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Poles Apart

As European Integration deepens, will the clustering of people and firms lead to a polarized Europe, in which some regions buzz with activity while others decline? This report explains how the right policies can prevent polarization. system.  James Morgan, interviews Paul Seabright, one of the authors of "Integration and the Regions of Europe: How the Right Policies Can Prevent Polarization", Monitoring European Integration 10 (MEI). Some of the issues they discussed:

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Questions and Answers

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1. What is the problem? [James Morgan]
... Adam Smith wrote in The Wealth of Nations how economic activity can cluster ... and the worrry has been that the clustering may lead some regions to be left behind ... [Paul Seabright]

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2. What does your Report come up with that's new? [James Morgan]
... ... Europe's clusters may be sufficiently dispersed across the continent to ensure that regions don't need to be permanently left behind ...Europe's particular misfortune has been that we have not got the benefits from the clustering ... but at the same time we have regions that have stagnated and stagnation has meant not just low incomes, but persistent unemployment ... ... [Paul Seabright]

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3. Is this really a problem? One is used to the phenomenon that some areas do grow more rapidly than others, just because they happen to better endowed [James Morgan]
... ... Absolutely, and the history of the United States shows how this has happened ... [Paul Seabright]

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4. What went wrong [with regional policies] in the Mezzogiorno and what went right in Ireland? [James Morgan]
... ... There is no doubt that Ireland's investment in education ... has been an extremely important factor attracting firms to locate there ... [Paul Seabright]

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5. So in order for a regional policy to succeed ... are you actually looking to the National Governments to adopt these sensible policies or will (in the end) there have to be some kind of European policy on all of this? [James Morgan]
... ... It is very clear that in recent decades there have been a lot of benefits ... from a process of competition among regions, there has been innovation in policy design [Paul Seabright]

Integration and the Regions of Europe: How the Right Policies Can Prevent Polarization. Monitoring European Integration 10 - Report Details

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As European integration deepens, will the clustering of people and firms lead to a polarized Europe, in which some regions buzz with activity while others decline? A new CEPR Report explains how the right policies can prevent polarization - Read more in "European Economic Perspectives"
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