Pierpaolo Barbieri: A Lesson in Crony Capitalism
As the U.S. gears up for an important presidential election, Argentina is a sad reminder of how crony capitalism is the enemy of genuine development.
Social security funds have also been funneled into nationalized businesses like the seized YPF. But when management is trusted to cronies rather than experts, the unfortunate mix of corruption and ineptitude guarantees losses for both social security and company employees. Not surprisingly, no foreign oil company—not even Russia’s Gazprom or China’s Sinopec—has invested in YPF. Last week, the government’s handpicked CEO even threatened to quit YPF because of how little control he has over the company.
It can’t happen here, you say?