Fiscal effects of accession in the new member states
In: Economic papers 203
In: European economy
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In: Economic papers 203
In: European economy
In: Economic papers 120
A frequently expressed criticism on regional polices in Europe is that they seem to have hardly any effect in view of the little progress in regional convergence over the last two decades. The paper criticises this view for being overly simplistic for several reasons. First, it does not differentiate between the developments in different types of countries. Second, it attributes the income performance of regions exclusively to regional policy expenditure, although several other factors need to be in place in order to have a visible effect in terms of income convergence. Third, concluding from the income performance on the success or failure of policies fails to take into account the counterfactual situation, i.e. it does not properly analyse what would have happened in the absence of these policies. The paper elaborates on these arguments on the basis of stylised facts of regional disparities in Europe, main determinants of income convergence and the role of EU Structural Funds. It concludes by discussing some of the main future challenges of regional policies in Europe.
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In: Trierer Schriften zur Wirtschaftstheorie und Wirtschaftspolitik 6
Lit.
Williamson (1965) argued that catching up countries experiencing strong national growth tend also to see a widening in regional disparities, whereas in more developed economies strong national growth and falling regional disparities could go hand in hand. We find some evidence of a trade-off between national growth and regional dispersion in the EU's Cohesion countries, notably in Spain and Ireland. We also find some evidence of spread effects in some richer EU Member States, although no inevitable link between lower regional disparities and stronger national growth. The potential policy implications of this analysis are also examined.
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