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The Dilemma of Enlargement for the European Union's Regional Policy

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  • Gregor Van Der Beek
  • Larry Neal

Abstract

The integration of the former communist countries of central and eastern Europe into the European Union creates a dilemma for the EU's regional policy. The EU's expenditure on regional policy (its ‘active’ regional policy) has been guided by political reactions to deepening or enlarging the EU, not by a rational strategy for regional policy. In contrast, the strong EU instrument of state aid control, developed for competition policy (its ‘reactive’ regional policy) has been relatively successful in avoiding a national race of regional subsidies among the member states. We show that a shift from active regional policy to reactive, competition‐oriented, regional policies is the preferred way for the established member states to handle the challenge of enlargement. At the same time, however, this shift is politically difficult for the accession countries to accept, despite the fact that this shift might prove better for them economically. This regional policy dilemma is one of the major obstacles for the full integration of the accession countries into the EU.

Suggested Citation

  • Gregor Van Der Beek & Larry Neal, 2004. "The Dilemma of Enlargement for the European Union's Regional Policy," The World Economy, Wiley Blackwell, vol. 27(4), pages 587-607, April.
    • Handle: RePEc:bla:worlde:v:27:y:2004:i:4:p:587-607
    DOI: 10.1111/j.0378-5920.2004.00615.x
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    Cited by:

    1. Tobias Hagen & Philipp Mohl, 2011. "Econometric Evaluation of EU Cohesion Policy: A Survey," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume III, chapter 16, Edward Elgar Publishing.
    2. Manolis Christofakis & Nicholas Karachalis & Athanassios Papadaskalopoulos, 2006. "EU-Supported Regional Development After 2007: Lessons Learnt and Future Priorities of the Greek Regions Falling Under the New "Competitiveness" Objective Programmes," ERSA conference papers ersa06p109, European Regional Science Association.

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