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Reversal of economic fortunes: institutions and the changing ascendancy of Barcelona and Madrid as economic hubs

Rodríguez-Pose, Andrés ORCID: 0000-0002-8041-0856 and Hardy, Daniel (2020) Reversal of economic fortunes: institutions and the changing ascendancy of Barcelona and Madrid as economic hubs. Growth and Change. ISSN 0017-4815

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Identification Number: 10.1111/grow.12421

Abstract

This paper looks at the divergent economic trajectories of Barcelona and Madrid since Spain's transition to democracy. It highlights how Barcelona, the city that was better positioned four decades ago to emerge as the main Spanish economic hub, has lost out to Madrid. We argue that the contrasting trajectories of the two cities have less to do with the pull of Madrid as the capital of Spain, with the development of new infrastructure in the country, or with agglomeration economies, and more with institutional factors. A growing societal divide in Barcelona along economic, social, and identity lines has led to a greater breakdown of trust and to the development of strong groups with limited capacity to bridge with one another than in Madrid. This has entailed the emergence of negative externalities that have limited the economic potential for growth in Barcelona and facilitated the rise of Madrid as the main economic hub within Spain.

Item Type: Article
Official URL: https://onlinelibrary.wiley.com/journal/14682257
Additional Information: © 2020 The Authors
Divisions: Geography & Environment
Subjects: H Social Sciences > HC Economic History and Conditions
G Geography. Anthropology. Recreation
Date Deposited: 22 Jul 2020 11:57
Last Modified: 20 Aug 2021 02:39
URI: http://eprints.lse.ac.uk/id/eprint/105772

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