Spain’s Economic Divergence and Convergence: A Historical Analysis
Spain’s Economic Divergence and Convergence
What are the main characteristics of the phases of estrangement between Spain and Europe or the USA?
Historically, Spain has experienced periods of both convergence and divergence with European countries and the USA. The U.S. held a position of economic leadership, often outpacing Spain. The divergence observed during 1891-1913, 1930-1939, and 1973-1984 stemmed from both internal and external factors. Spain’s political and social imbalances hindered its ability to fully benefit from periods of convergence and the aid provided by the U.S. after World War II.
Spanish backwardness was exacerbated by:
- Government’s protectionist policies
- Lack of advanced production technologies and media
- Lack of competitiveness of enterprises in the international framework
- A closed market, controlling prices
- A lack of multinational corporations and small business size
- Heavy dependence on exports due to a lack of resources for investment and industrial growth
- Underinvestment in infrastructure, education, R&D, technology, and communications
In addition, events such as the 1929 crisis, the oil crisis, wars, and autarky negatively impacted growth.
Causes of Incomplete Convergence (1960-1990)
This period saw growth and convergence in Spain. The post-autarky era was marked by corporatism and stagnation. A significant growth phase followed, driven by the agrarian revolution and the industrial revolution. This was favored by the stabilization plan implemented by technocrats alongside Franco. This plan brought positive changes, including infrastructure improvements, market opening, and increased spending on education and health.
Despite challenges during the transition following Franco’s death, entry into the European Economic Community in 1986 and the Moncloa Pacts were crucial for explosive growth.
State’s Role in Promoting Convergence
The state should avoid excessive intervention in trade matters. Overbearing leadership and control can hinder economic growth. It is crucial to invest in research, improve communication and transportation networks, and enhance education, as education facilitates the adoption of technological improvements after periods of divergence.
Excessive consumer spending by the state is detrimental to the economy. Internal protectionism should be avoided in favor of opening foreign markets, particularly towards entering the European market. Furthermore, managing public finances to avoid deficits is essential for a healthy production environment.