Regional economic inequality in Latin America (1895-2010)

Abstract

This article analyzes, for the first time, the evolution of regional growth and inequality over the course of the historical economic development process of nine countries of Latin America (Argentina, Bolivia, Brazil, Chile, Colombia, Mexico, Peru, Uruguay and Venezuela) between 1895 and 2010. In doing that, we first verify the
presence of a beta-convergence process among Latin American countries along the whole period. Nevertheless, it is also shown that convergence across countries was especially intense during the periods when different States implemented inward looking policies that favored regional convergence within countries. Second, we study regional sigma-convergence taking together the regions of these nine countries as unit of analysis. The study shows that regional income inequality has followed over time what appears to be an N-shaped evolution. Particularly, Latin America experienced an increase in regional inequality from the end of the XIXth century up to the interwar years. Nevertheless, Latin America underwent a period of regional convergence between the aftermath of the Second World War and the crisis of the 1970s. Finally, the crisis of the 1970s and the changes in the international political and economic consensus in the 1980s marked the beginning of a new stage in the evolution of inequality.