Regional Development

Problems and Policies in Eastern and Western Europe

George Demko

• Publisher: Taylor & Francis
• Year: 2017
• eBook ISBN: 9781351594615
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Originally published in 1984. This volume brings together papers concerned with the problems of regional development in both Eastern and Western Europe. These include regional, economic, and social inequalities; lagging and backward regions; and constricted flows of labour. This book provides identification, comparison, analysis and discussion of regional development problems in Eastern and Western Europe. It discusses the latest trends in regional policy, assesses their effectiveness and puts forward innovative thinking on the various issues and how they should be tackled in future.

PART I: THEORETICAL ASPECTS OF REGIONAL DEVELOPMENT

INTRODUCTION

George J. Demko

The original plan for this volume included sets of paired papers, one for Eastern Europe and one for Western Europe, on each theme included in the original conference at Bellagio. In most cases this was accomplished with one major exception. The paper on theoretical aspects of regional development in the Eastern European socialist context could not be arranged. A limited review-type discussion on this topic is attempted at the end of this introduction.

The volume is made up of five parts. Western regional development theory is discussed at some length by Harry Richardson at the outset. Part II addresses the issue of regional development trends in both Europes. General trends and concerns in Western Europe and Eastern Europe are reviewed by George Hoffman, and Gyorgy Enyedi reviews the issues of the quality and numbers of development indicators utilized to measure regional disparities in Europe. The section is concluded with a paper by Niles Hansen on recent development in economic integration and the new regionalism in Europe.

The third part of the volume focuses upon the policy measures and instruments employed in Europe to ameliorate regional disparities and the question of success. G. Demko and R. Fuchs describe and compare the wide array of particular measures which have been adopted by governments in Eastern and Western Europe. Brian Ashcroft's paper carefully assesses the effectiveness of regional policies in Western Europe and L. Lacko addresses this issue in Eastern Europe. The final paper of the section by W. Stohr and F. Todtling centers on the types of variables used in evaluating regional development policies and the complexity of this problem.

The fourth part of the volume contains a set of national case studies of regional development problems and policies. The situation in Italy is reviewed by A. Rodgers, Poland by A. Wrobel and France by M. Savy. An historical-political analysis of the Spanish case is offered by J. R. Lasuen as the final study of the section. It should be noted that the case studies were intended to be representative rather than exhaustive.

The final section of the volume, Part V, is designed to bring some issues together and to look ahead. The paper by Harry Richardson focused on regional policy in a slow growth situation is the result of discussions at the Bellagio Conference. The probability of slow growth economies in the near future led the discussions time and again to the question of regional policy's fate under such conditions. Stimulated by these deliberations and provoked by the editor, Professor Richardson produced an appropriate final paper.

As noted above, the only major lacuna in terms of the original plan for this volume is that of regional development theory from an Eastern European perspective. Thus a general perspective is offered here as a background for the Eastern European case.

The goals of regional policy put forth in the socialist nations of Europe are tied closely to appropriate statements of Marx, Engels or Lenin. Most of the general goals are broadly stated, sometimes contradictory statements. The goal of regional economic equality is stated in terms of the development of a uniform distribution of productive forces. Further, such equality is described as equilizing levels of economic well-being at all scales, regional, urban-rural, etc. Marx's admonition regarding the “idiocy of rural life” is frequently cited in the latter case.

Other goals or general principles include the minimization of transport costs with regard to raw materials, markets and other factors and the promotion of regional specialization where resources permit.

Such a loosely structured regional development framework has been of little practical utility and hence, recently, refinements and modifications have been promulgated. The equality goal in regional levels of development has been altered to read “more equitable.” There have been elucidated specific prohibitions on the location of industry which require large quantities of labor or other limited resources in regions of their deficit. The locational attraction of energy, markets or raw materials are now being distinguished by industry type.

However, even as regional and national location theory evolves toward a more specific and applicable body of tenets there continues the dominance of sectoral planning which is dedicated to economic efficiency rather than equity. Further compounding this problem is the difficulty or in many cases, the lack of coordination among the many economic planning and implementing bodies of these highly complex, centrally planned systems. Unfortunately, interesting and potentially useful notions in regional development such as the territorial production complex used in the USSR have been poorly assessed and have not spread to Eastern Europe.

With this general view of the theoretical aspects of regional development in the East, attention should now be turned to the West.

APPROACHES TO REGIONAL DEVELOPMENT THEORY IN WESTERN-MARKET ECONOMIES

Harry W. Richardson

An Empirical Frame for Theory

It is not possible to give a comprehensive review of all regional development theories relevant to market economies in one paper. The major criterion for selection adopted here is that each theory discussed should be capable of shedding some light on long-term interregional development trends in Western European countries. This does not mean that the predictions of each model should be exactly satisfied. Such a requirement would be impossible because the experiences in Western Europe are quite varied. Nor does it mean that there should necessarily be a close correspondence between the key predictions of the mainline model and observed regional development trends (e.g. the “naive” neoclassical model predicts interregional per capita income convergence which has indeed occurred in Western Europe). Many of the theories to be discussed can generate different predictions by varying some of the assumptions or as a result of changes in parametric variables. For instance a revised neoclassical model can produce interregional income divergence while a cumulative causation model can, if the coefficients of the models fulfill certain conditions, result in convergence. In other cases, the basic theory can be expanded to produce results that are different from those implied by the most simple version of a model. An illustration of this is where the core-periphery polarization associated with primitive versions of the cumulative causation model will break down if a shift in the locus of cumulative causation forces from the core to the periphery takes place, and can be explained.

Since this paper is not concerned with the empirical testing of alternative hypotheses implied by different models, the selection criterion is simply that each theory discussed should be generally helpful in understanding some aspect of interregional development trends in Western Europe or be relevant to an interpretation of trends in some particular country. To make a judgment on this point it is necessary to summarize some of the conclusions of recent empirical research. Also, much of the research refers to a period ending in 1970 (in a few cases 1975), and there are some grounds for suspicion that, as in the United States, major shifts or at least marked changes in pace may have taken place in the 1970s. Furthermore, the geographical scope of different studies varies. While some are national in scope, others refer to the European Economic Community countries (at different dates) and yet others deal with Western Europe as a whole or with a particular subset. Hence, to summarize the research results in a few paragraphs is far from easy.

The following generalizations, however, appear reasonable:

1) There is a wide variation in experience among countries so that any generalization in terms of experience in Western Europe as a whole has to be expressed very cautiously.

2) The process of population concentration continued within most West European countries between 1950 and 1970, but there was a slight reduction in population density disparities across EEC countries (1).

3) After 1970, on the other hand, population became more dispersed in most European countries. The evidence for this is largely based on a sharp decline in net internal migration to an overbounded core region in each country; in many cases net migration became negative (2).

4) Between 1950 and 1970 there was a marked decrease in regional per capita income disparities both within and between EEC countries (3). However, this convergence has little to do with the integration process of the EEC itself since “the creation of a customs and also the formation of a monetary union may well lead to increased regional disparities (4).” Instead, the main convergence force within countries was the shift of population from low-to-high income regions while between countries it was the fact that lower income countries tended to experience higher rates of per capita growth GDP (5). However, regional growth rates tended to cluster in national blocs rather than be explained in terms of an EEC-wide core-periphery pattern. This suggests the dominance of national influences over the concept of the EEC as a system of regions.

5) Since 1970, on the other hand (more specifically, over the period 1970–77) disparities among EEC regions have increased, though convergence among regions within countries has continued (6). These variations in experiences reinforce the hypothesis that national influences predominate.

6) In spite of these convergence forces, per capita income differentials between regions within each country and across countries remained wide. For example, in Italy in 1970 the per capita gross value added ratio of the highest (Liguria) to the lowest (Calabria) region was 2.63, in the United Kingdom it was 1.43, in West Germany 2.62, France 2.09, Belgium 1.66, the Netherlands 1.56, Ireland 1.60 and in Denmark 1.45 (7). Across countries, the extremes were even wider. For instance, GNP per capita in Portugal, Greece, Spain and Ireland in 1978 was only 16.4 percent, 26.9 percent, 28.7 percent and 28.7 percent respectively of the level in Switzerland. Within the EEC, GNP per capita in Greece was 32.8 percent, Ireland 35.0 percent, and Italy 38.8 percent of Denmark’s (8). These data imply that convergence forces work slowly, even within countries with policies in operation to narrow regional income differences. This evidence should be kept in mind when extolling the predictive accuracy of regional convergence theories.

7) Considering the national space economy as a system of urban regions, the timing of decentralization of population fr...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of Tables
• List of figures
• Preface
• Dedication
• PART I: Theoretical Aspects of Regional Development
• PART II: Trends in Regional Development in Eastern and aWestern Europe
• PART III: Regional Development Instruments and Their Effectiveness
• PART IV: National Case Studies in Regional Development
• PART V: Summary and Conclusion