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Dr. Martin Krause, Professor of Economics and Dean of ESEADE Business School in Buenos Aires, has an article in TCS Daily on "Populism and Institutional Ruin," dealing with government in South America.
Populism is the absence of constraints, of rules of conduct in the public arena which is the other side of corruption. Populist leaders built their own constituencies, their own political structures, and their own mafias at the same time.
The result of this is what is usually called "lack of institutions." Governmental decisions are at the whim of the populist leaders, subject to his ideas or his interests -- undermining legal stability. Things can change radically from one day to the next. President Kirchner in Argentina decides to ban exports of beef, no matter all the efforts of producers and exporters to open new markets. Tomorrow he may open them again. How are producers going to invest in a process that takes, at least, three years to mature?
Appropriate business conditions are bought at a price. It is a cost producers must count as any other business cost. No wonder Latin American producers lack competitiveness or they have it only when they are based in cheap and abundant resources. ESEADE was PFF's partner in last Friday's conference on Intellectual Property and Innovation in the Digital World.
As I noted earlier, there is an air of pessimism in Buenos Aires.
posted by James DeLong @ 9:03 AM | Digital Americas
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