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, despite the widespread belief that economic growth fostered by European in- tegration would reduce the cross-country dispersion of per capita GDP. While there is empirical support for a positive link between the EEC and convergence among member states, the influence of European economic integration on within-country regional dispari - ties is more disputed. This paper examines the evolution of income dispersion among Italian regions in the period 1951-1987, in order to ascertain whether the substantial catching-up by the South dur- ing the 1950s and 1960s and the subsequent standstill in regional income and output gaps with respect to the North were primarily due to European integration. To this end, we analyse the dynamics of the main determinants of the evolution of regional income dif- ferentials in Italy since the birth of the EEC, as well as the South’s capability to cope with the new competitive environment. We argue that the performance of the South’s per capita GDP relative to the North’s was only indirectly related to European integration; to a great extent, it derived from changes in Italy’s general eco- nomic conditions and in the economic policy stance towards the South