Catching up or falling behind? Economic performance and regional trajectories in the "New Europe"

This paper examines the trajectories of economic development of European na tional and regional economies in light of the pressures for greater integra tion and enlargement of the European Union. Using a variety of data sets, w e demonstrate that there are significant variations in the speed and direct ion of change in per capita income and in productivity and employment rates across countries and a sample of European regions, and that falling behind (divergence) occurs as well as catching up (convergence). Making sense of spatial development therefore requires, we argue, that attention be paid to processes of differentiation and, in particular, to the falling behind exp erienced by less developed areas in East Central Europe and the forging ahe ad of the most developed, as well as to processes of catch-up. The paper al so contributes to an assessment of the appropriateness of interpretations o f growth and spatial development through countering the dominant discourse of convergence in neoclassical and neoliberal formulations and by suggestin g that integration brings with, it a number of important territorial "costs " associated with increasing inequality.