The roots of a dual equilibrium: GDP, productivity, and structural change in the Italian regions in the long run (1871–2011)

The article presents updated estimates of GDP per capita, productivity, and employment for Italy's regions, at the NUTS II level and at current borders, for the whole economy and its three branches (agriculture, industry, services): they span 14o years in 10-year benchmarks (1871-2o11). The Moran's indices of spatial autocorrelation, measures of sigma and beta convergence, Theil's and Hanna-Kim's decompositions are computed and discussed. Four phases in the history of regional inequality are identified: mild divergence (the liberal age), strong divergence (the two world wars and Fascism), general convergence (the golden age), and the "two Italies" tale (1971-2o11). In the first two phases, we observe the formation of three macro-areas; in the last decades, we record convergence within the Center-North and thus an increasing North-South polarization, with differences in employment becoming more important than those in productivity. This result is in line with a socio-institutional interpretation of the North-South divide.