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Structural change in Argentina, 1935–60: The role of import substitution and factor endowments

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  • Debowicz, Dario
  • Segal, Paul

Abstract

This paper investigates structural change in Argentina between 1935 and 1960, a period of rapid industrialization and of relative decline of the agricultural sector. This has been the subject of a long-running debate that has exercised Argentine economists throughout the twentieth century, and remains politically salient today. It has been argued that this this relative decline of agriculture was due to the policies of import-substituting industrialization (ISI). This was also the period, however, that directly followed the closing of the land frontier, resulting in a declining land-labor ratio as the population continued to grow. We use a stylized, dynamic three-sector computable general equilibrium (CGE) model of the period to analyze the respective effects of ISI policies and the observed changes in factor endowments on the structure of the economy. We find that the declining land-labor ratio was more important than ISI in explaining relative stagnation in agriculture. ISI gave a substantial boost to manufacturing but primarily at the expense of nontraded services, rather than of agriculture.

Suggested Citation

  • Debowicz, Dario & Segal, Paul, 2012. "Structural change in Argentina, 1935–60: The role of import substitution and factor endowments," IFPRI discussion papers 1212, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:ifprid:1212
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    File URL: http://www.ifpri.org/sites/default/files/publications/ifpridp01212.pdf
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    1. Kanlaya J. Barr & Bruce A. Babcock & Miguel A. Carriquiry & Andre M. Nassar & Leila Harfuch, 2011. "Agricultural Land Elasticities in the United States and Brazil," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(3), pages 449-462.
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    3. Meckl, Jürgen, 1999. "Structural change and generalized balanced growth," Discussion Papers, Series I 298, University of Konstanz, Department of Economics.
    4. Breisinger, Clemens & Diao, Xinshen & Thurlow, James, 2009. "Modeling growth options and structural change to reach middle income country status: The case of Ghana," Economic Modelling, Elsevier, vol. 26(2), pages 514-525, March.
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    6. Kelley, Allen C & Williamson, Jeffrey G, 1973. "Modeling Economic Development and General Equilibrium Histories," American Economic Review, American Economic Association, vol. 63(2), pages 450-458, May.
    7. Taylor, Alan M., 1992. "External Dependence, Demographic Burdens, and Argentine Economic Decline After the Belle Époque," The Journal of Economic History, Cambridge University Press, vol. 52(4), pages 907-936, December.
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    Cited by:

    1. Jorge Niosi, 2014. "The construction of national systems of innovation: a comparative analysis of Argentina and Canada," Chapters, in: Gabriela Dutrénit & Judith Sutz (ed.), National Innovation Systems, Social Inclusion and Development, chapter 12, pages 349-379, Edward Elgar Publishing.
    2. Yury Simachev & Mikhail Kuzyk & Nikolay Zudin, 2016. "Import Dependence and Import Substitution in Russian Manufacturing: A Business Viewpoint," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 10(4), pages 25-45.

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    Keywords

    structural transformation; Computable general equilibrium (CGE); Industrialization; agricultural sector; Import substitution; Economic history;
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