l
Page 7 and 8:
A final point on this mechanistic a
Page 9 and 10:
GDP in 1900 at 12,100 (in constant
Page 11 and 12:
nationalized railways and banks, to
Page 13 and 14:
country interacted with initial con
Page 15 and 16:
1900. As there is an extremely stro
Page 17 and 18:
Between the 1940s and 1970s income
Page 19 and 20:
particularly in terms of food consu
Page 21 and 22:
Even before the 2001 crisis, Argent
Page 23 and 24:
Scandinavia and Northern Europe the
Page 25 and 26:
Figure 4. A modified Human Developm
Page 27 and 28:
Figure 6. Per capita GDP across Arg
Page 29 and 30:
production 15 . Moreover, beyond st
Page 31 and 32:
Figure 10. Average weight of export
Page 33 and 34:
etween the prewar export-led growth
Page 35 and 36:
which was wholly bound to local dem
Page 37 and 38:
protectionism", certainly stronger
Page 39 and 40:
agricultural pastures and cropland
Page 41 and 42:
far. Argentina's differential popul
Page 43 and 44:
Appendix Figure A. 1. Argentina's r
Page 45 and 46:
Peru 35 38 25 34 34 34 32 29 26 27
Page 47 and 48:
Like the Llach paper, the Campante
Page 49 and 50:
I. Introduction Both Buenos Aires a
Page 51 and 52:
across the ocean. Over the course o
Page 53 and 54:
Buenos Aires’ hinterland rose dra
Page 55 and 56:
significantly greater education lev
Page 57 and 58:
Why is there such a difference in l
Page 59 and 60:
illion dollars today). Each Chicago
Page 61 and 62:
Chicago also appears to have been a
Page 63 and 64:
casualties. Roca secured the presid
Page 65 and 66:
capital to St. Petersburg he was pr
Page 67 and 68:
and the logarithm of per capita GDP
Page 69 and 70:
Moreover, years of schooling today
Page 71 and 72:
y its overwhelming political import
Page 73 and 74:
200 Figure 2a: Annual Wage Data 187
Page 75 and 76:
Figure 3: Real Monthly Wages in Chi
Page 77 and 78:
Log GDP per capita 2000 5 6 7 8 9 1
Page 79 and 80:
Figure 7 Log GDP per capita 2000 7
Page 81 and 82:
Table 2: Top 5 Industries in Chicag
Page 83 and 84:
Table 4: 19th Century Variables and
Page 85 and 86:
A simple calculation suggests that
Page 87 and 88:
toy model with a minimum of paramet
Page 89 and 90:
were lifted, but import taxes remai
Page 91 and 92:
to compute that the MPK term above
Page 93 and 94:
versus foreigners, on most occasion
Page 95 and 96:
X institutions policies income p
Page 97 and 98:
series variation. The coincidence o
Page 99 and 100:
Figure 1—The Great Divergence and
Page 101 and 102:
Figure 3—Trade taxes
Page 103 and 104:
Transition Remarks The previous ess
Page 105 and 106:
CHAPTER FOUR Argentine Trade Polici
Page 107 and 108:
Argentine comparative advantage lie
Page 109 and 110:
thousands of product lines in Argen
Page 111 and 112:
Japan). Third, the agricultural pro
Page 113 and 114:
different preferences over trade pr
Page 115 and 116:
two nomenclatures had to be manuall
Page 117 and 118:
esult, soybeans were finally adopte
Page 119 and 120:
Figure 1 Trade Openness Exports + I
Page 121 and 122:
Figure 5 Relative Sectoral Protecti
Page 123 and 124:
Figure 7 Average Export Taxes 0 10
Page 125 and 126:
Figure 9 Average Export Taxes at 2-
Page 127 and 128:
Figure 11 Evolution of Argentine Ag
Page 129 and 130:
Figure 13 Yields in Agriculture: Wh
Page 131 and 132:
Table 2 Livestock per Capita 1895 C
Page 133 and 134:
Table 5 Mean Share of Exports (Impo
Page 135 and 136:
Table 7 Tariff Statistics for perio
Page 137 and 138:
Table 9 Evolution of Industrial Pro
Page 139 and 140:
CHAPTER FIVE Path-Dependent Import-
Page 141 and 142: actors, and they were demanding pro
Page 143 and 144: the primary sector, using land and
Page 145 and 146: Figure 1: The Long Run: Four Region
Page 147 and 148: Finally, in the reversal of pattern
Page 149 and 150: Figure 3: Medium Run Preferences ov
Page 151 and 152: sector to give rise to a protection
Page 153 and 154: technological improvements or incre
Page 155 and 156: Argentina did relatively well when
Page 157 and 158: World War, a second globalization e
Page 159 and 160: Argentine primary sector and ensure
Page 161 and 162: Clearly, world market conditions we
Page 163 and 164: for the years to come. The most imp
Page 165 and 166: governments zigzagged in their poli
Page 167 and 168: public spending on infrastructure s
Page 169 and 170: understand the rise of the urban-ru
Page 171 and 172: To sum up, by the beginning of the
Page 173 and 174: has a comparative advantage in the
Page 175 and 176: L λ = m L K κ = m K That is, λ i
Page 177 and 178: K c a = 1− α 1−α T A ( κ )
Page 179 and 180: Given a set of parameters ϒ , φ a
Page 181 and 182: consumption of good i. For any agen
Page 183 and 184: Proposition 3 In the short run, pro
Page 185 and 186: ρ 1/ 1 ρ ρ 1 ( ξ ξ ) 1 TT K ,
Page 187 and 188: Up to 2008, the FPV government had
Page 189 and 190: negative correlation between the pr
Page 191: policies would, supposedly, eviscer
Page 195 and 196: terms, Peronist beliefs in the 1990
Page 197 and 198: Several authors have emphasized the
Page 199 and 200: foreign capital and trade as the gl
Page 201 and 202: of already available information. A
Page 203 and 204: having the need to do more than wak
Page 205 and 206: Argentines (who implement these pol
Page 207 and 208: opinion about elements of capitalis
Page 209 and 210: intense (the proportion is under 1.
Page 211 and 212: involved in social ordering that wi
Page 213 and 214: cost of the deviating firm, since w
Page 215 and 216: Admissible Region Bounds on w b Nex
Page 217 and 218: The previous proposition may be par
Page 219 and 220: and note that Peron insists on the
Page 221 and 222: Appendix 2: Definitions of Variable
Page 223 and 224: Table II: The Beliefs of Peronists
Page 225 and 226: Transition Remarks The previous cha
Page 227 and 228: CHAPTER SEVEN A Short Episodic Hist
Page 229 and 230: the income distribution between 193
Page 231 and 232: empirical evidence and on existing
Page 233 and 234: of commodities. The country was off
Page 235 and 236: accounts increased by 8% between 19
Page 237 and 238: Argentina in 1942 (4.1%) is not ver
Page 239 and 240: This change in inequality is also r
Page 241 and 242: 1982, when Mexico’s default on it
Page 243 and 244:
1995. While growth bounced back qui
Page 245 and 246:
The main characteristics of this ep
Page 247 and 248:
skilled workers that more than offs
Page 249 and 250:
Household Expenditure Survey. An in
Page 251 and 252:
The relationship between internatio
Page 253 and 254:
machinery and equipment can acceler
Page 255 and 256:
occurred not only in production tec
Page 257 and 258:
a relative abundance of rents to sh
Page 259 and 260:
even when the number of well-off in
Page 261 and 262:
and similar patterns emerge when co
Page 263 and 264:
This chapter described the level an
Page 265 and 266:
Transition Remarks Economic success
Page 267 and 268:
CHAPTER EIGHT Why do Argentines tru
Page 269 and 270:
in the 1970s and 1980s. Despite the
Page 271 and 272:
Figure 5. Percentage of the populat
Page 273 and 274:
analysis of the Argentinean and Chi
Page 275 and 276:
observationally equivalent individu
Page 277 and 278:
the low rank policeman. 13 4. The C
Page 279 and 280:
Figure 7. Share of people having a
Page 281 and 282:
6. Why did the Argentinean Police d
Page 283 and 284:
instability, σ, a worried leader h
Page 285 and 286:
the deeper question of why the Arge
Page 287 and 288:
Table 2. Comparative facts for cano
Page 289 and 290:
of formal education, whereas in the
Page 291 and 292:
only bargaining tool to get money.
Page 293 and 294:
Table 6. Tierra del Fuego Subinspec
Page 295 and 296:
4. Police deaths during the 20th ce
Page 297 and 298:
Of course, these conclusions depend
Page 299 and 300:
“stop go” dynamics 4 ). In fact
Page 301 and 302:
income distribution and earnings gr
Page 303 and 304:
Figure 2. Basic Statistics Food Clo
Page 305 and 306:
Table 2 Dep. Var.: Share of food Sm
Page 307 and 308:
Figure 3. Variety in food retailing
Page 309 and 310:
Table 3 Dep. Var.: Share of food at
Page 311 and 312:
3.3 Income distribution effects The
Page 313 and 314:
Figure 6. Individual Effects Using
Page 315 and 316:
Expenditure Income 5000 6000 4000 4
Page 317 and 318:
Figure 10. Income distribution Dens
Page 319 and 320:
Appendix A: Estimation strategy Est
Page 321 and 322:
w ijt where [ ln( 1+ ∏ ) − ln(
Page 323 and 324:
2.2 Income distribution effects Fol
Page 325 and 326:
Appendix B: The data To run our est
Page 327 and 328:
Appendix C: Additional tables C1: B
Page 329 and 330:
C3: Table 3 coefficients Dummy for
Page 331 and 332:
CONCLUSION 20 th century Argentina
Page 333 and 334:
can be harbingers of worse things t
Page 335 and 336:
Ahumada, Hildegart, Alfredo Canaves
Page 337 and 338:
Barro, Robert J. 2005. “Rare Even
Page 339 and 340:
Burzaco, Eugenio et al. 2004. “Ma
Page 341 and 342:
Cortés Conde, Roberto and María M
Page 343 and 344:
Di Tella, Rafael, Juan Dubra and Ro
Page 345 and 346:
Gaggero, Horacio and Alicia Garro.
Page 347 and 348:
Gerchunoff, Pablo, Fernando Rocchi
Page 349 and 350:
James, Daniel. 1988. “October 17
Page 351 and 352:
Maddison, Angus. 2006. The World Ec
Page 353 and 354:
Piketty, T. 2003. “Income Inequal
Page 355 and 356:
Spiller, Pablo and Mariano Tommasi.
Page 357:
Williamson, Jeffrey G. 1995. “The
show all

Exceptional Argentina Di Tella, Glaeser and Llach - Thomas Piketty

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?