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The Working Papers Series on Comparative Regional Integration Studies is devoted to the study of regional integration from a comparative and interdisciplinary perspective. It covers theory, empirical work and policy analysis, and includes contributions on the political, economic, social and cultural aspects of co-operation at the level of both macro-regions and micro-regions. While committed to the highest academic standards, the series aims to be accessible to policy-makers and practitioners and seeks to encourage informed debate on comparative regional integration.

11.02.09

W-2009/1: Macro-Regions and Micro-Regional Inequalities: The European Union and the Cohesion Funds

By: Lidia Hernández López

The grouping of countries into a bloc, macro-regions, is a frequently used strategy for countries to increase their political power and enhance the competitive position of their organizations in the context of globalization (Breslin, Higgot and Rosamond, 2002). The formation of macro-regions is not a new phenomenon. The Deutsche Zollverein established the economic basis for the unification of Germany; the Customs Union of Moldavia-Wallachia led to the creation of Romania; and the Swiss Confederation achieved the economic and political unification of the Swiss Cantons. Since the Second World War there has been a progressive growth in macro-region initiatives. A trend that intensified in the 1990’s and has continued into the 21^st century, these initiatives are called the New Regionalism. There are currently more than 200 preferential trade agreements in force and almost all World Trade Organization (WTO) members are party to a macro-regional agreement (World Bank, 2005).

  

In the New Regionalism, macro-regions also include the processes that evolve outside formal agreements (Winters, 1999; Yamawaki, 2001; Prins, 2001; Söderbaum, 2003). The formation of macro-regions can occur between states that seek to reduce their trade barriers “[...] independently of whether those countries are adjacent to or even close to one another” (Winters, 1999: 8) creating relations “[...] not only between countries, but also between non-state actors, particularly between private companies” (Söderbaum, 2003:1). Unlike the high degree of institutionalization in the European bloc, regionalization between China, Japan, Taiwan, and South Korea has developed around informal market dynamics (Xinning, 2001; Murshed, 2001).

  

A key issue in the building of a macro-region is its ability to deal with inequalities that occur between the participant territories in the bloc. The formation of a macro-region can create disparities between the member countries and between the regions within these countries. Successful regionalization requires the integration, of business and non-business organizations and the least economically developed territories, with the dynamics of the regionalization process. This integration is important for the macro-regional project as it endows it with the political and economic legitimacy that allows it to work effectively and achieve further integration. Thus, macro-regionalism necessitates micro-regional strategies that deal with the integration-induced disparities that occur in the formation of a macro-region.

  

The presented article looks at macro-regions and the inequalities between its micro-regions. It focuses on the specific dynamics generated in the formation of a macro-region, the inequalities induced by the integration process of a macro-region and the effectiveness of the EU cohesion funds in micro-regional growth. In the European Union (EU), there are territories that have an insufficient capacity for innovation and that have difficulties in maintaining economic growth despite having adequate infrastructures and human capital (European Commission, 2004). This is important for a macro-region that seeks “[t]o become the most competitive and dynamic knowledge-based economy with sustainable economic growth and greater social cohesion and to make a success of the pending enlargement by rapidly raising living standards in the new Member States” (Sapir et al., 2004:i) and to continue to take in new members while maintaining the momentum of integration (European Commission, 2006).

   

The paper is organized as follows. Section 1 addresses the dynamics that generates a regionalization process generates in the New Regionalism and Section 2 highlights the inherent effect of macro-regionalism on the creation of inequalities between the participant territories in the bloc. Based upon the inequalities in the EU bloc, Section 3 describes the methodology of a study that aims to determine the effectiveness of EU cohesion funds on micro-regional growth, and whose results are presented and discussed in Section 4.

 

 

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