This paper reviews the empirical literature on growth and convergence that has addressed the importance of spatial factors. An important distinction in this literature is the one between absolute and relative location. The literature on absolute location predominantly uses non-spatial...

By studying the interaction between social capital and decentralization, we show that political decentralization can be a source of divergence across heterogeneous regions. In particular, we claim that since the local endowments of social capital display their effect on the economy mainly...