Synthesis Report - European Commission - Europa

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Synthesis Report Ex-post Evaluation of the ERDF 2000-2006 In the EU15 countries, the extent of the narrowing of regional disparities over the period 2000- 2006 was relatively small (the mean logarithmic deviation index falling from 3.9 to 3.7). This, however, followed a widening of disparities, even if small, over the preceding 5 years (from 3.8 in 1995). Disparities in GDP per head in 2006 in the EU15, therefore, were marginally narrower than they had been 11 years earlier. In the EU10 countries, regional disparities widened between 2000 and 2006, largely because of the stronger growth of the capital city regions than others. This differs from the preceding 5-year period when the index remained unchanged, primarily as a result of the relatively high growth in regions with the lowest GDP per head – in the three Baltic States and in Poland, especially – which offset the capital city effect. Within EU15 countries, regional disparities narrowed over the period 2000-2006 in 8 of the 13 countries in which there was more than one NUTS 2 region. The extent of this was particularly large in Austria and Spain. In another two countries, Belgium and Portugal, disparities remained unchanged. There were only three countries, therefore, where regional disparities widened – the Netherlands (marginally), the UK and Greece. In Greece, the extent of widening was substantial as a result of the much higher growth in Attiki, where Athens is situated, than in other regions (Between 2000 and 2006, GDP per head in Attiki grew by over 5% a year as against growth of 3% a year in the other regions taken together.) In the UK, the widening was associated with increased commuting as indicated below. The experience over the 2000-2006 period is almost the exact reverse of that in the previous 5 years when disparities narrowed in only three countries – Austria, Italy (marginally) and Greece – remained unchanged in one (Germany) and widened in the other 9. In all four of the EU10 Member States with more than one NUTS 2 region, regional disparities widened between 2000 and 2006, the increase in the index being particularly large in Hungary and Slovakia. Regional disparities also widened in all four countries over the period 1995-2000, most especially in the Czech Republic and Hungary for the same reason as in the subsequent years – i.e. the much higher growth in the capital city regions than in others. As a result of the widening in internal disparities, regional inequality in GDP per head in the Czech Republic, Hungary and Slovakia was among the highest in the EU25 in 2006, and in the last two much higher than in any other country. In general, therefore, while disparities in EU15 countries in most cases narrowed over the period 2000-2006, those in the EU10 widened. This followed a 5-year period when the reverse was the case, when disparities widened in nearly all EU15 countries. At the same time, it should be recalled, as noted above, that GDP per head in all EU10 regions apart from Malta increased relative to the EU25 average over the period 2000-2006. There was, therefore, almost universal convergence in these regions towards the EU average during these years. 2.3.3 Narrowing of disparities in commuter-adjusted GDP per head and household income per head As noted at the outset, the NUTS 2 regions which are the focus here – and which equally tend to be the focus of cohesion policy – do not in many cases correspond to functional regions from an 58
Ex-post Evaluation of the ERDF 2000-2006 Synthesis Report economic perspective. One of the consequences of this is that commuter flows, instead of taking place largely within regions, cross regional boundaries to a significant extent and, moreover, tend to be in one direction, either into or out of regions. This means that the commuters concerned contribute to the GDP in the region in which they work but are not counted as part of its population, which accordingly pushes up GDP per head. It also pushes down GDP per head in the region where commuters live since they do not contribute to its GDP but are counted in the ‘heads’ over which it is measured. Commuting is an important reason for the pronounced disparities in GDP per head between regions in a number of countries indicated above (see Box). It is also a potential reason for the differential rates of GDP per growth indicated above. If, for example, people living in an Objective 1 region moved out to live elsewhere but continued to work in the region, then GDP per head would have risen because of the fall in population without any growth in GDP occurring as such (see Box for examples). It is, therefore, important to make an explicit adjustment for commuting in order to distinguish ‘genuine’ increases in GDP per head from spurious ones, so as to be sure that the narrowing of disparities in GDP per head over the period was a real phenomenon 14 . In practice, according to the data available – which are relatively uncertain and, accordingly should be regarded as indicative only – commuting did not change a great deal over the programming period. Indeed, net outward commuting from Objective 1 regions seems on average to have increased slightly, which suggests that the rate of growth of GDP per head indicated above may understate the increase in their economic potential which occurred. The small increase in outward commuting from lagging regions, by depressing their GDP per head, tends in itself to widen regional disparities measured in these terms. Adjusted for the effect of commuting, disparities in GDP per head between regions in the EU15, therefore, narrowed by slightly more than indicated above (Table 2.6). The effect of commuting is especially marked in the UK, where the relatively wide disparity in GDP per head between regions owes a great deal to this effect. After adjusting for commuting, the degree of disparity in GDP per head in 2006 was much the same as in 2000. The effect of commuting on regional disparities is even more pronounced in Belgium, but here the effect is slightly weaker in 2006 than in 2000 because of a small decline in flows. Adjusted for commuting, therefore, regional disparities in GDP per head widened a little over the period. This was also the case in Portugal, though the degree of widening was less. 14 The adjustment is made by relating the number of people employed in a region, including both those who are resident there and those who live elsewhere, to the number of people living in a region who are employed either in the region or outside. This gives a ratio which can be applied to GDP to allow for the effect of commuting: (Er+Eo)/(Er+Or) where Er is the number in employment in the region who live there, Eo is the number employed in the region who live in another region and Or is the number in employment in a region who work in another region. If the ratio is 1, then the same number of people travel to work outside the region as travel in to work and commuting has no effect on regional GDP per head. If it is positive, then more travel in to work than travel out and vice versa if it is negative. 59
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