Argentina and South Korea: So Similar, Yet So Different. A Comparative Study of Economic Development 1957-2017

Abstract

Analyzing the experience of Argentina and South Korea for the period 1957-2017, evidence is offered that the gap in per capita income can be analyzed through essentially microeconomic behaviors. The work describes how Argentine productivity declined over the years, especially starting in the 2000s, while the only exception was the nineties, when for the first time Argentine productivity was above that of South Korea. The results of the PISA tests are in line with these results, which show that Argentina has a greater proportion of students at level 1, below minimum knowledge, and practically none at levels 5 or 6 (elite). Furthermore, it is shown that in the years of Argentine high growth (2003-2011), growth was spurious and disconnected from productivity: it grew at Chinese rates while productivity barely grew and would fall to historical levels in the following decade. South Korea's current productivity is at levels above its historical average and has been affected by external factors, such as the oil and Asian crises. On the other hand, Argentine productivity is below historical values, with a lot of variability and affected by domestic issues, such as the hyperinflation crises and that of 2001/2.