Impact of European Union development subsidies on Hungarian regions

Since the collapse of the communist system, regional inequalities have increased in Central European Countries. This paper describes an assessment of the impacts of regional development programmes on the development of Hungarian regions at a highly disaggregated level between 2002 and 2008. We construct a multi-dimensional composite indicator to estimate the overall development of rural regions and capture social, economic and environmental dimensions. The impacts of rural development programmes were investigated through counterfactual analysis in combination with Propensity Score Matching and Difference-in-Differences approaches. There has been considerable variation with increasing concentration in the level of subsidies distributed during the analysed period. From a policy perspective, the results are disappointing. Irrespective of the subsidy measures or methodology employed, the impact of the former is very close to zero or non-significant. Our findings cast serious doubt on the effectiveness of development policy and the long-run convergence of European regions.     

The European Union and Major Infrastructure Policies: The Reforms of the Trans-European Networks Programmes and the Implications for Spatial Planning

The European Union (EU) has been involved in influencing major infrastructure in the fields of transport and energy mainly by means of the Trans-European Networks (TENs) programme begun in the 1990s. Other macro-planning and wider spatial planning exercises, including the European Spatial Development Perspective, made reference to such infrastructure systems, particularly in relation to the need for connectivity and mobility, but normally did not attempt to intervene in an area seen as one of the prerogatives of national states. Much more important have been the wider programmes of liberalization pressed by the EU since the 1980s, but these have had no specific geographical content. A revision of the TENs programmes since 2008 has led to proposals to increase the role of the EU, by drawing up continent wide schemas indicating needs for future investment in many fields of both transport and energy, and introducing new procedures to streamline decision-making by designating projects as of European interest. The initiatives in transport and energy are described here, including the two Regulations currently under discussion within the EU institutions. These include major proposals for cross-European multi-modal transport corridors within an EU core network, and regional schemas for energy drawn up primarily by energy industries and government counterparts. Both are likely to be of real significance for spatial planners throughout the continent, and have major impacts on the shapes of future infrastructure networks. These proposals are analysed, as cases of the rescaling and re-ordering of government, giving more force to the EU in these fields, and reinforcing sectoral- or silo-based decision-making. It is argued that somewhat different outcomes will result in the few areas, such as the Baltic, where long-term macro-regional collaboration has been present, from the rest of Europe, where these sectoral programmes may complicate further the mix of planning impacting on each region, making even more confused the accountability of governance. Suggestions are made for the careful assessment of these schemas by national and regional governments, and for the creation of some spatial planning analytical capability at the EU level, which could examine this type of proposals, with powerful spatial impacts.     

The Regional Impact of EU Eastern Enlargement: A View from Germany

Based on a relational concept of regional analysis this contribution emphasizes that European Union (EU) Eastern enlargement will primarily lead to a restructuring or intensification of interregional economic relations. However, it rejects the widespread view that at first the border regions at the present EU Eastern boundary would be affected by Eastern enlargement. This view relies on the problematic assumption that the regions' transnational relations are subject to a logic of geographical nearness. The most important nodes of transnational economic relations in an enlarged EU are not the border regions, but certain regional development centres in the interior of the European economic space. Thus the regional impact of EU Eastern enlargement should be differentiated with regard to different types of regions: Particular advantages come towards the structurally strong regions in the interior of the present EU as well as the accession countries, whereas the structurally weak regions at the present EU Eastern boundary can gain advantages from Eastern enlargement only to the extent that they manage to overcome their endogenous blockades concerning cross-border economic cooperation and a positive attitude of the regions' population towards European integration.     

Determinants of the Uneven Regional Participation of Firms in European Technology Programmes. The 'Low R&D Trap'

Technology is of key importance to the growth of regional firms and economies. Research has shown the association between low technology development or take-up and regional disparities. Hence technology policy is moving closer to the heart of regional policies. European innovation programmes are intended to involve firms, large and small, in international technology research and development networks. The paper focuses on the involvement of Spanish firms in such programmes. Participation tends to be low if business R&D, presence of large firms, and the development of regional innovation systems are also low. Creation of R&D infrastructure through the Structural Funds has now to be prioritized at EU level and also define a new scheme of sectoral priorities in order to support R&D innovation activities in fields diverse from high-tech, if regions are to escape the 'low R&D trap'.     

Regional Policy and the 'Regionalization' of University-Industry Links: A View from the English Regions

As several senior figures in UK Government have recently professed to want to promote the knowledge-driven economy across the nation, discussion of university-industry ties in less-favoured regions is particularly salient. This account documents how UK central government efforts to encourage greater university-industry links have increasingly taken on a regional dimension but then stresses that these efforts do not constitute a 'regional policy' (in the traditional sense of measures that seek to reduce interregional economic disparities). This activity is then set within the context of overall Government and European Union (EU) funding to universities which is also at odds with stated government aims of lessening regional economic disparities. The article goes on to highlight how mainstream regional policy, particularly that of the European Commission, has seen considerable support for university-industry activity in the regions but has faced an uncertain future due largely to the spectre of fund-draining EU expansion. The article concludes by asking what policies might be pursued for university-industry links to be increased in weaker regions. The underlying aim of the article is to contribute towards raising the profile of universities in debates about reducing interregional economic disparities (that must, in turn, be much higher on the public policy agenda).     

Improving European Union Regional Policy by Learning from the Past in View of Enlargement

This paper raises questions of centralisation versus decentralisation in European Union policy making, especially regarding regional policy. Shifts towards multi-level governance in the 1990s increased the partnership principle with sub-national governments. However, while regional disparities between countries has lessened, that between regions on some measures has increased. This will undoubtedly be an increasing feature in the context of EU enlargement. A history of centralisation in many such countries makes development of intermediary networks and institutions imperative if regional disparities are, again, to be reduced.     

Border-regional resilience in EU internal and external border areas in Finland

European border regions have witnessed a long history of remarkable mobility shocks stemming from complex ecological and economic changes and geopolitical events. The experience of near-continuous regional and global crisis has increased interest towards the idea of resilience, that is, the ability of communities and regions to adapt and cope with disturbances and transitions. Inspired by the literature of regional resilience and the evolutionary approach, this paper will examine the difference that borders and geopolitical conditions make from the perspective of regional resilience and especially ‘border-regional resilience’. Particular focus will be on irregular cross-border mobilities and consequent transitions in EU external and internal border towns, here the Finnish towns of Lappeenranta and Tornio. The study points out that the geopolitical environment and the openness of the border partly determine the regional development trajectories and the ways of coping with cross-border mobility-related changes. Although the border location entails some vulnerability, formal and informal cross-border institutions and relations of trust are of crucial importance from the perspective of border-regional resilience. The paper proposes a research agenda for studying border-regional resilience in the context of environmental, economic and social changes and geopolitical events.     

Environment and Modernity in Transitional China: Frontiers of Ecological Modernization

The process of institutionalizing environmental interests and considerations in Western (especially, but not only, European) industrialized societies has been reflected and theorized upon by social scientists, many of whom have adopted the ‘ecological modernization’ framework. One of the key questions on the research agenda of ecological modernization is its appropriateness for developing or industrializing countries in other parts of the world. This contribution analyses to what extent environmental reforms in contemporary China can be interpreted as ecological modernization. It focuses on the similarities and differences between Chinese and European modes or styles of ecological modernization with respect to the role of state institutions, market dynamics, civil society pressure and international integration.     

Do EU Regional Policies Favour Regional Entrepreneurship? Empirical Evidence from Spain and Germany

The European Commission in the scope of its cohesion policy tries to increase competitiveness of the European Union (EU) regions by supporting, beside many other instruments, entrepreneurial activities in the EU sub-national regions. This paper sheds an empirical light on the relationship between entrepreneurial activities and entrepreneurial perceptions on the one hand and the economic performance of regions eligible for EU regional policies in Spain and Germany on the other. Based on empirical data on the NUTS2 level, there will be analysis of whether previous EU support has later had an impact on entrepreneurial activities and/or entrepreneurial perception in the regions. The results show empirical evidence for a relationship between entrepreneurial activities and EU regional policies. However, other determinants such as gender and the role model function have an even stronger impact. Some of the results may help to increase the effectiveness of EC regional policies and of regional policies of the national governments, especially if the interdependence of entrepreneurship support policies and proper regional policies is considered.     

Territorial Impact Assessment of European Draft Directives—The Emergence of a New Policy Assessment Instrument

European Union directives, along with their transposing arrangements in EU member states, can have unanticipated and sometimes undesirable impacts on certain regions and places. These include impacts on the use of space (e.g. new infrastructure or sprawl), governance, and on wider social, economic or environmental dimensions. Although ex-ante assessment of the potential impacts of EU initiatives has been carried out since 2002 through the European Commission's Impact Assessment procedure and also through national equivalents in some member states, important impacts are still overlooked, frequently because of their territorially heterogeneous nature within and between EU member states. This paper presents the results of the ESPON EATIA research project, in which a new territorial impact assessment methodology was developed for national and regional administrations in EU member states in order to inform their national positions during the negotiation of European draft directives and potentially other policy proposals.     

European Corridors as Carriers of Dynamic Agglomeration Externalities?

Transport corridors are viewed as a promising way forward in European Union (EU) transport policy, assumed to contribute positively to regional economic development. However, the validity of this assumption is not evident. The aim of this paper is to empirically test whether agglomeration economies in European transport corridor regions are positively related to indicators of regional economic development compared to regions outside the scope of corridors. The results build on the notion that the type of agglomeration economy in combination with the structure of the economy matters for prospects of structural economic growth in different regions. In this way, the analysis not only contributes to enhancing the empirical scrutiny of the corridor concept in EU transport policy, but also provides new insights into how corridors contribute to regional economic growth. We find only limited evidence for a corridor effect across European regions on productivity and employment growth externalities. Instead, we find a large degree of spatial heterogeneity interacting with corridors—a heterogeneity that has been little recognized in EU policies. We suggest that recent attention to place-based development strategies may accord well with the kinds of agglomeration effects related to corridor development observed in this study.     

The open method of coordination and policy mainstreaming: the European employment strategy and regional conversion programmes in the UK

This article is a critical exploration of the issues raised by the attempt to integrate aims and concerns derived from one European Union (EU) policy domain into another. It does this via an examination of the ways in which the European Employment Strategy (EES) has been taken into account in the design and initial implementation of Structural Fund programmes in the 2000–2006 round. In particular, it examines the nature of this ‘mainstreaming’ relationship in terms of the structures and mechanisms associated with current Objective 1 programmes operating in the UK. It maps out the vertical and horizontal linkages between European, national and regional levels, and assesses the extent to which strategic frameworks, programme guidance and programme content have successfully integrated EES considerations. The article concludes by identifying some implications for theories of European governance.     

The regional impact of the channel tunnel: Qualitative and quantitative analysis

The paper addresses the question of how different types of regions mill be affected by the development of a major new transport infrastructure such as the Channel Tunnel. It summarizes a study on the regional impacts of the Channel Tunnel throughout the European Union (EU). The research design combined qualitative methods of futures exploration employing 13 regional case studies with quantitative forecasting techniques using the MEPLAN transport and economic model. The paper presents the methodology and major results of the two approaches with respect to the impacts of the Channel Tunnel on transport flows and regional development in Europe and draws conclusions for transport and regional policy of the EU. The paper demonstrates that the removal of a bottleneck like the Channel Tunnel does not necessarily induce economic gains in all adjacent regions. Much more important for regional economic development than the reduction of transport costs are the image to be a region well integrated into the European high‐speed transport network and an active political response of the region to take advantage of opportunities like the Channel Tunnel.     

Ex-Ante Analysis of the Regional Impacts of the Common Agricultural Policy: A Rural–Urban Recursive Dynamic CGE Model Approach

A recursive dynamic regional Computable General Equilibrium model is developed to assess the economic impacts of two Common Agricultural Policy (CAP) scenarios in six NUTS-3 (Nomenclature of Territorial Units for Statistics) (NUTS-1: major socio-economic regions, NUTS-2: basic regions for the application of regional policies, NUTS-3: small regions for specific diagnoses) regions of the European Union (EU). The main goal of the analysis is to assess the scenario effects (change in production, prices, income, employment) in the rural and urban parts of these regions as well as on the different sectors. The two scenarios analysed are related to a 30% reduction in Pillar 1 (market measures and direct support to farmers) support and the introduction of an EU-wide flat rate level of Pillar 1 support complemented by a 45% increase in Pillar 2 (Rural Development Policy) funds. Results show that the overall gross domestic product effects are not significant, due to the relatively low importance of both the agricultural sector and CAP spending in the regional economies. However, impacts on the agricultural sector are quite important and differ according to the nature of the policy shock. Also, the structural characteristics of each case study influence the rural–urban and sectoral spillovers, including impacts on region-specific agricultural activity.     

EMU versus the regions? Regional convergence and divergence in Euroland

There is currently considerable interest in and debate overthe impact of increasing European economic and monetary integration(EMU) on the regions of the EU. Opinion is sharply divided overwhether EMU is leading to regional economic convergence or regionaleconomic divergence. This paper examines the theoretical argumentsand empirical evidence for these opposing views, and presentssome additional analysis of patterns of regional productivitytrends and employment growth over the period 1975–98.The picture that emerges is a complex one: whilst worker productivityshows only very weak convergence across the EU regions (a processwhich halted altogether after the mid-1980s), regional employmentgrowth has been sharply divergent. Although there is littlesupport for the claim that EMU will lead to regional convergence,these findings suggest that until much more detailed investigationof the specific impacts on particular types of region is undertaken,the regional implications of EMU will remain a contentious issue.     

EUROPEAN BRIEFING

This article explores alternative interpretations of the meaning and method of urban policy evaluation within the European Union (EU) Structural Funds. Using the EU URBAN Community Initiative Programme 1994-1999 it draws a distinction between 'instrumental' techniques that are primarily concerned with performance and efficiency measures and 'interpretative' approaches that stress the need to explore power relationships in the development and delivery of spending programmes. Empirically, it reflects on the interpretation of EU guidance and the MEANS (Means for Evaluating Actions of a Structural Nature) Collection to evaluate the Derry/Londonderry (UK) URBAN Sub-programme 1994-1999. The analysis concludes by emphasizing the need to ensure that urban policy evaluation is consistent with the broader social turn in the scope and content of regeneration programmes.     

The dynamics of the community support framework for Greece and its contribution to regional convergence

The objective of this paper is to shed light on the dynamic aspects of the Community Support Framework for Greece and to further explore its contributions to regional convergence. Given that, the majority of the Greek regions have been classified among the poorest regions of the European Union (EU) with a major inter and intra regional divergence gap, the issue of catching up the convergence factors acquires paramount importance in view of the new trends of European Community (EC) Regional Policies. Unquestionably, the convergence of the Greek regions requires a series of macroeconomic management devices and the encouragement of a series of soft and hard infrastructure projects which will restructure, upgrade and adjust their regional economy. The analysis of this paper will focus on the assistance stemming from the Regional and Structural Funds of the EU, plus the Cohesion Fund with the aim to uncover the factors which determine the extension and intensity of the convergence and divergence procedure. Using the data from the Community Support Framework (CSF I) (1989–1993), which has already been completed, attention will be paid to some of the basic problems which decisively impedes the real convergence of the Greek regions. The author will also examine in depth the criteria used by the competent authorities in allocating the funds to the regional bodies in relation with the existing regional imbalances and then he will propose a new synthetic method considering more factors which influence the final allocation approach. The conclusions of the paper might systematically unravel a series of problems facing the regions both socio‐economic and administrative which if they are not effectively confronted may possibly enlarge the existing divergence gap of the Greek regions.     

City branding in polycentric urban regions: identification,profiling and transformation in the Randstad and Rhine-Ruhr

In polycentric urban regions several distinct cities, none of which is dominant, cooperate and compete with each other to attract inhabitants and firms. In such settings city branding strategies do not solely affect one city, but the entire region. We examined how city branding in the face of ecological modernization, that is, delivering higher added economic value, while lowering environmental impacts, is playing out in the Dutch Randstad and the German Rhine-Ruhr. Our findings show that regional identity formation occurs at the sub-polycentric urban region level, coinciding more with (historical) economic profiles than with planning imaginaries. The Dutch cities profile themselves more along the lines of ecological modernization than their German counterparts. Differences between subregions within each polycentric urban region are also noticeable, where more industrialized regions, such as the Ruhr or southern Randstad focus on ‘green’, ‘liveable’ and ‘knowledge-oriented’, while cities with stronger knowledge-intensive sectors portray themselves as ‘smart’ or ‘sustainable’. Cities generally substantiate their profiles through projects, but a significant gap persists between reality and aspirations for improved environmental conditions. This is especially true for the Dutch cities, where many claims, but little visible action can be observed.     

Policy governance from an autopoietic perspective: revisiting Hungary’s regionalization experience

This perspective on Hungary’s post-socialist regional policy governance is informed by an approach that relates region-building and regional governance to social autopoiesis and the self-referential and self-(re)producing nature of social systems such as states. Following debates in regional studies that reflect tensions between the local constitution and external determination of regional governance, we will demonstrate how Hungary has incorporated European Union (EU) policy frameworks through specific appropriations of territorial politics and regional ideas. These appropriations reflect Hungary’s post-socialist transformation not only in terms of responses to global forces, but also as specific spatial practices and regionalization experiences. As we argue, this has in effect resulted in a regionalism without regions – a strategy of Europeanizing territorial politics without creating institutional structures that directly challenge existing power relations. Autopoiesis thus helps explain the resilience of social systems, not only their resistance to institutional change but also their capability to ‘domesticate’ external influences. While criticisms of Hungary’s technocratic and post-political regionalization projects cannot be ignored, our analysis indicates why externally driven intervention in self-organizing governance processes, for example through EU conditionality, has had less impact than expected.     

European Policy and the Regions: A Review and Analysis of Tensions

This article explores a series of tensions inherent in the series of European policies that are designed to improve the competitiveness of regions in the face of globalization. Its focus is the co-existence of interventionist policies intended to overcome problems of lagging regions such as cohesion policies and those, for example competition policy which are designed to remove barriers to market integration and that are anti-interventionist. Moreover, the changing relationship between the European Union (EU), member states and the regions and problems of how regions are defined complicate policy implementation. To review these issues, the article adopts an agent-centred approach to understanding economic behaviour in the face of globalization in particular geographical and sectoral contexts. This methodology is used to highlight five sources of tension relating to the reality of the experience of globalization. These are illustrated by evidence from a recently completed EU Fifth Framework Programme study of regional adjustment strategies and technological change in five European countries.