The Economies of Argentina and Brazil
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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.
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Chapter 18: Comments on Part VI

Geoffrey J.D. Hewings

Extract

18. Comments on part VI Geoffrey J.D. Hewings GENERAL PERSPECTIVES In his seminal paper, Williamson (1965) proposed a stylized model to explain the process of regional disparities over time. From his work came the now well-known inverted U-shape (Figure 18.1) that reveals very clearly the ‘location’ of countries over time. Those with low levels of per capita income tend to be associated with low levels of regional disparities. Concomitantly, the same is true for countries with high levels of per capita income. In between, we find a cluster of countries – mainly in Latin America – with medium levels of per capita income but high levels of regional disparities. Williamson was able to explain the growth of disparities by appealing to notions of comparative advantage enjoyed by some regions, as well as the processes of circular and cumulative causation (Myrdal, 1953; Kuznets, 1968). Now, the evidence from the new growth Index of regional disparity High Low Low Middle High Per capita income Figure 18.1 Regional disparities and per capita income. 327 809962 BAER PRINT (M2763).indd 327 27/09/2011 16:30 328 The economies of Argentina and Brazil theory and new economic geography offers additional explanations – the role of scale economies, agglomeration economies, path dependence and the critical role of transportation costs. However, none of these approaches/theories provided a convincing explanation for the processes towards convergence. Now, well over 100 articles in the last decade on regional disparities, convergence, convergence clubs etc. have been published using a variety of techniques (stimulated in part...

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