Developing the "outermost regions" of Europe: some lessons from economic geography

The aim of this report is to critically review, in the light of recent economic geography theory, various strategies often suggested for developing the outermost regions of Europe. In so doing, we point out pitfalls and bring to the foreground various relatively neglected aspects. The key messages are as follows. First, insularity, difficult topography and climate, and exposure to natural disasters are not, in fine, insurmountable obstacles to economic development. Yet, a small internal market and excessive reliance on homogeneous products traded in increasingly integrated world markets most certainly are. Second, alleviating remoteness by simply improving infrastructure may backfire, which is one of the main lessons from economic geography. Improvements and development efforts in infrastructure and communications technologies should, therefore, be combined with policies targeting at enhancing and developing relatively immobile local resources, both physical and human.