Peripheral development through extractive industries?: Gateways, local content policy, and the oil and gas sector in Neuquén and Río Negro, Argentina

Abstract

The World Bank encourages integration into the global economy as the path towards development. However, the performance of resource peripheries has remained unsatisfactory, also because numerous economic activities are concentrated in ‘gateways’ – that is, cities that interlink other places globally. Gateways appear to prosper at the expense of peripheral locations, whose role in the corresponding networks is reduced to basic functions. To guarantee better development outcomes for resource peripheries, an increasing number of scholars call for strict legislation on local content. The article engages with this literature. It analyses the interplay of Buenos Aires with the provinces of Neuquén and Río Negro, where large oil and gas deposits are exploited. Buenos Aires bundles especially corporate control and research-intensive activities, but there are several other obstacles to peripheral development. Local content policy is largely inadequate to solve these problems, as firms from the resource periphery still fail to upgrade to higher value-added tasks and jobs created by extractive industries are not sustainable. Skilled employees reject moving to peripheral locations. The business environment there is not suitable for corporate control.