Lessons from European Union Policies for Regional Development

Regional disparities present an ever
present development challenge in most countries, especially
those with large geographic areas under their jurisdiction.
A neglect of these inequities may create the potential for
disunity and, in extreme cases, for disintegration. In view
of this, most countries actively pursue policies with a view
to helping lagging regions catch up with faster growing
regions. These policies have at best a mixed record of
success. It is therefore useful to discern what type of
policies work and why? In this context learning from the
experience of the European Union (EU) may be particularly
instructive as, over the years, it has provided significant
support to assist poorer regions achieve convergence with
the richer regions. This paper reviews the impact of EU
policies for regional development to draw lessons of
interest to other countries pursuing similar goals. The
paper concludes that policies that serve to create an
internal common market by creating a level playing field
that enables poorer regions to integrate with the broader
national and global economies have the best potential to
advance regional income convergence. In this context,
removal of barriers to trade and factor mobility and
providing enhanced access to information and technology to
the lagging regions should be main policy priorities for
regional development.