State rescaling and economic convergence

Vlad Mykhnenko, Manuel Wolff
  • Regional Studies, June 2018, Taylor & Francis
  • DOI: 10.1080/00343404.2018.1476754

Regional inequalities in Europe, North America, and BRICS economies, 1980-2015

What is it about?

The gap between Europe's haves and have-nots has been narrowing over the past 35 years. This article is a major comparative study of European urban and regional growth patterns, revealing that since 1980 cities and regions across the EU have been converging economically, becoming increasingly similar in per capita incomes and real growth rates. The aggregate decline in regional income inequalities across 28 EU member states (EU-28) from 1980-2015 amounts to at least 7.2%. This refers to the average spread of regional gross domestic product (GDP) per capita across the EU, meaning regional per capita levels across Europe are over 7% more similar today than they were in 1980. Furthermore, Europe's regional convergence trends have become much stronger since 2000, coinciding with the eastward enlargement of the EU. Between 1995 and 2015, the gap in regional GDP per capita levels decreased by 10.6% on average.

Why is it important?

Europe's remarkable progress in economic convergence is due to a combination of free markets and government intervention in the form of active regional policy, targeting state assistance to the lagging regions and cities. Contrary to some caricatures of "Brussels" as a bureaucratic, crypto-socialist juggernaut stifling growth, this research suggests that it is the EU’s single market, with its four freedoms of movement of labour, capital, goods and services, that has propelled faster economic growth and catching-up across the continent. At the same time, this research shows how hopelessly outdated are the views of those, who portray the EU as a capitalist plot created to benefit only giant transnational corporations and further to impoverish the poorest people and places.

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http://dx.doi.org/10.1080/00343404.2018.1476754

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