The Power and the Money

Does small-scale bribery matter? An empirical puzzle

Transparency International has released its new report on corruption in Latin America. One of the things that I like about the survey is that it asked whether respondents have personally had to pay a bribe. 

Let’s call it “retail corruption,” as opposed to “wholesale corruption” paid by businesses or stolen from public coffers. In theory, that strikes me as a more accurate measure than simply asking about overall perceptions.

The problem is that the survey gives some unexpected results. Is Trinidad really that clean? If it is — and it very well might be, asking people I know reports very low levels of retail corruption — does that imply that the retail corruption does not matter? After all, Trinidad suffers from very high rates of wholesale corruption. So does Brazil. Conversely, Chileans and Uruguayans report levels of retail corruption on a par with their Paraguayan and Argentine neighbors ... but corruption appears to play a much smaller role in economic life in the former two.

Consider Uruguay. 22% is a very high number of people needing to pay a bribe for public services! (Albeit not to use the courts or public utilities.) But in overall corruption perceptions it is between Japan and Estonia, slightly less corrupt than France. The country certainly does not feel particularly corrupt on the ground. Of course, it is consistent with the survey that Uruguay should feel much less corrupt than Mexico; but it also feels much less corrupt than Brazil! In a brief trip to Brazil, I came directly in contact with venal officials several times; equally brief trips to Uruguay have yielded nothing. 

Anecdotes are dangerous, of course. But the disjunct between the data and broader survey results, as well as personal experience, makes me wonder. Either the survey cross-section fails to capture actual differences or small-scale bribery is less damaging than I would have thought.  

So many questions, so little answers. I wish somebody would take the bribery survey and include the United States and Canada, to give us a baseline. 

Kiddie fútbol and the Trump administration

My son had a bit of culture shock in Mexico City, where he learned that 4-to-6 year-olds there take fútbol seriously. None of this everybody-wins bullshit we have back here in D.C. Nope, kids in Mexico play fút the way kids here play basketball. My son overreacted to that realization: he started to play dirty, like Luis Suárez dirty. The professors (that is what the coaches are called!) could deal with it, but the other kids would complain to my wife and me after practice.

Fortunately, nobody ever attributed the boy’s dirty pool to his nationality. He scored a lot and made saves, albeit diosmio the red cards. Whatever image the other kids had of American children was not affected by this crazy American fond of fouling, handballs and other Suárez-like program activities. He was the youngest kiddo out there and represented nobody but himself. (And maybe his parents, but the other kids’ parents came across as amused and sympathetic, not judgmental. Much like the reaction of soccer fans when they talk to Uruguayans about Suárez. Which is fortunate for Uruguay’s international reputation.)

And that brings us to the impact of another individual at about the same maturity level as my 4-year-old son: President Donald J. Trump. Earlier this summer, I noted that there seemed to be very little anti-Americanism among middle-class chilangos, certainly when compared to the wave of hate-America that passed over the same group in 2001-02. Mexicans realize that the current American president is unpopular and does not represent the American people as a whole any more than my son represents all American children.

A former Mexican ambassador to China initially shared my views but now fears that the Trump administration is doing permanent damage to Mexicans’ view of the American people:

I believed Mex people can tell diff btwn Trump & Amer people & would revert to normal once he's gone. Now afraid damage will be long lasting

— Jorge Guajardo (@jorge_guajardo) August 27, 2017

How can we know who is right? Polls are not helpful. The standard question asks about Mexican views of the United States, and those views, obviously, depend greatly on the current government. Consider the below results from the Economista poll. They are obviously influenced by the policies of the American government-of-the-day. The U.S. was highly unpopular in early 2004, only a year after Gulf War 2 and while the Iraq insurgency dominated the headlines. By late 2005, that had passed from Mexican headlines (albeit not American ones) and people’s view of the United States recovered.

I would like pollsters to ask Mexican respondents a different question: “What is your view of the American people?” or “What is your view of American society?” Asking them about the “United States” invites conflation with the current administration. What we want to know is the damage that Trump has done to the relationship between the two peoples, not to the image of his administration.

Does anyone have any data on this? I would also like to know qualitative impressions. Please, comment below.

The Brazilian fiscal cap still makes no sense

McDevite is not answering my call. I am sad. 

But I am not as sad as the people of the Federal Republic of Brazil, right across border from here! (“Here” is Uruguay, on my way to Buenos Aires. And while I am in parentheses and can be pedantic, allow me to point out that “federative” is not a word in American English and the proper translation of “federativa” is “federal.”)

Over in Brazil, Michel Temer is mired in a growing corruption scandal. His woes are compounded by his blatant reactionary conservatism. The man worked to keep women and black people out of his cabinet. He also shoved through a constitutional amendment that insures public spending will shrink no matter what over the next decade. All that plus corruption! Brazil is, once again, a mess.

Now come Filipe Campante and Dani Rodrik with a short essay reiterating just how incredibly stupid the fiscal handcuffs will be for Brazil. They draw a parallel with Argentina. By the 1990s, Argentine governments had racked up a long history of irresponsible monetary policy. So they decided that the best way to promise to no longer inflate would be to throw away the printing presses. The Convertibility Act stated that the Argentine central bank could only issue pesos 1-for-1 with the dollars it had on reserve. 

Of course, the fact that Argentina had no control over its monetary policy meant that an otherwise manageable mild balance-of-payments crisis turned into a depressionary nightmare. The country abandoned the link in a moment of political chaos. 

Campante and Rodrik make the point that the fiscal limit is as problematic as convertibility. If it succeeds in bringing down interest rates and sparking growth, then it will no longer be necessary ... but will by its past success be perceived as a vital totem and therefore be incredibly hard to remove even should it start to cause damage. Meanwhile, if it is unsuccessful it will unsuccessful because the limit itself will become an early focus of political conflict. Either way, Brazil will lose, unless it somehow manages to dodge all economic bullets over the next decade.

So I am at a loss as to why the cap might even be remotely a good idea! But I know people disagree with me. So, Lee Allston, Aldo Musacchio, and anyone else in the know, once again, could you please give me the counter-arguments? Surely I am missing something. 

Uruguay and New Zealand: Never alike?

So here I am in Uruguay! Getting here was a bit more involved than I had hoped. My Copa flight gave me 45 minutes to change planes in Panama City, but thunderstorms delayed our departure from Dulles for about that long, and that was that. Overnight in Panama.

In a previous post, I showed evidence that Uruguay and New Zealand were very similar in terms of their geographic endowment (meaning lots of great grazing lands) but Uruguayan farners failed to adopt technological innovations that their New Zealander cousins took up with abandon. I asked why and got two good hypothesis: Shah8 suggested that New Zealanders were more integrated with Australia and had access to cheaper capital, while Sam pointed out that Uruguayans were far less educated than New Zealanders in 1900.

Well, there is another possibility. In the late 19th and early 20th centuries there were two ways to generate large-scale energy: burn a fossil fuel or dam a river. But Uruguay is flat, with no natural lakes, and it receives only 75% as much rainfall. Moreover, that rainfall is more erratic. Reto Bertoni and Henry Willeband (Universidad de la República) noticed that difference, and gathered hydro cost data for the two countries. And they found this circa 1920 (page 25):

Capital costs for hydropower in Uruguay were triple their level in New Zealand; operating costs (for all electric power plants) were double. And if you consider Shah8’s conjecture that capital was scarcer in Uruguay, then the levelized capital cost relative to N.Z. will be even higher than these figures imply.

New Zealand and Uruguay were very much unalike in one key respect — hydropower resources. But two quibbles. First, hydro was not the only source of power. The Uruguayans could have burned coal. Second, did energy matter that much? Sure, it cost more than in New Zealand, but that does not mean that those higher costs mattered in countries dependent on agriculture. 

Thoughts?

Uruguay and New Zealand: no copying allowed?

 I am currently starting a project that will (well, may) end with a comparison of Argentina and Canada. Along with Argentina and Australia, that is a comparison that many scholars have noted, even if the literature so far has shed less light on the mystery of Argentine failure than one might have expected. 

A recent paper by Jorge Álvarez Scanniello, however, notes an even better comparison: Uruguay and New Zealand. (Apologies to all for also putting this post under the “Argentina” tag. I did it for future reference, at least until Typepad develops a widget for nested topic searches. In my defense, many Argentines are still unclear on the fact that Uruguay is a country.) Moreover, the paper focusses in on livestock. So it is a one-industry comparison between two like countries. 

How similar were they? Well, here is chart of livestock exports as a % of all exports:

OK, so far, so similar. But maybe they exported to different markets or had different trade preferences, and therefore maybe experienced different economic shocks? Well, here are their terms of trade:

Pretty correlated until the 1990s, by which point Uruguay had already fallen from 80% of New Zealand’s income per capita circa 1925 to only 50%.

Well, maybe New Zealand was just a better place for cows and sheep?

 

Line 1 is the ratio of New Zealand’s “meat equivalent” per hectare to Uruguay’s. It is about the same until 1930, which is when (not coincidentally) N.Z. starts to pull away in the income tables. The other three measures do not go back as far (for details, page 6) but show the same post-1930 trend. Basically, the two places look about as good for cows until 1930, when New Zealand becomes a lot better.

So what happened?

Well, the paper has only hypotheses, but they are interesting. In New Zealand, university botanists in 1920-40 developed better strains of ryegrass combined with clover that could fix nitrogen and reduce fertilizer use. So, better pasture. Then, in 1940-66 the country started using aerial topdressing (dropping fertilizer from airplanes) combined with a great deal of government investment in things like rural roads and electrification. 

In Uruguay, well, they saw what was happening in New Zealand. In 1951, Uruguay sent a team of experts to New Zealand to copy their technology for improving grasslands, but it never really went anywhere, with improved lands stalled out at 12% if the total around 1975. (Graph 10.) Why? Well, results on improved lands seemed to fall behind those in New Zealand. Since farmers were not really making more money, they stopped bothering.

In other words, something stopped Uruguay both from developing its own indigenous technology and from successfully adopting techniques from New Zealand.

What could that block have been?

Syrians to South America?

 Here is a question for you: why aren’t flights from the Middle East to South America crowded with Syrian refugees?

On paper, most of the Southern Cone countries have remarkably liberal immigration regimes. Start with Argentina. Refugees are automatically accorded two years of residency and receive legal representation. (See the 2010 Migration Act.) Now, the law is not as liberal as American activists would have you believe: undocumented migrants can still be deported (page 17), but the Argentine government has explicitly opened its doors to Syrian migration. Uruguayan immigration law is even more liberal than Argentine. All you need to do to migrate to Uruguay is demonstrate an income stream of $500 per month. After that, naturalization comes within a few years. Brazil has a liberal new refugee law. 

The problem isn’t cost. A ticket costs around $800, rather less than the monetary cost of making it overseas to Europe. 

But in practice, all three countries are pretty much closed.

Start with the official Argentine program for Syrian refugees. The refugees need to have links to an Argentine sponsor either through family ties (out the fourth generation) or via a “pre-existing personal relationship based on whatever legal, reasonable, and justifiable reason: family, social, educational, work, etcetera.” 

Unless a Syrian in a camp somewhere can demonstrate a tangible documented link with somebody in the Argentine Republic, then they do not get a visa. This policy lets Buenos Aires claim that the doors are open while actually keeping them firmly shut. 

The policy may change, depending on how seriously Argentine authorities take the definition of a family link. Supposedly, 4 million Argentines trace some ancestry to Syria. In reality, no. In the peak years of 1897-1913, net migration from Syria came to about 103,000. To get from that to 4 million you have to assume almost total exogamy, which is not likely. (For the pedantic: if you assume the same birthrates as the general Argentine population, a generation of 35 years, and total exogamy, then about 3.4 million Argentines should have some “Syrian” ancestry by now.)

Moreover, a 1936 census registered only 11.2% of the Syrian-born residents of Buenos Aires as Muslim. (Page 17, once again.) Some of that is surely conversion, but it also implies that the “Syrians” came much more from Lebanon than from Syria.  

Nor is this policy in violation of Argentine refugee law. Article 10 exempts anyone under U.N. protection. Article 11 exempts anyone who has “voluntarily settled inside or outside the country which he left owing to fear of persecution.” Depending on the definition of “voluntarily settled,” that could include precisely every Syrian refugee. It certainly includes anyone in a UNHCR camp. Only a few hundred people have escaped under this not-so-generous regime. 

Uruguay is worse. After the country took in a whopping 42 refugee families, a counterreaction set in, and the door are now firmly shut. In theory, the country has pledged to admit ... wait for it ... 120. Now, Uruguayan law opens up an interesting way from European countries to send their unwanted refugees to Uruguay: give them an airplane ticket and a $500 per month stipend. That said, given what happened with the 42 refugees the law would be changed right quick if a European government tried to take advantage of it. 

Chile, meanwhile, has a liberal refugee law that only considers people who manage to make it to Chilean territory. So no visa for that plane ticket from Dubai. 

And then there is Brazil, which had settled 1,740 Syrian refugees as of March, and 2,077 as of this month. That is nice, but still a very small number. The Brazilian issue is that the bureaucracy is slow, so even without formal quotas few applications get processed. (The Brazilians also exempt anyone under U.N. protection.) It is probably the most open, but still not enough for a mass exodus.

The Brazilian case shows how much bureaucracy can turn an ostensibly open process into a closed one. The Mexican government is coming under a surprising amount of domestic pressure to accept 10,000 refugees. I bet there will even be a bill. And it will sound good.

But the devil will be in the details. Do not wait for Latin America to open its doors in any serious way.

Argentines are still a little upset that Uruguay is a country

 A while back, Randy “Proud Canadian” McDonald expressed surprise at the terrible state of Uruguayan-Argentine relations. Well, now President Fernández has managed to add some fuel to the fire by saying this:

Transcript: “Esta bandera de Entre Ríos, cruzada por la franja roja que es el símbolo de Artigas, vivo en la tierra entrerriana, de ese Artigas que quería ser argentino y no lo dejamos, ¡carajo! ¿Cómo pudo haber sido posible? Ay, se me fue, disculpeme. Se me fue pero me da bronca cuando lee la historia y ve que desde Buenos Aires rechazaron a los delegados de la Banda Oriental. Por eso no somos una sola nación.”

Translation: “The flag of the [province of] Entre Ríos, crossed by the red stripe symbol of Artigas, alive in the land of Entre Ríos, of this Artigas who wanted to be Argentine and we didn’t let him, fuck! How could that happen? Ah, it just slipped out, apologies. It slipped out but I get annoyed when I read the history and see that Buenos Aires rejected the delegates from the Eastern Shore. This is why we aren’t one single nation.”

Hmm. As history, she has it sort-of-right. Perhaps I should say “not quite wrong”?

Artigas’ revolt against Spain was linked to the Argentine revolt (in more-or-less the same sense as the revolt against the British in Virginia was linked to the revolt in Massachusetts) but the leaders in Buenos Aires sold him out by signing a truce with the Spanish viceroy in Montevideo. Artigas fled to what is now Entre Ríos.

Uruguay might have then become the quite-literal Canada of South America, but Buenos Aires resumed the offensive and liberated the territory. (The government in Buenos Aires was hostile to Artigas, seeing him not as a secessionist but as a rival for the national leadership.) With the Spanish gone, Argentina now had to figure out how to organize its new government. Artigas was a federalist, and once it became clear that Buenos Aires was not willing to accept a federal system he organized the Federal League (which included several northern provinces) and went to war with the dictatorship in the capital.

He lost when the Portuguese allied with the Buenos Aires government. The Brazilians invaded and annexed Uruguay. Artigas fought on in what is now northern Argentina, but he was eventually defeated.

So, as history President Fernández is almost right. It wasn’t like Artigas went down to Buenos Aires and said,“Hey, great country there, let me in?” Rather, he fought and lost a civil war when Buenos Aires refused to allow for a federal system. But it is correct that he thought of himself as a citizen of the Provincias Unidas de Sudamérica. (Argentina, like America, had a lot of trouble deciding on a name for the country. The Argentines eventually picked one, however, while up in the United States the moniker “Columbia” never really caught on.) 

But as politics, well, ugh. Whatever the origin, Uruguay is in fact now a country. Moreover, it’s one whose citizens have (quite understandably, even absent nationalism) rather little interest in joining the Argentine Republic. Not only that, it’s a country that has a remarkably contentious relationship with the Argentine Republic. 

So having an Argentine president say, “Fuck, I get annoyed that we’re not one country” does not help. 

“This old lady is worse than the one-eyed man”

That is what President José Mujica of Uruguay accidently said about President Cristina Fernández of Argentina when he didn’t know the mike was live. The one-eyed man, by the way, is her late husband and former President of Argentina.

“Esta vieja es peor que el tuerto.” In Mexico, in this context, the use of vieja would not necessarily be an aspersion against President Fernández’s age, meaning instead something like “The wife is worse than the one-eye.” I am told, however, that in the Southern Cone it translates to something more like “hag.”

Uruguay is not happy with Argentina. The tension goes back a long way (Canadians should appreciate the psychology) but the recent imbroglios began with this. Short version: Argentine activists blockaded a bridge between Uruguay and Argentina in anger over a big paper mill a Finnish company was building in Uruguay.

President Mujica’s predecessor, Tabaré Vázquez, considered going to war over the blockade, but quickly realized ... well, take a listen:

So much for sending the Uruguayan army over the bridge. (Plus, well, even a successful action would have worked out about as well for Uruguay as Pearl Harbor did for Japan: you don’t get a country to reopen its roads to your commerce by attacking them.)

Ex-President Vázquez is telling the truth about the seriousness of the conflict over the Botnia paper mill. In 2006, the Uruguayans told the American government that the Argentines were “fascists” and asked the U.S. for help. “A brother slapping another in the face needs a big uncle to put a stop to it,” said the Uruguayans, although they feared that Argentina would cut off gas imports. (The U.S. tacitly supported Uruguay.) In April 2007, in the face of Argentine threats, Uruguayan newspapers revealed military contingency plans should the plant be attacked, although the Uruguayan military attache in Buenos Aires later contradicted those reports.

In November 2007, Vázquez ordered the mill to start operations, with the blockade still underway. But the Uruguayans feared the Argentine response, so they secretly asked for closer military relations with the U.S. and stepped up security around the plant.

Uruguayan fears notwithstanding, war was not going to happen — the U.S. embassy in Buenos Aires wrote: “There is absolutely no indication that GOA [Government of Argentina] is considering a military ‘solution’ to this dispute, and the GOA’s own military operational capacity is very limited. Any suggestions of a military ‘solution’ here actually brings about expressions of humor or disbelief. At the recent Embassy-hosted Veterans Day event, a military contact only barely jokingly said that as a matter of fact, right now, the GOU [Government of Uruguay] probably has more active and usable aircraft and other military assets than does the GOA.”

That said, it is ridiculous that Buenos Aires let the situation get so out of hand. With the plant running (and causing little pollution) the crisis passed, but the reverberations continued to mess up relations between the two countries. Argentina blocked Mercosur from funding a second frequency converter on the Uruguay-Brazil border. The converter would have let Uruguay import more electricity from Brazil ... freeing it from Argentine pressure. (As well as occasional power shortfalls: Uruguay wanted it for economic as well as political reasons. Tenders finally went out in 2011, without Mercosur money.)

Then the Argentines blocked joint dredging operations to maintain the Martín García canal, under the treaty governing the Rio de la Plata. The problem has kept big ships out of the Uruguayan port of Nueva Palmira. It looks like the dredging might finally happen, maybe.

Buenos Aires proceeded to add insult to injury by imposing import licenses on 6 percent of Uruguayan exports to Argentina. It also went after Uruguay as a putative tax haven and denied its national airline landing rights in Chubut. Then Argentina stalled on attempts to build a regasification plant to allow for LNG imports. (President Mujica announced on April 2 that a plant will go ahead “with or without Argentina.”)

The most recent insult was not aimed at Uruguay specifically, but angered Montevideo nonetheless: Argentina limited the amount of money that Argentines can take out of the country ... sucker-punching Uruguay’s tourism industry.

Uruguay tried to shoot back by delaying Néstor Kirchner’s attempt to become the first Secretary-General of the Union of South American Nations, but they failed. Kirchner took over the organization shortly before his death in 2010.

It has become about as dysfunctional a relationship as one can imagine between two democratic and culturally-similar neighboring states. Argentina fruitlessly and pointlessly bullies Uruguay; Uruguay impotently pokes back. Things will certainly not get any worse, but they also show no sign of getting better.

The next time a Canadian complains about relations with the U.S., point to the Southern Cone. It could be much much worse.

More on the legalization of marihuana in Uruguay

It seems that the Uruguayan government has decided to send a new legalization proposal to Parliament. It is considerably more detailed than the original, and its text can be found at this link.

The new bill establishes a National Cannabis Institute to regulate the drug (including sales) and allows for the creation of “membership clubs” of up to 15 people licensed to grow 7,200 grams per year for the use of the members. The institute will be able to fix the price of its licenses to grow or sell cannabis. I presume that the Parliament will also be able to impose taxes in excess of the license fees. I am a little surprised as to the budgetary autonomy that the legislation seems to grant the Institute.

It appears that the Broad Front legislators have abandoned the idea of having the state control the entire value chain in favor of a more ordinary regulatory approach.

The experiment will bear watching.

Legalizing marijuana in Uruguay

So Colorado and Washington have legalized marijuana! This is a big step, although it is going to be a problem that the federal government still bans the substance.

Now, it looks like Uruguay might be the first country on Earth to fully legalize marijuana. (Or “marihuana,” as they spell it.) The Netherlands tolerates it, but it is not fully legal.

It is pretty neat that a serious country may legalize marijuana, but to give away the punchline, I doubt very much that it will be a harbinger of much until the American or Canadian federal government moves. There is a lot of opposition to legalization in Latin America, and Uruguay is not considered a bellweather. (It is one in practice, but that is more because Uruguay gets to the future first and less because other nations deliberately emulate the Eastern Republic.)

The bill is pretty vague. Here is the complete text:

“The State will assume control and regulation over the importation, production, acquisition in any form, storage, commercialization and distribution of marihuana and its derivatives, under such terms and conditions as fixed by regulation.

“Likewise, the State will undertake such material activities as are necessary before, during and after to carry out the activities referred to in the previous paragraph, under such terms and conditions as fixed by regulation.

“The activities referred to in the previous paragraphs shall be realized exclusively under a policy of damage reduction that shall, therefore, alert the population to the consequences and adverse effects of marihuana consumption, as well as the effects of minimizing the risks and damages to the population of potential consumers under such conditions as fixed by regulation.”

It is worth noting here that the Uruguayan president is quite a bit more powerful than the American president. (At least inside the country. Outside Uruguay, I do not believe that Mr. Mujica has the ability to order flying robots to kill anyone.) As long as his cabinet concurs, the Uruguayan president can send bills directly to Parliament. (Officially, the “General Assembly,” but everyone calls it Parliament.) In fact, under Article 168 the president can designate bills as urgent. “Urgent” bills must be approved or disapproved with 85 days or they automatically become law. The catch is that the president can only submit one urgent bill at a time.

The marihuana bill is not urgent.

So it is taking its own sweet time through Parliament. Of the six security measures proposed by the President (the marihuana deal is considered a security measure) the legislature has approved only one, which reduced sentences for low-level drug dealing while increasing the penalties for corruption. Right now, the marihuana bill is in a dicey spot. It can pass, but only with support from the President’s Broad Front. So far, only one opposition legislator has come out in support.  President Mujica seems reluctant to pass such a significant bill on a party-line vote.

In order to get support, the administration has announced what the regulations might look like after the bill is passed. The drug will cost ₱700 per gram, around US$36. That is higher than the U.S. price of $14 per gram, but roughly the price in Uruguay. (Since marijuana is still illegal, it is hard to come up with a standardized price, even for tolerated medical marijuana.) If the law passes, Uruguayan consumers will receive a photo ID armed with a photo and bar code (that is high tech?) and be limited to 40 grams a month.

To sum, the bill looks likely to pass, but it is still generating controversy.

But I would also bet that the Mexican government is going to consider legalization but do nothing until the U.S. federal government moves. There is a great deal of conservative opposition in Mexico, deeper and wider than in Uruguay, and with a weaker president and a divided Congress everything is tougher.

In fact, contrary to popular belief, a great book by Isaac Campos shows that opposition to marijuana actually originated inside Mexico; it was not imposed by international norms. The reverse actually: had Mexicans been less anti-marijuana, then the world might not have gone prohibitionist.*

Big dumb error, but an interesting bit of history anyway

  That flag that perplexed me? Well, it's the Entre Ríos provincial flag. In Uruguay they call it the Artigas flag and you can see it outside museums and the like, although the shade of blue is rather darker. In Argentina, it seems to mean nothing other than the flag of the province. 

I really should have known that it was the provincial flag. My excuse is that I've never actually been to Entre Ríos. Route 9 skirts it, but never actually enters the province.

So much for there being some sort of living historical symbolic connection across the Uruguay River. Nope. Now, in historic terms it makes sense that Entre Ríos would pick a flag based on the old Liga Federal, but I'd bet not one in fifty people (on the Argentine side) could explain its origin. (Leticia?) 

And we get a hit from Uruguay just as I make the mistake! Ah, ni modo.

Anyway, I need to rent a car and spend a week or two driving aimlessly around Argentina. That would be a dream vacation. I just need an excuse to do it. My wife just nixed heading there in June. Too cold.