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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 16: Regional Development, Regional Disparities and Public Policies in Argentina: A Long-run View

Alberto Porto and Atilio Elizagaray

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


1 Alberto Porto and Atilio Elizagaray 16.1 INTRODUCTION Regional disparities, between and within countries, are an important issue for economic theory and also for economic policy. Within countries, fiscal equalization transfers are commonplace,2 while between countries there are also territorial transfers.3 Among international organizations the terms of loans (amounts, interest rates and maturity) change according to the economic and social conditions of the recipient countries. In this chapter, aspects of the regional development and territorial imbalances in Argentina are examined. For a long time this territorial disequilibrium has been a relevant issue on the Argentine public agenda.4 For instance, Bunge (1940) asserts that: ‘in this way . . . [the country] . . . is shaped like a fan, with population density, economic capacity, cultural level and the standard of life constantly decreasing as you move farther away from the capital.’ Bunge believes that the main responsibility for this outcome relies on the economic policies which were geared more toward foreign trade and less toward the underdeveloped regions of the interior of the country. He concludes that consistent and sustainable policies could, during the time span of a generation, reduce these economic, social and cultural gaps. Economic policies have not had much success in achieving convergence in per capita gross domestic output. Nonetheless, they did achieve convergence in social indicators and began to reduce population concentration in the Buenos Aires Metropolitan Area. The set of economic policies implemented have been rather inconsistent and variable throughout time. Consequently, they have incurred large efficiency costs and have...

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