Agriculture and Economic Growth in Argentina, 1913-84

In 1982 Dominga Cavallo and Yair Mundlak received an award for quality of research discovery from the American Agriculture Economics Association for IFPRI Research Report 36, Agriculture and Economic Growth in an Open Economy: The Case of Argentina. The research was sponsored jointly by IFPRI and the Instituto de Estudios Economicos Sobre la Realidad Argentina y Latinoamericana (IEERAL) of the Fundacion Mediteranea, and it in turn built on earlier prize-winning research by Mundlak, presented in Research Report 6, Intersectoral Factor Mobility and Agricultural Growth. The model developed for the study makes it possible to explore the effects of policies directed at agriculture as well as general macro and trade policies, taking into account interaction with other sectors of the economy. IFPRI and IEERAL have again cooperated in sponsoring this research, which is and expansion of the earlier work. Yair Mundlak, Dominga Cavallo, and Roberto Domenech apply the model to a larger body of data, extending the time period coverted from 1946-73 to 1913-84 in order to measure the effects of Argentina’s macro and trade policies during the Great Depression and the volatile 1970s and 1980s. In this segment of the research, government is presented as a separate sector. Thus the effect of government actions, such as consumption, investment, the deficit, and its financing, in the private sector are evaluated. The message that emerged for agriculturally based economies is clear. Inward-looking policies that gave high protection to the industrial sector and taxed agricultural exports, reinforced by expansionary macroeconomic policies, severely restricted the overall growth of Argentina. This study on Argentina is part of IFPRI’s research program on trade and macroeconomic linkages and agricultural growth. Other country studies include Chile, Colombia, Nigeria, Pakistan, the Philippines, and Thailand