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The Economies of Argentina and Brazil

The Economies of Argentina and Brazil

A Comparative Perspective

Edited by Werner Baer and David Fleischer

This book compares the successes and failures of the development and growth processes of Argentina and Brazil. It provides important insights into the different performances of these economies through a series of comparative essays written by Argentinian and Brazilian economists.

Chapter 1: Industrial Development in Argentina

Bernardo Kosacoff

Subjects: development studies, development economics, economics and finance, development economics


Bernardo Kosacoff 1.1 INTRODUCTION Argentina’s industrialization started off in the late nineteenth century and developed alongside the dynamic agro-export model which dominated the economy until the beginning of the 1930s. At that time, industry began to occupy a favored position in the Argentine economy through the process known as import–substituting industrialization (ISI). In fact during the second phase of ISI, which began in 1958, industrial activities became the country’s engine of economic growth and job creation, and its base for capital accumulation. At the same time, industry was developing technological capabilities which were remarkable for the Latin American context at that time. However, by the mid 1970s this model of industrialization was facing a series of inherent difficulties. These included problems related to the type of industrial organization which had emerged – e.g. plants on too small a scale, the lack of subcontractors and specialized suppliers, poor international competitiveness etc. – and to the macroeconomic functioning of the Argentine economy – e.g. considerable transfers of income, balance-ofpayments deficits and volatility among other problems. Meanwhile, progress made in the more advanced industrial countries was generating a changeover to a new techno-production pattern in which the models for organizing industrial production were based on a kind of logic different from the prevailing Fordist mass-production models. One of the key factors behind such changes was the spectacular progress occurring in microelectronics – which made the transition possible from the electromechanical word to the electronic word. On the other hand, when faced by difficulties in restoring industrial...

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