The Regional Dimension in European Public Policy: Convergence or Divergence?

217 Pages·1999·0.717 MB·English

by  Reiner Martin (auth.)

The Regional Dimension
in European Public Policy
Convergence or Divergence?
Reiner Martin
THE REGIONAL DIMENSION IN
EUROPEAN PUBLIC POLICY
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The Regional Dimension
in European Public
Policy
Convergence or Divergence?
Reiner Martin
First published in Great Britain 1999 by
MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 6XS and London
Companies and representatives throughout the world
A catalogue record for this book is available from the British Library.
First published in the United States of America 1999 by
ST. MARTIN’S PRESS, INC.,
Scholarly and Reference Division,
175 Fifth Avenue, New York, N.Y. 10010
ISBN 978-1-349-41087-3 ISBN 978-0-333-98259-4 (eBook)
DOI 10.1057/9780333982594
Library of Congress Cataloging-in-Publication Data
Martin, Reiner, 1966–
The regional dimension in European public policy : convergence or
divergence? / Reiner Martin.
p. cm.
Includes bibliographical references and index.
ISBN 0–312–21702–1 (cloth)
1. Regional planning—European Union countries. 2. European Union
countries—Economic conditions—Regional disparities. 3. European
Union countries—Economic policy. I. Title.
HT395.E8M375 1999
338.94—dc21 98–50835
CIP
©Reiner Martin 1999
Softcover reprint of the hardcover 1st edition 1999 978-0-333-74671-4
All rights reserved. No reproduction, copy or transmission of this publication may be made
without written permission.
No paragraph of this publication may be reproduced, copied or transmitted save with
written permission or in accordance with the provisions of the Copyright, Designs and
Patents Act 1988, or under the terms of any licence permitting limited copying issued by
the Copyright Licensing Agency, 90 Tottenham Court Road, London W1P 9HE.
Any person who does any unauthorised act in relation to this publication may be liable to
criminal prosecution and civil claims for damages.
The author has asserted his right to be identified as the author of this work in accordance
with the Copyright, Designs and Patents Act 1988.
This book is printed on paper suitable for recycling and made from fully managed and
sustained forest sources.
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08 07 06 05 04 03 02 01 00 99
To my family
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Contents
List of Tables xii
List of Figures xv
List of Boxes xvii
Acknowledgements xviii
List of Abbreviations xix
1. Introduction 1
I Regional Convergence or Divergence in the 5
European Union?
2. European Economic Integration and the Growth
of Regional Heterogeneity 7
2.1 A Short History of European Economic Integration 7
2.2 The Regional Organisation of the European Union 9
2.3 Regional Economic Disparities within the EU 11
2.3.1 Regional Income Disparities 11
2.3.2 Regional Labour Market Disparities 14
2.3.3 Links between Regional Income, Employment and
Productivity 15
3. Economic Theory and the Convergence versus
Divergence Debate 19
3.1 Convergence Theory 19
3.1.1 The Neoclassical Approach to Growth and
Convergence 19
3.1.2 Adjustment Mechanisms and the Theory of Factor
Price Equalisation 22
3.2 Divergence Theory 28
vii
viii Contents
3.2.1 Technological Differences between Locations 28
3.2.2 Increasing Returns to Scale and External Effects 30
3.2.3 New Growth Theory and Endogenous
Technological Progress 33
3.2.4 Location Theory 35
3.2.5 Locational Competition and Governmental
Intervention 37
3.3 Conclusions: The Ambiguity of Theoretical
Predictions 39
4. Regional Convergence within the EU:
an Empirical Analysis 41
4.1 National Economic Performance in the Cohesion
Countries 41
4.2 Determinants of Regional Convergence 46
4.2.1 Convergence as a Spontaneous Process? 46
4.2.2 The Impact of Regional Policy Variables on Growth 58
4.2.3 The Impact of Regional Policy Variables:
a Multivariate Approach 64
4.3 Conclusions: Can Regional Policy Foster
Convergence? 66
II European Regional Policy and the Problem of 69
Policy Co-ordination
5. The Regional Policy of the European Union 71
5.1 Rationales for European Regional Policy 71
5.1.1 Why Regional Policy in the First Place? 71
5.1.2 Why European Regional Policy? 73
5.1.3 Why ‘Bounded’ Regional Policy Transfers? 74
5.2 EU Regional Policy – Past and Present 77
5.2.1 The Development of European Regional Policy 77
Contents ix
5.2.2 Principles of European Regional Policy – a Critical
Assessment 80
5.2.3 The Spatial Allocation of Structural Funds Support 90
5.2.4 Explaining the Spatial Allocation of Structural
Funds Support 93
5.3 Regional Policy after 1999 and Eastern Enlargement 95
5.4 Conclusions 97
6. National and European Regional Policy: an Uneasy
Relationship 101
6.1 The Economic Effects of Regional Incentives 102
6.2 Hypotheses about the Spatial Distribution of
Regional Incentives 104
6.3 An Empirical Analysis for European Regions 107
6.3.1 Productive Sector Support within the Structural
Funds 109
6.3.2 National Productive Sector Support – Regional
Incentives 111
6.3.3 Total Public Support for the Productive Sector 113
6.3.4 Regional Incentives and Regional Income:
an Econometric Analysis 114
6.4 Conclusions 117
7. Human Capital Investments and Cohesion: the Case
of R&D Policy 120
7.1 R&D and Economic Growth – a Review 121
7.2 R&D Endowments in the European Union 123
7.2.1 Input Differences: R&D Personnel in EU Regions 123
7.2.2 Output Differences: Patents and Publications 126
7.3 R&D Funding in the European Union 129
7.3.1 National R&D Budget Appropriations 129