Insularity and economic development: a survey

This survey reviews theoretical and empirical evidence on the impact of insularity on regional economic development. Far from being a mere geographical condition, insularity can be regarded as a permanent phenomenon of economic and social peripheralization that prevents islands to reach the goals of sustainable development that are reached by the mainland. Even if the issue of the consequences of insularity on economic development is garnering greater interest in light of the growing recognition of the significant economic disadvantage faced by islands, both the theoretical and empirical literature in this regard are fragmented. More importantly, the effects of insularity on economic development are not disentangled from similar conditions such as remoteness, smallness and peripherality. The survey focus as well on the two-sided nature of insularity, since if it is true that islands suffer from permanent handicaps, adequate policy interventions may not only mitigate insularity effect, but also transform insularity into an asset leading a great potential for growth. Finally, some policy suggestions are drawn, highlighting the need for custom-tailored policy measures.