Income inequality, decentralisation, and regional development in Western Europe

Vassilis Tselios, Andrés Rodríguez-Pose, Andy Pike, John Tomaney and Gianpiero Torrisi ()
Authors registered in the RePEc Author Service: Andrés Rodríguez-Pose ()

Environment and Planning A, 2012, vol. 44, issue 6, pages 1278-1301

Abstract: This paper deals with the relationship between decentralisation, regional economic development, and income inequality within regions. Using multiplicative interaction models and regionally aggregated microeconomic data for more than 100 000 individuals in the European Union (EU), it addresses two main questions. First, whether fiscal and political decentralisation in Western Europe has an effect on within-regional interpersonal inequality. Second, whether this potential relationship is mediated by the level of economic development of the region. The results of the analysis show that greater fiscal decentralisation is associated with lower interpersonal income inequality, but, as regional income rises, further decentralisation is connected to a lower decrease in inequality. This finding is robust to the measurement and definition of income inequality, as well as to the weighting of the spatial units by their population size.
Keywords: income inequality, income per capita, fiscal and political decentralisation, interaction, regions, Europe

Date: 2012
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Related works:
Working Paper: Income inequality, decentralisation and regional development in Western Europe (2011)
Working Paper: Income inequality, decentralisation and regional development in Western Europe (2011)
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Persistent link: http://EconPapers.repec.org/RePEc:pio:envira:v:44:y:2012:i:6:p:1278-1301

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