Problems and Perspectives of Regional Development in Western Europe

S ei , M. E. A icle P oblems and Pe spec i es o Regional De elopmen in Wes e n Eu ope Zei sch i ü Wi scha s- und Sozialwissenscha en (ZWS) - Vie eljah essch i de Gesellscha ü Wi scha s- und Sozialwissenscha en, Ve ein ü Socialpoli ik P o ided in Coope a ion wi h: Duncke & Humblo , Be lin Sugges ed Ci a ion: S ei , M. E. (1974) : P oblems and Pe spec i es o Regional De elopmen in Wes e n Eu ope, Zei sch i ü Wi scha s- und Sozialwissenscha en (ZWS) - Vie eljah essch i de Gesellscha ü Wi scha s- und Sozialwissenscha en, Ve ein ü Socialpoli ik, ISSN 0342-1783, Duncke & Humblo , Be lin, Vol. 94, Iss. 3, pp. 267-288, h ps://doi.o g/10.3790/schm.94.3.267 This Ve sion is a ailable a : h ps://hdl.handle.ne /10419/291342 S anda d-Nu zungsbedingungen: Die Dokumen e au EconS o dü en zu eigenen wissenscha lichen Zwecken und zum P i a geb auch gespeiche und kopie we den. 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S ei * Basic objec i es o his pape a e (1) o sc u inize ac s and egula i ies which appea o indica e a speci ic egional de elopmen pa e n in Wes e n Eu ope, (2) o ind c ucial ac o s which migh de e mine he dynamic o his pa e n, and (3) o de i e om hese indings conclusions o a policy which is di ec ed owa ds educing egional imbalances. 1. In oduc ion: he issues Twen y yea s ha e passed since he Economic Commission o Eu ope (ECE) poin ed a — he g owing a en ion which egional dispa i ies ecei ed by he Eu opean go e nmen s, — he d awback which economic in eg a ion may imply o he pe i- phe al egions o Eu ope, — he in e - ela ionships be ween egional policies and in e na ional economic ela ions, and — he need o coope a ion be ween coun ies in he ield o egional policy1. In he mean ime, hese poin s ha e no los hei impo ance. On he con a y, he pa ly s enuous go e nmen al e o s2 o cope wi h egional dispa i ies u gen ly equi e a e iew: The li le s a is ical e idence we ha e allowing in e egional compa isons sugges s ha by and la ge egional dispa i ies in pe capi a income in Wes e n Eu ope3 ha e no inc eased since 1960, bu ha e, in gene al o some deg ee e en * Re ised and ex ended e sion o a lec u e gi en a he Uni e si y o Zu ich on June 19 h, 1974. The au ho wishes o hank his collabo a o s U. Ho e , G. Noe and J. Wal e o help ul commen s and sugges ions bu e ains ull esponsibili y o any e o s and omissions. 1 See Uni ed Na ions [1955], pa icula ly pp. 136 . and 170. 2 Fo a p esen a ion o he a ious policy measu es see, o example, OECD 1970 b, pa s V o VII, Bi d (1967), and McC one (1969). Ten a i e es ima es o a leas some o he cos s can be ound, o example, in OECD 1970 b, Table 2, p. 66 and in de Cas elbajac (1972). 3 De ined o hese pu poses as comp ising he enla ged Eu opean Com- muni y and in addi ion Aus ia and Swi ze land. Admi edly, such an ex en- OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/schm.94.3.267 | Gene a ed on 2023-04-04 11:50:53 268 M. E. S ei na owed. Howe e , e en i one lea es aside he p oblem o how and o wha ex en o a ibu e his obse a ion o speci ic policies, his can ha dly be conside ed a sa is ac o y eco d, pa icula ly i a en ion is also paid o o he aspec s o egional de elopmen . To hese belong p ima ily unemploymen a es, lows o mig a ion, economic s uc u e, equip- men wi h in as uc u e e c. The e is wide ag eemen ha he com- pa ison should be ex ended o e en mo e social indica o s in o de o ge an app op ia e pic u e o he egional condi ions o li ing. How- e e , al eady o c oss-coun y compa isons sho age o s a is ical in o - ma ion is se ing na ow limi s o such e o s. And beyond ha , concep- ional di icul ies p oduce se ious limi a ions; pe haps he mos impo an di icul y consis s in mo ing om a one- a iable wel a e unc ion (income pe head) o a — ce ainly desi able — mul i a iable wel a e unc ion, weighing oge he a se o social indica o s4. Taking up he poin s aised by he ECE, any assessmen o pas de elopmen s wi h he aim o imp o e he analy ical basis o u u e ac ion in he ield o egional policy can ha dly a oid o deal wi h he ollowing aspec s: — Regional p oblems p ima ily ha e a long- e m cha ac e . This means ha Keynesian measu es o demand managemen o which go e n- men s end o eso in he i s place when aced wi h employmen p oblems, can only b ing empo a y elie , and e en his a ely wi hou in la iona y consequences5. In he long- un, he ques ion mus be aised whe he he a ious egions ha e chosen he igh "p o essions" conside ing secula changes in he s uc u e o demand. — By a numbe o easons i is empi ically suppo ed ha he loca io- nal posi ion and hence he supply condi ions o he Eu opean egions a e a ec ed by economic in eg a ion wi hin he amewo k o he ECE espec i ely he EFTA. And he e is su icien e idence o show ha his e ec is e en enhanced i he libe aliza ion o ade is accompanied by a libe aliza ion o ac o mo emen s, pa icula ly o labou 6. sion o he a ea unde conside a ion can me ely be conside ed as an absolu e minimum necessa y because hese wo coun ies a e p ac ically loca ed wi hin he enla ged Communi y. 4 Fo a ecen su ey on he co esponding li e a u e see, o example, Leipe (1973). 5 As is sugges ed he e, egional p oblems e lec la gely a disad an ageous s uc u e and compe i i eness o supply. Hence an inc ease in o e all demand will u n o he backwa d egions as ma ginal p oduce s on a la ge scale only a e he p ospe ous egions show sho - e m bo lenecks in supply which end o push up hei p ice-le el. Bu he consecu i e inducemen o in es in he p ospe ous egions and he o e all ise in cos will soon es o e he old dispa i ies. 6 Fo a summa y o he Communi y o he Six* measu es o elimina e obs acles o labou mo emen s see, o example, Yannopoulos (1969), pp. 226 . OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/schm.94.3.267 | Gene a ed on 2023-04-04 11:50:53 P oblems and Pe spec i es o Regional De elopmen in Wes e n Eu ope 269 — T ade libe aliza ion can lead o speci ic egional consequences i disc imina ion is no a oided. Cases in poin a e he ag icul u al p o ec ionism and, mo e gene ally, he bias in libe aliza ion a ou - ing ade be ween de eloped coun ies (DC's) as compa ed wi h ade be ween DC's and less de eloped coun ies (LDC's). The s uc u al conse a ion which can esul may no a all help he backwa d egions in he long un. — The case o in e na ional coope a ion, al eady s essed by he ECE, becomes he s onge he mo e na ional go e nmen s emba k upon compe i i e egional policies because such e o s can easily u n in o non- a i ba ie s o a size in ole able wi h ega d o a smoo h unc ioning o he in e na ional economic o de : The e is always he dange ha he in an indus y a gumen is misused o ad oca e p o ec ion o he pu pose s uc u al conse a ion. — Finally, a e iew o egional policies canno by-pass he ques ion o consis ency i basic a ionali y equi emen s should no be neglec - ed. An a emp o assess he cos s and bene i s o a speci ic policy mus ake in o accoun he possibili y ha o he policies pu suing o he objec i es may well be coun e -p oduc i e wi h espec o e o s aiming a egional balance. In he ligh o hese aspec s he assessmen will consis ou o he ollowing sequence o s eps: — Fi s , i appea s use ul o highligh he egional p oblems exis ing in Eu ope by p o iding a ew selec ed ac s7. — Second, beyond he ac s, some egula i ies poin ing a a speci ic egional de elopmen pa e n in Eu ope will be p esen ed and sc u inized. — Thi d, a en ion will be paid o concep ual di icul ies and adminis a- i e as well as poli ical obs acles which egional policy usually has o ace. — Fou h, he key ques ion as o he analy ical basis o policy ac ion will be aken up, namely wha a e he impo an , dynamic ac o s which p obably a ec he obse ed egional de elopmen pa e n. — Fi h, conclusions will be d awn wi h ega d o hose policy measu es mos app op ia e in helping o suppo and o di ec he dynamic which can be ound inhe en in he egional de elopmen pa e n and which could educe egional dispa i ies wi hin Eu ope. 7 The in o ma ions a e p ima ily selec ed o gi e ac ual suppo o he pe spec i es o be de eloped in he ollowing sec ion. Addi ional in o ma ions can be ound in he sou ces which will be quo ed hen. OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/schm.94.3.267 | Gene a ed on 2023-04-04 11:50:53 270 M. E. S ei 2. Regional p oblems: income dispa i ies, mig a ion, s uc u al weaknesses and poli ical obs acles Dispa i ies The e a e s ill sizeable di e ences in pe capi a egional income8 wi hin he a ious coun ies: In he second hal o he 1960s his income was be ween 50 pe cen (e. g. Swi ze land9) and 190 pe cen (I aly) highe in he mos p ospe ous egions han in he poo es egions10. In 1970, he iches a eas in he Communi y o he Six as a whole had a pe capi a income abou i e imes as high as ha o he poo es 11 lea ing he la e a a le el compa able o some LDC's in La in Ame ica. As al eady men ioned, he dispa i ies wi hin he indi idual coun ies appea o ha e na owed somewha . Howe e , as also indica ed, he eliabili y o such a inding is limi ed. This does no only esul om p oblems ela ed o he es ima ion o egional incomes e en when con- side ing indi idual coun ies and compa ing es ima es o di e en pe iods. A leas equally impo an is he way in which he egions ha e been delinea ed12. In any case, he igu es men ioned do show 8 The egional income da a a ailable a e subjec o conside able s a is ical and concep ual limi a ions. Compa e o hese p oblems Biehl, Hussmann and Schnyde (1972), pp. 64 ., Commission (1973), pp. 51 and 59, Fische (1967), pp. 257 . and (1970), pp. 239 . 9 This igu e compa es he pe capi a income o wo adminis a i e uni s (Kan one): Basel (S ad and Land) on he one side, Un e walden (Obwalden and Nidwalden) on he o he (S a is ical Sou ce: Fische [1970], p. 248). 10 Fo all coun ies, he app oxima e pe cen ages ( he co esponding egions a e gi en in b acke s) we e: Belgium/Luxembu g 70 p.c. (B aban /Limbu g), Denma k 50 p. c. (Sjaelland/Jylland), F ance 90 p. c. (Région Pa isienne/B e- agne), Ge many 80 p. c. (Kôln/Niede baye n, lea ing ou he wo ci y egions Hambu g and B emen), I eland 60 p.c. (Eas /Wes ), I aly 190 p.c. (Lomba dia/ Calab ia), Ne he lands 50 p.c. (Zuid Holland/D en he), Uni ed Kingdom 70 p.c. (Sou h Eas and Eas Anglia/No he n I eland). Sou ces: Biehl, Hussmann and Schnyde (1972), pp. 64* and 65*, Commission (1973), p. 60. (The da a o he UK, I eland and Denma k e e o 1970, he o he da a o 1969.) 11 Commission (1973), p. 2. 12 I may su ice o poin a he ac ha a compa ison o he ela i e dis- pe sion (coe icien o a ia ion) in egional pe capi a income o Ge many in 1960 and 1969 is al eady somewha ambiguous because he h ee ci y-s a es Be lin, B emen and Hambu g en e he calcula ion as egions. Bu i would be equally a bi a y o me ge, o example, Hambu g wi h Schleswig-Hols ein as a whole simply because no in o ma ions a e a ailable o smalle adjacen a eas. — The ac ual a io o Ge many is 0.97. The co esponding a ios o he o he membe coun ies o he Communi y o he Six a e: F ance 0.99, I aly 0.75, Belgium and Luxembu g 0.88, Ne he lands 1.08; i.e. excep o he Ne he lands, dispa i ies seem o ha e na owed o a leas did no inc ease (compu ed om he da a gi en in Biehl, Hussmann and Schnyde (1972), Table 29*, column 1 [ o 1960] espec i ely 2 [ o 1969]). A simila esul was ob ained o Swi ze land (1950 - 1965) al hough wi h less sophis ica ed measu es o a iance (Fische [1967], p. 257). Aus ia appea s o show a widening o dispa i ies (Os e . Ins , . Raumplanung [1966], pp. 23 .); howe e his com- pa ison e e s o he pe iod 1950 - 1961. OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/schm.94.3.267 | Gene a ed on 2023-04-04 11:50:53 P oblems and Pe spec i es o Regional De elopmen in Wes e n Eu ope 271 ha he dispa i ies a e s ill sizeable. And he income hie a chy o egions did ha dly change o e ime13. Regula i ies (1) Close inspec ion o he egional income da a p o ides some e idence o a sys ema ic geog aphical pa e n. Al eady he compa ison o he egions wi h he highes and lowes pe capi a income shows ha in hose coun ies which each ou o he pe iphe y o Wes e n Eu ope, he poo es egions a e loca ed a he pe iphe y14. Fo he Communi y o he Six, pe capi a egional income appea s o decline a he sys e- ma ically wi h g owing dis ance om wha could be conside ed as he Communi y's economic cen e, i. e. he Rhein/Ruh a ea15. A simila cone- ype decline o pe capi a income om he cen e o he pe iphe y was ound when applying a g a i y model16: Fo he enla ged Com- muni y, an a ea oughly desc ibed by he iangle Düsseldo , Liège, An we p was iden i ied as he economic cen e. Taking in o accoun ha he i s quo ed eg ession analysis is limi ed o he Communi y o he Six and ha he g a i y model does no use egionalized igu es o Swi ze land and Aus ia and is pa ly based on qui e la ge ad- minis a i e egions (Lände ) in he case o Ge many17, he ollowing modi ied pa e n appea s mo e plausible: Pe capi a egional income ends o decline a he egula ly in all geog aphical di ec ions om a somewha cu ed de elopmen axis unning om he mou h o he Thames along he Rhine wi h he a ea be ween Düsseldo and F ank- u as he likely peak, along he Rhine o e he Alps p ac ically o Milan18. Addi ional suppo o his hypo hesis is ound when con- side ing he geog aphical dis ibu ion o popula ion wi hin Wes e n Eu ope19. 13 The coe icien s o co ela ion, compa ing he ank o he a ious egions acco ding o hei pe capi a income in wo di e en yea s a e ex emely high. Fo he Communi y o he Six (1960/1969): 0.92, o Swi ze land (1950/1965): 0.91, and o Aus ia (1950/1961): 0.94 (Own calcula ions om he da a gi en in Biehl, Hussmann and Schnyde [1972], Fische [1967] and ös e . Ins . . Raum- planung [1966]). 14 I.e. B e agne, Wes o I eland, No he n I eland, Jylland, Niede baye n, Bu genland and Calab ia. 15 Taking Düsseldo as he u ban cen e o he cen al egion, a signi ican non-linea ela ionship can be es ima ed be ween pe capi a income o he a ious egions and he geog aphical dis ance o hei u ban cen e om Düsseldo (Biehl, Hussmann and Schnyde [1972], p. 74). 18 Cla k, Wilson and B adley (1969), pa icula ly he esul p esen ed on pp. 204 . (Map III). 17 Al oge he 22 egions bu wi h Hessia, Baden-Wü embe g, Ba a ia and Schleswig-Hols ein ea ed as " egions". 18 The majo bu easily explainable excep ions om his egula i y a e Hambu g, B emen, Be lin and B ussels. 10 Fo he enla ged Communi y compa e Commission (1973), p. 26 a. OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/schm.94.3.267 | Gene a ed on 2023-04-04 11:50:53 272 M. E. S ei (2) Tu ning o unemploymen and mig a ion, a pa e n complemen a y o he geog aphical dis ibu ion o pe capi a income appea s o exis : Fo he Communi y o he Six, he a e o unemploymen ises a he sys ema ically20 wi h g owing geog aphical dis ance om he sugges ed economic cen e. Ex ending he analysis o he Communi y o he Nine, i is unlikely ha his pa e n is upse in iew o he No h-Sou h de- cline o unemploymen a ios in England and Sco land and he ex- emely high unemploymen a ios in No he n I eland and No he n Denma k21. Qui e in co espondance wi h he pa e n o employmen oppo uni ies a e he lows o mig a ion: The majo ne emig a ion zones o he enla ged Communi y a e on he pe iphe y22 wi h he desc ibed de elopmen axis as he majo immig a ion a ea23. Howe e , mig a ion wi hin Wes e n Eu ope is ou numbe ed by an in low o labou , p ima ily om LDC's bo de ing he Medi e anean basin24. (3) I is almos common sense ha unemploymen and mig a ion a e causally in e ela ed wi h economic s uc u e. This iew appea s o be con i med when inspec ing mo e sys ema ically, o example, he egion- al s uc u e o he Communi y o he Six: The e is a elling in e se ela ionship be ween unemploymen and he sha e o he seconda y sec o (i. e. indus y a la ge) in egional income26. And as al eady men ioned, he majo egions o emig a ion a e he pe iphe al ones which also ha e ha dly any indus y; he same holds pa icula ly ue o hose LDC's whe e mos o he p esen mig an s o he cen al Eu opean egions come om. Bu egional popula ion d ain in Eu ope is no comple ely es ic ed o ag icul u al a eas. Regions wi h un down indus ies a e simila ly a ec ed by he a ac ion o cen al a eas; he No h o England, he No hwes o F ance and pa s o Belgium a e cases in poin . 20 Coe icien o de e mina ion (R2) o he ela ionship be ween hese wo a iables: 0.63 (Biehl, Hussmann and Schnyde [1972], p. 74). 21 Compa e, o example, he ins uc i e map 3 in Commission (1973), p. 126 a. 22 Commission (1973), pp. 129 . 23 A s iking case wi hin he enla ged Communi y is Ge many. In 1972, he sha e o o eign labou in he o al labou o ce amoun ed o 10.5 p.c. compa ed wi h 0.7 p.c. in 1958, F ance (7.3 p.c.) and, Belgium (7.2 p.c.) coming nex (Kommission [1974], p. 226). Wi h a peak o 24.6 p.c. in 1964 (Joh , Hube [1968/ 1969], p. 378), Swi ze land held an Eu opean " eco d". 24 In Ge many, o example, he a io be ween o eign labou coming om membe coun ies o he enla ged Communi y and om hi d coun ies was abou 1 :3 in 1972 (S a . Bundesam [1973], p. 144). 25 The co esponding, s a is ically signi ican (a 99 p.c.) coe icien o de- e mina ion (R2) is (—) 0.43. Fu he mo e a signi ican al hough compa a i ely weak, posi i e co ela ion can be ound be ween he sha e o ag icul u e in egional income and he a e o unemploymen (R2 = 0.13); aking in o accoun ha pa icula ly ag icul u e is a sec o whe e much disguised unemploymen can be ound, he s a is ical esul p obably ep esen s an unde s a emen . (Fo he coe icien s compa e Biehl, Hussmann and Schnyde [1972], Table 5, p. 74). OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/schm.94.3.267 | Gene a ed on 2023-04-04 11:50:53 P oblems and Pe spec i es o Regional De elopmen in Wes e n Eu ope 273 Obs acles (1) The ques ion which necessa ily will come up, namely whe he he pas end o mig a ion can be ex apola ed in o he u u e, canno be answe ed wi hou aking in o accoun a u he egional p oblem. On he one side we ha e egional depopula ion which in mos cases implies a loss o economic iabili y because he depa u e egions end o lose he mos dynamic pa o hei popula ion26. On he side o he cen al egions which p ima ily abso b hese mig an s, he e is a g owing awa eness o he social ne cos s including en i onmen al damages caused by a s eady concen a ion o economic ac i i y and o popula ion. Bu he co ec i e measu es which a e con empla ed o enac ed a e highly di igis ic, beginning wi h Swi ze land's legisla- i e ac ion in 1964 o s em he in low o o eign wo ke s. And i may be ques ioned whe he legal ba ie s o mobili y o labou a e a leas in he medium un he mos app op ia e co ec i e ac ion pa icula ly i he objec i e o secu e a socially mos e icien use o esou ces o e space should no be neglec ed. As loca ion heo y sugges s27 he ex ensi e mo emen o wo ke s o he wo ks can be explained by a ai- lu e o close gaps be ween p i a e and social cos s o p oduc ion and consump ion a any loca ion. Fo agglome a ions which can only ex- pand a s ongly inc easing cos s o be incu ed when p o iding addi- ional public goods and when ying o conse e decen en i onmen al s anda ds, alloca i e e iciency would equi e o cha ge in ull wi h hese cos s o expansion (ma ginal ne social cos s) all p oduce s and consume s loca ed in o mo ing in o such agglome a ions. On he o he hand, he e a e u ban cen es which could each a la ge size ul ima ely a compa a i ely lowe cos s and consequen ly should be encou aged o do so by cha ging p oduce s and consume s again wi h he ( a he de- clining) inc emen al (ma ginal) cos s o expansion. Howe e , he p ac i- cal di icul ies o ollow such an alloca ion de ice esul om he well known cha ac e is ics o public goods including he en i onmen , namely how o ma ch he paying g oup o he bene i ing g oup. Nei he he ne cos s o expansion can be p ope ly assessed no can hey be cha ged app op ia ely, i.e. acco ding o he ex en o which hese goods a e used by he indi idual. F equen ly, he conges ed a eas e en do no manage o co e hei o al cos s, i. e. o balance hei budge s. And e en i hey succeed hey s ill cha ge p ac ically on a e age he indi idual p oduce and consume conside ably less han he cos s o expansion. O he wise hey would sco e budge su pluses. And hese could 26 Fo an elabo a ion o his poin compa e, o example, Williamson (1968), pp. 102 . 27 Compa e, o example, . Boe en e (1962), pa icula ly he policy con- clusion on pp. 186 . 18 Zei sch i li Wi scha s- u. Sozialwissenscha en 1974/3 OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/schm.94.3.267 | Gene a ed on 2023-04-04 11:50:53 274 M. E. S ei be ans e ed o po en ial u ban cen es which ind hemsel es ha d up o p o ide an ini ial in as uc u e consis ing la gely ou o indi i- sible espec i ely complemen a y p ojec s which a e i al o make such cen es a ac i e. (2) Tu ning he egional policy and o how i is p ac iced by he Eu opean go e nmen s, i may be wo h o no e he OECD's e dic ha "s a ing om assis ance gi en o pa icula egions in o de o cope wi h pa icula p oblems, mainly unemploymen , policy has mo ed on o placing egional and na ional p oblems in a common in e ela ed pe spec i e"28. Howe e , his pe spec i e does no necessa ily lead o an ac ual change in policy and e en i i would be he case he e emains he ques ion whe he i is he mos app op ia e policy. Fi s , he e a e adminis a i e and poli ical obs acles o a sa is ac o y coo dina ion o legisla i e and go e nmen al measu es likely o a ec he egional de elopmen wi hin a na ional amewo k. A case in poin is a some imes a - eaching decen aliza ion o budge a y powe s which does no necessa ily ake ca e o he egional aspec ; in mos coun ies, and no only on he na ional le el, one can ind ha e en in egional policy as such esponsibili ies es wi h qui e a numbe o minis ies, de- pa men s and o he adminis a i e agencies. Wha is e en wo se, he alloca ion o public unds can be de ini ely biased agains a dis ibu ion acco ding o he needs o egional de elopmen . On he adminis a i e le el he e is a po en ial ad an age o agglome a ions o e smalle ad- minis a i e uni s wi h espec o planning expe ise. And since compe- i ion o unds o be p o ided by highe au ho i ies is equen ly de- cided ia compe i ion o p ojec s, lack o planning expe ise can also mean lack o unds. On he poli ical le el, i is obse able ha agglom- e a ions as concen a ions o elec o s end o induce cen al go e n- men s o gi e special a en ion o hei p oblems29. And hese consis p ima ily o bo lenecks in hei in as uc u e. To emo e hese bo le- necks equi es unds a an inc easing scale wi hou p o iding mo e 28 OECD (1970 b), p. 33. 29 Gie sch (1973), pp. 110 . Fu he adminis a i e and iscal ac o s a ou - ing agglome a ions a e epo ed in Rappo (1971), pp. II/1/29 . In Bildungs- we k (1973), pp. 40 ., a majo iscal dis o ion is discussed consis ing o he wide-sp ead p ac ice o a ibu e ax e enues o hose loca ions ( egions, coun ies) which he ax-paye s can decla e hei home-base. Such a p ac ice igno es he o igin o he axable eceip s. And since he p ospe ous a eas a e impo an as o igins o in es men s elsewhe e because o hei weal h and as inancial cen es which e en collec and p o ide as c edi s sa ings om o he a eas, hey will also ecei e he e u ns and he de i ed public eceip s which la gely de e mine he capaci y o p o ide addi ional in as uc u e. Such a iscal sys em lea es unnecessa ily much o clumsy ans e sys ems h ough which public unds a e channelled om he ich o he poo egions. OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/schm.94.3.267 | Gene a ed on 2023-04-04 11:50:53 P oblems and Pe spec i es o Regional De elopmen in Wes e n Eu ope 281 — Cen ipe al o ces eleased by a lowe ing espec i ely emo al o a i and non- a i ba ie s wi hin Eu ope (economic in eg a ion) and p ima ily a ibu able o agglome a ion economies; — Cen i ugal o ces which e lec (1) secula changes in he in e sec o al income e ms o ade pushing some ac i i ies ou o he high-cos , high-income agglome a ions and c ea ing possibili ies las no leas o comple ely new ones, (2) he well-known e ec s o conges ion which make hemsel es el soone o la e du ing he p ocess o spa ial economic concen a ion; — Re a ding o ces which can be aced back o ill-concei ed economic policies as well as o a gene al poli ical and adminis a i e o igin ahd which, in a ious ways, so a p olonga ed he p ocess o agglome a- ion pa icula ly in he cen e o Wes e n Eu ope by o se ing la ge- ly he cen i ugal o ces. Remo ing e a ding o ces Fo any policy which aims a educing he egional imbalance in Wes e n Eu ope and which ies o employ as much as possible he ma ke o ces o achie e his objec i e, a i s and mos ob ious s ep would be o u n o he e a ding o ces. (1) So a , he ma ke mechanism as a spa ial alloca ion de ice has been la gely le o wo k wi h he "w ong" p ice signals: he gaps be- ween social and p i a e cos s o p oduc ion, o example, a e mo e han ob ious in he conges ed cen e o Wes e n Eu ope. Howe e , o close such gaps co ec ly is ha dly possible as al eady explained. Bu his does no mean ha he e a e no a leas ough and eady measu es concei - able o ed ess he loca ional imbalances; a ax on he alue o land47 and an employmen ax a ying wi h he deg ee o egional employmen densi y48 a e wo h o be se iously conside ed. Since land de i es i s alue om he e u ns ea ned espec i ely he sa is ac ion enjoyed by using i , a gene al and pe iodic land ax would no be piled on op o ma ke en s. Gi en an inelas ic supply i would ha e o be bo ne by he landowne s. Hence i s p io unc ion would be a iscal one; he e- enues could be used o suppo he expansion o he de elopmen o o he u ban cen es equi ed o decen alize economic g ow h. An inhe- en alloca i e e ec o such a ax could, i s , be expec ed o he ex en o which — in an impe ec ma ke — landowne s would be induced o y ha de o de o e hei p ope y o he bes possible use. Second, and 47 P oposed as a ax on he inc ease in he alue o land in Gie sch (1971), pp. 91 . Ou basic a gumen , howe e , does no change when conside ing simply a ax on he o al alue o land. 48 P oposed in Bildungswe k (1973), p. 40. OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/schm.94.3.267 | Gene a ed on 2023-04-04 11:50:53 282 M. E. S ei ela ed o i , hoa ding o land in he expec a ion o impending app ecia- ion would become mo e cos ly; as a consequence u ban sp awl would possibly be decele a ed49. A ax which a ies acco ding o he egional densi y o ( ull- ime) jobs would wo k in he same di ec ion since he en isaged ax-base is a p oxy o he geog aphical concen a ion o p oduc ion as one o he majo sou ces o he social cos s o u baniza ion. The o al ax o be paid by an employe could depend on he di e ence be ween he ac ual densi y o jobs in his egion and, say, he a e age densi y o a coun y o a g oup o coun ies like he enla ged Communi y. And i he ac ual densi y would be below his a e age, he employe could claim a subsidy which could be paid ou o he ax e enues aised in a eas wi h an abo e-a e age densi y. In his way, he ax would edis ibu e public unds au oma ically be ween loca ions o high densi y and hose o low densi y hus combining some kind o conges ion ax wi h an employmen subsidy. (2) The case o an employmen subsidy is a mo e gene al one e- qui ing some elabo a ion. A p esen , mos egional aids a e di ec ly o indi ec ly capi al subsidies. Howe e , such a bias is ha dly compa ible wi h a qui e amilia si ua ion: backwa d egions wi h below-a e age p oduc i i y and a sys em o wage ba gaining whe e money wages a e nego ia ed p ima ily on he basis o he p oduc i i y and employmen eco d o p ospe ous egions50. Such a cons ella ion is bound o inc ease he egional p oblems because wage cos s in backwa d a eas may be oo high compa ed wi h labou p oduc i i y e en i e ec i e wages paid in mo e p ospe ous pa s a e s ill highe han nego ia ed ones. In his case, egional minimum-wage unemploymen would be a no mal ma ke esul . I he p ice o labou is dis o ed as explained, i should be co ec ed by paying an employmen subsidy in he hope o a ac - ing complemen a y capi al which could help o ise p oduc i i y o a le el compa ible wi h he nego ia ed money-wage a e. I he ma ke would be le o wo k wi h he "w ong" p ice o labou , emig a ion om he backwa d egions and conges ion in he mo e ad anced ones a e e y likely o be he ul ima e ou come. (3) Fo eign ade policy o Eu opean and o he DCs owa ds LDC's was and s ill is nei he conduci e o a mos ad an ageous in e na ional di ision o labou no o egional balance in Eu ope. So a , comple- men a i ies domina ed ade ela ions be ween DCs and LDC's; he la e p o ided he aw ma e ials o indus ial expansion o he o me and pa icula ly hose ag icul u al p oduc s equi ing speci ic clima ic condi ions. Al hough LDC's a e qui e sui able as loca ions o some in- 49 Fo he mo e de ailed a gumen compa e Ga ney (1969), pp. 147 . 50 Compa e o he basic a gumen Gie sch (1949/50), p. 92. OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/schm.94.3.267 | Gene a ed on 2023-04-04 11:50:53 P oblems and Pe spec i es o Regional De elopmen in Wes e n Eu ope 283 dus ies in iew o hei endowmen wi h less skilled bu abundan labou and in iew o he a ailabili y o compe i i e labou -in ensi e p oduc ion echniques, such indus ies we e p e en ed o p ospe he e. Ins ead hey we e kep in DCs ia massi e p o ec ion and — in he case o Wes e n Eu ope — labou was impo ed om he neighbou ing LDC's wi h no a all pleasan egional consequences. A mo e libe al ade policy combined wi h he o emen ioned measu es o deconges could help o b ing he wo k o he wo ke s. This would no a all be disad- an ageous o he Eu opean economies. Fi s o all, some o he p o- duc ion in ques ion is likely o s ay in Wes e n Eu ope al hough i would p obably eloca e on a la ge scale in o hose egions whe e he compe i i e condi ions a e s ill a he simila o hose in LDC's. Second, a ake-o e o p oduc ion by LDC's would ha dly be possible wi hou combining hei manpowe wi h Eu opean capi al and know-how p o ided hese LDC's would emo e he ba ie s o capi al impo s which s ill p e ail o a e e en se up in some cases. Thi d, he e is no jus i i- ca ion o ea ha libe aliza ion will c ea e las ing employmen p oblems in Wes e n Eu ope. S ong p essu e o demand a ou ing pa icula ly he mode n se ices is clea ly ecognizable in many pa s o Eu ope. And i he indus ializa ion o LDC's would be accele a ed ia a mo e libe al ade policy, i is mos likely ha he DC's and hence also Eu ope will be in a qui e a ou able posi ion o p o ide he complemen a y se ices, pa icula ly in iew o he lack o expe ise o LDC's, e. g. in consul ing, banking, insu ance, esea ch and de elopmen . (4) Mos di icul o o e come a e he adminis a i e and poli ical obs acles o a be e egional balance wi hin he indi idual coun ies and in Wes e n Eu ope as a whole. On a na ional le el o wi hin he enla ged Communi y he p oblem o poli ical o e - ep esen a ion o agglome a ions could be possible a acked by es ablishing a Chambe o Regions on a basis simila o he US Sena e as pa o he pa liamen - a y sys em51. And hese egions could be mo e equally and p ope ly equipped wi h planning capaci y. The di icul ies in coo dina ing e- gional policies a e e en la ge on he le el o Eu ope as a whole. Assuming qui e eluc an ly ha he enla ged Communi y will succeed in o ganizing an e ec i e common egional policy, he e will be e en mo e need and esponsibili y on he pa o coope a e wi h Eu opean non-membe coun ies. In p inciple a Eu opean coo dina ion could ake 51 Such a chambe is p oposed in Cai nc oss, Gie sch e al. (1974). Looking a indi idual Eu opean coun ies and lea ing aside he c i ical ques ion o he mos app op ia e delinea ion o " egions", Swi ze land a leas p ima acie comes closes o such a legisla i e cons uc ion, i.e. he "S ände a ". The Wes Ge man "Bundes a " does no con o m o he basic idea because he Lände go e nmen s (i.e. only indi ec ly he elec o a e) delega e ep esen a i es and hei numbe pa ly depends on he size o he popula ion o he a ious Lände . OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/schm.94.3.267 | Gene a ed on 2023-04-04 11:50:53 284 M. E. S ei place on he le el o he Council o Eu ope al hough i s pe o mance, o example, in en i onmen al ma e s (e. g. he Rhine Commission) is no e y encou aging. Complemen ing he ma ke mechanism The e emains he ques ion whe he mo e mus be done han simply co ec ing he ma ke signals and emo ing adminis a i e as well as poli ical obs acles. The answe s a e well-known: Fi s , a la ge pa o he na ional p oduc is no de e mined by he ma ke bu by decisions o he legisla i e and o go e nmen al agencies. And as a as go e n- men spending akes he o m o in es men in o in as uc u e a la ge i s egional impac is mos ob ious and asks o much mo e consis en planning han expe ienced so a . Second, he ma ke mechanism, wi h a ew excep ions ( o wa d ma ke s), does coo dina e ex pos and no ex an e. Howe e , he la e is necessa y whene e in es men decisions ha e o be aken which a e highly in e dependen . Unde such condi- ions economic g ow h can be easily biased in a ou o exis ing cen es o economic ac i i y. The eason is ha any single in es o who wan s o expand o o ake up p oduc ion will mos likely ind po en ial supplie s o inpu s o as well as use s o his own ou pu in sizeable u ban cen es oge he wi h o he impo an ameni ies. Hence he will end o loca e whe e all o mos in es men s complemen a y o his p oduc ion a e al eady a ailable. The conclusion o any policy which ies o decen alize indus ial and ela ed g ow h in Wes e n Eu ope would be: "The se ing up o new indus ies can be expec ed o p o e a las ing success only i he places chosen a e well p o ided wi h a good in as uc u e o public ameni ies, schools, hospi als, shopping and ad- ing acili ies. Also, new indus ial zones will in gene al be iable only i hey can lean on a majo u ban cen e52!" Such a equi emen amoun s o a g ow h-pole s a egy53 ying o se agains he domina ing agglo- me a ions o Wes e n Eu ope well-equipped u ban cen es which a e e icien ly in eg a ed in a mul i-mode anspo sys em and om which impulses would dissemina e o he su ounding loca ions. Howe e , his would equi e much mo e coope a ion be ween he Eu opean coun ies in o de o a oid he was e which can be p oduced i egions compe e wi h expensi e immobile and long-las ing in es men s in o he in as uc u e. Secula de elopmen pa e n Taking in o accoun he a ious policy measu es as well as he ma ke o ces which ha e been discussed, he ollowing secula de elopmen 52 . d. G oeben (1969), p. 5. 53 Fo an analysis o he g ow h-pole hypo hesis om he poin o iew o egional policy compa e S ei (1971). OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/schm.94.3.267 | Gene a ed on 2023-04-04 11:50:53 P oblems and Pe spec i es o Regional De elopmen in Wes e n Eu ope 285 pa e n would be concei able which could educe mo e quickly he ex- is ing egional dispa i ies in condi ions o li ing: — Acco ding o he egula i ies in sec o al change and in he in e - egional dis ibu ion o income pe head, i could be expec ed ha he cen al a eas o Wes e n Eu ope will inc easingly p o ide se - ices equi ing highly quali ied manpowe whe eas egions a a dis ance om he cen e will become mo e and mo e a ac i e as indus ial loca ions, pa icula ly i employmen oppo uni ies will be u he educed in he p ima y sec o acco ding o i s long- e m de elopmen p ospec s. — Loca ional shi s in indus ial p oduc ion will no s op a he bo de s o Wes e n Eu ope i he LDC's we e allowed o use mo e ully hei compe i i e ad an age in he p oduc ion o indus ial commodi ies equi ing compa a i ely li le capi al and quali ied labou , and i ag icul u al p o ec ion will be no longe a aboo o Eu ope's ade policy. This would imply a s eady change in he dis ibu ion o labou be ween he a ious egions inside and ou side Eu ope; he eby he p oduc ion o commodi ies and se ices equi ing much physical bu especially human capi al would expand espec i ely be aken up in he mos ma u e egions and less demanding ac i i ies would mo e o less ma u e egions. Summa y Wes e n Eu ope's egional p oblems a e cha ac e ized by p o iding some c ucial ac s; u he mo e, a speci ic egional de elopmen pa e n is aced by sc u inizing appa en empi ical egula i ies. Then a en ion is paid, i s , o concep ual di icul ies and adminis a i e as well as poli ical obs acles which egional policy usually has o ace; second, hypo heses a e analyzed which could explain an obse able ela ionship be ween egional economic ma u i y and composi ion o ou pu . The esul s ob ained a e me ged and complemen ed in an e o o answe he key ques ion o he pape : Wha a e he o ces which appea o go e n he egional de elopmen pa e n in Wes e n Eu ope? The answe allows, inally, o ou line basic ea u es o a a ional policy which aims a educing he exis ing egional imbalances. Zusammen assung Wes eu opas Regionalp obleme we den zunächs mi einigen zen alen Fak en gekennzeichne ; da übe hinaus wi d ein spezi isches egionales En - wicklungsmus e übe p ü , das du ch einige empi ische Regelmäßigkei en beleg zu sein schein . Sodann gil die Au me ksamkei e s ens, konzep ionellen Schwie igkei en sowie adminis a i en und poli ischen Hinde nissen, die de Regionalpoli ik gewöhnlich en gegens ehen; zwei ens we den Hypo hesen analysie , die eine beobach ba e Beziehung zwischen egionalem ökono- OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/schm.94.3.267 | Gene a ed on 2023-04-04 11:50:53 286 M. E. S ei mischem Rei eg ad und Wi scha ss uk u e klä en könn en. Die e ziel en E gebnisse we den zusammenge aß und e gänz in dem Bemühen, die zen- ale F age de A bei zu bean wo en: Welche Fak o en scheinen das egio- nale En wicklungsmus e Wes eu opas p imä zu bes immen? Die An wo e laub es schließlich, eine a ionale Poli ik zu um eißen, die da au ge ich e is , die bes ehenden egionalen En wicklungsun e schiede zu e inge n. Re e ences Bildungswe k eu opäische Poli ik (Ed .) (1973), Gu ach en zu Übe gangs- phase de Wi scha s- und Wäh ungsunion, Manusk ip , Bonn 15. 11. 1973. Biehl, D.y E. Hussmann and S. Schnyde (1972), Zu egionalen Einkommens- e eilung in de Eu opäischen Wi scha sgemeinscha , Die Wel wi - scha , He 1,1972, pp. 64 - 78. Bi d, H. M. (1967), Regional Policies in a Common Ma ke , in: C. S. Shoup (Ed .). Fiscal Ha moniza ion in Common Ma ke s, New Yo k, London, Co- lumbia Uni e si y P ess 1967, pp. 385 - 456. Boe en e , E. . (1962), Theo ie des äumlichen Gleichgewich s, Tübingen, J. C. B. Moh 1962. Bo s, G. H. and J. L. 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(1973), P o ek ion und B anchen- s uk u de Wes deu schen Wi scha , Tübingen, J. C. B. Moh 1973. Fels, G. (1972), The Choice o Indus y Mix in he Di ision o Labou be ween De eloped and De eloping Coun ies, Wel wi scha liches A chi , 108 (1972), pp. 71 - 121. Fels, G., K.-W. Scha z and F. Wol e (1971), De Zusammenhang zwischen P oduk ionss uk u und En wicklungsni eau, Wel wi scha liches A chi , 106 (1971), pp. 240 - 278. Fische , G. (1967), Das Volkseinkommen de Kan one 1950 - 1965, Wi scha und Rech , 19 (1967), pp. 229 - 270. — (1970), Me hoden und E gebnisse kan onale Volkseinkommensschä zungen als Ins umen e des bundess aa lichen Finanzausgleichs, Schweize ische Zei sch i ü Volkswi scha und S a is ik, 106 (1970), pp. 237 - 255. OPEN ACCESS | Licensed unde CC BY 4.0 | h ps://c ea i ecommons.o g/abou /cclicenses/ DOI h ps://doi.o g/10.3790/schm.94.3.267 | Gene a ed on 2023-04-04 11:50:53 P oblems and Pe spec i es o Regional De elopmen in Wes e n Eu ope 287 Ga ney, M. 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