Better together: Untapped potentials in Central Europe

Abstract

Borders prevent the optimal exploitation of socio-economic and environmental resources. A relevant obstacle due to missed integration is associated with legal and administrative barriers, which cause the emergence of untapped potentials. This paper exploits the case study of the Interreg Central Europe programme. Removing borders among countries in the area enhances scale economies due to a large market for inputs and goods, both within regions and across Central European area regions. This paper identifies untapped potentials by looking at the missed regional GDP growth due to the inefficient exploitation of regional growth assets. Results hint at a complex and heterogeneous spatial distribution of untapped potentials, involving several growth factors.