Over the years, the long-lasting declination of Argentina has remained a puzzle for social science researchers as well as for the general public. At the beginning of the 20th century Argentina was one of the top-ten richest countries in the world, accounting for 7 percent of the world's exports and for half of the Gross Domestic Product of Latin America. In this book, Vito Tanzi not only describes and analyzes several key and dramatic episodes of the economic life of Argentina in the last 60 years such as mega inflations, hyperinflations, currency crises and sovereign debt default but also dares to conjecture on the causes of its decadence.
This book is an updated edition of Vito Tanzi's Argentina: an economic chronicle (2007) with four new chapters that cover the evolution of the economy after the default of 2002, the controversial period of the Kirchners' presidencies and the challenges facing the current Macri administration. This new edition comes at the right moment, when demand for understanding the Argentina puzzle is increasing since the country is facing another currency crisis featuring twin deficits. The book has a nontechnical and non-academic approach. There are no equations, no figures but an enjoyable prose that mixes solid economic analysis with good doses of funny working and travel anecdotes written with evident affection for the country.
Tanzi is a privileged and keen observer of the Argentina decadence. He visited the country at least 30 times from 1969 and spent cumulatively several months there in different capacities but mainly as senior staff member of the IMF, which gave him the opportunity to have a direct dialogue with presidents, ministers, politicians, scholars, artists, journalists and also with taxi drivers and tourist guides.
Deliberately, the economic chronicle starts with a description of the Peron administration from 1946 to 1955. Tanzi points out that Peron's policies promoted and legislated an economic role of the state that required a huge public spending that could only be financed with extraordinary revenues like the ones that were available to Peron in his first presidential period: enormous amount of international reserves accumulated during WWII and large rents from the exports of commodities. Since then, Tanzi claims, fiscal cycles became a distinctive feature of the Argentine economy. In general, the administrations following Peron's era faced different circumstances from Peron's on the revenue...