Regional Income Disparities In Canada: Implications For Theories Of Regional Convergence

Elias G. Carayannis and Rajiv Mallick
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Elias G. Carayannis: George Washington University
Rajiv Mallick: Pracon University

The Review of Regional Studies, 1996, vol. 26, issue 1, 55-74

Abstract: Traditional regional convergence theory has come under serious scrutiny in view of the recent divergence in regional incomes in the U.S. during the eighties. Neither the neoclassical theory of a steady decline in regional disparities over time nor Kuznets' inverted-U hypothesis can satisfactorily explain regional divergence in an advanced industrial nation. Alternative theories that emphasize spatial restructuring of economic activity have been offered to explain rising regional inequality in the U.S. In this paper, we caution against a hasty approach to new theorizing based on the U.S. experience alone. We study the Canadian experience with regional economic convergence to see how, if at all, it parallels the experience of the United States, Europe, and Australia, with respect to regional growth. By examining provincial data at the industry level, we seek to detect if there are any leading sectors of spatial concentration as in the U.S. We find that, unlike the U.S., European, and Australian experience, Canada has been characterized by consistent, albeit gradual, economic convergence, including in the 1980s. No leading sectors of regional importance emerge, but based on available data, federal programs of regional equalization may be at least partly responsible for continued regional convergence in Canada.

Date: 1996
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