George Petrakos

Growth, Integration, and Regional Disparities in the European Union

In this paper we challenge the ability of the conventional methods initiated by Barro and Sala-i-Martin in the early 1990s to detect actual convergence or divergence trends across countries or regions and suggest an alternative dynamic framework of analysis, which allows for a better understanding of the forces in operation. With the use of a SURE model and time-series data for eight European Union (EU) member states, we test directly for the validity of two competing hypotheses: the neoclassical (NC) convergence hypothesis originating in the work of Solow and the cumulative causation hypothesis stemming from Myrdals theories. We also account for changes in the external environment, such as the role of European integration on the level of regional disparities. Our findings indicate that both short-term divergence and long-term convergence processes coexist. Regional disparities are reported to follow a procyclical pattern, as dynamic and developed regions grow faster in periods of expansion and slower in periods of recession. At the same time, significant spread effects are also in operation, partly offsetting the cumulative impact of growth on space. Similar results are obtained from the estimation of an intra-EU model of disparities at the national level, indicating that the forces in operation are independent of the level of aggregation. Our findings challenge the view of economic growth as the main driver for a reduction of regional disparities and contribute to the growing scientific evidence that points towards the need to rethink current EU-wide regional development policies.

Patterns of Regional Inequality in Transition Economies

This paper provides a comparative account of important aspects of regional development in transition economies, on the basis of regional statistics available for Poland, Hungary, Romania and Bulgaria. More specifically it examines the geographical pattern of disparities, the convergence/divergence trends that have taken place at the regional level and the relation of regional disparities to the process of transition. It is found that spatial adjustments under transition favour metropolitan and western regions, especially in countries sharing common borders with the European Union (EU) and being a short distance from the European core. In addition, disparities have increased at various rates and degrees in transition countries to levels that are higher than most of the EU countries. Given that the catch-up process, which favours more often efficiency than equity policies, has a long way to go, the regional problems in these countries may take alarming, by EU standards, dimensions.

A Border Regions Typology in the Enlarged European Union

Abstract The processes of European Union (EU) integration and enlargement have produced a new regional socioeconomic map in Europe. Border regions, in particular, have been put in a state of flux. The re‐allocation of activities, opportunities and threats is changing their socioeconomic role and significance. Thus, border regions have become an issue of great importance during the last fifteen years in both the areas of scientific research and policy making. The overall picture of the actual dynamics occurring at the border regions, however, when economic barriers have been abolished, remains rather unclear. The absence of an appropriate methodological framework for the study of the impact of EU integration and enlargement dynamics on border regions is evident. The paper proposes a typology for the EU NUTS III border regions, interpreting the socioeconomic dynamics occurring within the enlarged EU space. Primary and secondary data, incorporating quantitative and qualitative determinants for border regions, were elaborated with integrated factor and fuzzy clustering analysis techniques. The proposed border regions typology provides a framework to assess the relative position of each EU border region in the EU space.

Regional convergence and growth in Europe: understanding patterns and determinants

The paper examines the pattern of regional convergence and the determinants of regional growth in Europe, providing a discussion of the issues that are of relevance to the theoretical conceptions and the subsequent design of regional development policy, supported by an illustrative empirical analysis. The analysis covers 249 NUTS II regions of the European Union in the period 1990–2003. Using as its basis the standard framework of (absolute) β-convergence, the paper detects a mirror-image J-shaped relationship between regional growth and regional development levels. This type of relationship indicates that regional divergence factors are getting stronger, and, eventually, dominate, at more advanced levels of development. On the basis of a regional growth model, factors such as agglomeration economies, geography, economic integration and economic structure seem to create an overall unfavourable economic environment for lagging (and, possibly, less favoured) regions. Such an environment generates dilemmas and questions concerning the mix of policies that may promote growth and at the same time reduce regional inequalities in the European Union.

Economic structure and change in the Balkan region: implications for integration, transition and economic cooperation

The purpose of this article is to provide a comprehensive comparative analysis of the economic performance, economic structure and trade relations of the Balkan countries, in order to detect basic trends and developments in the region. On the basis of this analysis, the article evaluates alternative scenarios regarding the prospects of the region in the evolving pan-European economic order and discusses policy responses to the pressures generated by the interaction of the integration and transition processes in South-eastern Europe. Copyright Joint Editors and Blackwell Publishers Ltd 2000.

The ESDP relevance to a distant partner: Greece

Greece is an untypical case from a territorial planning perspective at a European level as it faces constraints and limitations arising by its peripheral position and the limited accessibility to major economic agglomerations and markets. The opportunities of benefiting from a European spatial development strategy are further reduced by missing neighbours, external and internal asymmetries. From the Greek point of view, European Spatial Development Perspective (ESDP) can be evaluated in terms of three different axes of reflection: improving linkages and spatial relationships to neighbouring countries (particularly European Union member states); bringing national level issues to the European agenda of spatial planning policies; bringing to the national level of spatial planning European-wide relevant issues. In this view ESDP does not reflect the particularities of spatial development in Greece (lack of territorial cohesion, fragmented national geographic space, etc.) but had indirect beneficial effects on the Greek planning system at a national level in spreading institutional innovation, good practices, etc. However, the influence which the ESDP is likely to have on spatial organization and development remains in doubt.

Peripherality and integration: industrial growth and decline in the Greek regions

Peripheral European economies are often characterized by unfavorable structural regularities and geographical coordinates, making the process of economic integration an experience possibly associated with welfare losses at the regional level. Such types of arguments are at variance with the neoclassical understanding of the operation of the spatial economy, making the study of a weak industrial base in the EU periphery an interesting assignment with implications for theory and policy. We develop an empirical model accounting for industrial (manufacturing) growth and decline in the Greek regions in the period following EU membership (1981–2005). Given that Greek regions are characterized as lagging behind and structurally weak for the entire period under consideration, understanding the factors behind their industrial experience may have a value added for many regions with similar characteristics, especially in the new and potential EU member states.

The regional impact of EU association agreements: lessons for the ENP from the CEE experience

The Eastern Enlargement of the EU saw a proliferation of association agreements with countries in the ‘near abroad’ under EU’s European Neighbourhood Policy framework. Although such agreements are considered to be strictly welfare-enhancing, there is very little evidence to show their economic effects, including their distributional consequences across space, separately from other concurrent processes (transition, internationalisation, capital deepening, etc). This paper draws on the experience of pre-accession agreements in Central and Eastern Europe to estimate the effect that such agreements had on regional growth, and thus on the long-run evolution of regional disparities, in the associated countries. We apply an event-analysis and exploit the country variation in the timing of these agreements to identify their distinctive effect on regional growth, using regional data at the NUTS3 levels covering the period from the early transition phase (1991/92) until the eruption of the financial crisis (2008). Our results provide strong evidence that EU association agreements accelerate growth; but show that this is far from evenly distributed across space – with denser, larger and more diversified regional economies gaining the most. We discuss what these findings imply for regional growth and spatial imbalances in the new wave of associated countries under the ENP.

Integración económica y desequilibrios territoriales en la Unión Europea

Given the lack of theoretical consensus about the spatial effects of economic integration processes, this paper studies the impact of European economic integration on regional disparities from an empirical perspective. The analysis highlights that different stages of integration are associated with conv ergence among European states in inflation and unemployment rates and in economic cycles, as well as with convergence in GDP per capita. However, when the analysis is performed taking into account the distortions linked to the state effect, conv ergence gives way, in numerous cases, to divergence. From this point of view, European integration is fostering the economic dynamism of core areas, whereas many peripheral regions are encountering increasing difficulties to compete in integrated markets.

The Regional Structure of Albania, Bulgaria and Greece Implications for Cross-Border Cooperation and Development

The forces of integration and transition in Europe are generating a new geography of economic relations and structures that affects the Balkan region in a very fundamental way. This article analyses the regional structure of Albania, Bulgaria and Greece, focusing on the intensity of regional disparities, the geographical distribution of activities, and the barriers to economic interaction. The analysis indicates that the new situation in the Balkans provides Greece with an opportunity to overcome geographical isolation, and deal with its regional problems as well as the difficulties of the European integration process. It also provides the Balkan countries with an opportunity to interact and cooperate. From the strategic point of view, the long-term interests of Greece and the other countries in the region require stable relations, successful implementation of the policies of transition, and a policy mix promoting unification and coherence of the European economic space, the development of the European south-eastern region, and the facilitation of cross-border co-operation.