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Economic and Social Disparities across Subnational Regions of South America: A Spatial Convergence Approach

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Abstract

This paper studies the evolution of economic and social disparities across South America. By exploiting a novel multi-country subnational dataset, we evaluate the evolution of gross national income per capita (GNI) and the human development index (HDI) across 151 subnational regions over the 1990–2018 period. In particular, regional dynamics are evaluated through the lens of two spatial convergence models. The first model deals with the role of spatial dependence. Results indicate that for both GNI and HDI, there is an overall process of regional convergence. Furthermore, spatial dependence plays a significant role in this process. A spatial error specification suggests that spatial dependence accelerates the speed of convergence in some decades, but decelerates it in others. The second model deals with the role of spatial heterogeneity. Results indicate that for both GNI and HDI, the speed of convergence is largely heterogeneous across space and time. Moreover, economic and social disparities are characterized by multi-country spatial clusters that show both converging and diverging trends. Taken together, these results emphasize the importance of accounting for spatial dependence and heterogeneity when evaluating the dynamics of economic and social inequality in South America.

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Notes

  1. Although, in this paper, we focus on the study of the convergence process in South America, there is a related stream of literature that analyses trends in well-being indicators using spatial econometric methods. Such studies consider different aspects of well-being such as educational outcomes (Delboy 2019; Cepeda-Cuervo and Núñez-Antón 2013; Fujita et al. 2021; Elias and Rey 2011), poverty (Agudelo Torres et al. 2015; Ponce et al. 2020; Álvarez-Gamboa et al. 2021) crime (Ingram and Marchesini da Costa 2019; Santos-Marquez et al. 2021) environmental degradation (de Barros and Stege 2019; Ferrer Velasco et al. 2020) to name but a few.

  2. All data are accessible from the website of the Global Data Lab https://globaldatalab.org/

  3. Nevertheless, as indicated by the p-value map associated with Fig. 1, many of the regions belonging to this cluster show no significant values.

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Acknowledgements

We would like to thank the editor and two anonymous referees for their constructive and insightful comments, which have substantially improved the contents and presentation of this article. We are also grateful to the members of the QuaRCS-network for their academic support and ideas that helped formulate this article. Felipe also thanks the participants of the Brown Bag Seminar at TU Dresden for their comments and suggestions which have greatly improved the final version of this paper.

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  1. Graduate School of International Development, Nagoya University, Nagoya, Japan

    Carlos Mendez

  2. Faculty of Business and Economics, Technische Universität Dresden, Dresden, Germany

    Felipe Santos-Marquez

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Correspondence to Carlos Mendez.

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Mendez, C., Santos-Marquez, F. Economic and Social Disparities across Subnational Regions of South America: A Spatial Convergence Approach. Comp Econ Stud 64, 582–605 (2022). https://doi.org/10.1057/s41294-021-00181-0

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