Regional disparities and national development revisited: The case of Western Europe

Abstract:

This article explores the relationship between regional inequality and economic development level in 14 Western European countries for the period 1980-2002. The results, which were obtained by means of a semi-parametric methodology, indicate the presence of a process of regional divergence once a certain level of development has been reached. Nevertheless, in contrast to the available empirical evidence for the United States, our estimates show that the increase in regional disparities is purely transitory. Indeed, beyond a given level of per capita GDP, regional inequality can be seen to decrease, ultimately leading to a stabilization of territorial imbalances in the later stages of the development process.These findings are robust to the inclusion of additional variables in the analysis and to the choice of the measure used to quantify regional disparities.