Institutional Determinants of High Unemployment The Case of Andalusia

Abstract

This work aims to shedding light on the nature and causes of severe unemployment in the Spanish region of Andalusia—34 per cent of the active population, three times the EU average. Far from explanations based on neoclassical economics or external to the region or simply truisms, I sought the ultimate determinants of a high and persistent unemployment permanently above the Spanish average. The origins of modern Andalusia go back to the Early Modern Age when most Iberian countries amalgamated into a single entity. However, unlike its northern counterparts Andalusia’s predecessor al-Andalus was a Muslim country and its incorporation into the Western European world was implemented through forced assimilation. Five centuries after the conquest, the transposition of northern institutions in the south has resulted in a backward region with age-old problems of economic development and unemployment. I brought together elements such as violence, landownership, trust, and the role of the state from the point of view of evolutionary economics.