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Stabilization and Growth under Dictatorship: The Experience of Franco's Spain

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  • Prados de la Escosura, Leandro
  • Rosés, Joan R.
  • ,

Abstract

Stabilizing and liberalizing policies are key elements of the Washington Consensus. This paper adds a historical dimension to the ongoing debate by assessing the economic impact of market-oriented reforms undertaken during General Franco?s dictatorship, the 1959 Stabilization and Liberalization Plan. Using an index of macroeconomic distortions (IMD) the relationship between economic policies and the growth record is examined. Although a gradual reduction in macroeconomic distortions was already in motion during the 1950s, the 1959 Plan opened the way to a new institutional design that favoured a free-market allocation of resources and allowed Spain to accelerating growth and catching up with Western Europe. Without the 1959 Plan, per capita GDP would have been significantly lower in 1975.

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  • Prados de la Escosura, Leandro & Rosés, Joan R. & ,, 2010. "Stabilization and Growth under Dictatorship: The Experience of Franco's Spain," CEPR Discussion Papers 7731, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:7731
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    More about this item

    Keywords

    Macroeconomic policy; Stabilization; Liberalization; Growth; Dictatorship; Anti-market policies; Spain;
    All these keywords.

    JEL classification:

    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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