Regional inequality and economic development in Spain, 1860-2010

Fifty years ago Jeffrey G. Williamson suggested that during the process of economic development regional income differences trace out an inverted U-shaped pattern. Since then several studies have tested this hypothesis. Yet, most of these only explore particular stages of development. This study, however, investigates the long-term evolution of regional income inequality. Using a novel dataset spanning 150 years, we describe per-capita GDP disparities across Spanish provinces (NUTS3) from 1860 to 2010. Moreover, to gain a deeper understanding of regional inequality, we examine other relevant dimensions: modality, mobility and spatial clustering. Overall, the findings confirm the existence of an inverted U-shaped pattern. Furthermore, there appears to be two major phases. Between 1860 and 1930 the upswing in regional inequality was accompanied by a certain mobility in income class or rank. Then, regional convergence followed until the 1980s, but mobility was rather low and spatial clustering significantly increased. Thus, a map with 'Two Spains' emerged, and spatial polarization has become a major concern.