Estímulos fiscales a la industrialización en el período 1956-1966

Abstract

This paper analyses some of the general investment incentives such as investment allowances and income tax exemptions. From a microeconomic point of view these incentives introduced a bias in favour of capital-intensive industries and techniques. When the supply of capital is inelastic this results in sub-optimal resource allocation. The bias towards small size projects is also undesirable in the conditions of the Argentine market in the period, where scale economics were important and demand was growing. From the macroeconomic point of view these incentives would have fostered the economic instability that was a constant of the period. The decision to use these incentives seems to have been taken with independence from that concerning most other instruments of economic policy. The absence of a comprehensive appraisal in the design of economic policy, which this indicates, resulted in inconsistencies between the short-term effects of long-term instruments, and short term economic policy.