OECD regions have been converging and the process has been driven by lagging, yet dynamic regions. Despite robust growth in lagging regions has not been enough to reduce disparities there is a process of catching-up. It is important to identify the policies that have led to such dynamism in order to spur growth in underperforming regions. Yucatán is among the 10 fastest growing regions in the OECD, but is also a lagging region even in the Mexican context. In contrast to the trend in OECD countries, Mexico has experienced a process of regional divergence fuelled by human capital upgrading.

OECD regions show diverse economic performance and income. Despite the OECD groups 30 of the most developed economies in the world, regional performance and development is far from homogenous. An analysis of the 324 TL2 regions in the OECD reveals that there are at least 4 types of regions based on their performance.1 The first type that can be identified is the rich and performing group of regions among which DC, Delaware, Wyoming or California in the USA, Luxembourg, Bolzano-Bozen and Emilia-Romagna in Italy, or the Northwest Territories or Newfoundland in Canada which not only have incomes above the OECD average but also outstrip the mean in terms of growth (See quadrant 1 in Figure 1.1). The second group is comprised by rich but underperforming regions among which Brussels in Belgium, Hamburg and Bremen in Germany, Vienna in Austria, Alaska in the USA or Alberta in Canada which have an above- OECD-average income but have been growing slower than the OECD average (See quadrant II in Figure 1.1). The third type can be described as lagging and underperforming regions which not only have below-OECDaverage incomes, but also have been growing slowly such as Okinawa in Japan, Istanbul and Ankara in Turkey, Berlin in Germany or Severovychod in the Czech Republic (see quadrant III in Figure 1.1). The fourth group are lagging regions that have been dynamic and in many cases the fastest growing regions in the OECD such as Bratislava in the Slovak Republic, Kosep-Magyarorszag in Hungary, the Border-Midlands-West and Southern and East regions in Ireland, Zonguldak in Turkey, or Yucatán in Mexico (see quadrant IV in Figure 1.1).

Analysis of the current policy agenda for improving regional competitiveness and social cohesion in Yucatán must take into account the implications of recent political and economic transformations at both the national and state levels. Since the turn of the 21st century, both Mexico and Yucatán have experienced tremendous political and economic change. On the one hand, new forms of government, in Yucatán –and at the national level- have opened up new opportunities for more inclusive civic and political engagement. In addition, NAFTA and other free market policy reforms in Mexico and abroad have created unprecedented opportunities for some regions, while some others have lagged behind resulting in profoundly reconfigured economic landscapes, and concomitant livelihoods, throughout the country. On the other hand, due to political and economic change, policymakers at both state and national levels have devoted much of their energies in recent years to developing and implementing regulatory and institutional frameworks that were largely missing, poorly enforced, or improperly designed under previous administrations.

The Yucatán Peninsula was a territory that remained isolated for many years. Its integration process to the rest of Mexico was slow and difficult, particularly during the nineteenth century when various independence attempts were undertaken which led to a reduction in size and a division of the region into three states. What is more, the State of Yucatán pursued inward-looking strategies for development furthering isolation. Nonetheless, towards the end of that century henequen (sisal) exploitation allowed for economic growth and tapping into both local and international markets.