Abstract
Abstract One of the fundamental pillars of the European Union aims the convergence of economic performances between countries and regions. This objective has proved to be increasingly difficult to achieve with the expansion of the regional group towards the Central and East of the continent. The aim of this paper is to study real convergence in the New Member States from Central and Eastern Europe, by taking into consideration the evolution of GDP per capita between 2000 and 2018. In this respect, we have conducted a comparative analysis between countries and regions using β- and σ-convergence. By applying cross-sectional regressions, we have identified a strong relationship between the initial level of income of the Central and Eastern European countries and the subsequent growth rates, the average catching-up speed reaching 3.6%. Moreover, β-convergence was accompanied by a reduction of income divergences between Central and Eastern European Members. In contrast, our analysis suggests a weaker process of convergence between regions compared to countries, the convergence rate reaching 1.7% per year. Furthermore, by studying the intra-national patterns, we have illustrated that the capital regions have consolidated their relative position in the majority of the Central and Eastern Member States to the detriment of the other territorial units. Consequently, the paper suggests that convergence across countries was accompanied by an increase of intra-national disparities between regions in Central and Eastern Europe.
Highlights
The establishment of the European Economic Community in the second half of the last century has proved to be a successful project of six visionary countries that has fundamentally changed the history of the European continent
The European leaders stated since the creation of the European Economic Community the objective to reduce the development gaps between regions, the accession of the Southern and Central and Eastern European (CEE) countries have called into question the capacity of the European Union to achieve this goal
By using β-convergence, we have found evidence in favor of the neoclassical growth model assumptions, as the initially poorer CEE Members, for example, Romania and Bulgaria, experienced higher GDP per capita growth rates than the more developed ones (Slovenia, Czech Republic)
Summary
The establishment of the European Economic Community in the second half of the last century has proved to be a successful project of six visionary countries that has fundamentally changed the history of the European continent. The European leaders stated since the creation of the European Economic Community the objective to reduce the development gaps between regions, the accession of the Southern and Central and Eastern European (CEE) countries have called into question the capacity of the European Union to achieve this goal. In the second section of the paper, we have examined the intra-national convergence/divergence patterns in CEE, by taking into consideration the evolution of income per capita of the regions compared to the national average. Our study suggests that convergence is stronger between CEE countries than regions In this respect, the catching-up speed between countries was on average 3.6%, and the relationship between the initial income per capita and the subsequent growth rates was strong. The analysis suggests that convergence between CEE countries has been accompanied by an increase in intra-regional disparities
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