What is the economic system of Argentina? The economy of Argentina is based on a mixed economy. The country’s economic system combines elements of a market economy and a planned economy.
In Argentina, the economy is composed of a private sector, consisting of individuals and businesses that make autonomous decisions based on self-interest, and a public sector, where the state determines the production and distribution of certain goods and services. No country is purely capitalist or purely communist.
What do the freedom indexes tell about the economic system of Argentina?
Now, to determine if a country is mostly a market economy or a planned economy, it is useful to examine some economic indexes. For instance, according to the 2022 Index of Economic Freedom, which measures the ability of every human to control his own labor and property, Argentina is ranked 144th globally and 27th in the Americas indicating that the country has a mostly unfree economy.
In a similar way, the 2022 Freedom House index evaluates the state of political rights and civil liberties globally. Generally, market economies tend to align more with democracy and freedom, while command economies tend to be characterized by greater state control and fewer democratic and civil liberty protections. Argentina gets a score of 84/100, which qualifies it as Free. Argentina is a country where the government does not control what people do for political reasons, and people have the freedom to choose (what, how much, and how to produce, whether to buy or not, selling price, etc.)
The Link Between Public Sector Employment and the Economic System of Argentina
An indicator of the extent to which the state is involved in the economy is the number of public sector employees. In Argentina, according to ILOSTAT, the number of public sector employees as a percentage of the total workforce is 19.3% (2021). In the country’s mixed economy, the number of public sector employees as a percentage of the total workforce varies based on the specific policies and practices adopted by the state. Some economic activities are left to the private sector, while others are under government control. The bigger the public sector, the closer the economy is to a command economy.
What does the biggest company in Argentina say about the country’s economic system
The biggest company by market cap in Argentina should also be looked at, as well as whether it is a state-owned or private company. In this case, MercadoLibre from Argentina is a mixed private-public company. It is owned by both private and public shareholders, making it a hybrid of the two sectors.
Top 10 Biggest companies by revenue in Argentina (2023 data)
The historical factors that have influenced the economic system of Argentina
In the last century, Argentina’s mixed economic system was caused by a combination of economic policies and changes in the global economy. These included a shift from import substitution industrialization to export-oriented growth, the liberalization of trade and capital flows, and the privatization of state-owned enterprises. These changes led to an increased reliance on the private sector and a more open economy, resulting in a mixed economic system.
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