Globalisation, Economic Policy and Rural Development in Europe

Article excerpt

1. Introduction

Rural Europe has been experiencing far-reaching transformations in the context of contemporary economic globalization. Most rural areas have traditionally depended on agrarian activity. Nevertheless, the general decline in the importance of agriculture and the subsequent reduction in its employment absorption capacity have been bringing about significant mutations in the rural sphere. In many rural areas deep demographic changes are taking place, such as population aging and depopulation, while processes of counter-urbanization in some areas close to large city centres are also being observed. In this context, the viability of many rural zones has been dependent on economic diversification and the impulse of non-farming activities.

Economic policy has faced up the opportunities of managing the challenges that these transformations present while preventing the impoverishment of the rural environment. Therefore the role that the State should play in rural development is a question of central interest. After the crisis of the 70s, the subsequent boom in neoliberalism since the 80s and the fall of the Berlin Wall in 1989 the role of the State in the economy has been thoroughly questioned. Nevertheless, despite the tide being against it, State intervention through economic policy continues to be very important. In fact, the weight of the State in the economies of the European Union (EU) has barely diminished; changes have been produced more in the ways of intervention rather than in the intensity itself.

2. What is the specificity of the rural sphere?

There is a commonly held image of what the rural world is. Nevertheless, it is difficult to establish a precise operating definition from an economic policy and research point of view. This difficulty is rooted in the diversity of territories that could be identifying as rural. A variety of more or less spontaneous concepts and perceptions associates rural spaces with barely populated remote territories surrounded by natural countryside, agriculturally dependent, culturally traditional, etc. But, it would be necessary to specify what is understood by barely populated and even by what constitutes a territory (a municipality, a province, a region). Also, not only remote zones, but also those close to city centres may be considered rural. Furthermore, a post-industrial space (with a minimum of natural zones) belonging to a region in decline that has suffered a process of intense depopulation could also be considered rural. The most utilized definition is provided by OECD (1994). It distinguishes two hierarchical levels of geographic detail, local community level and regional level. Local communities are classified as rural or urban, according to their population density (rural if there are less than 150 inhabitants per square kilometre). Regions are then classified according to the proportion of population living in rural or urban communes as "predominately urbanised" (less than 15%), "significantly rural" (15-49%) and "predominately rural" (more than 50%) (1).

Working with this definition, it is interesting to outline some very broad characteristics of the rural world in EU to be able understand its importance and, therefore, the importance of rural development economic policy. The overall picture hides not only an enormous diversity of situations among different EU countries but also within each country. The rural sphere is important in terms of territory, population and employment. Rural areas (predominantly rural and intermediate regions) represented 90% of the territory and 54% of the population in 2005. They generate 42% of the gross value added and provide 53% of employment. Income per capita is 28% to 32% lower in rural areas. The primary sector represents 18% of employment and 5% of value added. In general, most economic activity depends more and more on the service sector. Between 2000 and 2005, the relative importance of the primary sector in the economy of the rural areas in EU-27 decreased by 6. …