Do regions gain from an open economy?

This paper looks into whether and how sub-national regions can benefit from a country’s economic openness. Using data on the Philippines, it first notes marked disparities across its regions as reflected in economic and social indicators. The dominance of Metropolitan Manila in the national economic landscape persists, albeit spread effects into adjacent regions are increasingly apparent. Applying econometric analysis to panel data, the paper then examines how regional economic growth is influenced by economic openness. Results show that regional gains appear to be uneven with the ex-ante lagging regions at a disadvantage; by extension, the welfare effect on the poor appears unequal, as well.