Transition, Regional Features, Growth and Labour Market Dynamics

The aim of this paper is to throw some light on the institutional change, regional features, and growth and labour market performances in the eight transition countries that became EU members in May 2004 (8-CEECs). The consideration of a rather fine territorial disaggregation – at NUTS-3 Eurostat level – distinguishes this paper from previous studies. This allows for the investigation of some important tendencies such as the concentration of production around the capital cities. The main empirical finding is that, while transition countries – in particular the eight CEECs – are converging, with a reduction of disparities in per capita incomes across countries, within each single country divergence is prevailing, with leading regions (mainly the capital city areas) growing much faster than the rest of the country. Econometric investigations also highlight a positive role for institutional change. The main policy implications, concerning both European and national economic policies, are presented in the conclusive section.