Regional GDP in OECD countries : how has inequality developed over time?

This paper surveys the state and evolution of GDP per capita in 281 regions of OECD countries for the time period 1995 – 2013. It puts a special focus on the disparities between the regions. These can be substantial: In 2013, GDP per capita of the least and most developed region varied by a factor of roughly ten. Using standard inequality measures like the coefficient of variation or the Gini coefficient, it is found that inequality has been decreasing between countries, while within-country disparities have often widened. Furthermore, transition matrices reveal that mobility within the distribution over time is higher in countries with larger degrees of fiscal decentralisation. This suggests that decentralisation allows regions to “take matters into their own hands”. Implications of other factors that correlate with the level of economic development are also discussed.