No. 86. FUNCTIONAL ECONOMIES OR ADMINISTRATIVE UNITS IN GREECE: WHAT DIFFERENCE DOES IT MAKE FOR POLICY?

P.I. Prodromídis. 2006.

 

The paper provides the 2001 income mosaic of Greece at the local (municipal and postcode) level, and econometrically isolates a number of territorial, demographic, and occupational factors on declared income, on the basis of which it makes a number of policy proposals. The disaggregate nature of the data facilitates the construction of alternative spatial models that are juxtaposed to the regional framework on the basis of which national and EU sub-national convergence and prosperity plans are devised, implemented, and assessed. A specification based on the existing regional framework provides an inferior econometric fit, which, in turn, suggests that the economy does not operate according to the country’s administrative divisions but rather according to local-specific factors and transportation linkages, as is the case in a fragmented land united by its transportation network. Accordingly, if income disparities are larger within administrative regions rather than across regions, it might make more sense if regional economic development policy were conducted within a functional-area framework rather the current administrative-region framework. (Originally presented at KEPE seminars and OECD meetings, under the title “A Regional Analysis of Declared Incomes in Greece,” the paper has benefited from comments made to earlier versions by D.Christelis, V.Mathur, and the participants in the above seminars and meetings. Thanks are also due to H.Kati for diligently helping match the census and revenue datasets. The usual disclaimer applies).

 

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