Metro-nonmetro Economic Growth and Convergence in the Plains States - Rethinking the Rural-Urban Relationship in a Global Economy

This paper tests for conditional b-convergence, and for s-, or unconditional convergence of the metro- and non-metro portions of per capita incomes of the Plains states as classified by the Bureau of Economic Analysis, and calculates metro- non-metro income inequality. We find evidence of b-convergence only for the state of Missouri, and divergence for Iowa, Kansas, Minnesota, Nebraska, North Dakota and South Dakota, indicating slower economic growth, and lack of economic parity for Plains states’ non-metro counties, and heterogeneity rather than homogeneity in terms of factor endowments. Metro non-metro income inequality as measured by the Gini coefficient, increased for all states except Missouri. In terms of policy implications, we suggest a shift of Federal policy from subsidy based support of traditional agricultural commodity production to a multi-sectoral economic development approach, using the existing Northern Great Plains Regional Authority as an institutional structure to coordinate development efforts across the Region.