Cohesion and/or Growth?

Convergence and territorially balanced economic growth require faster economic growth in weaker regions. It is difficult to decide what measures would strengthen the growth capacity of regions most. Following a brief review of growth theories and the growth and catch-up performance of the Hungarian economy, the study focuses on the differences in development across regions in Hungary. Both the analysis of available statistical data and the calculations in connection with the catch-up rate show that the Hungarian regional development is strongly differentiated, and the so-called centre–periphery relationship can clearly be identified. Growth factors (e.g. human capital and R&D investment, innovation) should be enhanced simultaneously. Cohesion policy can complement and support growth objectives in many areas. Moreover, through the coordination of the innovation and cohesion policies even the trade-off problem between efficiency and convergence may be reduced.