Adalgiso Amendola

Regional Disparities in Europe

The results of the analysis confirm the thesis of those who contend that the European economy is a diversified reality influenced by structural phenomena concerning labour market characteristics, sectoral composition, and localization factors which make it unlikely that integration processes — although accelerated by the enlargement of markets and their greater efficiency — will give rise to the hopedfor levelling of economic development in the near future. The main reason for regional differences still seems to be the composition and structure of labour markets. To be noted in particular is the marked contrast between the Mediterranean regions, most of which belong to the Objective 1 regions, and their high rates of structural unemployment, and the regions of central-northern Europe and central-southern England characterized by more flexible labour markets and high employment rates.

Labour Market and Decentralized Decision-making: An Institutional Approach

The persistent failure in the labour market is due to uncertainty and asymmetric information, and relies on a reconsideration of the bargaining process. This process is not generated by individual action but rather by the behaviour of social groups and institutions in which State intervention can immprove the efficiency in matching demand and supply. In this framework we will discuss the ways by which institutional decentralization can be implemented in a labour market characterized by deep regional differences and by long-term unemployment persistence as in Italy. The main conclusion is that this policy option better fits the active labour policies. In fact the actual aim of such supply-side policies is to reduce the regional and skill mismatches and therefore it needs a substantial involvement of local public agencies. Copyright Fondazione Giacomo Brodolini and Blackwell Publishers Ltd 1997.