Acerca de la viabilidad de la descentralización económica

This teaching material concentrates on the influence of transportation costs, size of markets and productivity differences in the competitiveness of producers located in different places. It is a simple presentation of the approach taken by Krugman, by Button and by Richardson in their elementary texts on regional competition. We accentuate the importance of rising the value added per unit of weight (or unit transportation cost) in order to increase competitiveness of those producers that are located farther than others from the market. Weight-reducing transformations can be important to make some producers competitive. It also becomes clear that the size of the maximum investment possible in any particular location depends not only on the size of the local market but also on the unit transportation costs from other locations. Road improvements can reduce the size of firms in the smaller market, and also push producers toward low-value products. Competition in markets where the provinces compete with bigger cities seems implies a descentralizacion of small and low-unit-value products. Specialization in local indigenous products seems to be obligatory.