Published by EH.NET (November 2005)

Juan Carlos de Pablo, La econom?a argentina en la segunda mitad del siglo XX (The Argentine Economy in the Second Half of the Twentieth Century). Buenos Aires: La Ley, 2005. 2 volumes, xlii + 1084 pp. and xxx + 1233 pp. 135 Argentine pesos (about $47) (paperback), ISBN: 987-03-0618-7.

Reviewed for EH.NET by Kurt Schuler, U.S. Treasury Department.

There are books meant to be read from cover to cover, and there are those for dipping into here and there. As Juan Carlos de Pablo acknowledges, most readers of his massive work will be dippers. It is a mine of facts and will be an indispensable reference for subsequent researchers.

The book is both broader and narrower than its title indicates. It is broader because its coverage of key themes extends back to the nineteenth century and into the early twenty-first century, although it focuses on the fifty years from the start of Juan Per?n’s first term as president in 1946 to the end of Carlos Menem’s first term as president in 1995. The book is narrower than its title indicates because it not a study of entrepreneurs, businesses, or changes in economic sectors over time. Rather, it is a study of economic policies. Because government intervention in Argentina’s economy has been extensive since the 1930s, the story of necessity involves some description of how the main sectors of the economy have fared.

The three major parts of the book are “The Facts,” 1700 pages of historical description and analysis; “Reflections,” more than 200 pages of thoughts about economic history and policy as exemplified by Argentina’s experience; and reference matter of nearly 400 pages.

An introductory chapter summarizes economic aspects of Argentina’s first 130 years of independence in some detail.[1] After that, chapters on the years 1946 to 1995 follow a common structure. Each administration gets its own chapter or pair of chapters. Each chapter typically surveys the international scene; the domestic political context; policymakers; measures adopted (subdivided into various categories); the implicit strategy of economic policy; results; and some concluding remarks. The common structure of the chapters makes it easy for readers who want to follow a particular thread, such as price controls or labor relations, through successive administrations. It also helps compensate for the lack of an index. De Pablo discusses the years 1996 to 2003 in far less detail, because he thinks insufficient time has passed to allow for judicious historical perspective.

The “Reflections” ponder themes arising from Argentina’s historical experience, such as Argentina’s economic decline relative to the world average and how ideas on economic policy originate and spread. Some of the themes restate ideas de Pablo has written about elsewhere, but in publications that will be familiar to few readers outside Argentina.

The reference matter contains two lengthy appendixes listing laws and decrees on economic matters by date and by subject. Argentine laws and decrees are available through online search engines, but de Pablo’s book will be useful to any researcher who wants to save time looking for key enactments. The appendixes are an enormous labor in themselves, apart from the reading of them de Pablo did to incorporate brief descriptions of important laws and decrees in the main text. The main text includes extensive macroeconomic statistics, though they are scattered through the book.

De Pablo was born about the time that a military coup brought to power a group of officers among whom was Juan Per?n. De Pablo has spent his life first simply experiencing and then, as an adult, pondering the consequences of Per?n on Argentina’s economy and political system. One way to read the book is as an extended meditation on the durability of Per?n’s influence. Peronism was never a coherent ideology, but it proved a sufficiently durable melding of interest groups that the Peronist Party is still Argentina’s dominant political force. Per?n was president from 1946 to 1955 and again from 1973 until his death in 1974. His successors, both after his first period in office and his second, spent much of their time trying to revise Per?n’s policies so as to correct economic imbalances arising from them. They found themselves battling an iron triangle of businesses, unions, and government officials, each group determined to preserve its narrow privileges despite the inefficiencies they imposed on the wider economy.

During the period de Pablo surveys, Argentina’s economy continued to grow, on average. However, it grew more slowly than the world as a whole or than Argentina’s neighbors — Brazil and Chile. De Pablo’s voluminous documentation suggests the cause: a multitude of regulations choked economic activity. Regulation extended to ridiculous specifics. A decree of 1947 required restaurants to reduce prices 10 percent or offer an economy menu “composed of a soup course, two main courses and dessert,” with courses selected from those specified in the decree. The price of the menu was set at levels ranging from 1.80 pesos for a category 4 (cheap) restaurant to 5 pesos for a luxury restaurant (pp. 308-09). Laws changed with bewildering frequency, creating temporary advantages for people quick enough to spot them and draining wealth from the slow or unlucky. The long-term effect was to create pervasive disregard for the law, which Argentines came to view as a hindrance to earning a living rather than an aid to securing property. Part and parcel of the frequent changes in laws was rapid turnover among ministers of finance, presidents of the central bank, and to some extent presidents of the nation. De Pablo has talked to most of them, and his first-hand observations are useful, because economic policy in Argentina has been unusually dependent on the personalities of policymakers.

In the late 1970s and 1980s the economy entered a prolonged time of troubles. Persistent economic decline and extreme inflation created the political conditions for the far-reaching reforms undertaken by Peronist president Carlos Menem, who served from 1989 to 1999. A recession that began near the end of Menem’s term became a long depression under his successor, Fernando de la R?a. Whether Menem’s reforms were responsible for the depression is a matter of heated debate in Argentina. What is not in dispute is that in the last five years Menem’s successors have reversed a number of his reforms, notably some privatizations and the “convertibility” monetary system, which rigidly linked the peso to the U.S. dollar and removed exchange controls. Argentina has moved toward policies more like those of Per?n.

The book is more a chronicle than a master narrative designed to argue a thesis, but besides the points I have already mentioned, some other important themes emerge. One is the costs of Argentina’s defensive economic posture. For two generations until the Great Depression, Argentine policy makers sought greater involvement in the world economy as the path to prosperity. They encouraged foreign investment, European immigration, and international trade. When the Depression dealt a severe setback to outward-looking policies, economic policy became defensive, concerned with attaining economic stability by promoting self-sufficiency. It has never recovered the sense of outward orientation that made Argentina a fast-growing economy a century ago. Argentines remain torn between recognition of the dynamism that greater involvement in the world economy can impart and fear of the volatility it can transmit.

A point that emerges by omission is the absence of attempts to use fundamental tax reform as a way of encouraging economic growth. With the partial exception of the Menem administration, no Argentine government has tried broad-based reductions in tax rates over a period of several years, after the fashion of the United States on a few occasions since the early 1960s or several Eastern European countries from the 1990s onward.

Yet another theme is the increasing influence of economists. High inflation in the 1970s and 1980s made ordinary Argentines acutely sensitive to matters of economic policy and gave economists an audience in newspapers, radio, and television. At the same time, governments increasingly asked for economists’ help in trying to devise economic reforms that would be politically palatable. Economists changed from spectators to shapers of policy. The change seems permanent. De Pablo’s book will be useful both to economists who want to know where Argentina has come from and to those who want to shape where it is going.


1. In the chapter, page 121 of volume 1 is misprinted. I hope de Pablo or the publisher will post the proper text on the Internet for interested readers.

Kurt Schuler is an international economist in the U.S. Treasury Department. The views here are his personal opinions, which are not necessarily those of the Treasury.