UNU-WIDER Regional Inequality – Balanced Growth, World Bank launch with comments from UNU-WIDER

Regional Inequality – Balanced Growth

World Bank launch in Helsinki with comments from UNU-WIDER Director, Anthony Shorrocks.

Extensive research by the UNU-WIDER institute in Helsinki has shown that regional differences in economic activity, incomes, and social indicators are on the rise in most developing economies. Some regions of Brazil, China, India, and Russia have poverty rates of more than twice those found in economically vibrant parts of the country.

Concentrating economic activity in a capital city or a port area brings benefits of return of scale, and often leads to efficiency and growth. But the danger is that inequality within a nation can combine with political, ethnic, and caste divisions to form a volatile mix. The civil war in Nepal had its roots in rural poverty and underdevelopment.

Ignoring these regional variations in average household income, poverty, and health can distort the overall assessment of a country’s progress. National human development indicators can mislead policymakers when large regional disparities exist, for example between China’s industrialized coastal belt and its many poor inland regions.

How can developing economies address growing regional inequality while still benefiting from industry and commerce choosing specific locations that best serve their needs?

UNU-WIDER research suggests a two-pronged approach to tackling the dilemma. First, there is a clear need to develop economic and social infrastructure in regions lagging behind; schools, clinics, and housing as well as roads, railways, and ports. Political and administrative barriers preventing economic development flowing to poorer regions also need to be removed.

The second component is to facilitate the migration of individuals and families to areas of prosperity and growth. In China, research shows that restrictions on migration to the wealthy coastal region have had a dramatic impact on regional inequality.

These themes form the core of the World Bank’s 31st World Development Report Reshaping Economic Geography launching in Helsinki on Friday, 21 November.

The report analyses the early experience of developed countries and suggests how urbanization in developing nations can be managed to benefit the majority.

For the poorest countries in Africa and Asia that are landlocked or otherwise isolated from world markets the World Bank report highlights promising approaches to regional intervention. In growing middle-income nations general prosperity can mask areas of persistent poverty. For such countries the report outlines strategies to foster domestic integration and help the poor.

Professor Anthony Shorrocks, Director of UNU-WIDER, coordinated and contributed to the UNU research into spatial disparities and will be speaking at the launch. Professor Shorrocks is available for interview during or prior to the event to discuss the significance of the World Bank report and UNU’s research and its implications for a wide range of developing economies.

To arrange an interview with Professor Shorrocks please contact: Sean Crowley

Media Consultant
UNU-WIDER
Tel. (+358 9) 615 99233
Mob. (+358 0) 400 192271
Fax (+358 9) 615 99333
email: sean(at)wider.unu.edu