Regional Structural Change and Cohesion in the Process of European Integration: A Comparison of French, German, Portuguese and Spanish Regions

The process of European integration entails regional structural change thereby affecting the economic situation of regions and the objective of regional cohesion in Europe. As some kinds of specialization may be more favourable to regional income opportunities than others, there may be winning and losing regions depending on their characteristic specialization pattern. Relying on regional employment data from national data sources in a deep industrial break-down, I study the long-term structural change of regions from four countries depending on their initial kind of specialization, i.e., their initial set of industries with high or low scale economies and with high resource, labour, skill or research intensities. This approach requires a classification of industries according to their characteristics, and of regions according to their industrial mix, by means of cluster analyses. This will help identifying types of regions like the core regions of each country with usually quite diversified industrial structures and a certain focus on more modern industries, like old industrialised regions with a focus on iron-and-steel or textiles, like peripheral regions with an initial focus on traditional labour intensive industries, and finally like some highly and very specifically specialised regions. The evolution of specialization is then analysed in the context of the identified type-classes of regions with similar specialization. While the overall change of regional specialization is slow and without a clear direction towards an increase or decrease, the analysis for types of regions yields some more explicit results.

European integration and the case for compensatory regional policy

The ongoing process of European integration is likely to increase trade and factor mobility thereby increasing interregional competition and affecting the interregional division of labour. From a theoretical standpoint, particularly on the basis of the New Economic Geography (NEG), rising specialization and polarization of European regions could result from this process, and could entail a growing core-periphery-divide of regional income. Hence, there may be winning and losing regions of the integration process, according to the way industrial concentration and regional specialization takes place. Such an supposition evokes questions on the need of an accompanying compensatory regional policy, and whether it can be justified from an efficiency and/or distributional perspective. Also, questions arise as to the adequate design of such compensatory regional policy, with respect to institutions, measures, and recipients. The proposed paper will start reviewing the case for regional policy in Europe on theoretical and empirical grounds. It will then discuss some options for an efficient European regional policy, and compare it to the actual EU regional policy.

European integration and the case for compensatory regional policy

The ongoing process of European integration is likely to increase trade and factor mobility thereby increasing interregional competition and affecting the interregional division of labor. From a theoretical standpoint, rising specialization and polarization of European regions may result from this process, and may entail a growing core-periphery-divide of regional income. Such a supposition evokes questions on the need of an accompanying compensatory regional policy and its adequate design. I find that a case for regional policy cannot be denied, but that the EU largely overstates the need for such a policy at EU level, and should abstain from direct structural interventions into regional economies

New ethics for economics?

[Introduction] In autumn and winter 2011, more or less out of a sudden, the movement 'Occupy Wall Street' arose and almost immediately attracted an amazing amount of public attention. Young people in New York, Baltimore, California, Madrid, Frankfurt and Zurich started bristling at a loss of decency and morals in economic processes, at growing inequality, at lacking justice regarding gains and merits, and at the destabilization of the globalized economy by unleashed financial markets. Meanwhile, the excitement surrounding the 'Occupy' movement has abated largely. Still, certain renewed resentment against capitalism, in general, and against the rules assumed to guide our economic system, in particular, has risen in the public, and has echoed into the mainstream of economic science. Within the economic discipline, a hot debate on the paradigm of economic theory has unfolded. While this debate is not free of unspoken allegations and silent misunderstandings, e.g., as to what actually is the paradigm that should be debated, still it seems fair to state that the discipline is on the move, perhaps more fundamentally than ever within at least the last twenty years. (...

EU cohesion policy, past and present: Sustaining a prospering and fair European Union?

In 2015, the EU regional / cohesion policy has passed its 40th anniversary. During this time, it has undergone various manifestations with ever-changing objectives. It started as a mixture of structural and regional policy aimed at reducing regional economic disparities within the Union. Since 2000 at latest, however, cohesion policy has been subordinated to a growth and competitiveness strategy and has undergone a substantial re-definition of objectives and principles. At the background of a potential conflict between growth and cohesion objectives, i.e., between efficiency and equality, the paper finds discrepancies between asserted intentions and actual practise of cohesion policy. On this ground, the paper argues for a return to a less ambitious, more basic-needs oriented cohesion policy

Regional Structural Change and Cohesion in the Process of European Integration: A Comparison of French, German, Portuguese and Spanish Regions

The process of European integration entails regional structural change thereby affecting the economic situation of regions and the objective of regional cohesion in Europe. As some kinds of specialization may be more favourable to regional income opportunities than others, there may be winning and losing regions depending on their characteristic specialization pattern. Relying on regional employment data from national data sources in a deep industrial break-down, I study the long-term structural change of regions from four countries depending on their initial kind of specialization, i.e., their initial set of industries with high or low scale economies and with high resource, labour, skill or research intensities. This approach requires a classification of industries according to their characteristics, and of regions according to their industrial mix, by means of cluster analyses. This will help identifying types of regions like the core regions of each country with usually quite diversified industrial structures and a certain focus on more modern industries, like old industrialised regions with a focus on iron-and-steel or textiles, like peripheral regions with an initial focus on traditional labour intensive industries, and finally like some highly and very specifically specialised regions. The evolution of specialization is then analysed in the context of the identified type-classes of regions with similar specialization. While the overall change of regional specialization is slow and without a clear direction towards an increase or decrease, the analysis for types of regions yields some more explicit results