Growth and Convergence Among Argentine Provinces Since 1895

The economic development of Argentina since the end of the nineteenth century is a story of growth, splendour and then stagnation and relative decline. In this chapter we present the first consistent formal quantitative analysis of the regional dimension of that story. By putting together estimations of the provincial Gross Domestic Products (GDPs) for ten benchmark years between 1895 and 2004, we confirm the paramount importance of the city of Buenos Aires and the province of Buenos Aires in the national economy since the end of the nineteenth century. We also add new insights about the evolution of regional disparities: first, there is a remarkable persistence in the relative positions of the provinces along the whole period under analysis; second, this persistence is mainly due to the fact that the high levels of income per capita in some provinces of Patagonia and in Capital Federal—relative to provinces in the North—is a feature that is defined since the nineteenth century. Third, the explanation of a large share of regional inequality is related to high productivity generated by abundance of natural resources in some areas of Pampa Húmeda and Patagonia and by increasing returns in manufacturing and services in Capital Federal.