This paper explores issues regarding the regional convergence process. We study the per capita income of Andalusia compared with the remaining regions in Spain over period 1965-1995. Using a very simple growth model with public capital as a production factor, we show that infrastructure endowment is not the main cause of Andalusian relative lower income per capita, so we guess there is a small effect of public investment on growth. However, productive public spending could have played an important role in minimizing the inefficiencies yielded by a non-competitive labour market.
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Find related papers by JEL classification: H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures R40 - Urban, Rural, and Regional Economics - - Transportation Systems - - - General R53 - Urban, Rural, and Regional Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock
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