Working Paper

European Integration and the Case for Compensatory Regional Policy


  • Krieger-Boden
  • C.
Publication Date

The ongoing process of European integration is likely to increase trade and factor mobility thereby increasing interregional competition and affecting the interregional division of labor. From a theoretical standpoint, rising specialization and polarization of European regions may result from this process, and may entail a growing core-periphery-divide of regional income. Such a supposition evokes questions on the need of an accompanying compensatory regional policy and its adequate design. I find that a case for regional policy cannot be denied, but that the EU largely overstates the need for such a policy at EU level, and should abstain from direct structural interventions into regional economies.


JEL Classification
F12, F15, N11, R12, R58

Key Words

  • EU structural policy
  • Integration
  • regional polarization
  • regional policy
  • regional specialization
  • Regionalpolitik