The 'Argentine Failure' from a comparative perspective: The role of TFP

GONZÁLEZ, GERMÁN HÉCTOR; VIEGO, VALENTINA

REVISTA DE HISTORIA ECONOMICA/JOURNAL OF IBERIAN AND LATIN AMERICAN ECONOMIC HISTORY

Cambridge University Press

Lugar: Cambridge; Año: 2011 vol. 29 p. 301 - 326

0212-6109

The aim of this paper is to propose a new interpretation of the ?Argentine Failure? based on development accounting and econometrical approaches frequently used in the current cross-country income differentials literature. The main results are as follows: The development process of Canada ?in term of per capita GDP- moved away from the Argentine economy around 1918, but there was a structural change in the determinants of aggregate productivity in around 1935 that led Argentina to take a diverging path. The recovery ?through better performance of aggregate productivity- was not possible after 1940. Neither the idea of an Argentine Government with excessive size nor the thesis of political instability, seem to be significant to explain their differing performances. The results give support to the idea that Argentina fell into a ?staple trap?, meanwhile Canada entered into a successful path due to the adjacency and political proximity with a bigger and complementary economy