PROBLEM REGIONS IN GREECE AND THE LOCATIONAL INCENTIVES POLICY IN MANUFACTURING (INEQUALITY, RADICAL FRAMEWORK, STATE ROLE

In the last two decades the regional problem has drawn considerable attention in Greece. The Greek regional problem consists of overconcentration of population and economic activity in Athens and demographic and economic decline in most of the rural areas. A variety of regional policies have been implemented in Greece but the regional problem seems persistent. The main objective of this work is to examine the nature and the causes of the regional problem in Greece and to evaluate the effectiveness and the appropriateness of the existing regional policies. The emphasis is given on the regional development incentives policy which directs manufacturing firms to the problem regions in Greece.;There are several theoretical frameworks which have been developed concerning the regional problem. These frameworks express different expectations on the process of regional inequality and the effectiveness of regional policies. In this work the radical framework is adopted for studying the regional problem and the regional policies in Greece. The basic argument of this framework is that regional inequality is inherent in the capitalist system and results from the workings of the system itself. Also, regional policies are not successful in reducing regional inequality because the private ownership of the means of production and the social composition of the capitalist state pose severe limits to the planning abilities of the state. The present work examines the above arguments of the radical framework. First, the causes of the regional problem in Greece are sought in the evolution of the capitalist mode of production. Second, the regional development incentives policy in manufacturing is evaluated. The main expectations of the radical framework that are tested in this evaluation are the following: the ability of the state to influence private investment decisions is limited; the incentives facilitated spatial processes already in progress and were not necessary for the location of the subsidized firms; the subsidized firms do no necessarily correspond to the needs and the development potential of the problem regions.