European Integration, Regional Policy and Growth: Ebook

Publication: The World Bank
 
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Description

The function of regional policy is to stimulate growth in less developed areas as to best benefit from economic integration. While the overall objective is clear, the actual implementation raises a series of issues. Targeting regional inequalities should not be confused with reducing individual income inequalities. Consequently, rather than serving an income redistribution purpose, the goal is to generate sustained growth in less developed regions. While a series of income transfers may induce a succession of temporary reductions in regional discrepancies, it must not be mistaken with triggering sustained regional convergence, which would be the successful conclusion of regional policy. Therefore, it is also critical to appropriately define the territorial units being compared, as to avoid targeting inescapable regional differences that are not a result of underdevelopment. This book brings together the views of leading academics, European Commission representatives and senior policy makers from national governments in charge or regional policy. The papers organized in this volume are the results of the discussions held at a conference on regional policy held in Barcelona and jointly organized by the World Bank, the Bertelsmann Foundation and the CIDOB foundation. In an effort to draw policy lessons for the new members of the European Union, the concurring lesson was that it is not investment per se that leads to growth, but when the appropriate national policies for growth are implemented, investment follows. These include avoiding permanent income transfers and other obstacles to labor market flexibility and creating a favorable environment to attract private investments.

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European Integration, Regional Policy and Growth: