Category Archives: Argentina

Settlement and extraction or – how come Argentina is so much richer than Bolivia?

Argentina and Bolivia are neighbours yet Argentina feels rich, like home, and Bolivia, feels poor. Today despite having been colonised by the same country, about the same time, Argentinians are about four times richer than Bolivians.

Why some countries end up rich and others poor is of constant interest to development economists and other scholars. There are a bunch of theories. For example, and grossly simplified:

  • Climate – in cold places you have to work harder to stay alive so you develop technology sooner.
  • Geography determines whether there are plants and animals that are ripe for domestication. With farms you develop surpluses so you have time to do other things, like getting rich (this is the theory put forward in an enjoyable book called Guns, Germs and Steel that was recommended to me by readers, thanks for that).
  • Institutions – the way society is structured – governance, hierarchy etc. – supports or hinders the development of wealth.

Enter colonisation

These theories are all interesting, and not necessarily mutually exclusive, but they become a bit moot once you add colonisation to the mix, as in South America. Geography, say, might explain why the Incans got smashed by the much more developed Spanish at Cajamarca, but it doesn’t necessarily explain what happens next once the Spanish took control of much of the continent. And what did happen was that some of their colonies, like Argentina, turned out much richer than others, like Bolivia.

Settlement and extraction

One popular explanation in economics is that the colonists’ intention for the colony – extraction or settlement – determined the kind of institutions that they developed and this in turn determined whether the colony became rich or poor.

Peru is a nice micro-example. The Spanish who arrived in Cusco and other great Incan cities were interested in plundering precious metals. They didn’t necessarily envisage they would stay in the frigid Andes long and so they were probably more cavalier about the way they set up government and courts and schools, if they bothered to at all. Lima, now Peru’s capital, was founded by the Spanish. They wanted a capital by the sea and they preferred the coastal climate. They built that city, and its institutions, to last. Today, Lima is much richer than the Andean hinterland.

On a wider scale you can apply this logic to whole countries, including, say, Argentina and Bolivia. While, at its height, Potosi was among the greatest cities in the world, the industry that brought about its prominence was fundamentally extractive. In contrast, Argentina was settled by Europeans who planned to stick around and raise cattle. The long term view of the settlers in Argentina undoubtedly influenced the kind of institutions they developed.

There is, of course, a rejoinder between this institutional view and other schools of thought about climate and geography. While the institutions may have been the first order determinant of who got rich and who got poor, it was geography and climate that determined where Europeans settled and where they didn’t.

Being able to make a strong case about why some countries got rich and others didn’t doesn’t imply a justification for the present, of course. In fact, it’s another cause to reflect on the birth lottery, and how random our personal riches really are. That’s especially true for those of us from New Zealand, who just happen to have grown up with settler institutions and not extractive ones.

Argentinian Shpanish

Argentinian Spanish is to Spanish what Irish English is to English: thickly and endearingly accented with an unmatched musicality. And depending on the thickness of the accent it ranges from nice to listen to to marginally comprehensible.

In Argentina double ls and ys are pronounced like “sh”. Elsewhere they sound as “ya” or “ja”. The effect is a slightly slippery sound when Argentinians speak that could easily be misinterpreted as they trying to get everyone to settle down and be quiet: “sh, sh, sh…”.

True to the Italian heritage of many, if not most Argentinians, the accent has taken on the sing-song syncopated cadence of Italian. That’s the lyrical, musical bit.

Argentinians also do some funny stuff with grammar. Most Spanish speakers say for the informal form of you whereas Argentinians say vos. They also change the matching conjugation, maybe, we hypothesise, so the emphasis better matches that classic Italian cadence. These changes aren’t just slang, or informal, they’re also written in formal Argentinian Spanish. I can’t think of an example where there is such a significant and formal deviation in English. Americanised spelling pales in comparison.

Variation in Spanish

Much to my initial frustration when leaving Colombia, Spanish varies considerably more between regions than English. The vocab changes noticeably. It’s similar to how we say rubbish in New Zealand and in the US they tend to say trash but the variation is much more pronounced. And while Argentinian Spanish is probably the most marked accent differentiation, there are plenty of others too. What amounts is a language that is definitely mutually intelligible, but, to a learner, feels like a constantly changing and evolving thing.

Still, if I had to pick an accent to take on, it would totally be Argentinian – sho shamo Jose, vamos a la plasha.

Parliament of the future


We have become the people I used to frown upon – the parliamentary tour goers who crowd in the hallways and block the queue for the metal detector, making a nuisance of themselves and obstructing the work of parliamentary staffers.

Today we visited the Argentinian Congress which houses the Senate and the Chamber of Deputies. It seems to follow, basically, the American system. The lower house has seats allocated by population and the upper by state. The executive is separate, but the Vice President has a tie breaking vote in the Senate.

They had a couple of neat things automated:

  • to establish quorum there’s a system that counts how many of the 259 chairs for deputies are being sat in
  • voting is done by button at the desks of each deputy and the buttons have finger print readers so they record exactly who voted for what
  • when things get too rowdy to gavel to order the speaker can press a button that rings bells around the chamber and drowns out the noise

Sadly with our (otherwise excellent) party based system at home most of this is unnecessary. Although I can imagine the bells being of some use.

Some pizza with your cheese?

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Buenos Aires surely ranks with Rome, Naples, New York and Chicago as one of the great pizza cities of the world.

The pizza here has a distinct style all of its own. The base is thick and doughy and there is a copious amount of cheese. At the pizza by the slice place we visited for lunch today the cheesiest was in the hottest demand. When a fresh pizza was slapped down on the counter for slicing it wiggled and oozed like jelly. It was that covered in cheese.

The ingredients tend towards simple: ham, olives, and peppers. There’s also a special style that has bundles of sliced onions piled on called fugazza.

It isn’t a quite a match with our tastes, but it is very tasty. It’s also cheap and filling. We can see why people crowd for a slice or two at lunchtime. There’s even individual tables to facilitate quick eating for one.

Trading blue dollars on the black market

Nothing to see here: black market currency traders hide in plain sight.
Nothing to see here: black market currency traders hide in plain sight.

In Argentina, because of currency controls (a little like those in Venezuela) you can get more for your US dollars if you exchange them on the black market. Admittedly, it’s a little illegal but it’s openly acknowledged. The main newspaper here advertises the rate you’re able to get for ‘blue dollars’ as does this site. And everyone knows the place to go to get the deal done is Florida street in downtown Buenos Aires.

Here’s how it works: Florida street is a pedestrian mall lined with the big retail brands you’d find in any cosmopolitan city. Amidst the hubbub of a busy street you hear a call of “cambio, cambio” – change, change – and look around to try and find its source. Changers are standing about. They’re all acting nonchalant, smoking cigarettes or leaning against the wall. Some are more cautious with their cries than others. But it’s not clear they need to be. There are police who are literally within shouting distance and they don’t seem to care.

We talked to a bunch of changers. They weren’t shady characters and they represented a cross section of society: men, women, young, old. We also checked out a store in an arcade that advertised it bought and sold ‘antique money’ but they were plainly more interested in money that could still by stuff. Good front, though.

There was some variation in rate. Notably the changers would pay a higher price for a $100 US note than for $20. The higher the denominations, we guess, and so more valuable. We settled on a rate for our USD that was a shade under 50% better than what we would have gotten officially at the airport, or at a bank. That makes it much easier to justify the more expensive steak here.

Agreement reached, our changer took us to a kiosk in the middle of the mall, the kind that sells magazines and chewing gum. It seemed a bunch of changers were linked with this kiosk. We were ushered inside a tiny alcove that was out of view, counted out our dollars and exchanged them for pesos. Both buyer and seller checked the authenticity of the notes, though in our case our checking was mostly for show. And then we were off. We headed to the supermarket where we giggled at how ridiculously cheap Argentinian wine and beer is with no taxes here and our black market buying power.

We’ll talk about why there’s a black market for foreign currency soon.

A good air about Buenos Aires

We’ve not even been in Buenos Aires – literally good airs – for twenty four hours, and already we’re prepared to declare ourselves big fans.

It’s the largest city we’ve visited on our travels and easily the most cosmopolitan and developed. There’s so many old buildings that it doesn’t matter there’s no ‘colonial old town’. There’s massive avenues evocative of Paris and other grand European cities.

One of the things that struck us immediately was how much more developed BA is than anywhere else we’ve been. This is probably intensified because it’s developed in a decidedly familiar, Western kind of way. For a while we struggled to put our finger on exactly what it was, but now we recognise that it’s in a thousand little things:

  • For the first time in five months there are no stray dogs on the streets. The dogs we see are being walked by their owners (responsible!).
  • There’s rubbish bins and they encourage you to split your recyclables.
  • People run, for exercise.
  • You can drink the water from the tap. And there’s a hot water tap in the kitchen.
  • There’s bookshops with books that people read for fun.
  • People walk faster in the streets like they have somewhere in particular to go and no reason to hang about.
  • There are senior citizens out and about, not working but doing other things. We stopped for a slice of pizza and the table behind us were two women in their seventies having gossip and afternoon tea.

It also helps that the supermarkets are well stocked with delicious goods and, at least when we arrived, the sky was a classic Western world grey. There’s foreignness here too, of course, not least in the fact that people don’t sit down to dinner until after 10pm, but we like the air this city has about it very much and are looking forward to five fun days here.

Country of destiny


Argentina. Officially our country of destiny today.