Concentration and growth in Chile: An ignored negative relationship

Abstract

Different studies show that, given the size of Chile and its level of development, there is an excess of concentration of population and activity in the Metropolitan Region. Furthermore, during the past two decades, spatial inequality has increased in Chile. This situation could negatively affect national growth, something that has been systematically ignored in the design of public policies. This article shows that some market mechanisms, such as labor mobility and inter-regional trade flows, and many public policies tend to strengthen the centripetal forces that have shaped the economic geography of Chile during the past decades. These results reveal the need to incorporate explicitly and actively the Í€œregional problemÍ€ in the national development strategy, not only as an equity problem, but also as part of the policies oriented to improve the efficiency of Chilean economy.

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