Publications > Publications > Working Papers > Effective policy has to start at regional level

Policy Brief No. 2

Karl Aiginger, Matthias Firgo & Peter Huber, Policy options for the development of peripheral regions and countries of Europe, WWWforEurope Policy Brief No. 2, December 2012


Research papers to download

Beatrice Camaioni, Roberto Esposti, Antonello Lobianco, Francesco Pagliacci & Franco Sotte, Looking for PeripheRurality, WWWforEurope Working Paper No. 35, July 2013

Peter Huber, Labour Market Institutions and Regional Unemployment Disparities, WWWforEurope Working Paper No. 29, July 2013

Adrien Labaeye & Thomas Sauer, City networks and the socio-ecological transition. A European inventory, WWWforEurope Working Paper No. 27, July 2013

Thomas Horvath & Peter Huber, The impact of networks, segregation and diversity on migrants' labour market integration, WWWforEurope Working Paper No. 22, July 2013

Dirk Dohse & Robert Gold, Measuring Cultural Diversity at a Regional Level, WWWforEurope Working Paper No. 10, June 2013

Effective policy has to start at regional level

Europe does not only have 28 member states but well over 1,000 regions (at NUTS-3 level). While countries are converging slowly, regions are converging even slower. At the same time regions create the highest sense of identity for the citizens of the European Union. Policy measures can be tried and evaluated for their impact best at regional level. Best practice lessons then have to take into account the differences and heterogeneities of regions.

WWWforEurope experts have published a number of important papers on these regional issues: Karl Aiginger, Peter Huber and Matthias Firgo from WIFO led the way with a policy brief on political options for peripheral regions, calling for a new strategy based on active growth policies, especially on a new industrial policy. These new policies have to be supported at the community level by providing additional funds for investment and by helping to reform institutions. It will be crucial to maximise spillovers from the centre to the periphery by balancing surpluses and deficits between countries.

Since this policy brief research work on the role of regions has progressed and diversified:

Beatrice Camaioni and her colleagues from the Università Politecnica delle Marche in Ancona show that we should not think of regions in the dichotomy of "rural" or "urban" anymore, but have to go much more into detail, looking for example at the main economic activities in a given region and its accessibility from the next centre. Only then it is possible to define fitting and effective structural policies for specific regions.

Adrien Labaeye and Thomas Sauer from the University of Applied Sciences Jena look at partnerships of cooperation and information between cities (so-called city networks). They show that these networks change over time and that Eastern European countries are still under-represented, which is a problem, as city networks play an especially important role in spreading information relevant to sustainable development.

Peter Huber has researched labour markets in different regions: Why is unemployment higher in one region than in another? Just blaming it on "inflexible" institutions would be a wrong explanation. Much more important are differences in productivity and specialisation and the very simple fact that some regions are more attractive to people than others and they just do not want to leave, even if the labour market there gets weaker.

Two very interesting papers deal with cultural and migrant diversity. Dirk Dohse and Robert Gold from the Kiel Institute for the World Economy share their first steps in exploring the impact of cultural diversity on the performance of regions. In their paper they present different measures of cultural diversity. Overall one can say that cultural diversity is highest in urban and industrial centres, especially in Central and North-Western Europe, while less populated and peripheral regions are less diverse.

Thomas Horvath and Peter Huber of the Austrian Institute of Economic Research look at the effects of diversity of the migrant population on their labour market integration. When there is heterogeneity migrants face large obstacles arriving in the labour and accommodating themselves, but after a while they integrate faster into the new society and labour market than in regions where there is an established network of migrants from a specific country. These networks help newcomers to integrate fast and according to their actual education, but slow down further integration.