Institutions, Technology, and Circular and Cumulative Causation in Economics

258 Pages·2013·3.905 MB·English

by  Henning Schwardt (auth.)

Institutions, Technology, and Circular and
Cumulative Causation in Economics
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Institutions, Technology,
and Circular and
Cumulative Causation
in Economics
Henning Schwardt
Institute for Institutional and Innovation Economics (iino) University of Bremen
© Henning Schwardt 2013
Softcover reprint of the hardcover 1st edition 2013 978-1-137-33387-2
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First published 2013 by
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ISBN 978-1-349-46243-8 ISBN 978-1-137-33388-9 (eBook)
DOI 10.1057/9781137333889
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Contents
List of Figures i x
Acknowledgments x
1 Introduction 1
1.1 Development as a distinctive phenomenon 1
1.2 Limiting factors and shifting policy focuses 3
1.3 Institutions and technology 4
1.4 Economic development 5
1.5 Changing structures and context-dependent influences 7
1.6 Argentina 8
2 Concepts of and Models for Growth and
Development Dynamics 10
2.1 N eoclassical growth models and economic development 13
2.1.1 E xogenous growth models 1 3
2.1.2 E ndogenous growth models 1 5
2.1.3 D iscussion 1 8
2.2 T he ‘high theory of development’ 23
2.2.1 G eneral outline of development economics 2 3
2.2.2 B ig push, balanced growth, unbalanced growth,
and the dual economy 2 5
2 .2.3 D iscussion 2 8
2.3 N ew institutional economics 31
2.3.1 N IE – collective action problems 3 1
2.3.2 N IE – transaction costs 3 4
2.3.3 D iscussion 3 8
2.4 O riginal institutional economics 41
2 .4.1 V eblen’s foundation for an institutional
economics 4 2
2.4.2 D evelopments in the OIE body of theory 4 5
2.4.2.1 I nstitutions 4 5
2.4.2.2 T echnology 4 8
2.4.2.3 C ircular and cumulative causations 5 0
2.4.3 D iscussion 5 1
2.5 S ummary 5 4
v
vi Contents
3 The Analytical Framework: Institutions, Technology,
and Circular and Cumulative Causation 58
3.1 A categorization of growth and development effects 59
3.1.1 Schumpeterian development effects 60
3.1.2 I nvention and innovation, imitation and
entrepreneurs 61
3.1.3 Smithian development effects 63
3.1.4 Arrovian development effects 64
3.1.5 Learning and the longer-term growth trajectory 64
3.1.6 Veblenian development effects 65
3.1.7 Solovian development effects 65
3.1.8 C ircular and cumulative causation between
these development effects 66
3.2 A n evolutionary-institutional model of economic
development 6 7
3.2.1 I nstitutions and economic development 6 8
3.2.2 T echnology – skills 7 0
3.2.3 T echnology – equipment 7 4
3.2.4 I ntegrating the principal influence factors in
processes of development and change 7 9
3.3 C ase studies based on an evolutionary-institutional
model of economic development 84
4 Economic Development in Argentina after 1946 8 6
4.1 M acroeconomic and sectoral development after 1946 90
4.1.1 M acroeconomic development: general growth
performance 9 0
4.1.2 M acroeconomic development: investment 9 6
4.1.3 M acroeconomic development: fiscal accounts and
external sector 9 7
4.1.3.1 F iscal accounts 9 7
4.1.3.2 E xternal sector 1 00
4.1.4 M acroeconomic development: inflation and
unemployment 1 04
4.1.4.1 I nflation 1 04
4.1.4.2 U nemployment 1 06
4.1.5 S ectoral development: changes in sectoral
structure and production 1 08
4.1.5.1 S ectoral structure 1 08
4.1.5.2 S ectoral production 1 09
4.1.6 S ummary and current structures 1 12
Contents vii
4.2 P olitical changes and economic
policies – Juán D. Perón, 1946–1955 115
4.2.1 B ackground of the policy decisions taken 1 16
4.2.2 O utline of Perón’s economic policies 1 17
4.2.3 I nterest groups and political objectives 1 21
4.2.4 I nflation as a sign for persistent structural
problems 1 25
4.2.5 S ummary – the foundation for subsequent
developments 1 27
4.3 P olitical changes and economic policies – the alternation
of military and civilian rule, 1955–1976 128
4.3.1 O verview of the political development of
the period 1 29
4.3.2 T he ‘Revolución Libertadora’
dictatorship, 1955–1958 1 31
4.3.3 T he presidency of Arturo Frondizi, 1958–1962 133
4.3.4 T he presidency of José M. Guido, 1962–1963 136
4.3.5 T he presidency of Arturo U. Illia, 1963–1966 137
4.3.6 T he ‘Revolución Argentina’ dictatorship,
1966–1973 1 39
4.3.7 T he second Peronist government, 1973–1976 141
4.4 P olitical changes and economic policies – ‘El Proceso de
Reorganización Nacional’, 1976–1983 143
4.4.1 P olitical development 1 43
4.4.2 G eneral outline of economic policies 1 44
4.4.3 C onsequences of the policies implemented 1 46
4.5 Political changes and economic policies – the
transition to democracy and its
consolidation 1983–1999 150
4.5.1 T he presidency of Raúl Alfonsín, 1983–1989 150
4.5.2 T he presidency of Carlos S. Menem, 1989–1999 155
4.6 P olitical changes and economic policies – the collapse
and recovery of the economy after 2001–2002 160
4.7 T he general institutional framework 167
4.8 M ain tendencies identified 174
4.8.1 E conomic development until 1975 1 74
4.8.2 P olitical and social developments until 1975 178
4.8.3 E conomic policies after 1975 and their
consequences for development 1 79
4.9 S ummary 1 83
viii Contents
5 Consequences for Development Policy 187
5.1 R ecent development policy focuses 188
5.2 G eneral outlines for development policy 191
5.2.1 Policies and development effects 192
5.2.2 Coordination and dilemma problems 193
5.2.3 Creating capacities and competences 193
5.2.4 Foundations for skill development 194
5.2.5 Access to knowledge and communication
of results 194
5.2.6 Local-level support 195
5.2.7 Overcoming ceremonial structures 196
5.2.8 Dealing with the financial sector 196
5.2.9 Real sector activity and equipment build-up 197
5.2.10 Expectations 197
5.2.11 Context-dependence of policies 198
5.3 C onsequences for development policy in Argentina 199
5.3.1 Broadening industrial structures 199
5.3.2 Mercosur 200
5.3.3 Specialization with a view to structures in Brazil 201
5.3.4 Investment and complementary structures 201
5.3.5 A qualified workforce 201
5.3.6 Choices of courses of study 202
5.3.7 Overcoming ceremonial patterns 202
5.3.8 Summary 203
Notes 2 05
References 2 20
Index 2 41
List of Figures
3.1 O utput volume and structure 7 9
3.2 E conomically motivated behavior 8 0
3.3 C hanges in output volume and structure 81
4.1 G DP after 1946 9 1
4.2 G DP growth rate after 1946 9 1
4.3 G DP per capita after 1946 9 3
4.4 G rowth rate per capita after 1946 93
4.5 C omparison of relative real per capita income
increase, 1954–1974 9 5
4.6 C omparison of relative real per capita
income increase, 1954–2004 9 6
4.7 N ominal investment rate 9 7
4.8 F iscal deficit 98
4.9 E xternal debt 9 9
4.10 I nterest payments 9 9
4.11 E xports plus imports as share of GDP 100
4.12 T rade balance and current account 102
4.13 I mport shares of categories of goods 103
4.14 E xport share by product category 103
4.15 C apital flight 1 04
4.16 C onsumer price inflation rate, 1946–1975 105
4.17 C onsumer price inflation rate, 1976–1991 106
4.18 C onsumer price inflation rate after 1992 106
4.19 U nemployment rate 1 07
4.20 G DP by origin 1 08
4.21 A gricultural production index 1 10
4.22 I ndustrial production index 1 11
ix