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Regional disadvantages and economic and political integration within the European Community
Koh, Jae Bang, Ph.D.
The Ohio State University, 1992
UMI 300 N. Zeeb Rd. Ann Arbor, MI 48106
REGIONAL DISADVANTAGES AND
ECONOMIC AND POLITICAL INTEGRATION
WITHIN THE EUROPEAN COMMUNITY
DISSERTATION
Presented in Partial Fulfillment of the Requirements for
the Degree Doctor of Philosophy in the Graduate
School of The Ohio State University
By
Jae Bang Koh, M.A., M.P.A., B.A.
*****
The Ohio State University
1992
Dissertation Committees Approved by
Chadwick F. Alger
Anthony Mughan
Donald A. Sylvan Chadwick Department of Political Science DEDICATION
To Mom and Dad
- ii - ACKNOWLEDGEMENTS
I express sincere appreciation to three committee mem bers, Drs. Chadwick F. Alger, Anthony Mughan, Donald A.
Sylvan, for their comments and critiques on this disserta
tion. Special thanks go to Dr. Chadwick Alger for his con
tinuous encouragement. I also offer thanks to my parents
for never giving up their faith in me. To my brother, Jae
Wun, and to my sisters, Jae Hyun, Young Ran, and Oak Hee, I
thank you for spiritual support and encouragement.
- iii - VITA
April 8, 1957 ...... Born - South Korea
1982 ...... B.A., Seoul National University, Seoul, South Korea
1984-1985 ...... Researcher, Ohio Governor's Office of Criminal Justice Services, Columbus, Ohio
1986-1989 ...... Human Service Analyst, Metropolitan Human Service Commission, Columbus, Ohio
1984-1990 ...... Graduate Research Associate, Ohio State University, Columbus, Ohio
FIELDS OF STUDY
Major Field: Political Science Studies in International Politics Studies in Comparative Foreign Policy Studies in Transnational Relations
Minor Field: American Politics Studies in Public Policy Studies in Urban Politics
- iv - TABLE OF CONTENTS
PAGE
D e d i c a t i o n ...... ii
Acknowledgements ...... iii
VITA ...... iv
LIST OF TABLES ...... viii
LIST OF FIGURES ...... X
CHAPTER
I. INTRODUCTION ...... 1
1.1 Research Problem ...... 1 1.2 Theoretical Significance ...... 2 1.3 The Concept of I n t e g r a t i o n ...... 4 1.4 The Measurement of Integration ...... 7 1.5 Integration Theory ...... 10 1.6 Integration Effects ...... 14 1.7 Regional Disadvantages ...... 17 1.8 The Theory of Regional Imbalance . . . 20 1.8.1 The Neoclassical T h e o r y ...... 20 1.8.2 The Export-Base Theory ...... 22 1.8.3 The Growth Pole Theory ...... 23 1.8.4 The Center-Periphery Theory . . . 25 1.9 H y p o t h e s e s ...... 28 1.10 Methodologies ...... 29
- v - II. INTEGRATION EFFORTS IN THE EUROPEAN COMMUNITY . 30
2.1 I n t r o d u c t i o n ...... 30 2.2 The First P e r i o d ...... 33 2.3 The Second P e r i o d ...... 36 2.4 The Third P e r i o d ...... 40 2.5 The Fourth P e r i o d ...... 44 2.6 The Fifth Period ...... 46 2.7 C o n c l u s i o n ...... 48
III. REGIONAL DISADVANTAGES IN THE EUROPEAN C O M M U N I T Y ...... 50
3.1 I n t r o d u c t i o n ...... 50 3.2 Definition of Regions ...... 51 3.3 Regional Imbalances within the C o m m u n i t y ...... 55 3.3.1 Imbalances in GDP per capita in the Community ...... 57 3.3.2 Imbalances in GDP per Worker in the Community ...... 61 3.3.3 Imbalances in Unemployment Rate in the C o m m u n i t y ...... 64 3.3.4 Imbalances in Agricultural Employment in the Community . . . 68 3.3.5 Imbalances in Net Migration in the Community ...... 71 3.4 Development of Common Regional P o l i c i e s ...... 74 3.4.1 Overview of Regional Policy . . . 77 3.4.2 The European Regional Development Fund (ERDF) ...... 80 3.5 C o n c l u s i o n ...... 81
IV. TWO CASE STUDIES: THE RELATIONSHIP BETWEEN REGIONAL DISADVANTAGE AND INTEGRATION IN THE MEZZOGIORNO AND NORTHERN IRELAND . . 84
4.1 Introductory Discussion ...... 84 4.1.1 Theoretical Purpose of a Case S t u d y ...... 84 4.1.2 Review of the Center-Periphery T h e o r y ...... 88 4.1.3 Research Problem ...... 89 4.1.4 The Selection of Cases ...... 91 4.2 The Relationship between Regional Disadvantage and Integration in the Mezzogiorno and Northern Ireland . . . 93
- vi - 4.2.1 Case 1: The Mezzogiorno ...... 93 4.2.1.1 The Analysis of Regional Disadvantage ...... 95 4.2.1.2 The Rise of Social Unrest and Political Tension .... 100 4.2.1.3 Conclusion ...... 108 4.2.2 Case 2: Northern Ireland ...... 109 4.2.2.1 The Analysis of Regional Disadvantage ...... Ill 4.2.2.2 The Rise of Disintegrative F o r c e s ...... 115 4.2.2.3 Conclusion ...... 121 4.3 Discussion and Conclusion ...... 123
V. INTRODUCTORY DISCUSSION FOR AN EMPIRICAL ANALYSIS ...... 129
5.1 The Unit of A n a l y s i s ...... 129 5.2 I n d i c a t o r s ...... 132 5.3 Time Period ...... 140 5.4 M e t h o d s ...... 143 5.5 Data S o u r c e s ...... 146
VI. THE FIRST HYPOTHESIS: THE RELATIONSHIP BETWEEN REGIONAL DISADVANTAGE AND INTEGRATION . . 148
6.1 Introductory Discussion ...... 148 6.2 Testing of the First Hypothesis.... 150 6.3 Summary and Conclusion ...... 163
VII. THE SECOND HYPOTHESIS: THE RELATIONSHIP BETWEEN INTEGRATION AND ECONOMIC ADVANTAGE IN URBAN AND RURAL AREAS . . . 171
7.1 Introductory discussion ...... 171 7.2 Testing of the Second Hypothesis . . . 176 7.3 Summary and Conclusion ...... 181
VIII. CONCLUSION ...... 185
8.1 I n t r o d u c t i o n ...... 185 8.2 Summary and Review of Findings .... 187 8.3 Limitations of Methodology and Data . . 195 8.4 Future R e s e a r c h ...... 198 8.5 Policy Implications ...... 201
- vii - APPENDICES
A. PREAMBLE, AND ARTICLES 2, 92 AND 113 OF THE TREATY OF R O M E ...... 207
B. PREAMBLE, ARTICLES 1, 2, 3, AND TITLE V OF THE SINGLE EUROPEAN A C T ...... 214
C. TABLES OF CORRELATIONS AMONG PGDP, UNEMP AND NMIG ...... 224
Bibliography ...... 225
- viii - LIST OF TABLES
The CV of GDP per capita between Regions in the Community, 1970-1982 ...... , 58
Difference between the Highest and the Lowest GDP per capita between Regions in the Community, 1970-1982 ...... 59
The CV of GDP per Worker between Regions in the Community, 1970-1982 ...... 62
Difference between the Highest and the Lowest GDP per worker between Regions in the Community, 1970-1982 ...... 63
The CV of Unemployment Rate between Regions in the Community, 1970-1982 ...... 66
Difference between the Highest and the Lowest Unemployment Rates between Regions in the Community, 1970-1982 ...... 67
The CV of the Proportion of Agricultural Employment between Regions in the Community, 1970-1982 ...... 69
Difference between the Highest and the Lowest Proportion of Agricultural Employment between Regions in the Community, 1973-1984 .... 70
The CV of Net Migration between Regions in the Community, 1970-1982 ...... 73
Difference between the Highest Emigration and Immigration between Regions in the Community, 1977-1985 ...... 74
Expenditures for the ERDF in the European Community, 1975-1988 ...... 80
GDP per capita by Region in Italy ...... 96
- ix - 13. Unemployment Rate by Region in Italy ...... 98
14. Net Migration by Region in Italy (1000) .... 99
15. Public Opinion in Favour of the EC Membership . 104
16. The Proportion of Intra-EC Letter Traffic . . . 107
17. GDP per capita in Northern Ireland ...... Ill
18. Unemployment Rate in Northern Ireland ...... 113
19. Net Migration in Northern Ireland (1000) .... 114
20. Means of Deviations for Per Capita GDP, Unemployment, and Net Migration ...... 135
21. The Relationship between Regional Disadvantage and Economic Integration (the State, Lag = 1) 151
22. The Relationship between Regional Disadvantage and Economic Integration (the Most Favoured Region, Lag = 1 ) ...... 151
23. The Relationship between Regional Disadvantage and Economic Integration (the Community, Lag = 1) 152
24. The Relationship between Regional Disadvantage and Political Integration (Communication Measures, the State, Lag = 1) . . 155
25. The Relationship between Regional Disadvantage and Political Integration (Communication Measures, the Most Favoured Region, Lag = 1 ) ...... 156
26. The Relationship between Regional Disadvantage and Political Integration (Communication Measures, the Community, Lag = 1 ) ...... 156
27. The Relationship between Regional Disadvantage and Political Integration (Public Opinion Measures, the State, Lag =1) . 159
28. The Relationship between Regional Disadvantage and Political Integration (Public Opinion Measures, the Most Favoured Region, Lag = 1 ) ...... 160
- x - 29. The Relationship between Regional Disadvantage and Political Integration (Public Opinion Measures, the Community, Lag = 1 ) 160
30. The Relationship between Integration and All Regions, (Lag = 1) 177
31. The Relationship between Integration and Regions with an Extremely High Proportion of Agricultural Employment, (Lag =1).... 178
32. The Relationship between Integration and Regions with an Extremely Low Proportion of Agricultural Employment, (Lag =1).... 178
33. Correlations among Per Capita GDP, Unemployment and Net Migration, the Reference Group = the S t a t e ...... 224
34. Correlations among Per Capita GDP, Unemployment and Net Migration, the Reference Group = the Most Favored Region within the S t a t e ...... 224
35. Correlations among Per Capita GDP, Unemployment and Net Migration, the Reference Group = the Community ...... 224
- xi - LIST OF FIGURES
FIGURE PAGE
1. The Regions of Italy and the Mezzogiorno .... 94
2. The Regions of the United Kingdom and Northern Ireland ...... 110
- xii - CHAPTER I
INTRODUCTION
1.1 RESEARCH PROBLEM
The European Community (EC) intends to enter into a new stage of a United Europe. That is, the EC has adopted in
1985 an ambitious program to eliminate remaining internal frontiers - physical, technical, and fiscal - by 1992.1
During the past thirty years, the EC has experienced ups and downs in achieving integration among its member states.
The number of member states expanded from six to 12 when the United Kingdom, Ireland and Denmark joined in 1973,
Greece in 1982, and Spain and Portugal in 1986. Also, many other countries, e.g. Austria, Switzerland, Sweden and Nor way, etc., have been recognized as associate members of the
EC.
Meanwhile, the gap between rich and poor regions has also widened. For example, in terms of per capita GDP, the ratio of the ten wealthiest regions in the Community to the ten poorest ones rose from 3.3 in 1970 to 4.3 in 1977.
When there exist regional imbalances within the Community,
1 Michael Emerson, What Model for Europe ? (Cambridge: MIT Press, 1988), p.2.
- 1 - 2 they are likely to affect integration within the Community.
This study examines the relationship between regional dis advantages and integration.
1.2 THEORETICAL SIGNIFICANCE
There were many efforts to explain the relationship between regional disadvantages and integration. Ernst Haas saw that differences in the level of industrialization would sharply influence expectations of regional action and make the less developed eager to minimize dependence on the more developed.2 In a neo-Marxian interpretation, Gorz predict ed a failure to develop depressed regions, and a growing disparity between these regions and those which were better endowed.3 Keohane and Nye also argued that integration had distributive effects and might look different from the periphery than from the center of member states.4
Although those views were concerned with regional impacts of integration, they did not go beyond explaining imbalances among nation-states. Thus, I will extend these
2 Ernst B. Haas, "The Study of Regional Integration: Reflections on the Joy and Anguish of Pretheorizing," Regional Integration: Theory and Research, eds. Leon N. Lindberg and Stuart A. Scheingold (Cambridge: Harvard University Press, 1971), p.13.
3 Andre Gorz, Strategy for Labor: A Radical Proposal (Bos ton: Beacon Press, 1967), p.162.
4 Robert 0. Keohane and Joseph S. Nye, "International Interdependence and Integration," International Politics, eds. Fred I. Greenstein and Nelson W. Polsby (Reading: Addison-Wesley, 1975), p.376. approaches by taking into account regions with different levels of development, rather than nation-states, as the unit of analysis for this study.
Also, previous studies were not supported by empirical studies to explain the relationship between regional disad vantages and integration. It seems that theory and data should go hand in hand. Thus, I will take a step forward to see the relationship between disadvantages and integra tion, based upon those data which have been cumulated for the last twenty years.
Lastly, integration theory has contributed to maintain ing peace in Europe. After World War II, many problems have been resolved peacefully rather than belligerently because integration has created an environment of peaceful problem solving. Furthermore, integration efforts have survived to date, through the ups and downs of its cycle. Also more ambitious efforts to transcend physical, technical, and fiscal barriers among member states have been going on.
However, there is the gap between rich and poor regions within the Community. It is likely that the deeper the gap is between regions within the Community, the harder inte gration would be to achieve. Thus, I will examine the impacts of regional disadvantages on integration. 4
1.3 THE CONCEPT OF INTEGRATION
As a general theory, integration theory can be applicable
within nations as well as between nations.5 In this sec
tion, I will discuss the concept of integration, which can
be applicable at all levels: subnational, national and
international.
Integration is defined, depending upon how it is viewed,
either as a process, or as an end product.6 Those who view
integration as a process are divided about the need for
setting up supranational institutions, while those who view
integration as an end product have no agreement about what
would be an end product.
Karl Deutsch provided a definition of integration in his
books.7 Integration is the attainment within a territory,
5 Arend Lijphart argued that integration theory was the major example of a general theory that was applicable not only at the international level but also the national and subnational levels. For his discussion, see Arend Lijp hart, "Karl W. Deutsch and the New Paradigm in Interna tional Relations," From National Development to Global Community, eds. Richard L. Merritt and Bruce M. Russett (London: Allen & Unwin, 1981), pp. 233-251.
6 Robert 0. Keohane and Joseph S. Nye, "International Interdependence and Integration," International Politics, eds. Fred I. Greenstein and Nelson W. Polsby (Reading: Addison-Wesley, 1975), pp. 363-414. They argued that integration could be viewed in four ways. That is, inte gration can be viewed, either as a process or as an end product, or as a combination of being integrated, or as any level of association ascertained by specific meas ures.
7 Karl W. Deutsch, et al., Political Community and the North Atlantic Area (Princeton: Princeton University Press, 1957), p. 5; Karl W. Deutsch, International Polit ical Communities: An Anthology (Garden City, New York: of a "sense of community" and of institutions and practices strong enough and widespread enough to assure, for a "long" time, dependable expectations of "peaceful change" among its population. Following the communication approach,
Deutsch stressed transactions among societies. Also, by making a distinction between integration and amalgamation, he was more concerned with integration (i.e. absence of war) than amalgamation (i.e. political union). In this respect, Deutsch's understanding of integration will be distinguished from that of Ernst Haas, which will be dis cussed below.
As a neofunctionalist, Ernst Haas was concerned with institutions. The concept of integration was provided in his work, The Uniting of Europe: Political, Social, and
Economic Forces, 1950-1957.6 Integration is the process whereby political actors in several distinct national set tings are persuaded to shift their loyalties, expectations, and political activities toward a new and larger center, whose institutions possessed or demanded jurisdiction over the preexisting nation states. Thus, Haas was more con cerned with conditions for creating political union. In his later work, Haas redefined integration. Regional integra tion is to explain how and why states cease to be wholly
Doubleday, 1966), p. 2.
8 Ernst B. Haas, The Uniting of Europe: Political, Social, and Economic Forces, 1950-1957 (Stanford: Stanford Uni versity Press, 1958), p. 16. 6 sovereign, how and why they voluntarily mingle, merge, and mix with neighbors so as to lose the factual attributes of sovereignty while acquiring new techniques for resolving conflict between them.9 However, Haas argued that integra tion theory was obsolete because it did not capture a per vasive condition that characterized the entire earth and the whole range of international relations.10
A neofunctional definition of integration was also pro vided by Joseph Nye. Integration is the process leading to political community - a condition in which a group of peo ple recognized mutual obligations and some notion of a com mon interest.11 External actors were also included in the process of integration.12 Like Nye, Philip Jacob and Henry
Teune defined political integration as the process for the creation of political communities.13
9 Ernst B. Haas, "The Study of Regional Integration: Reflections on the Joy and Anguish of Pretheorizing," International Organization 24 (1970): 607-46.
10 Ernst B. Haas, The Obsolescence of Regional Integration Theory (Berkeley: Institute of International Studies, University of California, 1975), p. 17.
11 Joseph S. Nye, Pan-Africanism and East African Integra tion (Cambridge: Harvard University Press, 1965), p. 84.
12 Joseph S. Nye, "Comparing Common Markets: A Revised Neo- Functionalist Model," International Organization 24 (1970): 796-835.
13 Philip E. Jacob and Henry Teune, "Integrative Process: Guidelines for Analysis of the Bases of Political Commu nity," The Integration of Political Communities, eds. Philip E. Jacob and James V. Toscano (Philadelphia: J.B. Lippincott, 1964), p. 4; Charles Pentland also argues that international political integration is a process Meanwhile, Donald Puchala asserted that integration is neither federalism, nor nationalism on the regional level, nor functionalism in the Mitrany tradition, nor power poli tics. Instead, he argued that integration could be best thought of as a set of processes that produce and sustain a
Concordance System, which was peaceful relations among nations.14
Amitai Etzioni provided a different definition of inte gration. Integration is an end product, not a process of getting there. That is, integration is an ability of a unit or system to maintain itself in the face of internal and external challenges.15
1.4 THE MEASUREMENT OF INTEGRATION
It is not likely that integration can be measured by a par ticular indicator.16 I will begin with the measurement
whereby a group of people, organized initially in two or more independent nation-states, came to constitute a political whole which can in some sense be described as a community. See Charles Pentland, International Theory and European Integration (Faber and Faber, 1973), p. 21.
14 Donald J. Puchala, "Of Blind Men, Elephants and Interna tional Integration,” Perspectives on World Politics, eds. Michael Smith, et al. (Londons The Open University Press, 1981), pp. 233-244.
15 Amitai Etzioni, Political Unification: A Comparative Study of Leaders and Forces (New York: Rinehart and Win ston, 1965), p. 330.
16 Leon Hurwitz, Contemporary Perspectives on EC Integra tion: Attitudes, Nongovernmental Behavior, and Collec tive Decision Making (Westport, Connecticut: Greenwood, 1980), p. 4. He argues that international integration 8 using transaction data.17 ' The utility of transaction data for integration dates back to the cybernetic approach, which Karl Deutsch advocated in the 1950s. Even those who doubt the utility of transaction data do not argue that transaction data are useless in order to measure integra tion. Instead, they argue that multiple measurements are needed, besides transaction data. For this purpose, they tend to dissect integration into political, economic, and social integration.
In his pioneering work on integration, Karl Deutsch argue that international community can be ascertained and measured by examining the volume, content, and scope of international transactions between hypothesized community
is a multifaceted societal attribute requiring multivar iate measurement; Leon N. Lindberg, "Political Integra tion as a Multidimensional Phenomenon Requiring Multi variate Measurement," International Organization 24 (Fall 1970}: 649-731.
17 For a discussion of transaction data, Steven J. Brains, "Transaction Flows in the International System," Ameri can Political Science Review 60 (December 1966): 880-98; Barry B. Hughes, "Transaction Analysis: The Impact of Operationalization," International Organization 25 (Win ter 1971): 132-139; Donald J. Puchala, "International Transactions and Regional Integration," International Organization 24 (Fall 1970): 732-763; I. Richard Savage and Karl W. Deutsch, "A Statistical Model of the Gross Analysis of Transaction Flows," Econometrica 28 (July 1960): 551-572; Ingo Walter, The European Common Market: Growth and Patterns of Trade and Production (New York: Frederick A. Praeger, 1967). They have dealt with tou rist traffic, labor flows, capital markets, foreign stu dents, information flow (mail, book transactions, tele phone calls), trade and other economic transactions, business collaboration, and cultural exchanges. 9 members.18 He used transaction data, e.g. absolute figures on mail, trade, tourism, and student interchanges, in order to show whether the EC countries have become a distinct transaction network.
As new indices, the sensitivity to economic development was suggested to replace absolute or relative volumes of transactions between the units. That is, sensitivities of societies to one another could be explained by an analysis of the diffusion of innovation in social patterns and of popular opinions and perceptions.19
Meanwhile, there is another measurement using attitudi- nal data.20 Those who followed the cybernetic approach were primarily concerned with attitudinal changes, while those who dissected integration into separate dimensions tended to take attitudinal data as a part of measurements for political integration. The latter employed multiple measurements for economic integration (e.g. trade), social
18 Karl W. Deutsch, Political Community at the Internation al Level: Problems of Definition and Measurement (Gar dens City, New York: Doubleday, 1954), pp. 46-64.
19 Robert 0. Keohane and Joseph S. Nye, "International Interdependence and Integration," International Poli tics, eds. Fred I. Greenstein and Nelson W. Polsby (Reading: Addison-Wesley, 1975), pp. 368-371.
20 See Stuart A. Scheingold, "Domestic and International Consequences of Regional Integration," Regional Integra tion, eds. Leon N. Lindberg and Stuart A. Scheingold (Cambridge: Harvard University Press, 1971), pp. 395-396. It is difficult to get at causal relationship or account for opportunity costs with survey and aggre gate data. 1 0 integration (e.g. mass and elite transaction), and politi cal integration (a proportion of national budgets and staffs involved in an international institution, interde pendence in policy formation, mutual identity and obliga tion as reflected in elite and mass polls and by bargaining behavior, the degree of security community).21
1.5 INTEGRATION THEORY
Integration theory covers functionalism, neofunctionalism, and federalism. Core elements for each are not exactly the same. Rather, they include different elements for achieving integration. Thus, we will examine what the core elements are, and how they are related to each other.
Meanwhile, a question about the validity of integration theories has been raised. One line of argument is that none of them has any real validity.22 The other line of argument is that federalism is already falsified, while neofunctionalism is yet neither falsified nor proved to have predictive power, which can be applicable outside of
21 Joseph S. Nye, Peace in Parts (Boston: Little & Brown, 1971), p. 49.
22 George A. Codding, Jr., ''Federalism: The Conceptual Set ting," International Organization:____ A Conceptual Approach, eds. Paul Taylor and A.J.R. Groom (New York: Nicholas, 1978), p. 341; Ernst B. Haas, "Turbulent Fields and the Theory of Regional Integration," Interna tional Organization 30 (Spring 1976): 173-212. Haas also raised the same doubt about its validity, after observing the process of integration in the European Community. 11
Europe.23 However, slow as the process of integration is in the European Community, integration efforts continue, and furthermore, they have been showing some progress. In this context, it is time to reexamine integration theory.
David Mitrany's work, A Working Peace System, has been regarded as the starting point of integration theory as well as neofunctionalist thinking. With many unstated assumptions and little theoretical rigor, Mitrany argued for the generation of interdependence according to func tion. That is, interdependence by function was stressed to bring states more closely together in fruitful partnership and to maintain peace in international society. Since there was no institutional emphasis in the functionalist view of integration, its dictum says, form follows function.24
There are two core elements in functionalist views. One is the changing attitudes of people in the direction of greater amity, or towards a growing support for coopera-
23 Ernst B. Haas, "The Study of Regional Integration: Reflection on the Joy and Anguish of Pretheorizing," Regional Integration: Theory and Research, eds. Leon N. Lindberg and Stuart A. Scheingold (Cambridge: Harvard University Press, 1971), p. 19.
24 For a critique, see William Wallace, "Walking Backwards towards Unity," Policy-Making in the European Communi ties, eds. Helen Wallace, et al. (New York: John Wiley & Sons, 1977), p. 302. The false dichotomy between 'politics' and 'welfare', which led functionalists to conclude that politics was fading in importance and the rational pursuit of welfare coming instead to occupy the central focus of government, also misled some critics of functionalism into misunderstanding the character of politics at the Community level. 12 tion. The other is the development between states of a widening range of interdependence.25 That is, functional ists are concerned with pressure from, and changes in mass attitudes in the process of integration, rather than with institutions. In this respect, Mitrany opposed movements toward regional political unification in Western Europe.
Neofunctionalism differs from functionalism in terms of how the former views the role of central institutions, which are distinctively federal.26 Also, the building of community does not depend initially upon mass support in neofunctionalist views. It is directed toward political union.27 In neofunctionalist views, there is no interven ing community, such as a socio-cultural community in a functionalist interpretation, between member states and community. The idea of.neofunctionalism was well reflected in an address by M. Robert Schuman in 1950. He said,
'•Europe will not be made all at once, or according to a single, general plan. It will be built through concrete achievements, which first create a de facto solidarity ...
The policy of coal and steel production will immediately provide for the setting-up of common bases for economic
25 Paul Taylor, "Functionalism: The Theory of David Mitra ny, " International Organization: A Conceptual Approach, eds. Paul Taylor and A.J.R. Groom (New York: Nicholas, 1978), p. 238.
26 R.J. Harrison, "Neofunctionalism," op. cit., p. 254.
2 7 Ibid., p. 256. 13 development as a first step in the federation of Europe."28
Thus, the attempt to build the European Community can be seen as an effort for testing the neofunctionalist view of integration.
Although there were many arguments for federalism prior to World War II, federalism was not seriously considered in the European context. However, World War II provided an impetus for the need for federalism in order to prevent any wars between states.
The core of federalism is to create a supranational gov ernment which shares power with member states. Carl Fried rich argued that, "a federal system is a particular kind of constitutional order. The function it is supposed to serve is to restrain the powers wielded by the inclusive communi ty, as well as those of the communities included within it.
It is ... a kind of division or separation of powers, but applied on a spatial basis."29 However, critics argued that, even though there were successful cases in federal ism, for example, the U.S., it would be unwise to copy those systems in Europe.30 In Federalist views of integra tion, direct structural change was stressed, which is dis tinct from those of functionalism and neofunctionalism.
28 M. Robert Schuman, Declaration of May 9, 1950.
29 Carl J. Friedrich, Man and His Government (New York: McGraw-Hill, 1963), p. 597.
30 John Pinder and Roy Price, Europe after de Gaulle (Mid dlesex, England: Penguine, 1969), p. 176. 14
1.6 INTEGRATION EFFECTS
Integration effects were assumed to be positive by both theorists and practitioners. Based upon this unstated assumption, theorists tried to explain how to define, and how to measure integration, while practitioners tried to achieve integration. However, some questions would be asked. If there are integration effects, how can you recog nize them ? If integration effects are known, are they all positive to the Community ? Would integration effects be measured at the Community, national, or subnational level ?
Although these questions could not be unequivocally answered, the theory of integration effects will be exam ined in this section.
Economic integration was intended to achieve 'balanced expansion' and 'harmonious development' within the Communi ty, as stated in the Treaty of Rome, Article 2. That is, all regions within the Community were intended to benefit from economic integration. It is unlikely, however, that all regions within the Community would have the same amount of benefits from integration,31 although there were only positive effects from integration, and that all regions
31 Robert Keohane and Joseph Nye also argue that economic integration has distributive effects, and that it may look different from the periphery. For example, there may be a mass immigration from the periphery to the cen ter, which would cause brain drain in the periphery. For further discussion, see Robert 0. Keohane and Joseph S. Nye, op. cit., p. 376. 15 would have been affected In the same directions.32 Distin guishing industrial centers from rural peripheries, Herbert
Giersch also argued that the abolition of restriction on trade and factor movement would strengthen the attractive ness of highly industrialized centers for both labor and capital.33 The UN Economic Commission for Europe also cau tioned that the gap between levels of development in the high-income and the low-income areas of Europe would con tinue to widen.34 Since the enlargement of the Community in the 1970s, more concerns were given to how integration would affect regions with different levels of development.
It seemed that the gap between urban centers and rural peripheries has widened in the 1970s.
There are two kinds of integration effects: the spread and backwash effect. Gunnar Myrdal and Albert Hirschman provided the initial notions.35 Due to the spread effect,
32 For further discussion, see Hans O. Schmitt, "The National Boundary in Politics and Economics," Communica tion in International Politics, ed. Richard L. Merritt (Urbana, Illinois: University of Illinois Press, 1972), p. 4. He argues that instead of travelling in opposite directions toward each other, capital and labor will tend to migrate together towards concentrations of capi tal and technology to participate in higher returns there.
33 Herbert Giersch, "Economic Union between Nations and the Location of Industries," Review of Economic Studies 17 (1949): 87-97.
34 UN Economic Commission for Europe, Economic Survey of Europe since 1953 (Geneva, 1954), p. 220.
35 Gunnar Myrdal, Economic Theory and Underdeveloped Regions (London: G. Duckworth, 1957), p. 63; Albert 0. 16 the periphery would have favourable effects from the growth in the center, while, due to the backwash effect, regional inequalities would be exacerbated as a result of integra tion. Stressing the backwash effects, Andre Gorz, in a
Marxian tradition, argued that there would be a growing disparity between better endowed and disadvantaged regions, which economic integration would fail to resolve.36 In contrast, the UN Economic Commission for Europe argued that the spread effects would become more powerful, which would increase demand for the underdeveloped regions' products, rising proportion of mobile external economies, transmis sion of technological knowledge, and relocation of plants in response to wage differences.37 Since the 1970s, when the enlargement of the Community began, more attention was paid to regional imbalances within the Community, and how they would be affected by integration.38 Also, the Paris
Hirschman, The Strategy of Economic Development {New Haven: Yale University Press, 1958), p. 187.
36 Andre Gorz, Strategy for Labor: A Radical Proposal (Bos ton: Beacon Press, 1967), p. 162.
37 The UN Economic Commission for Europe, op. cit., p. 204.
38 See Leon N Lindberg, "Political Integration as Multidi mensional Phenomenon Requiring Multivariate Measure- ment," International Organization 24 (Autumn 1970): 660. He argues that an integration undertaking will not thrive and grow in scope unless it has significant dis tributive consequences for important actors; Also see Ernst Haas, "The Study of Regional Integration: Reflec tion on the Joy and Anguish of Pretheorizing," Regional Integration: Theory and Research, eds. Leon N. Lindberg and Stuart A. Scheingold (Cambridge: Harvard University Press, 1971), p. 13. He argues that differences in the 17 summit recognized that resolving regional imbalances would be needed in order to maximize integration effects within the Community. Member states subsequently agreed to the establishment of a Regional Development Fund in 1974.
Scholars, on the other hand, are keen about negative effects of integration on disadvantaged regions.39
1.7 REGIONAL DISADVANTAGES
Since the enlargement of the Community, imbalances between regions have widened. For example, even in rich provinces of Spain, per capita GDP is only 85 percent of the Communi ty average, while poor provinces reach a mere 36 percent.
For Greece, these percentages are 53 and 23, respectively, and for Portugal 37 and 13. Disadvantaged regions, mean while, have a relatively narrow industrial base, or a large and relatively backward agricultural sector. Thus, disad vantaged regions are clustered into two groups. The one is
level of industrialization sharply influence expecta tions of regional action and make the less developed eager to minimize dependence on the more developed.
39 See W.G.C.M. Haack, "The Selectivity of Economic Inte gration Theories: A Comparison of Some Traditional and Marxist Approaches," Journal of Common Market Studies 21 (June 1983): 381. He argues that the effects of inte gration are likely to increase regional and structural imbalances; Also see Peter Robson, The Economics of International Integration (London: Allen & Unwin, 1987), p. 177. He argues that the formation of a Community may accelerate regional problems; Harvey W. Armstrong, "Com munity Regional Policy: A Survey and Critique," Regional Studies 12 (1979): 513. Integration is likely to inten sify existing regional problems in the EEC. 18 underdeveloped regions which have predominant agricultural employment, e.g. the Mezzogiorno, Ireland, and the French overseas territories. The other is depressed regions with declining industries.
Two kinds of integration effects are discussed in the relationship between core and peripheral regions. One line of argument stresses positive effects of core-peripherty relations. That is, the periphery would have more opportu nities to develop its less developed structures, economic and political, because of the influences of the center within the Community. The other line of argument is con cerned with negative effects of core-periphery relations.
That is, the periphery may remain dependent, by transfer ring sovereign decisions on economic policy to the center, creating new economic hardships and enhancing existing dif ficulties. Cromwell argued that the Community’s decision to open membership to poorer and less stable southern Euro pean countries was made more for political than economic reasons.4 0
In terms of the relations between poor and rich regions,
Wallerstein's center-periphery model posits a hierarchy of economic centers and defines peripheries as territories dependent on economic centers.41 Also, Rokkan, et al. sug
40 William C. Cromwell, "The European Community," Current History 77 (November 1979): 151.
41 Immanuel M. Wallerstein, The Modern World-System II: Mercantilism and the Consolidation of the European 19 gested three distinctive forms of peripherialization; by military conquest and administrative subjection, by econom ic dependence, or by cultural subordination.42
World cities, meanwhile, are likely to further develop the center, since they possess high-order banking and financial institutions, international transport, and commu nications.43 The development of world cities caused migra tion of people and movement of labor into the center. Such phenomena were observed in Italy (from the south to the northern industrial areas), as well as in Spain (to the
Mediterranean coast, Barcelona, Madrid, and the industrial area of Bilbao). In this respect, world cities accentuate the contrast between the core and periphery.
The EC intends to achieve prosperity and security for all member states. It is socially and politically essen tial to redistribute some of the gains from integration to disadvantaged regions. The number of instruments for regional policy has increased, including the European
Social Fund, the European Investment Bank, the European
Regional Development Fund, and the Agricultural Guidance and Guarantee Fund. However, it was not until 1972 that
World-Economy 1600-1750 (New York: Academic Press, 1980).
42 Stein Rokkan, et al., Centre-Periphery Structures in Europe: An ISSC Workbook in Comparative Analysis (Frank furt and New York: Campus Verlag, 1987), p.41.
4 3 Hugh D. Clout, Regional Development in Western Europe (London: David Fulton Publishers, 1987). 20 real political commitment to regional policy was made to help reduce imbalances between regions.
1.8 THE THEORY OF REGIONAL IMBALANCE
The theory of regional imbalance was initially introduced in economics, and later followed in political science and geography. While those in economics were concerned with demand and supply effects of factors of production, e.g. capital and labor, and technical advances and exports in an open market, those in political science and geography were concerned with the center-periphery relations between regions. Some were more static, while others were more dynamic theories. In this section, I will examine core ele ments of the regional imbalance theory, and how they are related to each other. I will examine the neoclassical theory, the export-base theory, the growth-pole theory, and the center-periphery theory.
1.8.1 The Neoclassical Theory
The neoclassical theory is a useful starting point for understanding some of possible sources of regional dispari ties of growth. It is concerned with the growth of output, or the growth of output per capita, to explain regional imbalances. Three elements of regional imbalances are the growth of the labor force, the growth of capital stock, and 21 technical progress.44 The neoclassical theory is, on the other hand, concerned with the effects that interregional mobility of factors of production, e.g. labor and capital, can have on regional disparities.45
Strengths in the neoclassical theory are as follows.
First, it shows that the growth of capital and labor depends not only upon indigenous changes in regional factor supplies, but also upon interregional movements of capital and labour. Second, it makes a distinction between the simplistic one-sector and the two-sector model. The one- sector model stresses the potential significance of three factors, i.e. the labor force, capital, and technique, while the two-sector model provides a more realistic expla nation of regional disparities by considering the effect of export sector on movements of factors of production.
Weaknesses in the neoclassical theory are as follows.
First, in contrast to the export-base theory, which is con cerned with demand factors, the neoclassical theory is only
44 For a discussion of regional growth equation, see Harvey Armstrong and Jim Taylor, Regional Economic Policy and Its Analysis (Southampton, England; Philip Allan, 1978), p. 27. The regional growth equation is Qr = Ar + a Kr + (1-a) Lr where r; region Qs output A; technical progress K: capital L: labor Thus, regional differences would be expressed as fol lows: Qr - Lr = Ar + a (Kr - Lr)
4 5 Ibid., p. 28. 22 concerned with the influence of supply factors. For an
open economy, the demand for export commodities would have
effects on the growth of a region. Second, the neoclassi
cal theory assumes that investors and workers are perfectly
informed about factor prices in all regions, and they would migrate to the most advantaged region. In practice, move
ments of capital and labor are not as easy as they assume.
Third, the neoclassical theory is only concerned with
interregional shifts of factors of production. However, the
growth of output can be also achieved through intersectoral
shifts of factors of production, when there are many com
modities in an economy. Fourth, unlike the growth pole
theory, which considers different returns to scale,46 the
neoclassical theory assumes constant returns to scale in a
model. However, in the long run, returns to scale are
likely to vary.
1.8.2 The Export-Base Theory
The Export-base theory is distinct from the neoclassical
theory, since it stresses the role of demand factors to
explain regional imbalances.47 That is, there are imba
lances between regions with export-base and regions with-
46 That is, more output and jobs can be created due to economy of scale and scope.
47 There is a famous Hecksher-Ohlin theorem, which states that regions will specialize in the production and export of commodities that use their relatively abundant factor intensively. 23 out. The export-base of a region plays a primary role in determining the level of absolute and per capita income in
a region.48 There are, on the other hand, criticisms
against the export-base theory.' First, the export-base
theory only describes the historical development of regions
dependent on raw materials exports, and it provides little
insight into the conditions likely to have a dominant
effect on growth. Second, even though the export-base
theory is concerned with demand factors, it does not pro
vide an explanation about what determines the demand of
export.
1.8.3 The Growth Pole Theory
The growth pole theory is concerned with why economic
development becomes increasingly concentrated in certain
'growth poles' among different regions.49 Unlike tradi
48 For further discussion, see Douglas North, "Location Theory and Regional Economic Growth," Journal of Politi cal Economy (June 1955). North claimed that (1) the concept of a region should be defined in terms of its development around a common export base, and (2) the success of export base has been the determining factor in the growth of regions.
49 The terms, such as growth poles, development poles, growth centers, core regions, and regional centers, are often interchangeable; The concept of 'pole' was ini tially introduced by Francois Perroux, who used 'pole de croissance'. For further discussion, see Francois Per roux, "Note sur la notion des poles de croissance," Economie Appliquee 1 (1955): 307-320; Also, see J.R. Lausen, "On Growth Poles," Growth Centers in Regional Economic Development, ed. Niles M. Hansen (New York: Free Press, 1972), p. 22. He argues that the growth pole concept is the logical derivation of one such Per- rouxian type of abstract spaces; Also, see Macolm J. 24 tional theories of the location, which are concerned with equilibrium, the growth pole theory admits the asymmetry or inequality in interregional movements of capital.50 Also unlike the neoclassical theory, the growth pole theory admits the presence of internal and external economies of scale. Some regions have significant internal economies of scale, which would lead them to gain a competitive advan tage over other regions. The growth pole theory, on the other hand, is distinct from other theories, since it is more concerned with spatial factors.51 The growth pole
Moseley, Growth Centers in Spatial Planning (Oxfords Pergamon, 1974), p. 4. He argues that Perroux champi oned the idea of imbalance in development, in marked contrast to the equilibrium notions of more traditional economist, geographers and sociologists.
50 For this matter, see Stuart Holland, Capital versus the Regions (Londons Macmillan, 1976), pp. 54-59. He argues that not all services are equally mobile between regions, and the bulk of them are not mobile at all. They are in distribution and other activities which are location-bound, so that they cannot be shifted into problem regions. He also argues that the imbalance between job and income structure between regions in mature capitalist economies is increasing rather than decreasing.
51 For further discussion, see Thomas Hermanse, "Develop ment Poles and Related Theoriess A Synoptic Overview," Growth Centers in Regional Economic Development, ed. Niles M. Hansen (New York: Free Press, 1972), p. 174. He argues that the application of the growth pole con cept and theory in a specific geographical and regional context is primarily due to Boudeville, who distinguish es between space and region; Also see J.R. Boudeville, Problems of Regional Economic Planning (Edinburgh: Edin burgh University Press, 1966), p. 16. He distinguishes the programming space from the programming region. The one is a geographically discontinuous, and an economi cally functional, instrument, while the other is a geo graphically continuous tool. 25 theory is often regarded as a conditional theory of region al growth, since it indicates conditions under which accel erated regional development can occur.52 Meanwhile, ques tions were raised about a self-reinforcing process of growth within growth poles. The Mezzogiorno was often men tioned as an example, where there was no self-reinforcing process of growth generation by the Mezzogiorno, which was designated as a growth pole in Italy.53
1.8.4 The Center-Periphery Theory
The center-periphery theory extends the growth pole theory further into a general theory of regional imbalances, stressing spatial factors. It is concerned with cumulative and self-sustaining advantages of the center in the process of development, especially stressing the role of agglomera tion and external economies.5* The center-periphery theory was initially developed by Gunnar Myrdal and Albert Hirsch-
52 For further discussion, see Stuart Holland, op. cit., p. 51.
53 In the same context, Naylon argues tht growth pole strategy has a limited effect on regional inequalities and has exerted little influence further afield than its own municipal districts. See John Naylon, "Iberia," Regional Development in Western Europe, ed. Hugh D. Clout (New York: John Wiley & Sons, 1975), p. 305.
54 For further discussion, see Harry W. Richardson, Region al Growth Theory (New York: Macmillan, 1973), p. 57; David M. Smith, Industrial Location: An Economic Geo graphical Analysis (New York: John Wiley & Sons, 1981), p. 403. Economic growth can be transmitted from the core into the periphery through a hierarchical system of settlements, the creation of which helps to achieve the spatial integration of the economy. 26 man.5 6
The thrust of Myrdal's theory is based upon the notion of cumulative causation. That is, once a particular region has moved ahead of others, new increments of growth will focus on the already expanding region because of their derived advantages.
Divergence between favoured and disadvantaged regions is likely to become wider when there is an interchange between the two regions. Once development has been sparked in fav oured regions, it will eventually result in flows of labor, capital and commodities from disadvantaged regions. This is called the backwash effects because of their impact on the backward hinterland. Disadvantaged regions tend to lose their workers and local capital to favoured regions.
At the same time, markets in disadvantaged regions are swamped by cheap manufactured goods which throttle local industry such as traditional artisan manufacturing. Thus, backwash effects stifle economic growth in disadvantaged regions and stimulate and sustain further development in favoured regions.5 6
55 Gunnar Myrdal, Economic Development and Under- Development Regions (Bombay: Vora, 1957); Albert 0. Hirschman, The Strategy of Economic Development (New Haven: Yale University Press, 1958).
56 Allan Rodgers, Economic Development in Retrospect: The Italian Model and Its Significance for Regional Planning in Market-Oriented Economies (New York: John Wiley & Sons, 1979). 27
A relation between integration and regional disadvantage was illuminated in Myrdal's argument: "To a low level of
economic development correspond low levels of social mobil
ity, and communication. This implies greater impediments
to the spread effects."57
A relation between disadvantaged regions and integration
was also illuminated in Hirschman's argument. He suggested
the notion of polarization effects and trickle-down
effects, which were identical to backwash effects and
spread effects, respectively. Disadvantaged regions would
be likely to have more polarization effects and less
trickle-down effects. He argued that these would be
obstructive forces to integration.
57 Gunnar Myrdal, Ibid., p. 63. 28
1.9 HYPOTHESES
Hypothesis 1; The greater its economic disadvantage, the less economically and politically integrated the region.68
Hypothesis 2: The positive relationship between integra tion, economic and political, and economic advantage is stronger in urban areas than in rural areas.59
58 For a discussion of the relationship between regional disadvantage and integration, Nobert Vanhove and Leo H. Klaassen, Regional Policy: A European Approach (Brook field, Vermont: Gower, 1987). E.C. Hallett, "Economic Convergence and Divergence in the European Community: A Survey of the Evidence," Economic Divergence in the European Community, eds. Michael Hodges and William Wal lace (London: Allen & Unwin, 1981). Sergio Barzanti The Underdeveloped Areas within the Common Market (Prince ton: Princeton University Press, 1965). Harvey Arm strong and Jim Taylor Regional Economics and Policy (Oxford: Philip Allan, 1985). William Molle and Jean Paelinck, "Regional Policy," Economic Policies of the Common Market, ed. Peter Coffey (London: Macmillan, 1979).
59 For a discussion of the effects of integration on regions, Herbert Giersch, "Economic Union between Nations and the Location of Industries," Review of Eco nomic Studies 17 (1949): 87-97. Maurice Bye, "Customs Unions and National Interests," International Economic Papers 3 (1953): 208-34. UN Economic Commission for Europe, Economic Survey of Europe since 1953 (Geneva, 1954). Francois Perroux, Europe without Strands (Paris: University of France Press, 1954). Robert 0. Keohane and Joseph S. Nye, "International Interdependence and Integration," International Politics, eds. Fred I. Greenstein and Nelson W. Polsby (Reading, Massachusetts: Addison-Wesley, 1975), pp. 363-414. 29
1.10 METHODOLOGIES
I employ multivariate statistical analysis in order to examine the relationship between regional disadvantage and integration, and between integration and economic advantage in urban and rural areas.60
Regional data has been cumulated for the past twenty years in the Community. Based upon these data, multivari ate linear models are formulated to explain the relation ship between regional disadvantage and integration, and between integration and economic advantage in urban and rural areas. Data61 is collected from various issues of
Eurostat and Eurobarometer publications, and public opinion surveys conducted by Ronald Inglehart.
60 Refer to Chapter V for a discussion of methodology.
61 Refer to Section 5.5 in Chapter V for data sources. CHAPTER II
INTEGRATION EFFORTS IN THE EUROPEAN COMMUNITY
2.1 INTRODUCTION
Throughout the history of Europe, there were many efforts for integrating or unifying the continent. Adolf Hitler tried to unify the continent in the 1930s, and Bonapart
Napoleon also tried to unify the continent in the early nineteenth century. Also, the Roman Empire and the Holy
Roman Empire tried to unify the continent of Europe. How ever, those efforts are not likely to be understood as integration, which is intended for security, peace, and prosperity in the continent.62 On the other hand, the need
for integration was argued by many politicians, including
Winston Churchill and Robert Schuman, during and after
World War II. That idea of integration was gradually devel oped and fructified in 1951, when six countries, including
France, West Germany, Italy, Belgium, the Netherlands, and
Luxembourg, agreed to join the European Coal and Steel Com munity (ECSC).
62 Chadwick F. Alger, "Analytical Approaches: Functionalism and Integration," International Social Science Journal 29 (1977): 73-93. Joining nations together by force is not integration (p. 80) .
- 30 - 31
Efforts for integration continued after the creation of the ECSC in 1951. The six member states also agreed to cre ate the European Economic Community (EEC) and Euratom by including more issue areas63 in which member states had common interests, in the Rome Treaty in 1957. Although they were mainly concerned with economic issues in the Treaty, it was believed that political integration would be an ultimate goal for member states to achieve.64
Until the early 1970s, efforts for economic and politi cal integration did not go beyond Euratom and the EEC, in which no new member states were accepted, besides the orig inal Six member states. Aside from de Gaulle's refusal to
63 For a discussion of issue area, see James N. Rosenau, "Foreign Policy as an Issue Area," Domestic Sources of Foreign Policy, ed. James N. Rosenau (The Free Press, 1967), pp. 11-50. Issue area is a category of issues that affects a political process in sufficiently simi lar ways to justify being clustered together.
64 Leon Lindberg also argued that the fundamental motiva tion was political, although the stated goal of the EEC was the creation of a customs union and the achievement of a significant measure of integration. It is, in the words of the Treaty, to establish "an ever closer union among the European peoples." (See the Preamble of the Treaty in Appendix A.) He also suggested that the Trea ty of Rome had a wide potential for political integra tion because it provided the setting up of a complex central decision-making machinery, which, though formal ly dependent upon the will of the Member States, did provide for an independent source of initiative and impulsion toward the Treaty's goal. See Leon N. Lind berg, The Political Dynamics of European Economic Inte gration (Stanford: Stanford University Press, 1963); Robert J. Shepherd, Public Opinion and European Integra tion (Lexington: D.C. Heath, 1975), p. 1. He also argued that the preamble to the Treaty of Rome referred to the eventual political unification. accept the United Kingdom into the EEC, there basically existed a deep gap between national policies and Community policy. That is, any member state was primarily interested in its national interest, prior to the Community interest.
During the first oil shock, the gap between them was clear ly shown. On the other hand, the enlargement of the EEC in
1973 can show that the majority of Europeans still did not lose a hope for integration, even with a gradual pace.
Thus, by adopting new member states, including the United
Kingdom, Ireland and Denmark, the scope of issue areas should be expanded, besides the size of the Community.
Also, the Community began to realize that it had to deal with new problems, which were due to regional imbalances in the Community. The second enlargement of the Community facilitated regional imbalances, by adopting new member states, which were less developed than original member states.
In a nutshell, I will examine the historical background of integration efforts since World War II, because those efforts were really oriented toward peace, security, and prosperity in Europe. Although the past forty-five years might be divided into many possible periods, five periods will be introduced. The first period covers from the end of
World War II until the establishment of the European Coal and Steel Community (ECSC) in 1951, and the second period 33 from the establishment of the ECSC until that of the Euro pean Economic Community (EEC) and European Atomic Energy
Community (Euratom) in 1957. The third period will focus on the first enlargement of the Community in 1972. The fourth period will focus on negotiations with Mediterranean countries for the second enlargement of the Community in the 1970s. Lastly, the fifth period will focus on efforts for political cooperation in the 1980s.
2.2 THE FIRST PERIOD
Although there were not integration efforts for the entire continent, there was a thorough attempt at economic inte gration in the interwar period, which was the Belgium-
Luxembourg Economic Union in 1922. This initial effort made progress, and in 1944, an agreement was made for the estab lishment of a customs union between Belgium, Luxembourg, and the Netherlands, and subsequently, an economic union was established in 1947. During the fifties, economic inte gration was accelerated between the Benelux countries. The
"Agreement on the Status of Pre-economic Union" of 1949 proposed a system of cooperation between industrial sectors of the three economies in order to prepare the way for more binding action.
The Benelux integration, on the other hand, was an attempt for economic integration on a limited regional 34 scale in the continent. Right after World War II, new thinking for a United States of Europe was proposed by Win ston Churchill in 1946. In his speech at the University of
Zurich, on September 19, 1946, he stated:
We must build a kind of a United States of Europe. In this way only will hundreds of mil lions of toilers be able to regain the simple joys and hopes which make life worth living. The process is simple. All that is needed is the resolve of hundreds of millions of men and women to do right instead of wrong and gain as their reward blessing instead of cursing.65
In terms of how a United States of Europe would be achieved, Churchill stated:
The first step in the re-creation of the European family must be a partnership between France and Germany. In this way only can France recover the moral leadership of Europe. There can be no revi val of Europe without a spiritually great France and a spiritually great Germany.66
On the other side of the Atlantic, Secretary of State
George Marshall proposed the first systematic effort at
European integration in his address at Harvard University in June 1947.
the U.S policy would be ..... neither fitting nor effacious for this government to undertake to draw up unilaterally a program designed to place Europe on its feet economically. This is the business of the Europeans. The initiative, I think, must come from Europe.67
66 Uwe Kitzinger, The European Common Market and Community (New York: Barnes & Noble, 1967), p. 34.
6 6 Ibid., p. 36.
67 Finn B. Jensen and Ingo Walter, The Common Market: Eco nomic Integration in Europe (Philadelphia and New York: J.B. Lippincott, 1965), p. 8. 35
Marshall, in his speech, encouraged the European govern ments to formulate a definite program of joint action to accelerate economic recovery, which would be a precondition to substantial U.S. aid.
Encouraged by Marshall's speech, sixteen nations met in
Paris in 1947, and joined the European Recovery Programme.
They formulated a plan to raise both industrial and agri cultural output to levels considerably above prewar produc tion with U.S. aid. They also founded the Organization for
European Economic Co-operation (OEEC) in 1948, and subse quently in May 1948, a Congress was held in the Hague, which issued a resolution asserting that "it is the urgent duty of the nations of Europe to create an economic and political union in order to assure security and social progress."68
The OEEC was the first effective instrument for European
Cooperation because economic plans of member states were to be integrated into an overall recovery program to ensure economic harmony and to avoid unnecessary duplication of productive facilities.69 The OEEC also embodied the first steps toward multilateralism, although many of its works were accomplished through bilateral agreements between mem ber states.
6 8 The Congress brought together such leading European Fed eralists as Spaak, Monnet, de Gasperi, and Bidault, each calling for both economic and political unification.
69 Ibid., p. 9. 36
In 1949, the Council of Europe was instituted by ten states at Strasbourg. It was remarkable, in that it was a meeting place where the advocates of a United Europe could get together and debate the Community future. However, it still lacked in federal authority.
2.3 THE SECOND PERIOD
As a new approach to Germany, Robert Schuman, French For eign Minister, proposed to place French and German coal and steel under a Common High Authority.70 In his Declaration of May 8, 1950, Schuman stated:
The pooling of coal and steel production will immediately provide for the setting-up of common bases for economic development as a first step in the federation of Europe, and will change the destinies of those regions which have long been devoted to the manufacture of munities of war, of which they have been the most constant victims. The solidarity in production thus established will make it plain that any war between France and Germany becomes, not merely unthinkable, but materially impossible. The setting-up of this powerful production unit, open to all countries willing to take part, and eventually capable of providing all the member states with the basic elements of industrial production on the same terms, will lay the real foundations for their economic unification.71
As the first effective experiment in supranational economic integration,72 the European Coal and Steel Community (ECSC)
70 That is, a new approach was intended to achieve that Germany would be intertwined with the rest of Europe.
71 Uwe Kitzinger, op. cit., p. 38.
72 It even had the ability to tax. 37
Treaty was signed in Paris by six states,73 including Bel gium, France, Germany, Italy, Luxembourg and the Nether lands. The mission of the ECSC was stated in Article 2.
The mission of the Coal and Steel Community is to contribute to economic expansion, the development of employment and the improvement of the standard of living in the participating countries through the institution, in harmony with the general economy of member states of a common market.74
The success of the ECSC encouraged further efforts for integration, since "it proved, on a limited scale, that supranational economic integration is not only practicable, but also beneficial in the long run for the economic wel fare of the participating countries."75
73 Thus, it was sometimes called a 'Little European' approach. Britain declined to join the ECSC because supranational control over its mines and steel mills would be incompatible with national welfare; Also see Christopher Tugendhat, Making Sense of Europe (Middle sex, England: Viking, 1986), p. 33. He argues that, in the years between 1945 and 1950 the British had shown that they did not share the aspirations taking root on the continent; A statement by the National Executive at the Labour Party in June 1950 would reflect the under standing of European unity.
In every respect except distance we in Britain are closer to our kinsmen in Australia and New Zealand on the far side of the world than we are to Europe. We are closer in language and in origins, in social habits and institutions, in political outlook and economic interest.
74 That is, the tariffs and quotas on the movement of coal, steel, and iron ore within the Community were removed; subsidies were tapered off; take measures to end dis criminatory freight rates; establish common rules for price policies; regulate cartels and concentrations.
75 Finn B. Jensen and Ingo Walter, op. cit., p. 19. 38
On the other hand, Rene Pleven, French Prime Minister, proposed a European Defense Community (EDC) in October
1950, and the EDC Treaty was signed in Paris by the six
ECSC states in May 1952. The Constitution of the EDC was formulated to achieve 'European Political Community', where wide political powers were given based upon federal princi ples and a popular mandate through an elected parliament.76
However, the French National Assembly rejected the EDC
Treaty in August 1954, because it feared the potential loss of political and military sovereignty and the rebirth of the German wehrmach.
Another effort was made through British initiative, excluding supranational characteristics which the ECSC and the EDC had in common. In October 1954, the Western Europe an Union (WEU) was formed, including France, Britain, the
Benelux and Germany.77 It was intended to deal with secur ity matters, and had intergovernmental characteristics. In the mid-fifties, the pace of integration was slowing down.7 8
76 It was initially proposed that national military forces would be integrated with those of other countries, and later, a proposal for a European Political Community was added.
77 Five states except Germany signed in 1948 the Brussels Treaty, for the purpose of promoting collective defense and improving cooperation among them.
78 Finn B. Jensen and Inngo Walter, op. cit., p. 11. They also argued that, by 1955 the pace of economic integra tion was diminishing significantly. 39
In June 1955, the foreign ministers of the Six countries met at Messina, Italy, and organized a committee of experts under Paul-Henri Spaak. The committee was to formulate pro posals for the establishment of the atomic energy pool and an economic union. The Spaak report (1956) served to strengthen the federative nature of economic union. It emphasized eliminating distortions of competition, coordi nating national economic policies, integrating agriculture, and forming an economic union. Following these proposals,
negotiations were undertaken with a view to creating an
Economic Community and an Atomic Energy Community.
Besides national governments, unofficial organizations
also contributed to fostering ideas of European unifica
tion. Since 1955, Jean Monnet's Action Committee for a
United States of Europe had been the most important of
those organizations. In May 1957, the Six signed the Treaty
of Rome that officially established the European Economic
Community (EEC) and the European Atomic Energy Community
(Euratom).79 The EEC (the Common Market) provided the pos
sible nucleus for an economic union, however, "its purpose
79 In a Treaty, there are agreements on the creation of a customs union, with no barriers to trade among them selves; the creation of a common tariff on imports from the rest of the world; the provision for free movement for labor and capital; the coordination of financial and economic policies; the establishment of common rules concerning competition; the establishment of funds to help finance investment and economic adaptation in Europe and to aid overseas territories associated with the Community. 40 was not limited to economic integration but included the increasing convergence of the member-nations in political, social, and military matters as well.1'80 The preamble of the EEC reflected a determination 'to establish the founda tions of an even closer union among European peoples'.
2.4 THE THIRD PERIOD
Over a ten-year period Britain had membership negotiations with the Community, and finally became a member in 1972.
Thus, we will focus on the first enlargement of the Commu nity. Britain joined the WEU, while she declined to join
the ECSC, and stood aloof from negotiations in the EDC, the
EEC, and Euratom, because she was unwilling to accept sup
ranational institutions and the idea of an eventual United
States of Europe. After the Common Market was instituted,
Britain proposed a free trade area that would include the
Six and the other members of the OEEC.81 However, negotia
tions on a free trade area failed. Subsequently, Britain
joined with Denmark, Sweden, Norway, Switzerland, Austria
and Portugal to form the European Free Trade Association
(EFTA) in January I960.82
80 Finn B. Jensen and Ingo Walter, op. cit., p. 22.
81 That is, the proposal of a free trade area included gradual removal of tariffs and quotas on trade in indus trial products, and a separate treatment of agricultural trade. Also, it included that each member states would keep its own tariff and trade policy in relations with the rest of world. 41
In July 1961, Britain requested negotiations with the
Six in order to become a full member of the Community.
Following Britain, some EFTA member states, including Den mark, Norway and Ireland, applied for full membership, and others, such as Austria, Sweden and Switzerland, applied
for association. For Britain, views of Prime Minister
Harold Macmillan and Labour opposition leader Hugh Gaits-
kell would reflect the British position during negotiations
for the membership. In July 1961 Macmillan stated:
no British government could join the EEC without prior negotiations with a view to meeting with needs of the Commonwealth countries, of our EFTA partners, and of British agriculture.
In October 1962 Gaitskell stated:
if we could carry the Commonwealth with us, safe guarded, flourishing, prosperous; if we could safeguard our agriculture and our EFTA friends were all in it; if we were secure in our employ ment policy, and yet have this wider, closer, association with Europe, it would indeed be a great ideal.
In January 1963, President de Gaulle clearly stated that
France would not agree to Britain becoming a member of the
Community, because Britain was not part of the essential
Europe and her ties were with the Commonwealth and the U.S.
82 The EFTA was called a 'Outer Seven'. It was formed along 'functionalist' lines; Also see William Diebold, Jr., ''The Process of European Integration," The Common Mar ket: Progress and Controversy, ed. Lawrence S. Krause (Inglewood Cliffs: Prentice-Hall, 1964), p. 38. He argues that the EFTA is a move to improve the chances of striking a bargain with the Six; Also, see Finn B. Jen sen and Ingo Walter, op. cit., p. 23. They argue that the EFTA is a threat of European fragmentation in the form of economic blocs. 42
In his press conference in January 1963, de Gaulle stated:
For example, the means by which the people of Great Britain nourish themselves is in fact by importing foodstuffs purchased at low prices in the two Americas or in the former dominions, while still granting large subsidies to British farmers. This means is obviously incompatible with the system the Six have quite naturally set up for themselves.83
On the other hand, the Merger Treaty was signed in 1965, which would establish a single Council and a single Commis sion of the European Communities. However, many proposals for supranational development for the Community were rejected, because of French opposition. In May 1967 Brit ain reapplied to join the Community, and Ireland, Denmark, and Norway followed suit. Even though Britain displayed greater enthusiasm than before, not only as far as economic integration was concerned, but also on the highly contro versial issue of political unification,84 the Council of
Ministers failed to reach agreement on their memberships in the Community.
In December 1969 the Hague summit made agreements on a number of important matters, which would include strength ening the Community institutions, enlarging the Community, establishing economic and monetary union by 1980, and developing political cooperation.
83 Uwe Kitzinger, op. cit., p. 184.
84 Derek H. Hene, Decision on Europe: An Explanation of the Common Market (London: Jordan & Sons, 1970), p. 138. 43
Since the Hague summit, the Community was more concerned with the enlargement issue than before. In 1970 it signed a preferential trade agreement with Spain. It also reopened membership negotiations with Denmark, Ireland, Norway and
Britain. Two years later, the Treaty of Accession to the
European Communities was signed in Brussels by the Prime
Ministers of Denmark, Ireland, Norway and Britain. In both
Denmark and Ireland, Community accession was approved in a
referendum,85 whereas in Norway, the referendum resulted in
53.5 percent being cast against entry and 46.5 percent in
favour. As a result, Norway decided not to join the Commu
nity, and Britain, Denmark, and Ireland became members of
the Community on January 1, 1973.86
85 For further discussion, see Keesing's Research Report, The European Communities: Establishment and Growth (New York: Charles Scribner's Sons, 1975). The British Labour Party had shown continued opposition to entry into the European Communities on the terms negotiated by Mr. Heath's Government (p. 35). However, a majority vote was in favour of continued Community membership in British referendum in June 1975; In Denmark, ratifica tion of the Treaty of Accession was approved by Parlia ment on September 8, 1972, by 272 votes to 95, with 1 blank vote. Denmark entry into the Community was also approved in a referendum on October 3 by 63.3 percent of the votes cast to 36.7 percent (p. 36); In Ireland, those in favour constituted over 58 percent of the electorate and those against about 12 percent (p. 36).
86 See William Wallace, ''Walking Backwards towards Unity," op. cit., p. 316. The first enlargement, absorbing Britain, Ireland and Denmark with their distinctive pat terns of national policies and external ties into a Com munity not well enough organized for early adjustment of its established practices, provided a substantial shock to the Community institutions. 44
2.5 THE FOURTH PERIOD
Efforts were also made for cooperation on foreign policy matters. In October 1970 the Community accepted the Davig- non report on political cooperation. However, there was
little progress toward political cooperation. For example,
there was no cooperation among member states in the Commu
nity during the Yom Kippur war and subsequent oil crisis.
The Dutch displayed more sympathy with Israel than most
other Europeans as a result of which the Netherlands became
a particular object of Arab hostility and was subjected to
oil boycott. Britain and France, on the other hand, scram
bled all over the Gulf to make special deals with the sup
pliers and it was left to multinational oil companies to
make sure that the Dutch and others without special influ
ence in the Middle East were all right.87
In October 1972 future guidelines for the Community were
set in the Paris summit. They included a pledge to trans
form the relations of member states into a European Union
by 1980, and an undertaking to institute a new regional
development fund to correct the structural and regional
imbalances which might affect the realization of economic
and monetary union. Two years later, details of a European
Regional Development Fund were agreed in the Paris summit.
Also, the principle of direct election to the European Par
87 Christopher Tugendhat, op. cit., p. 62. 45 liament (EP) was agreed.88 In order to strengthen the
European Parliament budgetary powers, the Treaty amending
Certain Financial Provisions of the Treaties was signed in
July 1975. In 1979 the first direct elections to the EP were held, and the European Monetary System (EMS) came into operation.
Efforts for enlarging the Community were also made on the Mediterranean dimension. Greece has had an association agreement with the Community since 1961.89 From 1967 to
1974 the monarchy was replaced by a military dictatorship.
During this period relations with the Community were sus pended and not resumed until 1975 when Greece, having
restored a democratic government, applied to join the Com munity as a full member. The Accession Treaty between the
Community and Greece was signed in May 1979, and Greece
became a member in January 1981.
The Community made a preferential trade agreement with
Spain in 1970, and established a free trade area with Por
tugal in 1973. The revolution in Portugal of April 1974
88 See Horst Reichenbach, "A Politico-economic Overview,'1 Integration and Unequal Development: The Experience of the EEC (New Yok: St. Martin's, 1980), p. 92. The direct election to the European Parliament and the for mation of European parties will contribute to political integration.
89 See Richard Pomfret, Mediterranean Policy of the Europe an Community: A Study of Discrimination in Trade (Lon don: Macmillan, 1986), p. 18. He argues that the Athens accord provided for the establishment of a customs union over a 22-year period for harmonization of policies and for the creation of joint institutions. 46 removed a political barrier to closer links with the Commu nity and the Potuguese Government hoped for improvement in her free trade agreement. This hope remained unfulfilled during 1974-1975 because of French and Italian opposition to any concessions on Portuguese agricultural exports, but the Community did express a desire for closer ties and showed its good will by granting financial aid in October
1975.90
Negotiations with Spain had been broken off by the Com munity in October 1975 after some Basque separatists were executed. However, Franco's death and the return of a con stitutional monarchy removed a political obstacle to closer ties with the Community.91 Portugal and Spain applied for full membership in the Community in March and July of 1977, and they became members in 1986.
2.6 THE FIFTH PERIOD
Further efforts were made in order to strengthen European political cooperation.92 In October 1981, agreement on the
90 Ibid., p. 22.
91 Among member states, the Benelux countries did not want contact with Franco's Spain.
92 See William Wallace and David Allen, op. cit., p. 244. The trend was towards a closer association of the polit ical structure with the Community institutions. This might culminate in the creation of a permanent secretar iat as a new branch of the Council Secretariat and the gradual assimilation of political cooperation into the Community process - the opposite outcome from that feared in 1969-70. 47
'London Report' was made for political cooperation. On the other hand, there are three cases in which the Community showed different degrees of cooperation among themselves.
First, when martial law was imposed in Poland in December
1981, the Community showed slow response. In other words, the crisis in Poland served to expose differences between member states rather than to demonstrate a common resolve.
Second, when Argentina invaded the Falkland Islands in
April 1982, the Community showed cooperation between member states. Under Article 113 of the Treaty of Rome, the Coun cil of Ministers, acting on a proposal from the Commission, could swiftly adopt a regulation suspending all imports from Argentina that had legally binding force on all member states. Third, when the Korean airliner was shot down by
Soviet fighters in September 1983, the Community barely reacted at all.93
In December 1985, the Luxembourg European Council meet ing agreed to the principles of the Single European Act.94
The Act incoporated Treaty revisions, gave European Politi cal Cooperation legal status, and established the comple tion of the internal market by 1992 as a top priority. In
February 1988, the European Council agreed to increase and
93 For more discussion, see Christopher Tugendhat, op. cit., pp. 63-65.
94 The Single European Act inserts regional policy into the Treaty of Rome for the first time. It offers hope of a doubling of the ERDF as well as an increased emphasis on concentrating resources in the poorest regions. 48 widen the Community's budgetary base, and to reduce expen diture on the CAP and to double expenditure on the regional and social funds.95
2.7 CONCLUSION
This chapter was concerned with how the Community was formed, what the main barriers are for the enlargement of the Community, and whether efforts for political integra tion, besides economic integration, exist. The ECSC was the first effective attempt for economic integration, and it was a 'Little European Approach', since the Six joined the
Community and Britain declined. Through a rollercoaster of integration efforts in the 1950s, the EEC and Euratom were instituted in the Treaty of Rome, while Britain still stood aloof from negotiations for them. However, Britain had mem bership negotiations with the Community over the ten year period in the 1960s. The Hague summit provided a spring board for the Community to accept new members, which resulted in the first and second enlargement.
The enlargement of the Community, on the other hand, drew concerns about the impacts of regional imbalances on integration. The Paris summit in 1972 realized that the
Community should provide measures for 'balanced growth' and
95 Social fund is intended to help member states with training and retraining scheme, while regional develop ment fund is intended to help them develop their poorer and isolated regions. 49
•harmonious development' for all regions within the Commu nity. In 1974 the Regional Development Fund was formally instituted in the Paris summit, in order to reduce regional imbalances. CHAPTER III
REGIONAL DISADVANTAGES IN THE EUROPEAN COMMUNITY
3.1 INTRODUCTION
The Treaty of Rome stipulated that the Community intended to achieve 'balanced growth' and 'harmonious development' in Article 2. There exist, however, gaps between developed and less developed areas, or between rich and poor areas, within the Community. Less developed or poor areas are called disadvantaged areas.96 Consequently, some questions are asked. Have the gaps widened or narrowed in the last forty years, during which the Community has enlarged from the Six to the Twelve ? What are effective indicators of regional imbalances ? What instruments have been used for the Community to redress regional imbalances ? These ques tions will be examined in this chapter.
96 Such terms as problem regions, development regions, and programming regions can also be understood as related to disadvantaged regions or areas. For problem regions, see David Smith, Industrial Location; An Economic Geo graphical Analysis (New Yorks John Wiley & Sons, 1981), p. 387; For development regions, see J.R. Friedmann, Regional Development - A Case Study of Venezuela (Cam bridge: MIT Press, 1966); For programming regions, see J.R. Boudeville, Problems of Regional Economic Planning (Edinburgh: Edinburgh University Press, 1966).
- 50 - 51
It was not until the 1970s that the Community began to realize that it needed to redress regional imbalances in order to achieve harmonious development within the Communi ty. Among new members, Ireland was heavily dependent upon agriculture for her GDP, and Britain also had many depressed areas. Among the original Six there were also many regions, which were depressed or less developed. For example, they were the Mezzogiorno in Italy, Wallonia in
Belgium, and south and west regions in France. When Greece,
Portugal and Spain became new members for the Community, the gap between rich and poor areas further widened.
The Community came up with various instruments to resolve regional imbalances. Some of them were already cre ated by the Treaty of Rome, while others were later insti tuted by member states. However, it was not until 1974 that the European Regional Develpment Fund (ERDF) was created.
In the last section, I will examine how the ERDF has been used to resolve regional imbalances within the Community.
3.2 DEFINITION OF REGIONS
There may be many ways to define regions in the Community.
On the one hand, when regions are too broadly defined, we may run the risk of losing distinctive characteristics for each and every region. Also, it would be hard to distin guish broadly defined regions from states. On the other 52 hand, when regions are too narrowly defined, questions arose about the availability of data for those regions.
Thus, in order to define Community regions to be used in this study, those questions will be considered at the same time.
Regions in this study will be based upon administrative units. That is, considering population and/or territory, regions will group together into some administrative units.97 For example, when the size of a territory is too small, e.g. Luxembourg, or when there is too small of a population, e.g. Denmark, Ireland, to be sub-divided, they will be regarded as one region, respectively. Regions defined in this study are as follows.
1. Belgium
(1) Flanders
(2) Wallonia
(3) Brussels
2. Denmark
3. Germany
(1) Schleswig-Holstein
(2) Hamburg
(3) Niedersachsen
(4) Bremen
(5) Nordhein-Westfalen
97 Actually, regions defined in this study are related to Level I regions of territorial units, according to the Eurostat. 53
(6) Hessen
(7) Rheinland-Pfalz
(8) Baden-Wurttemberg
(9) Bayern
(10) Saarland
(11) West Berlin
4. Greece
(1 Voreia Ellada
(2 Kentriki Ellada
(3 Anatolika kai notia nisia
5. Spain
(1 Noroeste: Galicia, Asturias, Cantabria
(2 Noreste: Pais Vasco, Navarra, Rioja, Aragon
(3 Madrid
(4 Centro: Castilla-Leon, Castilla-La Mancha, Extemadura
(5 Este: Cantaluna, Comunidad Valenciana, Baleares
(6 Sur: Andalucia, Murcia, Ceuta y Melilla
(7 Canarias
6 . France
(1 Ile-de-France
(2 Bassin Parisien
(3 Nord-pas-de-calais
(4 Est
(5 Ouest
(6 Sud-Ouest
(7 Centre-Est (8) Mediterranee
7. Ireland
8. Italy
(1) Northwest
(2) Lombardia
(3) Northeast
(4) Emilia-Romagna
(5) Cetro
(6) Lazio
(7) Campania
(8) Abruzzi-Molise
(9) Sud: Calabria, Basilicata, Apulia
(10) Sicily
(11) Sardinia
9. Luxembourg
10. The Netherlands
(1) Noord-Nederland: Groningen, Friesland, Drenthe
(2) West-Nederland: Utrecht, Noord-Holland, Zuid-Holland
(3) Zuid-Nederland: Noord-Brabant, Limbourg, Zeeland
(4) Oost-Nederland: Overijssel, Gelderland
11. Portugal
(1) Norte do Continente
(2) Sul do Continente
(3) IIhas
12. The United Kingdom
(1) North 55
(2) Yorkshire and Humberside
(3) East Midlands
(4) East Anglia
(5) South-East
(6) South-West
(7) West Midlands
(8) North-West
(9) Wales
(10) Scotland
(11) Northern Ireland
3.3 REGIONAL IMBALANCES WITHIN THE COMMUNITY
Even before the first enlargement of the Community in 1973, there existed regional imbalances between regions in the
Community. Southern regions in Italy, e.g. Campania, Sici ly, Sardinia, Abruzzi, Molise, and Sud (i.e. Calabria,
Basilicata, Apulia), were much less developed than any oth er regions in the Six. The proportion of agricultural employment and emigration rate were very high compared with the Community average. Meanwhile, regional imbalances have widened within the Community since the enlargement in the
1970s. The impacts of regional disadvantages on integra tion will be examined in chapter VI.98
98 There is a caution against negative effects of regional imbalances. See Horst Reichenbach, "A Politico-economic Overview," Integration and Unequal Development:____ The Experience of the EEC, eds. Dudley Seers and Constantine Vaitsos (New York: St. Martin's, 1980), p. 96. He 56
What kind of indicators should be used in order to meas ure regional imbalances in the Community ? Even though many
indicators could be used, I will use five indicators, i.e.
GDP per capita, GDP per worker, unemployment rate, the pro portion of agricultural employment, and net migration.09
argues that the 'lack of convergence' will make further progress impossible; Also see Sergio Barzanti, The Underdeveloped Areas within the Common Market (Prince ton: Princeton University Press, 1965), p. 81. He argues that regional inequalities within the Community are very evident. They represent obstacles, brakes, and potentially disruptive elements in the way of unifica tion. They are an invitation to protectionism, escape clauses, preferential treatment, subsidies, and all the factors which go against a liberalization of trade.
99 See Wolfgang Stabenow, "Regional Policy in the EEC," Regional Policy and Planning for Europe, ed. Morgan Sant (Westmead, England: Saxon House, 1974), pp. 71-86; Geof frey Denton, "Regional Divergence and Policy in the Com munity, with Special Reference to Enlargement," Economic Divergence in the European Community eds. Michael Hodges and William Wallace (London: Allen & Unwin, 1981), p. 136. He suggests many indicators, such as unemployment rates, activity rates, income per head, rates of emigra tion, rates of economic growth, age and class structure of the population, industrial structure, degree of spa tial congestion and environmental condition; E.C. Hal- lett, "Economic Convergence and Divergence in the Euro pean Community: A Survey of the Evidence," op. cit., pp. 16-31. He suggests inflation rate, GDP per capita and exchange rate; Paul C. Cheshire and Dennis G. Hay, Urban Problems in Western Europe (London: Unwin Hyman, 1989), pp. 43-86. He suggests income, unemployment rate, migration index, and index of travel demand; Francesco Vito, "Problems of the Underdeveloped Regions of Italy," Backward Areas in Advanced Countries ed. E.A.G. Robinson (London: Macmillan and St. Martin's, 1969), pp. 210-225. He suggests per capita income, unemployment rate, and net migration rate; Nobert Vanhove and Leo H. Klaassen, Regional Policy: A European Approach (Brookfield, Ver mont: Gower, 1987), p. 241. They suggest regional income, productivity, migration, sectoral structure and unemployment; Willem Molle, Industrial Location and Regional Development in the European Community: The FLEUR Model (Brookfield, Vermont: Gower, 1983), p. 115. 57
When indicators of regional imbalances are chosen, the standard deviation or coefficient of variation for each
indicator can measure how much regional imbalances have widened or narrowed within the Community.100 I will use the coefficient of variation, since it is a relative meas ure of variation, which represents the standard deviation
as a percentage of the arithmetic mean. However, the stan dard deviation is not comparable when the means and/or the units of measurement are different.
3.3.1 Imbalances in GDP per capita in the Community
Among many indicators, GDP per capita is the primary indi
cator of regional imbalances,101 since GDP per capita can
He suggests employment by sector and region, unemploy ment, GDP per head, and migration.
100 For further discussion, see Marja-Liisa Kiljunen, "Regional Disparities and Policy in the EEC," Integra tion and Unequal Development; The Experience of the EEC, eds. Dudley Seers and Constantine Vaitsos (New York: St. Martin's, 1980), p. 208. Besides the coeffi cient of variation, ratios of regional maximum and min imum are suggested.
101 E.C. Hallett, "Economic Convergence and Divergence in the European Community: A Survey of the Evidence," Eco nomic Divergence in the European Community, eds. Michael Hodges and William Wallace (London: Allen & Unwin, 1981), p. 25. He argues that, if economic con vergence is defined as a process of narrowing income disparities in member states, the most appropriate indicator is probably gross domestic product per cap ita; John Naylon, "Iberia," Regional Development in Western Europe, eds. Hugh D. Clout (New York: John Wiley & Sons, 1975), p. 305. He argues that lessening regional imbalances is needed not in the sense of an even spread of employment but in terms of income per head; Willem Molle, "Regional Policy," Main Economic Policy Areas of the EEC - Towards 1992, ed. Peter Cof- 58 not only show one aspect of living standards but it can be also comparable across the Community. Table 1 shows how GDP per capita has varied between regions in the Community, in terms of the coefficient of variation (CV).
Table 1
The CV of GDP per capita between Regions in the Community, 1970-1982
YEAR CV of GDP per capita
1970 33. 77 1971 34.39 1972 35.44 1973 38.62 1974 42.23 1975 42.30 1976 42.63 1977 43.07 1978 43.88 1979 43.89 1980 44.14 1981 44.37 . 1982 44.95
Sources The figures are calculated from various issues of Regional Statistics: Population, Employment, Living Standards, 1973-1977; Yearbook of Regional Statistics,1981-1988; Regional Statistics: Main Regional Indicators, 1970-1983; Regional Statistics: The Community's Financial Participation in Investment, 1973-1975; Rapid Reports: Regions, 1989-1991.
As we can see in Table 1, regional imbalances have wid ened throughout the 1970s and early 1980s, during which the
Community has adopted new members, such as Ireland, Eng
fey (Norwell: Kluwer Academic, 1989), p. 76. He argues that the disparity in income per head is generally felt to be one of the most painful disparities among the regions. 59
land, Denmark, and Greece. Differences between the highest and the lowest GDP per capita have also widened, which can be seen in Table 2.
Table 2
Difference between the Highest and the Lowest GDP per capita between Regions in the Community, 1970-1982
YEAR DIFFERENCE
1970 3580 1971 4053 1972 4452 1973 5458 1974 6284 1975 6473 1976 8490 1977 9708 1978 10594 1979 11761 1980 12447 1981 14104 1982 15375
Note: GDP per capita is measured by ECU. Source: The figures are calculated from various issues of Regional Statistics: Population, Employment, Living Standards, 1973-1977; Yearbook of Regional Statistics,1981-1988; Regional Statistics: Main Regional Indicators, 1970-1983; Regional Statistics: The Community's Financial Participation in Investment, 1973-1975; Rapid Reports: Regions, 1989-1991.
During the period 1970-1982, the regions with the lowest
GDP per capita were Sicily, Campania, Abruzzi, Molise, Sar
dinia, and Sud (i.e. Calabria, Basilicata, Apulia) in Ita
ly, Ireland, and Greece. Regions with the highest GDP per
capita, on the other hand, were Brussels, Ile-de-France, 60
Noord-Nederland (i.e. Groningen, Friesland, Drenthe), and some urban areas in Germany (i.e. Hamburg, Bremen, Berlin).
For regions with the lowest GDP per capita, their GDP per capita only accounted for less than half of the Community average, while they accounted for 70 percent of their national averages. Also, the proportion of their GDP per capita to the Community average has decreased throughout the years, even though the proportion of their GDP per cap ita to their national averages increased or stayed the same. This is likely to indicate that regional imbalances worsened at the Community level. On the other hand, when lowest and highest GDP per capita regions are compared, the former is in many cases related to rural areas, while the latter is related to urban areas.102
Meanwhile, we can compare the top six regions with the highest GDP per capita (Group A) with the bottom six regions with the lowest GDP per capita (Group B). The gap between averages of Group A and B has widened over the years. That is, while the average of Group A was three times as high as that of Group B until the middle of the
1970s, the one has been four times as high as the other
102 Josep Fontana, "Economic Development of Mediterranean Countries in Historical Perspective," The Enlargement of the European Community:____ Case-Studies of Greece, Portugal and Spain, eds. Lyn Gorman and Marja-Liisa Kiljunen (London: Macmillan, 1983), p. 47. He argues that the machinery of unequal growth worked also inside Europe, among the economies that had first industrial ized and those that did so later. 61 since then. Also while the average of Group A is twice as much as the Community average, that of Group B is only half
as much as the Community average. In a nutshell, imbalanc
es tended to worsen at the Community level between 1970 and
1982.
3.3.2 Imbalances in GDP per Worker in the Community
Unlike GDP per capita, which could be related to urban and
rural areas, GDP per worker is useful, since regions with
low GDP per worker can be related to depressed areas,
besides rural areas. That is, regions with declining indus
tries are also likely to be disadvantaged regions in the
Community.103 Table 3 shows how GDP per worker has varied
in terms of the coefficient of variation (CV) from 1970 to
1982.
During the period 1970-1982, regions with the lowest GDP
per worker were Campania, Abruzzi, Molise, Sicily, Sardi
nia, Sud, in Italy, Northern Ireland, Yorkshire and Humber
side, North, in England, Greece, and Ireland. Regions with
the highest GDP per worker were Brussels, Ile-de-France,
103 Hugh D. Clout, Regional Development in Western Europe (New Yorks John Wiley & Sons, 1975), p. 7. For problem regions in the Community, he included regions with declining industries (e.g. coal mining and/or textile manufacturing); Harvey Armstrong and Jim Taylor, Regional Economics and Policy (Oxford: Philip Allan, 1985), p. 63. Depressed industrial areas are also problem regions in the Community; Nobert Vanhove and Leo H. Klaassen, op. cit., pp. 101-102. Stranded (depressed) regions are problem regions in the Communi ty. 62
Table 3
The CV of GDP per Worker between Regions in the Community, 1970-1982
YEAR CV of GDP per Worker
1970 20.94 1971 22.81 1972 24.65 1973 29.59 1974 31.86 1975 31.88 1976 36.47 1977 38.44 1978 38.55 1979 40.85 1980 41.12 1981 44.84 1982 46.15
Source: The figures are calculated from various issues of Regional Statistics: Population, Employment, Living Standards, 1973-1977; Yearbook of Regional Statistics,1981-1988; Regional Statistics: Main Regional Indicators, 1970-1983; Regional Statistics: The Community's Financial Participation in Investment, 1973-1975; Rapid Reports: Regions, 1989-1991.
Noord- and West-Nederland, and some urban areas in Germany
(i.e. Hamburg, Bremen, Berlin, Nordhein-Westfalen). With the lowest GDP per worker, such regions as Yorkshire, Hum berside, and North regions in England have declining indus tries other than farming, while some regions, i.e. Northern
Ireland, Ireland, the Mezzogiorno in Italy, and Greece, are peripheral rural areas. On the other hand, for regions with the lowest GDP per worker, their GDP per worker only accounted for about 60 percent of the Community average, 63 even though they accounted for more than 80 percent of their national averages. Also, the proportion of their GDP per worker to the Community average has decreased through out the years, reflecting growing gaps between regions in the Community. Table 4 shows differences between the high est and the lowest GDP per worker between regions in the
Community, 1970-1982.
Table 4
Difference between the Highest and the Lowest GDP per worker between Regions in the Community, 1970-1982
YEAR DIFFERENCE
1970 5690 1971 6436 1972 6758 1973 8449 1974 10027 1975 12408 1976 16733 1977 20254 1978 20922 1979 23654 1980 25756 1981 29965 1982 33404
Note: GDP per worker is measured by ECU. Source: The figures are calculated from various issues of Regional Statistics: Population, Employment, Living Standards, 1973-1977; Yearbook of Regional Statistics,1981-1988; Regional Statistics: Main Regional Indicators, 1970-1983; Regional Statistics: The Community's Financial Participation in Investment, 1973-1975; Rapid Reports: Regions, 1989-1991. 64
Meanwhile, we can compare the top six regions with the highest GDP per worker (Group A) with the bottom six
regions with the lowest GDP per worker (Group B). The gap between the averages of Group A and B has widened through out the years. That is, while the average of Group A was
twice as high as that of Group B until the middle of the
1970s, the one has been three times as high as the other
since then. Also, while the average of Group A is 1.5 times
as high as the Community average, the average of Group B is
only half as much as the Community average. Although
regions in Group A and B have experienced increases of GDP
per worker, those regions in Group A showed more signifi
cant increases than those in Group B, which tended to wors
en imbalances between them.
3.3.3 Imbalances in Unemployment Rate in the Community
Unemployment rate is used along with GDP per worker, since
it is also related to rural and depressed regions in terms
of high unemployment rate.10* In the 1970s the Mezzogior-
no105 in Italy and Northern Ireland experienced very high
104 See Stein Rokkan, et al., Centre-Peripherv Structures in Europe:____ An ISSC Workbook in Comparative Analysis (Frankfurt: Campus Verlag, 1987), p. 44. They argue that, to group regions economically, the best sources are statistics of employment and production.
los irhe Mezzogiorno includes most of Italy south of Rome. It is made up of seven administrative regions: Abruzzi-Molise, Campania, Calabria, Basilicata, Apulia, Sicily and Sardinia. Refer to a map in Section 4.2.1 in Chapter IV. 65 unemployment rates, and most regions in Spain had the high est unemployment rates in the Community.106 Other regions with high unemployment rates included North and Northwest of England, Mediterranee in France, Wallonia in Belgium, and Noord- and Zuid-Nederland in the Netherlands.107
Regions with the lowest unemployment rates, on the other hand, were Luxembourg, Denmark, most regions in Germany,
Ile-de-France, Lombardia and Northwest in Italy, East Ang lia and South-East of England, and West-Nederland in the
Netherlands. Except Luxembourg, each member state tended to have both high and low unemployment regions.108 Table 5 shows the coefficient of variation (CV) of unemployment rates between regions in the Community from 1970 to 1982.
Table 6 shows differences between the lowest and the highest unemployment rates between regions in the Community from 1970 to 1982. Even though the coefficient of varia tion for unemployment rate between regions became higher
106 For a discussion of Spanish problems, see Lyn Gorman and Marja-Liisa Kiljunen, op. cit., p. 14. Even in the most advanced province of Spain (e.g. Madrid), average income is only 85 percent of the Nine, while the less advanced provinces reach a mere 36 percent.
107 Andre Gorz, Strategy for Labor (Bostons Beacon Press, 1964), p. 155. The decline of certain regions (espe cially Wallonia and the Mezzogiorno) risked repercus sions on the economies of the nations concerned, as well as tensions and centrifugal tendencies which might endanger the cohesion of the EEC.
108 For similar argument, see Hugh D. Clout, op. cit., p. 8. He also argues that, except tiny Luxembourg, each member state contained regions with values both above and below the Community average. 66
Table 5
The CV of Unemployment Rate between Regions in the Community, 1970-1982
YEAR CV OF UNEMPLOYMENT RATE
1970 44.31 1971 46.43 1972 48.41 1973 50.20 1974 50.70 1975 50.94 1976 53.62 1977 55.49 1978 55.77 1979 60.38 1980 74.66 1981 75.67 1982 77.84
Source: The figures are calculated from various issues of Regional Statistics: Population, Employment, Living Standards, 1973-1977; Yearbook of Regional Statistics,1981-1988; Regional Statistics: Main Regional Indicators, 1970-1983; Regional Statistics: The Community's Financial Participation in Investment, 1973-1975; Rapid Reports: Regions, 1989-1991. during that period, differences between the lowest and the highest unemployment rates between regions changed little, since unemployment rates have increased for most regions in the Community. For example, it was only 7.3 percent in
1973, and 9.5 percent in 1979, because all regions in the
Community experienced the oil shocks in 1973 and 1979.
Meanwhile, we can compare the top six regions with the lowest unemployment rate (Group A) with the bottom six regions with the highest unemployment rate (Group B). The 67
Table 6
Difference between the Highest and the Lowest Unemployment Rates between Regions in the Community, 1970-1982
YEAR DIFFERENCE
1970 13.5% 1971 13.5 1972 24.0 1973 7.3 1974 14.8 1975 15.6 1976 21.8 1977 20.2 1978 15.7 1979 9.5 1980 31.8 1981 43.2 1982 47.8
Source: The figures are calculated from various issues of Regional Statistics: Population, Employment, Living Standards, 1973-1977; Yearbook of Regional Statistics,1981-1988; Regional Statistics: Main Regional Indicators, 1970-1983; Regional Statistics: The Community's Financial Participation in Investment, 1973-1975; Rapid Reports: Regions, 1989-1991. gap between averages of Group A and B has tended to worsen throughout the years. For example, while the average unem ployment rate in Group A has changed from 0.5 percent in
1970 to 5 percent in 1982, that in Group B has changed from
12 percent in 1970 to 23 percent in 1982. Also, while the average unemployment rate in Group A was only half as high as the Community average, that in Group B showed twice as high as the Community average. On the other hand, there are also imbalances between regions at national level. For 68 example, there exist some regions with the lowest unemploy ment rate and other regions with the highest unemployment rate within the same member state. In Italy, Lombardia and
Northwest experienced the lowest unemployment rates, while
Campania and Sud experienced the highest unemployment rates. In the United Kingdom, Southeast regions experienced the lowest unemployment rates, while North and North-West regions experienced the highest unemployment rates. How ever, imbalances among different regions tended to worsen at the Community level more than at national level.
3.3.4 Imbalances in Agricultural Employment in the
Community
Sectoral structure can be used to measure regional imba lances in the Community. When the proportion of agricultual employment is higher than the Community average, GDP per capita and GDP per worker are likely to be lower than their
Community averages.10 9
During the period 1970-1982, regions with the highest proportion of agricultural employment were Campania, Sici ly, Sardinia, Abruzzi, Molise, Sud, in Italy, Ouest region
109 Hugh D. Clout, op. cit., p. 7. Problem areas would include regions with more workers in farming than the Community average; Harvey Armstrong and Jim Taylor, op. cit., p. 63. Depressed agricultural areas are the poorest regions in the Community; Nobert Vanhove and Leo H. Klaassen, op. cit., p. 24. They divided agri cultural regions into peripheral and nonperipheral agricultural region; College of Europe, A Community of Twelve ? : The Impact of Further Enlargement on the European Communities (Belgium, 1978), p. 222. 69 in France, Ireland, and Portugal. Regions with the lowest proportion of agricultural employment, on the other hand, included Brussels, Ile-de-France, South-East and North-West in England, and some urban regions in Germany (i.e. Ham burg, Berlin, Bremen, Saarland). For regions with the high est proportion of agricultural employment, their proportion of agricultural employment was less than a half as much as the Community averages. Table 7 shows the coefficient of variation of the proportion of agricultural employment from
1970 to 1982.
Table 7
The CV of the Proportion of Agricultural Employment between Regions in the Community, 1970-1982
YEAR CV
1970 73.26 1971 76.17 1972 79.34 1973 80.78 1975 82.78 1979 82.80 1980 83.10 1981 83.36 1982 86.86
Source: The figures are calculated from various issues of Regional Statistics: Population, Employment, Living Standards, 1973-1977; Yearbook of Regional Statistics,1981-1988; Regional Statistics: Main Regional Indicators, 1970-1983; Regional Statistics: The Community's Financial Participation in Investment, 1973-1975; Rapid Reports: Regions, 1989-1991. 70
Differences between the highest and the lowest propor tion of agricultural employment in the Community from 1973 to 1984 are shown in Table 8/ in which we can see little change.
Table 8
Difference between the Highest and the Lowest Proportion of Agricultural Employment between Regions in the Community, 1973-1984
YEAR DIFFERENCE
1973 23.0 % 1975 26.6 1977 21.6 1979 30.5 1980 28.4 1981 27.7 1982 26.0 1983 25.5 1984 30.1
Source: The figures are calculated from various issues of Regional Statistics: Population, Employment, Living Standards, 1973-1977; Yearbook of Regional Statistics,1981-1988; Regional Statistics: Main Regional Indicators, 1970-1983; Regional Statistics: The Community's Financial Participation in Investment, 1973-1975; Rapid Reports: Regions, 1989-1991.
Meanwhile, we can compare the top six regions with the highest proportion of agricultural employment (Group A) with the bottom six regions with the lowest proportion of agricultural employment (Group B). The average of Group A has been more than 20 times as high as that of Group B throughout the years, while the average of Group A has been more than twice as high as the Community average. For 71 example, in Italy, where many regions with the highest pro portion of agricultural employment are located, the highest proportion of agricultural employment is 1.5 times as high as the national average in Italy, while it tends to be 2.5 times as high as the Community average. Thus, imbalances are likely to be wider at the Community level than at the national level.
3.3.5 Imbalances in Net Migration in the Community
Net migration is another indicator for measuring regional imbalances, since depressed regions or regions with high unemployment rates are likely to experience a high rate of emigration. Until the 1980s, rural areas also had a high emigration rate, for example, the Mezzogiorno in Italy.110
However, those regions tended to have more immigration than emigration since the 1980s.111
110 Niles argues that emigration from peripheral areas tends to be associated with problems of traditional agriculture. For further discussion, see Niles M. Han sen, Public Policy and Regional Bconomic Development: The Experience of Nine Western Countries (Cambridge: Ballinger, 1974), p. 31.
111 Commission of the European Communities, The Regions of Europe: First Periodic Report on the Social and Econom ic Situation of the Regions of the Community (Brussels, 1981), p. 114. Emigration from the periphery to the centre in the 1960s helped to reduce disparities, whereas the cessation and in some cases, reversal of these outward movements in the 1970s contributed to the increase in disparities. During the period 1970-1982, the regions with the high est emigration were Noord-Nederland in the Netherlands, Sud in Italy, Ireland, North, North-West, Northern Ireland,
Scotland, in England, Nord-pas-de-Calais, Ile-de-France,
Est, in France. Regions with the highest immigration, on the other hand, were Noreste in Spain, South-East, South-
West, East Anglia, in England, Mediterranee, Sud-Ouest,
Ouest, in France, Bayern, Hessen, Berlin, Niedersachen, in
Germany, and Lombardia, and Centro and Lazio (in the 1980s) in Italy. Regions with the highest emigration are likely to be either rural or depressed areas, whereas regions with the highest immigration are likely to be either urban or industrialized areas with low unemployment rate. Table 9 shows the coefficient of variation (CV) of net migration in the Community from 1970 to 1982.
Table 10 shows differences of the highest emigration and immigration between regions in the Community from 1977 to
1985. It appears that economic recession in late 1970s and early 1980s affected migratory trend between regions in the
Community. Differences seem to be at peak in 1979 and
1980, and once again increase rapidly in 1983 and 1984.
We will compare the top six regions with the highest immigration (Group A) with the top six regions with the highest emigration (Group B). While the average of Group A has increased, that of Group B has also increased through- 73
Table 9
The CV of Net Migration between Regions in the Community, 1970-1982
YEAR CV
1970 255.34 1971 288.07 1972 289.21 1973 310.05 1974 344.63 1975 389.21 1976 414.01 1977 456.12 1978 447.02 1979 498.30 1980 873.41 1981 1495.49 1982 1526.05
Source: The figures are calculated from various issues of Regional Statistics: Population, Employment, Living Standards, 1973-1977; Yearbook of Regional Statistics,1981-1988; Regional Statistics: Main Regional Indicators, 1970-1983; Regional Statistics: The Community's Financial Participation in Investment, 1973-1975; Rapid Reports: Regions, 1989-1991. out the years. That will lead to an argument that the gap between Group A and B has been wider in the Community. On the other hand, attention needs to be given to the fact that regions in both Group A and B could exist in the same member state. For example, in Italy, such regions as Lom bardia, and Centro brought in high immigration, while, such regions as Calabria, Basilicata, and Apulia recorded high emigration. Also, in France, Mediterranee and Sud-Ouest experienced high immigration, while Ile-de-France and Nord- 74
Table 10
Difference between the Highest Emigration and Immigration between Regions in the Community, 1977-1985
YEARDIFFERENCE
1977 72400 1978 72200 1979 195000 1980 104600 1981 85200 1982 98400 1983 129000 1984 145700 1985 77500
Source: The figures are calculated from various issues of Regional Statistics: Population/ Employment/ Living Standards, 1973-1977; Yearbook of Regional Statistics,1981-1988; Regional Statistics: Main Regional Indicators, 1970-1983; Regional Statistics: The Community's Financial Participation in Investment, 1973-1975; Rapid Reports: Regions, 1989-1991. pas-de-Calais experienced high emigration. The United
Kingdom also experienced high emigration in such regions as
Scotland and North-West throughout the 1970s and early
1980s. In a nutshell, the movement of people is partly due to people leaving for regions with employment opportuni ties.
3.4 DEVELOPMENT OF COMMON REGIONAL POLICIES
Even though the Treaty of Rome in 1957 stated harmonious development and balanced growth in the Community, it was not until 1974 that more emphasis was put on common region- 75 al policies.112 On the one hand, different regions in the
Community were left with different inflation rates, which would in turn lead to different rates of growth and devel opment, after the oil shock in 1973. On the other hand, the
Community had to adopt some member states with many regions whose level of development was much lower than the Communi ty average, since the first enlargement of the Community.
Subsequently, the Paris summit in 1974 agreed to the cre ation of the European Regional Development Fund (ERDF).
As stated in the Treaty of Rome in 1957, regional poli cies are basically intended to achieve the 'harmonious development' and the 'balanced growth', without which inte gration is difficult to achieve within the Community. Tak ing into account the significance of regional policies, other policies, for example, industrial policy, competition policy, and agricultural policy, tend to have some aspects of regional policies. For the last forty years, the con cern with regional policies has been increasing. Among the original Six, regional policies had a scant interest, and only a token fund set aside for regional policies even until the middle of the 1970s. As the Community has enlarged from the Six to the Twelve, the need for regional
112 Michael Hodges, "Liberty, Equality, Divergency: The Legacy of the Treaty of Rome," Economic Divergence in the European Community, eds. Michael Hodges and William Wallace (London: Allen & Unwin, 1981), p. 11. He argues that the Community's regional policy has been of little use in reducing the gap between rich and poor member states, which widened during the 1970s. 76 policies was stressed to resolve imbalances between regions
in the Community. I will examine what regional policies
intend to achieve in the Community, why regional policies
are needed, and how they are likely to achieve their objec
tives.
Many financial instruments were instituted to achieve
the objectives of regional policies since the 1950s. The
ECSC in 1951 was concerned with structural policy, which
would promote employment in areas with declining coal and
steel industries. The EIB (European Investment Bank) and
the ESF (European Social Fund) were instituted by the Trea
ty of Rome. The former is intended for regional moderniza
tion and conversion by granting loans to less favoured
regions, while the latter was amended in 1971 and intended
to improve employment in problem areas. The Guidance Sec
tion of the EAGGF (European Agricultural Guarantee and Gui
dance Fund) in 1962 was, on the other hand, concerned with
improving agricultural structures in less favoured regions.
The ERDF was created in 1975, and was intended to assist
regional development by industrial and infrastructure meas
ures. 77
3.4.1 Overview of Regional Policy
Regional policy is distinct from other policies, since it
is a mixture of the economic, political, and social.113
Thus, when regional policy is made at the Community level,
it is concerned with the issues of redistribution as well
as economic growth and development.
Regional policy is a structural policy, which is con
cerned with improving structures in less favoured regions.
Even though there are some policies at the Community level,
which also have, in part, the aspects of a structure poli
cy, regional policy is wholly concerned with structural
changes in less favoured regions in the Community.114
113 E.T. Nevin, "Regional Policy," The Economics of the European Community, ed. Ali M. El-Agraa (New York: St. Martin's, 1985), p. 341; Also, see Paul Romus, "Region al Policy in the European Community," Economic Sover eignty and Regional Policy: A Symposium on Regional Problems in Britain and Ireland, ed. John Vaizey (Dub lin: Macmillan, 1975), p. 122. While regional policy is part of economic policy, it is also equally politi cal and this means that pressures exist which are not always dictated by economic means; A.J. Marques Mendes, "The Contribution of the European Community to Economic Growth," Journal of Common Market Studies 24 (June 1986): 276. He argues that the CAP increases inequally between countries, and the other common policies lack sufficient scope to have a major counteracting impact on growth; Willem Molle, "Regional Impact of Welfare Policies in the European Community," Human Behavior in Geographical Space: Essays in Honor of Leo H. Klaas- sen, ed. J.H.P. Paelinck (Brookfield, Vermont: Gower, 1986), p. 77. He argues that motives for regional pol icy include full employment, and more equal income and welfare distribution.
114 As an example of other policy which has in part the aspects of a structural policy, see David Deacon, "Com petition Policy in the Common Market: Its Links with Regional Policy," Regional Studies 16 (1982), p. 54. 78
As regards the objectives, and tasks of regional policy, the 'harmonious development' and the 'balanced growth' between regions in the Community were already stated in the
Treaty of Rome in 1957. That is, regional policy is prima rily intended to reduce regional disparities, especially in terms of income levels, and to reduce the concentration in congested regions in the Community.115 In terms of aid which regional policy would provide, the Treaty of Rome,
Article 92 states three categories: aid to areas with abnormally low standard of living or serious unemployment; aid to remedy a serious disturbance in the economy of the member states; regional or sectoral aid, provided that trading conditions are not unduly affected.116
He argues that competition policy can also play a posi tive role in regional development when seen from a Com munity context.
115 In this perspective, there is an argument that regional policy is invariably place-oriented rather than people- oriented. For further discussion, see Niles M. Hansen, Public Policy and Regional Economic Development: The Experience of Nine Western Countries (Cambridge: Bal linger, 1974), p. 21.
116 Paul Romus developed more specific categories for regional policy. There are six categories: (1) the development of predominantly agricultural regions, which suffer from unemployment, underemployment, emi gration and low incomes; (2) the reconversion of long established industrial regions which are at present experiencing unemployment, emigration and fall in income; (3) the development of regions suffering from unemployment for other reasons than those indicated above; (4) the development of frontier regions which are on the borders of the Community and from this fact are at a disadvantage because of their proximity to certain third countries or which are inside the Commu nity and are penalized by imbalances which still exist 79
The primary reason why regional policy is needed at the
Community level is that economic and political integration would be difficult to achieve when there exist significant imbalances between regions in the Community.117 That is, regional policy at the Community level tends to be under stood as a necessary condition for integration, even though it is hardly a sufficient condition. The relationship between regional imbalances and integration will be exam-
between member states; (5) preventive measures to limit concentration in certain urban areas and in some instances decentralization from those areas; and (6) development of the tertiary (services) sector in cer tain urban areas of medium size. For further discus sion, see Paul Romus, op. cit., p. 125.
117 Gavin McCrone, "Regional Policy in the European Commu nities," Economic Integration in Europe, ed. G.R. Den ton (London: Weidenfeld, 1969), p. 195. He argues that it is necessary to have some sort of regional policy if political or economic union is to be succeded; Harvey W, Armstrong, "The Reform of the European Community Regional Policy," Journal of Common Market Studies 23 (June 1985): 321. EC regional policy is often justi fied as being necessary if Member States are to agree further economic and monetary integration; Harvey W. Armstrong, "Community Regional Policy: A Survey and Critique," Regional Studies 12 (1978), p. 527. Region al policy represents an essential prerequisite for eco nomic integration and is necessary if economic integra tion is not to lead to a further widening of regional disparities in the Community; Harvey W. Armstrong, "The Assignment of Regional Powers within the EC," Britain within the European Community, ed. Ali M. El-Agraa (London: Macmillan, 1983), p. 295. He argues that reduced regional disparities are necessary for greater political cooperation; Walter Hahn, "Fiscal Policy in the EEC," Europe and the Andean Countries: A Compari son of Economic Policies and Institutions (London: Pin ter, 1988), p. 94. Economic divergencies will make it increasingly difficult to complete the Common Market or even to preserve what has already been achieved in the field of fiscal and monetary integration. 80 ined more specifically in Chapters IV, V, VI and VII.
3.4.2 The European Regional Development Fund (ERDF)
The ERDF was established in 1975, and constituted 4.8 per cent of the Community budget. Since its establishment, it has increased on average 31 percent per year. Table 11 shows how expenditures for the ERDF have changed during the period 1975-1988.
Table 11
Expenditures for the ERDF in the European Community, 1975-1988
YEAR EXPENDITURE ANNUAL INCREASE SHARE OF TOTAL (Mio ECU) (%) COMMUNITY BUDGET(%)
1975 257.6 - 4.8 1976 394.3 53.1 5.6 1977 378.5 -4.0 4.9 1978 581.0 53.5 4.6 1979 945.0 62.7 6.1 1980 1165.0 23.3 6.7 1981 1540.0 32.2 7.3 1982 1759.5 14.3 7.6 1983 2010.0 14.2 7.6 1984 2140.0 6.5 7.3 1985 2289.9 7.0 7.5 1986 3098.0 35.3 8.8 1987 3311.0 6.9 9.1 1988 3684.8 11.3 8.1
Source: Data come from various issues of General Report on the Activities of the European Communities, 1970-1982; The Community Budget: The Facts and Figures, 1988; Financial Report, 1987; The European Community of its Regions: 10 Years of Community Regional Policy and of European Regional Development Fund, 1985; ERDF in Figures, 1975-1988. 81
Like most regional and social funds, it is a noncompul- sory fund. The ERDF is intended to help reduce regional disparities in the Community by subsidizing problem regions with structural unemployment and predominant agricultural employment. In the ERDF, an emphasis is put on coherent overall planning for less developed regions. The 1972 amendment included a non-quota section, for which 5 percent of the ERDF resources would be reserved. The inclusion of non-quota section would help finance specific Community measures for regional development, and operate outside the assisted areas defined for Community action in support of member states' own regional policy measures.
Meanwhile, a new Regional Fund regulation in 1985 stressed the coordination of regional policy measures at
Community and national levels in order to maximize their effects. Furthermore, it replaced the quota section with the 'indicative range' section so that regions most in need would get assistance from the ERDF.
3.5 CONCLUSION
There have existed rich and poor regions, or developed and less developed regions, or favoured and less favoured regions, in the Community. Those regions which are poor or less developed or less favoured are called disadvantaged regions. Meanwhile, I examined whether imbalances between 82 regions in the Community have widened or narrowed, and how . regional imbalances are measured, and how regional policy helps reduce regional disparities.
To measure imbalances between regions in the Community, such indicators as GDP per capita, GDP per worker, unem ployment rate, the proportion of agricultural employment, and net migration are used. Meanwhile, the coefficient of variation and range between the highest and the lowest val ue of each indicator were examined to see whether regional imbalances have worsened in the Community. In light of the five indicators, disadvantaged regions were related to regions with high structural unemployment, regions with predominant agricultural employment, or depressed regions
(i.e. regions with declining industries, e.g. coal and steel industries, or textile industry). Regional imbalanc es, on the other hand, have widened throughout the 1970s and 1980s.
Lastly, I have examined what regional policy is, why it is needed at the Community level, and what kind of finan cial instruments are employed to achieve the goals of regional policy. Regional policy seems to be a mixture of the economic, political, and social. It is also a structur al policy, which is meant to improve structures in disad vantaged regions, thereby reducing disparities between regions in the Community. 83
Meanwhile, the need for regional policy was stressed, since the removal of regional imbalances is likely to be a necessary, though not a sufficient, condition for integra tion. Further discussion of the relationship between regional imbalances and integration will be made in Chap ters IV, V, VI and VII. Other financial instruments and funds, which have the aspects of regional policy in charac ter, are the European Coal and Steel Community (ECSC), the
European Social Fund (ESF), the European Investment Bank
(EIB), and the Guidance Section of the European Agricultur al Guidance and Guarantee Fund (EAGGF). Even though the
ECSC in 1951 had the aspects of regional policy in charac ter, and the ESF and the EIB were instituted in the Treaty of Rome, it was not until 1974 that the need for new regional policy drew attention from member states. The first oil shock in 1973 left different regions with differ ent rates of inflation, which would in turn affect the development and growth of each region in the Community. On the other hand, the enlargement of the Community brought in many regions with a lower level of development than the
Community average, which would widen the gap between devel oped and less developed regions.
In a nutshell, we cannot emphasize too much the need for
Community Regional Policy and more financial aids for dis advantaged regions in the Community in order to reduce dis parities . CHAPTER IV
TWO CASE STUDIES: THE RELATIONSHIP BETWEEN
REGIONAL DISADVANTAGE AND INTEGRATION IN THE
MEZZOGIORNO AND NORTHERN IRELAND
4.1 INTRODUCTORY DISCUSSION
4.1.1 Theoretical Purpose of a Case Study
A case study is an inductive approach toward theory- building. There are two distinct types of the inductive approach: the case study and the statistical approach. I will discuss the theoretical purpose of the case study in relation to the statistical approach.
George118 argued that the case study could be used for theory development by converting lessons of history into a theory. Historical cases are likely to have unique fea tures. However, when these cases are grouped into a class of similar events, we can find ways of describing and explaining individual cases that render them comparable.
118 Alexander L. George, "Case Studies and Theory Develop ment: The Method of Structured, Focused Comparison," Diplomacy, ed. Paul Gordon Lauren (New York: Free Press, 1979); Alexander L. George and Richard Smoke, Deterrence in American Foreign Policy: Theory and Prac tice (New York: Columbia University Press, 1974).
- 84 - 85
He argued that, when we employ an analytical inductive approach for historical cases, the outcomes of the depen dent variable can occur in different ways and for different reasons. Thus, the case study can show different causal patterns that can occur for the dependent variable, and different conditions under which different causal patterns occur.
George compared the case study with the statistical approach. The former deals with a relatively small number of cases, while the latter deals with a large number of cases. The large N in the statistical approach either includes all instances of the class of events in question or constitutes a representative sample of that universe. On the other hand, the small n in the case study is not neces sarily representative of the universe of instances belong ing to the class of events; furthermore, it needs not be representative in the statistical sampling sense in order to contribute to theory development. That is because the case study is intended to seek different causal factors to refine or reformulate current theories.
Like the statistical approach, the case study seeks to identify the causal relationship between the dependent variable and independent variable. Thus, the case study is neither competitive with nor a substitute for the statisti cal approach. Rather, they are complementary. The case 86 study should facilitate development of more sophisticated quantitative studies, while the statistical approach can subject the causal hypotheses developed in the case study to a different kind of statistical test of causal signifi cance.
Meanwhile, Achen and Snidal119 argued that case studies failed when used for theory construction and theory verifi cation, because the logic of case studies provided too lit tle logical constraint to generate dependable theory and too little inferential constraint to permit trustworthy theory testing. However, they argued that the case study was an important complement to statistical investigations because investigators could examine historical sequences in the search for causal processes. The case study can pro vide the intensive empirical analysis that can find previ ously unnoticed causal factors and historical patterns. It can also provide guidance in the revision and reformulation of analytic theory to account for a broader range of phe nomena .
Thus, they saw that the value of the case study was to provide historical wisdom about the limits of current theo ry and empirical generalization to be explained by future theory.
119 Christopher H. Achen and Duncan Snidal, "Rational Deterrence Theory and Comparative Case Studies,” World Politics 41 (January 1989): 143-169. 87
Russett120 argues that case studies have value when they are integrated with the findings from the statistical approach. He suggests four uses of case studies in theory- building. First, case studies can stimulate the production of hypotheses about possible regularities. It is noted that most hypotheses later investigated with correlation techniques are originally generated from case studies.
Second, case studies can test in a different and more appropriate context the inferences made from suggestive but not fully appropriate correlational analyses. Third, case studies can be employed to eliminate spurious correlations when the correlational pattern relating two variables is satisfactorily established. Fourth, case studies can refine and reformulate a hypothesis which is strongly sup ported by high correlations.
In this chapter, two case studies are concerned with the relationship between regional disadvantage and integration.
The case studies are intended to illuminate the relation ship between regional disadvantage and integration, the nature of the causal pattern between the two, and condi tions under which causal patterns occur. Thus, the case studies are intended to be a complement to the statistical approach in chapter VI.
120 Bruce M. Russett, 11 International Behavior Research: Case Studies and Cumulation," Approach to the Study of Political Science, eds. Michael Haas and Henry S. Kar- iel (Scranton: Chandler, 1970), pp. 425-443. 88
4.1.2 Review of the Center-Periphery Theory
Myrdal developed a "general theory of underdevelopment and development." It includes a Center-Periphery theory which is concerned with regional imbalances or regional disadvan tages, and illuminates a relation between regional disad vantage and integration.
The thrust of his theory is based upon the notion of cumulative causation. That is, once a particular region has moved ahead of others, new increments of growth will
focus on the already expanding region because of their derived advantages.
Divergence between favoured and disadvantaged regions is
likely to become wider when there is an interchange between
the two regions. Once development has been sparked in fav
oured regions, it will eventually result in flows of labor,
capital and commodities from disadvantaged regions. This is
called the backwash effects because of their impact on the
backward hinterland. Disadvantaged regions tend to lose
their workers and local capital to favoured regions.
At the same time, markets in disadvantaged regions are
swamped by cheap manufactured goods which throttle local
industry such as traditional artisan manufacturing. Thus,
backwash effects stifle economic growth in disadvantaged
regions and stimulate and sustain further development in
favoured regions.121
121 Allan Rodgers, Economic Development in Retrospect: The 89
A relation between integration and regional disadvantage was illuminated in Myrdal's argument: "To a low level of
economic development correspond low levels of social mobil
ity/ and communication. This implies greater impediments
to the spread effects."122
A relation between disadvantaged regions and integration was also illuminated in Hirschman's argument. He suggested
the notion of polarization effects and trickle-down
effects, which were identical to backwash effects and
spread effects, respectively. Disadvantaged regions would
be likely to have more polarization effects and less
trickle-down effects. He argued that these would be
obstructive forces to integration.
4.1.3 Research Problem
In the 1970s and early 1980s we experienced economic crises
- international currency disorder, the oil crisis, acceler
ated inflation levels, economic recession, and growth in
unemployment. At the same time, it seemed that divergence
between regions became wider in the European Community. In
terms of per capita GDP, the gap between the ten most
developed and the ten most disadvantaged regions in the
Community rose from 2.9 to 1 in 1970 to 4.0 to 1 in 1977.
Italian Model and Its Significance for Regional Plan ning in Market-Oriented Economies (New York: John Wiley & Sons, 1979) .
122 Gunnar Myrdal, Ibid., p. 63. 90
With the accession of Greece to the Community on January 1,
1981, it reached the ratio of 5.0 to l.123
It is important that we realize that regional disadvan tage is likely to obstruct integration. That is, regional imbalances are likely to cause social unrest and political tensions. When they are combined with many other disrup tive tendencies, they are likely to create centrifugal forces, which obstruct solidarity and impair continuity.
Meanwhile, relative deprivation theory is concerned with how discontent is linked to political violence. Gurr argued that politicized discontent was a necessary condi tion for the resort to violence in politics. Also, the intensity of discontent seems to increase, as regional dis advantage becomes wider. The Commission of the European
Communities stated in 1976 that increasing economic diver gence between regions was a major obstacle to the progress of integration.12 4
123 Commission of the European Communities, European Regional Development Fund: Sixth Annual Report (1980) (Brussels, 1981), p. 3.
124 Commission of the European Communities, European Regional Development Fund: Second Annual Report (1976) (Brussels, 1977), p. 8. 91
4.1.4 The Selection of Cases
George argued that the desideratum that guided selection of cases was not numbers but variety, that is, cases belonging
to the same class that differ from each other. Thus, an
investigator in designing the case study would seek cases
in which the outcome of the dependent variable differed or
cases having the 'same outcome but a different explanation
for it. He also argued that cases needed not be represen
tative of the universe of instances belonging to the class
of events.
I have selected two cases which have the same outcome -
lower development - but appear to have a different explana
tion for it: the cases of the Mezzogiorno and Nothern Ire
land. In the Mezzogiorno, regional disadvantage seems to
stem from economic underdevelopment, while in Northern Ire
land, regional disadvantage appears to be based upon eco
nomic underdevelopment, interacting with ethnic and secta
rian divisions. Myrdal’s theory of underdevelopment and
development was concerned with regions with a lower level
of development.
Of course, in choosing case studies, I could have
selected one region from a class which comprises the most
favoured regions in the Community, and the other from a
class which comprises the most disadvantaged regions in the
Community. These two regions would illuminate different 92 outcomes for the dependent variable. However, since I am concerned with conditions under which integration is less likely to occur in disadvantaged regions, I have selected two disadvantaged regions.
The reasons for choosing the Mezzogiorno and Northern
Ireland as my two cases of disadvantaged regions still remains to be explained. First, the Mezzogiorno and North ern Ireland are among the most disadvantaged regions in terms of per capita GDP. They are priority regions that get assistances from the Community.
Second, the Mezzogiorno is chosen because regional dis advantage in the Mezzogiorno is based more on economic fac tor, and less on ethnic factor. The Mezzogiorno includes most of Italy south of Rome, and makes up of seven adminis trative regions: Abruzzi-Molise, Campania, Calabria,
Basilicata, Apulia, Sicily and Sardinia. These seven regions share similar geographical, cultural and economic characteristics. The economic gap between the Mezzogiorno and the north widened in the 1970s, and imposed a heavy burden on Italy and the Community so that it could inhibit
Italy from enjoying the potential benefits of European integration.
Third, Northern Ireland is chosen because regional dis advantage in Northern Ireland is based upon the interaction of ethnic, religious and economic factors. Anglo-Irish 93 relations, and inter- and intra-sectarian relations, inter acting with economic disadvantage, seemed to bring about opposition to integration.
Thus, two cases should show that the relationship between regional disadvantage and integration persists despite very different social and political conditions in the Mezzogiorno and Northern Ireland.
4.2 THE RELATIONSHIP BETWEEN REGIONAL DISADVANTAGE AND
INTEGRATION IN THE MEZZOGIORNO AND NORTHERN IRELAND
4.2.1 Case 1: The Mezzogiorno
In the Mezzogiorno case, I will examine whether regional imbalances widened in the 1970s, and what was likely to be an intervening process between regional disadvantage and integration. I will also examine whether there was a rela tionship between regional disadvantage and integration in the Mezzogiorno.
The Mezzogiorno includes most of Italy south of Rome.
As shown in Figure 1, it is made up of seven administrative regions: Abruzzi-Molise, Campania, Calabria, Basilicata,
Apulia, Sicily and Sardinia.
The population of the Mezzogiorno increased by 966,000 persons in the period 1970-1975 and by 406,000 persons in the period 1976-1979 to a total of 20,246,000 in 1979. The net migration in this period was on average 28,000 persons 94
IOHIAM iMA
Figure 1: The Regions of Italy and the Mezzogiorno. Sources Alan B. Mountjoy, The Mezzogiorno (Oxford, 1973), p.6.
per year. In the period 1970-1975 unemployment rose by
41,500 and in the period 1975-1979 by 172,000 to 762,000 persons in 1979, or 11 percent of the labor force, while
the level for the country as a whole was 7.7 percent. The
agricultural sector occupied about 25 percent of the labour
force in 1979, against 14 percent for Italy as a whole.
Per capita GDP was 33 percent below the Italian average in
1979.125
125 Commission of the European Communities, The Regional 95
Regional disadvantage in the Mezzogiorno seems to be based much less on ethnological, cultural, or religious division between the Mezzogiorno and the north, but it has more of an economic basis.126 When regional disadvantage persisted, social unrest and political insecurities seemed to affect integration. The Italian President, Giulio
Andreotti, was clearly aware of this when he stated that
"if the present imbalances and gaps were not removed,
Europe will only be united on paper."127
4.2.1.1 The Analysis of Regional Disadvantage
It is the purpose of this section to describe and assess whether the Mezzogiorno was relatively disadvantaged in the period 1970-1979, and the degree to which it was disadvan taged.
Per capita GDP is an indicator of the economic capacity of the regions, which stresses the production side. In
Table 12, we notice that per capita GDP of the Mezzogiorno was 75 percent of the Italian average in 1970 and declined to 66.4 percent in 1979, while that in the north was 115
Development Programmes of the Second Generation for the Period 1981-1985 (Brussels, 1985).
126 For a discussion, Dominick J. Coyle, Minorities in Revolt:____ Political Violence in Ireland, Italy and Cyprus (Londons Associated University Press, 1983), p. 89.
127 Emanuela Itta, "Italy at a Crossroads: The Problem of the South and European Union," Journal of Regional Pol icy 10 (1990): 665. 96 percent of the Italian average in 1970 and increased to
133.4 percent in 1979.
Table 12
GDP per capita by Region in Italy
1970 1979
Italy 100.0 100.0
North 115.0 133.4 Mezzogiorno 75.0 66.4
Note: Italy = 100. Source: The figures are calculated from various issues of Regional Statistics: Population, Employment, Living Standards, 1973-1977; Yearbook, of Regional Statistics,1981-1988; Regional Statistics: Main Regional Indicators, 1970-1983.
In the Mezzogiorno 28 percent of laborers were employed
in the agricultural sector in 1970, and 25 percent in
1979.128 Farmers in the Mezzogiorno began to face intense
foreign competition in both export and domestic markets
based upon lower costs and higher quality. The result was
a decline of fruit and vegetable production in the Mezzo
giorno.
Meanwhile, the intensity of the CAP support varied
depending upon the composition of agriculture. The produc
tion of fruits, vegetables and wine dominated in the Mezzo
giorno, while the production of cereals, milk and sugar did
128 Commission of the European Communities, The Regions of Europe (Brussels, 1981). 97 in northern regions. Because the CAP support was related to cereals, milk and sugar, the Mezzogiorno benefited less than did the north.129
Two theories are concerned with the relationship between economic structure and regional disadvantage. The one is location theory, which was developed in political science, and the other is the growth pole theory, which was devel oped in economics. Location theory, which was discussed in chapter I, suggests that the location of industries is related to economic growth because industrial areas have a skilled labor force and external economies. The growth pole theory argues that economic growth is likely to be led by regions with industrial infrastructure.
Industrial structure in the Mezzogiorno relied on small- and medium-sized firms, which concentrated on handicrafts.
During the period 1970-1979, industrial investment in the
Mezzogiorno was 60 percent of the Italian average, while the north had 134 percent of the Italian average.130
Table 13 shows that the unemployment rate of the Mezzo giorno was 5.7 percent in 1970 and increased to 11.0 per cent in 1979, which was nearly four times as high as that of the north in 1979.
129 Commission of the European Communities, The Regions of Europe (Brussels, 1981), p. 75.
130 Commission of the European Communities, Regional Imba lances and National Economic Performance (Brussels, 1985). 98
Table 13
Unemployment Rate bv Reqion in Italy
1970 1979
Italy 5.2% 7.7%
North 2.4% 3.0% Mezzogiorno 5.7% 11.0%
Source: The figures are calculated from various issues of Regional Statistics: Population, Employment, Living Standards, 1973-1977; Yearbook of Regional Statistics,1981-1988; Regional Statistics: Main Regional Indicators, 1970-1983.
We note that there is a fair correlation between unem ployment rates and per capita GDP presented earlier. It seems that economic crises imposed more severe burden on the Mezzogiorno than the north.
The problem of unemployment worsened in terms of its nature as well as its overall level. In terms of long-term unemployment, where unemployment is of long duration (over six months), the Mezzogiorno had 6.0 percent in 1979, while the Italian average was 3.1 percent. In terms of youth unemployment, which is unemployed 14-24 years olds as a percentage of labour force aged 14-24, 40 percent of the young people were unemployed in the Mezzogiorno in 1979, while the Italian average was 18 percent, and that in the north 9.5 percent in 1979. 1 3 1
131 Eurostat, Labour Force Survey (Brussels, 1979). 99
Table 14 indicates that the Mezzogiorno experienced a
net loss of 13,400 laborers in 1970, and a net loss
increased to 20,000 in 1979. The main exodus was from the
rural areas of Basilicata, Molise, Calabria and Abruzzi.
The emigration was predominantly to the industrial areas of
the north. Despite reduced employment opportunities in the
north due to deteriorating economic conditions in the
1970s, the drawing power of the north persisted. In 1975
the mayor of Turin described his city as "the biggest town
of the Mezzogiorno."132
Table 14
Net Migration by Region in Italy (1000)
1970 1979
Italy 6.0 4.1
North 4.7 8.7 Mezzogiorno -13.4 -20.0
Source: The figures are calculated from various issues of Regional Statistics: Population, Employment, Living Standards, 1973-1977; Yearbook of Regional Statistics,1981-1988; Regional Statistics: Main Regional Indicators, 1970-1983.
Although there is an argument that the movement from the
Mezzogiorno should be seen as part of the process of making
agriculture more efficient, of raising the per capita
income of the remaining population, thus increasing demand
132 Economist, August 16, 1986, pp. 30-31. 100 for goods and services and giving greater incentive to industrialization,133 it seems that the Mezzogiorno became disadvantaged at least partly because of the movement of the labor force to the north. That is, labor migration to the north drained the skilled labor pool in the Mezzogior no, and it led to the draining-off of potential enterprise or skills.134 Thus, it is necessary to move jobs to people
(rather than to move people to jobs) in order to have more job opportunities in the Mezzogiorno.
4.2.1.2 The Rise of Social Unrest and Political Tension
Regional disadvantage in the Mezzogiorno seemed to bring about grass-roots discontent, which in turn would cause social unrest and political tension. The Mezzogiorno has been a stronghold of the Christian Democrats. However, in the 1974 election in Sardinia, there occurred a strong swing away from the Christian Democrats toward parties such
133 G.N. Minshell, The New Europe: An Economic Geography of the EEC (London: Hodder and Stoughton, 1980), pp. 245-246.
134 For a discussion of emigration in the Mezzogiorno, see Russell King, The Industrial Geography of Italy (Lon don: Croom Helm, 1985), p. 15. Internal flows of popu lation are closely related to increasing socio-economic disparity between Italian regions; Douglas F. Lamont, Managing Foreign Investment in Southern Italy (New York: Praeger, 1973), p. 99; Percy Selwyn, "Some Thoughts on Cores and Peripheries," Underdeveloped Europe: Studies in Core-Periphery Relations, eds. Dud ley Seers, et al. (Atlantic Highlands: Humanities, 1979), p. 38; Geoffrey Parker, The Countries of Commu nity Europe:____ A Geographical Survey of Contemporary Issues (London: Macmillan, 1979), p. 94. 101 as the Socialists and the Communists, which said that they could offer an economic alternative.135 Also, in Sicily
and Sardinia there were rumblings of separatist feeling.
Inhabitants of the Mezzogiorno were discontented with wider imbalances between the Mezzogiorno and the north.
Carlo Donat Cattin, Minister for the Development of the
South, offered this analysis of difficulties of the Mezzo
giorno in a 1973 interview with Panorama; "The number of
workplaces did not increase, but stagnated around 1.8 mil
lion for those employed in industry and agriculture. The
Cassa {Southern Development Fund} was slow in fulfilling
its objective, that of providing services for the new phase
of industrialization, and it was virtually absent in the
development of agriculture. The main delay was in the allo
cation of incentives for new industrial initiatives, a
deficiency which provoked mistrust among entrepreneurs,
discontent among public opinion, and left practically
unchanged the imbalance between North and South."136
Grassroots discontent tends to develop when groups that
recognize common socioeconomic interests arise to represent
these interests. Emigration and improvements in communica
tion and transportation have led to a broadening of the
peasant's sphere of social interaction. The peasant has
135 Economist, May 25, 1975, pp. 69-75.
136 Excerpt from interview with Panorama, August 9, 1973. John Earle, Italy in the 1970s (London; David & Charles, 1975), p. 96. 102 become ever more aware of the world beyond the boundaries of his own community, and with this growing awareness has come a growing class consiousness and intensification of feelings of relative deprivation. When peasants began to adhere to the trade unions, they tended to call for social and structural reforms in the name of the union.137
At the same time, Sergio Pininfarina, the President of the Confindustria {Confederation of Employers}, reached the conclusion in his Report to the 1975 Annual General Assem bly: ''There is no other way to improve the overall situ ation in Italy, other than that of coming to terms with and solving the problems of the Mezzogiorno."138
Discontent from inhabitants seemed to affect political parties. The rise of the Monarchists has been particularly noticeable in the Mezzogiorno. The Monarchists were led by two Southerners, Alfredo Covelli and Achille Lauro. The formal goal of the party was the restoration of the monar chy. It was able to gather the votes of a mass of poor peo ple. Its greatest success was in Naples, where it gathered
24 percent of votes and thus, it was available to join with
Christian Democrats and Liberals to form majorities in southern communal and provincial governments. The success of the Monarchists showed one of the centrifugal forces in the Mezzogiorno.
137 John Earle, Ibid., p. 147.
138 Emanuela Itta, Ibid., p. 658. 103
Meanwhile, when regional imbalances worsened, regional movements emerged demanding local autonomy or secession from the national political system. The Italian government was highly centralized and there was a lack of financial autonomy of local government. The assistance from the cen tral government was too slow in developing agriculture and providing services in the Mezzogiorno. As shown in the speech from Cattin,139 the delay in the allocation of incentives for new industrial initiatives provoked mistrust among entrepreneurs, and discontent among public opinion.
As regional disadvantage became wider, southern regions tended to call for autonomy or secession from the central government, which would decrease Italian integration.
Nevertheless, support for European integration remained exceedingly high despite its decline. As Shepherd argued, public opinion in favour of EC membership, European unifi cation and direct election to the European Parliament is likely to show the image and expectations of people about integration.
He distinguished utilitarian from affective support when the public was in favour of integration. Utilitarian sup port for integration stems from perceived economic and political interests - for example, increased standards of living or guarantee of peace. Affective support for inte gration, which is the non-rational attitude of loyalty,
139 John Earle, Ibid., p. 96. 104 sympathy and shared values, may reflect attachment to an international community. Since the European Community has, to date, been concerned with economic integration, support for integration seems to be mainly utilitarian.
Table 15
Public Opinion in Favour of the EC Membership
1970 1979
Mezzogiorno 79.0% 69.0% North 76.0% 76.0%
Public Opinion in Favour of European Unification
1970 1979
Mezzogiorno 94.0% 88.0% North 94.0% 93.0%
Public Opinion in Favour of Direct Election to EP
1970 1979
Mezzogiorno 90.0% 83.0% North 86.0% 93.0%
Source: Data comes from Ronald Inglehart, European Communities, Center for Political Studies, University of Michigan; Ronald Inglehart, Eurobarometer, Center for Political Studies, University of Michigan, 1985.
Table 15 shows public opinion in favour of EC member ship, European unification, and direct election to the 105
European Parliament. Public opinion in favour of EC mem bership declined from 79 percent in 1970 to 69 percent in
1979 in the Mezzogiorno, while it has been steady at 76 percent in the north. Public opinion in favour of European unification also declined from 94 percent in 1970 to 88 percent in 1979 in the Mezzogiorno, while it was stationary in the north. Public opinion in favour of direct election to the European Parliament declined from 90 percent in 1970 to 83 percent in 1979 in the Mezzogiorno, while it increased from 86 percent in 1970 to 93 percent in 1979 in the north. Bearing in mind that Italy is a country which cherished an idealistic vision of a genuinely united
Europe, it is not surprising that she showed more favoura ble attitudes toward integration compared with other member states. However, inhabitants in the Mezzogiorno became less favourable toward integration in 1979 than in 1970.
Public opinion surveys provide us, in part, with insight on the relationship between regional disadvantage and inte gration. There is a decline in support for integration along with economic decline. Thus, some may be less suppor tive of integration because of economic decline. But what does it mean that most still support integration ? Do they see that integration may overcome economic decline ? Do they see Italian disintegration and European integration as helping the Mezzogiorno ? 106
Although Italy has been favourable toward integration efforts since the 1950s, that did not necessarily mean that inhabitants in all regions had the same attitudes toward integration. Inhabitants in the Mezzogiorno had almost the same attitudes toward integration in 1970 as those in the north. However, they became less favourable toward inte gration, along with economic decline in the Mezzogiorno.
Deutsch advocated the utility of transaction data, for example, mail flows, trade, foreign students, and tourist traffic, as indicators of integration. He argued that international community could be ascertained and measured by examining the volume, content, and scope of internation al transactions between regions.
Table 16 shows the proportion of intra-EC letter and telegram traffic. The proportion of intra-EC letter traf fic is letter traffic with the other 64 regions in the EC as a percentage of letter traffic with the whole world. The proportion of intra-EC telegram traffic is telegram traffic with other EC regions as a percentage of the total telegram traffic.
The proportion of intra-EC letter traffic was 29.3 per cent in 1970 and declined to 23 percent in 1979 in the Mez zogiorno, while it was 35 percent in 1970 and increased to
41 percent in 1979 in the north. The proportion of intra-
EC telegram traffic was 14 percent in 1970 and declined to 107
Table 16
The Proportion of Intra-EC Letter Traffic
1970 1979
Mezzogiorno 29.3% 23.0% North 35.0% 41.0%
The Proportion of Intra-EC Telegram Traffic
1970 1979
Mezzogiorno 14.0% 10.0% North 25.0% 27.0%
Source: The figures are calculated from Statistical Yearbook, Transport, Communications, Tourism, 1970-1980.
10 percent in 1979 in the Mezzogiorno, while it was 25 per cent in 1970 and remained stationary in 1979 in the north.
There seems to be a correlation between regional disad vantage and intra-EC letter and telegram traffic. That is, regional disadvantage in the Mezzogiorno is negatively associated with intra-EC letter and telegram traffic. As
Deutsch argued, people are less likely to view others in the EC as partners and depend upon mutual communication when they are frustrated by becoming more disadvantaged. 108
4.2.1.3 Conclusion
The Mezzogiorno remained a disadvantaged or peripheral region, as it became economically more disadvantaged. The economic gap between the Mezzogiorno and the north widened in terms of per capita GDP, unemployment rate, and net migration.
Economic disadvantage in the Mezzogiorno seemed to bring about peasant discontent, which tended to create centrifu gal forces when it gathered around trade unions and/or political parties. These centrifugal forces tended to be in favour of secession or separatism, and were accompanied by a decline in support for European integration.
Support for European integration still remained very high in the Mezzogiorno, although it has been declining.
This raises a question: Do many inhabitants in the Mezzo giorno see disintegration from Italy and integration within the EC as helping the Mezzogiorno ? This question remains to be answered in future research.
Meanwhile, inhabitants in the Mezzogiorno appeared to feel less comfortable with others in the European Communi ty, as economic divergences became wider. The letter and telegraph traffics between the Mezzogiorno have showed a decline.
In a nutshell, the Mezzogiorno seemed over the course of the 1970s to become economically more disadvantaged and less integrated in the European Community as well as Italy. 109
4.2.2 Case 2: Northern Ireland
I will examine whether there is a correlation between
regional disadvantage in Northern Ireland and integration.
I will also examine conditions under which integration is
less likely to occur.
The population of Northern Ireland increased by 10,000
persons in the period 1970-1975 and by 6,000 persons in the
period 1976-1979 to a total of 1,543,000 in 1979. Unlike
the other regions of the United Kingdom, it depended heavi
ly upon agriculture, i.e. 10 percent of the labour force in
1979 (2.9 percent for the British average). Figure 2 shows
the regions of the United Kingdom and Northern Ireland
Unlike the Mezzogiorno case, regional disadvantage in
Northern Ireland seemed to be based upon not only economic
but also ethnic and religious factors. There was, on the
one hand, an ethnic division (Anglo-Irish), and on the oth
er hand, inter- and intra-sectarian divisions (Catholic-
Protestant).
The issue of European integration tended to be linked to
such issues as a united Ireland, direct rule, power sharing
(between Protestants and Catholics), cross border (between
the Republic of Ireland and Northern Ireland), as well as
economic situations of Northern Ireland. Those who opposed
a united Ireland and were in favour of direct rule seemed
to oppose European integration, while those who were in 110
Figure 2: The Regions of the United Kingdom and Northern Ireland favour of a united Ireland and cross border seemed to be in favour of European integration. The Democratic Union Party
(DUP) tended to see the whole idea of European integration as a threat to British sovereignty and tradition, while the
Social Democratic and Labour Party (SDLP) viewed European integration as a stepping stone for a united Ireland, which meant that European integration could lead to a united
Ireland.1 * 0
140 Arthur Aughey, et al., Northern Ireland in the European Community: An Economic and Political Analysis (Bel fast, 1989), p. 156. Ill
Meanwhile, those who were in favour of power sharing tended to support European integration, while those who were against power sharing opposed European integration.
Those who opposed power sharing within Northern Ireland opposed power sharing between Northern Ireland and the
Republic of Ireland, or within the European Community.141
Thus, Northern Ireland seemed to be disintegrated whenever the issue of European integration was raised.
4.2.2.1 The Analysis of Regional Disadvantage
The purpose of this section is to assess whether Northern
Ireland was disadvantaged in the period 1970-1979. Table
17 indicates that per capita GDP of Northern Ireland was 86 percent of the British average in 1970 and declined to 80 percent in 1979.
Table 17
GDP per capita in Northern Ireland
1970 1979
United Kingdom 100.0 100.0
Northern Ireland 86.0 80.0
Note: United Kingdom = 100. Source: The figures are calculated from various issues of Regional Statistics: Population, Employment, Living Standards, 1973-1977; Yearbook of Regional Statistics,1981-1988; Regional Statistics: Main Regional Indicators, 1970-1983.
141 Economist, May 28, 1983, pp. 42-43. 112
The economy of Northern Ireland is more similar to the
Irish than the British economy, with a large proportion of the population engaged in agriculture. The population of agriculture in total employment was 10 percent in 1979, while the British average was 2.9 percent, and the Irish average was 19 percent.142
In the 1970s Northern Ireland suffered from the decline of traditional industries situated mainly in the Belfast area. Northern Ireland's industrial economy was built on two products, textile and shipbuilding. However, they proved vulnerable to low-cost competition from the NICs.
Employment in textile fell from 65,000 in 1970 to 9,800 in
1979 and in shipbuilding from 25,000 in 1970 to 7,500 in
1979. 1 43
Table 18 shows that the unemployment rate of Northern
Ireland was 7.5 percent in 1970 and increased to 10.5 per cent in 1979, while the British average was 3.0 and 3.5 percent respectively.
We can examine unemployment problems in terms of its nature. In terms of long-term unemployment, Northern Ire land had 4.7 percent in 1979, while the British average was
2.1 percent. In terms of youth unemployment, 21 percent of the young people were without a formal job, while the Brit-
142 For the United Kingdom data, OECD, Economic Outlook: Historical Statistics 1960-1980. For the Northern Ire land data, Central Statistical Office, Annual Abstract.
143 Eurostat, Labour Force Survey (Brussels, 1979). 113
Table 18
Unemployment Rate in Northern Ireland
1970 1979
United Kingdom 3.0% 3.5%
Northern Ireland 7.5% 10.5%
Source: The figures are calculated from various issues of Regional Statistics: Population, Employment, Living Standards, 1973-1977; Yearbook of Regional Statistics,1981-1988; Regional Statistics: Main Regional Indicators, 1970-1983. ish average was 8.6 percent. It was much worse in some areas in Northern Ireland. The rate was 30 percent in the
Londonderry district, and 42 percent in Strabane.144
There was an economic gap between the Protestant and
Catholic communities. Catholics were worse off than Prot estants on average. The 1971 census indicated that Catho lic males were 2.62 times more likely than Protestant males to be unemployed. On the other hand, the 1981 census showed that Catholic males were 2.44 times more likely than Prot estant males to be unemployed. Rowthorn and Wayne145 showed in their empirical study that the Northern Ireland
Catholic male unemployment rate, at 30 percent, far out stripped the figure anywhere else, while the Northern Ire
144 Eurostat, Labour Force Survey (Brussels, 1979).
145 Bob Rowthorn and Naomi Wayne, Northern Ireland: The Political Economy of Conflict (Cambridge: Polity, 1988), p. 115. 114 land Protestant male unemployment rate, at 12 percent, was only a little above the British average.
Table 19 shows that Northern Ireland had a net loss of
5,700 laborers in 1970, and of 6,800 in 1979, whereas fig ures for the United Kingdom as a whole were only 1,100 and
700 respectively.
Table 19
Net Migration in Northern Ireland (1000)
1970 1979
United Kingdom -1.1 -0.7
Northern Ireland -5.7 -6.8
Sources The figures are calculated from various issues of Regional Statistics: Population, Employment, Living Standards, 1973-1977; Yearbook of Regional Statistics,1981-1988; Regional Statistics: Main Regional Indicators, 1970-1983.
There were differential emigration rates between Catho lic and Protestant in Northern Ireland. Compton146 argued that Catholics accounted for 60 percent of net migration in the period 1971-1980. Differential migration seemed to be a further source of inequality between the Catholic and
Protestant communities. But without it, the unemployment differential would be even greater.
146 Paul Compton, "An Evaluation of the Changing Religious Composition of the Population in Northern Ireland," Economic and Social Review 16 (1985): 201-224. 115
4.2.2.2 The Rise of Disintegrative Forces
The issue of European integration did not draw much atten tion in Northern Ireland until the United Kingdom applied for membership in the EEC in 1970. In the 1971 Stormont debate on the EC, Patrick Kennedy claimed that "possibly as a result of the troubles which we have experienced here for the past two or three years this whole issue has gone into the background and not enough public attention has been focused on it."147 Rather, direct rule, troops in (or out), power sharing, internment, the Council of Ireland, the Ulster Workers' Council strike and the security prob lems were the issues of the day.
The British application prompted concern over the eco nomic and political implications for Northern Ireland.
Economically, Northern Ireland had high unemployment and declining traditional industries. Those who hoped to get assistance from the Community were in favour of membership in the Community. Politically, a difference arose among
Unionists as regards membership in the EC. Traditional
Unionists who hoped to sustain British tradition opposed membership in the European Community, while liberal Union ists who hoped that membership in the Community would break down sectarian divisions in Northern Ireland were in favour of membership in the Community.148
147 Northern Ireland Commons Debates, volume 81, col. 1211.
148 Arthur Aughey, et al., Ibid., p. 109. 116
Robin Bailie, the Minister of Commerce, stated in the
1971 debate at Stormont: "preoccupation with the hatreds with bitterness of yesteryear has no place in the main stream of European thinking. We have to make up our minds whether we are going to be cornered in this cul-de-sac of history or get into the mainstream of European progress and thinking. I have no time at all for the Sinn Fein ideology or for its equivalent which it sometimes expressed in a narrow Ulster view."149
Also, Prime Minister Brian Faulkner, who hoped that mem bership would bring economic development and resolve secta rian divisions, argued that "when frontiers are no longer a barrier to the free movement of trade or a line of demarca tion between different fiscal, social, or economic systems they will remain primarily as a mark of people's continuing sense of national identity and loyalty. In such a context it would become even clearer than it is today how foolish as well as immoral it would be for any one to seek to remove frontiers against the will of the majority of the inhabitants. And if that were to be accepted the Border could at last recede from the forefront of many minds."150
149 Adrian Guelke, Northern Ireland: The International Per spective (New York: St. Martin's, 1988), p. 154.
150 Adrian Guelke, Ibid., p. 154. 117
To the dismay of traditional Unionists, the Heath Gov ernment in the United Kingdom managed to join the Communi ty. Also, a power sharing Executive was created in Ulster, although short-lived for 1973-1974. Thus, those who were in favour of European integration and power sharing seemed to be in the ascendency in Ulster.
In 1975, Northern Ireland began to experience more eco nomic difficulties with high unemployment, and a decline in traditional industries. The hopes that membership in the
Community would resolve economic problems in Northern Ire land tended to disappear. Also, the hopes that membership in the Community would transcend the Northern Ireland con flict tended to recede. The Institute for the Study of
Conflict dismissed the relevance of European integration:
"since the EEC has so far been unable to promote any really significant political integration among its own members, it seems far-fetched to expect it to offer much in the search for a political solution in Northern Ireland."151
The 1975 referendum on the British Labour Government's renegotiated terms of membership provided the opportunity for a debate within Northern Ireland on the advantages and disadvantages of membership and for a test of political opinion on European integration.
151 Adrian Guelke, Ibid., p. 156. 118
There was a linkage between support for continued mem bership in the Community and support for power sharing in
Northern Ireland. The Northern Ireland Executive, based upon power sharing, reflected a pro-EC argument. In its
"Statement of Economic and Social Aims: Steps to a Better
Tomorrow" (January 1974), the Executive recognized the EC and stressed the importance of seeking "methods of increas ing Northern Ireland participation and influence in the
EEC."15 2
The small pro-power sharing Unionist Party supported continued membership, as did the Alliance Party and the
Social Democratic and Labour Party, though two of the
SDLP’s leading figures, Gerry Fitt and Paddy Devlin, were opposed to membership because they thought that Britain was more interested in the industrial population rather than the agricultural population. However, the most strident opposition to the Community came from the leader of the
DUP, Ian Paisley, who made much of the Catholic character of the original six members of the EEC.
In 1975, 52 percent of the population voted "Yes" for membership in the European Community. It was a narrow majority in favour of continued membership and the turn-out
(47 Percent) was one of the lowest in the United Kingdom
(65 percent overall). This indicated that inhabitants of
152 paui Hainsworth, "Direct Rule in Northern Ireland: The European Community Dimension 1972-1979," Administration 31 (1983): 57. 119
Northern Ireland had disinterest, and apathy about European integration. Rather, they appeared to be more concerned about violence and terrorism occurred in Northern Ireland.
Since the 1975 referendum, there have been numerous signs of dissatisfaction with European integration. A 1978 opinion survey showed: "economic rather than political factors dominated attitudes towards the Common Market and only 16.4 percent of Protestants and 26.7 percent of Catho lics agreed with a proposition that membership in the Com munity made Northern Ireland's political problems easier to solve."15 3
In 1979 the British response to a European initiative in the economic field struck a considerable blow against con vergence between Northern Ireland and the Republic of Ire land. The United Kingdom, unlike the Republic, decided not to participate in the EMS, a scheme to limit exchange rate fluctuations within the EC. As a consequence, parity between the Irish punt and the pound sterling was broken, providing an added economic dimension to partition.154
In the 1979 election to the European Parliament, three
Northern Ireland members of the European Parliament, Ian
Paisley, John Hume, and John Taylor, were elected. Ian
153 Edward Moxone-Browne, Nation, Class and Creed in North ern Ireland (Aldershot: Gower, 1983), p. 158.
154 For a discussion, European Commission Office in North ern Ireland, Northern Ireland in Europe: The Impact of Membership (Belfast, 1983). 120
Paisley who gathered most votes among the three tended to see the whole idea of European integration as detrimental to Northern Ireland’s status. Meanwhile, John Hume hoped to use the EEC as a means to further the cause of Irish nationalism by drawing support from members of the Communi ty.
Thus, when the process of European integration released centrifugal and centripetal forces, it seems that there existed disintegrative elements in the Northern Ireland
European election, which opposed European integration.155
Moreover, the DUP's electoral gains in Westminster, Europe an, and local elections represented the rise of forces opposed to European integration.
Public opinion surveys156 showed that public opinion in favour of EC membership declined from 37 percent in 1973 to
26 percent in 1979 in Northern Ireland, while it stayed at
61 percent in South-East of the United Kingdom. Public opinion in favour of European unification also declined from 53 percent in 1973 to 45 percent in 1979 in Northern
Ireland, while it increased from 61 to 78 percent in South-
East. Public opinion in favour of direct election of mem bers of the European Parliament declined from 43 percent in
165 Paul Hainsworth, "The European Election of 1979 in Northern Ireland," Parliamentary Affairs 32 (1979): 470-481.
156 Ronald Inglehart, European Communities (Ann Arbor: Cen ter for Political Studies). 121
1973 to 36 percent in 1979 in Northern Ireland, while it increased from 53 to 81 percent in South-East. Thus, we notice that inhabitants in Northern Ireland became less favourable toward European integration in 1979 than in
1973.
Furthermore, I discussed Deutsch's argument about the utility of communication indicators for integration in the
Mezzogiorno case. The proportion of intra-EC letter traf fic was 49.4 percent in 1973 and declined to 38.1 percent in 1979 in Northern Ireland. The proportion of intra-EC telegram traffic was 45.5 percent in 1973 and declined to
36.3 percent in 1979.157 Thus, when intra-EC letter and telegram traffic was an indicator of integration, Northern
Ireland seemed to become less integrated.
4.2.2.3 Conclusion
In Northern Ireland, there is an interaction of economic, and ethnic factors to affect European integration. In terms of cultural and ethnic distinction, we are concerned with language and religion. In Northern Ireland, sectarian division, i.e. Protestantism and Catholicism, seems to be associated with economic and political differences.
It seems that Northern Ireland is a disadvantaged or peripheral region because it is economically disadvantaged and ethnically divided.
157 Eurostat, Statistical Yearbook, Transport, Communica tions, Tourism, 12 vols. (Brussels, 1970-1981). 122
Northern Ireland became more disadvantaged in the United
Kingdom. The economic gap between Northern Ireland and the
British average widened in terms of per capita GDP, unem ployment rate, and net migration. Also, unlike the rest of
the United Kingdom, it has a high proportion of laborers
employed in agricultural sector.
In a nutshell, Northern Ireland became more disadvan
taged and less integrated. It seems that ethnic division,
interacting with economic disadvantage, brought about dis
integration within Northern Ireland, and opposition to
European integration. 123
4.3 DISCUSSION AND CONCLUSION
The case studies were conducted to examine the relationship between regional disadvantage and integration. The rela tionship between regional disadvantage and integration is examined for the Mezzogiorno and Northern Ireland because in the Mezzogiorno, regional disadvantage was based upon economic factors, while in Northern Ireland, it was based upon economic factors, interacting with ethnic and sectari an factors.
It seemed that regional disadvantage was negatively associated with integration. The Mezzogiorno and Northern
Ireland became more disadvantaged in 1979 than in 1970, and they seemed to become less integrated in 1979. However, the two cases showed that regional disadvantage could be negatively associated with integration under different political and social conditions.
As discussed earlier, case studies are intended to seek the development of an explanatory theory. Also, an expla natory theory must offer differentiated explanation of the outcomes of the dependent variable.
In the case studies, the outcome of the dependent vari able with which I was concerned was whether integration was less likely to occur. The independent variable was econom ic divergence between developed and disadvantaged regions.
The case studies sought to identify the causal relationship 124 between the dependent and independent variables. It seems that the outcome of the dependent variable occurred for different reasons in the Mezzogiorno and Northern Ireland.
In the Mezzogiorno, there seemed to be a correlation between regional disadvantage and social unrest, and between social unrest and disintegration. Although there were ethnic and linguistic differences in Sardinia and
Sicily, it was economic divergence between the Mezzogiorno
and the north which seemed to cause the Mezzogiorno to
become less integrated. Political differences between the
Mezzogiorno and the north did not seem to cause the former
to become less integrated. The Mezzogiorno has been a
stronghold of the Christian Democrats, and the Communist
party did not have roots in the Mezzogiorno.
Meanwhile, rumblings of secession were stimulated by
economic divergences. The Monarchists seemed to have an
impact on local and provincial elections when they made an
issue out of regional imbalances.
Economic divergences seemed to bring about centrifugal
forces in Italy. Regional movements arose demanding auton
omy and secession in the Mezzogiorno when the Mezzogiorno
became more disadvantaged.
Also, inhabitants in the Mezzogiorno appeared to become
less favourable toward European integration, although there
remained a significant number of people who supported Euro 125 pean Integration. Inhabitants in the Mezzogiorno seemed to see others in the European Community less as partners when they became frustrated by economic divergences between the
Mezzogiorno and the rest of the Community.
Thus, we notice that economic divergence mainly caused
the Mezzogiorno to become less integrated in the European
Community as well as Italy.
In Northern Ireland, regional disadvantage, based upon
economic disadvantage, interacted with ethnic and sectarian
divisions. There was a correlation between economic disad
vantage and sectarian divisions. The Catholics were more
likely to be unemployed than the Protestants. Also, the
Catholics tended to account for a higher proportion of
emigrants.
There was also a correlation between ethnic division and
sectarian division. Among the Protestants there was a
higher proportion of those who identified themselves with
the British, while among the Catholics there was a higher
proportion of those who identified themselves with the
Irish.15 8
We notice that economic disadvantage was negatively
associated with integration. Northern Ireland became more
disadvantaged in 1979 than in 1970, and it became less
integrated in 1979, in the European Community as well as
the United Kingdom.
158 Economist, May 28, 1983, pp. 42-43. 126
Thus, it seemed that economic disadvantage, interacting with ethnic and sectarian division, has an impact on oppo sition to integration.
The opposition to integration tended to be linked with the Protestants, or those who opposed power sharing
(between Protestants and Catholics), or loyalists who saw integration as a threat to British sovereignty. In con trast, integration was supported by the Catholics, or those who were in favour of power sharing (between Protestants and Catholics), or nationalists who saw integration as a stepping stone for a united Ireland.
Thus, although there was a correlation between economic disadvantage and integration, economic disadvantage seemed to be associated with a third variable, i.e. ethnic and sectarian divisions.
Reflecting on the two case studies, we can make a two fold typology of regional disadvantage to explain opposi tion to integration. The first type can be economic char acteristics, with which the Center-Periphery theory was concerned. The second type can be ethnic divisions.
Based on a two-fold typology, we can see some examples of those which have economic characterstics and ethnic divisions within the Community. The first group includes those which are economically disadvantaged and have strong ly felt ethnic divisions; Northern Ireland, Corsica, Brit- 127 tany and Galicia. The second group includes those which are not economically disadvantaged and have strongly felt ethnic divisions: Catalonia, and Basque country. The third group includes those which are economically disadvan taged and have not strongly felt ethnic divisions: the
Mezzogiorno, Andalucia, Asturias, Extremadura, the whole country of Greece, the whole country of Portugal, and the whole country of Ireland.
Bearing in mind the ethnic and national diversity within the Community, regional disadvantage which is based upon ethnic factors is likely to affect European integration.
Furthermore, when disadvantaged or peripheral regions with religion and language distinction become economically more disadvantaged, integration is less likely to occur. How ever, when they are not economically disadvantaged, those regions which have strongly felt ethnic divisions tended to be in favour of European integration. We can see such exam ples from Catalonia and the Basque country.1S9
Our case studies have offered insights on the Center-
Periphery theory, in which Myrdal and Hirschman illuminated a relation between regional disadvantage and integration.
As seen in the two case studies, although there is a corre lation between economic disadvantage and integration, there may be other causal factors which affect integration.
159 John Sallnow and Sarah Arlett, "European Centres of Dissent," The Geographical Magazine 61 (1989): 8. 128
* Thus, when we differentiate regional disadvantage into eco nomic characteristics and ethnic divisions, it is likely that the outcomes of the dependent variable can be better explained. To use the language of George, we have a "con tingent generalization1' about the relationship between regional disadvantage and integration. CHAPTER V
INTRODUCTORY DISCUSSION FOR AN EMPIRICAL ANALYSIS
I will discuss how the empirical analysis is conducted in
Chapters VI and VII. I am concerned with the unit of anal ysis, indicators, measurements, time period covered, meth ods, and data sources.
5.1 THE UNIT OF ANALYSIS
The traditional approach toward international relations was
based upon the nation-state; it was called the "state-
centric paradigm." However, a good deal of intersocial
relations have taken place between nonstate entities in
trade, personal contact, and communication. Thus, Keohane
and Nye defined world politics as political interactions
between any "significant actors," e.g. nation-states, sub
national entities, nongovernmental entities, across state
lines.16 0
160 For a discussion of transnational relations, see Robert 0. Keohane and Joseph S. Nye, Transnational Relations and World Politics (Cambridge: Harvard University Press, 1970).
- 129 - 130
International relations where nonstate entities are involved are called transnational relations. Keohane and
Nye argue that transnational relations increase intersocial sensitivity and thereby alter relations between govern ments. First, states may be able to reduce their sensitiv
ity to outside influence but only at the high price of
reducing the concomitant benefits which result from their
intercourse. Second, as a result of global mass communica tions, various groups in different societies can observe each other's behavior and copy it when it seems appropri
ate. It may have an impact on interstate politics. Third,
face-to-face interactions between citizens of different
states may alter the opinions and perceptions of elites and
masses within each state.
In this thesis, I am concerned with interactions of sub
national entities, i.e. regions within each state. That
is, the unit of analysis is the regions at different levels
of development in the European Community.
When we attempt to define regions, we have to deal with
two possible risks. The one is that we may lose distinc
tive characteristics of each region when regions are too
broadly defined so that they may be difficult to distin
guish from nation states. The other is that adequate data
may not be available when regions are too narrowly defined. 131
When regions are defined, we have the problems of com parability, homogeneity, and hetereogeneity between
regions. First, there is a problem of hetereogeneity in terms of ethnic and linguistic dispersion in the European
Community. For example, there are various linguistic dis persion, i.e. English, Romance (French, Portuguese,
Spanish-speaking), German-Dutch-Flemish, and multilingual states (Belgium, Luxembourg). Thus, cultural regions, which are defined based on ethnicity, culture and a common
identity, can deal with this problem. However, official
statistics broken down by cultural regions are not avail
able .
Second, there is a problem of comparability between
regions within the Community. For example, Luxembourg,
though a nation-state, has a small population and a small
territory. However, if subnational entities of Luxembourg
are taken as the unit of analysis, subnational entities of
Luxembourg do not in size correspond to other subnational
entities, e.g. Germany, Italy, the United Kingdom, in terms
of population and territory.
Third, Eurostat161 has drawn up a Nomenclature of Sta
tistical Territorial Units (NUTS). Community Regions (RCE)
are drawn as homogeneous as possible with an average popu
lation of five million. They were needed in order to study
161 Eurostat, Regional Statistics (Brussels, 1975), pp. 43-44. 132 the consequences of the creation of the Customs Union and of economic integration on subnational entities. For exam ple, the RCE consists of the ’Lander' in Germany, the
'Zones d'etude et d 'amenagement du territoire' in France, the 'Community regions' in Italy, the 'Landsdelen' in the
Netherlands, the 'Regions' in Belgium, the 'Standard regions' of the United Kingdom, Denmark, Ireland, and the
Grand Duchy of Luxembourg.
Thus, regions in this study are defined based on admin istrative units within each state. Although there are eth nic and linguistic dispersion across the European Communi ty, people with the same ethnic and linguistic characteristics tend to live with a geographical proximity, e.g. Flanders, Wallonia, Scotland, Wales, Ireland, Britta ny, Tyrol, the Basque country, etc. On the other hand, when there is too small a population, e.g. Luxembourg, or too small a territory, e.g. Ireland and Denmark, to be sub divided, they are regarded as one region, respectively.
5.2 INDICATORS
Regional disadvantage is measured by per capita GDP (PGDP), unemployment (UNEMP), and net migration (NMIG), respective ly.162 First, per capita GDP is an indicator of economic
162 For a discussion of various indicators of regional dis advantages, see Wolfgang Stabenow, "Regional Policy in the EEC," Regional Policy and Planning for Europe, ed. Morgan Sant (Westmead, England: Saxon House, 1974), pp. 71-86; Geoffrey Denton, "Regional Divergence and Policy 133 capacity. It is the primary indicator of regional dispari ty, because it represents the result of the productive efforts of the active population, but it is also comparable across the Community. Low per capita GDP is related to low activity rates. Second, unemployment is an indicator of regional disparity, because it indicates regional disadvan tage in depressed regions, which have high unemployment rates, e.g. Wallonia. Third, net migration is another indicator of regional disparity, because it shows that more people emigrate from depressed regions or rural areas.
in the Community, with Special Reference to Enlarge ment ," Economic Divergence in the European Community, eds. Michael Hodges and William Wallace (London: Allen & Unwin, 1981), p. 136. He suggests many indicators, such as unemployment rates, activity rates, income per head, rates of emigration, rates of economic growth, age and class structure of the population, industrial structure, degree of spatial congestion and environmen tal condition; E.C. Hallett, "Economic Convergence and Divergence in the European Community: A Survey of the Evidence," op. cit., pp. 16-31. He suggests inflation rate, GDP per capita and exchange rate; Paul C. Che shire and Dennis G. Hay, Urban Problems in Western Europe (London: Unwin Hyman, 1989), pp. 43-86. He sug gests income, unemployment, migration index, and index of travel demand; Francesco Vito, "Problems of the Underdeveloped Regions of Italy," Backward Areas in Advanced Countries, ed. E.A.G. Robinson (London: Mac millan and St. Martin’s, 1969), pp. 210-225. He sug gests per capita income, unemployment rate, and net migration rate; Nobert Vanhove and Leo H. Klaassen, Regional Policy: A European Approach (Brookfield, Ver mont: Gower, 1987), p. 241. They suggest regional income, productivity, migration, sectoral structure and unemployment; Willem Molle, Industrial Location and Regional Development in the European Community: The FLEUR Model (Brookfield, Vermont: Gower, 1983), p. 115. He suggests employment by sector and region, unemploy ment, GDP per head, and migration; Willem Molle, The Economics of European Integration (Brookfield, Vermont: Dartmouth, 1990), p. 418. 134
I will elaborate how these indicators are used to meas ure regional disadvantage. First, bearing in mind that the unit of analysis in this study is the regions, three refer ence groups are introduced: the state, the most favoured region within the state, and the Community as a whole.
The relative deprivation theory taps the psychological and political aspects of individuals or regions feeling deprived relative to a reference group.163 Feeling of rel ative deprivation arises when individuals perceive discrep ancy between their value expectations and their value capa bilities. It is likely to intensify when individuals feel deprived relative to a reference group. Furthermore, when discontent is widespread and intense among elite and mass, political strains are likely to develop.
It seems that regional disadvantage can be evaluated within states and within the Community. In terms of regional disadvantage within states, each region can be compared with the national average in order to see how it fares overall within states. However, each region may be more interested in how it fares compared with the most fav oured region. That is, regional disadvantage in the United
Kingdom may be more keenly felt when regions compare them selves with the most favoured region, South-East, rather than with the state as a whole. Regional disadvantage in
163 The relative deprivation theory will be more specifi cally discussed in next section. 135
Italy may be better measured when each region is compared with Lombardia. Meanwhile, in terms of regional disadvan tage within the Community, each region will be compared with the Community average. Thus, we can discover the ref erence group against which regional disadvantage is most keenly felt.
Second, deviations from each reference group are esti mated when the national average, the most favoured region value within each state, and the Community average are sub tracted from each region's score on the same variable.
Table 20 shows means of deviations from the national aver age (DEVI), the most favoured region value (DEV2), and the
Community average (DEV3), respectively.
Table 20
Means of Deviations for Per Capita GDP, Unemployment, and Net Migration
PGDPUNEMPNMIG
DEVI DEV 2 DEV3 DEVI DEV 2 DEV3 DEVI DEV2 DEV3
6.44 -1848 0 -0.06 1.93 0 275 1022 0
Third, PGDP is measured by ECU, and is standardized in terms of purchasing power parities over time as well as over regions.
Fourth, rurality is defined in terms of the proportion of agricultural employment to the total labor force within each region (EAGR). 136
Fifth, UNEMP is the proportion of the unemployed to the total labor force within each region, while EAGR is agri cultural employment as a percentage of the total labor force. EAGR indicates how many workers are employed in agriculture rather than in industry or service sectors.
Sixth, NMIG represents the balance between immigration and emigration. For example, positive figures for NMIG means that there is more immigration than emigration.
Seventh, the proportion of intra-EC export to total exports (EXPORT) and the proportion of intra-EC import to total imports (IMPORT)164 are used to calculate an index of economic integration (ECON_INT). I use an index of econom ic integration for the purpose of simplicity in reporting how economically integrated the Community became. On the other hand, a relationship between regional disadvantage and economic integration, as measured by EXPORT and IMPORT, respectively, was not changed when economic integration was measured by an index of economic integration (ECON_INT).
EXPORT and IMPORT are standardized across the Community, and then the standardized scores for EXPORT and IMPORT are added and then divided by two for each region. Thus,
ECON_INT is an indicator of economic integration in this study.
164 For a discussion of these measures, see chapter I. We have discussed various views of how to measure economic integration. 137
Eighth, intra-EC letter traffic (LETTER) is letter traf fic with other EC regions as a percentage of the total let ter traffic. Intra-EC telegram traffic (TELEGRAM) is tele gram traffic with other EC regions as a percentage of the total telegram traffic. COMM is a communication indicator of political integration. LETTER and TELEGRAM are stan dardized across the Community/ and then the standardized
scores for LETTER and TELEGRAM are added and then divided
by two for each region.
Ninth, Public opinion data was drawn from surveys con
ducted by Ronald Inglehart from 1973 to 1985.165 Thus,
attitudinal indicators are public opinion in favour of EC membership (0PIN1), public opinion in favour of European
unification (0PIN2), and public opinion in favour of direct
election to European Parliament (0PIN3).166 0PIN1, 0PIN2,
and 0PIN3 are regional scores, and are standardized acorss
the Community, respectively. The standardized scores for
0PIN1, 0PIN2, and 0PIN3 are added and then divided by three
165 Ronald Inglehart, European Communities Studies (Ann Arbors University of Michigan, 1973-1984). (ICPSR 8434); Ronald Inglehart, Eurobarometer. (Ann Arbor: University of Michigan, 1985). (ICPSR 8513). Survey questions were: (1) Are you for or against Community membership ? (2) Are you for or against the efforts being made to unify West Europe ? (3) Are you for or against a direct election to European Parliament ?
166 por a discussion of these measures, see chapter I. We have discussed various views of how to measure politi cal integration. 138 for each region. Thus, OPIN is an attitudinal indicator of political integration.
Tenth, COMM and OPIN, as neofunctionalists argued, can provide multi-dimensionaJL aspects of political integration.
Clark and Merritt167 argued that increased communications are likely to change popular attitudes or to shape public opinion. People who have dealings or communications with other regions within the Community are more likely to favor integration. Changing public attitudes may provide a legit imate basis for elites attempting to promote further inte gration. Thus, they can have some impact on elite foreign policy decision-making.
The relationship between communication and political integration has been developed from Deutsch's work, Politi cal Community at the International Level: Problems of Def inition and Measurement. Deustch postulated and proved that it was empirically feasible to ascertain the existence of the community-ness by observing people's communications behavior. Countries so isolated from one another as to have no significant dealings among their populations would not be members of one community. Thus, increasing communi cation provides a basis for the development of a sense of community, and also movement upward on the scale of
167 Cal Clark and Richard L. Merritt, "European Community and Intra-European Communications: The Evidence of Mail Flows," Communications and Interaction in Global Politics, eds. Claudio Cioffi-Revilla, et al. (Beverly Hills: Sage, 1987), pp. 209-235. 139
"community-ness" is called integration because increasing communication enhances the need for decision rules to moni tor and coordinate the flows.
It is likely that communication serves to strenthen the sense of mutual identification between regions, and to pro mote a readiness to respond sympathetically to the need of others between regions. Puchala suggests that when a popu lation shares values, preferences, life-styles, common mem ories, aspirations, loyalties, and identification, people within this population communicate with one another fre quently, rapidly, clearly and effectively, over social, economic, cultural, and political concerns.168
Inglehart169 regarded attitudes as the psychological dimension of the transaction, and argued that the reduction in the psychological distance between the groups concerned would lead to reshaping the political aspirations of the major groups in the society.
Public preferences are likely to constitute an increas ingly effective influence on political decision-makers.
For example, changing attitudes favourable to integration are likely to provide a "permissive consensus" for decision-makers attempting to promote further integration.
168 Donald Puchala, "International Transactions and Region al Integration," International Organization 24 (Autumn 1970): 741.
169 Ronald Inglehart, "An End to European Integration," American Political Science Review 61 (March 1967): 91-105. 140
5.3 TIME PERIOD
This study covers the period from 1970 to 1981, because the
Community began to be enlarged beyond the original Six dur ing this period. Also, it was not until the 1970s that the
Community began to realize that there were regional imba lances within the Community, and began to disseminate its official statistics broken down by regions. The gap of per capita GDP between the ten most developed and the ten most less-favoured regions of the Community rose from 2.9 to 1 in 1970 to 4.0 to 1 in 1977. With the accession of Greece to the Community on January 1, 1981, it reached the ratio of 5.0 to l.170 The Community started to collect data by region as well by state since 1970. However, regional data is available only until 1981. On the other hand, during the period 1970-1981, the Community has enlarged from the original Six to Twelve member states. Thus, this study includes 76 regions from 1970 to 1971 (38 regions for each year), 357 regions from 1972 to 1978 (51 regions for each year), 108 regions from 1979 to 1980 (54 regions for each year), and 64 regions in 1981.
Regional disparities in per capita GDP or unemployment is likely to cause internal tension and political strains between regions, which would have an impact on the integra tion process. That is, divergence between regions at time
170 Commission of the European Communities, Regional Devel opment Fund: Sixth Annual Report (1980) (Brussels, 1981), p.3. 141
(t) is likely to cause internal tension and political strains between regions at time (t), which would affect integration efforts after time (t+1).
Gurr171 suggested that such strains could be explained in terms of relative deprivation theory. Relative depriva tion is defined as actors' perception of discrepancy between their value expectations and their value capabili ties. Gurr argued that it was the macro-analytic concept as well as the micro-analytic concept, because it referred both to individual states of mind and their collective dis tribution. When an individual or a group felt deprived or discontented, a reference point can be its own past condi tion, an abstract ideal, or the standards articulated by a leader as well as a "reference group." Gurr172 suggested an example of rural violence, when rural areas felt deprived relative to the most favoured region. Feelings of relative deprivation are likely to intensify when economic conditions, e.g. per capita GDP and unemployment, get worse relative to a reference group.
171 Ted Robert Gurr, Why Men Rebel (Princeton, New Jersey: Princeton University Press, 1970); Ted Robert Gurr, "A Causal Model of Civil Strife: A Comparative Analysis Using New Indices," Anger, Violence, and Politics, eds. Ivo K. Feierabend, et al. (Englewood Cliffs: Prentice- Hall, 1972), pp. 184-222.
172 Ted Robert Gurr, Why Men Rebel (Princeton, New Jersey: Princeton University Press, 1970), p. 180.
173 Ted Robert Gurr, Why Men Rebel (Princeton, New Jersey: 142
Gurr173 argued that the frustration-aggression relation ship was significant for political violence. He suggested that "the spread of frustration in areas developing less rapidly than their people wish can be seen as the outcome of a deep imbalance between achievement and aspiration .,. aspiration outruns achievement so far that many people, even if they are making some progress toward their goal, are dissatisfied because they get so much less than they want." That is, it seems that an individual or a group is likely to be frustrated or feel deprived when it sees its status relative to its reference group.
In a nutshell, the relative deprivation theory is con cerned with how feeling of an individual's or a group's relative deprivation has developed, and how it leads to political violence, which negatively affects the unity and solidarity of a community. Thus, the relative deprivation theory seems to illuminate a relationship between regional disadvantage and integration.
I take into account time-lags in order to examine the
relationship between regional disadvantage and integration
in the Community. Since data was collected on a yearly
basis, lags will also be based on 1- or 2- or 3-year, etc.
I choose short lags rather than longer ones because econom
ic welfare is the most salient issue in less developed
areas, and has a greater influence on political decisions
Princeton University Press, 1970), p. 39. 143 during a short period.174 Nye17S argued that the lower the
income, the lower the tolerance to differences in symmetry
and the more sensitive the problem of equitable distribu
tion of benefits. That is, models with a 1-, or 2-year lag were examined, among which models with a 1-year lag seem to
explain the relationship between regional disadvantage and
integration better than the other models in terms of sig
nificance of equation. In other words, both theoretical
and methodological considerations point to the superiority
of the one-year lag.
5.4 METHODS
In order to estimate the relationship between regional dis
advantage and integration, regression analysis is employed.
The first hypothesis is concerned with the relationship
between regional disadvantage and integration, while the
second hypothesis is concerned with the relationship
between integration and economic advantage in urban and
rural areas.
A correct functional form for the relationship between
regional disadavantage and integration is determined
through the analysis of residuals. First, I examine wheth
174 Ronald Inglehart, "Public Opinion and Regional Integra tion," International Organization 24 (Autumn 1970): 770.
175 Joseph S. Nye "Comparing Common Markets: A Revised Neo-Functional Model," International Organization 24 (Autumn 1970): 832. 144 er the expected value of residuals is zero in order to see whether a linear relationship is adequate for the model.176
Second, I examine whether there is an autocorrelation, which means that residuals are correlated with each other, because the existence of serial correlation in the residu als indicates that a relevant independent variable might be omitted from the model, or the model might have an incor rect functional form.177 In order to examine the existence of autocorrelation, Durbin-Watson test is used.
Lastly, there are pros and cons about the significance test.178 Critics argued that it was simply impossible to
176 For a discussion of linear and curvilinear regression, James H. Heward and Peter M. Steele, Business Control Through Multiple Regression Analysis (Londons Gower, 1972). See pp. 30-34, and pp. 61-76; Allen L. Edwards, Multiple Regression and the Analysis of Variance and Covariance (San Franciscos W.H. Freeman, 1979), pp. 7-53; For a discussion of nonlinear regression model ing, David A. Ratkowsky, Handbook of Nonlinear Regres sion Models (New Yorks Marcel Dekker, 1990), pp. 19-48; Leona S. Aiken and Stephen G. West, Multiple Regres sions Testing and Interpreting Integration (Newbury Parks Sage, 1991), pp. 28-48; James Jaccard, et al., Interaction Effects in Multiple Regression (Newbury Parks Sage, 1990), pp. 7-33.
177 For a discussion of autocorrelation, see Lawrence Salzman, Computerized Economic Analysis (New Yorks McGraw-Hill, 1968), pp. 133-190.
178 For those who do not favor the use of the significance test, Hanan C. Sevin, "A Critique of Tests of Sigifi- cance in Survey Research," American Sociology Review 22 (October 1957)$ 519-27. Denton E. Morrison and Ramon E. Henkel, The Significance Test Controversy (Chicagos Aldine, 1970), p. 185. Charles D. Cowger, "Statistical Significance Testss Scientific Ritualism or Scientific Method ?" Social Service Review 58 (September 1984)$ 358-72; For those who defend the significance test, G.E.P. Box, "Non-normality and Tests on Variations," 145 meet all of the assumptions (e.g. normal distribution, homogeneity of variance, etc.) required of the tests of significance. On the other hand, defenders argued that the tests were able to provide evidence, if not proof, for hypotheses and theories. Also, Box179 suggested that sta tistical tests were only inconsequentially affected by a violation of the underlying assumptions. Boneau100 showed that, based on the central limit theorem, when the sample sizes reach 25 or 30, one can ignore the effects of viola
tions of assumptions except for extremes. Thus, the sig
nificance test seems to be one of the best ways to express
the odds that the results of a study are not just chance
fluctuation.
Biometrika 40 (1950): 318-35. C.A. Boneau, "The Effects of Violations of Assumptions Underlying the t-Test," Psychological Bulletin 57 (1960): 49-64. Rob ert F. Winch and Donald T. Campbell, "Proof ? No. Evi dence ? Yes. The Significance of Tests of Signifi cance," American Sociologist 4 (1969): 140-3. Jacob Cohen and Patricia Cohen, Applied Multiple Regression/ Correlation Analysis for the Behavioral Science (Hills dale, New Jersey: Lawrence Erlbaum, 1975), pp. 48-9. Charles Glisson, "In Defense of Statistical Tests of Significance," Social Service Review 59 (September 1985): 377-86.
179 G.E.P. Box, op. cit. pp. 318-35.
180 C. Alan Boneau, op. cit. p. 63. 146
5.5 DATA SOURCES
1. Intra-EC trade data
George M. Taber, Patterns and Prospects of Common Market
Trade (London: Peter Owen, 1974).
Commission of the European Communities, Basic Statistics of the Community, 14 vols. (Brussels, 1970-83).
Eurostat, EC External Trade Indices (Brussels, 1988).
Eurostat, Monthly External Trade Bulletin, 12 vols. (Brus sels, 1970-81).
2. Communication data
Herbert Ungerer, Telecommunications in Europe (Brussels,
1988).
Eurostat, Statistical Yearbook, Transport, Communications,
Tourism, 16 vols. (Brussels, 1970-1985).
3. Public opinion data
Ronald Inglehart, European Communities Studies (Ann Arbor:
Center for Political Studies, 1973-1984). (ICPSR 8434)
Ronald Inglehart, Eurobarometer (Ann Arbor: Center for
Political Studies, 1985). (ICPSR 8513)
4. Financial data
Commission of the European Communities, General Report on the Activities of the European Communities. 12 vols. (Brus sels, 1971-1982).
Commission of the European Communities, The Community Budg et: The Facts and Figures (Brussels, 1988). 147
Commission of the European Communities, Financial Report
(Brussels, 1987).
Commission of the European Communities, The European Commu nity and its Regions: 10 Years of Community Regional Poli cy and of European Regional Development Fund (Brussels,
1985) .
5. Data about EC institutions
Eurostat, Review, 14 vols. (Brussels, 1971-1984).
6. Data about GDP, unemployment, agricultural employment and net migration
Eurostat, Rapid Reports: Regions, 3 vols. (Brussels,
1989-1991).
Eurostat, Regional Statistics: Population, Employment, Liv ing Standards, 5 vols. (Brussels, 1973-1977).
Eurostat, Yearbook of Regional Statistics, 8 vols. (Brus sels, 1981-1988).
Eurostat, Regional Statistics: Main Regional Indicators, 14 vols. (Brussels, 1970-1983).
Eurostat, Regional Statistics: The Community’s Financial
Participation in Investments, 3 vols. (Brussels,
1973-1975). CHAPTER VI
THE FIRST HYPOTHESIS: THE RELATIONSHIP BETWEEN
REGIONAL DISADVANTAGE AND INTEGRATION
The greater its economic disadvantage, the less eco
nomically and politically integrated the region.
I______i
6.1 INTRODUCTORY DISCUSSION
A relationship between regional disadvantage and integra tion was examined in two case studies in chapter IV. The two case studies suggested that regional disadvantage was negatively associated with integration. In this chapter, I will examine the relationship between economic disadvantage and integration more systematically. This involves esti mating it across all the regions in the Community and using multivariate statistical analysis to estimate the impact of the independent variables.
It seems that the greater the degree of regional disad vantage in the Community, the more likely it is to bring about political tensions which will in turn deter integra-
- 148 - 149
tion. That is, economic divergences between regions are
likely to affect both economic and political integration
because, as the neofunctionalists argued, economic integra
tion is likely to be a stepping stone for political inte
gration. The Commission of the European Communities point
ed out in the 1976 annual report that an increasing
tendency of the economic divergence between regions was a major obstacle to economic integration.181 Reichenbach
argued that regional disadvantage would have a negative
effect on economic and political integration.182 Many dis
advantaged regions are afraid that integration would bring
far greater benefits to the more advanced regions, leaving
behind the other regions. For example, there is more youth
unemployment and long-term unemployment in disadvantaged
regions. Young and skilled laborers in disadvantaged
regions are likely to migrate to favoured regions. Emigra
tion of young people will leave disadvantaged regions with
an ageing population. The drain-off of skilled labor will
leave disadvantaged regions with few opportunity to develop
their regions. People in disadvantaged regions will feel
deprived, as discrepancy between regions increases in the
181 Commission of the European Communities, European Regional Development Fund: Second Annual Report (1976) (Brussels, 1977), p. 8.
182 Horst Reichenbach, "A Politico-economic Overview," Integration and Unequal Development: The Experience of the EEC, eds. Dudley Seers and Constantine Vaitsos (New York: St. Martin's, 1980), pp. 79-99. 150 process of integration. They may think that integration benefits only favoured regions.183 When regional dispari ties persist, political strains are likely to have an adverse impact on the unity and solidarity of the Communi ty. Thus, I hypothesize that there is a negative relation ship between regional disadvantage and integration.
6.2 TESTING OF THE FIRST HYPOTHESIS
The independent variables measuring economic disadvantage are regional per capita GDP (PGDP), unemployment rate
(UNEMP), and net migration (NMIG), respectively. The dependent variables measuring economic and political inte gration are EC0N__INT, COMM and OPIN, respectively.
EC0N_INT is an indicator of economic integration, as meas ured by the share of community trading in total trading.
COMM is an indicator of political integration, as measured by inter-regional communications, and OPIN is an indicator of political integration, as measured by peoples' attitudes toward integration.
Tables 21, 22, and 23 summarize the relationship between regional disadvantage and economic integration when the reference group is the state, the most favoured region lea Tony Cutler, et al., 1992 - The Struggle for Europe: A Critical Evaluation of the European Community {New York: Berg, 1989), p. 79; Eduardo Lizano, "Integration of Less Developed Areas and of Areas on Different Lev els of Development," Economic Integration: Worldwide, Regional, Sectoral, ed. Fritz Machlup (London: Macmil lan, 1976). 151 within the state, and the Community as a whole, respective ly.184
Table 21
The Relationship between Regional Disadvantage and Economic Integration (the State, Lag = 1)
F R 2 D-W PGDP UNEMP NMIG
b beta b beta b beta
ECON 42.02** 0.27 1.12 50.31* 0.48 -43.42* -0.11 0.07 0.01 (5.31) (20.62) (0.28)
Note: *p<0.05; **p< 0.0001; one-tailed test. Note: D-W is Durbin-Watson statistic. Note: Estimated standard errors are put in parenthesis.
Table 22
The Relationship between Regional Disadvantage and Economic Integration (the Most Favoured Region, Lag = 1)
F R2 D-W PGDP UNEMP NMIG
b beta b beta b beta
ECON 10.25** 0.20 1.22 1.16 0.03 -66.28* -0.32 -0.23 -0.09 (2.80) (13.82) (0.17)
Note: * p < 0.05; ** p < 0.0001; one-tailed test. Note: D-W is Durbin-Watson statistic. Note: Estimated standard errors are put in parenthesis.
184 Tables of correlations between independent variables are presented in Appendix C. The correlations among any two independent variables are not extremely high. 152
Table 23
The Relationship between Regional Disadvantage and Economic Integration (the Community, Lag = 1)
F R 2 D-W PGDPUNEMPNMIG
b beta b beta b beta o O CT\ 1 ECON 28.37** 0.21 1.22 22.65* 0.40 -27.15* • 0.18* 0.09 (3.14) (15.99) (0.09)
Note: * p < 0.05; ** p < 0.0001; one-tailed test. Note: D-W is Durbin-Watson statistic. Note: Estimated standard errors are put in parenthesis.
Unemployment has a negative relationship with economic integration, whether the reference group is the state, or the most favoured region, or the Community. Regions with higher unemployment rates are less likely to be knitted into Community trading relative to regions with lower unem ployment rates. McHugh and Widdows185 argued that unem ployment rates were related to the composition of local industry and the characteristics of the local labor market.
There are two reasons why regions with higher unemployment rates are less likely to be integrated into the Community.
First, major items for intra-EC import are machinery and transport equipments. The higher unemployment rates in dis advantaged regions, the less economic activities in these regions, and the less the trade in machinery and transport
185 Richard McHugh and Richard Widdows, "The Age of Capital and State Unemployment Rates," Journal of Regional Sci ence 24 (February 1984): 85. 153 equipments with the Community. Second, major items which disadvantaged regions export into the Community are tradi tional manufactured goods. The higher unemployment rates
in disadvantaged regions, the greater impact on the tradi tional industry. In addition, the share of disadvantaged
regions in the Community export is likely to decrease, as
the share of low-cost manufactured goods, e.g. textiles, clothing, shoes, from the NICs increases.
The strength of unemployment's impact varies across the
three reference groups. The impact of unemployment on eco
nomic integration is the largest when the reference group
is the most favoured region within the state. Gurr186
argued that most people probably chose their reference
groups from among those groups they perceived to be socioe
conomically similar to themselves, but they were most like
ly to set their expectations by those experiencing the most
rapid increase in well-being. Thus, regions with higher
unemployment rates are less likely to be integrated into
the Community when their unemployment rates are increasing
relative to the most favoured region.
Per capita GDP has a positive relationship with economic
integration when the reference group is the state or the
Community. Regions with higher per capita GDP relative to
the state or the Community are more likely to be integrated
186 Ted Robert Gurr, Why Men Rebel (Princeton: Princeton University Press, 1970), p. 107. 154 into the Community. As Nye187 argued, the lower the income, the lower the tolerance to differences in symmetry.
These regions are likely to have preference to protective measures against free trading within the Community. Thus, regions with lower per capita GDP are less likely to be integrated into the Community.
Net migration has a positive relationship with economic integration when the reference group is the Community. The immigrant regions, where labor tends to be scarce among factors of production, can increase their national products by utilizing foreign labor. Thus, they are more likely to be knitted into the Community trading. Meanwhile, the labor sending regions are likely to have the problem of declining agricultural production affected by large-scale emigration.
Their intra-EC trading of agricultural products will decrease.
It seems that regional disadvantage is most keenly felt when the reference group is the state because there is the strongest relationship between regional disadvantage and economic integration when the reference group is the state.
People are more likely to be sensitive to equitable income distribution within the state.
187 Joseph S. Nye, "Comparing Common Markets: A Revised Neo-Functional Model," International Organization 24 (Autumn 1970): 832. 155
A functional form for the relationship between regional disadvantage and economic integration is based upon linear regression. Durbin-Watson statistics indicate that we do not reject the null hypothesis of no-first-order autocorre lation. The lower and upper values for D-W statistic are
0.7 and 1.8, respectively.
Tables 24, 25, and 26 summarize the relationship between regional disadvantage and political integration, as meas ured by inter-regional communications, when the reference group is the state, the most favoured region within the state, and the Community as a whole , respectively.
Table 24
The Relationship between Regional Disadvantage and Political Integration (Communication Measures, the State, Lag = 1)
F R2 D-W PGDP UNEMP NMIG
b beta b beta b beta
COMM 13.46** 0.21 1.34 27.26* 0.31 -13.33 -0.04 -0.13 -0.03 (4.89) (19.00) (0.26)
Note: * p < 0.05; ** p < 0.0001; one-tailed test. Note: D-W is Durbin-Watson statistic. Note: Estimated standard errors are put in parenthesis.
Per capita GDP has a positive relationship with politi cal integration, as measured by inter-regional communica tions, whether the reference group is the state, or the 156
Table 25
The Relationship between Regional Disadvantage and Political Integration (Communication Measures, the Most Favoured Region/ Lag = 1)
F R 2 D-W PGDP UNEMPNMIG
b beta b beta b beta
COMM 6.07** 0.20 0.99 6.04* 0.18 -22.36* -0.13 0.21 0.10 (2.35) (11.58) (0.14)
Note: * p < 0.05; ** p < 0.0001; one-tailed test. Note: D-W is Durbin-Watson statistic. Note: Estimated standard errors are put in parenthesis.
Table 26
The Relationship between Regional Disadvantage and Political Integration (Communication Measures, the Community, Lag = 1)
F R 2. D-W PGDP UNEMP NMIG
b beta b beta b beta
COMM 20.33** 0.25 1.35 15.48* 0.33 -23.22* -0.09 0.17* 0.11 (2.70) (13.73) (0.08)
Note: * p < 0.05; ** p < 0.0001; one-tailed test. Note: D-W is Durbin-Watson statistic. Note: Estimated standard errors are put in parenthesis. most favoured region, or the Community. Regions with higher per capita GDP relative to the state or the most favoured region or the Community as a whole are more likely to be integrated into the Community. Deutsch argued that if the 157 volume of communications increases, then mass and elite
responsiveness to their partners increases within a commu
nity. The increase of mass and elite responsiveness will
strengthen the sense of mutual identification within the
Community. People will identify with one another, and dis
tinguish between themselves and outside. Regions with
higher per capita GDP are likely to have more dealings or
communications with other regions within the Community.
Thus, they are more likely to have mutual identification
with other regions, and to be integrated into the Communi
ty.
Unemployment has a negative relationship with political
integration, as measured by inter-regional communications,
when the reference group is the most favoured region within
the state, or the Community as a whole. As Inglehart
argues, regions with better economic conditions are likely
to have more communications with other regions, and to be
integrated into the Community.
Like the relationship between net migration and economic
integration, net migration has a positive relationship with
political integration, as measured by inter-regional commu
nication, when the reference group is the Community. It
indicates that immigrant regions are more likely to be
integrated into the Community. The immigrant regions are
required to provide immigrants with housing, schools and 158 hospitals, as the number of married immigrants and their families grows. As Deutsch argued, the development of institutions, which resulted from increasing volume of transaction, will promote political integration. The immig rant regions are more likely to be integrated into the Com munity.
The strength of the relationship between regional disad vantage and political integration, as measured by inter regional communications, varies across the three reference groups. Economic disadvantage is most keenly felt when the reference group is the Community. People may be more con cerned with regional disparities within the Community in order to have the sense of the community-ness, i.e. friend liness, trust, mutual identification, etc. As Puchala188 argued, regions which share similar life-style within the
Community are more likely to identify with one another, and to be integrated into the Community.
A functional form for the relationship between regional disadvantage and political integration, as measured by inter-regional communications, is based upon linear regres sion. Durbin-Watson statistics indicate that we do not reject the null hypothesis of no-first-order autocorrela tion.
188 Donald Puchala, "International Transactions and Region al Integration," International Organization 24 (Autumn 1970): 741. 159
Tables 27, 28 and 29 summarize the relationship between regional disadvantage and political integration, as meas ured by peoples' attitudes toward integration, when the reference group is the state, the most favoured region within the state, and the Community as a whole, respective ly.
Table 27
The Relationship between Regional Disadvantage and Political Integration (Public Opinion Measures, the State, Lag = 1)
F R 2 D-W PGDP UNEMP NMIG
b beta b beta b beta
OPIN 23.88** 0.20 1.10 7.50* 0.08 -52.36* -0.14 0.11 0.02 (5.67) (20.58) (0.34)
Note: * p < 0.05; ** p < 0.0001; one-tailed test. Note: D-W is Durbin-Watson statistic. Note: Estimated standard errors are put in parenthesis.
Per capita GDP has a positive relationship with attitu dinal integration when the reference group is the state or the Community, and a negative relationship with attitudinal integration when the reference group is the most favoured region within the state. Regions with higher per capita
GDP relative to the state or the Community as a whole seem to have positive attitudes toward integration. On the oth er hand, because the region which has the highest per cap- 160
Table 28
The Relationship between Regional Disadvantage and Political Integration (Public Opinion Measures, the Most Favoured Region, Lag = 1)
F R 2 D-W PGDPUNEMP NMIG
b beta b beta b beta
OPIN 48.49** 0.40 1.10 -20.00* -0.53 -83.52* -0.42 -1.42* -0.52 (2.50) (10.50) (0.10)
Note: * p < 0.05; ** p < 0.0001; one-tailed test. Note: D-W is Durbin-Watson statistic. Note: Estimated standard errors are put in parenthesis.
Table 29
The Relationship between Regional Disadvantage and Political Integration (Public Opinion Measures, the Community, Lag = 1)
F R2 D-W PGDP UNEMP NMIG
b beta b beta b beta
OPIN 25.18** 0.21 1.05 14.00* 0.30 -20.50 -0.07 0.15* 0.10 (3.50) (16.50) (0.10)
Note: * p < 0.05; ** p < 0.0001; one-tailed test. Note: D-W is Durbin-Watson statistic. Note: Estimated standard errors are put in parenthesis. ita GDP within the state was designated as the most fav oured region, any region is not likely to have higher per capita GDP than the most favoured region. As Inglehart189
189 Ronald Inglehart, "An End to European Integration ?11 American Political Science Review 61 (March 1967): 91-105. 161 argued, those satisfied with their standard of living are more likely to have attitudes favourable to integration.
Thus, regions with higher per capita GDP relative to the state or the Community are more likely to be integrated
into the Community. However, the larger the gap between a
region's per capita GDP and that of the most favoured
region, the less favourable to integration the region.
Unemployment has a negative relationship with attitudi-
nal integration when the reference group is the state or
the most favoured region within the state. Regions with
higher unemployment rates relative to the state or the most
favoured region are less likely to be integrated into the
Community. The Community would seem to be a less salient
reference group than the state. The impact of per capita
GDP and unemployment on attitudinal integration is most
salient when the reference group is the most favoured
region within the state. Also, the strength of the rela
tionship between economic disadvantage and attitudinal
integration varies across the three reference groups. Eco
nomic disadvantage manifests itself most strongly when the
reference group is the most favoured region within the
state. As discussed in the relative deprivation theory,
people tend to compare their economic conditions with the
most favoured region within the state. When their economic
conditions are getting worse relative to the most favoured 162 region# they are more likely to feel deprived# and have negative attitudes toward the unity and solidarity of the
Community.
Net migration has a positive relationship with attitudi nal integration when the reference group is the Community# and a negative relationship with attitudinal integration when the reference group is the most favoured region within the state. Positive net migration may bring about economic gains for immigrant regions. The immigrant regions# which have more net migration than the Community average# may see the inflow of foreign laborers as an opportunity to increase the national products by using them. They are more likely to have positive attitudes toward integration. How ever# when the number of immigrants grows# the immigrant regions may have greater economic burden in order to pro vide immigrants and their families with housing# hospitals and schools# etc. Meanwhile# immigrants may feel discrimi nated against because of their poor living conditions, social insecurity, and insufficient integration into socie ty. Thus# these regions with more net migration than the most favoured region are more likely to have negative atti tudes toward integration.
A functional form for the relationship between regional disadvantage and attitudinal integration is based upon lin ear regression. Durbin-Watson statistics indicate that we 163 do not reject the null hypothesis of no-first-order auto correlation.
6.3 SUMMARY AND CONCLUSION
This chapter addresses the issue of whether regional disad vantage is negatively associated with economic and politi cal integration.
Economic integration is measured by the share of intra-
EC trading in total trading. Political integration is measured by inter-regional communications and attitudinal integration.
Regional disadvantage is examined relative to the state, the most favoured region within the state, and the Communi ty as a whole. It is intended to discover the reference group against which regional disadvantge is most keenly felt. I will summarize the salience of the reference group and the impact of the independent variables.
The strength of the relationship between regional disad vantage and economic integration is the largest when the reference group is the state. People seem to be more con cerned with the regional disparities relative to the state.
As Nye argued, the lower the income, the lower the toler ance to differences in symmetry, the more protective meas ures against free trading, and the less likely it is to be integrated into the Community. 164
Unemployment has a negative relationship with economic integration, whether the reference group is the state, the most favoured region, or the Community. Regions with high er unemployment rates are less likely to be knitted into the Community trading relative to regions with lower unem ployment rates. The higher unemployment rates in disadvan taged . regions, the less economic activities in these regions, and the less imports of machinery and transport equipments from the Community. Also, the increasing exports of low-cost manufactured goods from the NICs will decrease the share of disadvantaged regions in Community trading.
Net migration has a positive relationship with economic integration. Immigrant regions are likely to have an oppo- tunity to increase their national products by using foreign laborers. However, the labor sending regions are likely to experience decrease in agricultural products in EC trading because of declining agricultural production affected by large-scale emigration.
The relationship between regional disadvantage and political integration, as measured by inter-regional commu nications, is most salient when the reference group is the
Community. It seems that people are more concerned with the regional disparities within the Community in order to have the sense of mutual identification with other regions in the Community. Regions are more likely to have mutual 165 identification with other regions which have similar levels of development within the Community.
Per capita GDP has a positive relationship with politi cal integration, as measured by inter-regional communica tions, whether the reference group is the state, the most favoured region, or the Community. Regions with higher per capita GDP are likely to have more communications with oth er regions, and to have the sense of mutual identification, and to be integrated into the Community.
Unemployment has a negative relationship with political integration, as measured by inter-regional communications, when the reference group is the most favoured region within the state, or the Community as a whole. Net migration has a positive relationship with political integration, as measured by inter-regional communication, when the refer ence group is the Community. As Deutsch argued, the devel opment of institutions, which resulted from inter-regional communications, is likely to bring about political integra tion. Immigrant regions are required to provide immigrants and their families with housing, hospitals, and schools, etc. Thus, they are more likely to develop institutions dealing with immigrants and to have mutual identification with one another.
The relationship between regional disadvantage and atti tudinal integration is most salient when the reference 166 group is the most favoured region within the state. The
impact of per capita GDP and unemployment on attitudinal
integration is also most salient when the reference group
is the most favoured region. People are more likely to compare their economic conditions with the most favoured
region within the state. When their economic conditions
are getting worse relative to the most favoured region,
they are more likely to feel deprived, and have negative
attitudes toward the unity and solidarity of the Community.
Per capita GDP has a positive relationship with attitu
dinal integration when the reference group is the state or
the Community, and has a negative relationship when the
reference group is the most favoured region. As Inglehart
argued, those satisfied with their standard of living are
more likely to favour integration. On the other hand, the
most favoured region was defined as that which had the
highest per capita GDP within the state. Any region is not
likely to have higher GDP than the most favoured region
within the state. Thus, the larger the gap between a
region's per capita GDP and that of the most favoured
region, the less favourable to integration the region.
Unemployment has a negative relationship with attitudi
nal integration when the reference group is the state, or
the most favoured region within the state. Regions are
more likely to be concerned with economic conditions within 167 the state because they want to be compared with regions which are socioeconomically similar to themselves, as dis cussed in the relative deprivation theory. Regions with better economic conditions relative to- other regions within the state are more likely to favour integation.
Net migration has a positive relationship with attitudi nal integration when the reference group is the Community, and a negative relationship when the reference group is the most favoured region. There seems to be a threshold for attitudinal integation due to positive net migration. The immigrant regions which have more net migration than the
Community average are more likely to have economic gains from the inflow of foreign laborers. However, when there are too many immigrants and their families are living in immigrant regions, which have more net migration than the most favoured region, these regions will have an economic burden of constructing housing, hospitals, and schools for immigrants. Immigrants, meanwhile, may feel discriminated against because of their poor living conditions, social insecurity, and insufficient integration into society.
People in these regions are more likely to have negative attitudes toward integration.
We notice that per capita GDP and unemployment rate have the largest impact on economic and political integration across the three reference groups. These findings about 168 per capita GDP and unemployment rate make sense when we examine the economic situation in the 1970s and early
1980s.190
First, we had the monetary crisis in 1971, which arose from the overvaluation of the U.S. dollar against gold and currencies valued in terms of gold. The monetary crisis upset the rate of economic expansion and level of employ ment in the Community. Unemployment seemed to increase in all regions, but more rapidly in disadvantaged regions, which might bring about greater disadvantage in less devel oped areas.
Second, oil crisis arose when the Arab countries quadru pled the price of crude oil later in 1973 and 1979. The
Community was hard hit by the oil crisis because it import ed 63 percent of its energy requirement in 1973 (55 percent in 1979), and imported 90 percent of imported oil from the
Middle East. The oil crisis forced up the commodity prices and seemed to affect the standards of living in all regions, but more significantly in disadvantaged regions, which might bring about wider discrepancy of per capita GDP between regions.
190 E.C. Hallett, "Economic Convergence and Divergence in the European Community: A Survey of the Evidence," Eco nomic Divergence in the European Community, eds. Michael Hodges and William Wallace (London: Allen & Unwin, 1981), p.25; Stein Rokkan, et al., Centre- Periphery Structures in Europe: An ISSC Workbook in Comparative Analysis (Frankfurt: Campus Verlag, 1987), p. 44. 169
Findings also suggest that regional disadvantage is more
likely to have a negative effect on integration. The greater regional disadvantage, the more likely it is to
bring about interregional disaffection. Disintegrative
forces are likely to gather around political parties in
disadvantaged regions, seeking secession or separatism.
For example, the Sardinia Action Party has been seeking
full regional autonomy, and the Scottish National Party and
Plaid Cymru did in Scotland and Wales, respectively.
When there existed ethnic differences (e.g. cultural,
linguistic, religious differences) in economically disad
vantaged regions, disintegrative forces are more likely to
interact with regionalism or nationalism. Examples are
Northern Ireland, Corsica, Brittany, Alsace, Wallonia, Tyr
ol, and Andalucia, etc.
In conclusion, economic disadvantage is likely to affect
economic and political integration. As Deutsch argues,
more inter-regional communications will bring about the
sense of community-ness. As Inglehart argues, attitudinal
integration will lead to the reduction in the psychological
distance between regions. However, as Gurr argues in the
relative deprivation theory, disadvantaged regions are
likely to feel deprived or discontented when their economic
conditions are worse relative to the reference group,
whether it is the state, or the most favoured region within the state, or the Community as a whole. When feeling of relative economic deprivation intensifies, it is likely to bring about political strains between regions, which will have an adverse effect on the unity and solidarity of a community. CHAPTER VII
THE SECOND HYPOTHESIS: THE RELATIONSHIP BETWEEN
INTEGRATION AND ECONOMIC ADVANTAGE IN URBAN AND
RURAL AREAS
The positive relationship between integration, eco
nomic and political, and economic advantage is
stronger in urban areas than in rural areas.
7.1 INTRODUCTORY DISCUSSION
There are two views about the effects of integration, political and economic, on urban and rural areas. The one is an optimistic view,191 which argues that integration benefits all regions, even if some benefit more than oth ers. Each region specializes in the production of goods which it is able to produce relatively cheaply, and highly developed transport and communications systems promote
191 For those who have an optimistic view about the effects of integration, economic and political, on urban and rural areas, Karin Peschel, The Effects of European Integration on Regional Development - Some Lessons from the Past (Kiel, 1989). Roger D. Hansen, "European Integration: Forward March, Parade Rest, or Dismissed ?" International Organization 27 (1973): 225-54.
- 171 - 172
interregional exchanges. The other is a pessimistic view,192 which argues that integration, economic and polit
ical, favours centralization and prosperous urban areas at the expense of rural areas, which brings about a decline in the well-being of rural areas.
Keohane and Nye193 are concerned with the effects of
integration, economic and political, on regions. They argue that it is not true that increases in levels of inte gration are necessarily beneficial to all regions. Too
often one finds an implicit assumption that integration is
a good thing per se. However, they argue that this is wrong
for several reasons. First, where many values are
involved, integration may enhance some values while dimin
ishing others. For example, Canadians argue that increased
levels of economic integration with the U.S. have contrib
uted to increased Canadian material welfare but decreased
Canadian political and cultural autonomy. Second, economic
integration has distributional effects, and may look dif
ferent from the periphery than from the centre. What is
good for the whole is not necessarily good for each of the
192 For those who have a pessimistic view about the effects of integration, economic and political, on urban and rural areas, Stuart Holland, The Regional Problem (Lon dons Macmillan, 1976).
193 Robert 0. Keohane and Joseph S. Nye, ’'International Interdependence and Integration," International Poli tics, eds. Fred I. Greenstein and Nelson W. Polsby (Reading, Massachusetts: Addison-Wesley, 1975), pp. 363-414. 173 parts. Third, integration may introduce changes in socie
ties that are undesired at least by many of the inhabi
tants. For example, importation of new patterns of life may drastically alter established social patterns and lead
to more or less serious problems.
Parker194 argues that political integration will
increase the disparity between urban and rural areas by
making urban areas richer and rural areas poorer, because
new investment is most attracted to urban areas, which in
turn increases the advantages which urban areas possess
over rural areas. Clout195 also argues that political
integration benefits urban areas with more developed trans
port and communications systems. Urban areas exert broaden
ing control of their surrounding space, with individual
cities becoming bound together by roads and railways to
give rise to dynamic city regions and axes of movement and
economic activity. Rural areas, on the other hand, appear
even more deprived, lacking the stimulus of good communica
tions to encourage employment growth.
194 Geoffrey Parker, The Logic of Unity (London: Longman, 1975)
19 5 Hugh D . Clout, Regional Development in Western Europe (London: David Fulton, 1987).
196 Herbert Giersch, "Economic Union between Nations and the Location of Industries," Review of Economic Studies 17 (1949): 87-97. 174
On the other hand, Giersch196 is concerned with the effects of economic integration on the location of indus tries and the economic structure. He maintains that the abolition of restrictions on trade and factor movements will strengthen the attractiveness of highly industrialized centres for both labor and capital. Bye197 also argues
that, as a result of economic integration, some regions might gain, while others would lose. Holland198 argues
that agglomeration economies stimulate the progressive
growth of productivity and production in urban areas. Ter
tiary activities grow in urban areas, which attract the
most high-skilled labor, whose presense may then attract
new technologically advanced economic activities to that
region. Rural areas, on the contrary, may suffer if work
ers migrate to other regions, leaving their markets deplet
ed and their labor supply deprived of young and skilled
workers.
In this chapter I will examine whether the relationship
between integration, political and economic, and economic
advantage is stronger in urban areas than in rural areas.
As Stewart199 argues, the urban-rural dichotomy may not be
197 Maurice Bye, "Customs Unions and National Interests," International Economic Papers 3 (1953): 208-34.
198 Stuart Holland, Capital versus Regions (London: Macmil lan, 1976).
199 Charles T. Stewart, "The Urban-Rural Dichotomy: Con cepts and Uses," American Journal of Sociology 64 (1958): 152-58. 175 representative of the real world situation. Many regions are mixed rather than pure ideal types, e.g. rural or urban. For example, when the various cities form a discon tinuous conurbation enclosing large areas of agricultural land and important elements of rural population, urban and rural space coexist, the former being superimposed on the latter. On the other hand, Cloke200 argues that certain selected variables may be measured to ascertain whether regions incline towards the rural or urban pole. In this chapter the rural-urban distinction is made in terms of occupational structure, i.e. the share of agricultural employment in total labor force. There are two types of regions: Group A and Group B.201 Group A consists of regions, which have an extremely high proportion of agri cultural employment, and account for 10 percent of the total regions in the Community (77 regions). Group B con sists of regions, which have an extremely low proportion of agricultural employment, and account for 10 percent of the total regions in the Community (77 regions). I will com pare Group A with Group B in order to see whether the rela
200 Paul J. Cloke, Key Settlements in Rural Areas (New York: Methuen, 1979), pp. 3-15.
201 The one case (Group A) contains regions whose share of agricultural employment is higher than 11 percent, while the other case (Group B) contains regions whose share of agricultural employment is lower than 4 per cent. The Community average in the share of agricul tural employment is 7 percent. Thus, with a 95 percent confidence, Group A and Group B are determined as two extreme cases in both ends. 176 tionship between integration, political and economic, and economic advantage is stronger in urban areas than in rural areas. Meanwhile, we may be missing the urban-rural dis tinction for single state regions, e.g. Luxembourg, Ireland and Denmark, which are regarded as one region, respective ly, because they have too small a population to be sub divided. For example, although the share of agricultural employment in Ireland is over 19 percent, there are few people employed in agriculture in Dublin, Ireland. How ever, because we are concerned with two extreme cases, i.e. areas with an extremely high share of agricultural employ ment and an extremely low share of agricultural employment, they are less likely to confound our findings in this study.
7.2 TESTING OF THE SECOND HYPOTHESIS
The independent variables measure economic and political integration. ECON_INT is an indicator of economic integra tion, as measured by the share of community trading in total trading. COMM is an indicator of political integra tion, as measured by inter-regional communications, and
OPIN is an indicator of political integration, as measured by peoples' attitudes toward integration. The dependent variables measuring economic advantage are per capita GDP
(PGDP), unemployment (UNEMP) and net migration (NMIG) 177
respectively. I want to see whether the whole community is wealthier by economic and political integration, and the
relationship between integration, economic and political, and economic advantage is stronger in urban areas than in
rural areas.
Tables 30, 31 and 32 summarize the relationship between
integration and all regions, between integration and
regions with an extremely high proportion of agricultural
employment, and between integration and regions with an
extremely low proportion of agricultural employment,
respectively.
Table 30
The Relationship between Integration and All Regions, (Lag = 1)
F R 2 D-W ECON _INT COMM OPIN
b beta b beta b beta
PGDP 32.95** 0.32 1.48 0.18* 0.20 0.16* 0.15 0.25* 0.25 (0.08) (0.09) (0.05)
UNEMP 16.18** 0.25 0.93 -0.25* • -0.10 -0.19* -0.09 -0.17* -0.08 (0.06) (0.05) (0.05)
NMIG 6.51 0.15 1.80 0.05 0.06 0.05 0.05 0.21 0.23 (0.08) (0.10) (0.15)
Note: * p < 0 .05; ** p < 0 .0001; one- tailed test. Note: D-W is Durbin-Watson statistic. Note: Estimated standard errors are put in parenthesis. 178
Table 31
The Relationship between Integration and Regions with an Extremely High Proportion of Agricultural Employment, (Lag = 1)
F R 2 D-W ECON _INT COMM OPIN
b beta b beta b beta
PGDP 15.04** 0.25 1.05 0.44* 0.61 -0.42* -0.47 -0.78* -0.40 (0.16) (0.22) (0.25)
UNEMP 14.62** 0.22 1.20 -0.50* ■-0.43 0.07 0.05 0.05 0.02 (0.27) (0.37) (0.42)
NMIG 3.79 0.13 1.41 0.13 0.22 0.01 0.02 0.50 0.31 (0.24) (0.19) (1.22)
Note: * p < 0 .05; ** p < 0 .0001; one-tailed test. Note: D-W is Durbin-Watson statistic. Note: Estimated standard errors are put in parenthesis.
Table 32
The Relationship between Integration and Regions with an Extremely Low Proportion of Agricultural Employment, (Lag = 1)
F R 2 D-W ECON _INT COMM OPIN
b beta b beta b beta
PGDP 26.72** 0.53 1.02 0 .20* 0.15 0.79* 0.40 0.45* 0.32 (0.04) (0.12) (0.14)
UNEMP 12.32** 0.29 1.60 -0.25* -0.46 -0.08 -0.12 -0.08 -0.17 (0.07) (0.15) (0.06)
NMIG 8.03 0.25 1.93 0.59 0.57 0.09 0.06 0.57 0.52 (1.33) (0.31) (1.43)
Note: * p < 0.05; ** p < 0.0001; one-tailed test. Note: D-W is Durbin-Watson statistic. Note: Estimated standard errors are put in parenthesis. 179
The more economically integrated the Community, the wealthier the Community. Economic integration has a posi
tive relationship with per capita GDP (PGDP), and a neg
ative relationship with unemployment (UNEMP) in urban and
rural areas. The increasing share of community trading is
likely to help rural economies, which tend to rely on the
trade in artisan goods, and agricultural products, e.g.
fruits, vegetables, wine, tobacco, and olive oil. Thus,
when rural areas are knitted into Community trading, eco
nomic integration is likely to make rural areas wealthier.
On the other hand, urban areas, where tertiary activities
grow, attract the most high-skilled labor and capital.
Thus, the more economically integrated urban areas, they
are likely to be richer as economic core areas.
Integration, political and economic, has a stronger
relationship with per capita GDP than with unemployment.
Interregional mobility of capital and labour is likely to
affect per capita GDP more than unemployment, because per
capita GDP fluctuates as economic conditions change, while
unemployment does not fluctuate over a short period.
The more politically integrated the Community or urban
areas, the wealthier the Community as a whole or urban
areas. However, this is not the case for rural areas.
Political integration, as measured by inter-regional commu
nications (COMM) and attitudinal integration (OPIN), has a positive relationship with per capita GDP (PGDP) and a neg ative relationship with unemployment (UNEMP) for all regions in the Community. Political integration has a positive relationship with per capita GDP 'PGDP) for regions with an extremely low proportion of agricultural employment, and has a negative relationship with per capita
GDP (PGDP) for regions with an extremely high proportion of agricultural employment. The more politically integrated rural areas, inhabitants in rural areas are likely to be attracted to urban areas, which have more environmental attractions with commercial and educational facilities.
Rural areas become depopulated and deprived of young and skilled workers, which makes a decline of the well-being in rural areas. Thus, as Clout202 argues, rural areas may be left with some financial inputs from tourists, second-home owners and retired people. On the other hand, the more politically integrated urban areas, urban areas with highly developed communications systems are likely to be richer, because inter-city links, e.g. the link between Paris and
Brussels, or between London and Paris, facilitate the flow of people and goods in favour of urban areas, which are economic core areas.
202 Hugh D. Clout, "Rural Space," Regional Development in Western Europe, ed. Hugh D. Clout (London; David Ful ton, 1987), pp. 39-64. 181
A- functional form for the relationship between integra tion, economic and political and economic advantage is based upon linear regression. Durbin-Watson statistics indicate that we do not reject the null hypothesis of no- first-order autocorrelation. The lower and upper values for D-W statistic are 0.8 and 1.9, respectively.
7.3 SUMMARY AND CONCLUSION
This chapter is concerned with whether the relationship between integration, political and economic, and economic advantage is stronger in urban areas than in rural areas.
I will summarize how economic and political integration affect urban and rural areas.
Unlike views of those, e.g. Holland, Giersch, Bye, who argue that economic integration brings about a decline in the well-being of rural areas, the more economically inte grated, the richer the Community as a whole, urban and rural areas. It appears that economic integration is good for each of the parts as well as for the whole. Economic integration has a positive relationship with per capita GDP
(PGDP), and has a negative relationship with unemployment
(UNEMP) for all regions, urban areas, and rural areas, respectively. As rural areas are more knitted into Commu nity trading, rural areas are likely to benefit from eco nomic integration, because they can export more artisan 182 goods and agricultural products into the Community. Thus,
economic integration is likely to be beneficial to rural
economies. On the other hand, the more economically inte
grated urban areas, the more tertiary as well as manufac
turing employment in urban areas, because interregional
mobility of labor and capital will attract skilled labor
and capital to urban areas. Thus, the more economically
integrated urban areas, the wealthier urban areas.
Like views of those, e.g. Parker, Clout, who argue that
political integration makes urban areas richer and rural
areas poorer, political integration seems to have different
effects on urban and rural areas. The more politically
integrated the Community and urban areas, the richer the
Community as a whole and urban areas. However, this is not
the case for rural areas. As Keohane and Nye argue, polit
ical integration which seems to be good for the whole is
less likely to be good for each of the parts. Political
integration, as measured by inter-regional communications
and attitudinal integration, has a positive relationship
with per capita GDP (PGDP), and has a negative relationship
with unemployment (UNEMP) for all regions. Political
integration has a positive relationship with per capita GDP
(PGDP) in urban areas. However, political integration has a
negative relationship with per capita GDP (PGDP) in rural
areas. The more politically integrated (i.e. the more 183
interregional communications), the more likely it is that
inhabitants in rural areas are attracted to urban areas, which have more environmental attractions with commercial
and educational facilities. Rural areas become depopulated
and deprived of young and skilled workers, which brings
about a decline of the well-being of rural areas.203 Mean while, the more politically integrated urban areas, urban
areas with developed communications and transport systems
become more prosperous. Inter-city links in communications
and transport systems help the flow of people and goods in
favour of urban areas, where more skilled workers and capi
tal are attracted.
It was expected that integration, economic and politi
cal, is less likely to benefit rural areas in terms of
migration.204 They experience the depopulation because
more people emigrate to urban centres. They also experience
the ageing population because most emigrants are young
workers. However, the finding shows that there is no sta
tistically significant relationship between integration and
migration for urban and rural areas. It is argued that it
is impossible to obtain statistically significant results
about migration because there are many determinants of
203 Hugh D. Clout, Regional Development in Western Europe (London: David Fulton, 1987).
204 Francesco Vito, "Problems of the Underdeveloped Regions of Italy," Backward Areas in Advanced Countries, ed. E.A.G. Robinson (London: Macmillan, 1969). 184 migration, e.g. migrant's characteristics (age, income, education, length of residence) and place attributes (ori gin, destination, interaction, regional-competitive charac teristics), and so many variables are controlled to see a relationship between integration and migration.205 Mean while, it seems that the pattern of urban-rural migration
is also affected by other determinants, e.g. land rent, taxes, long-distance commuting, cost of city living, etc.
In conclusion, as Keohane and Nye argue, integration is
less likely to benefit all regions. On the one hand, as
Peschel206 argues, economic integration benefits all
regions, even if some benefit more than others. That is,
economic integration is beneficial and desirable to urban
and rural economies. On the other hand, as Parker and
Clout207 argue, political integration which is beneficial
for urban areas is not the same case for rural areas.
205 Takatoshi Tabuchi, "Time-series Modeling of Gross Migration and Dynamic Equilibrium," Journal of Regional Science 25 (1985): 65-83.
206 Karin Peschel, The Effects of European Integration on Regional Development - Some Lessons from the Past (Kiel, 1989).
207 Geoffrey Parker, The Logic of Unity (London: Longman, 1975). Hugh D. Clout, Regional Development in Western Europe (London: David Fulton, 1987). CHAPTER VIII
CONCLUSION
8.1 INTRODUCTION
It is half a century ago that new thinking about a United
Europe began to draw attention from practitioners and political scientists. Since then, many efforts for inte gration were made in Europe, starting with the establish ment of the ECSC.
Europeans initially intended to create the Community in their continent in order to maintain permanent peace and security, after they experienced two world wars in Europe.
Thus, when the ECSC was established in 1951, one of its goals was to tie Germany with the rest of the Community. On the other hand, the Common Market was more concerned with economic matters, especially agricultural policy in the
Community, although political integration was an ultimate goal for the Community.208 The six-member Community has
208 Leon N. Lindberg argued that the fundamental motivation was political, although the stated goal of the EEC was the creation of a customs union and the achievement of a significant measure of integration. It is, in the words of the Treaty, to establish "an ever closer union among the European peoples." (See the Preamble of the Treaty in Appendix A . ) He also suggested that the Treaty of Rome had a wide potential for political inte gration because it provided the setting up of a complex
- 185 - 186 been enlarged, including Britain, Denmark and Ireland in
1973, Greece in 1981, and Spain and Portugal in 1983.
There existed regional imbalances in the Community, even before the enlargement of the Community. However, diver gence within regions became more marked as the Community adopted member states with a lower standard of living com pared with the Community average. Disadvantaged regions seem to have lower per capita GDP, lower per worker GDP, high unemployment rate, high emigration rate, and a high proportion of agricultural employment.
I examined in the first hypothesis whether there was a relationship between regional disadvantage and integration within the Community. Also, I examined in the second hypothesis whether there was a relationship between inte gration and disadvantge of rural areas.
In this chapter I will summarize findings, and discuss the limitations of the methodology and data. I will also discuss future research and policy implications drawn from this study.
central decision-making machinery, which, though for mally dependent upon the will of the Member States, did provide for an independent source of initiative and impulsion toward the Treaty's goal. See Leon N. Lind berg, The Political Dynamics of European Economic Inte gration (Stanford: Stanford University Press, 1963); Robert J. Shepherd, Public Opinion and European Inte gration (Lexington: D.C. Heath, 1975), p. 1. He also argued that the preamble to the Treaty of Rome referred to the eventual political unification. 187
8.2 SUMMARY AND REVIEW OF FINDINGS
This thesis consisted of seven chapters: (1) Theoretical
Underpinnings of Integration and Regional Disadvantage
(Chapter I); (2) Integration Efforts in the European Commu nity (Chapter II); (3) Regional Disadvantage in the Europe an Community (Chapter III); (4) Two Case Studies: The Rela tionship between Regional Disadvantage and Integration in the Mezzogiorno and Northern Ireland (Chapter IV); (5) An
Introductory Discussion for An Empirical Analysis (Chapter
V); and (6) The First Hypothesis: The Relationship between
Regional Disadvantage and Integration (Chapter VI); (7) The
Second Hypothesis: The Relationship between Integration and Economic Advantage in Urban and Rural Areas (Chapter
VII) .
Chapter I provided theoretical underpinnings of integra tion and regional disadvantage. Integration theory covers functionalism, neofunctionalism and federalism. The feder alists and neofunctionalists envisaged supranational insti tutions, while the functionalists were concerned with a feeling of mutual affection, identity, and loyalty. The latter was concerned with a socio-psychological community alongside a political and economic community. Meanwhile, the functionalists and neofunctionalists focused on econom ic, social and technological forces in the integration pro cess, and viewed that they could bring about political 188 change incrementally.209 In terms of the definition of integration, integration is viewed as either a process or an end product. However, there was divergence among those who viewed integration as a process. The main difference for divergence was over the need for setting up suprana tional institutions in the integration process.
In terms of the measurement of integration, those who followed the cybernetic approach210 argued that transaction and attitudinal changes would measure integration, while those who followed neofunctionalism argued that integration would be measured on a multi-dimensional level, including political, economic and social integration.
We examined the theory of regional imbalance. While the neoclassical theory is concerned with the aspects of the supply of factors of production, the export-base theory is concerned with the aspects of demand of factors of produc tion. Unlike the regional imbalance theories developed in economics, theories developed in political science, geogra phy, and sociology were concerned with locational aspects.
The growth pole theory is concerned with the spread
209 For a discussion, see Charles Pentland, International Theory and European Integration (Faber and Faber, 1973), p. 23.
210 Karl W. Deutsch was concerned with the 'sense of commu nity', which was measured by means of mutual trans action. He argued that the populations should share feelings of 'mutual relevance' and 'mutual responsive ness'. See Karl W. Deutsch, The Analysis of Interna tional Relations (Prentice-Hall, 1968), pp. 191-202. 189
effects, while the center-periphery theory is concerned with the backwash effects.
In Chapter II we examined the historical background of
integration efforts in the European Communityj (1) how the
Community was formed; (2) what the main barriers were for
the enlargement of the Community; and (3) whether efforts
for political integration existed. The ECSC was the first'
effective attempt for economic integration, and was a 'Lit
tle European Approach', because only six states joined. In
1957 the Common Market and Euratom were established by the
Treaty of Rome. Meanwhile, the Hague summit provided a
springboard for the Community to adopt new member states,
which resulted in the first and second enlargement of the
Community. The Community began to be concerned about how
divergence between regions would affect the progress of
integration. In the 1972 Paris summit the Community pro
vided measures for 'balanced growth' and 'harmonious devel
opment' for all regions within the Community. Regional
Development Fund was formally instituted in the 1974 Paris
summit.
In Chapter III we examined: (1) whether imbalances
between regions in the Community have widened or narrowed;
(2) how regional disadvantage is measured; and (3) how a
common regional policy has developed. 190
Regions in this study were defined based upon adminis
trative units. That is, considering population and/or ter
ritory, regions grouped together into some administrative units. There were rich and poor regions, developed and
less developed regions, or favoured and less favoured
regions in the Community. Those regions which were poor,
less developed, less favoured were called disadvantaged
regions in this study.
Regional GDP per capita, GDP per worker, unemployment
rate, the proportion of agricultural employment, and net
migration were examined to see the existence of regional
disadvantage and the coefficient of variation of each indi
cator were used to see whether regional imbalances have
worsened during the period 1970-1981. Meanwhile, there
were definitely two types of disadvantaged regions: those
with declining industries, and those with predominantly
agricultural employment.
Regional policy was a mixture of the economic, politi
cal, and social. It was also a structural policy to improve
structures in disadvantaged regions. Regional policy was
needed because the removal of regional disadvantage was a
necessary condition for integration. It was not until 1974
that a common regional policy was instituted because the
enlargement of the Community adopted many regions with a
lower level of development compared with the Community 191 average, which widened the gap between developed and less developed regions.
In Chapter IV case studies were conducted to examine a relationship between regional disadvantage and integration in the Mezzogiorno and Northern Ireland. The two regions were selected for case studies because they were two of the most disadvantaged regions in the Community. That is, they were part of priority regions to get assistance in the integration process.
The Center-Periphery theory of Myrdal and Hirschman illuminated a relation between regional disadvantage and integration. When they were concerned with regional imba lance or disadvantage, it was primarily related to economic disadvantage. In the Mezzogiorno, regional disadvantage was based upon economic factors, while in Northern Ireland, regional disadvantage was based upon ethnic (Anglo-Irish),
religious (Catholic-Protestant) division, alongside econom
ic divergence.
It seemed that regional disadvantage was negatively
associated with integration. The Mezzogiorno and Northern
Ireland became more disadvantaged in 1979 than in 1970, and
they became less integrated in 1979.
In the Mezzogiorno, economic divergence tended to bring
about grass-roots discontent, which would cause internal
tension and political strain, which would affect integra 192 tion. The centrifugal forces seemed to gather around the political parties which looked for separatism or secession.
In Northern Ireland, although regional disadvantage was negatively associated with integration, opposition to Euro pean integration was in part due to political differences
induced by ethnic conflict, e.g. anti-power sharing, or sectarian differences, e.g. Protestants, or ethnic divi
sion, e.g. loyalists who viewed integration as a threat to
British sovereignty.
In Chapters VI and VII two hypotheses were tested.
Hypothesis 1: The greater its economic disadvantage, the
less economically and politically integrated the region.
Hypothesis 2: The positive relationship between integra
tion, economic and political, and economic advantage is
stronger in urban areas than in rural areas.
The first hypothesis is concerned with a relationship
between regional disadvantage and integration, while the
second hypothesis is concerned with a relationship between
integration and economic advantage in urban and rural
areas.
In order to see a relationship between regional disad
vantage and integration, I used multivariate statistical
analysis. I chose shorter time-lags between regional dis
advantage and integration than longer ones because economic
welfare is the most salient issue in less developed areas,
and has a great influence on political decision during a 193 short period. Both theoretical and methodological consider ations seemed to point to the superiority of the one-year lag.
In the testing of the first hypothesis, regional disad vantage was examined relative to the state, the most fav oured region within the state, and the Community as a whole. On the one hand, regional disadvantage within the state is likely to be measured when each region is compared with the national average. However, it appeared that regional disadvantage in the United Kingdom was better measured when each region was compared with South-East, while regional disadvantage in Italy was better measured when it was compared with Lombardia. Thus, in terms of regional disadvantage within the state, two reference groups were used: the state and the most favoured regions within the state. On the other hand, regional disadvantage within the Community was measured when each region was com pared with the Community average.
In the testing of the second hypothesis, I compared two
types of regions over the effects of integration on
regions. The one type of region is those which have an
extremely high proportion of agricultural employment and
the other type of region is those which have an extremely
low proportion of agricultural employment. 194
I used indices of economic and political integration for the purpose of simplicity in reporting how economically and politically integrated the region becomes. Also, a rela
tionship between regional disadvantage and integration was
not changed when indices of integration were used. For
indices of economic integration (ECON_INT), EXPORT and
IMPORT are standardized across the Community, and then the
standardized scores for EXPORT and IMPORT are added, and
then divided by two for each region. In order to measure
political integration, indices of communication (COMM) and
opinion (OPIN) measures are used. COMM is an indicator of
political integration, as measured by inter-regional commu
nications, while OPIN is an indicator of political integra
tion, as measured by peoples’ attitudes toward integration.
In conclusion, the results of case studies and findings
of multivariate statistical analysis are summarized as fol
lows .
First, economic disadvantage is more likely to have an
adverse effect on economic and political integration within
the Community.
Second, disadvantaged regions which are resentful of a
decline of their standards of living relative to favoured
regions are less likely to be integrated into the Communi
ty. 195
Third, the reference group against which disadvantaged regions keenly felt deprived can be either the most fav oured region within the state, e.g. the South-East in the
United Kingdom, the Lombardia in Italy, or the national average, or the Community average.
Fourth, when ethnic or cultural characteristics are strongly felt in disadvantaged regions, economic disadvan tage tends to be associated with regionalism or national ism, e.g. Northern Ireland, the Mezzogiorno.
Fifth, regionalism tends to have the disintegrative nature within the state, however, it inclines toward fav ouring integration within the Community. For example, many people in Northern Ireland who experience a decline of well-being Still favour integration within the Community.
Sixth, the more economically integrated the urban and
rural areas, the wealthier they are. However, the more politically integrated the urban and rural areas, the wealthier urban areas, and the poorer rural areas. Highly
developed communications and transport systems tend to help
urban areas attract highly skilled labor.
8.3 LIMITATIONS OF METHODOLOGY AND DATA
It seems that there are some limitations inherent in multi
variate statistical analysis. Limitations are due to the
nature of statistical analysis. While statistical analysis 196 is very useful because it can show a relationship between the variables in a simple and proper form, all other fac tors except the independent and dependent variables are assumed to be constant, which is the assumption of 'ceteris paribus'. Those factors which are assumed to be constant may be changed over time, and affect a relationship between the independent and dependent variables in the model. How ever, the models based upon regression analysis will not show the impacts of 'all other factors' on the dependent variables.
There are some disadvantages of cross-sectional studies.
The problem of cross-sectional studies stems from the stat
ic nature of cross-sectional studies. Cross-sectional results may be sensitive to the choice of the time period.
For example, the cross-sectional pictures for the 1970s and the 1980s may not appear similar. Thus, they may not lead
to generalizations of the dynamics of the relations.
There are also pros and cons about the significance
test. Critics argue that it is simply impossible to meet
all of the assumptions (e.g. normal distribution, homogene
ity of variance) required of the tests of significance. On
the other hand, defenders argue that the significance test
is able to provide evidence, if not proof, for hypotheses
and theories. Boneau showed that when the sample sizes
reach 25 or 30, one can ignore the effects of violations of 197 assumptions except extremes. The significance test seems
to be useful in that it can show that the results of a
study are not just chance fluctuation.
There are also limitations for the data used in this
thesis. There was a lack of regional data available in the
Community. It was not until the 1970s that the Community was concerned with divergence between regions, and regional
data has been collected by the Eurostat since 1970. Even when regional data were collected, there was another prob
lem. One problem was how to define regions. There were
three levels of territorial units suggested by the Euros
tat: Level I regions, Level II regions, and Level III
regions. The definition of regions in this thesis was
related to Level I regions of territorial units suggested
by the Eurostat. Luxembourg, Ireland and Denmark are
regarded as one region, respectively because they have too
small a populationto be sub-divided. In these single state
regions there exist developed and less developed regions,
and urban and rural areas, which may confound findings of
multivariate statistical analysis.
The other problem was how to compare regions, based upon
indicators of regional disadvantage. Because member states
were reluctant to share regional data with each other, we
did not have a systematic and coherent regional data base
in the Community. This problem got worse when we were con 198 cerned with regional per capita GDP because different mone tary units were used and exchange rates kept changing.
8.4 FUTURE RESEARCH
An empirical analysis in this thesis examined a relation ship between integration and regional disadvantage over the period 1970-1981, based upon cross-sectional studies. We need to examine in future research time-series analysis.
Regional data has been collected since 1970. For time- series analysis, data for longer periods are needed in order to strengthen the time-series estimates. Even if we could get annual data from the period 1970-1990, a sample of this size, i.e. 20 years, is not "large.” However, when time-series analysis is conducted along with cross- sectional studies, it is comparable to the samples used in cross-sectional studies. There are also advantages of time-series analysis. Time-series analysis deals with the intertemporal dynamics. It can help identify explicit long itudinal phenomena and thereby show the relational patterns from being static to having a more continuous and dynamic focus. When monthly or quarterly data is used, seasonality can be identified, which can show cyclical aspects of the relational patterns.
We need to examine in future research whether a rela tionship between regional disadvantage and integration will 199 be also supported beyond the year 1981. It seems that this research is needed in light of the inner and outer environ ment of the Community after the year 1981. In terms of inner environment of the Community, the number of disadvan taged regions has increased since the adoption of Spain and
Portugal. In terms of outer environment of the Community, many countries, e.g. Turkey, Sweden, Austria, Switzerland,
Cyprus, Malta, Hungary, Poland, and Czechoslovakia, etc. intend to join the Community. However, many regions in those countries have a lower level of development compared with the Community average.311 Thus, it is likely that divergence between regions will not be narrowed in the Com munity. Meanwhile, the Community intends to achieve a high er level of economic and political integration. Future research should examine whether divergence between regions is likely to impede a higher level of economic and politi cal integration in the 1980s and 1990s.
We need to devise other ways of making urban-rural dichotomy. The share of agricultural employment was used in this study. However, it seems that the urban-rural dichotomy can be based upon population-density or commuting-out pattern or in-out migration balance, etc,
Meanwhile, urbanization can be based upon population densi-
311 For example, the Turkish economy is at a lower level of development than the Community average and prone to growing pains such as treble-digit inflation. See John Pinder, European Community: The Building of a Union (Oxford: Oxford University Press, 1991), p. 51. 200 ty or commuting-out pattern, while rurality can be based upon occupational structure or population aged over 65.
We also need to examine in future research how rural areas are related to the periphery in the Community. It is not likely that all rural areas are the periphery in the
Community. Thus, we need to examine conditions under which rural areas fall into the periphery, and whether any exploitative relations exist between urban and rural areas.
We need to examine in future research whether a Common
Regional Policy helps reduce regional imbalances within the
Community. A Common Regional Policy has been neglected in the past because the Common Agricultural Policy accounted for a high proportion of the Community budget, and member states were reluctant to share regional policies, which led to incoherent regional policy at the Community level.
Meanwhile, a Common Regional Policy did not always help disadvantaged regions, which were the most in need. Many regions with their living standards above the Community average were also supported by a Common Regional Policy.
Thus, we need to examine in future research how a Common
Regional Policy should be improved to reduce divergence between regions.
We need to examine in future research how economic, social and political integration are related to one another. I was concerned with economic and political inte 201 gration. Meanwhile, the functionalists were concerned with a socio-psychological community along with an economic and political community. We need to examine whether a socio- psychological community exists in the European Community, and whether a socio-psychological community is a precondi tion for an economic and political community or vice versa.
8.5 POLICY IMPLICATIONS
In this section I will discuss some problems in Common
Regional Policy. There is a caveat for discussing policy
implication: This study is not designed to deal with poli cy analysis.
The preamble to the Treaty of Rome212 states that member states are "anxious to strengthen the unity of their econo mies and to ensure their harmonious development by reducing
the differences existing between the various regions and by mitigating the backwardness of the less-favoured regions."
Despite the commitment in the Treaty of Rome, regional pol
icy was overshadowed by the other activities, e.g. agricul
tural policy, during the period 1958-1972. The 1972 Paris
Summit is a turning point in Community Regional Policy
(CRP). The heads of state agreed that "a high priority
should be given to the aim of correcting .... the struc
tural and regional imbalances which might affect the reali
212 Refer to the preamble to the Treaty of Rome in Appendix A. 202 zation of economic and monetary union." As a direct result of the Paris Summit, the European Regional Development Fund
(ERDF) emerged in 1975.
- The objectives of Community Regional Policy are to
reduce existing regional problems, and to prevent new
regional imbalances arising from the change in world eco nomic structures or from measures adopted by the Community within the framwork of its own policies. The Commission of
the European Communities states that "it is an illusion to hope for the covergence of Member States' economies so long
as regional problems continue to weigh so heavily on cer
tain economies, and the strenthening of Community Regional
Policy is not only desirable, but it is also one of the
conditions of continuing European economic integration.213
Community Regional Policy has three distinct components:
(1) the ERDF, (2) the activities of other Community insti
tutions and funds, i.e. the ECSC, the EIB, the ESF, the
Guidance Section of the EAGGF, (3) the coordination of the
regional policies of member states, the ERDF, and the
activities of other institutions and funds. The ERDF is
the most important element of Community Regional Policy
among the three. The ERDF is intended to make grants to
industrial, handicraft and service projects, and to infra
structure investments, including infrastructure in certain
213 Commission of the European Communities, Guidelines for Community Regional Policy (Brussels, 1977). 203 designated less-favoured farming areas.
The most significant failing of the ERDF has been the paucity of resources allocated to it. The share of the
ERDF expenditures in total Community budget is 4.8 percent
in 1975/ and 7.3 percent in 1981. 214 The Community budget
is dominated by the Common Agricultural Policy/ and in par
ticular by the Guarantee Section of the EAGGF. Commission
er George Thompson argues that "the blunt truth about the
Community farm policy is that it is anti-regional."215 The
Guarantee Section of the EAGGF may not have operated in the
best interests of regional policy. The richer agricultural
areas seem to have benefited most from the operations of
the Common Agricultural Policy. For example, it was esti
mated that in 1975 per capita spending on farm price sup
port by the Community amounted to 56.4 European Units of
Account (EUA) in Denmark, 33.9 EUA in the Netherlands, 20.4
EUA in France, and 14.5 EUA in Italy.216
The other failing of the ERDF is that most of the ERDF
expenditures (about 87 percent) are allocated according to
national shares. It represents an unnecessary restriction
on the activities of Community Regional Policy, which is
intended to direct the Fund expenditures to desired loca-
214 Commision of the European Communities, ERDF in Figures, 1975-1988 (Brussels, 1989).
The Times, January 6, 1977.
The Times, January 6, 1977. 204 tions, i.e. regions which are the most in need, and to react quickly to changing regional problems.
Thus, several changes are needed so that Common Regional
Policy is better able to help less favoured regions. The share of the ERDF expenditures in total Community budget needs to increase. It appears that the proportion of appropriation for regional policy has been increasing in the Community budget. The share of the ERDF in the total community budget has increased from 4.8 percent in 1975 to
8.1 percent in 1988.217 However, because economic diver gence between regions has widened in the Community, more
resources are needed to help disadvantaged regions. Mean while, it has to be pointed out that the benefits which
Common Regional Policy produces are not confined either to
the assisted areas themselves or the member state of which
they are part, but encompass the whole Community.218
The share of the ERDF expenditures in total Community
budget will be likely to increase at the expense of the
Common Agricultural Policy, which accounts for about 70
percent of the Community budget. The CAP expenditures ben
efit northern agricultural producers, e.g. Denmark, the
Netherlands, France, for whose products high prices are
217 Commission of the European Communities, ERDF in Fig ures, 1975-1988 (Brussels, 1989).
218 Harvey W. Armstrong, "The Reform of the European Commu nity Regional Policy," Journal of Common Market Studies 23 (1985); 319-43. 205 maintained, rather than southern producers. Thus, the
EAGGF appears to operate regressively, because the method
of supporting incomes of farmers via the prices of farm products concentrates assistance on the large producers in
favoured regions.219
Better ways to distribute the Fund expenditures and to
designate assisted areas should be sought. The quota sec
tion of the ERDF (the indicative range section after 1985)
accounts for most of the Fund expenditures, which are allo
cated according to national shares. Although the severity
of the regional problems faced by member states is reflect
ed, the quota section tends to restrict unnecessarily the
activities of Community Regional Policy. Regional problems
should be assessed by objective standards across the Commu
nity, e.g. regional per capita GDP, unemployment rate,
out-migration. For example, some member states, e.g. Ita
ly, Ireland, Greece, the United Kingdom, have the majority
of the most depressed areas of the Community. On the other
hand, there seems to be a mismatch between the regional
problems faced by these states, and the ability of these
states to make available public funds for their own region
al policy efforts.220 The ERDF expenditures should go to
219 Geoffrey Denton, "Regional Divergence and Policy in the Community, with Special Reference to Enlargement," Eco nomic Divergence in the European Community, eds. Michael Hodges and William Wallace (London: Allen & Unwin, 1981), p. 144.
220 Harvey W. Armstrong, "The Reform of the European Commu- 206 the areas which are the most in need.
nity Regional Policy," Journal of Common Market Studies 23 (1985): 319-43. Appendix A
PREAMBLE, AND ARTICLES 2, 92 AND 113 OF THE
TREATY OF ROME
Excerpts from the English translation of the Treaty of
Rome, made in 1958.221
HIS MAJESTY THE KING OF THE BELGIANS, THE PRESIDENT OF
THE FEDERAL REPUBLIC OF GERMANY, THE PRESIDENT OF THE
FRENCH REPUBLIC, THE PRESIDENT OF THE ITALIAN REPUBLIC, HER
ROYAL HIGHNESS THE GRAND DUCHESS OF LUXEMBOURG, HER MAJESTY
THE QUEEN OF THE NETHERLANDS,
DETERMINED to establish the foundations of an ever clos er union among the European peoples,
DECIDED to ensure the economic and social progress of their countries by common action in eliminating the barri ers which divide Europe,
DIRECTING their efforts to the essential purpose of con stantly improving the living and working conditions of their peoples,
221 The European Communities, Treaty Establishing the Euro pean Economic Community and Connected Documents (Brus sels, 1958).
- 207 - 208
RECOGNISING that the removal of existing obstacles calls for concerted action in order to guarantee a steady expan sion, a balanced trade and fair competition,
ANXIOUS to strengthen the unity of their economies and to ensure their harmonious development by reducing the dif ferences existing between the various regions and by miti gating the backwardness of the less favoured regions,
DESIROUS of contributing by means of a common commercial policy to the progressive abolition of restrictions on
international trade,
INTENDING to confirm the solidarity which binds Europe and overseas countries, and desiring to ensure the develop ment of their prosperity in accordance with the principles
of the Charter of the United Nations,
RESOLVED to strengthen the safeguards of peace and lib
erty by establishing this combination of resources and
calling upon the other peoples of Europe who share their
ideal to join in their efforts,
HAVE DECIDED to create a European Economic Community and
to this end have designated as their plenipotentiaries:
HIS MAJESTY THE KING OP THE BELGIANS:
Mr. Paul-Henri Spaak, Minister of Foreign Affairs, Baron J.
Ch. Snoy et d'Oppuers, Secretary-General of the Ministry of
Economic Affairs, Head of the Belgian delegation to the
intergovernmental Conference; 209
THE PRESIDENT OF THE FEDERAL REPUBLIC OF GERMANY:
Dr. Konrad Adenauer, Federal Chancellor, Professor Dr. Wal ter Hallstein, State Secretary of the Federal Foreign
Office;
THE PRESIDENT OF THE FRENCH REPUBLIC:
Mr. Christian Pineau, Minister of Foreign Affairs, Mr. Mau
rice Faure, Under-Secretary of State for Foreign Affairs;
THE PRESIDENT OF THE ITALIAN REPUBLIC:
Mr. Antonio Segni, President of the Council of Ministers,
Professor Gaetano Martino, Minister of Foreign Affairs;
HER ROYAL HIGHNESS THE GRAND DUCHESS OF LUXEMBOURG:
Mr. Joseph Bech, Prime Minister of Foreign Affairs, Mr.
Lambert Schaus, Ambassador, Head of the Luxembourg delega
tion to the Intergovernmental Conference;
HER MAJESTY THE QUEEN OF THE NETHERLANDS:
Mr. Joseph Luns, Minister of Foreign Affairs, Mr. J. Lin-
thorst Homan, Head of the Netherlands delegation to the
Intergovernmental Conference;
WHO, having exchanged their full powers, found in good
and due form, HAVE AGREED as follows: ARTICLE 2
It shall be the aim of the Community, by establishing a
Common Market and progressively approximating the economic policies of Member States, to promote throughout the Commu nity a harmonious development of economic activities, a continuous and balanced expansion, an increased stability, an accelerated raising of the standard of living and closer relations between its Member States. 211
ARTICLE 92
1. Except where otherwise provided for in this Treaty, any aid, granted by a Member State or granted by means of State resources, in any manner whatsoever, which distorts or threatens to distort competition by favouring certain enterprises or certain productions shall, to the extent to which it adversely affects trade between Member States, be deemed to be incompatible with the Common Market.
2. The following shall be deemed to be compatible with Com mon Market:
(a) aids of a social character granted to individual consumers, provided that such aids are granted without any discrimination based upon the origin of the products con cerned;
(b) aids intended to remedy damage caused by natural calamities or other extraordinary events; or
(c) aids granted to the economy of certain regions of the Federal Republic of Germany affected by the division of
Germany, to the extent that such aids are necessary in order to compensate for the economic disadvantages caused by such division.
3. The following may be deemed to be compatible with the
Common Market: 212
(a) aids intended to promote the economic development of regions where the standards of living is abnormally low or where there exists serious under-employment;
(b) aids intended to promote the execution of important projects of common European interest or to remedy a serious disturbance of the economy of a Member State;
(c) aids intended to facilitate the development of cer tain activities or of certain economic regions, provided that such aids do not change trading conditions to such a degree as would be contrary to the Common interest. Any aids to shipbuilding existing on 1 January 1957 shall, to the extent that such aids merely offset the absence of cus toms protection, be progressively reduced under the same conditions as apply to the abolition of customs duties, subject to the provisions of this Treaty relating to the common commercial policy in regard to third countries; and
(d) such other categories of aids as may be specified by decision of the Council acting by means of a qualified majority vote on a proposal of the Commission. 213
ARTICLE 113
1. After the expiry of the transitional period, the common
commercial policy shall be based on uniform principles, particularly in regard to tariff amendments, the conclusion or tariff or trade agreements, the alignment of measures of
liberalisation, export policy and protective commercial measures including measures to be taken in cases of dumping
or subsidies.
2. The Commission shall submit proposals to the Council for
the putting into effect of this common commercial policy.
3. Where agreements with third countries require to be
negotiated, the Commission shall make recommendations to
the Council, which will authorise the Commission to open
the necessary negotiations.
The Commission shall conduct these negotiations in con
sultation with a special Committee appointed by the Council
to assist the Commission in this task and within the frame
work of such directives as the Council may issue to it.
4. The Council shall, when exercising the powers conferred
upon it by this Article, act by means of a qualified major
ity vote. Appendix B
PREAMBLE, ARTICLES 1, 2, 3, AND TITLE V OF THE
SINGLE EUROPEAN ACT
Excerpts from the Single European Act.*22
HIS MAJESTY THE KING OF THE BELGIANS, HER MAJESTY THE
QUEEN OF DENMARK, THE PRESIDENT OF THE FEDERAL REPBULIC OF
GERMANY, THE PRESIDENT OF THE HELLENIC REPUBLIC, HIS
MAJESTY THE KING OF SPAIN, THE PRESIDENT OF THE FRENCH
REPUBLIC, THE PRESIDENT OF IRELAND, THE PRESIDENT OF THE
ITALIAN REPUBLIC, HIS ROYAL HIGHNESS THE GRAND DUKE OF
LUXEMBOURG, HER MAJESTY THE QUEEN OF THE NETHERLANDS, THE
PRESIDENT OF THE PORTUGUESE REPUBLIC, HER MAJESTY THE QUEEN
OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN
IRELAND,
MOVED by the will to continue the work undertaken on the basis of the Treaties establishing the European Communities and to transform relations as a whole among their States into a European Union, in accordance with the Solemn Decla-
222 The European Communities, Treaties Establishing the European Communities (ECSC, EEC, EAEC): Single European Act and Other Basic Instruments (Brussels, 1987).
- 214 - 215 ration of Stuttgart of 19 June 1983,
RESOLVED to implement this European Union on the basis, firstly, of the Communities operating in accordance with their own rules and, secondly, of European Cooperation among the Signatory States in the sphere of foreign policy and to invest this union with the necessary means of action,
DETERMINED to work together to promote democracy on the basis of the fundamental rights recognized in the constitu tions and laws of the Member States, in the Convention for the Protection of Human Rights and Fundamental Freedom and the European Social Charter, notably freedom, equality and social justice,
CONVINCED that the European idea, the results achieved in the fields of economic integration and political cooper ation, and the need for new developments correspond to the wishes of the democratic peoples of Europe, for whom the
European Parliament, elected by universal suffrage, is an indispensable means of expression,
AWARE of the responsibility incumbent upon Europe to aim at speaking ever increasingly with one voice and to act with consistency and solidarity in order more effectively to protect its common interests and independence, in par ticular to display the principles of democracy and compli ance with the law and with human rights to which they are 216 attached, so that together they may make their own contri bution to the preservation of international peace and
security in accordance with the undertaking entered into by
them within the framework of the United Nations Charter,
DETERMINED to improve the economic and social situation
by extending policies and pursuing new objectives, and to
ensure a smoother functioning of the Communities by
enabling the institutions to exercise their powers under
conditions most in keeping with Community interests,
WHEREAS at their Conference in Paris from 19 to 21 Octo
ber 1972 the Heads of State or of Government approved the
objective of the progressive realization of Economic and
Monetary Union,
HAVING REGARDED to the Annex to the conclusions of the
Presidency of the European Council in Bremen on 6 and 7
July 1978 and the Resolution of the European Council in
Brussels on 5 December 1978 on the introduction of the
European Monetary System (EMS) and related questions, and
noting that in accordance with that Resolution, the Commu
nity and the Central Banks of the Member States have taken
a number of measures intended to implement monetary cooper
ation,
HAVE DECIDED to adopt this Act and to this end have des
ignated as their plenipotentiaries:
HIS MAJESTY THE KING OF THE BELGIANS: 217
Mr Leo TINDEMANS, Minister for External Relations;
HER MAJESTY THE QUEEN OF DENMARK:
Mr Uffe ELLEMANN-JENSEN, Minister for Foreign Affairs;
THE PRESIDENT OF THE FEDERAL REPUBLIC OF GERMANY:
Mr Hans-Dietrich GENSCHER, Federal Minister for Foreign
Affairs;
THE PRESIDENT OF THE HELLENIC REPUBLIC:
Mr Karolos PAPOULIAS, Minister for Foreign Affairs;
HIS MAJESTY THE KING OF SPAIN:
Mr Francisco FERNANDEZ ORDONEZ, Minister for Foreign
Affairs;
THE PRESIDENT OF THE FRENCH REPUBLIC:
Mr Roland DUMAS, Minister for External Relations;
THE PRESIDENT OF IRELAND:
Mr Peter BARRY, T D, Minister for Foreign Affairs;
THE PRESIDENT OF THE ITALIAN REPUBLIC:
Mr Giulio ANDREOTTI, Minister for Foreign Affairs;
HIS ROYAL HIGHNESS THE GRAND DUKE OF LUXEMBOURG:
Mr Robert GOEBBELS, State Secretary, Minister for For
eign Affairs;
HER MAJESTY THE QUEEN OF THE NETHERLANDS:
Mr Hans VAN DEN BROEK, Minister for Foreign Affairs;
THE PRESIDENT OF THE PORTUGUESE REPUBLIC:
Mr Pedro PIRES DE MIRANDA, Minister for Foreign Affairs; 218
HER MAJESTY THE QUEEN OF THE UNITED KINGDOM OF GREAT
BRITAIN AND NORTHERN IRELAND:
Mrs Lynda CHALKER, Minister of State for Foreign and
Commonwealth Affairs;
WHO, having exchanged their full powers, found in good and due form, have agreed as follows. 219
ARTICLE 1
The European Communities and European Political Coopera tion shall have as their objective to contribute together to making concrete progress towards European unity.
The European Communities shall be founded on the Treat ies establishing the European Coal and Steel Community, the
European Economic Community, the European Atomic Energy
Community and on the subsequent Treaties and Acts modifying or supplementing them.
Political Cooperation shall be governed by Title III.
The provisions of that Title shall confirm and supplement the procedures agreed in the reports of Luxembourg (1970),
Copenhagen (1973), London (1981), the Solemn Declaration on
European Union (1983) and the practices gradually estab lished among the Member States. 220
ARTICLE 2
The European Council shall bring together the Heads of
State or of Government of the Member States and the Presi dent of the Commission of the European Communities. They shall be assisted by the Ministers for Foreign Affairs and by a Member of the Commission.
The European Council shall meet at least twice a year.
ARTICLE 3
1. The institutions of the European Communities, henceforth designated as referred to hereafter, shall exercise their powers and jurisdiction under the conditions and for the purpose provided for by the Treaties establishing the Com munities and by the subsequent Treaties and Acts modifying
or supplementing them and by the provisions of Title II.
2. The institutions and bodies responsible for European
Cooperation shall exercise their powers and jurisdiction
under the conditions and for the purposes laid down in
Title III and in the documents referred to in the third
paragraph of Article 1. 221
TITLE V
Economic and Social Cohesion
Article 130a
In order to promote its overall harmonious development, the Community shall develop and pursue its actions leading to the strengthening of its economic and social cohesion.
In particular the Community shall aim at reducing dis parities between the various regions and the backwardness of the least-favoured regions.
Article 130b
Member States shall conduct their economic policies, and shall coordinate them, in such a way as, in addition, to attain the objectives set out in Article 130a. The imple mentation of the common policies and of the internal market shall take into account the objectives set out in Article
130a and in Article 130c and shall contribute to their achievement. The Community shall support the achievement of these objectives by the action it takes through the struc tural Funds (European Agricultural Guidance and Guarantee
Fund, Guidance Section, European Social Fund, European
Regional Development Fund), the European Investment Bank and the other existing financial instruments. 222
Article 130c
The European Regional Development Fund is intended to help redress the principal regional imbalances in the Com munity through participating in the development and struc tural adjustment of regions whose development is lagging behind and in the conversion of declining industrial regions.
Article 130d
Once the Single European Act enters into force the Com mission shall submit a comprehensive proposal to the Coun cil, the purpose of which will be to make such amendments to the structure and operational rules of the existing structural Funds (European Agricultural Guidance and Guar antee Fund, Guidance Section, European Social Fund, Europe an Regional Development Fund) as are necessary to clarify and rationalize their tasks in order to contribute to the achievement of the objectives set out in Article 130a and
Article 130c, to increase their efficiency and to coordi nate their activities between themselves and with the oper ations of the existing financial instruments. The Council shall act unanimously on this proposal within a period of one year, after consulting the European Parliament and the
Economic and Social Committee. 223
Article 130e
After adopting of the decision referred to in Article
130d/ implementing decisions relating to the European
Regional Development Fund shall be taken by the Council,
acting by a qualified majority on a proposal from the Com
mission and in cooperation with the European Parliament.
With regard to the European Agricultural Guidance and
Guarantee Fund, Guidance Section and the European Social
Fund, Articles 43, 126 and 127 remain applicable respec
tively. Appendix C
TABLES OF CORRELATIONS AMONG PGDP, UNEMP AND NMIG
j. a u j . t r
Correlations among Per Capita GDP, Unemployment and Net Migration, the Reference Group = the State
PGDPUNEMPNMIG
PGDP 1.00000 -0.28559 -0.12525
UNEMP -0.28559 1.00000 -0.21705
NMIG -0.12525 -0.21705 1.00000
Table 34
Correlations among Per Capita GDP, Unemployment and Net ligration, the Reference Group = the Most Favored Region within the State
PGDP UNEMP NMIG
PGDP 1.00000 -0.00766 -0.20549
UNEMP -0.00766 1.00000 -0.26758
NMIG -0.20549 -0.26758 1.00000
Table 35
Correlations among Per Capita GDP, Unemployment and Net Migration, the Reference Group = the Community
PGDP UNEMP NMIG
PGDP 1.00000 -0.41484 0.06777
UNEMP -0.41484 1.00000 -0.15601
NMIG 0.06777 -0.15601 1.00000
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