Distributing the European structural and investment funds from a conflicting claims approach

In order to support economic development across all European Union regions, €351.8 billion –almost a third of the total EU budget– has been set aside for the Cohesion Policy during the 2014–2020 period. The distribution of this budget is made through five main structural and investment funds, after long and difficult negotiations among the EU member states. This paper analyzes the problem of allocating the limited resources of the European Regional Development Fund as a conflicting claims problem. Specifically, we attempt to show how the conflicting claims approach fits this actual problem, and we propose alternative ways of distributing the budget via (i) claims solutions or (ii) the imposition of bounds (guarantees) to each of the regions. By applying this approach we also show that there is a claims solution that performs better than the others by reducing inequality and promoting convergence to a greater degree. It is clear that political bargaining will always be part of the allocation process. However, having an intuitive initial proposal may help politicians to find the best agreement. To that effect, we propose the use of a claims solution as a way to find an initial proposal for future policy changes concerning the allocations of the EU structural funds.

Prerequisites and initial developments for economic specialization in lagging regions—A study of specialized villages in Iran

Although the literature provides a huge number of studies on specialized regions, such as clusters and industrial districts, most of them concern developed regions. Studies that focus on the initial processes and preconditions for the emergence of economic specialization in lagging regions are rare, and studies of this kind considering a large number of cases not existing. We use the information on 140 villages in lagging rural regions in Iran to examine the initializing processes and preconditions as well as the connection between the two. We find that the conditions that are present in the region affect the potential initial processes and developments that might lead to specialization. Thus, the findings support the application of place-based policies.

Nighttime lights and wealth in very small areas:

Nighttime lights observed from satellites are a widely accepted proxy measure for economic development. This is mainly based on cross-country evidence that finds strong correlations between lights and Gross Domestic Product. Yet, the evidence on the correlations at local levels is scarce, and it often relies on randomly sampled survey data. We contribute by enhancing the understanding of the relationship between light and development at local levels. First, we use complete (non-publicly available) census data from Namibia to evaluate the findings based on the randomly sampled Demographic and Health Surveys data. We find that the census data provides a stronger association between light and wealth at local levels. Second, we criticize the practice of aggregating light from buffers around survey cluster locations. Instead, we recommend aggregating data in grid cells, and studying the relationship in different grid sizes. In our study correlations based on grid cells remain significant from a 0.5 degree grid to the smallest 0.0083 degree grid (~1 km2) allowed by the nighttime light data. Third, we supplement the commonly used relative wealth index by using individual asset variables as proxies for the total stock of wealth. The stock variables reveal a significant association between changes in light and wealth which cannot be found using our relative wealth index. Altogether, our results show that nighttime lights provide an even stronger signal of economic development at local levels than the current survey-based results in the literature suggest.

Sorting in an urban housing market—is there a response to demographic change?

Using Dortmund as a case study we analyse whether rents and housing prices responded to local demographic change in a German city between 2007 and 2016. In a two-step analysis based on a spatial autoregressive hedonic pricing model and a discrete choice model of housing location we find that during the study period as a whole, higher local mortality induced a negative effect on apartment prices and rents. Yet, the neighbourhood effects of local ageing vary across sub-city districts. Most prominently, the study period was characterised by a strong and rising desire to purchase or rent housing in the vicinity of the city centre. Furthermore, prices for owner-occupied apartments and houses increased rapidly in the more well-off southern part of the city and particularly in a previously declining community, where a large-scale urban regeneration and environmental upgrading project has been implemented since 2011. The characteristics of households likely to move to this neighbourhood switched from low to high income.

Solving the restructuring problems of (former) old industrial regions with smart specialization? Conceptual thoughts and evidence from the Ruhr

Abstract(Former) old industrial regions are a specific kind of lagging regions that suffer from long-term restructuring problems and deindustrialization. They are back in the focus of many researchers as well as media observers, because of the rise of populist parties in many of these regions in North America and Europe. Therefore, new policy options are discussed in the literature. In this paper, we critically discuss the effects of smart specialization as the most recent regional policy strategy in Europe on solving the restructuring problems and deindustrialization in (former) old industrial regions and we illustrate our analysis with a view on the Ruhr in Germany. Since smart specialization focuses on existing endogenous potential and entrepreneurial discovery processes from the region, vested interests in (former) old industrial regions might hinder necessary restructuring. Although potentially path transformation might be fostered in some cases, overall, smart specialization is certainly not a quick fix for solving long-term negative effects of restructuring and deindustrialization in (former) old industrial regions.

Recruitment of scarce competences to rural regions: Policy perspectives

This paper studies the perceived difficulty of recruiting scarce competencies to rural regions. Furthermore, the role of policy in facilitating and enhancing recruitment to and better skills matching in rural regions is discussed. Based on a survey targeted to the business sections of Swedish municipalities, the results show that recruitment is perceived to be difficult in both rural and nonrural regions and that the difficulty of recruiting for the right skills results in a lack of skills matching and constitutes an obstacle to growth. Rural regions located close to urban areas can to some extent mitigate these recruitment problems, and their locations pose less of a barrier in recruitment processes compared to those of remotely located rural regions.Which policies can help remedy recruitment problems faced in rural regions? In both rural and nonrural regions, incentives for writing off student debt and relocation support for accompanying persons and tandem recruitment are perceived to be the most promising policies. Rural regions are more receptive to the implementation of such policies. Finally, the need for flexibility and policies that can be adapted to the regional demand for labour are stressed.