The European Economic Community and Italian regional disparities, 1951-1987

Economic disparities across regions have been a concern for the European Economic Community since its foundation, notwithstanding the widespread belief that economic growth fostered by the European integration would reduce the cross-country dispersion of per capita GDP. While there is empirical support for a positive link between EEC and convergence among member States, the influence of the European economic integration on within-country regional disparities is more disputed. In the paper, we study the evolution of income dispersion among Italian regions in the period 1951-1987, with the aim to verify whether the Southern substantial catching-up during the 1950s and 1960s, and the subsequent standstill in regional income and output gaps with respect to the Northern regions, were primarily due to the European integration process. To this aim, we analyse the dynamics of the main factors behind the evolution of regional income differentials in Italy since the birth of the EEC, as well as the South capability to cope with the new competitive environment. We argue that the dynamics of South’s per capita GDP relative to the North seems to have been only indirectly linked to the European integration, being more the result of changes in the overall economic conditions of the country and in the economic policy attitude towards the South.