Is There a Global Link between Regional Disparities and Devolution?

In this paper we present an examination of the possible correlation between rising income inequalities at the regional level and widespread devolutionary initiatives worldwide. When the responsibility and resource-based facets of decentralisation are taken together a marked congruency is evident between the two trends. Various spatial economic forces promote the emergence of core and peripheral regions, and devolution, by establishing the autonomy of these regions, allows these forces a greater impact. We argue that this is because decentralisation initiatives carry with them implicit fiscal, political, and administrative costs, which fall more heavily upon those regions with limited adjustment capacities, resulting in differential rates at which regions can capitalise upon the opportunities offered by devolution. The global tendency towards devolution therefore reflects a subtle, but profound, renunciation of the traditional equalisation role of national government in favour of conditions fostering economic and public competition and leading to greater development of initially rich and powerful regions to the detriment of poorer areas.