Is “Harmonious Development” Valid for European Union Regions?

Abstract

This paper analyzes the relationship between income inequality and economic development within 273 Nomenclature of Territorial Units for Statistics (NUTS2) European regions. In the study Human Development Index (HDI) values as well as weighted and unweighted gini levels are constructed for each of these regions for 2000-2010 period. Although there is evidence of narrowing income per capita and HDI differences within the regions, the regional disparities steady still in Europe. The results show that before the latest enlargement of European Union, the income inequality and economic development relation was in line with the 'harmonious development' goal of the treaties. However, the enlargement process spoils this relation as more resources are devoted to underdeveloped regions of the union.Keywords: Economic Development; Income Inequality; Regional AnalysisJEL Classifications: D3; O10; O11; O18