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Contract enforcement and Argentina's long-run decline

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  • Prados de la Escosura, Leandro
  • Sanz Villarroya, Isabel

Abstract

Argentina has slipped from being among the ten richest countries in the world by the eve of World War I to its current position close to developing countries. Why did Argentina fall behind? In this paper we employ a structural model to investigate the extent to which contract enforcement, as captured by Clague, Keefer, Knack, and Olson's "Contract Intensive Money", conditioned broad capital accumulation and economic growth in Argentina and, consequently, the country's relative international position. Our results suggest that poor contract enforcement played a major role in Argentina's unique experience of long-run economic decline.

Suggested Citation

  • Prados de la Escosura, Leandro & Sanz Villarroya, Isabel, 2006. "Contract enforcement and Argentina's long-run decline," IFCS - Working Papers in Economic History.WH wp06-06, Universidad Carlos III de Madrid. Instituto Figuerola.
    • Handle: RePEc:cte:whrepe:wp06-06
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    Cited by:

    1. Campos, Nauro & Karanasos, Menelaos & Tan, Bin, 2008. "Two to Tangle: Financial Development, Political Instability and Economic Growth in Argentina (1896-2000)," CEPR Discussion Papers 7004, C.E.P.R. Discussion Papers.
    2. Campos, Nauro F. & Karanasos, Menelaos G. & Tan, Bin, 2009. "From Riches to Rags, and Back? Explaining the Growth Trajectory of Argentina since the 1890s," Proceedings of the German Development Economics Conference, Frankfurt a.M. 2009 37, Verein für Socialpolitik, Research Committee Development Economics.
    3. Sebastián Fleitas & Andrés Rius & Carolina Román & Henry Willebald, 2013. "Contract enforcement, investment and growth in Uruguay since 1870," Documentos de Trabajo (working papers) 13-01, Instituto de Economía - IECON.

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