John Bradley, The Economic and Social Research Institute, Dublin 8, Ireland
Has EU regional policy been effective? The debate on Structural Funds (assigned to theme
Even before the latest EU enlargement, the debate on the European Commission’s role in shaping trans-EU regional policy had been vigorous. After 15 years of National Development Plans and their accompanying Structural Funds, economists remain sharply divided on how to interpret the policy effectiveness of the outcome. Today, as new member states prepare for the next seven-year programme of EU regional aid, it is important to examine this debate. Two contrasting positions on the EU’s role might be characterised as the "Anglo-Saxon" approach and the "European" approach. In a crude formulation, the "Anglo-Saxon" approach focuses on stabilization, liberalization, and privatisation as the crucial driving forces of cohesion.. The "European" approach is related to Gerard Roland’s concept of the “evolutionary-institutionalist perspective” developed within his study of the economics of transition, and places more emphasis on direct policy intervention and the provision of a range of public goods such as infrastructure and human capital. We examine the views of the opposing sides in the debate on EU regional policy, and the tools of economic analysis that are commonly used to support different positions. Having surveyed the economic models that have been used in policy impact analysis studies, we conclude that none of them are likely to provide a satisfactory resolution to the debate. We suggest that EU National Development Planning is compatible with an updated version of the "Anglo-Saxon" model, and that many criticisms of EU regional policies are weakened by the latest advances in spatial and growth research, as well as by insights derived from business strategy frameworks such as those of Michael Porter and Michael Best. In other words, there appears to be a significant role for EU regional policies aimed at transforming the underlying structure and competitiveness of the weaker beneficiary economies in order to prepare them for exposure to the Single Market and Monetary Union. The policy activism involved in National Development Planning does not require the rejection of the "Anglo-Saxon" model. Rather, it may be a precondition for the successful operation of that model in economies that are seriously lagging behind.
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(copyright Gunther Maier) |