Academic journal article The Town Planning Review

Regional Inequalities in Europe: Reflections on Evidence, Theory and Policy

Academic journal article The Town Planning Review

Regional Inequalities in Europe: Reflections on Evidence, Theory and Policy

Article excerpt

The evolution of regional inequalities in the European Union is often perceived as the spatial footprint of the forces and dynamics driving and shaping its increasingly integrated economy. Seen from this perspective, regional inequalities have received increasing attention at the national and European level and are typically understood as a measure of success of the integration, development and cohesion policies.

The last two decades have been marked by important events, including: the Single European Market; the process of transition in Central and Eastern European Member States in the early 1990s; the introduction of the Euro currency; three waves of expansion of the EU; and, important institutional and policy development. Together these events have changed the European economy in an unprecedented way. In the same period, regional inequalities in Europe appear to be consistently high following a mixed core-periphery, east-west and north-south pattern. On average, the core, western and northern regions are more advanced than the peripheral, eastern and southern regions, respectively. Although stories of success have emerged in nearly all parts of Europe, their spatial frequency has maintained this pattern intact over the last 20 years.

A large number of econometric studies have examined regional inequalities in Europe with a variety of results that mainly depend on the selection of methodology. However, an increasing number of papers and a simple examination of regional data show that inequalities are increasing. First, at the national level, regional inequalities have increased in most countries. The weighted coefficient of variation of regional GDP per capita has increased between 1995 and 2004 in 14 out of 19 EU countries when inequalities are measured at the NUTS (Nomenclature of Territorial Units for Statistics) II level. In the same period it has also increased in 20 out of 24 countries when measured at the NUTS III level. In most Member States, the spatial patterns of growth have favoured the metropolis, which has increased its dominance. The share of national GDP produced in the metropolis increased in 19 out of 25 EU countries (in some of them considerably) in the period 1995-2004. Besides the success of the metropolitan regions, the spread in regional performance has also increased because of weak performance at the lower end of the regional distribution. A significant part of regional inequalities is due to the inability of the least advanced regions to close the development gap and converge towards the national average.

Second, regional variation in terms of income levels also seems to be increasing at the European scale. For example, the European top 10 NUTS II regions have improved their relative position in terms of GDP per capita from 180.5 per cent to 183.8 per cent in the 1995-2004 period compared to the EU 27 member average. On the contrary, the 10 bottom European 10 regions have experienced a relative decline of their GDP per capita levels from 29.3 per cent to 26.8 per cent in the same period. Thus, although progress has been made at both ends of the European scale, success is more obvious in the leading regions, rather than in the lagging ones.

Third, the recent expansion of EU to Central and Eastern Europe with the inclusion of 12 New Member States (NMS) has increased inequalities in a dramatic way. While in 2004 at the EU 15 Member NUTS II level the regional GDP per capita max/min ratio was equal to 5.3, the same ratio at the EU 27 Member NUTS II level increased to 12.8. Although in 2004 in the 'old' EU the least-advanced region had a welfare level equal to one-fifth of that of the most-advanced region, in the 'New' EU this ratio collapsed to less than one-twelfth. This change indicates that the expansion of the EU to countries with significantly lower levels of development has led to a doubling of this simple measure of regional inequalities. Taking into consideration that the regional GDP per capita figures are measured in Purchasing Power Systems (PPS) that adjust for price levels, it becomes clear that regional inequalities in the EU based on productivity are considerably higher. …

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