The Dynamics of Regional Disparities in Central and Eastern Europe during Transition

This paper examines the evolution of territorial imbalances in per capita income in the Central and Eastern Europe regions between 1990 and 2001. In order to overcome the limitations of conventional convergence analysis, we have combined a non-parametric approach that allows us to study the dynamics of the entire cross-section distribution, with a series of theoretical results and measures taken from the literature on personal income distribution. The results obtained show an overall reduction in regional inequality over the study period. This process has been compatible with the simultaneous presence of between-country convergence and within-country divergence. Likewise, we have observed a reduction in the development gap between the sample regions and Western Europe. In any event, the polarization of the distribution under consideration has decreased, while the registered level of intra-distribution mobility is relatively low. Furthermore, the analysis highlights the important role played in explaining the distribution dynamics by factors such as the national component, spatial location, productive structure, agglomeration economies and the percentage of gross domestic product devoted to investment.