The Great Transformation in EU Cohesion Policy: Re-Embedding Market Economy

Abstract

The global market economy can advance human and social development in some ways, fostering productivity and growth, and yet is harmful to it in others, producing instability, inequality and ecological destruction. Engaging with Karl Polanyi, the thesis argues that the difference is found in how the market system is instituted. The market economy generates negative effects through the fictitious commodification of labour, land and money, but so too does an ad hoc ‘counter-movement’ against this, as it ends up impairing the system overall. I therefore explore how the market economy might instead be guided by broad socio-political institutions. Cohesion Policy in the European Union exemplifies this by supporting European regional development. Its budget of €346 billion for 2014–2020 has provided European public investment in a range of areas – employment, enterprises, environment, infrastructure, research and innovation and so on. By instituting this support at the supranational level, across the EU, Cohesion Policy is able to boost the union’s less developed regions while avoiding tensions between national economic policies. Therefore, the thesis examines the extent to which EU Cohesion Policy has produced advances in regional development and has enabled a more stable socio-economic system within the regional political economy of Europe.