Rational underdevelopment

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dc.contributor.author Desmet, Klaus
dc.contributor.author Ortuño, Ignacio
dc.date.accessioned 2012-05-17T13:53:57Z
dc.date.available 2012-05-17T13:53:57Z
dc.date.issued 2007-03
dc.identifier.bibliographicCitation Scandinavian Journal of Economics, 2007, v. 109, n. 1, pp. 1-24
dc.identifier.issn 1467-9442
dc.identifier.uri http://hdl.handle.net/10016/4800
dc.description.abstract We propose a two-region two-sector model of uneven development, where technological change benefits either the lagging or the leading region. In this framework interregional transfers may lead to persistent underdevelopment; by raising wages, transfers reduce the chance of the backward region adopting a new technology and taking off. Due to uncertainty about which region benefits from technological change, the backward region may rationally choose to remain underdeveloped, while the advanced region continues to pay transfers. The model provides a rationale for cases, such as Italy's Mezzogiorno, where the same rich region subsidizes the same poor region on a continuous basis.
dc.description.sponsorship Financial support from the Spanish Ministry of Education (SEJ2005-05831), the Regional Government of Madrid (06/HSE/0157/2004) and the Fundación BBVA is gratefully acknowledged
dc.format.mimetype text/plain
dc.format.mimetype application/pdf
dc.language.iso eng
dc.publisher Blackwell Publishing
dc.relation.isversionof http://hdl.handle.net/10016/5544
dc.rights © Blackwell Publishing
dc.subject.other Interregional transfers
dc.subject.other Regional policy
dc.subject.other Uneven development
dc.title Rational underdevelopment
dc.type article
dc.type.review PeerReviewed
dc.description.status Publicado
dc.relation.publisherversion http://dx.doi.org/10.1111/j.1467-9442.2007.00478.x
dc.subject.jel R58
dc.subject.jel H7
dc.subject.eciencia Economía
dc.identifier.doi 10.1111/j.1467-9442.2007.00478.x
dc.rights.accessRights openAccess
dc.type.version acceptedVersion
dc.identifier.publicationfirstpage 1
dc.identifier.publicationissue 1
dc.identifier.publicationlastpage 24
dc.identifier.publicationtitle Scandinavian Journal of Economics
dc.identifier.publicationvolume 109
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