DP12803 Power to the Periphery? The failure of Regional Convergence in Canada, 1890-2006

Author(s): Chris Minns, Joan R. Rosés
Publication Date: March 2018
Keyword(s): Canada, random growth theory, Regional Inequality, resource booms, structural change
JEL(s): N91, N92, R12
Programme Areas: International Trade and Regional Economics, Economic History
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=12803

Economic historians have long signalled the importance of location-specific resource booms in the Canadian development experience, but a full analysis of the dynamics of Canada's internal income dynamics is conspicuously absent. This article presents comprehensive estimates of regional inequality in Canada from 1890 to 2006 and assesses the sources of convergence and divergence across Canadian provinces. Our convergence decompositions support the central role of resource booms in accounting for regional income dynamics, and show that structural change contributing relatively little to the development process. Our findings are in sharp contrast to the historical experience of other countries, including the United States.