3
has become a disheartening social phenomenon and an important political issue.
2
The emptying
heartland has also revived an argument that the Senate, with its equal representation of states,
should be discarded as undemocratic (Rosenfeld, 2004). If we want a counterexample of
peripheral regions filling, we could look at Zimbabwe where indigenous Africans are resettling
colonial-era farms. However its political environment – a dictatorship – is very different from
the above Western examples.
These examples show how domestic inequality and divergence raise perplexing political
questions, questions that cannot be answered by cross-country studies that examine national
averages while leaving turbulent inner dynamics hidden.
Inequality Theories
Domestic inequality and divergence are puzzling from classical economic perspectives,
which predict convergence. Political economists have offered various explanations for
divergence that are alternative theories from the new economic geography.
Romer notes that the standard growth model’s inability to explain comparative economic
growth in the world has frustrated scholars to theorize growth in what he calls endogenous terms.
Endogenous growth theories seek to explain growth by internal policies, or by “private and
public sector choices” in the words of Romer (p. 1). For example, North has written that
decisions by Italian policy-makers to create institutions strengthening the credibility of trading
systems during the Renaissance were important developments that have since helped Western
style economies grow (North, 1991; also see Avner, 1994). By contrast, Collier and Gunning
write that bad policies, such as overly large public sectors and slow adoption of new
2
See for example: “Amid Dying Towns of Rural Plains …” from The New York Times. Dec 1, 2003, pg. A1.
and “Change of Heartland: America’s rural interior …” from National Geographic. May 2004, pp. 2-29
August
2005
Convention