Democracy and economic growth

The different sciences, both the so-called “hard” and the so-called “soft”, intervene and converge to try to explain to as many people as possible why? of the occurrence (or not) of the consensual construction of the processes which link the indispensable economic growth to effective progress, then to this latter to real development and, finally, to a continuous and lasting positive evolution of the countries in the long term.

By exploring the many hypotheses raised in this regard, perhaps one of the simplest, if not one of the most vulgar, turns out to be the one that would ultimately best explain the prolonged declines such as those that the country has suffered for several decades, would be the so-called “(voluntary) ignorance” hypothesis of the leaders who make the most relevant public policy decisions.

It is currently very reinforced by the so-called “post-truth”, which admits almost all the “slogans” formulated from the marketing of politics, which before was “the art of the possible” and it turns out today Today any political belief that manages to be accepted by any part of society immediately elevates to the status of reality, without relatively consistent evidence.

Thus, a solid “distorted context” is being built, from an erroneous and persistent point of view, which leads to an erroneous visualization and interpretation of the causes of the problems, fundamentally macroeconomic, of our country.

A solid “distorted context” is being built, from a persistent wrong point of view, which leads to incorrect visualization and interpretation of the causes of the problems.

As an inevitable diversion, it leads to the formulation of misdiagnoses and misguided public policies, repeatedly missing the path to economic growth.

The paradox is that these continuous errors, their own painful results far from producing the rectification of the erroneous orientations of public policies, because of their own condition of failures of ideological utopias to follow at all costs, thus reaffirm the wrong direction; even the political vigor of actions is increased and it enters into continuous “loops” or iterative processes of error, as explained by many political scientists who attempt to formalize the reason for the continued underdevelopment status of many nations, the even doing so, voluntarily or not, sustainable in the long run.

In this sense, the continuous decline, even the permanent very slow relative economic growth of many nations, is explained, in many other authors, by Daron Acemoglu y james robinson, in his highly recommended book “Why Countries Fail”, with presentations of various cases. The example of the African nation of Ghana arises. After gaining independence from Britain, the government of the Ghanaian leader Kwame Nkrumah it adopted very low-quality public economic measures for the stated purpose of greater and more rational production and distribution of goods and services.

Due to the so-called “political restrictions”, they were only intended to gain continued support from pre-existing public and private institutions that were very “distorted” and closed but, in turn, very important in the short term for the electoral results. of the successive elections, necessary to stay in political power. At his fall, the next leader, Kofi Abreva Busiaa fierce political opponent of Nkrumahseized power, already under a democratic regime in 1969. But, faced with identical problems and similar contexts, he pursued the same continuously expansionary fiscal and monetary policies of his political predecessor.

This was followed by the usual phase of increased price controls and the formation of national production and marketing boards for almost all goods in the economy; in addition to the application of a continuously highly distorted exchange rate.

Price controls almost exclusively ‘compressed’ only the first links in the production chains of the agricultural sector, which was supplemented by a high tax burden and the prohibition of exports, so that the so-called ‘addition of local economic value,” subsidized and continually protected by high import tariffs, generates the so-called “cheap food table” for conurbation voters in major urban centers.

Despite this, large, still “hidden” taxes were needed on domestic food consumption, to help fund ever-increasing public spending.

When internal price controls became unsustainable, the country entered the next phase of many successive balance of payments crises, fueled by growing deficits, both fiscal, quasi-fiscal and trade. Finally, again and only 2 years later, in 1971, faced with the impossibility of continuing to restructure or “reprofile” the public debt, internal and external, busia signed an agreement with the IMF which already necessarily included a significant devaluation of the local currency.

When internal price controls were already unsustainable, the country entered successive balance of payments crises, fueled by a growing and continuous budget deficit.

The seriousness of the disturbances this has caused, paradoxically appeased by the same institutions, public and private, which had previously insisted on irresponsible and continuously expansionary fiscal and monetary policies, which have led to the very critical situation; Now, in the wake of grave general discontent, which was of such magnitude in a country without sufficient democratic history, Busia has finally been overthrown, even with popular support for his downfall, led by Lt. Col. Frank Acheampong. This very sad story of Ghana, which happened more than 50 years ago, even without any margin of being a possible alternative for Argentina, if it could lead to an “amplified lesson” for our country.

Democracy is the worst system of government, except for all the others practiced up to this day, says the well-known expression, absolutely applicable to our country too. Argentina would already have a sufficient critical amount of “democratic history”.

We have been in this system for nearly 40 years, the longest continuous period in institutional life, and whether by virtue or by necessity, it will never come out. Let us discourage any irresponsible and unfounded discursive “political warning” which would only have the effect of continuing to ignore and constantly push back the public resolutions necessary to get out of the very poor economic performance of our democracy.

Over the aforementioned 40 years from 1983-2023, GDP only slightly doubled, while at the same time the population grew from less than 30 to almost 50 million inhabitants.

Democracy is the worst system of government except all others practiced to this day, says the well-known expression

Throughout past institutional history, GDP has doubled several times in just 2 decades. The current average annual rate of long-term economic growth per capita is only about 1%, which is clearly insufficient to meet logical progressive demands for greater general well-being. This is one of the main “tests” that Argentine democracy has not yet been able to overcome, without this, it is reiterated, calling into question its continuity.

The very earthly farrago of a political practice of low institutional quality and the continuous immediacy of Argentine democracy, as well as a permanent electoral opportunism (critical, on the part of the opposition, of what would be done if it were the government and, on the part of the government, blaming only the previous management) makes it increasingly “liquid” and less solid.

The conclusion would be that the country’s policy has excessively neglected the basic criteria that underpin economic growth, an issue absolutely necessary to achieve the much-declaimed equity and that such poor results are displayed, both in terms of productivity and development. fairness itself.

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