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Economic impact assessment of alternative European Neighborhood Policy (ENP) options with the application of the GMR-Turkey model

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Abstract

This paper applies the GMR-Turkey policy impact model to estimate the likely regional effects of a selected set of policies suggested in the European Neighborhood Policy literature. We grouped the policy suggestions into two alternative sets of measures, which became the bases of two alternative scenarios of regional economic development, the Conservative scenario and the Technology- and innovation-based development scenario. Our results suggest that a persistent and systematic long-term regional technology development-based economic policy which applies measures such as investment, education and R&D support, promotion of better connectedness to EU research networks and increased physical accessibility to developed markets could in the longer run result in higher levels of regional and national production together with decreasing interregional differences than a scenario supporting the expansion of traditional industries in the region.

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Notes

  1. The ENP framework is proposed to the 16 of EU’s closest neighbors—Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, Moldova, Morocco, Palestine, Syria, Tunisia and Ukraine.

  2. The Acquis is the body of common rights and obligations that is binding on all the EU member states.

  3. Horizon 2020 is the EU’s collaborative research support program that follows the Framework Programs (FPs) from 2014.

  4. The MASST (Capello 2007) and the RHOMOLO (Brandsma et al. 2015) models should also be referred here. Though GMR, MASST and RHOMOLO are different in many respect in their internal structures (e.g., MASST is a partial equilibrium econometric model, RHOMOLO is a general equilibrium, SCGE model on six industries, the GMR model is an integrated econometric-SCGE–DSGE model) they share the common interest of incorporating geographic effects into their model structures.

  5. The ENQ effect may appear quite significant in comparison with the R&D effect. In our observation it is because the relative weight of the change in ENQ is more significant than that of the change in R&D. While the allocated IPA funding increases R&D by about 2 %, the increase in ENQ by the end of the 7-year period is 10 %, which is in our observation a really significant improvement in the composition of research partners.

    Fig. 8
    figure 8

    The effect of the Technology development scenario on TR72 GDP

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  6. Note that we depicted the impacts of the Conservative scenario without accounting for the effects of the 2 % increase in export. The specific reason is that the model is not capable of differencing between export increase impacts on a particular region and the impacts on all the regions at the national level. Consequently the export impact at the national level would include increased the effects of export activities in all the regions of Turkey and not only the impacts doming from the Kayseri region.

    Fig. 9
    figure 9

    Comparison of the effects of the three scenarios on regional GDP, national GDP and interregional inequalities

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Acknowledgments

We would like to thank Orsolya Hau-Horváth, Péter Járosi, Tamás Sebestyén, Áron Kovács, Dániel Kehl and Gallusz Abaligeti for helping us in running simulations and adjusting model capabilities, two anonymous referees, Ed Bergman and Alpay Filiztekin for excellent comments on an earlier version of the paper and Alessia Matano and Raul Ramos for very useful suggestions on a specific literature. The present scientific contribution is dedicated to the 650th anniversary of the foundation of the University of Pécs, Hungary.

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Authors and Affiliations

  1. Department of Economics and Econometrics, Faculty of Business and Economics, University of Pécs, Pécs, Hungary

    Attila Varga

  2. MTA-PTE Innovation and Economic Growth Research Group, Faculty of Business and Economics, University of Pécs, Pécs, Hungary

    Attila Varga & Mete Basar Baypinar

  3. Department of Urban and Regional Planning, Regional Planning Division, Faculty of Architecture, Istanbul Technical University, Istanbul, Turkey

    Mete Basar Baypinar

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  1. Attila Varga
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  2. Mete Basar Baypinar
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Correspondence to Attila Varga.

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Varga, A., Baypinar, M.B. Economic impact assessment of alternative European Neighborhood Policy (ENP) options with the application of the GMR-Turkey model. Ann Reg Sci 56, 153–176 (2016). https://doi.org/10.1007/s00168-015-0725-6

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  • DOI: https://doi.org/10.1007/s00168-015-0725-6

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