Transit Stud Rev (2012) 18:498511 DOI 10.

1007/s11300-012-0221-y WORLD TRANSITION ECONOMY RESEARCH

Beyond the Nation State: the Quest for New Territorial Paradigms in an Interconnected World Economy
Valentin Cojanu

Received: 14 June 2011 / Accepted: 15 November 2011 / Published online: 4 February 2012 Springer-Verlag 2012

Abstract This paper addresses one neglected issue in the study of regional integration: the impact of a complex of transnational factors on a countrys development. Goods and productive factors move relatively unhindered and engender less visible (and quantiable) linkages in the form of global value chains, regional productive clusters or social networks within areas of variable geometry. We refer to this regional partitioning that emerges in space and time within variable boundaries as a context of development. On the basis of this central premise, this study aims to contribute to the ongoing debate on the spatial complexity of economies with a mapping exercise delineating a self-supporting space for development. Papers key insight implies that development is informed as much by conventional tenets of economic theory as by new theses of social and cultural nature that makes the case for a space of development of variable geometry. Keywords Development European integration Competition History F15 M21 O18

JEL Classications

Introduction In the aftermath of the Second World War, two opposite tendencies began shaping the new world order. On the one hand, the world economy became intensely geopolitical in character: a fragmented political space, which tripled the number of borders between nations in the past 50 years (World Bank 2009, p. 97). On the other hand, the world grew ever more integrated, facilitating increased ows of persons, goods and services, and capital. The recent resurgence of regional agreements,
V. Cojanu (&) Bucharest University of Economic Studies, Bucharest, Romania e-mail: cojanu@ase.ro

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based on preferential concessions among member countries, has only reinforced the trend towards a polarized globalization. How could we make sense of these contradictory evolutions of present-day globalization? What are their implications for the future of international relations? This paper aims at contributing to a better understanding of the emerging pattern of integration in the world economy. The focus here is on the territorial congurations of a societal development. Authors like Krugman (1991) or Ohmae (1995) proclaimed the end of the nation state as the geographical unit of analysis, but were less successful in nding a proper replacement to account for the territorial limits of development. The existing analytical setting confusingly concludes that areas of growth are relatively rich for reasons that have to do more with culture than with geography (Krugman 1991, p. 95). Political economy theorists are not used to map territories of development because there is no primer of the kind. Statehood and geography matter for development, yet a pure geopolitical approach seems incomplete in an increasingly interdependent world economy, where goods and productive factors moving relatively unhindered engender less visible (and quantiable) linkages in the form of global value chains, regional productive clusters or social networks within areas of variable geometry. A mounting scholarly trend (e.g. Porter 1990; Krugman 1991; Enright 1993; Martin and Sunley 1996; Ricart et al. 2004; World Bank 2009) suggests that contemporary economies growth is intimately linked to a complex web of territorial evolutions originating in sources as diverse as agglomeration, distance, exchanges or culture. From this viewpoint, phenomena across territories and populations and not necessarily between or within countries supposedly hold the key to understand todays economies. As this paper argues, a world view based on nation states may gradually have to give way to contexts of development as the analytical framework which more appropriately accounts for the interstitial fabric of historical, social and cultural linkages between atomized actors (countries, rms, and individuals). The strength of the new vision rests on varied lines of interdisciplinary thinking; no discipline claims exclusive right to a new paradigm. To be sure, such claims in fact exist. Economists, for example, produce a generalized theory of optimal country size (e.g. Alesina, Spolaore, Warcziarg 2005) based on a trade-off between the economically viable size of country and politically acceptable heterogeneity of multiple jurisdictions. However, the modelling connes conclusions to abstract congurations of polities and ex post views of the geography of development, while key factors of historical evolution such as social or cultural values are conspicuously absent. We look at the modern views of identity patterns in the modern economy and attempt to illuminate the factors that could explain the new logic of inter-regional commonality in an interdisciplinary context. The argument is advanced in two sections. We begin with an overview of contemporary thought to emphasize the need of embracing a broader analytical perspective for a reliable representation of the spatial congurations of economies. The nation state has considerably lost its explanatory power once new theories appeal to a considerably larger set of determinants to account for a countrys development.

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To gure out this set of circumstances we propose a three step exercise evolving around contexts of development by emphasizing analytical constraints related to identiers, core functionalities, and policy scope. Papers key insight implies that drawing contexts boundaries is deemed necessary to organize a qualitative assessment to reveal the contextual origins of development and, ideally, to capitalize on them by suggesting tangible policy implications.

Modern views of Identity Patterns in a Global Economy For most analysts (cf. Hollis 1994; Nye Jr. 2005, p. 41), the nation state is still the appropriate form to make intelligible a societys aspirations towards progress. In a survey of the knowledge accumulated in connection to inter-regional interactions that transcend and/or challenge established jurisdictions at varying territorial scales (cross-scalar) and across different institutional remits or responsibilities (cross-jurisdictional), Adams et al. (2011) observe that seemingly no other construct has gained a hegemonic role in driving policy development. Given the dynamic reconstruction that state-related concepts presently undergo, this conclusion is hardly expected. Concurrent criticism takes on every pillar associated with a jurisdictions authority and responsibility over a given territory. The respectable political history of the nation state as a prototype of political and economic development is contented on grounds that this key actor of international relations may in fact be nothing more than a semictional overlay of institutions and a historically contingent social experiment (Brooks 2005) or a legal illusion (Milliken and Krause 2002). Among possible explanations, one view is advanced on grounds of shared human aspirations applicable to socio-political realities independent of the idea of national frameworks. When Marx and Engels urged Workers of the world, unite! in The Communist Manifesto, they appealed to an internationally shared sense of common aspirations relative to class struggle, work conditions and other targets of the proletariat. Various other strands of activism like feminist or environmental movements have similarly tried to speak out through a single voice a common code of ideals. Whitehead (2009) aptly uses the metaphor of elective afnities to designate mutually reinforcing but causally indeterminate links between multidimensional phenomena (e.g. democratization, inequality, rule of law) that affects the overall process of development. Sen (1999) refers to the new thinking as a third alternative between the established approaches of grand universalism and national particularism. Although his approach starts from the demands of a justice that is relevant at a global level, his vision equally accommodates commonalities like economic institutions (e.g. market mechanisms), cultural values (e.g. equity), or political goals (e.g. democracy) that cut vigorously across national boundaries and do not operate through national polities. To translate these moral precepts into operational policy may take various forms according to the adopted disciplinary approach. As our interest lies in economics, well take a closer look at the economic contexts that require us to rethink the

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optimal spatial area for analysing the territorial range of wealth-creating activities of an economy. The current economic literature invites to a revision of our understanding of the self-adjusting mechanisms of open competition. Terminology like economic space (Peschel 1998), Potential Integration Zone (ESPON project 1.1.3 2005), ecology of rms and locations (Ricart et al. 2004), optimum competitive areas (Cojanu 2007), or socio-political space (Dupeyron 2008) has been coined to refer to spatial congurations within which growth opportunities are selfenforcing. In a similar vein, econometric studies aim to come up with predicted effects of redrawing some sensitive political boundaries acknowledging though that this empirical work should be supported by a little theory (Frankel and Rose 2000). However, this work depicts synchronic economic evolutions as a result of within rather than between country groups competition. The integration networks of trade and investments become more inuential in amplifying the existing competitive advantages the more similar are their constituting economies structural characteristics. This paper proposes a few lines of interrogation which may come closer to a tter theory. We argue that on the premise that the emerging spaces of self-sustaining opportunities for development may not appear visible from statistical tests alone. Factors like commercial exchanges, institutional endowments or societal patterns draw our attention as much towards an areas geographical coordinates as to its historical, temporal context. Regional partitioning emerges in space and time within variable boundaries to which this paper refers as a context of development. Identifying contexts becomes possible by redirecting attention from comparable variables of individual actors to comparable patterns of evolution over territories. On its spatial coordinate, a context of development is dened by an arbitrary combination of geographically relevant factors such as distance, industry economics, centres of decision, commodity value chains etc. On its temporal axis, the context is the historical bearer of more or less tangible commonalitiessome sort of feeling of belonging together (Peschel 1998)that uniquely leave their imprint within a certain time span of development. It is our task to suggest that the interplay of historical sequences of social, economic, and political decisions that arrive at like results could nevertheless be mapped and used to assess conditions that are or are not auspicious for a selfsustaining process of development.

An Economic Proposition about Territorial Paradigms When The Economist tried to gure out possible territorial extensions of East African Community beyond the clubs existing member countries (i.e. Uganda, Tanzania, Kenya, Burundi and Rwanda), they realised that if dened by the area in which a common language is used, a common infrastructure is shared, and a common economic capital is recognized, east Africa spreads into Ethiopia and includes a chunk of Somalia, a swathe of east Congo, a strip of northern Mozambique and all of southern Sudan. (The Economist 2009). In a borderless

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world economy, we should expect this being the habitual albeit less conventional approach to regional integration. But, how do we know where to stop our territorial searches? Which regional or local economy to include and which one to exclude? Moreover, what would the implications be as to distant inter-regional exchanges? We address this issue by laying ground in the following for a preliminary outline against which potential contexts of development could be congured. Table 1 summarizes prima facie evidence about the dening elements of evolutions coalescing at intra-group level relative to likely candidates of development contexts at the level of smaller regional groupings. We look at a selected snapshot of European countries. Our families of countries show a predisposition for sharing ingredients that make them effective as a group, on the one hand, and struggling to overcome specic impediments, on the other. The need for a mapping exercise becomes manifest even from such a quick look that reveals the signicant extent their spatial and temporal proximities are still affected by past events. For the rst two, less developed areas, the cold war, the colonization era or the strategic interests connected to the Middle East affairs left behind unnaturally devised boundaries, resembling the usual geopolitical taxonomies, which form the usual sample group population. As for the third area of Nordic countries, their advanced level of development translates proportionally into the ease of multiplying the opportunities for asserting regional belongingness. The competitive drivers become straightforwardly recognisable and are described in more sophisticated terms. Particular visions of conducting own policies left this area as one of the most dissenting within the integration process, counting both non-EU and EU countries, whereas the latter further differentiating themselves as to euro zone membership. Our arguments below suggest a view of a contexts spatial and temporal coordinates emerging from a three-stage mapping exercise investigating its boundaries, core functionalities, and policy space. Step One: Drawing the Boundaries One stumbling block that pre-eminently arises in any analytical exercise on development is that the policy scope must take account of local conditions for development under a still incomplete understanding of what actually means local. Eurostat (2009), the EUs statistical arm, refers to a region as a tract of land with more or less denitely marked boundaries which often serves as an administrative unit below the level of the nation state and admits that its supposed features (e.g. physical barriers, historical frontiers, administrative structures) are usually to be found to some degree over such a wide area that they cannot be used in themselves to mark off one region from another; in other words, the boundaries are fuzzy. It is so safe to assume, in broad strokes at least, that contexts of development are founded on the twin pillars of identity and functionality: an identiable common denominator and a functional pattern of territorial evolutions that account for the temporal and spatial premises of development. The rst task then is to look for an identity. If language or ethnic roots are typically taken for the key unifying rationale in the case of budding nation states, an

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Beyond the Nation State Table 1 European contexts of development (a selected snapshot) Regional groupings Institutional anchors The Black Sea Economic Cooperation organisation (BSEC) (1992) The EU Black Sea Synergy initiative (2007) The EUs Stability Pact for the Balkans, 1999 The Mediterranean basin Southern Mediterranean Algeria, Cyprus, Egypt, Jordan, Israel, Lebanon, Malta, Morocco, Libya, Syria, Tunisia, Turkey, the Palestinian Authority (including Cisjordan and Gaza), Northern Mediterranean France, Greece, Italy, Spain and Turkey Nordic countries Norway, Iceland, Finland, Sweden, Denmark, Estonia, Lithuania, and Latvia The EU Northern Dimension (1999) The Council of the Baltic Sea States (CBSS) (1992) VASAB (Vision and Strategies around the Baltic Sea 2010) The EU Baltic Sea strategy (2009) The Nordic Council of Ministers The US Enhanced Partnership in Northern Europe (e-PINE) Programme (2003) The Barents Euro-Arctic Council (BEAC) (1993) New focus on Arctic energy and transport cooperation Energy transport routes (NORD-EL grid) Nordic electricity Market (Nordpool) Management of sea resources The EuroMediterranean partnership (the Barcelona process) launched in 1995 NATO (the Mediterranean Dialogue, 1995) Centripetal forces Centrifugal forces

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South Eastern Europe Bulgaria, Croatia, Romania, Serbia, Turkey, Bosnia and Herzegovina, Montenegro and Albania

Former Ottoman dominions Transit route for Europe-bound gas Security regionalism (illegal migration and trafcking of drugs and people, and movements of terrorists)

Regional economics (weak intra-regional trade and investment links, low level of development, weak institutions) No regional centre of economic or political power (emerging: Turkey) The IsraelPalestinian and Western Sahara conicts EU internal political process Disparate democratic standards Incomplete liberalization of markets

Mare Nostrum Energy transport routes

The EU-Russia relationship Low interoperability of national transport networks

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economic space is less apt in contrast to a political territory in revealing what makes it of self-sustaining structures throughout. And it might be that both established jurisdictions and spaces of variable geometry may be equally as much confusing relative to what makes them distinctive, because, as Wallace and Strmsnes (2008) argue in their discussion of European identities, although the nation states were built upon a sense of exclusionary national culture, this idea is criticised in the context of late modernity. People adapt and choose identities which can change under different circumstances. Regional identiers often come in visionary terms. The Union for the Mediterranean envisions a political, economic and cultural union (Emerson 2008a) no less. To substantiate the promise, it has become customary that intra-regional partnerships include science and technology, cultural and educational exchange, or health among prioritized areas of cooperation (Aalto et al. 2008, p. 44; Emerson 2008a, b) which all are particularly favourable to promoting local/regional distinctiveness. Territorial visions also elicit socio-cultural specicities deeply rooted in historical circumstances. For Kuus (2007), Eastness, where East is a territorially dened periphery of Europe, is best understood not as a location but as a tendency, one always inscribed in degrees, shades and avours. Sometimes, negative denitions may convey a similarly powerful message: the Nordic countries as a group are affected by longstanding conicts with Russia on the interpretation of history (Aalto et al. 2008, p. 2), whereas both Mediterranean and SEE spaces are perceived by the EU more of a threat than an opportunity (The Economist 2008) due to a defaming legacy of illegal immigration, unstable democracy, and economic instability. Yet, it may be the case that a vision does not necessarily invite to action and so shows signs of considerably diminished effectiveness. A visionary assertion of belongingness translates into a pragmatic approach upon the recognition of a common interest. Peschel (1998) encapsulates its meaning in her denition of an economic space as a region within which relationships are cause and consequence of trade and capital ows, of the transfer of knowledge and technology as well as of the various forms of communication and cultural exchange. They tend to mutually reinforce each other. In this view several anchors of space identity become manifest. Economic factors such as productive networks are vital, but may be functionally impaired if not complemented by less tangible albeit equally effective interconnected developmental capabilities. Dillehay et al. (2006) detect various social processes being at play in substantiating such ecosystems like negotiation, exchange and adoption, resistance, and tolerance between central and peripheral societies. One general lesson may be drawn at this stage: a regional identier in whatever variety it may come would not provide by itself a sufciently rm contour of a context; a necessary complement lies in revealing its perceived functionality. Step Two: Finding Core Functionalities Presumably, an early verdict on the probable location of territorial boundaries may be found in the ease of identifying a core functionality of that space. This is a

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conclusion which in fact can be fairly checked even against the case of nation-states as a retrospective rather than a predictive exercise. While the impact of historical threads may take long to discern, making use of technical investigative tools to gauge the long-run welfare effects of economic spaces seems at hand. A currency union, to which favourable contexts should ultimately lead, stakes its effectiveness on highly correlated business cycles of the participating countries. The bulk of the present models are erected on the premise that the functioning of a regional grouping is revealed by synchronized uctuations in key macroeconomic aggregatese.g. output, consumption, investment, employmenta case which connes the search for optimum to models estimating the strength of cyclical evolutions. There is without doubt a kind of deterministic relation that assigns core functionality to highly correlated economic uctuations. Transmissions of shocks are easily alleviated or adjustment mechanisms are routinely prompted the less visible are differences in productive structure across regions and countries and policies relative to factor mobility or scal policy. The adoption of a single currency could or could not change the pattern of industry location at regional level, but the expectations are that spatial linkages be revealed through intensity measures. Empirical evidence shows that the current period of globalization brought about not only increased cross-country correlations at the expense of national business cycles (Fatas 1997) but also, more specically, convergence of cyclical uctuations within country groupings of comparable level of development (Kose et al. 2008). One may thus expect to nd different benets of economic interdependence at different layers of regional integration. However, the capability to measure the strength of inter-regional correlations is weakened by one apparently neglected premise: the (a)symmetries owe their existence to predictable processes related to the economics of respective industries as much as to idiosyncratic business decisions embodied in psychological aims, motives, and means. The business fabric adds probably much more unpredictability than our models can reasonably process and hence makes our expectations about cyclical synchronization look less rm, especially when the spatial direction of exchanges within regional productive networks is less visible from a statistical viewpoint. Coordination mechanisms must coexist with volatile business behaviour in contexts of disruptive rather than steady economic evolutions. Besides commodity chains, sequences of events of institutional or socio-cultural nature prove equally important in revealing what supports the integrative processes of an economic space. How then to detect those sequences? Which characteristics are so relevant that a space of development act as a single economic unit? On a small scale, denitions of functional areas are still amenable to strict technical terms of spatial coordinates which more or less surround an urban area. The functionality of such a perimeter is revealed, for example, on the basis of travel-to-work (commuting) conditions (OECD 2002) or of the size of cities (population, economic activity), their distribution in space and the spatial interactions between them (ESPON project 1.1.3 2005). For ever larger geographical scale, evidence becomes increasingly elusive. A case in point is the EU practice of dening geographically relevant market

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conditions for anti-trust regulatory purposes. Case by case explorations of competitive behaviour reveal territorial dimensions that could range from local to global. The EU experts have in fact concluded that trade ows, and above all, the rationale behind trade ows provide useful insights and information for the purpose of establishing the scope of the geographic market but are not in themselves conclusive (Commission Notice 1997). Thats why quantitative tests informed by industry economics and international comparisons of prices have to be complemented in actual investigations by factors such as preferences for national brands, language, culture and life style, geographic patterns of purchases, barriers and switching costs, which go well beyond the conventional analytical frameworks centred on national statistics although so ttingly dene the context concept as advocated here. However instructive, anti-trust regulation propounds a very narrow view of functionally relevant spaces of competition, one that only makes sense for product markets. Rising the exploratory task to societal or global level and inquiring about more complex goals such as development potential confront policy makers with quite distinct challenges.

Step Three: Policy Design The paired representations of identiers and core functionalities set the stage for a policy scope concentrated on regional cohesiveness rather than on country benchmarking. That means that the institutional capability to reach a consensual view or congruent political strategies on key targets, say social welfare or macroeconomic stability, matters more than the targets themselves. In this view, for example, the Maastricht convergence criteria would have proved of little institutional help in creating the euro zone unless a separate conventioni.e. the Growth and Stability Pacthad not allowed a margin of policy freedom if need be. The main difculty rests on shifting the analytical focus from variables to patterns of evolutions. The economist is afraid, like any scientist, of ambiguous concepts, precisely the ones that are not tractable in models. Yet, quantication alone remains ineffectual as analytical tool in mustering all relevant information specic to an identiable, functional, and governable economic territory. For one thing, studies are compelled by data availability to provide deep but narrow perspectives on individual jurisdictions (e.g. countries, districts or other administrative units) which are not necessarily suitable candidates to depict viable contexts of development. For another, numerical exercises of assessing economic performance too often allude to quick xes (Morse 2008) or simplistic indexicality (Ricart et al. 2004) to understand the complexity of reality. Neat and convenient data do not necessarily meet the needs for relevance and diagnosis. A study of American economic regions capacity to compete recently deplored that the US Department of Commerce EDA has 379 separate economic development districts, many of which are too small to function as globally competitive entities (Council on Competitiveness 2010). When circumscribed by the logic of territorial development, policy effectiveness depends on an

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interdisciplinary effort able to validate the contextual components (i.e. identiers and functionalities) as sources of competitive gains. The EU experience with tackling the variable geometry of development has produced incremental and at times indecisive results. The proposal made by France in March 2008 to create a Union for the Mediterranean took many aback, especially Germany, by mentioning a project scope that would encompass selected EU countries (i.e. the northern shore of the Mediterranean) and non-EU Mediterranean coastal states (Emerson 2008a). Initiatives of this sort certainly do not suit the dominant logic of European development, in which nation-states and not territories are the key actors of integration, but their acceptance is imminent. Facing an ever varied neighbourhood, the EU replied by vigorously negotiating extensions of partnerships. Security issues of course play a key role in this design, but the whole process magnies the regions potential to foster locally devised solutions for competitive advance. At policy level, institutional initiatives struggle to cope with borderless entrepreneurial enthusiasm. Territorial visions amass themselves into a considerable literature, whereas integrative bodies like the European Union (EU) earmarks nancial support for policy and governance tools (e.g. the European Grouping for Territorial Cooperation (EGTC), cross-border networks or polycentricity) with a view to re-imagining territories in terms of their economic functionality. Running an SPSS routine, we have processed data to reveal similarities specic to groupings (or clusters) of European countries that would otherwise not be apparent. The EastWest division of the old continent has been lately eclipsed by as many divides as its heterogeneity may invite to: EU and non-EU member countries; euro and non-euro zone EU member countries; Northern and Southern Europe, suggestive rather of NorthSouth developmental dilemma than of geographical locations; and, of course, a variety of groupings (Western, Central, Eastern or South Eastern Europe; Nordic, Black Sea, Baltic, or Mediterranean countries) of geopolitical signicance. The data set contains six variable categories consisting of 30 social, economic, and institutional indices for 46 economies, mostly European but including also those neighbouring the Mediterranean Basin on its Southern side. We performed a total of seven routines, one for each set of indicators, and one for the whole set of 30 indicators, using the latest available data. Table 2 gather results of what we call quasi-permanent clusters, which represent same membership of groupings of country appearing most frequently. The ndings permit two distinct interpretations. Firstly, Europe is home of several cores of country groupings, each one preserving a recurrent pattern of cluster membership. For one thing, the resulting picture is suggestive of a more complex territorial partitioning based on economic, political and social commonalities than for example conventionally dichotomized patterns (i.e. core-periphery, EastWest or NorthSouth) reveal. It delineates relatively small country groupings of similar characteristics ranging over a signicantly broad range of variables. For another, euro zone area which presently counts 17 countries among its members has a relatively indenite identity, at least as far as its homogeneity estimated in terms of our selected characteristics is concerned. There is no instance in which all area members belong to the same cluster. The starkest divide is provided by the social-cultural identity, one criterion

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508 Table 2 Recurrent patterns of cluster membership Quasi-permanent clustersa Denmark, Sweden, and Norway UK and Ireland Latvia and Lithuania Germany and Austria Czech Republic and Slovakia Italy and Spain Romania and Turkey Jordan and Tunisia Egypt and Morocco Source: authors calculations
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Other country associationsb Finland Belgium Estonia France, The Netherlands, Switzerland Greece Bulgaria, Poland

Same cluster membership for at least ve out of seven sets of variables Same cluster membership for at least three out of seven sets of variables

which is supposed to strengthen the integration case, and implicitly the monetary union. Secondly, the ndings show some idiosyncratic cases (e.g. same-cluster yet not contiguous countries) for which no meaningful explanation can be supplied in the limits of the adopted methodology. On the one hand, making sense of distant countries exhibiting similar behaviour should pose no difculty. This is precisely the case of, for instance, very large country groupings (i.e. developed vs. developing) differentiating from each other by distinct convergence paths on a global scale. On the other hand, these very cases indicate that some further investigations covered by an analytical framework as here suggested should be pursued in order to bridge the gap between hypotheses and applied theory. One appropriate corollary is that policies should be motivated by a territorial vision adapted to achieve self-sustaining competitive t, devising policies around similarities in interests, capabilities, stimuli, motives, attitudes, able to enhance autonomous sources of growth. In the long run, cycle synchronization is not necessarily supposed to lead to either prolonged depression or lasting prosperity if the sources of competitive gains are dependent on an economic spaces selfsupporting links between people, rms, and institutions.

Concluding Remarks There are countless variables that can inuence economic growth, from economic structures and resources, to sophisticated factors such as governance, knowledge or entrepreneurial ability. Growth does not necessarily diffuse evenly throughout a jurisdiction which in fact stands for an analytical gment in the realm of unbound spatial interdependencies. Disaggregated regional growth statistics would reveal a rugged landscape of competitive growth dependent on such diverse factors as levels

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of development, cultural stereotypes, political attitudes or infrastructure connections. We are able to spot instead spatial concentrations of afuence or poverty of variable geometry (in comparison with xed political boundaries) that raise a different challenge: how could we delineate a space of economic dynamism able to generate self-sustaining resources for development? Our contribution to this debate was to congure the dening elements of a context of development, an analytical search in which spatial and temporal threads of evolutions over a given economic space gain in importance as a developmental asset. The success of quantitative studies to generate comparative data undoubtedly plays a helpful role in designing state-building trajectories although they must be seen in a broader context. Our statistical exercise did produce European country groupings resembling familiar geopolitical partitions of the old continent (e.g. Western Europe, Eastern Europe, South East Europe), and also allowed for some novel interpretations in respect to country similarities. For example, one key insight is to visualise Europe in several areas of distinct evolutionary characteristics, which may or may not correspond to current major integration constituents such as European Union or euro zone membership. The limits of analyzing country-level data become visible once we try to nd a rm indication about territorial limits of a societys economically self-sustaining community. Ever increased productive networks push countries towards greater interdependencies, in such a way that, according to available empirical evidence, the more similar their development circumstances are, the more advantageous those territorial connections become for their competitive standing. We did not attempt in fact to draw actual contours of existing European contexts of development, an investigation which would require additional exploration (e.g. eld research) that did not come into the purview of the present study. However, we suggest two interpretations that are moving us in this direction. First, the challenge of delineating a realistic spatial frame of development consists in the study of established or emerging habitats, towards which people, entrepreneurs, and authorities willingly assert their regional belongingness, and which create the necessary conditions enabling them to collectively produce selfgenerating capabilities for development. In most studies, development is investigated in reference to a polity, which may or may not transcend a countrys borders. Yet, the actual threads of inuences that may be held responsible for peoples wellbeing get rarely so easily framed. Politically organized units are indeed the best approximation we may have to discuss developmental issues but increasingly critical inuences in the form of global value chains, regional productive clusters or social networks unfold within areas of variable geometry. This can be an analytically complex view to grasp. Both geography and history arbitrarily concur in creating a context of economic evolutions, which may be visualized in scales ranging from global (e.g. developed vs. developing countries) to local (e.g. Upper Rhine Valley and Alsace). Their coexistent impact also stands proof about a relatively small territorial range of functional communities. Development is indeed underpinned by optimal resource allocation, although the contextual fabric of its emergence is at least as much critical. Key issues for any development policy, such as income disparities, labour motivation

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and conict resolution, nd a quasi-identical resolve in short aspatial distances like common perception of values (tastes, work attitudes, demand sophistication). Secondly, it is not so rare a case of international experiences of borderless prosperous areas bearing little resemblance to the surrounding jurisdictions. This reassuring observation notwithstanding, we do not expect to come across political agreement to redraw economic spaces to the benet of enhanced local possibilities for development; smouldering ethnic or territorial conicts, taxation benets or merely political inuence count probably among the most prominent causes for not ceding administrative control. But the range of policy design may vary considerably with no harm done to sovereignty susceptibility: adopting similar policies among peer national/regional administrations or countries is in fact a current trend of EU strategic framework for territorial cooperation. As with the free trade case, opening up public and private interests to as many functional cooperative networks as possible within adjacent economic spaces is the second best solution until political interests eventually become subdued by economic rationality.

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