This chapter surveys the economic growth experience of Iberia since the early nineteenth century. After more than a century dominated by sluggish growth and divergence from Western Europe, there was a substantial acceleration in GDP and per capita GDP growth of both Iberian economies c. 1950. As a result, in the very long term, Iberia has partially closed its initial gap with the Western European core. The chapter also shows that, in the case of Spain, the early 1950s represent a divide between a hundred years of moderate growth dominated by factor accumulation, and half a century of fast growth led by total factor productivity (TFP). By contrast, this intensive model of growth was not shared by Portugal, where per capita GDP increases so far have been mainly associated to factor accumulation, rather than to TFP increases. Finally, new estimates of regional historical GDPs show that regional inequality emerged after the first long wave of modern economic growth and market integration. By 1950, the geographical patterns of regional inequality were well established, and since then they have just been consolidated. As a result, a poor Iberia has emerged that spreads over a continuous area around the border between Spain and Portugal.

This chapter examines Tunisia’s decentralization process from the start of the constitutional drafting process in 2011 to adoption of the Local Authorities Code in 2018. Tunisia’s decentralization process reveals the existence of historical territorial cleavages that are often obscured by the usual ideological cleavages highlighted in the literature, particularly the secularist–Islamist binary. The chapter begins with a brief historical overview of regional inequalities, which played a prominent role in the 2011 uprising and led to the adoption of decentralization in the new Constitution. The chapter analyzes how two key factors – institutional venue and party system coherence – shape the incentives and capacities of political and bureaucratic officials to shape decentralization. It draws on the literature on decentralization in other transitioning and developing countries and analyzes the role of political parties in a post-authoritarian transitional context, the balance of power between political and administrative actors, and how choices regarding process design and institutional venue at the outset of decentralization reforms shape subsequent outcomes. The chapter sheds light on how actors’ strategies are shaped by not only their own interests and ideas, but by the wider institutional arrangements that shape the incentives and capacities of individual and collective actors.