International Review of Economics

, Volume 63, Issue 2, pp 107–128 | Cite as

Insularity and economic development: a survey

Research Article


This survey reviews theoretical and empirical evidence on the impact of insularity on regional economic development. Far from being a mere geographical condition, insularity can be regarded as a permanent phenomenon of economic and social peripheralization that prevents islands to reach the goals of sustainable development that are reached by the mainland. Even if the issue of the consequences of insularity on economic development is garnering greater interest in the light of the growing recognition of the significant economic disadvantage faced by islands, both the theoretical and empirical literature in this regard are fragmented. More importantly, the effects of insularity on economic development are not disentangled from similar conditions such as remoteness, smallness and peripherality. The survey focuses as well on the two-sided nature of insularity, since if it is true that islands suffer from permanent handicaps, adequate policy interventions may not only mitigate insularity effect, but also transform insularity into an asset leading a great potential for growth. Finally, some policy suggestions are drawn, highlighting the need for custom-tailored policy measures.


Insularity Islands Regional development 

JEL Classification

R12 O50 F63 


  1. ADE (2012) Study on the relevance and the effectiveness of ERDF and cohesion fund support to regions with specific geographical features—islands, mountainous and sparsely populated areas. Final report, vol. 1. Report prepared by ADE at the request of the European commission.
  2. Adrianto L, Matsuda Y (2004) Study on assessing economic vulnerability of small island regions. Environ Dev Sustain 6(3):317–336CrossRefGoogle Scholar
  3. Aiello F, Scoppa V (2000) Uneven regional development in Italy: explaining differences in productivity levels. Giornale degli Economisti 59(2):270–298Google Scholar
  4. Armstrong, HW, Ballas D, Staines A (2006) A comparative analysis of the economic performance of Greek and British small Islands. In: Paper presented at the 36th regional science association international (British and Irish Section) conference, Jersey, Channel Islands, 16–18 August 2006Google Scholar
  5. Armstrong HW, Read R (1995) Western European micro-states and EU autonomous regions: the advantages of size and sovereignty. World Dev 23:1229–1245CrossRefGoogle Scholar
  6. Armstrong HW, Read R (2000) Comparing the economic performance of dependent territories and sovereign micro-states. Econ Dev Cult Change 48:285–306CrossRefGoogle Scholar
  7. Armstrong HW, Read R (2002) The phantom of liberty?. Economic growth and the vulnerability of small states. J Int Dev 14(3):435–458CrossRefGoogle Scholar
  8. Armstrong HW, Read R (2004a) Insularity, remoteness, mountains and archipelagos: a combination of challenges facing small states?. In: Paper presented for the regional studies association conference Europe at the margins: EU Regional Policy, Peripherality and Rurality, University of AngersGoogle Scholar
  9. Armstrong HW, Read R (2004b) The economic performance of small states and islands: The Importance of Geography, paper presented at Island of the world VIII International Conference “Changing Islands—Changing Worlds”, Kinmen Island (Quemoy), Taiwan, 1–7 November 2004Google Scholar
  10. Armstrong HW, de Kervenoael RJ, Li X, Read R (1996) The economic performance of micro-states. Report for the UK ODA (DfID)Google Scholar
  11. Armstrong HW, de Kervenoael RJ, Li X, Read R (1998) A comparison of the economic performance of different micro-states and between micro-states and larger countries. World Dev 26:639–656CrossRefGoogle Scholar
  12. Ascari G, Di Cosmo V (2005). Determinants of total factor productivity in the Italian regions, Sci Reg 4(2):27–50Google Scholar
  13. Ashoff G (1989) Economic and industrial development options for small third world countries, occasional paper No 91. German Development Institute, BerlinGoogle Scholar
  14. Atkins JP, Easter CD, Mazzi S (2000) A commonwealth vulnerability index for developing countries: The position of small states. Economic Paper No. 40, Commonwealth Secretariat, LondonsGoogle Scholar
  15. Baldacchino G (2004) The impact of bridges and other “fixed links” on island communities: when small islands are connected to Mainlands. Islands of the World VIII, changing islands–changing worlds: proceedings (1), Kinmen, Taiwan & International Small Islands Studies Association, 99–110Google Scholar
  16. Baldacchino G (2006) Small Islands versus big cities: lessons in the political economy of regional development From the world’s small islands. J Technol Transf 31(1):91–100CrossRefGoogle Scholar
  17. Bertram G, Karagedikli XX (2004) Are Pacific economies converging or diverging? In: Poot J (ed) On the edge of the global economy. Edward Elgar, CheltenhamGoogle Scholar
  18. Bohme K, Doucet P, Komornicki T, Zaucha J, Światek D (2011) How to strengthen the territorial dimension of ‘Europe 2020’ and the EU Cohesion Policy. Report based on the territorial agenda 2020, prepared at the request of the Polish Presidency of the Council of the European Union. Warsaw.
  19. Borgatti L (2007) Pacific Islands’ Bilateral Trade The Role of Remoteness and of Transport Costs, United Nations University, World Institute for Development Economic Research, Research Paper No. 2007/21Google Scholar
  20. Briguglio L (1995) Small island developing states and their economic vulnerabilities. World Dev 23:1615–1632CrossRefGoogle Scholar
  21. Bronzini R, Piselli P (2009) Determinants of long-run regional productivity with geographical spillovers: the role of R&D, human capital and public infrastructure. Reg Sci Urban Econ 39(2):187–199CrossRefGoogle Scholar
  22. Brunello G, Lupi C, Ordine P (2001) Widening differences in Italian regional unemployment. Labour Economics 8:103–129CrossRefGoogle Scholar
  23. CEC (1994) Eurostat: portrait of the islands. Office of the Official Publications of the European Communities, LuxembourgGoogle Scholar
  24. Cerina F, Pigliaru F (2007) Agglomeration and growth in NEG: a critical assessment. In: Fingleton B (ed) New Directions in Economic Geography, chap. 5Google Scholar
  25. D’Acunto S, Destefanis S, Musella M (2004) Exports, supply constraints and growth: an investigation using regional data. Int Rev Appl Econ 18(2):167–189CrossRefGoogle Scholar
  26. Del Monte A, Giannola A (1997) Istituzioni economiche e Mezzogiorno. Nuova Italia Scientifica, RomeGoogle Scholar
  27. Di Liberto A, Symons J (1998) Human capital stocks and the development of Italian regions: a panel approach, Crenos WP No. 98-4Google Scholar
  28. Diani M (2004) How associations matter. An empirical assessment of the social capital-trust-voluntary action link, in investigating social capital. In: Prakash S, Selle P (eds) Comparative perspectives on civil society, participation, and governance. Sage, New Delhi, pp 137–161Google Scholar
  29. Dimou M (2006) Insularity and urban hierarchies: the case of la Reunion, University of La Reunion, CERESUR, mimeoGoogle Scholar
  30. Dolman AJ (1985) Paradise lost? The past performance and future prospects of small island developing countries. In: Dommen EC, Hein PL (eds) States, microstates and islands. Croom Helm, London, pp 40–69Google Scholar
  31. Doz YL, Hamel G (1998) Alliance advantage: the art of creating value through partnering. Harvard Business School Press, BostonGoogle Scholar
  32. Elsass PM, Viega JF (1994) Acculturation in acquired organizations: a force-field perspective. Hum Relat 47(4):431–453CrossRefGoogle Scholar
  33. ESPON (2010) The development of the islands—European islands and cohesion policy (EUROISLANDS), interim report v.3Google Scholar
  34. Eurisles (1998) Regional disparities: statistical indicators linked to insularity and ultra-Peripherality, Summary reportGoogle Scholar
  35. EURISLES (2002) Off the coast of Europe: European construction and the problem of the islands, Study undertaken by EURISLES on the initiative of the Islands Commission of CPMRGoogle Scholar
  36. EUROMONTANA (2009) The green paper on territorial cohesion ‘turning territorial diversity into strength’-Response to consultation.
  37. Europe Planistat (2002) Analyse des régions insulaires de l’Union Européenne (Survey of insular regions of the EU). In Interreg Project, DG Regio, Brussels, European CommissionGoogle Scholar
  38. Fagerberg J, Verpagen B, Caniels MCJ (1997) Technology gaps. Growth Unempl Across European Reg Reg Stud 31(5):457–466Google Scholar
  39. Faini R (1999) Trade unions and regional development. Eur Econ Rev 43:457–474CrossRefGoogle Scholar
  40. Faini R, Galli G, Giannini C (1993) Finance and development: the case of southern Italy. In: Giovannini A (ed) Finance and development: issues and experience. Cambridge University Press, CambridgeGoogle Scholar
  41. Gloersen E, Michelet JF, Corbineau C, Giraut F, Price MF, Borowski D, Schuiling R (2012) GEOSPECS-European perspectives on specific types of territories, ESPON programmeGoogle Scholar
  42. Hache JD (1987) The island question: problems and prospects. Ekistics 323(324):88–92Google Scholar
  43. Krugman P (1991) Geography and trade. MIT Press, CambridgeGoogle Scholar
  44. Krugman P (1998) What’s new about economic geography? Oxf Rev Econ Policy 14:7–17CrossRefGoogle Scholar
  45. Krugman P, Venables AJ (1995) Globalization and the inequality of nations. Q J Econ 110(4):857–880CrossRefGoogle Scholar
  46. Lodde S (2000) Education and growth: some disaggregate evidence from the Italian regions. RISEC Int Rev Econ Bus 47:267–293Google Scholar
  47. Marrocu E, Paci R (2010) The effects of public capital on the productivity of the Italian regions. Appl Econ 42(8):989–1002CrossRefGoogle Scholar
  48. Melitz MJ (2003) The impact of trade on intra-industry reallocations and aggregate industry productivity. Econometrica 71(6):1695–1725CrossRefGoogle Scholar
  49. Melitz MJ, Ottaviano GI (2008) Market size, trade, and productivity. Rev Econ Stud 75(1):295–316CrossRefGoogle Scholar
  50. Moncada S, Camilleri M, Formosa S, Galea R (2010) From incremental to comprehensive: Towards island-friendly European Union policymaking. Isl Stud J 5(1):61–88Google Scholar
  51. Musotto F (2007) Report on the islands and natural and economic constraints in the context of the regional policy. A6-0044/2007, European Parliament, Committee on Regional Development.
  52. Ottaviano G (2003) Regional policy in the global economy: insights from new economic geography. Reg Stud 37(6–7):665–673CrossRefGoogle Scholar
  53. Ottaviano G, Thisse JF (2005) New economic geography: what about the N? Environ Plan A 37(10):1707–1725CrossRefGoogle Scholar
  54. Ottaviano GI, Tabuchi T, Thisse JF (2002) Agglomeration and trade revisited. Int Econ Rev 43:409–436CrossRefGoogle Scholar
  55. Paci R, Pigliaru F (2002) Technological diffusion, spatial spillovers and regional convergence in Europe. Springer, Berlin Heidelberg, pp 273–292Google Scholar
  56. Paci R, Usai S (2000) Technological enclaves and industrial districts. Anal Reg Distrib Innov Act Eur Reg Stud 34:97–104Google Scholar
  57. Planistat (2003) Analysis of the island regions and outermost regions of the European Union: part I: the island regions and territories, Report No. 2000.CE.0.AT.118 to the European Commission, DG Regional Policy, BrusselsGoogle Scholar
  58. Read R (2004) The implications of increasing globalization and regionalism for the economic growth of small island states. World Dev 32(2):365–378CrossRefGoogle Scholar
  59. Streeten P (1996) ‘Why small Countries Succeed’, paper presented at the Conference on The Effects of Economic Globalisation and Regional Integration on Small Countries, Nicosia, Mimeo, 4th–6th September, 1996Google Scholar
  60. Tinbergen J (1962) Shaping the world economy: suggestions for an international economic policy. Twentieth Century Fund, New YorkGoogle Scholar
  61. Venables AJ (1996) Equilibrium locations of vertically linked industries. Inter Econ Rev 37(2):341–359Google Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2015

Authors and Affiliations

  1. 1.Dipartimento di Scienze Economiche e AziendaliUniversità degli Studi di CagliariCagliariItaly

Personalised recommendations