Dictatorship, Democracy, and Globalization: Argentina and the Cost of Paralysis, 1973-2001 (review)

Argentina has long served as a model of both economic success and failure for commentators across the globe. Although memories of the country's calamitous meltdown in 2001 and 2002 remain strong, observers have recently contrasted Argentina's remarkable turnaround in the last decade with the slow pace of recovery in the United States and the decades of austerity looming over the European Union. The publication of Klaus Veigel's book comes at an opportune time, for it provides a valuable guide through the complexities of contemporary Argentinean economic history—in particular the politics of economic policy making from the mid-1970s to the early 2000s. This book should appeal not only to country specialists but also to a wider cohort of readers who, having lived through the Great Recession, may have renewed interest in economic history and the "lessons" of the Argentinean case.

Dictatorship, Democracy, and Globalization covers the most tumultuous years in twentieth-century Argentinean history (as the book notes, the country experienced 13 presidents and 21 economic ministers between 1973 and 1991 alone). Veigel argues that in this period Argentina suffered from a chronic condition of "paralysis." Perhaps this is not the best term, for what the book reveals instead is ever-frantic motion, as policymakers veered fitfully from one stopgap solution to the next. Political rivalry hampered economic performance, and competing factions failed to agree on shared development strategies or even consistent property rights. Similar conclusions have been reached by other scholars, but Veigel's contribution is twofold. First, his book goes farther than most previous works in connecting domestic trends with international conditions as the narrative tacks skillfully between politically divided Argentina and global players like the International Monetary Fund and the Federal Reserve Bank. Second, Veigel provides a finely textured account of the "logic of emergency economics" that delves into the design and implementation of competing stabilization schemes, rescue packages, and currency reforms. Among the sources employed are interviews with ministers and technocrats, which allow a greater appreciation of the outlook, assumptions, and recriminations of top policy makers.

In assessing the "cost of paralysis," the first half of the book documents the damage wreaked by the Proceso regime (1976-1983). As if the regime's infamous human rights abuses were not criminal enough, its economic policies contributed directly to woes such as deindustrialization, wealth concentration, and a massive increase in foreign debt. Veigel's tone is less one of rabid condemnation than a measured attempt to understand how and why authorities acted as they did. Nevertheless, the book weighs in on controversies such as whether military policies represented an experiment in neoliberal reform. Veigel concludes that military rulers were still wedded to traditions of state intervention, even if their main policy maker, José Martínez de Hoz, was clearly a devotee of free-market principles. In any event, military mismanagement left subsequent rulers with onerous burdens. As the book shows, the Raúl Alfonsín administration (1983-1989) found it impossible to satisfy lofty promises of social-democratic change while dealing with overlapping problems of explosive inflation, domestic opposition, Latin America's debt crisis, and U.S. "stabilization" of the world financial system. By comparison the neoliberal frenzy of the Carlos Menem era (1989-1999) receives briefer treatment, but here, too, Veigel places policies like the Cavallo convertibility plan within the context of political rivalries, global conditions, and the shortsighted logic of emergency economics.

As with any work on recent history, this study faces an unavoidable dilemma: the present is a moving target. The gloomy shadow of the 2001 crisis hangs over this historical account more weightily than the impressive boom of Argentina's last decade. Perhaps as a result the book is not particularly sanguine about the fact that Argentina today has escaped from chronic paralysis, especially as growth slows and political frictions increase. Dictatorship, Democracy, and Globalization ultimately offers...