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Time and Space pp 157–182Cite as

Palgrave Macmillan

Spatial Inequality in Chile in the Long Run: A Paradox of Extreme Concentration in the Absence of Agglomeration Forces (1890–2017)

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Abstract

Chile is characterized as a country with an extreme concentration of economic activity around Santiago, the administrative capital. Despite this, and in contrast to what is found in most of the industrialized countries, income levels per inhabitant in the capital have been below the country average and far from the levels in the wealthiest regions. In this context it is relevant to understand the evolution and the dynamics that lie behind both results, in a country where agglomeration economies seem to have had a marginal impact and where natural resource endowments have been crucial to explain the spatial location of economic activity (the nitrate mining cycle was extremely concentrated in space whereas the copper mining has been much more disperse). Other factors to bear in mind are the impact of regional development policies around the 1960s, or the role played by infrastructures such as the railway through the Valle Central in boosting Santiago as a trade centre.

This chapter is mostly based on previous works already published as Badia-Miró (2015). I would appreciate the comments received by C. Ducoing, D. A. Tirado-Fabregat, H. Willeballd and A. Herranz-Loncán. I 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). I also thank the financial support of the Catalan Government (2017SGR1466).

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Notes

  1. 1.

    The introduction to the book by Combes et al. (2008) makes a thorough review of the impact of industrialization as the main driver of the generation of regional inequalities during the industrial revolution. Other references to bear in mind when considering the evolution of regional income inequality are Barro and Sala-i-Martin (1992), Fujita and Krugman (2004) and Fujita et al. (1999).

  2. 2.

    The integration of domestic markets and the opening of the economy to international markets explain most of the reduction in transport costs during the late nineteenth century and the beginning of the twentieth century.

  3. 3.

    Díaz and Wagner (2004) offers an interesting survey for Chilean trade policies.

  4. 4.

    Gran Minería describes three North American-owner mines of low-grade copper ores which started to produce copper after huge investments in machinery and infrastructure at the beginning of the twentieth century.

  5. 5.

    A detailed description of the reconstruction of the regional GDP of Chile can be found in Badia-Miró (2008).

  6. 6.

    We have considered those products with which we can explain almost 80% of the total product, which were cereals, vines, potatoes and cattle. For more information, see Badia-Miró (2008).

  7. 7.

    In the mining provinces of the North we have confirmed that most of mining production destined for exports were produced in the same province (Badia-Miró 2007, 2008, 2015). This is also valid for the province of Aysén. Difficulties appeared assigning exports in the Zona Central. In these provinces it is difficult to link the production province with the export province. Though it was clear that the production of Aconcagua and Valparaíso would leave the country via Valparaíso, we do not know what part of the production of Santiago would leave the country via the neighbouring provinces. The same occurred with the O’Higgins (San Antonio started to be important after the 1960s and 1970s). To solve this, we have adjusted the export values by mining production per provinces, easily available from 1930 onwards, and estimated before the 1930s.

  8. 8.

    That is assuming that the GDP per capita of Santiago is the same as that observed for the Metropolitan Region of Santiago, despite the differences that exist between the two administrative divisions.

  9. 9.

    The results of the robustness test between own figures and official sources was very good. Rank analysis confirmed the same analysis and we could identify the main differences obtained in Santiago, due to the impact of being the administrative capital of a country.

  10. 10.

    Carmagnani (1998) and Palma (1979) state that this expansion was driven by the growth of the demand from the United States East Coast and ended with the emergence of Australia as the main wheat producer of the Pacific.

  11. 11.

    Valparaíso had become the headquarters of the main trading companies, while simultaneously it was the point where most of the products entered and left the country (Carmagnani 2001; Cavieres Figueroa 1988; Coudyoumdjan 2000; Pinto Vallejos 1987).

  12. 12.

    This high level of income per capita is also observed in the Patagonian and southern regions in Argentina, which were also characterized by low population density levels.

  13. 13.

    Mainly in Tarapacá, province in the North of the country which was recently incorporated into Chile because of the War of the Pacific.

  14. 14.

    Gwynne’s initial articles analyse the economic impact of the de-industrialization after 1973 (Gwynne 1984, 1986). His subsequent articles focus on the economic development of specific sectors such as forestry or viticulture, and their industrialization process (Gwynne 1999, 2003, 2006).

  15. 15.

    The high level of income in region I is devoted to the nitrate cycle, at the beginning of the period, and the high level of income in region XII is related with its low density. High rates for region II, III and IV are related with the copper cycle from the beginning of the twentieth century. To obtain real figures we have considered real GDP per capita by Díaz et al. (2016).

  16. 16.

    The Central Bank of Chile offers annuals data for the regions from 1985: http://www.bcentral.cl/publicaciones/estadisticas/actividad-economica-gasto/aeg07.htm.

  17. 17.

    An example of this are the works of Atienza and Aroca (2012), Aroca and Bosch (2000) and Duncan and Fuentes (2006).

  18. 18.

    Part of these higher values comes from an overvaluation of the figures, because I have not corrected it with the differences in regional prices. Natural resource regions have higher prices than the other parts of the country.

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  1. Departament d’Història, Institucions, Política i Econòmica Mundial, Universitat de Barcelona, Barcelona, Spain

    Marc Badia-Miró

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Correspondence to Marc Badia-Miró .

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  1. Departament d’Anàlisi Econòmica, Universitat de València, València, Spain

    Daniel A. Tirado-Fabregat

  2. Departament d’Història Econòmica, Institucions, Política i Economia Mundial, Universitat de Barcelona, Barcelona, Spain

    Marc Badia-Miró

  3. Universidad de la República, Montevideo, Uruguay

    Henry Willebald

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Badia-Miró, M. (2020). Spatial Inequality in Chile in the Long Run: A Paradox of Extreme Concentration in the Absence of Agglomeration Forces (1890–2017). 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_7

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