فراز و نشیب نابرابری درآمد منطقه ای در اسپانیا (1860-1930)

This paper studies the evolution of Spanish regional inequality from 1860 to 1930. The results point to the coexistence of two basic forces behind changes in regional economic inequality: industrial specialization and labor productivity differentials. The initial expansion of industrialization, in a context of growing economic integration of regions, promoted the spatial concentration of manufacturing in certain regions, which also benefited from the greatest advances in terms of labor productivity. Since 1900, the diffusion of manufacturing production to a greater number of locations has generated the emulation of production structures and a process of catching-up in labor productivity and wages.

A source of concern among policy-makers is the possibility that the processes of cross-national integration, like the European Union and NAFTA, may result in increasing regional inequality.1 Furthermore, the predictions made by economic theory about the impact of integration on regional economic inequality are at best ambiguous, which calls for empirical analysis. The Neoclassical trade theory (the Heckscher–Ohlin (HO) model) argues that regional incomes differ because of differences in factor endowments and factor prices (Harry Flam and Flanders, 1991 and Slaughter, 1997). The factor-prize-equalization (FPE) theorem, within this framework, is optimistic about the consequences of market integration: the increase in trade and factor movements leads to factor-price equalization across regions, and hence, per-capita GDP convergence.2 It should be noted, however, that market integration may also lead to increasing regional specialization because regions differ in factor endowments. In this situation, the standard HO model allows FPE but not income equality (Rassekh and Thompson, 1998 and Slaughter, 1997). Conversely, if regional differences in factor endowments tend to decrease and factor prices converge, one should observe a reduction in regional income disparities.3 On the other hand, the recent new developments in trade theory, the New Economic Geography (NEG), are even less optimistic about the regional inequality impact of integration processes.4 NEG models are constructed around the idea that the existence of product differentiation, increasing returns to scale and transport costs may generate pecuniary externalities in firms and workers’ location choices. In the presence of factor mobility or intermediate inputs, these three factors give rise to agglomeration and, hence, uneven regional specialization. As workers tend to concentrate in a given location, the resulting shift in local demand increases the incentive for firms to concentrate production in that location. Also, workers may obtain a wage premium in these places due to the presence of Marshallian externalities and the subsequent higher labor productivity levels.5 In sum, NEG argues that market integration could lead to regional divergence. To further complicate the situation, economic integration is not the only causal factor for regional convergence and divergence. Williamson (1965) pointed out that regional inequality could have been growing during the initial phases of modern economic growth and declining from certain levels of development. So, in the long run, in parallel with the processes of economic integration and industrialization, changes in economic inequality may have followed an inverted-U shape. Similarly, several authors have emphasized the importance of structural change in regional inequalities. For example, Caselli and Coleman (2001) related the convergence among regions within the US to the reduction of agricultural employment in the poorest locations. To summarize, a substantial literature has related the upward trend in regional per-capita GDP inequality to the unequal distribution of industrial production. Finally, the growth theory also offers insights about the causes of regional inequality. In the textbook Solow model, in a closed economy context, differences in capital per worker led to slow income convergence across locations (Barro and Sala-i-Martin, 2003). If we add to the model cross-regional movements of capital, convergence rates may increase due to the fact that capital moves from capital-abundant to capital-scarce regions following differences in its relative remuneration (Barro et al., 1995). The new strand of growth theory, the endogenous growth theory, also makes contradictory predictions about the impact of cross-regional integration. In the presence of increasing returns, the basic model (Romer, 1986) predicts that increasing movements of capital will lead to regional divergence. Instead, if we consider that technology is not a public good and, hence, subject to decision-making processes of individual agents and their prospect for monopoly rents, an increased scale of the economy will have a lasting positive effect on growth. The monopoly rent increases with the number of consumers, while the costs for innovation are independent of the size of the economy (Crespo Cuaresma et al., 2008). An obvious historical precedent of these economic unions among nations is the emergence of national markets in many European countries and the United States. During the 19th century, institutional barriers to trade and factor movements within countries were eliminated, transport costs decreased dramatically (particularly with the construction of the railway networks and the improvements in sea transport), and national monetary and financial markets emerged. As a consequence, domestic movements of people, capital and goods grew, and the prices of commodities and production factors tended to converge across locations.6 On the other hand, the creation of these national markets was sometimes contemporary to industrialization processes and the subsequent processes of structural change and regional specialization.7 In this context, the study of the Spanish experience is particularly appealing. First, the Spanish national market emerged over the second half of the 19th century as a consequence of the expansion of the railway network, the liberalization of markets and the development of a national financial system. However, domestic migrations and structural change were relatively unimportant up to the years following World War I (see Section 2). Second, industrialization developed in certain regions, like Catalonia and the Basque Country, while a large part of the country remained agrarian (Nadal, 1974). Third, different studies have confirmed the fact that manufacturing production became increasingly concentrated during the period, as is suggested by the NEG models (Rosés, 2003 and Tirado et al., 2002). Nevertheless, we had sparse and inconclusive evidence about the impact of this industrial concentration on regional income disparities (Rosés and Sánchez-Alonso, 2004). Finally, in the European context, Spain was a relatively large country with a low population density that specialized in exportation of agricultural goods and minerals. So, one could expect that its experience to be situated in between two extreme historical experiences: that of the United States, which is characterized by land abundance, the expansion of the land frontier and important transport costs (Kim, 1995 and Kim, 1998, and Kim and Margo, 2004), and that of Britain, which is marked by high population density, the international specialization in manufacturing exports, and low transport costs (Crafts and Mulatu, 2005 and Crafts and Mulatu, 2006). The rest of the paper will proceed as follows. Section 2 discusses the process of creation of the Spanish national market. In Section 3, we describe the methods and sources for constructing our new per-capita regional GDP database. In Section 4, we present the main stylized facts on the evolution of Spanish per-capita regional GDP. The following section considers the subsequent regional specialization and the industrialization patterns. Section 6 decomposes the determinants of regional variation in per-capita GDP. Section 7 presents the conclusions.

This article provides the first empirical analysis of the upswing of regional income inequality in Spain. We do this by constructing a new database in regional per-capita GDP for the seventeen Spanish NUTS II regions (by aggregating NUTS III provinces) for the years 1860, 1900, 1910, 1920 and 1930. Our approach follows Geary and Stark’s (2002) basic methodology but introduces several refinements. More specifically, we estimated agricultural regional output not indirectly but directly from production figures, considered capital differences in manufacturing (like in Crafts, 2005), and used several different wages as determinants of productivity in different services industries. The formation of the Spanish national market progressed significantly from 1860–1900 due to improvements in transport and institutional changes. At the same time, industrialization and urban expansion were underway. As a consequence, the share of industry and services in the Spanish GDP grew, to the detriment of agricultural participation. These processes were not accompanied by dramatic changes in the positions of different regions in terms of per-capita GDP. Only the Basque Country improved its ranking position, while Andalusia lost significant ground, falling from the top to middle positions. Regional incomes practically did not converge, and even diverged from 1860 to 1910. As Trade Theory predicts, in response to market integration, regional specialization increased up to 1920. What determined the fortunes of the different Spanish regions? In line with the predictions of Jeffrey Williamson, regional inequality increased substantially in Spain during the initial phases of economic growth and industrialization. Furthermore, this inequality growth was mainly caused by divergent patterns of regional specialization; that is, by the very unequal distribution of industry and services. The expansion of industry to a limited number of regions during the second half of the 19th century increased regional inequality; while the contrary holds for the first third of the twentieth century. In this sense, the Spanish experience closely resembles that of the United States (Kim, 1998 and Caselli and Coleman, 2001). Our results also have important implications for judging the validity of alternative theoretical explanations for regional inequality. Broadly speaking, it seems that the proposal of Epifani (2005), which combines HO and NEG models, explains the Spanish historical experience quite well. More prominently, as our decomposition of per-capita GDP in productivity and industry-mix effects shows, regions that specialized in the most productive industries also enjoyed the higher labor productivity levels. In other words, they had favorable endowments and also benefited from NEG forces. However, it seems that HO forces were the main driver behind unequal regional development, given that between-sector differences accounted for the lion’s share of regional differences in labor productivity. The increasing returns explanation, mainly related to within industry differences in industry and services, was only significant in the years 1920 and 1930. Therefore, it seems that once industrialization arrived in a considerable number of regions, NEG forces gained momentum to the detriment of regional differences in factor endowments.