Evaluate the effectiveness of economic policies in either Weimar Germany (1919–1933) or Argentina under Alfonsin (1983–1989).

Candidates are required to appraise the effectiveness of the economic policies pursued in their chosen country. Successes and failures should be identified and explained. Candidates may also consider the impact of economic policies upon society in general in order to assess effectiveness.

Indicative content

Weimar Germany

• Following the end of the First World War Weimar Germany was faced with significant inflation, unemployment, and the need to meet increased welfare bills to help support the widows, orphans and casualties of war. It may be argued that, in the early years of the republic, the government was reluctant to reform the economy as this would be seen as facilitating
  reparation payments.
• The Ruhr Crisis of 1923 resulted in the printing of money to meet government expenditure and this led to hyperinflation. There may be analysis of the highly effective measures taken by Gustav Stresemann (Chancellor from August to November 1923) and Hjalmar Schacht in revaluing the currency. The Dawes Plan may also be mentioned and linked to the boost that US loans gave to the faltering economy.
• During the “Golden years” (1924–1928) the German economy appeared to prosper and expenditure on public housing schemes, for example, increased significantly, but there was a dependency on US loans.
• Following the Wall Street Crash of 1929, problems arose as foreign loans were recalled, banks failed and unemployment soared to at least 6 million (although there was no inflation at this time). Reluctant to introduce austerity measures, Chancellor Müller resigned in 1930 and his successor, Brüning earned the sobriquet “The Hunger Chancellor” for his willingness to cut
  benefits and impose deflationary policies.
• Candidates may argue that it was the upturn in the world economy rather than government policies that resulted in the slight falls in unemployment by late 1932.

Alfonsin

• Candidates should focus on the struggles of the administration to address inflation, budget deficit and foreign debt. Meanwhile, tax evasion and the unprofitability of state enterprises compounded the problems. Alfonsin inherited a foreign debt of over US$40,000,000,000 with inflation running at over 400 per cent.
  • Policies included printing money to tackle the deficit, the Austral Plan (which introduced a new currency and imposed strict controls on wages and prices), cutting military spending and attempts at privatization.
  • Candidates may suggest that external factors also had an impact on the economy. These included falling commodity prices, climate extremes such as droughts and floods, which affected agricultural production, and the collapse of share prices in 1987.
  • Candidates may argue that although Alfonsin achieved some success in his economic policies, as by the end of 1985, inflation and the government deficit had fallen dramatically, it was only temporary.
  • By 1989 the economy was once again in recession, inflation was rampant, and foreign debt repayments were overdue. It was this economic crisis that led him to hand over power to his successor before his term was over.
• Candidates may argue that that Alfonsin’s priority was the establishment of democracy and his economic policies foundered on a failure both to confront vested interests and conduct fundamental reforms.

The above material is an indication of what candidates may elect to write about in their responses. However, it is not exhaustive and no set answer is required.

Examiners and moderators are reminded of the need to apply the markbands that provide the “best fit” to the responses given by candidates and to award credit wherever it is possible to do so.

[20 marks]