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convergence, regional |
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The tendency for regional incomes or levels of living within a nation to become more equal over time. That this should be the case is a prediction derived from neo-classical economics, which portrays labour, capital and other factors of production moving from one region to another seeking the best possible returns (in the form of wages or profits), until there is nothing to gain from further movement because returns are the same in all regions. Thus a competitive free-market economy under capitalism should tend towards regional equality, subject to constraints on the spatial mobility of factors of production.
Evidence for individual nations shows that this prediction does not necessarily hold true. For example, regional incomes in the United States show steady convergence from the latter part of the nineteenth century up to the 1970s. However, individual regions had their own trajectory, reflecting their own historical experience of greater or lesser movement towards the national average income, which complicates a simple picture of regular convergence. In addition, the convergence thesis depends on the geographical scale adopted: the trend towards reduced inequality at a broad regional scale can be contradicted more locally, e.g. between core and periphery and within the city. Thus in the United States convergence at a broad regional scale has been accompanied by local divergence between city and countryside and among neighbourhoods.
Regional convergence is not confined to capitalist economies. Indeed, this trend may be more marked under a socialist system which has the equalization of regional living standards as an explicit objective. For example, a strong convergence tendency could be observed among the republics of the former Soviet Union, although this may have been reversed during the so-called \'era of stagnation\' which preceded perestroika and the eventual collapse of communism.
There is evidence also of reversals of convergence in the capitalist world, including the United States, with inter-regional inequality increasing since the 1970s. In Britain, divergence can be observed among regions since the early 1980s in GDP per capita and other measures of income. The fact that this has ocurred during an era of dedication to the free market suggests limits to the extent of regional convergence towards perfect equality under capitalism, in practice if not in theory. Indeed, the earlier era of more positive regional planning may have taken the country further in the direction of equality than would have been the case under less restrained market forces. This suggests that, after a certain level in the convergence process has been reached, state intervention in the form of regional policy is a necessary if not sufficient condition for further convergence. (DMS)
Suggested Reading Hudson, R. and Williams, A. 1994: Divided Britain, 2nd edn. Chichester: Bellhaven. Smith, D.M. 1987: Geography, Inequality and Society. Cambridge: Cambridge University Press. Williamson, J.G. 1966: Regional inequality and the process of national development: a description of the patterns. Economic Development and Cultural Change 13: 3-45. |
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