Working Paper: CEPR ID: DP15304
Authors: Güneş Aykut; Ula Karako; Şevket Pamuk
Abstract: This study examines the evolution of regional income inequalities and its causes within present day borders of Turkey since 1880. We construct indices for value added per capita for agriculture, industry and services as well as GDP per capita for each of the 58 administrative units for about one dozen benchmark years. For the recent period since 1987, we make use of the official series for the same 58 units. We find that the overall trend from the 1910’s to the present has been convergence for the country as a whole. We also find an inverse U shaped pattern for the regional disparities in Turkey since 1880. While all other regions began to move towards country averages, the differences between the East and the rest of the country persisted and even increased. Our comparisons also suggest that regional disparities in Turkey have been and are still larger than those in European countries of similar size such as Italy, France and Spain. Problems of endogeneity make it difficult to establish causality at this stage of the research. Nonetheless, we are able to offer an interpretation consistent with our empirical findings. We argue that not a single cause but a combination of causes led by geography, structural change, industrialization and agglomeration economies, and ethnic conflict and demographic movements are behind this pattern for the country as a whole and for the fact that the East has continued to lag behind.
Keywords: regional development; regional inequalities; industrialization; ethnic conflict; turkey; ottoman empire
JEL Codes: N14; N15; N94; N95; O18; O53; O54; R12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| geography (R12) | regional income disparities (R11) |
| structural change (L16) | regional income disparities (R11) |
| industrialization (O14) | regional income disparities (R11) |
| agglomeration economies (R11) | regional income disparities (R11) |
| ethnic conflict (J15) | regional income disparities (R11) |
| demographic movements (J11) | regional income disparities (R11) |
| regional disparities (R11) | convergence of income (F62) |
| regional disparities (R11) | lag of eastern regions (R11) |