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Regional inequalities: causes and cures.

Frank Cörvers¹, Ken Mayhew²

¹Maastricht University, Netherlands.

Oxford Review of Economic Policy

|June 30, 2021

Summary

Regional income and wealth disparities in Western Europe and North America narrowed until 1980, then widened, exacerbating populism and regional disadvantage. This study examines measurement, historical trends, consequences, and evolving regional policies.

Keywords:

agglomerations economic shocks labour markets regional inequalities regional policies structural shocks

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Area of Science:

Economics
Sociology
Political Science

Background:

Significant regional inequalities in income and wealth persist across Western Europe and North America.
These disparities are thought to have narrowed from the early 1900s to around 1980, after which they began to widen.
The recent widening has been linked to the rise of populism, with the Covid-19 crisis highlighting regional disadvantages.

Purpose of the Study:

To discuss measurement issues related to regional disparities.
To trace the historical developments of these inequalities over time.
To explore the social and economic consequences of regional disparities and analyze the evolution of regional policies.

Main Methods:

Analysis of historical data on income and wealth distribution.
Review of regional policy evolution, focusing on the shift towards localized approaches in Europe.
Exploration of social and economic consequences linked to regional disparities.

Main Results:

Regional inequalities, after a period of narrowing, have widened since approximately 1980 in Western Europe and North America.
This widening trend is associated with increased populism.
The Covid-19 crisis has amplified the visibility of regional disadvantages.

Conclusions:

Regional disparities have profound social and economic consequences, influencing political trends like populism.
The effectiveness of evolving regional policies, particularly localized approaches in Europe, requires careful analysis of their strengths and weaknesses.