Argentina is an excellent example of the GDP consequences of poor governance. I think there are some details, though, that make it less relevant to the question of a developed country following the path of Venezuela.
In the post WW2 period Argentina had the same per capita income as a developed Western European country. That was the start of a decades long period of major economic growth for the western world which led to a major improvement in GDP and standard of living, and Argentina did not participate. Their GDP and standard of living did not fall but it also didn’t rise, so they slipped from being a high income country to middle income. They have been and continue to be a very solid middle income country. Their per capita GDP is quite high, close to meeting the criteria for “high income”, but the country does not have the institutional development a high income country needs to fully meet the criteria of “developed”. It is by no means underdeveloped or low income.
Venezuela had a similar level of GDP and institutional development, which put it solidly in the category of “middle income”. Since 1989, however, it has deliberately and systematically dismantled those institutions and rebuilt them as extensions of a corrupt executive office. The effect is almost war-like in its destructive nature, and the impact is just now becoming evident. Venezuela per capita GDP is still quite high but the reality is a much more severe loss in standard of living. Measurement will eventually catch up with reality and show Venezuela falling from a high middle income to borderline low income. This kind of [-]loss[/-] mass destruction only happens with war.
People focus on the numbers - GPD per capita - and gov’t policy as if it were a developed country, and judge, contrasting the “isms”. This loss is not the result of bad policy or an “ism”, it is the result of the deliberate destruction of policy making capability together along with the independent institutions that form a modern middle income society. Central bank, judicial, law enforcement, education, tax, industrial are all aspects that have been hijacked, completely dismantled, expropriated. An equivalent example (IMO) is a vibrant neighborhood taken over by a street gang.
Can this happen in a developed country? One should never confuse improbable with impossible, so the answer is “yes”. I think the likelihood is very remote. It is not about inflation or hyperinflation, it’s about the wholesale destruction of all the institutions that comprise a modern neoliberal democratic capitalist society.
