Half a World: Regional Inequality in Five Great Federations

The paper studies regional (spatial) inequality in the five most populous countries in the world: China, India, the United States of America, Indonesia and Brazil in the period 1980–2000. They are all federations or quasi-federations composed of entities with substantial economic autonomy. Two types of regional inequalities are considered: Concept 1 inequality, which is inequality between mean incomes (GDPs per capita) of states/provinces, and Concept 2 inequality, which is inequality between population-weighted regional mean incomes. The first inequality speaks to the issue of regional convergence, the second, to the issue of overall inequality as perceived by citizens within a nation. All three Asian countries, show rising inequality in terms of both concepts in the decade of the 1990s. Divergence in income outcomes is particularly noticeable for the most populous states/provinces in India and China. The United States, where regional inequality is the least, shows further convergence. Brazil, with the highest level of regional inequality, displays no trend. A regression analysis fails to establish robust association between the usual macro variables and the two types of regional inequality.