The Book Events Store Subterranean follies Property rights are essential for the market to work. So when oil was first discovered in the United States in 1858, private citizens rushed to profit from this geological miracle and made certain apparently barren communities vibrant. Argentina, on the other hand, does not allow private ownership of the underground and all the mineral resources therein.
Argentine law is derived from Spanish law which stated that the government owned the subsurface.
Of course, this law created a disincentive for any type of underground exploration and innovation. In 1865, Leonardo Villa had discovered oil in Argentina, but ended up fighting the government bureaucracy for permits instead of deciding where the next gusher might be, like his North American cousins. Leonardo Villa lost his battle with the parasitic bureaucracy of Argentina, and it wasn't until 1907, that Argentina finally took its place as an oil-producing nation. In the meantime, Argentina lost 42 years of growth, prosperity, and better living for its people.