The paper proposes an interpretation of the «Argentine failure» based on development accounting and econometrical approaches frequently used in the current cross-country income differentials literature. The main results are as follows: the development process of Canada — in term of per capita GDP –– moved away from that of Argentina around 1918, but there was a structural change in the determinants of aggregate productivity around 1935 that led Argentina to take a diverging path. Recovery — thanks to improved aggregate productivity –– was not possible after 1940. The results support the idea that Argentina fell into a «staple trap», while Canada embarked on a successful path due to the adjacency and political proximity with a larger and complementary economy.
