The Price of Europeanization: Why European Regional Policy Initiatives Are a Mixed Blessing

Abstract

1From the creation of the European Regional Development Fund (ERDF) in 1975, it has developed into the second most important policy area within the EU in budget terms taking up 35 per cent of the EU budget in 2000 (European Commission, 2000). While the European regional policy’s impact on the reduction of regional disparities has remained limited at best (European Commission, 2001) its impact on European governance, i.e. the question of how regional policy should be conducted in Europe, has been much more significant. Reasons for this can be found if one acknowledges the importance of three key dichotomies that have shaped the evolution of the European regional policy regime: (1) development versus compensation; (2) intergovermentalism versus multi-level governance; and (3) cohesion versus competition. A closer analysis of these dichotomies can help to eliminate certain myths that have been persistent in this policy area. First, it can be shown that European regional policy was not created to principally constitute a mechanism with which to achieve the reduction of regional disparities in Europe. Rather, an important part (some might say the most important part) of its raison d’etre has always been to act as a mechanism through which to compensate imbalances in member states’ netcontributions to the European budget. The article seeks to show that one can find ample evidence for this ‘compensation logic’ even after the recent reform of the Structural Funds in June 1999. Second, one needs to question the general claim that European policy-making is an area in which an intergovernmental logic of decision-making reigns supreme. While this might still be true for strictly budgetary decisions, the planning and implementation of EC regional policy constitutes perhaps the principal example of multi-level governance in the European Union (Marks, 1992; 1993; Marks et al., 1996), with devolutionary effects being felt even in highly decentralized states such as Germany. Finally, there is the myth that