, Volume 3, Issue 1, pp 1–26 | Cite as

Contract enforcement, capital accumulation, and Argentina’s long-run decline

  • Leandro Prados de la Escosura
  • Isabel Sanz-Villarroya
Original Paper


Argentina has slipped from being among the ten world’s richest countries by the eve of World War I to its current position close to mid-range developing countries. Why did Argentina fall behind? We employ a structural model to investigate the extent to which the enforceability of contracts and the security of property rights, as measured by Clague et al.’s “contract intensive money” (CIM), conditioned broad capital accumulation and, subsequently, economic performance in Argentina. Our results suggest that poor contract enforcement played a significant role at the origins of Argentina’s unique experience of long-run decline.


Contract intensive money Economic decline Argentina 

JEL Classification

D23 N16 N26 N46 O43 



Earlier versions of this essay were presented at the Columbia University Seminar in Economic History, the 5th World Congress of Cliometrics (Venice 2004), the XIX Jornadas de Historia Económica, San Martín de los Andes (Argentina), the VII Encuentro de Economía Aplicada, Vigo (Spain), and the International Society for New Institutional Economics Conference (Barcelona 2005). We gratefully acknowledge criticism and suggestions by Lee Alston, Samuel Amaral, Albert Carreras, Roberto Cortés Conde, Alan Dye, Michael Edelstein, Andrés Gallo, Pablo Martín Aceña, Patrick O’Brien, Carlos Rodríguez Braun, Albrecht Ritschl, Joan Rosés, Mar Rubio, Blanca Sánchez-Alonso, Richard Sylla, Alan Taylor, Joachim Voth, and Jeffrey Williamson. We alone are responsible for the remaining errors. Pablo Spiller kindly allowed us to use his series of Supreme Court Justices’ length of tenure. We acknowledge financial support from Spain’s Ministry of Education and Science, research project SEC2002-01596 and Comunidad Autónoma de Madrid, research project CCG06-UC3M/HUM-0872.


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Copyright information

© Springer-Verlag 2008

Authors and Affiliations

  • Leandro Prados de la Escosura
    • 1
  • Isabel Sanz-Villarroya
    • 2
  1. 1.Historia Económica e Instituciones and Instituto FiguerolaUniversidad Carlos III de MadridMadridSpain
  2. 2.Estructura Económica, Economía Pública e Historia EconómicaUniversidad de ZaragozaZaragozaSpain

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