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Regional disparities and convergences in America

Author

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  • Petr Blížkovský

    (Director of Economic and Regional Affairs, General Secretariat of the Council of the European Union, Rue de la Loi 148, 1048 Brussels, Belgium)

Abstract

This paper analyses the levels and trends of regional disparity and convergence in the two American macro-regions, NAFTA and MERCOSUR. In the case of NAFTA, 95 micro-regions were analysed (12 in Canada; 32 in Mexico; 51 states in the US). In MERCOSUR, the regions are represented by four countries (Argentina, Brazil, Paraguay and Uruguay). The analysis covers the period 2000-2008 (or rather 2000 to 2005 for Mexico).The regional disparities were calculated with the Gini coefficient based on nominal GDP, GDP per capita and GDP per capita PPS. Convergence analysis was done with the Disparity Range Coefficient (DRC), the Average Disparity Range Coefficient (ADRC), σ-convergence and β-convergence.The results of regional disparity were as follows. Based on the nominal GDP, it was at high levels in both macro-regions, with a Gini coefficient above 0.55. With the disparities calculated on GDP per capita, the level of regional disparity in both macro-regions was lower at 0.36 in NAFTA and 0.28 in MERCOSUR in 2000. Based on GDP per capita in PPP, the levels were lower than based on the GDP per capita analysis starting at 0.31 in NAFTA and 0.16 in MERCOSUR. The disparities further decreased by half in NAFTA while slightly increasing in MERSCOSUR.The convergence analysis results based on the DRC analysis showed that neither NAFTA nor MERCOSUR regions converged. The speed of divergence varied significantly. The disparities among the richest and poorest regions in GDP per capita increased 6.26 times more than the average GDP per capita in PPP in NAFTA as a whole. It was only 0.52 in MERCOSUR. The ADRC analysis also resulted in divergence trends for both macro-regions but with lower rates. Convergence calculated with the σ-convergence analysis confirmed that both macro-regions diverged. The divergence rate for NAFTA was 1.41% and for MERCOSUR 0.74. Calculated with the β-convergence analysis, the NAFTA region showed a status quo (convergence of 0.01%) and a divergence trend was registered for MERCOSUR (0.99%). At the country level, the micro-regions in Canada were diverging (1.62% per year) while the ones in the US and Mexico converging (0.02% and 0.77%, respectively).

Suggested Citation

  • Petr Blížkovský, 2012. "Regional disparities and convergences in America," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 60(4), pages 37-46.
    • Handle: RePEc:mup:actaun:actaun_2012060040037
    DOI: 10.11118/actaun201260040037
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