Regional incentive spending for European regions

This paper develops and evaluates two hypotheses concerning the regional distribution of European and national productive sector support between 1989 and 1993. While total BU regional policy expenditures were highest in peripheral areas, EU expenditures in support of the productive sector were much more evenly spread across peripheral and lagging regions of the EU, National regional incentives contributed further to an equalization of support levels across large parts of the Union. European and national productive sector support thus work at cross purposes and are unlikely to contribute to regional convergence. This paper concludes by recommending that state aid rules be tightened and that EU productive sector support be further spatially concentrated in order to promote regional convergence.