European Integration and the Case for Compensatory Regional Policy

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European Integration and the Case for Compensatory Regional Policy

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Christiane Krieger-Boden

Abstract

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.

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Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1135.

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Length: 38 pages
Date of creation: Nov 2002
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Handle: RePEc:kie:kieliw:1135

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Find related papers by JEL classification:
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
F15 - International Economics - - Trade - - - Economic Integration
N11 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations - - - U.S.; Canada: Pre-1913
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
R58 - Urban, Rural, and Regional Economics - - Regional Government Analysis - - - Regional Development Policy

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Alberto Alesina & Ignazio Angeloni & Ludger Schuknecht, 2001. "What Does the European Union Do?," Harvard Institute of Economic Research Working Papers 1935, Harvard - Institute of Economic Research. [Downloadable!]
Other versions:
- Alberto Alesina & Ignazio Angeloni & Ludger Schuknecht, 2001. "What Does the European Union Do?," NBER Working Papers 8647, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
- Alberto Alesina & Ignazio Angeloni & Ludger Schuknecht, 2002. "What Does the European Union Do?," EUI-RSCAS Working Papers 61, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS). [Downloadable!]
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de la Fuente, Angel, 2000. "Convergence Across Countries And Regions: Theory And Empirics," CEPR Discussion Papers 2465, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Other versions:
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