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Half a world : regional inequality in five great federations

  • Milanovic, Branko

Thepaper studies regional (spatial) inequality in the five most populous countries in the world: China, India, the United States, Indonesia, and Brazil in the period 1980-2000. They are all federations or quasi-federations composed of entities with substantial economic autonomy. Two types of regional inequalities are considered: Concept 1 inequality, which is inequality between mean incomes (GDP per capita) of states/provinces, and Concept 2 inequality, which is inequality between population-weighted regional mean incomes. The first inequality speaks to the issue of regional convergence, the second, to the issue of overall inequality as perceived by citizens within a nation. All three Asian countries show rising inequality in terms of both concepts in the 1990s. Divergence in income outcomes is particularly noticeable for the most populous states/provinces in China and India. The United States, where regional inequality is the least, shows further convergence. Brazil, with the highest level of regional inequality, displays no trend. A regression analysis fails to establish robust association between the usual macroeconomic variables and the two types of regional inequality.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3699.

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Date of creation: 01 Sep 2005
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Handle: RePEc:wbk:wbrwps:3699
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  1. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," NBER Working Papers 5098, National Bureau of Economic Research, Inc.
  2. Carsten A. Holz, 2004. "China's Statistical System in Transition: Challenges, Data Problems, and Institutional Innovations," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(3), pages 381-409, 09.
  3. Milanovic, Branko, 1999. "True world income distribution, 1988 and 1993 - first calculations, based on household surveys alone," Policy Research Working Paper Series 2244, The World Bank.
  4. Branko milanovic, 2003. "True world income distribution, 1988 and 1993: First calculation based on household surveys alo," HEW 0305002, EconWPA.
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  7. Ram, Rati, 1992. "Interstate Income Inequality in the United States: Measurement, Modelling and Some Characteristics," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 38(1), pages 39-48, March.
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  9. Bliss, Christopher, 1999. "Galton's Fallacy and Economic Convergence," Oxford Economic Papers, Oxford University Press, vol. 51(1), pages 4-14, January.
  10. Dabus, Carlos, 2000. "Inflationary regimes and relative price variability: evidence from Argentina," Journal of Development Economics, Elsevier, vol. 62(2), pages 535-547, August.
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  15. Carlos R. Azzoni, 2001. "Economic growth and regional income inequality in Brazil," The Annals of Regional Science, Springer, vol. 35(1), pages 133-152.
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