Exceptional Argentina Di Tella, Glaeser and Llach - Thomas Piketty

extractive boom appropriated by a small landowning elite just cannot be reconciled with these
wage data.
Figure 5. Ratios of wages to per capita GDP, 1925-1929
180
160
140
120
100
80
60
40
20
0
IRL
NOR
DEN
SWE
USA
AUL
CAN
ARG
GER
NET
SPA
UK
ITA
FRA
BEL
On the other hand, Argentina's fortunes did show steep differences across regions (Figure 7).
Per capita GDP in Buenos Aires −province and region, holding 46% of the population− was
probably close to that of Australia by 1929, around US$ 4500 in 1990, PPP money. In the
other extreme, the 10 non-Pampean provinces, with 22% of the population, were very close to
Mexico, around US$ 2000. In between, Pampean provinces outside Buenos Aires (Santa Fe,
Entre Ríos and Córdoba) were more or less at the national average of US$ 3700 11 . Of course,
every country has its own regional differences, but it is likely that Argentina's were on the
high end. The coefficient of variation of provincial incomes was 0,50 in 1925-1929, compared
to 0,38 for the US in 1929 12 and 0,24 for Australian states in 1930-34 13 . Unlike any of the
other big countries of the New World, natural resources were heavily concentrated in just one
region which happened to surround the obvious place for an Atlantic port. Importantly, from a
political economy point of view, the backward areas (say, from Córdoba to the North and
West) were not the latest but the earliest population settlements. The political agreements
behind the 1853 Constitution, and the system of regional distribution of power it sanctioned,
reflected this original demographic setting, which had little to do with what turned out to be
the economic potential of different regions. For some time −and, to some extent, to this day−
a problematic asymmetry between economic and political power existed in Argentina.
11 Data on income shares per province from Llach (2004).
12 Data from the St.Louis Fed, http://research.stlouisfed.org/fred2/release?rid=151&pageID=1.
13 Neri (2007).