Draft answers - OxfordX: OXBSG01x From Poverty to Prosperity: Understanding Economic Development


  1. 1. What is the name of the country you selected?
    Argentina
  2. 2. Is the country a centralised and/or inclusive state? Describe the country’s context to justify your answer. Use the concepts to explain how the country has progressed to where it is today (e.g. six steps to a centralised state, pressure through protests for inclusivity…etc). [200-300 words]
    After a period of 300 years of Spanish rule, the 1810 revolution in Argentina forged the birth of a new nation. Some periods of anarchism followed in the following years, with a divided territory and many disputes among different political leaders. However, the most powerful armies imposed the economy of scale, until a period of national reconciliation was achieved. There were huge gaps in economic development between the capital city and the rest of the provinces, but a spirit of common unity permeated the whole territory. The great controversy was about the tax system of the port of Buenos Aires. At the beginning, Buenos Aires did not accept to share the revenues of the port with the rest of the country. Although there was a constitutional assembly and the origin of a written constitution, Buenos Aires remained isolated from the rest. After some internal wars and thanks to the dream of a common spirit of nation, there was a unanimous agreement, and Buenos Aires accepted the Constitution. A new period with a rule of law and order made it possible contract enforcements, and the new Constitution entered into force making it possible the free circulation of goods and people by rivers and roads throughout the country, without internal customs or barriers to trade. Large investments in road infrastructure and ports enabled strong growth. With access to international financing, at the end of the nineteenth century, the railroad was able to unite the vast territory, and the massive arrival of immigrants (driven by the central state) positioned Argentina as a prosperous country. All those changes that operated in the 19th century made of Argentina a centralized and inclusive state, which was reinforced later with new labor laws, social welfare, and specially the massive provision of public, free and secular education.
  3. 3. Are power and identity aligned or misaligned in the country? Describe the country’s context to justify your answer. Explain how this alignment/misalignment impacts the country’s development. [200-300 words]

    The great alignment between power and identity occurs in the notion of being a single nation, and in the pride of having regained democratic values. However, in the last forty years there are some misalignments that affect negatively the development of the country. Since this is a very broad subject, I will just give a few examples to illustrate my analysis. I will cite the case of the so-called "viveza criolla". This is the case in which the most astute ones, those who deceive others are considered the most capable and worthy of admiration. Those who can evade law enforcement cunningly and get the most out of others are considered the smartest. As far as I am concerned, this concept generates a great misalignment in the country because the rule of law and order hangs on a thread. The noble ambition of the national constitution is neglected and the strongest can rule over institutions and weaker ones. As I see it, the “viveza criolla” is the most harmful disease in Argentina. As a result of this, corruption creates a vicious circle that makes the business climate not conducive to investment and growth, and the cost of transactions grows generating bad incentives to make prosperous investments. On the other hand, taxpayers have low incentives to comply with their obligations, doing everything at hand to avoid payments. The low compliance of the tax obligations forces the government to raise taxes, making it more difficult for those who really want to comply. At the same time, the growth of structural poverty in the last forty years has made many people excluded from the system generating a deep gap among citizens in the nation. A necessary step must be made in order to overcome corruption and to empower the attachment to law and justice.
  4. 4. Does the capital city of the country have high connectivity? Describe the country’s dominant transport technology and building technology to justify your answer. Explain how the level of connectivity impacts the size and location of firms in the capital city. [200-300 words]
    Buenos Aires, the capital city of Argentina has high connectivity, and by far, it is the most connected city in the region. A huge network of routes, streets and railways link the capital city with the rest of the country, forming a connection similar to the arterial connection that the human brain has. The capital city has river connections (Rio de la Plata) with other regions, and it has an important port that connects the country with the Atlantic Ocean. There are airports and a highly busy air routes that connects the country with the rest of the world. The capital city has a complex system of busses and trains, and it also has the first underground (subway) of South America. A large network of streets and routes makes the capital city the most populated site of Argentina. Nowadays, the country’s dominant transport technology is the use of trucks. The value and amount of goods transported by trucks is, by far, the most dominant mean of conveyance. All in all, the high connectivity of Buenos Aires makes it the most important location from the economic point of view. The biggest and most important firms are located in the capital city, and this is one of the most challenging issues that Argentina faces in the present moment. It is called “problem of macrocephaly” and it consists of a huge gap between the capital city (and its surroundings) and the rest of the country. In addition, the country is wide and vast, and there should be more investments in roads and railways for the development of different regions.

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