Regional Convergence in the European Community

Abstract This article assesses convergence in output per head across regions in the European Community, for the period 1975–90. We use three alternative methodologies to measure convergence, which yield consistent results. We observe that there are strong differences in the pattern of convergence across sub‐periods and across subsets of regions. If the south of Europe seems to catch up in the early 1980s, it stagnates, at best, in the second part of the eighties. At the opposite end, the regions in the north of Europe tend to stagnate or diverge in the first part of the eighties but converge strongly thereafter. This pattern is consistent with the view that northern European countries have adjusted better to the main change in policy regime which occurred in the mid‐1980s, namely the implementation of the internal market programme and the entry of the Iberian peninsula in the Community in 1985. This evidence also lends support to the view that trade liberalization can exacerbate disparities. Finally, our evidence indicates that the distinction between the north and the south of the EC is likely to be more relevant in the analysis of growth patterns than the distinction between the centre and the periphery. Preliminary evidence on migration indicates that the population of the southern regions responds much more slowly to wage and unemployment differences. This may explain partly why southern regions have not converged after 1985.