Finland’s regional GDPs 1880-2010: estimates, sources and interpretations

This paper provides the first consistent long-run estimates of Finnish regional GDPs, from 1880 to 2010. Estimates are provided for 12 historical counties as well as for the 5 current-border NUTS 2-regions. The main results from the analyses of the long-run evolution of regional GDPs are the following. Firstly, it is clear that Finland’s geographical position, in the intersection between Eastern and Western Europe, has led to a history of balancing between the two powers. A long-run economic decline of the historically important regions of the west is documented. Simultaneously access to Russian markets advanced the East, but trade was subject to several large shocks, notably with the Finnish independence of 1917 and the collapse of the Soviet Union in 1991. Over the long run, the paper finds that the southern part of the country has been the winner in the Finnish regional growth league. Secondly, the paper analyses regional inequality and finds that Finland’s counties and regions were relatively unequal in European comparison during early industrialization. Rapid convergence in GDP per capita only took place after the Second World War, but was interrupted by the 1980s and replaced by a new tendency for divergence.