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Income inequality, decentralisation, and regional development in Western Europe

Lookup NU author(s): Dr Vassilis Tselios, Professor Andy Pike, Professor John Tomaney, Dr Gianpiero Torrisi


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This paper deals with the relationship between decentralisation, regional economic development, and income inequality within regions. Using multiplicative interaction models and regionally aggregated microeconomic data for more than 100000 individuals in the European Union (EU), it addresses two main questions. First, whether fiscal and political decentralisation in Western Europe has an effect on within-regional interpersonal inequality. Second, whether this potential relationship is mediated by the level of economic development of the region. The results of the analysis show that greater fiscal decentralisation is associated with lower interpersonal income inequality, but, as regional income rises, further decentralisation is connected to a lower decrease in inequality. This finding is robust to the measurement and definition of income inequality, as well as to the weighting of the spatial units by their population size.

Publication metadata

Author(s): Tselios V, Rodriguez-Pose A, Pike A, Tomaney J, Torrisi G

Publication type: Article

Publication status: Published

Journal: Environment and Planning A

Year: 2012

Volume: 44

Issue: 6

Pages: 1278-1301

Print publication date: 01/06/2012

ISSN (print): 0308-518X

ISSN (electronic): 1472-3409

Publisher: Pion Ltd.


DOI: 10.1068/a44334


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