Economic Convergence and Divergence in Europe
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Economic Convergence and Divergence in Europe

Growth and Regional Development in an Enlarged European Union

Edited by Gertrude Tumpel-Gugerell and Peter Mooslechner

This highly topical book addresses the challenge of economic convergence within Europe, beginning with a thorough review of the theory of growth and related empirical research. Historical and more recent economic developments within the present EU and current accession countries are discussed, along with the design for the process of further integration of accession countries into the EU and the Euro area. Moreover, the potential to achieve a sustainable catch-up process in Western Balkan countries, the Ukraine and Russia is explored, focusing on the task facing the EU in designing proper policies vis-à-vis these countries. The contributors’ varied perspectives ensure that the theories and policies postulated are linked closely with the actual situation in accession countries and offer up-to-date insights.
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Chapter 4: Regional convergence in Spain, 1965Â…95

Angel de la Fuente


4. Regional convergence in Spain, 1965–95 Angel de la Fuente 4.1. INTRODUCTION1 In this chapter I review the process of regional convergence in Spain over the last two decades and explore the forces driving this process, with special reference to the impact of regional policies and aggregate growth performance. To do this, I will rely on a standard measure of convergence (the rate of unconditional ␤-convergence)2 and use a technique that allows me to decompose this measure into the sum of a series of partial convergence coefficients that capture the contribution of different variables of interest to the reduction of regional disparities. In this manner, we can trace back the observed reduction of inequality to the evolution of the different components of income per capita and isolate the effects of employment-related variables and the accumulation of productive factors, among other things. The chapter is organized as follows. In Section 4.2 I briefly review Spain’s performance over the period 1965–95 in terms of growth, employment creation and regional convergence. In Section 4.3 I present and discuss the results of the decomposition of the rate of regional convergence in income per capita for each of the three decades in the sample period. One clear implication of the results is that the poor employment performance of the less advanced regions has been a major factor in the convergence slowdown we observe in Spain during this period. Section 4.4 concludes with an exploration of the possible...

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