Discussion Paper Details

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Title: Stabilization and Growth under Dictatorship: The Experience of Franco's Spain

Author(s): Leandro Prados de la Escosura, Joan R. Rosés and Isabel Sanz Villarroya

Publication Date: March 2010

Keyword(s): anti-market policies, dictatorship, growth, liberalization, macroeconomic policy, Spain and stabilization

Programme Area(s): International Macroeconomics

Abstract: Stabilizing and liberalizing policies are key elements of the Washington Consensus. This paper adds a historical dimension to the ongoing debate by assessing the economic impact of market-oriented reforms undertaken during General Franco?s dictatorship, the 1959 Stabilization and Liberalization Plan. Using an index of macroeconomic distortions (IMD) the relationship between economic policies and the growth record is examined. Although a gradual reduction in macroeconomic distortions was already in motion during the 1950s, the 1959 Plan opened the way to a new institutional design that favoured a free-market allocation of resources and allowed Spain to accelerating growth and catching up with Western Europe. Without the 1959 Plan, per capita GDP would have been significantly lower in 1975.

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Bibliographic Reference

Prados de la Escosura, L, Rosés, J and Villarroya, I. 2010. 'Stabilization and Growth under Dictatorship: The Experience of Franco's Spain'. London, Centre for Economic Policy Research.