ECONOMIC DISPARITY UNDER CONDITIONS OF INTEGRATION — A LONG TERM VIEW OF THE EUROPEAN CASE

Abstract

ABSTRACT This paper examines the development of disparities between the regions of the European Union over a very long period of time. It does so by reviewing the relevant theoretical, empirical and prospective literature. First, the contributions of the; different schools of thought on regional growth are reviewed. They are inconclusive as to the outcome of the process in terms of convergence or divergence. Next, empirical studies into the differential development of European regions are reviewed, covering the whole period of the industrial revolution to our present time. The resulting picture reveals a considerable diversity of patterns. Over the postwar period, characterized by increased economic integration, a decrease in disparity has been recorded. Poorer regions have used their improved access to the European market and their better opportunities for attracting mobile capital to each up the likely behavior of the regional system of Europe are examined. In the future, new forms of economic integration (deepening like the EMU, and widening with the central European countries) will to a large extent shape the environment for regional developments. All in all, these factors are likely to bring more disparity. Therefore, increased attention should be given to policies that stimulate new ways of mobilizing the diverse potential of the various regions of the enlarged Europe.