Abstract
This chapter aims at contributing to the international literature on the long-term evolution of regional inequality by analysing the case of Mexico from 1895 to 2010. Economic differences among Mexican regions are substantial and have been increasing for a long time. The study of the Mexican case confirms that regional inequality in low- and middle-income economies may have different trends and determinants from those of the industrialized economies. In the case of Mexico, regional inequality has followed a W-form in the long term, which largely reflects the alternation of different development models in the country since the late nineteenth century. Thus, between 1910 and 1940, or in the most recent period of economic openness (from the 1980s to the present), regional inequality has tended to increase. Divergence among Mexican regions was especially intense during the last period of the First Globalization (the 1920s). It was also in this period when the regional structure that has characterized the Mexican economy during the twentieth century was established, with a strong concentration of activity in Mexico City and a clear division between the rich North and the poor South. By contrast, the period from 1940 to 1980 was characterized by regional convergence, although it was accompanied by a strong persistence in the geographical concentration of industry. The main determinants of regional inequality changes have been different in each period. During the early twentieth century, a spatially uneven process of structural change explains the increase in regional inequality. By contrast, regional convergence during the state-led Industrialization period was led by an intense process of factor mobility (and, particularly, labour flows) across the Mexican states and the concentration of economic activity around the main market (Mexico City), pushed by agglomeration economies in industry. Finally, since the mid-1980s divergence has been mainly driven by labour productivity differentials within each sector.
Previous versions of this chapter have been published in Aguilar-Retureta (2015, 2016a, b). We appreciate the comments received by D. A. Tirado-Fabregat and H. Willebald. We also acknowledge the financial support offered by the project PGC2018-095821-B-I00 and ECO2015-65049-C12-1-P, funded by the Ministerio de Ciencia, Innovación y Universidades (MCIU), to the Agencia Estatal de Investigación (AEI) and the Fondo Europeo de Desarrollo Regional (FEDER). We also thank the financial support of the Catalan government (2017SGR1466).
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Notes
- 1.
Even though this reform was formally approved in the middle of the nineteenth century, it was only applied at the end of the century.
- 2.
There is some debate on the actual effects of institutional change. For instance, Haber et al. (2003) argue that it was biased in favour of national elites (businessmen and politicians), which used the new institutions to preserve the late nineteenth-century authoritarian regime.
- 3.
- 4.
The main Mexican exports during the first globalization were silver bars, rubber, copper and fibres (Kuntz-Ficker 2017).
- 5.
The financial system was also modernized in this period thanks to its integration in the international capital markets and the presence in Mexico of the Guggenheim, Rothschild and Mirabaud banks, among others.
- 6.
World War II was an exceptional period in which industrial growth was not based on protection but on external demand (which explains 79% of manufacturing expansion), especially from the US (Cardenas 2010, p. 515).
- 7.
- 8.
This author has recently published new estimates of industrial GDP at the state level from 1930 to 1965 (Ruiz 2014).
- 9.
In 1893, the Dirección General de Estadística published, for the first time, the Anuario Estadístico de la República (Mexican Statistical Yearbook), which involved a substantial quality improvement in national statistics. Moreover, the first national Population Census (Censo Nacional de Población) was published, also by the Dirección General de Estadística, in 1895. By contrast, the available information for previous years is much scarcer and makes much more difficult to estimate regional GDP figures.
- 10.
It is not clear if Gutiérrez Requenes’ (1969) national output figures were estimated using a constant structure of prices, taken from one benchmark year for all different sectors, or whether the structure of prices used varied over time.
- 11.
To overcome the bias produced by the concentration of the oil sector, we have estimated regional GDP figures without this sector for 1950 onwards.
- 12.
The literature on Mexican regional disparities has often warned against the bias associated to oil production. See, for instance, Esquivel (1999), Sánchez-Reaza and Rodríguez-Pose (2002) or Aroca et al. (2005). Due to its extremely high spatial concentration, the oil industry production could cause a distorted picture of some regions’ income per capita, given that those regions may not really benefit from oil revenues.
- 13.
The Williamson index, proposed in Williamson (1965), is calculated as follows:
$$ WI=\sqrt{\sum \limits_{i=1}^n{\left(\frac{y_i}{y_m}-1\right)}^2\frac{p_i}{p_m},} $$where y is income per capita, p is population, and i and m refer to the i-region and the national total, respectively.
- 14.
This comparison may be affected by differences in the number and scale of the spatial units among countries. However, the number of Mexican states (36) lies in between the number of Spanish provinces (50) and the number of Portuguese districts (18) and Italian regions (19).
- 15.
Sonora, Chihuahua, Coahuila and Tamaulipas represent around 11% in 1930 and 10% in 2010 of the total Mexican output.
- 16.
This is rather usual in countries in which a single economic centre concentrates a large part of total GDP. See, for instance, the case of Chile and its capital, Santiago (Badia-Miró 2015).
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Aguilar Retureta, J., Badia-Miró, M., Herranz-Loncán, A. (2020). Regional GDP in Mexico, 1895–2010. In: Tirado-Fabregat, D.A., Badia-Miró, M., Willebald, H. (eds) Time and Space. Palgrave Studies in Economic History. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-47553-6_9
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