Entrepreneurship in Public Enterprise: General Enrique Mosconi and the Argentine Petroleum Industry

Abstract

The economic history of Latin America offers an unusual paradox. For much of the twentieth century, nationalist governments have fostered the growth of state enterprise, but for the most part the proponents of such policies have received little attention. The Argentine petroleum industry is a case in point. While the state oil company Yacimientos Petrolíferos Fiscales (or YPF) grew from relatively modest origins into the largest firm in the country, its most important architect, General Enrique Mosconi, has remained a little-known figure. In this article, however, Dr. Solberg takes note of Mosconi's career. He examines the forces that shaped it and that shaped his policies as the Director General of YPF. Mosconi's story, however, is not that of just another nationalist-turned-public servant, for his ideas and policies had far-reaching ramifications not only in the political economy of Argentina but also in that of other nations of Latin America.

Military Entrepreneurs: Patterns in Latin America

“…3 In earlier decades, scholars from a range of disciplines frequently drew attention to the military's involvement in the economy. The 1960s brought a first wave of studies, often by economic historians and historically minded economists, who identified the military as a key (and often admirable) protagonist in economic development and industrialization (Leff 1968;Baer 1969;Wirth 1970;Solberg 1979). In the 1970s and 1980s, a second wave of studies emphasized structural factors tying the military to the development of industry and the defense sector.…”

State-owned and multinational enterprises partnership as an import substitution strategy: A narrative ARDL approach to the case of oil contracts in Argentina (1958–1962)

“…In 1907, oil was found in great amounts (Gadano, 2006) and the President at that time issued a decree that created a national oil reserve (Solberg, 1986). Three years after the discovery of oil, the world's first state-owned oil company was created (Solberg, 1982). Even so, for many years to come, the State did not commit the sufficient energy to develop this resource.…”

“…Argentina became the first country outside the USSR to have a completely vertically integrated state-run oil company. Yacimientos Petrolíferos Fiscales, which was also known by the acronym YPF (Solberg, 1982), launched a strategic plan of investments aiming to cover all areas of the oil industry: production, exploration, refinement and distribution at competitive prices, and making it fully autonomous from the central government, with the exception of its annual budget and major purchases that required credit. Nevertheless, oil exploration lagged behind because the company did not have enough financial resources to put forward a large exploratory drilling plan (therefore, limited scale of production).…”

“…to be exploited only by the State, and therefore limiting the reach of foreign direct investment in the area (Solberg, 1982).…”

“…The military, worried about the implications for sovereignty, took a central role in pushing the State to lead the oil industry and other basic sectors (Solberg, 2001) with a nationalist position, that was also growing among civilians. The method that the head of YPF chose to spread support for the State monopoly was first to create a distribution network with gas stations, not only in the wealthy capital but also in the interior provinces where the private companies did not see enough profit; and second lower the prices of fuel below the international price, while maintaining a uniform national price (Gadano, 2006;Solberg, 1982Solberg, , 2001. 6 This policy was extremely popular and, together with public speeches against oil multinationals, would become a part of nationalist thinking from then on.…”