ABSTRACT
This chapter reviews two dominant theories in this area, namely regional economic divergence and regional convergence. Myrdal's theory of spread and backwash effects, Friedmann's regional economic polarization and Hirschman's growth pole thought are three early theories identified with regional divergence. Myrdal's study suggests a strong correlation between spread and backwash effects, and regional economic development and highlights the effects of free trade on regional disparity. The regional economy studied by Friedmann in 1966 suggests that the cumulative process characteristics of industrialization and urbanization tend to favour economic development in the existing rich core region, while condemning the periphery to economic backwardness. The new economic geographers (NEG) argue that the agglomeration effect plays a determining role in influencing the spatial distribution of industry and other economic activities. Some scholars have raised doubts and criticisms concerning the NEG. The world evidence of spatial economic development does not support the inverted U-curved hypothesis and regional income convergence of Kuznets and the neoclassical economists.
