Argentina’s Travails of Democracy and Market Economy

Abstract

Between 1980 and 1991, the growth rate of Argentina was -3.2 percent. The only other country in the Western Hemisphere which outstripped Argentina’s negative growth rate was Guyana which recorded -3.3 percent during the same period.¹ The dismal economic decline did not begin in the 1980s, however. Rather, it was in the offing by the early 1960s, after the decades of Argentina’s second phase of populism, or the “classic” phase under General Juan Domingo Perón. The governments, both civilian and military in between, had sought to unravel the Peronist structure with little success. In fact, the tradition of the statist economic and social welfare policies thrived until the mid-1980s, and Argentina was among the world’s most closed economies. Of the 126 countries studied by the World Bank, Argentina was 117th in the trade/GDP ratio, or the country openness index. Only the USSR, Burma, Bangladesh, Iran, and Iraq ranked lower. In the Western Hemisphere, however, Argentina was ahead of Brazil and the Dominican Republic.²