European Union Place-Based Policies: Contrasts and Similarities to the US Experience

The European place-based policy framework was established in the European Treaties and has a current budget of $60-70 billion per year. This paper identifies key features and directions for its future development with respect to four place-based problems: traditionally lagging regions; contemporary distressed (or left-behind regions); the challenge of spreading prosperity faced with the uneven geography of technological clusters and routine technology-based manufacturing; and the place-based challenges of transitioning from fossil fuels and adapting places to climate change. We analyze the place-based features of EU Cohesion Policy, its commonalities and differences with place-based policies in the US. We evaluate policies against a structural backdrop of long-term convergence in the two continents and the contemporary geography of spatial divergence, using both historical perspectives and recent policy evaluation evidence. Key differences are identified in policy programming, implementation, budgeting and time horizons. While there has been evidence for conditional policy success on both continents, there are also serious impediments to successful policy in both. These limits have to do with how well policy is designed with respect to economic geography fundamentals as well as problems in policy design, implementation and governance.