Economic convergence and polarisation: towards a multi-dimensional approach 187Benedek, J. and Moldovan, A. Hungarian Geographical Bulletin 64 (2015) (3) 187–203. DOI: 10.15201/hungeobull.64.3.3 Hungarian Geographical Bulletin 64 2015 (3) 187–203. Introduction In the last decades we have experienced a general growing tendency of regional ine- qualities. However, the views on the intensi- ty and direction of regional inequalities diff er widely from one author to another, depend- ing on the scale, timeframe and methodol- ogy of the analysis. In Europe the majority of the authors seem to agree that while the disparities of national economies decreased in the last decades, sub-national economic inequalities have been increasing. Such proc- esses were fuelled by the rapidly growing metropolises and national capitals (London, Paris, Brussels, Vienna, Prague, Bratislava, Bucharest etc.) and the parallel peripherali- sation of rural and old industrial regions. In addition, the fi nancial crisis has stopped the decreasing tendency of regional inequalities between Member States from 2008 on. The Cohesion Reports of the European Commission (EC) have clearly indicated these polarisation and peripheralisation ten- dencies at sub-national level and proposed the strengthening of territorial cohesion by guiding one third of the EU budget to the reduction of economic and social dispari- ties in 2014–2020 (EC 2004, 2007, 2010, 2014). However, despite this consensus, there is still a confusion resulted by the employment of the diff erent concepts used in the quantita- tive studies of mainstream economic and regional science (convergence/divergence) and in qualitative approaches applied in economic geography, spatial planning and sociology (centralisation/peripheralisation, polarisation, marginalisation). This paper off ers a critical review of diff er- ent theoretical concepts focusing on regional inequalities. We have selected theories and concepts relevant to the convergence/diver- 1 Hungarian Department of Geography, Faculty of Geography, Babeş-Bolyai University, RO-400006 Cluj-Napoca, Str. Clinicilor 5. E-mail: jozsef@geografi e.ubbcluj.ro Economic convergence and polarisation: towards a multi-dimensional approach József BENEDEK1 and Aura MOLDOVAN1 Abstract The current increase of regional inequalities in Europe, and in particular in Central and Eastern Europe (CEE) has led to the reconsideration and revival of the concepts of “polarisation” and “convergence” in academic fi elds like regional economics, economic geography and spatial planning as well. In contrast to the classical view on these concepts determined by functionalism and topology, the new theoretical and empirical perspec- tives are emphasising a multidimensional perspective. In addition, there is an important debate about the relation between economic inequalities and growth. This article provides a critical overview and assessment of the theoretical and empirical work on regional inequalities with special emphasis on theories of economic and social polarisation, regional economic growth, convergence, and social inequalities. We att empt to combine two powerful concepts of polarisation and convergence, emphasising their relational and multi-scalar nature. Building on this basis, we propose a multidimensional concept of socio-economic polarisation, which comprises processes of convergence and divergence, growth and mobility in economic and social dimensions. Keywords: regional inequalities, economic convergence, polarisation, Central and Eastern Europe Benedek, J. and Moldovan, A. Hungarian Geographical Bulletin 64 (2015) (3) 187–203.188 gence and polarisation debates2. The neo- classical and the new theories of growth are considered as the mainstream approaches in this fi eld, thus, main statements and devel- opments must be discussed here. Historical polarisation and sociological theories – more ‘heterodox’ in content and methods, and mar- ginal in the fi eld of economics – shall also be discussed below to deliver important argu- ments towards the development of a multi- scalar and multi-dimensional approach on regional inequalities. Our paper is focused on the connection of polarisation and the socio-economic proc- esses of diff erentiation. Drawing on a litera- ture survey, we summarise the facts of the main theoretical and empirical approaches discussing the problems of convergence and spatial polarisation in the fi rst section. In the second, we propose a multidimensional con- cept of polarisation and convergence, which comprises economic and social dimensions. We conclude with our fi nal remarks and with prospects for further research in the third section. Economic growth, convergence and polarisation: theoretical approaches Core-periphery structures in economics have always been defi ned as process-centred, un- like approaches in economic and urban geog- raphy that employed a traditional defi nition that is rather location-oriented and static and where the new process-oriented perspective off ered by introducing the term “periphe- rialisation” (Lang, T. 2012; Kühn, M. 2015) seems to be a promising innovation. 2 The research leading to these results was conducted in the frame of the project “Socio-economic and Political Responses to Regional Polarisation in Central and Eastern Europe” (RegPol²), coordinated by the Leibniz Institute for Regional Geography, Leipzig/Germany. The project received funding from the People Programme (Marie Curie Actions) of the European Union’s Seventh Framework Programme FP7/2007–2013/ under REA grant agreement no 607022. The basic position of mainstream eco- nomics is that, regional inequalities relate strongly to economic growth. Therefore, the main focus of the economic literature related to regional inequalities is whether economic growth produces increasing or decreasing inequalities. Furthermore, the economists rely on the so-called convergence-studies as analytical approaches to understand the rela- tions between growth and inequalities. Apart from the question, whether econom- ic growth leads to an increase or decrease of socio-spatial inequalities, three other im- portant issues are related to the above-men- tioned concepts: First, taking into account the important regional variability of economic growth, how can the diff erent economic growth rates between regions be explained? Second, how important is the spatial con- text for these diff erences? Third, what are the consequences of the spatially diff erentiated economic growth for spatial policy, or more explicitly, which are the recommendations for regional pol- icy in order to diminish regional inequali- ties and increase territorial cohesion? In the following subsections several theo- retical approaches will be summarised and critically evaluated to reveal, how these basic concepts contribute to the understanding of regional inequalities. We discuss traditional approaches on growth and convergence (the neoclassical exogenous growth theory, the post-Keynesian theories, and the export base theory, as laid out in the 1950s), as well as contributions from economic historians and more heterodox approaches (economic and spatial polarisation approach; sociological ap- proaches on inequalities).These are followed by an account of the most recent theoretical developments (new economic geography, new growth theory) and by an overview of the recent empirical work on convergence. The selection of literature is not meant to be exhaustive. It focuses on widely cited concepts and their selection was inspired by the works of Schätzl, L. (1998), Benedek, J. (2004) and Kühn, M. (2015). We have summarised the – – – 189Benedek, J. and Moldovan, A. Hungarian Geographical Bulletin 64 (2015) (3) 187–203. main statements of the analysed approaches, evaluated according to the following key ques- tions: how the development of inequalities is explained and what tendency for the evolution of regional inequalities is expected. Traditional models of economic growth Studies on economic convergence are rooted in the neoclassical theory of economic growth. The dominant concept between 1950 and 1980 was the Solow-model of exogenous growth, where the output is determined by three factors: capital, labour and technologi- cal progress (Solow, R.M. 1956). Technology is assumed to be a public good, while tech- nological progress (including advances in basic science) is assumed to be exogenous. This means that technological progress has the same contribution to economic growth in all regions, leading to the assumption that GDP per capita should grow at the same rate in all regions (Fagerberg, J. 1995). Nevertheless, due to the diff erent regional initial conditions and, accordingly, to the dif- ferent regional capital-labour ratios, poorer regions (with low capital-labour ratio) are growing faster than the richer ones, thus, regional inequalities tend to decrease and fi nally, should disappear. The model off ers a simple explanation for the evolution of regional inequalities: under the assumption of constant returns to capital, once a region achieves its steady-state as a result of long- term development, it will grow at the rate of technological progress. The farther is the region from its steady-state, the larger its growth rate of GDP per capita can be. As a consequence, poor regions will tend to grow faster than richer ones, which could result in income convergence (Solow, R.M. 1956; Mankiw, N.G. et al. 1992). In this model, con- vergence is determined by the capital fl ows directed from regions where it is abundant to regions where it is scarce, in order to achieve the highest rate of profi t on capital. One of the weak points of the neoclassical growth theory comes from the fact that it is not concerned with regional diff erences in the use of production factors and in the or- ganisation of fi rms. Another weak point is the assumption on the free fl ow of production factors that is refuted by empirical facts. For example, a major share of capital transfers and foreign direct investments are taking place be- tween advanced economies (Schatz, A.J. and Venables, A.J. 2000). Moreover, the labour has no unlimited mobility due to the high living costs, the diff erences in social and cultural en- vironments, the accessibility of jobs etc. Under these circumstances regional in- equalities between rich and poor regions can not diminish. In addition, empirical work has proved that capital and labour costs explain only a small part of actual growth (Fagerberg, J. 1995). As a consequence, the equalisation of inter-regional inequalities as stated in the neoclassical theory is not confi rmed by the empirical results, being thus less adequate in explaining regional inequalities. Keynes’ theory focused on demand and on state interventions, considered investments as a key factor for economic development, and did not address the question of conver- gence directly. The latt er problem is discussed explicitly in the post-Keynesian theory such as in the Harrod-Domar model relying on the assumption that the import determines the growth of regional economies (Harrod, R.F. 1939; Domar, E.D. 1946). Regional in- vestments exercise three types of eff ects on growth (Schätzl, L. 1998), such as income ef- fects, capacity eff ects (increasing production capacities and increasing capital stock) and complementarity eff ects (forward linkage ef- fects on the suppliers’ sector and backward linkage eff ects on the consumption). The theory suggests that equilibrated growth occurs when the demand growth has the same intensity as the growth of produc- tion capacity, refl ected through income and capacity eff ects. All these eff ects contain a spatial component: capacity eff ects generated by investments are connected to a location, their spatial distribution and characteristics being linked to the factors determining the spatial distribution of investments. The in- Benedek, J. and Moldovan, A. Hungarian Geographical Bulletin 64 (2015) (3) 187–203.190 come eff ects and the complementarity eff ects are spatially diff use, being more intensive in the place of investment and decreasing with the distance from the place of investment. The export base theory represents a variety of Keynesian growth theories. It concentrates accordingly on the demand side, more ex- actly – unlike the former one – it focuses on the external demand (North, D. 1955). The key argument is that the export activities realised in one region generate a cumula- tive regional development process. The size and time persistency of external demand for certain products or services determines the regional growth via multiplier eff ects, while a declining export demand generates the de- cline of the whole region (Malecki, E.J. 1997). One of the weak points of this theory lies in its methodology: it distinguishes basic and export oriented activities and sectors, thus, calls for a very detailed and not always acces- sible statistics. In addition, the above-men- tioned diff erentiation is highly dependent on the size and delimitation of the region. Another constraint is related to the urban economies, which are realising an intense internal commerce, the export sectors hav- ing a lower share. The theory induces a major reduction by the exclusive focus on the export activities, neglecting important internal growth factors like the increase of the internal consumption, the change of the consumption function, en- dogenous technological development etc. (Schätzl, L. 1998). The sociological approaches on inequalities Social theories in sociological approach have long been considered with inequalities, look- ing at how various resources are being dis- tributed within a society (EAPN 2014) and also at the resulting social diff erences be- tween various groups. Social inequality in this sense can be found wherever the accessi- bility of social goods and powerful positions are systematically restricted, thereby favour- ing or impairing the lives of the aff ected in- dividuals or groups. Inequalities manifesting e.g. in limited access to occupational, educa- tional and fi nancial opportunities might lead to social exclusion and marginalisation. At the same time, exclusion from social net- works of power – having litt le to no chance for infl uencing the decisions aff ecting daily lives – also contributes to such marginalisa- tion. Indicators used to measure social in- equality and marginalisation empirically can be assigned to one of four interconnected dimensions: wealth, knowledge, organisa- tion (understood as the status of a profes- sion within an organisational hierarchy) and association (or social capital) (Kreckel, R. 2004). This means – very broadly – that so- cially marginalised groups are characterised by low income, a low level of education, a high level of unemployment and no access to power holding social networks. It is important to note that all these four dimensions are mutually dependent and each one explores a signifi cant side of the structural heterogeneity, which is determin- ing the distribution of resources. However, one dimension is being emphasized for the purpose of capturing inequalities, and that is wealth – or, indicating the lack of wealth, poverty (Kühn, M. 2015). In the EU social policy inequality is ana- lysed mainly through the distribution of in- come. Moreover, non-fi nancial assets (such as property, shares or investment, especially, housing) are increasingly considered while analysing the wealth of households (EAPN 2014; Maesrti, V. 2015). Nevertheless, socio- logical studies are concerned mostly with social relations that individuals, households and groups are embedded in and which shape the patterns of social inequality (Kreckel, R. 2004). More complex studies on social inequal- ity and social exclusion supported by the EU also include non-fi nancial indicators such as life expectancy at birth, access to services (education, health and housing), old age de- pendency, share of foreign-born population, nutrition and sustainability (Copus, A. 2014; Thiry, G. 2015). 191Benedek, J. and Moldovan, A. Hungarian Geographical Bulletin 64 (2015) (3) 187–203. In order to link social inequality to the peripheralisation discourse, it is helpful to consider Kreckel’s conceptualisation of pe- ripherality (2004) as a structurally embed- ded constellation of conditions, which results in limited access to generally available and desirable resources (material or symbolic) for the people and groups aff ected, leaving a restricted room for autonomous action to them. In our interpretation, the diff erence be- tween marginalisation and peripheralisation is the following: the fi rst term refers to socio- structural exclusion, to pushing a group of people to the edge of social hierarchy, while we consider the second as the socio-spatial dimension of the process. Peripheralisation, thus, can be described as the gradual decline in socio-spatial development in relation to the dominant centre (Keim, K.D. 2006). The importance of the spatial dimension for social inequality is acknowledged also by EU social policy. One of the key factors used by EU policy-makers to determine which groups of people are at risk of living in poverty is “living in a remote or disadvan- taged community where access to services is worse” (EAPN 2014, p. 32). The structural disadvantages that people in peripheries face are limiting their capacity to improve their situation and raises the risk of falling into a vicious circle: given the lack of services in- cluding educational facilities, and the limited choices of career paths in peripheral areas, those who have resources for migration will leave, further diminishing the human capital and the chances of change in the region they leave behind (Massey, D. 1990). Moreover, apart from the actual lack of physical and social infrastructures, the inhabitants of marginalized places have to deal with the negative eff ects the image of backwardness, spread “from above”, through political, popular and scientifi c discourses, as well as “from below”, through daily routines and interactions (Wacquant, L. 2007). Uneven development has always been a major theme in social theory. Famously, Karl Marx compared the level of development between societies, looking at the modes of production at a national scale. His interpre- tation of the law of capitalist accumulation includes the criticism that any emergence of wealth and capital concentration goes togeth- er with poverty and oppression. Moreover, Marx views uneven development as intrinsi- cally linked to the transition from one mode of production to another: as an old mode de- clines and a new, more progressive one rises, diff erent growth patt erns are created, result- ing in uneven development (Bond, P. 1999). Developing the Marxist approach by add- ing a spatial component explicitly, David Harvey (1996) sees the increasing inequali- ties in development as a result of the compe- tition between diff erent places for att racting investments. In this process, the diff erenti- ated return on investment creates or destroys certain spatial and class confi gurations – on a local, regional and national scale (Bond, P. 1999). Depending on how successful they are in att racting investments and capital, the spaces described by Harvey enter core-pe- riphery (dependent) relations with each oth- er, as Lang, T. et al. (2015) argued. Moreover, Henri Lefèbvre (1991) linked uneven spatial development specifi cally to real estate invest- ments, through which, inequalities in capi- tal accumulation are transposed into space (residential patt erns; unequal provision of urban services). While neither poverty nor inequality are bound to certain physical spaces and can be found in all types of societies, sociological studies have a strong urban bias (Gottdiener, M. and Budd, L. 2005). The inequalities within cities have been increasing since the 1980s, due to suburbanisation processes and the resulting concentration of poverty in the central urban areas. Nevertheless, sociologi- cal studies are also concerned with global in- terconnectedness of countries and cities and the uneven development within the global labour market that resulted in the rise of ma- jor cities as high command centres. The process produced an increasing power concentrated in central urban areas on the one hand, and the expansion of commercial spaces dispersed across space on the other Benedek, J. and Moldovan, A. Hungarian Geographical Bulletin 64 (2015) (3) 187–203.192 (Gottdiener, M. and Budd, L. 2005, p. 73). Sassen, S. (1991) considers these major cities as ‘global’ ones, and describes their rise as host- ing processes of growing polarisation in terms of occupational and income structures. A very similar image, focused on the po- larised occupational structure within global cities, is described by Mollenkopf, J. and Castells, M. (1991). Each of the cited schol- ars is concerned with migration fl ows that play a crucial role in enabling this process of polarisation due to the expansion of low- skilled and poorly paid jobs occupied by im- migrant workers in global cities. However, the above concepts have been criticised for employing unstable, value-laden concepts and for oversimplifying the empiri- cal reality by reducing it to a simple dichoto- my. Hamnett, C. (2001) argued that the phe- nomenon described by Sassen in global cities is rather caused by professionalisation, typical of post-industrial societies than polarisation. Moreover, shift ing the focus from individuals (as Sassen discussed it) to households might produce a clearer image of the occupational structure in global cities, as it would shed light upon the increasing inequality between households (work-poor and work-rich house- holds), as it was argued by Hamnett. The household focus might also support the shift from the dichotomic view of po- larisation processes (command centre vs. production periphery) towards a deeper (multidimensional) understanding of this socio-spatial phenomenon (Gottdiener, M. and Budd, L. 2005. p. 66). What all these sociological theorists have in common is that they have a critical view on inequality and stratifi cation, and consider them as the results of the modern capitalist relations of exploitation and exclusion in which, some individuals or social groups benefi t at the expense of others. In capitalist societies, the diff erences between cores and peripheries is seen as the result of capital in- vestments, concentrated in urban and sub- urban sett lements, where the rate of return is the highest. The investment sets off a cu- mulative eff ect, creating jobs and generating tax revenues, enabling public investments to bett er infrastructure and the quality of life. The resulting highly diff erentiated life chances of the respective residents support the reproduction and the enhancement of so- cio-spatial inequalities (Gottdiener, M. and Budd, L. 2005). The argument continues by considering the forms of social inequalities typical of modernity and capitalism, shaped not by the independent achievements of indi- viduals or social groups, but by their ascribed characteristics. Thus, inequalities are consid- ered to be persisting at various scales, while the gap between rich and poor is deepening (Korzeniewicz, R.P. and Albrecht, S. 2013). The general weakness of the sociological ap- proach to inequalities lies in the vague defi - nition of the concepts of core and periphery (Kühn, M. 2015). This also means that the identifi cation of spatial core-periphery struc- tures, at any scale, remains a subjective mat- ter. Even though, sociologists have focused on the inequalities in cities, we agree with Kühn (2015) on that the poverty concept can easily be transferred to regional scale: if a large number of households or municipalities experiencing poverty are concentrated in a particular area, it should be considered as a periphery at re- gional scale Such peripheries are the results of deindustrialisation, ageing and demographic shrinkage, lack of investment, low level of in- come and out-migration of higher educated and young people (Kühn, M. 2015). Historical approaches Historical approaches embrace all contribu- tions of economic history to studying eco- nomic development and growth. The theories elaborated on this ground advanced the idea of the multi-stage and linear economic devel- opment path (Gerschenkron, A. 1962). One of the most infl uential models was proposed by Walt W. Rostow (1971), that combines eco- nomic (productivity, investments, knowledge), demographic (mobility), political (role of the state) and socio-cultural factors to identify fi ve stages of economic growth: traditional society, 193Benedek, J. and Moldovan, A. Hungarian Geographical Bulletin 64 (2015) (3) 187–203. transition to take-off , take-off , maturity and high mass consumption epochs. Certain economic sectors are dominant in each stage, and the take-off is driven by in- dustrialisation. Whereas, John Friedmann’s (1973) four-stage core-periphery development model (preindustrial, incipient industrial, ad- vanced industrial and post-industrial stages) suggests a clearer spatial accent, assuming that each stage of development corresponds to a certain type of spatial structure (Schätzl, L. 1998). In his model, the spatial structure evolves from an initial equilibrium situa- tion − with a high level of isolation between sett lements and a low level of spatial interac- tions − into a complex spatial structure, with a high level of functional interdependencies between the core and the peripheral regions. In the fourth stage of development, a new spatial equilibrium emerges characterised by low level of regional inequalities. The four-stage model developed by Harry W. Richardson (1973) rests on a similar logic; nevertheless, this concept is more complex and introduces the idea of reverse polarisa- tion. It att aches the decentralisation process of economic activities in the third stage of economic development, when investments and population migration are oriented from the core regions to the centres of the periph- eries, producing a more balanced urban and regional structure (Schätzl, L. 1998). It is obvious that historical approaches have contributed largely to the regional ine- quality debate, by combining a large number of economic, social and institutional factors and also by off ering an alternative narra- tive to the formalised neoclassical models. Moreover, these models combine the time and space dimensions, re-interpreting the processes described otherwise in the formal models, such as spatial diff usion, agglomera- tion and concentration. The latt er processes can be explained by the concepts of polarisation and depolarisa- tion, as they appear in the four-stage model of Richardson. Nevertheless, detailed analy- sis of the above concepts revealed their weak points, such as their descriptive character, the linear, one-way logic of economic develop- ment – that limits their explanatory power on economic decline and crisis − and the lack of empirical fi ndings on the fi nal (equilibrium) stages of development characterised by de- clining regional inequalities. Theories of economic and spatial polarisation The theories of polarisation include the seminal works of Gunnar Myrdal (1957), Albert O. Hirschman (1958), Francois Perroux (1950), Nicholas Kaldor (1957) and the later devel- opments of these theories, i.e. the concepts of development poles and the core-periphery models. Unlike the neoclassical theories, the theories of polarisation consider interregional inequalities growing, since the development advantages created in a region have a cumu- lative character determining the spatial and sectoral polarisation of socio-economic devel- opment. This cumulative process is triggered by the change of independent economic vari- ables like the demand, income, investments or production (Schätzl, L. 1998). The change of one variable induces a change of other variables, generating a cu- mulative process of polarisation. Thus, the equilibrium analysis specifi c to neoclassi- cal theories was replaced by the concept of circular cumulative causation, introduced fi rst by Myrdal (1957) and Kaldor (1957). According to this concept, the intensity of interregional inequality is determined by the intensity of two eff ects: the backwash eff ects through the migration of mobile production factors (labour, capital) from the peripher- ies to the core regions, and the spread eff ects emanating from the spatial diff usion of in- novation, production and services from the core regions toward the peripheries. Generally, the backwash eff ects are more intensive than the spread ones, which generates growing inequality tendencies. Exceptions are represented by the core economies where inequalities are decreas- ing due to the development of infrastructure and communication. Benedek, J. and Moldovan, A. Hungarian Geographical Bulletin 64 (2015) (3) 187–203.194 The other basic assumption of polarisa- tion theories is that polarised development is generated by the unequal regional dis- tribution of growth factors (labour, capital, technology, infrastructure, investment and consumption functions, natural resources) and by the limited mobility of such factors. The concept suggests that relations emerg- ing between core regions and peripheries are characterised by strong dependence and the economic growth of cores is possible only at the expense of the peripheries. Later, the concept of growth poles was de- veloped further by Perroux (1988) and by Jacques-Raoul Boudeville and José Ramón Lasuén (Schätzl, L. 1998). Their key assump- tion is that the growth poles are urban centres which polarise a larger region, where a single major fi rm or an economic sector generates a growth process and interregional inequali- ties. As a consequence, the latest approaches to the growth poles adopted the idea of sec- toral polarisation that leads to regional po- larisation and to the establishment of spatial growth centres. The intensity of polarisation eff ects depends on the market share and on the size of the dominant economic sector. The factors for the concentration of development in growth poles are related to the localisation advantages of production factors. The possi- bility of spatial diff usion of growth towards peripheries is admitt ed. An important contribution to the polarisa- tion theories came from Lasuén, J.R. (1973) who argued for that the explanation of un- equal economic development can be reduced to the unevenly distributed technological innovation process (diff usion and adapta- tion). This process has two components: a temporal one, represented by sectoral inno- vation poles, and a spatial one, represented by urban poles. These two poles are strongly interconnected, thus, the urban network de- termines the diff erentiation of the innovation process concentrated in a relatively small number of urban agglomerations of the ad- vanced economies. Meanwhile, innovation in non-core economies and in smaller urban centres rests on external development fac- tors and on adoption through imitation or diff usion. The intensity of adoption depends on the innovation capacity of the regional or urban economy that reinforces spatial con- centration and polarisation. The main weaknesses of polarisation theo- ries lie in their rigid framework and the lack of explanatory power of historical turning points in regional development (Kühn, M. 2015). The core-periphery models of world-system the- ories and the dependency theories add a power dimension to the relations of cores and pe- ripheries (Friedmann, J. 1973; Wallerstein, I. 1974). According to these theories, the core regions (or countries) are innovative, play an active role in the international trade, export capital, produce high incomes, have high productivity and a stable political system. In contrast, peripheries are less innovative, they depend on capital import, have a minor role in international trade, low incomes and pro- ductivity, and they are unstable politically. As a consequence, peripheries are dependent on the centres and disadvantaged by unequal terms of trade. Wallerstein distinguishes semi-peripher- ies that are economies with both character- istics of the core and also of the periphery (Wallerstein, I. 1974). Semi-peripheries experience the highest mobility, and their prospective ascension to the status of a core region is determined by state interventions. The proponents of these theories do not con- sider the elimination of spatial inequalities by any development policy. From a geographic point of view, the above mentioned global core-periphery model can be identifi ed at sub-national scale as well, emerging as a North–South divide (UK, Italy) or West–East disparities (Hungary, China, Germany), de- pending on national factors. The weak point of the core-periphery mod- els is represented by their strong focus on conflicting relations between centres and peripheries, reduced to a simple dualism of a powerful centre and a weak periphery (Kühn, M. 2015). Nonetheless, the theories of polarisation off er a relevant theoretical framework for the analysis of regional in- 195Benedek, J. and Moldovan, A. Hungarian Geographical Bulletin 64 (2015) (3) 187–203. equalities. Their core-periphery concept is a useful analytical concept for the descrip- tion of the spatial outcomes of polarisation processes, and their central idea of growing interregional inequalities corresponds to the main empirical fi ndings. New approaches to unequal development and growth The new economic geography (NEG), grounded by Paul Krugman and developed by a range of economists and economic geographers during the last two decades off ers a new perspective on the mechanism of unequal regional development, based on the agglom- eration process of industrial activities. NEG uses the new trade theory introduced by Alfred Marshall (external economies, ag- glomeration), and two modelling techniques such as the Dixit-Stiglitz model of monopo- listic competition and the iceberg function (Krugman, P.R. 1991). According to the NEG’s two-region model, a core-periphery structure evolves that de- termine their relationships: one of the re- gions ends up as an industrial core region, the other region becomes an agricultural periphery. The central element of the model is the mobility of manufacturing workers de- termined by interregional wage diff erentials. This induces a process of cumulative causa- tion in the region with higher wages, where additional workers att ract more fi rms as a result of increasing demand, which in turn att racts more workers from the periphery. This cumulative process might come to an end in two ways: – First, if the centripetal (agglomeration) forces (market size, mobility of workers, positive external eff ects) are dominant, it re- sults in a cumulative-circular, divergent and asymmetric development model, with one region achieving the core status, while the other becoming periphery. – Second, if the centrifugal (dispersion) forces (immobile factors, e.g. natural resourc- es, negative external eff ects, competition) are dominant, a regional convergence model prevails with low interregional diff erences. Krugman (2011) considers three factors that can modify the relation between centripetal and centrifugal forces: a) economies of scale in industrial production, b) transportation costs, and c) demand for industrial goods. The traditional growth models were se- riously challenged by the endogenous (new) growth theories represented by Paul R. Romer, Robert Lucas, Robert J. Barro and Xavier Sala-i-Martin in the 1980s. Technological progress was considered as an endogenous growth factor (determined by R&D, ad- vanced education facilities etc.) by them, playing a central role in economic growth through increasing returns. As a conse- quence, the endogenous growth theories of- fer a picture with growing inequalities and economic divergence, where the driving fac- tor is represented by the spatial concentra- tion of knowledge and the spill-over eff ects generated by R&D (Romer, P.M. 1986). New growth theories pay much att ention to the theory developed by Romer, which brings a novelty by considering monopolistic tech- nological knowledge and imperfect market conditions. Another novelty was added to the debate by considering the dispersion eff ects resulting from industrial research. These dis- persion eff ects are considered a major factor of technological development, in contrast to other new growth theories that propose dif- ferent factors, like competences obtained by practice (’learning by doing’), or the disper- sion eff ects resulted from capital investment (Ács, J.Z. and Varga, A. 2000). Nevertheless, the lack of spatial dimension in new growth theories has limited their adaptation in eco- nomic geography (Sternberg, R. 2001). New concepts in this fi eld explain regional convergence or divergence and regional dif- ferences by factors like the diff erences in the human capital, increasing returns, learning ef- fects, fi rm agglomeration, interregional knowl- edge transfers and in innovation diff usion. Recent studies added a further dimension to classical convergence studies by includ- ing the questions of income distribution and Benedek, J. and Moldovan, A. Hungarian Geographical Bulletin 64 (2015) (3) 187–203.196 the growth rates of income (Tselios, V. 2009; Amarante, V. 2014; Castells-Quintana, D. and Royuela, V. 2014). For example, as Tselios (2009) suggested, there is a conver- gence not just in the growth rate of income, but also in growth rates of income inequali- ties. Moreover, while earlier concepts relied on macroeconomic variables (e.g. GDP per capita), recent studies have adopted a new microeconomic dimension (Tselios, V. 2009; Rodríguez-Pose, A. and Tselios, V. 2015), based upon household income data from the European Community Household Panel (ECHP). Generally, the lack of adequate re- gional data on household and individual in- come is one of the main reasons for the domi- nance of the macroeconomic approach. It is a crucial question, because economic growth measured by GDP per capita has no relevance at individual scale, even though, the income distribution affects regional growth (Easterly, W. 2001; Dollar, D. and Kraay, A. 2002; Ezcurra, R. 2007; Rodríguez- Pose, A. and Tselios, V. 2010). Even more intriguing is the fact that empirical studies show convergence in incomes, in contrast to GDP per capita changes in Europe (Ezcurra, R. and Pascual, P. 2005; Tselios, V. 2009). Furthermore, recent studies introduced new concepts in the economic convergence/ divergence debate and suggest that regional inequalities have a cyclical evolution: phases of growing inequalities and divergence are followed by phases of declining inequali- ties and convergence. However, according to Quah, D.T. (1996), economic growth and convergence are related, but they are logi- cally distinct processes. It means that one can occur without the other (Quah, D.T. 1996). An important dimension of the regional con- vergence debate is the role of spatial interaction eff ects, geographical location and proxim- ity disregarded in the neoclassical conver- gence studies. Regions are open to a range of economic and demographic fl ows, like knowledge spill-over, interregional trade, capital mobility, spatial mobility (migration and commuting); moreover, other types of regional spill-over and their eff ect cannot be neglected, as they are important factors of regional growth. Spatial spill-over aff ect the economic growth strongly, while the con- vergence process is diff erent across spatial regimes (Ertur, C. et al. 2006). Therefore, spatial autocorrelation cannot be eliminated from the growth models without the risk of imposing serious restrictions to the model. Thus, we should not overlook spatial eff ects across borders and the spatial structures within regions. In growth theories, the concept of polarisa- tion is used to describe processes of spatial concentration of economic growth. Thus, po- larisation should be considered a special case of economic divergence, moreover, the process of polarisation − the concentration of economy (and population) in certain urban centres − is contributing decisively to the production and reproduction of core-periphery structures. A new approach in the convergence studies has been suggested by Sala-i-Martin, who found a slow convergence inside the group of developed countries (Sala-i-Martin, X. 1996). This fi nding was reinforced by other studies, and, as a consequence, a new ap- proach has been developed called club con- vergence (Baumol, W.J. 1986; Quah, D.T. 1995). Its key argument is that the conver- gence occurs inside of groups of countries or sub-national regions (convergence clubs), while the inequalities between the groups (clubs) have a growing tendency. This process is described as polarisation emphasising the spatial clustering (concen- tration process) of economic growth and it is viewed as a diff erent phenomenon from inequality. Accordingly, regional polarisation is estimated by considering density func- tions for the distribution of GDP per capita. Important empirical evidence was brought for the existence and persistence of regional polarisation in the form of convergence clubs at the top and bott om of income distribu- tion, while the middle-class clubs are van- ishing (Quah, D.T. 1997; Castro, J.W. 2003; Smetkowski, M. and Wójcik, P. 2012). Another major contribution of this new approach is the possibility of multiple equilibrium and 197Benedek, J. and Moldovan, A. Hungarian Geographical Bulletin 64 (2015) (3) 187–203. steady-states to which similar economies converge. However, empirical studies in club convergence have brought new evidence that poorer regions are trapped in clubs or, with other words in a group of regions at a lower level of development and with no chances of a way out (Mora, T. 2005; Benedek, J. and Kocziszky, Gy. 2015). The evaluation of diff erent theoretical approaches on inequalities In this section, we argue that the above- discussed theoretical approaches can be grouped according to key assumptions and fi ndings (Table 1). 1. A group of approaches largely relies on hard production factors (capital, labour, technological progress) in explaining the evolution of regional economic inequalities. The traditional growth theories (neoclassical, post-Keynesian and the export base theories), the new growth theories and the NEG con- stitute this group. In these approaches mul- tiplier eff ects – generated by investments, imports or exports – contribute to growth transmission largely and to amplifying in- equalities. The weak points of these theories are related to their assumption of economic equilibrium and also the imperative of a ra- tional and balanced spatial distribution of economy as there is no equilibrium situation, in which the interests of each economic actor are considered (Plummer, P.S. 2000). Thus, development and growth cannot be equal in all regions, and the steady-state situations are relative and unstable. Finally, the idea of long-term convergence of growth and ine- qualities between countries and sub-national regions was refuted by empirical studies. 2. The second group of approaches – his- torical and sociological theories – embraced non-economic or ‘soft ’ factors in their expla- nations for regional inequalities, such as the availability of services, quality of housing, accessibility, regional structure, characteris- tics of local or regional markets, the role of local administration, quality of life, quality of workforce. This group fi lls the gap opened up by quantitative models relying on ‘hard’ development factors, which cannot explain the diversity of regional development paths satisfactorily. They focus largely on the lo- cal perspective of development in which, the region appears as a strong entity with endogenous capacities for growth. Their weak point is related to the multi-stage de- Table 1. Theoretical approaches to regional inequalities in comparison Group of theories Theoretical approach Tendency of regional inequalities Reasons for increasing/diminishing inequalities Traditional models of economic growth Neoclassic Post-Keynesianism Export base Diminishing Diminishing Diminishing Production factor mobility and diminishing marginal product of capital Multiplier eff ects, spatial eff ects of investments Export activities Sociological theories Social inequality and marginalisation Growing Capitalism, new international division of labour, the logic of capital accumulation Historical theories Historical approaches Diminishing Reversed polarisation, integration Theories of eco- nomic and spatial polarisation Polarisation World-system, dependency Growing Persisting or growing Dominance of centripetal forces Polarisation eff ects, position in the world economy New theories on unequal develop- ment and growth Endogenous growth New economic geography Persisting or growing Persisting or growing Regional concentration of knowledge and technology Transport costs, spatial concentration of industry, mobility of industrial workforce Source: Authors’ own compilation. Benedek, J. and Moldovan, A. Hungarian Geographical Bulletin 64 (2015) (3) 187–203.198 velopment model which should be passed by every region in order to obtain a higher de- velopment status. For this, the model cannot explain deviations from this general trend generated by structural factors (diff erences in the internal structure of the regions), histori- cal paths (historical accidents) or by diff erent regional adaptation capacities. 3. The third group of approaches is repre- sented by polarisation, world-system, and dependency theories representing a structur- alist position, as they place cores and periph- eries in the context of a globally overarching system. They are anchored in global process- es, where the macroeconomic and political structures and the positioning of the region in the historically emerged core-periphery system determine regional development. Thus, the conditions of economic growth for peripheral regions are defi ned by the domi- nation of core regions resulting in a core-pe- riphery international division of labour with diff erent rates of accumulation. Summarising the reviewed literature, we can conclude the followings: Polarisation is linked to the complemen- tary notion of convergence/ divergence; It is focused on space-dynamics, where some regions rise while others fall; These processes are shaped by economic and social dimensions; Polarisation has varying characteristics on diff erent spatial scales, from global to local. We think, the discussed concepts of polari- sation and convergence/divergence provide arguments for a more comprehensive and interdisciplinary approach in researching spatial inequalities. Like polarisation, the concept of convergence can be viewed as a multi-dimensional process that can be ex- plained as the interaction of economic and social dimensions. The new approach we propose should include the combination of the concepts of polarisation and convergence/ divergence and provide a framework for the operationalisation for the empirical research using the tools offered by spatial econo- metrics. In recent studies (Benedek, J. and Kocziszky, Gy. 2015; Benedek, J. et al. 2015), – – – – new evidence was provided, that economic and social development in CEE is going hand in hand with growing regional inequalities and polarisation. In addition, the peripheral regions of the CEE at sub-national level seem to be trapped in the ’convergence clubs’ of backward regions diverging from the group of economically dynamic regions. We think, further research in this fi eld can contribute to a more comprehensive under- standing of polarisation and peripheralisation from a quantitative perspective. However, it is necessary to defi ne the main economic and social dimensions, and to identify the main factors determining polarisation. Some of the latest studies are also going in this direction (Duro, J.A. 2008; Liargovas, P. and Fotopoulos, G. 2009; Smetkowski, M. and Wójcik, P. 2012; Tselios, V. 2014; Li, G. and Fang, C. 2014; Rodríguez-Pose, A. and Tselios, V. 2015; Royuela, V. and García, G.A. 2015), proposing a new concept of con- vergence/divergence, interpreting them as multi-dimensional processes. This contrasts with the established neoclassical and endog- enous growth theories still operating with a one-dimensional economic convergence concept. The multi-dimensional approach to conver- gence/divergence refl ects upon some of the concerns formulated in recent years and re- acting to the inadequacy of the concepts and of the instruments used for the measuring regional inequalities – which are still based on the economic dimension of development. Thus, there is a growing recognition of the need for including the social dimension in the analysis of regional inequalities expressing people’s desire for a bett er quality of life and social welfare. The question is highly relevant to the regional policy of the EU, trapped in a simplistic GDP per capita approach to de- limiting the regions ‘lagging behind’, largely neglecting the basic interests of local, regional or even national communities. One can observe that economic growth oft en has no signifi cant infl uence on the in- come of the households and on the improve- ment of the social indicators expressing the 199Benedek, J. and Moldovan, A. Hungarian Geographical Bulletin 64 (2015) (3) 187–203. quality of life (Easterly, W. 1999; Rodríguez- Pose, A. and Tselios, V. 2015). Nevertheless, the research conducted by Becker, G.S. et al. (2005) showed that the income and health inequality trends are decupled at a global scale: while income disparities have a grow- ing tendency, cross-country inequality in dif- ferent dimensions of health is diminishing (Becker, G.S. et al. 2005). This suggests that social convergence can occur without eco- nomic convergence. At the same time, it calls for a regional social policy beside the existing regional policy. The studies reviewed above refer to a multi-dimensional convergence process at cross-country level and propose a new and alternative methodology for the analysis of convergence and divergence processes. Rodríguez-Pose, A. and Tselios, V. (2015) used Sen’s index of social welfare in the European context, while other studies pro- posed a large set of social indicators for the analysis of social disparities at international level. For instance, more and more the social and demographic components of Human Development Index (e.g. life expectancy, in- fant mortality, educational enrolment, or the literacy rate) are used to contribute to inter- national comparative studies. Moreover, studies based on micro level (personal or household) data give accounts of the processes of social convergence in Europe, e.g. Rodríguez-Pose, A. and Tselios, V. (2015), who used microeconomic data of the European ECHP in their analysis. Their main question was whether the absence of a strong convergence in GDP per capita in the EU makes the convergence in social welfare also weak or absent. They have found major social welfare disparities between diff erent regions of Europe, including a clear northern- southern divide. Welfare levels in the south- ern periphery − covering Greece, Southern Italy, Spain, and Portugal − are typically half of the EU average. In general, regions with similar welfare levels cluster together. The above methodological innovations pro- vided an empirical contribution to the work of “The Commission on the Measurement of Economic Performance and Social Progress” that defi ned the concept of well-being con- sidering the following dimensions: mate- rial living standards (income, consumption, wealth), health, education, political represen- tation and governance, social and personal connections, environment, economic and physical insecurity (Stiglitz, J. et al. 2010). Concerning the results of multi-dimen- sional convergence studies, there are some important remarks that have to be made. Methodological shortcuts are inevitable, like in the case of one-dimensional studies, which means that the results are highly dependent on the period under research, on the geo- graphical scale and on the used indicators. While the international comparison proved a strong connection between the economic and the social convergence, studies focused on sub-national/regional scale revealed the opposite situation: social convergence has occurred without economic convergence (Rodríguez-Pose, A. and Tselios, V. 2015; Royuela, V. and García, G.A. 2015). It is worth to consider this last issue, as it suggests that living standards can be improved even in the absence of economic growth or eco- nomic convergence. It is in this direction that the “The Commission on the Measurement of Economic Performance and Social Progress” has formulated as one of its key messages: “…the time is ripe for our measurement system to shift emphasis from measuring economic production to measuring people’s well-being.” (Stiglitz, J. et al. 2010, p. 312). Conclusions and future prospects We can summarise our contribution to the question of convergence and polarisation around two ideas. 1. First, our paper argues that alternative interpretations of convergence are possible, and that this concept can be related to other theoretical approaches than growth theories. Moreover, we have argued for the multidi- mensional perspective of convergence and divergence that means the combination of Benedek, J. and Moldovan, A. Hungarian Geographical Bulletin 64 (2015) (3) 187–203.200 social and economic dimensions is needed to understand the interrelatedness of social and economic factors infl uencing develop- ment. This new approach would enable a more proper operationalisation of the tech- nological factor, taking into account the fact that the reduction of the technological gap needs not only good imitation strategies, but also the development of social capabilities. In addition, the multidimensional approach can properly integrate the contributions of sociol- ogy studies focused on the question of social inequalities and social polarisation at the mi- cro scale. They contribute to the rescaling of the research by concentrating on the house- holds as basic research units. This rescaling was strongly supported by the proponents of recent microeconomic studies on household level income inequalities as well. We think, the defi nition of social polarisation in sociol- ogy (as the shrinkage of the middle class) can be adopted in the economic approaches as well and interpreted as the shrinkage proc- ess of semi-peripheries. Baumol’s (1986) idea on convergence clubs strengthens this fact, bringing evidence for a vanishing middle cat- egory club, while richer regions are becoming even richer and the poorest ones poorer. 2. Second, we have raised arguments to prove that processes like convergence, divergence, economic growth, spatial mobility and innova- tion are strongly interrelated. As we mentioned in the introductory part, the concept of polari- sation describes the spatial concentration of economic activities and population. At a high intensity of the concentration, core−periphery structures are reinforced, as the core regions att ract more capital and population, while pe- ripheries are shrinking both in economic and demographic terms. Thus, polarisation leads to increasing divergence, and this way, to in- creasing regional inequalities. The opposite process happens when capital and population spreads to peripheries, leading to convergence and diminishing regional inequalities, a proc- ess which can be termed as „depolarisation” (an antithesis of polarisation). However, we have pointed out that eco- nomic growth and convergence are not neces- sarily interrelated, since one can occur with- out the other. Research on the links between these processes needs more att ention in the future. Growth increases economic output and decreases income inequality, but we do not know if the growth in poorer and high- inequality economies would lead to catching up with the richer ones (Tselios, V. 2009). 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Hungarian Geographical Bulletin 64 (2015) (3) 187–203.204 Changing Ethnic Patt erns of the Carpatho–Pannonian Area from the Late 15th until the Early 21st Century Edited by: Károly KOCSIS and Patrik TÁTRAI Hungarian Academy of Sciences, Research Centre for Astronomy and Earth Sciences Budapest, 2013 This is a collection of maps that visually introduces the changing ethnic patt erns of the eth- nically, religiously, culturally unique and diverse Carpathian Basin and its neighbourhood, the Carpatho-Pannonian area. The Hungarian and English volume consist of three structural units. On the main map, pie charts depict the ethnic structure of the sett lements in proportion to the population based on census data et the millennium. In the supplementary maps, changes of the ethnic structure can be seen at nine dates (in 1495, 1784, 1880, 1910, 1930, 1941, 1960, 1990 and 2001). The third unit of the work is the accompanying text, which outlines the ethnic trends of the past fi ve hundred years in the studied area. The antecedent of this publication is the „series of ethnic maps” published by the Geographical Research Institute of the Hungarian Academy of Sciences from the middle of the 1990’s, which displayed each of the regions of the Carpathian Basin (in order of publication: Transylvania, Slovakia, Transcarpathia, Pannonian Croatia, Vojvodina, Transmura Region, Burgenland, Hungary). This work represents, on the one hand, the updated and revised version of these areas, and, on the other hand, regions beyond the Carpathian Basin not included on previ- ous maps. Thus, the reader can browse ethnic data of some thirty thousand sett lements in diff erent maps. ----------------------------------- Price: EUR 12.00 Order: Geographical Institute RCAES HAS Library H-1112 Budapest, Budaörsi út 45. 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