Integration and Regional Restructuring

Frankfurt

Seminario; IV Arnoldshain Seminar; 2000

Goethe-Universitat Frankfurt a.M. (JWG, Germany)

Domestic trade liberalization policies, the Mercosur agreement and globalization, are integrating the formerly closed Latin American economies to one another and with the rest of the world. There was a first effect on trade volume, composition, and direction. It is our prior intuitive belief that there is also a change on location incentives that will bring about a reshaping of the spatial allocation of resources, and will pose new economic policy problems: a new pattern of regional development in the Mercosur countries is likely to increase concentration along the axis Santiago- Córdoba- Buenos Aires- Sâo Paulo. A regional policy should in this case consider the welfare effects on the peripheric regions bearing the weight of the burden of transition losses. A leadership conflict with regional implications might also emerge, related to the role of the giant Brazil, and the drift of the Mercosur gravity centre towards Sao Paulo. The paper presents stylized facts of spatial patterns of economic activity in Argentina from a historic perspective, and advances hypotheses of future restructuring that is likely to result from the rapid and marked domestic and external economic transformations. Concentration, specialization, and clustering indexes, and "economic gravity centres" are calculated, using provincial population, gross geographic product and electricity data as rough indicators of the spatial pattern of economic activity.