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Yet Another Tale of Two Cities: Buenos Aires and Chicago

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  • Filipe Campante
  • Edward L. Glaeser

Abstract

Buenos Aires and Chicago grew during the nineteenth century for remarkably similar reasons. Both cities were conduits for moving meat and grain from fertile hinterlands to eastern markets. However, despite their initial similarities, Chicago was vastly more prosperous for most of the 20th century. Can the differences between the cities after 1930 be explained by differences in the cities before that date? We highlight four major differences between Buenos Aires and Chicago in 1914. Chicago was slightly richer, and significantly better educated. Chicago was more industrially developed, with about 2.25 times more capital per worker. Finally, Chicago’s political situation was far more stable and it wasn’t a political capital. Human capital seems to explain the lion’s share of the divergent path of the two cities and their countries, both because of its direct effect and because of the connection between education and political instability.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15104.

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Date of creation: Jun 2009
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Publication status: published as “ Yet Another Tale of Two Cities: Buenos Aires and Chicago ” (with Edward L. Glaeser), prepared for book Argentine Exceptionalism (edited by Rafael Di Tella and Edward L. Glaeser).
Handle: RePEc:nbr:nberwo:15104

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  1. Murphy, Kevin M. & Shleifer, Andrei & Vishny, Robert W., 1989. "Industrialization and the Big Push," Scholarly Articles 3606235, Harvard University Department of Economics.
  2. Ades, Alberto F & Glaeser, Edward L, 1995. "Trade and Circuses: Explaining Urban Giants," The Quarterly Journal of Economics, MIT Press, vol. 110(1), pages 195-227, February.
  3. Denice DiPasquale & Edward L. Glaeser, 1997. "Incentives and Social Capital: Are Homeowners Better Citizens?," Harvard Institute of Economic Research Working Papers 1815, Harvard - Institute of Economic Research.
  4. Campante, Filipe & Do, Quoc-Anh, 2007. "Inequality, Redistribution, and Population," Working Paper Series rwp07-046, Harvard University, John F. Kennedy School of Government.
  5. Ashenfelter, Orley & Krueger, Alan B, 1994. "Estimates of the Economic Returns to Schooling from a New Sample of Twins," American Economic Review, American Economic Association, vol. 84(5), pages 1157-73, December.
  6. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc.
  7. Campante, Filipe R. & Chor, Davin, 2008. "Schooling and Political Participation in a Neoclassical Framework: Theory and Evidence," Working Paper Series rwp08-043, Harvard University, John F. Kennedy School of Government.
  8. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," NBER Working Papers 10568, National Bureau of Economic Research, Inc.
  9. Daron Acemoglu & Joshua Angrist, 2001. "How Large are Human-Capital Externalities? Evidence from Compulsory-Schooling Laws," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 9-74 National Bureau of Economic Research, Inc.
  10. Rauch, James E, 1993. "Does History Matter Only When It Matters Little? The Case of City-Industry Location," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 843-67, August.
  11. Filipe R. Campante & Quoc-Anh Do, 2009. "A Centered Index of Spatial Concentration : Axiomatic Approach with an Application to Population and Capital Cities," Development Economics Working Papers 22059, East Asian Bureau of Economic Research.
  12. Edward Glaeser & Giacomo Ponzetto & Andrei Shleifer, 2006. "Why Does Democracy Need Education?," NBER Working Papers 12128, National Bureau of Economic Research, Inc.
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Cited by:
  1. Filipe R. Campante & Quoc-Anh Do & Bernardo Guimaraes, 2013. "Isolated Capital Cities and Misgovernance: Theory and Evidence," Sciences Po publications 10, Sciences Po.
  2. Maloney, William F. & Caicedo, Felipe Valencia, 2014. "Engineers, Innovative Capacity and Development in the Americas," IZA Discussion Papers 8271, Institute for the Study of Labor (IZA).
  3. Borowiecki, Karol Jan, 2012. "History matters: The origins of cultural supply in Italy," Discussion Papers of Business and Economics 15/2012, Department of Business and Economics, University of Southern Denmark.
  4. repec:spo:wpecon:info:hdl:2441/4eh5eurum690ur8datvh2sb4g9 is not listed on IDEAS
  5. Fabrice Murtin & Romain Wacziarg, 2014. "The democratic transition," Journal of Economic Growth, Springer, vol. 19(2), pages 141-181, June.

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