Prof. Eduardo Haddad (p), Prof. Inacio Araujo, Prof. Geoffrey Hewings

This paper draws on the construction and application of Iraq’s 2013 Multiregional Social Accounting Matrix (MRSAM) to examine the structural features of the country’s pre-ISIS, oil-driven economy and to derive lessons that remain relevant today. Benchmarking the economy at a moment when oil production and fiscal revenues were high but vulnerabilities had not yet been fully exposed, the MRSAM provides a comprehensive framework for tracing interregional linkages, household income distribution, and the diffusion of oil-export shocks across governorates. The analysis highlights three central findings. First, while Iraq’s economy was overwhelmingly dependent on oil, accounting for nearly half of GDP, over 90% of exports, and almost all fiscal revenues in 2013, the transmission of oil shocks extended beyond Basra through household consumption linkages rather than production chains alone. Second, Baghdad functioned as the dominant economic hub, mediating flows between oil revenues, public spending, and regional demand. This centrality strengthened national integration but reinforced spatial polarization, as most governorates relied heavily on spillovers from the capital and exhibited weak local absorptive capacity. Third, the distributional effects of oil revenues were strongly regressive: capital owners, public enterprises, and high-income households captured the largest gains, while labor and lower-income households benefited only marginally. Taken together, the findings reveal a structural paradox. Iraq’s oil wealth generated sizable multiplier effects, yet the benefits were unevenly distributed across space and social groups. The 2013 MRSAM thus serves not only as a historical benchmark but also as a diagnostic tool for contemporary policy. It reveals further the need to strengthen local productive capacity, diversify beyond hydrocarbons, adopt explicit redistributive mechanisms, and manage Baghdad’s central role more strategically. Ultimately, converting oil rents into inclusive and resilient development requires not only technical reforms, but also political commitment to address entrenched inequalities and spatial imbalances.

Prof George Petrakos, Ms Stavroula Alexiou (p), Dr Alexandra Sotiriou

Over the past two decades, the European Union (EU) has confronted a set of intertwined challenges that sit at the heart of debates on regional growth, competitiveness and convergence: persistently weak aggregate growth relative to global competitors, widening territorial disparities, and rising political discontent that can undermine the legitimacy of integration and the stability of growth regimes. For large segments of the population, the EU no longer embodies an unequivocal promise of opportunity and upward convergence. Instead, the prevailing economic framework appears increasingly unable to deliver adequate growth and employment in the places that need it most, while successive shocks and structural transitions have heightened uncertainty and exposed long-standing vulnerabilities across regions.
This paper explores the complex interplay between regional economic growth, political discontent, and policy responsiveness within EU regions, focusing on increasing inequalities in the context of the EU’s ongoing processes of deepening and widening integration. Drawing on panel data for the EU28 at the regional level (NUTS2) from 2010 to 2018, these interconnected dimensions are treated as endogenous within a Three-Stage Least Squares estimation framework, aiming to uncover both direct and indirect effects.
Our findings reveal the existence of feedback loops that link regional economic trajectories, rising public discontent, and the responsiveness (or lack thereof) of EU Cohesion Policy and underscore the necessity of a holistic and systemic approach to policy design.

Prof. Paweł Churski, Dr. Czesław Adamiak (p), Dr. Maciej Pietrzykowski, Dr. Anna Dubownik, Dr. Barbara Szyda

Recent crises including COVID-19 pandemic and wars in Ukraine and the Middle East have highlighted the importance of regional resilience in policy discussions. Current debates about regional economic resilience emphasize its multidimensional and dynamic nature—not only how regions absorb shocks, but also how they adapt and reshape their developmental paths. In the RECORU project, “Regional policy in Europe under development shocks – challenges for regional development arising from the socio-economic consequences of Russia’s aggression against Ukraine,” we analyze how European regions experience and transform in response to the war on the Eastern borders of the EU. Our presentation focuses on a quantitative study of these impacts seen through the lens of a purpose-designed but broadly applicable vulnerability–exposure–consequences (VEC) framework. In this model, vulnerability refers to a region’s general susceptibility to crises, which we break down into economic, social, institutional, and environmental-infrastructural dimensions. Exposure concerns event-specific factors that affect the region’s response to a particular shock, while consequences encompass the diverse and multifaceted outcomes that can be interpreted both as short-term effects and indications of long-term transformations. By classifying regions along a vulnerability–exposure spectrum, we demonstrate how specific configurations influence the severity of different crisis impacts. Ultimately, our findings show that the complexity of these issues makes simple measurement inadequate, and that measuring quantifiable impacts should be the starting point for case-specific analysis of regional adaptation and transformation paths during a crisis.

Dr. Christoph Hauser(p), Prof.Dr. Gottfried Tappeiner, Prof.Dr. Janette Walde

Social trust is increasingly seen as an important determinant of economic growth and social prosperity in regions and nations. Even in a comparatively homogeneous area such as Europe, there are stark sub-national differences in levels of generalized trust. It is thus of crucial importance to identify the driving forces of regional trust and analyze the dynamics of its formation. The present paper considers these issues based on four waves of the European Values Study collected in an almost 30 years timeframe from 1990 until 2017. Evidence is provided to demonstrate that values of regional trust remain substantially stable over the entire period and are modified only through spatially correlated random noise processes. This finding is consistent with additional analyses based on spatial regression models identifying slow-moving factors responsible for the geographic distribution of trust scores and buried deep in the cultural background of a society. Whereas the low values in post-communist countries are exhaustively explained based on their institutional and cultural setup, the high Nordic scores remain significant even after inclusion of control variables. The dominant driving force of regional trust is represented by an open society with emphasis on free expression rather than survival values rooted in a focus on economic physical security. Whereas both institutional and educational frameworks are only of minor importance, a high degree of social heterogeneity is clearly detrimental for trust after controlling for GDP per capita. Hence, in spite of its economic significance, social trust does not appear to be amenable to political intervention in the short to medium term but neither should it be responsive to sudden crisis effects.