Comparing different estimations methodologies of Regional GDPs in Latin American countries

Since 1980s, and particularly following the Great Recession, regional divergence has re-emerged, generating growing territorial tensions linked to widening socioeconomic differences in developed and developing countries. As a result, territorial cohesion has become a central concern in policy debates, academic research, and the media. For instance, in Europe this resurgence of regional inequality has occurred despite substantial efforts to promote cohesion, raising questions about the effectiveness of policy interventions and the predictive power of neoclassical growth theory. The persistence of regional disparities has long been recognized. Since the classical contributions of Sidney Pollard and Williamson’s inverted-U hypothesis, the uneven spatial impact of the industrialization has been largely highlighted in Economic History. However, progress in this field has been constrained by the scarcity of subnational quantitative data, which has limited empirical testing of these theories. Even in advanced economies, regional income statistics were largely neglected until the late twentieth century. Lack of regular, harmonized regional accounts has further hindered research. In this book new estimates of regional GDPs are reported for nine Latin American countries. This chapter compares the new long-run regional GDP estimates provided by several authors and explores how data limitations and the use of different estimation methodologies could generate potential biases for comparing cross-country regional disparities.