Regional inequalities in the European Neighborhood Policy countries: The effects of growth and integration

Abstract

Abstract. The paper explores the spatial dynamics in the European Neighborhood Policy (ENP) countries, in a period of significant transformations in their internal and external economic environment. Regional disparities are reported to be the net outcome of two opposite dynamics: a pro-cyclical pattern, on the one hand, with dynamic and developed regions growing faster in periods of expansion and slower in periods of recession, and a long-term spread effect, on the other, partly offsetting the cumulative impact of growth on space after some critical level of development. In this framework, expanding trade relations with the European Union advanced countries may be an additional source of spatially unbalanced growth and polarization for the ENP countries, as the costs and benefits of integration prove to be unevenly allocated in space. To the extent that growth and integration dynamics tend to polarize the ENP economic space, a set of critical policy questions arise. Keywords: European Neighborhood Policy countries, integration, growth, regional disparities IntroductionThe recent European Union (EU) enlargements (i.e. years 2004, 2007, and 2013) brought the borders of the EU to a set of countries in the East with historically less intensive economic relations. These countries have been part of the (former) Soviet Union and are characterized by lower development levels and significant institutional and structural differences. At the same time, in the Southern and the Eastern rim of the Mediterranean Sea, the EU is faced with countries that are linked to individual EU countries through their colonial past. Both bordering areas, in the EU East and the EU South, have been gaining significance as they include emerging economies, energy suppliers, or, simply, a large neighboring market, which is crucial for the EU economy. Thus, the EU, in order to avoid creating dividing lines with its neighbors, launched, in 2004, the European Neighborhood Policy (ENP).The ENP is a unified EU policy framework aiming at strengthening the prosperity, stability and security, creating a "ring of friends", around the EU geo-political borders (European Communities (EC), 2004;Wesselink and Boschma, 2012). In a nutshell, the ENP is an EU external relations and trade policy tool offering to the EU neighboring countries (hereinafter: the ENP countries) political association and market integration on the basis of promoting common EU values-such as the consolidation of democracy, the promotion of human rights, the preservation of peace, the eradication of poverty and the enhancement of market economy-enshrined in the EU Treaties. Currently, the ENP framework applies to Armenia,

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