Regional development disparities prevent the attainment of territorially balanced
economic growth and a more equitable distribution of income and wealth. Taking
into account the cumulative and self-perpetuating nature of these effects, they
affect negatively economic efficiency of the entire national economy (Armstrong
and Taylor, 2000). Apart from the economic aspects, there are also strong political
and social arguments for public support towards reduction of regional development
disparities (Illeris, 1993; Begg, 2003).
To a great extent accelerated by the EU-accession, conditions and structures for
faster economic convergence are gradually being created. The EU accession
implies also inclusion to common financial mechanisms such as CAP and EU
cohesion support. The focus of these financial mechanisms is given to sectors and
regions lagging in economic development or facing with structural problems (Artis
et. al., 2006). As suggested by Mole (2001) in assessing efficiency of these policy
mechanisms, it is necessary to address the following questions: (i) do the analysed
funds contribute to a faster economic convergence; (ii) are the expected impacts
affected by different modalities of support; (iii) do the analysed funds contribute
towards reduction of regional development disparities; (iv) which economic sectors
are likely to be affected the most; and (v) are there differences in the scope and
sectoral distribution of impacts among various policy mechanisms.
The CAP reform, following the agreement of the Council of Agricultural Ministers
of the EU in Luxemburg on 26th of June 2003, changed the nature of EU support
for rural economies. In addition, EU paid a lot of attention to overcoming the
disparities between rural and urban areas as laid out in Article 138 of the Treaty
establishing the European Community.