This thesis studies regional economic disparities both within individual countries as well as between countries. The main objective is to determine whether regional disparities converge automatically through time and, if this is not the rule, whether regional policies are needed. This thesis argues that disparities, far from converging automatically, can persist not only through time but also be affected by policies and external factors. The issue of convergence of regional incomes becomes significant when considering the case of integrated areas. In this thesis I study the potential effects that the deepening of MERCOSUR will have on disparities both between as well as within the member countries by focusing on Argentina and Brazil, the two largest countries within the area, up until the late 1990s. In order to analyse disparities within integrated areas, the European Union will be considered as a frame of reference. I show that although regional policies appear to have favoured convergence, this has not been as significant as expected, particularly within the regions. In addition, Argentina and Brazil will be analysed, and I trace the origin of national disparities to late colonial times. Further, regional disparities within both countries have not shown any major trends towards convergence over the centuries. Moreover, political and macroeconomic factors do seem to have an incidence in the process of regional convergence within those countries. Also, different subperiods display convergence and divergence. Both the European Union experience as well as that of Argentina and Brazil indicate that disparities were not reduced automatically as neo-classical economics predict. I also refer to macroeconomic and political factors having an impact in the process of convergence, diverting these regions away from their convergence paths. Another important factor in the automatic process of convergence as described in neo-classical economics is the interregional mobility of factors. However, this does not seem to have been the case for either the European Union or Argentina and Brazil. The thesis seeks to provide an insight into how disparities evolve through time and its conclusions will not only be useful in terms of regional policy planning in Argentina and Brazil but also in the process of deepening in MERCOSUR and a possible Latin American integration. The comparison with the European Union experience provides a more general frame of reference for other integration schemes around the world. The conclusions should provide a better insight into the problem of unbalanced growth not only for individual countries but also for integrated areas.

This doctoral study explores the generative factors that help to explain how middle-class citizens respond when confronted with sudden impoverishment in the aftermath of external economic shocks. Focusing on the actions taken by millions of ‘new urban poor’ during the 2002 economic crisis in Argentina, I examine why some resisted their sudden pauperisation and potential proletarianisation by participating in the bourgeoning protest movements and collective actions at the time, whilst others confined their responses to private strategies of self-improvement or to subtle acts of individual dissent. In this study, I undertake an extensive and critical review of the literature, together with quantitative research methods. A statistical analysis of World Bank household survey data is conducted in order to identify newly poor citizen responses in the first instance. I then explore the underlying political opinions and social attitudes that may have informed these actions using LatinoBarómetro survey data. Motivations for engagement in selected responses are analysed at both the collective group and private individual level. First, I find that the process of impoverishment itself was not sufficient to stimulate their involvement in collective action as a response on its own and that explanations were instead multicausal. By comparing the in-group behaviour and social and political attitudes of newly impoverished citizens in 2002 to those of their cohorts during the period of neoliberal reforms in the mid-1990s and then during the macroeconomic boom years since 2005, I offer four alternative contextual processes and explanations which account for the increased tendency towards participation in collective protests or self-improvement rather than simply private responses in 2002. These include 1) that the scale of the economic crisis led to the forming of a collective identity and sense of suffering which disposed them more towards participating in resistance actions alongside others, 2) that the simultaneous crisis of representation reduced their political tolerance of their hardship and so made protesting a more likely course of action, 3) that opportunities for individual self-improvement in the labour market and macroeconomy were undermined just at the time that the spaces to engage in social movements and collective self-help experiments increased and 4) changing ways of thinking and trends in underlying social and political attitudes at the time militated in favour of partaking in actions that brought the new urban poor together in solidarity actions with other social sectors against the government. Fluctuating diachronic patterns of political mobilisation are therefore observed and using Gramsci’s theories of cultural hegemony, ideology and false consciousness as a theoretical framework, I contextualise resistance activities under the specific conditions of economic crisis and loss of political legitimacy of 2002. Patterns of change in in-group behaviour are attributed to the oscillating consent of this new urban poor social stratum to being controlled by the dominant class on the one hand and the extent to which citizens encountered a shared class consciousness as a basis for resistance with other elements of the organised working class and the unemployed on the other. I discuss and critique a range of explanatory mechanisms, including whether the experience of pauperisation and social descent was either internalised (generating subsequent feelings of selfblame, demoralisation and alienation), or whether culpability was attributed to systemic factors, the government, other institutions and capitalist processes, whereby collective identities and grievances were more likely to form in the process. The impact of these subjectivities upon action is also explored. Then, citizens’ private considerations as individuals and as household members are examined. I find that the resistance activities adopted by the new urban poor were shaped by several factors including the respective impacts that relative deprivation and absolute impoverishment had on protest and self-improvement actions, the combinations of responses creating a polarised sense of either activism or disengagement and one’s biographical characteristics such as their prior exposure to community organisational involvement and localised opportunities to participate in collective or individual actions. Finally, having identified deficiencies in traditional Rational Choice, Resource Mobilisation and Political Opportunity social movement theories as explanatory models for new urban poor involvement in protest, I conclude the thesis by building on a Marxist theory of social movements. I demonstrate how the forming of grievances, targeting of anger, measuring of demands and form of resistance that these citizens adopted derived heuristically from their daily experiences of class struggle. Then, in seeking to remain true to and reinvigorate the principle of self-organisation which was at the core of their resistance to capitalism during 2002, the perceived unsustainability of Argentina’s nascent autonomist movements is analysed. Suggestions are made as to ways in which social movements could stimulate solidarity between the new urban poor, the organised working class and the structural poor, whilst at the same time increasing the durability of collective resistance through alternative mobilising vehicles and political and economic models.

Argentina’s early twentieth century is commonly portrayed as a ‘golden age’ in which it became ‘one of the richest countries in the world’. Here, however, this optimistic vision is challenged by placing Argentina within a new metanarrative of global divergence during the long nineteenth century. A massive terms-of-trade boom – the extent of which has not previously been appreciated – had profoundly uneven impacts across the periphery. Where land was abundant, frontiers could expand, leading to dramatic extensive (that is, aggregate) growth. An expanding frontier then had a safety-valve effect on labour markets, so capitalists responded to high wages by mechanising production, which raised labour productivity and, consequently, per capita incomes. In the land-scarce periphery, by contrast, deindustrialisation led to increasing quantities of labour receiving diminishing returns by being applied to limited land resources. Similarly, Argentina’s own century-long terms-of-trade boom allowed the Littoral to prosper but made the more densely populated interior stagnate. The presence of the poor interior then prevented the country from developing the kind of white-egalitarian democracy that had allowed the prosperous European offshoots to make the transition to rapid intensive (that is, per capita) growth. Most importantly, Argentina’s political backwardness ensured that landownership remained concentrated, which muted the safety-valve effect of the expanding frontier, so capitalists did not make the same investments in laboursaving technologies. The new metanarrative of global divergence thus leads to a far more pessimistic revision of Argentina at the beginning of the twentieth century – a revision that is verified through a comparative assessment of its living standards that shows them to have been considerably below the levels of Northern Europe and the European offshoots. Argentina’s ‘golden age’ is therefore a myth.

The thesis compares Argentine and Australian fiscal systems from the late nineteenth to the late twentieth centuries. It uses institutionalist and endowments approaches to evaluate the importance of state credibility and taxation on long run economic development. After rapid convergence in the early twentieth century, Argentina and Australia clearly diverged in the latter twentieth century. Divergence emanated from different institutional experiences, which ultimately originated from dissimilar experiences of state credibility. State credibility is the extent to which society trusts the state to act in its interests. Fiscal institutions are a clear and comparable measure of state credibility over time as they frankly express underlying political economy. As Argentina and Australia were once similarly successful settler economies with comparable geographic prospects for development, the comparison promises to transcend geographically deterministic explanations for development. Geography primarily consists of factor endowments and location. In fact Argentina was better placed to succeed in geographic terms than Australia. Yet Australia, not Argentina, secured the status of a developed country. Australia and Argentina exemplify the relative insignificance of geography in shaping development. Divergence resulted from a failure of Argentine institutions to generate sufficient space for negotiation and compromise, and a ‘latent civil war’ was entered from the 1930s until the early 1980s. A key finding of the thesis is that divergence in fiscal institutions, especially differing capacities to embed progressive systems of direct taxation was crucial to divergence in development. This finding is based upon the discovery of new evidence and the harmonisation of fragmented time series which enable comparison over a long period of time. Argentina and Australia took different paths in the latter half of the twentieth century due to distinct institutional environments and their legacies for social consensus and development.