WHY DID ARGENTINA STAGNATE AND CHILE RESURGE?(in Japanese)

In 1820, many people thought that the development of Argentina and Chile would be as smooth as that of the United States. What went wrong? If we compare Argentina and Chile to some European countries, we can see examples of rich countries gradually receding. In 1910, the per capita GDP of Argentina was 80 percent of that of the United Kingdom, a figure that exceeded that of Germany. Additionally, Argentina's GDP surpassed that of Chile by 50 percent at that time. The growth rate of Chile, however, has accelerated since the 1980s, and the per capita GDP of Chile exceeded that of Argentina in 2000. Why did Argentina and Chile recede in economic development? Why, since the 1980s, has Argentina stagnated more seriously while the growth rate of Chile accelerated? Generally speaking, differences between intervention economic policies and market- oriented economic policies can explain the differing economic performances of the two countries, because the growth rates of the two were low when both countries adopted market intervention policies, and the economic performance of Chile went above that of Argentina when Chile adopted market-oriented policies. The difference between Argentina and Chile, however, cannot be explained only by the difference of the policies, because both countries experienced large economic fluctuations even after Chile adopted its market-oriented economic policies. This paper argues that the fluctuation can be explained by "false" capital imports induced by the fixed exchange rate system. The false capital imports could damage the economy more seriously than President Peron's intervention policy did sometime around 1950, which was initiated by the significant wealth accumulated in the 1940s. Once the past wealth was spent, it did not affect the economy, but false capital imports are really a kind of "borrowed" wealth from the future. The borrowed wealth could persistently affect the economy. Economic prosperity induced by false capital imports under the fixed exchange rate system in Argentina in the 1990s could hurt its economy more than Peron's illusions did. The difference between Chile and Argentina can be explained by the fact that Argentina had the illusion of easy economic success created by Peron, but Chile did not. It is difficult to destroy that illusion. Additionally, Argentina reproduced another illusion. This could make the difference of the two countries even more pronounced.