20th Century

18

1st third of the 20th Century

1898: The loss of the last colonies (Cuba, Puerto

Rico and Filipinas)  The “Disaster”

• Positive economic consequences:

 Boost to renovation and reforms
 Villaverde’s Stabilization  BUDGET SURPLUS
and stabilization of prices
 Spaniards who had made fortunes in America
returned to Spain (capital accumulation)
19

1
Other drivers of development at early 20th:
 Protectionist policies (controversy about this)
 Capital accumulation in some industries (eg. iron and steel in
Basque Country)
 Economic boom during WWI (neutrality of Spain)
 Increase in domestic demand (demographic growth)
Development ‐ Intermediation function
of private
‐ Involvement of Spanish banks
banking
in manufacturing

Geographic expansion and

diversification of
manufacturing

• Transfer of workforce from agriculture to manufacturing +

technical modernization of agriculture  moderate rural
exodus
20

However, the political scene was

turbulent:
 Social and political conflicts
◦ In some urban areas
◦ In rural areas, around the (unsolved) issue of the
uneven land distribution
 II Republic (1931‐1936): Economic stagnation
◦ Strong drop in private investment due to political
instability
◦ Not much connected with the international crisis
 Civil War (1936‐1939)
21

2
 Chronology of the dictatorship
Early “Francoism”

1939: End of the 1953: Treaty 1957: Change in

Civil War with USA the Government

1975: Franco 1973:

1959:
dies. Transition International
Stabilization Plan
to democracy. economic crisis

22

Early ‘Francoism’
 Economic policy in this period:
1. Autarky / International blockade after WWII
2. Strong political intervention in industry
3. Agricultural policy: National Wheat Service
4. Low salaries
 Results
◦ Scarcity and food rationing
◦ Negative growth rates.
◦ Bureaucracy and black market.
◦ High prices and inefficiency of manufacturing
◦ Weak domestic market (people had little purchasing
capacity)
 Comparison with Europe
23

3
 The tourning point (1950s)
 Treaty and support from USA since 1953. Main
points.
 1957: ‘Technocrats’ access to the Government

Internal and external pressures:

The old economic model exhausted

• Stabilization Plan of 1959: A wide‐reaching reform

aimed at opening and liberalizing the economy

24

The 1960s: Take off

Results of the Stabilization Plan of 1959

• Unprecedented growth: 6,5% annual growth rate
between 1961‐1973. Which
• Stability of prices components?
• Improvement of some components of the balance of
Keep in
mind the payments
European • Liberalization made possible to take advantage of
context
potential resources and international situation:

 Cheap energy
 Accessible technology Components of
 Abundant labour force production
function
 Enlarged capital
25

4
The critical decade: 1970s
• Oil crisis (1973)
o Inflation (particularly serious in Spain)
o External deficit
o Crisis in business profits  Massive unemployment
o Weakening of the foundations of the previous growth
• Coincidence with the Transition to democracy in Spain
o Difficulties in undertaking the needed measures on
time.
o The crisis was longer (it lasted 10 years!)
• Moncloa’s Pacts (1977)
26

Late 20th Century

and beginning of 21st
Century

27

5
 The late 20th century and beginning of 21th
century
• 1986: Accession to European Economic Community
• 1986‐91: Strong economic growth
• 1992‐94: Economic crisis. Uncertainty after Maastricht
Treaty. Devaluation of the currency (peseta).
• 1994‐2007: Growth and stability. Convergence with
Europe
• 2007‐2013 Crisis
• Strong crisis in the Southern countries of Europe +
Ireland
• Moderate drop in income in Central Europe, growth in
Germany
• 2014 ‐ 2019 Recovery
• 2020: COVID Crisis 28

The economic growth rate of Spain between 1960 and

1980 was only surpassed by Japan in the world

6
 Transformation of the economic structure
completed
Contribution to GDP, current prices (%)

Source: Own elaboration from INE

30

21 Century
GROWTH, CRISIS, RECOVERY…
Tasas de variación anual del PIB (%), en términos reales
10
8
6
4
2
0
‐2
‐4
‐6
2017 (P)
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016

2018 (A)
2019

Fuente: Elaboración propia a partir del INE