In a recent Kaizen interview, Argentine entrepreneur Enrique Duhau discussed some of the challenges of doing business in a country with a politicized economy. I was reminded of Campante and Glaeser’s comparative study of Buenos Aires and Chicago, two cities that were very similar in the nineteenth century. They were similar in population size, with immigrants from all over, near great amounts of fertile land, and were important transportation hubs.
Yet, as Campante and Glaeser put it, “despite their initial similarities, Chicago was vastly more prosperous for most of the 20th century.” Why? Check out their paper at the NBER site: Filipe Campante, Edward L. Glaeser, “Yet Another Tale of Two Cities: Buenos Aires and Chicago”, NBER Working Paper No. 15104, Issued in June 2009.
The image is of the port of Buenos Aires, circa 1912. Click to enlarge.
Related:
* The two Americas: 13 countries’ GDP. Why are the North American countries spectacularly more prosperous than the Latin American countries? Why are Mexico, Brazil, and Argentina on average twice as wealthy as Venezuela, Cuba, and Peru? And why are the latter three nations on average twice as rich as Bolivia?
* On J. H. Elliott’s 2006 Empires of the Atlantic World: Britain and Spain in America 1492-1830 (Yale University Press). Elliott’s explanatory hypothesis: Spain’s empire in America was an “empire of conquest” while Britain’s was an “empire of commerce” (p. xv). Though Brazil was originally a Portuguese colony, so some additional connections need to be made.
* Argentina, Hong Kong, and the psychology of belief: Resource-poor Hong Kong’s relatively laissez-faire free market has taken it from poverty to riches. Resource-rich Argentina’s experiments in statism have taken it from prosperity to decline and semi-functionality.
* Crank economics and astrology in Bolivia: Ugghh.
Wow, this is really useful stuff. Thanks for posting.