33
have collectively experienced a net increase of over five and a half million people. The adjacent
regions experienced a net total increase of one and a half million people over the same period.
Surprisingly the periphery regions did not experience a collective net decline in their total population.
To the contrary, they experienced a net population increase of six hundred and ten thousand people
resulting in a higher ex post 1992 population density. Only the island periphery regions revealed a
population outflow.
[Figure 8]
These results are important from an economic geography viewpoint, since they lend support to
the theory of the home market and the competition effect on population (labour) movements due to
trade liberalisation (Krugman, 1991b). The EU core regions attracted the largest population inflows.
The net population increase in the adjacent regions was approximately one quarter of the increase in
the core regions. Seventy-nine percent of the total EU adjacent regions experienced population
growth. The periphery regions also showed an increase in population growth. On balance, seventy
percent of the EU periphery regions experienced positive population relocation.
Since labour is domestically mobile (Krugman, 1991b) in pursuit of employment
opportunities, relocation of labour to national periphery regions implies the development of self-
sustaining economic activity and long-term income opportunities in these regions.19 This is a
significant development for three reasons. One, it provides evidence of the success of the new EU
regional policies in preventing the export of unemployment (Doyle, 1989). Two, it provides some
evidence to support the theory of cumulative causation starting from very low initial levels of capital
accumulation (Krugman and Venables, 1996). Three, it supports the theories of diversified
agglomeration (Venables, 1994; Ludema and Wooton, 1997; Forslid and Wooton, 1999).
8.3 Economic Developments in the CAP Regions
The new economic geography trade theory assumes that manufacturing will locate where its
markets are largest, but its markets are largest where population density is highest (Krugman, 1991b).
19 This study has not examined international population migration. The data, however, appears to support the theories of
Venables (1994) and Ludema and Wooton (1997) that labour in the EU is imperfectly mobile.