IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Spatial inequality and development — Is there an inverted-U relationship?

  • Lessmann, Christian

This paper studies the hypothesis of an inverted-U-shaped relationship between spatial inequality and economic development. The theory of Kuznets (1955) and Williamson (1965) suggests that (spatial) inequality first increases in the process of development, and then decreases. To test this hypothesis I have used a unique panel data set of spatial inequalities in 56 countries at different stages of economic development, covering the period 1980–2009. Parametric and semiparametric regressions are carried out using cross-section and (unbalanced) panel data. The results provide strong support for the existence of an inverted-U. I also find some evidence that spatial inequalities increase again at very high levels of economic development.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/pii/S0304387813001260
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 106 (2014)
Issue (Month): C ()
Pages: 35-51

as
in new window

Handle: RePEc:eee:deveco:v:106:y:2014:i:c:p:35-51
Contact details of provider: Web page: http://www.elsevier.com/locate/devec

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Alberto Alesina & Arnaud Devleeschauwer & William Easterly & Sergio Kurlat & Romain Wacziarg, 2002. "Fractionalization," Harvard Institute of Economic Research Working Papers 1959, Harvard - Institute of Economic Research.
    • Alesina, Alberto & Devleeschauwer, Arnaud & Wacziarg, Romain & Kurlat, Sergio & Easterly, William, 2003. "Fractionalization," Scholarly Articles 4553003, Harvard University Department of Economics.
    • Wacziarg, Romain & Alesina, Alberto & Devleeschauwer, Arnaud & Easterly, William & Kurlat, Sergio, 2002. "Fractionalization," Research Papers 1744, Stanford University, Graduate School of Business.
    • Alberto Alesina & Arnaud Devleeschauwer & William Easterly & Sergio Kurlat & Romain Wacziarg, 2003. "Fractionalization," NBER Working Papers 9411, National Bureau of Economic Research, Inc.
  2. Rodriguez-Pose, Andres, 2011. "Trade and regional inequality," CEPR Discussion Papers 8616, C.E.P.R. Discussion Papers.
  3. Frances Stewart, 2000. "Crisis Prevention: Tackling Horizontal Inequalities," Oxford Development Studies, Taylor & Francis Journals, vol. 28(3), pages 245-262.
  4. Eric Strobl, & Salvador Barrios, 2006. "The dynamics of regional inequalities," Working Papers 2006-01, FEDEA.
  5. Nicola Gennaioli & Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer, . "Growth in Regions," Working Paper 73436, Harvard University OpenScholar.
    • Nicola Gennaioli & Rafael La Porta & Florencio Lopez de Silanes & Andrei Shleifer, 2013. "Growth in Regions," NBER Working Papers 18937, National Bureau of Economic Research, Inc.
  6. Tianlun Jian & Jeffrey D. Sachs & Andrew M. Warner, 1996. "Trends in Regional Inequality in China," NBER Working Papers 5412, National Bureau of Economic Research, Inc.
  7. Alberto F. Ades & Edward L. Glaeser, 1995. "Trade and Circuses: Explaining Urban Giants," The Quarterly Journal of Economics, Oxford University Press, vol. 110(1), pages 195-227.
  8. Tony Venables, 2003. "Spatial disparities in developing countries: cities, regions and international trade," LSE Research Online Documents on Economics 2038, London School of Economics and Political Science, LSE Library.
  9. Nicola Gennaioli & Rafael Laporta & Florencio López-de-Silanes & Andrei Schleifer, 2011. "Human Capital and Regional Development," Working Papers 581, Barcelona Graduate School of Economics.
  10. Christian Lessmann, 2012. "Regional inequality and decentralization: an empirical analysis," Environment and Planning A, Pion Ltd, London, vol. 44(6), pages 1363-1388, June.
  11. Adonis Yatchew, 1998. "Nonparametric Regression Techniques in Economics," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 669-721, June.
  12. Krugman, Paul & Elizondo, Raul Livas, 1996. "Trade policy and the Third World metropolis," Journal of Development Economics, Elsevier, vol. 49(1), pages 137-150, April.
  13. Yatchew, A., 1997. "An elementary estimator of the partial linear model," Economics Letters, Elsevier, vol. 57(2), pages 135-143, December.
  14. Vincenzo Verardi & Nicolas Debarsy, 2011. "Robinson's Squareroot-of-n-consistent Semiparametric Regression Estimator in Stata," Working Papers 1110, University of Namur, Department of Economics.
  15. Durlauf, Steven N., 2001. "Manifesto for a growth econometrics," Journal of Econometrics, Elsevier, vol. 100(1), pages 65-69, January.
  16. Charles Engel & John H. Rogers, 1995. "How wide is the border?," International Finance Discussion Papers 498, Board of Governors of the Federal Reserve System (U.S.).
  17. Christian Lessmann, 2009. "Fiscal decentralization and regional disparity: evidence from cross-section and panel data," Environment and Planning A, Pion Ltd, London, vol. 41(10), pages 2455-2473, October.
  18. Desbordes, Rodolphe & Verardi, Vincenzo, 2012. "Refitting the Kuznets curve," Economics Letters, Elsevier, vol. 116(2), pages 258-261.
  19. Chen, Jian & Fleisher, Belton M., 1996. "Regional Income Inequality and Economic Growth in China," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 141-164, April.
  20. Robinson, Peter M, 1988. "Root- N-Consistent Semiparametric Regression," Econometrica, Econometric Society, vol. 56(4), pages 931-54, July.
  21. Ravi Kanbur & Tony Venables, 2005. "Introduction: Spatial inequality and development," Journal of Economic Geography, Oxford University Press, vol. 5(1), pages 1-2, January.
  22. Christian Lessmann, 2013. "Regional Inequality and Internal Conflict," CESifo Working Paper Series 4112, CESifo Group Munich.
  23. Michael Lokshin, 2006. "Difference-based semiparametric estimation of partial linear regression models," Stata Journal, StataCorp LP, vol. 6(3), pages 377-383, September.
  24. Roberto Ezcurra & Andrés Rodríguez-Pose, 2009. "Does Decentralization Matter for Regional Disparities? A Cross-Country Analysis," SERC Discussion Papers 0025, Spatial Economics Research Centre, LSE.
  25. World Bank, 2011. "World Development Indicators 2011," World Bank Publications, The World Bank, number 2315, March.
  26. Marinella Terrasi, 1999. "Convergence and divergence across Italian regions," The Annals of Regional Science, Springer, vol. 33(4), pages 491-510.
  27. Kanbur, Ravi & Venables, Anthony J., 2005. "Rising Spatial Disparities and Development," Working Paper Series PB3/2005, World Institute for Development Economic Research (UNU-WIDER).
  28. Ravallion, Martin, 2001. "Growth, Inequality and Poverty: Looking Beyond Averages," World Development, Elsevier, vol. 29(11), pages 1803-1815, November.
  29. Christian Lessmann, 2012. "Foreign Direct Investment and Regional Inequality: A Panel Data Analysis," CESifo Working Paper Series 4037, CESifo Group Munich.
  30. Rodrik, Dani & Alesina, Alberto, 1994. "Distributive Politics and Economic Growth," Scholarly Articles 4551798, Harvard University Department of Economics.
  31. Sylvie Lambert & Martin Ravallion & Dominique van de Walle, 2010. "A Micro-Decomposition Analysis of Aggregate Human Development Outcomes," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(2), pages 119-145, 04.
  32. François Libois & Vincenzo Verardi, 2012. "Semiparametric Fixed-Effects Estimator," Working Papers 1201, University of Namur, Department of Economics.
  33. Araujo, M. Caridad & Ferreira, Francisco H.G. & Lanjouw, Peter & Özler, Berk, 2008. "Local inequality and project choice: Theory and evidence from Ecuador," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1022-1046, June.
  34. Kailei Wei & Shujie Yao & Aying Liu, 2009. "Foreign Direct Investment and Regional Inequality in China," Review of Development Economics, Wiley Blackwell, vol. 13(4), pages 778-791, November.
  35. Robin W. Boadway & Frank R. Flatters, 1982. "Efficiency and Equalization Payments in a Federal System of Government: A Synthesis and Extension of Recent Results," Canadian Journal of Economics, Canadian Economics Association, vol. 15(4), pages 613-33, November.
  36. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931, May.
  37. Sala-i-Martin, Xavier, 1994. "Regional Cohesion: Evidence and Theories of Regional Growth and Convergence," CEPR Discussion Papers 1075, C.E.P.R. Discussion Papers.
  38. Fan, C Cindy & Casetti, Emilio, 1994. "The Spatial and Temporal Dynamics of U.S. Regional Income Inequality, 1950-1989," The Annals of Regional Science, Springer, vol. 28(2), pages 177-96.
  39. Ravi Kanbur & Xiaobo Zhang, 2004. "Fifty Years of Regional Inequality in China: A Journey Through Central Planning, Reform and Openness," Working Papers 158, Institute for Social and Economic Change, Bangalore.
  40. Easterly, William, 2001. "The Middle Class Consensus and Economic Development," Journal of Economic Growth, Springer, vol. 6(4), pages 317-35, December.
  41. Mehran, Farhad, 1976. "Linear Measures of Income Inequality," Econometrica, Econometric Society, vol. 44(4), pages 805-09, July.
  42. Christa Deiwiks & Lars-Erik Cederman & Kristian Skrede Gleditsch, 2012. "Inequality and conflict in federations," Journal of Peace Research, Peace Research Institute Oslo, vol. 49(2), pages 289-304, March.
  43. Hansen, Nico & Kessler, Anke, 2004. "Interregional Redistribution and Mobility in Federations: A Positive Approach," CEPR Discussion Papers 4576, C.E.P.R. Discussion Papers.
  44. Rodriguez-Pose, Andres & Gill, Nicholas, 2006. "How does trade affect regional disparities?," World Development, Elsevier, vol. 34(7), pages 1201-1222, July.
  45. Zeng, Dao-Zhi & Zhao, Laixun, 2010. "Globalization, interregional and international inequalities," Journal of Urban Economics, Elsevier, vol. 67(3), pages 352-361, May.
  46. Ravi Kanbur & Anthony J. Venables & Guanghua Wan, 2005. "Introduction to the Special Issue: Spatial Inequality and Development in Asia," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 1-4, 02.
  47. Yemtsov, Ruslan, 2003. "Quo Vadis? Inequality and Poverty Dynamics across Russian Regions," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  48. Barro, Robert J, 2000. "Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
  49. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 465-490.
  50. Amos, Orley Jr., 1988. "Unbalanced regional growth and regional income inequality in the latter stages of development," Regional Science and Urban Economics, Elsevier, vol. 18(4), pages 549-566, November.
  51. John DiNardo & Justin L. Tobias, 2001. "Nonparametric Density and Regression Estimation," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 11-28, Fall.
  52. List, John A & Gallet, Craig A, 1999. "The Kuznets Curve: What Happens after the Inverted-U?," Review of Development Economics, Wiley Blackwell, vol. 3(2), pages 200-206, June.
  53. Badi H. Baltagi & Dong Li, . "Series Estimation of Partially Linear Panel Data Models with Fixed Effects," Working Papers 0109, East Carolina University, Department of Economics.
  54. Robert E. Lucas, 2000. "Some Macroeconomics for the 21st Century," Journal of Economic Perspectives, American Economic Association, vol. 14(1), pages 159-168, Winter.
  55. Mills, Edwin S & Ferranti, David M, 1971. "Market Choices and Optimum City Size," American Economic Review, American Economic Association, vol. 61(2), pages 340-45, May.
  56. Elbers, Chris & Lanjouw, Peter & Mistiaen, Johan & Ozler, Berk & Simler, Kenneth, 2003. "Are Neighbours Equal? Estimating Local Inequality in Three Developing Countries," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:deveco:v:106:y:2014:i:c:p:35-51. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.