Political Systems and Economic Outcomes: Contrasting Australia and Argentina

Benjamin Harris

Updated Sunday, February 11, 2024 at 2:14 PM CDT

Political Systems and Economic Outcomes: Contrasting Australia and Argentina

Political Stability and Economic Prosperity

Australia and Argentina, two countries with distinct political systems, have experienced divergent economic outcomes. The stability of Australia's political system, rooted in English Common Law, has played a crucial role in its economic success. On the other hand, Argentina's history of military coups and authoritarian dictatorships has hindered its economic growth and stability.

Turmoil and Stability: Argentina's Political Landscape

Throughout the 20th century, Argentina experienced multiple military coups and authoritarian dictatorships, which created a volatile political landscape. This political instability stood in stark contrast to Australia's stable democracy, which remained grounded in the principles of English Common Law.

Agricultural Exports and Economic Shifts

Argentina's economic growth from the mid-1800s to the 1930s was fueled by its booming agricultural exports. However, during the Great Depression, the government shifted its focus towards self-sufficiency and import substitution. This change in economic strategy had a negative impact on Argentina's economy.

Peronism and Economic Policies

The rise of Peronism in Argentina after World War II introduced significant government spending on social programs. However, these programs were often funded through inflationary measures like printing money, leading to economic instability. Additionally, the nationalization of industries further hindered Argentina's economic growth.

The Great Depression and its Aftermath

The Great Depression had a lasting impact on Argentina's economy. A corrupt government made a detrimental trade deal with Britain, followed by the nationalization of foreign assets. These actions scared away future foreign investments, exacerbating the economic downturn.

Corruption and Economic Inequality

Corruption has deeply rooted itself in Argentina's political system, contributing to economic instability and inequality. The country heavily relies on US dollars, which further exacerbates economic disparities and hampers long-term stability. In contrast, Australia ranks high in the corruption index, contributing to its economic prosperity.

Political Instability and Coup Culture

Argentina's history of political instability is evident through multiple military coups and fraudulent elections. From the 1930s to the 1980s, the country witnessed a series of political upheavals, further destabilizing its governance and economy.

The Legacy of Debt and Crises

The military dictatorship in Argentina left behind a massive foreign debt of $45 billion and unsustainable interest rates. The country faced multiple economic crises in the 1980s, culminating in hyperinflation in 1989. Despite attempts to control debt and inflation in the 1990s, Argentina experienced the infamous 1998-2001 financial crisis and a debt default in 2001.

Isolation and Economic Challenges

Since the 2001 debt default, Argentina has been effectively isolated from international finance, adding strain to its economy. This isolation has hindered foreign investments and further impeded economic growth.

Cultural Influence on Governance

The cultural differences between English colonies, like Australia, and Spanish colonies, like Argentina, have had a significant impact on their political systems. English colonies, rooted in the tradition of English democracy and Common Law, tend to evolve into stable democracies. In contrast, Spanish colonies, derived from an absolute monarchy and feudal structure, often face challenges in establishing democratic governance.


The divergent economic outcomes between Australia and Argentina can be attributed, in part, to their political systems. Australia's stable democracy, influenced by English Common Law, has contributed to its economic success. In contrast, Argentina's history of political instability and authoritarian rule has hindered its economic growth and stability. Cultural factors and economic policies have also played significant roles in shaping the economic trajectories of these two nations.

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