New institutional economics and the performance of nations: the case of Australia and Argentina

This paper analyses the economic performance of Australia and Argentina by conducting an 'economic experiment'. This comparative exercise contrasts the economic performance over time of these two economies by analysing and comparing 'popular' economic indices. In conducting this experiment, we test the hypothesis that the main tenet of the neo-institutional strand of economics is that good institutions induce superior economic and social performance over time. The results of this study indicate that Australia’s superior economic performance relative to that of Argentina is mainly due to the more successful functioning and operation of its economic and social institutions.