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Portugal ECONOMIC GROWTH AND STRUCTURAL CHANGE
Portugal's First Republic (1910-26) became, in the
words of
historian Douglas L. Wheeler, "midwife to Europe's longest
surviving authoritarian system." Under the sixteen-year
parliamentary regime of the republic with its forty-five
governments, growing fiscal deficits financed by money
creation
and foreign borrowing climaxed in hyper-inflation and a
moratorium on Portugal's external debt service. The cost
of
living around 1926 was thirty times what it had been in
1914.
Fiscal imprudence and accelerating inflation gave way to
massive
capital flight, crippling domestic investment. Burgeoning
public
sector employment during the First Republic was
accompanied by a
perverse shrinkage in the share of the industrial labor
force in
total employment. Although some headway was made toward
increasing the level of literacy under the parliamentary
regime,
68.1 percent of Portugal's population was still classified
as
illiterate by the 1930 census.
Data as of January 1993
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