The trajectories and challenges of the development of inner peripheries in the new conditions of cohesion post SARS-CoV-2

2. Significance of the project

2.1. State of the art

Developmental inequalities are a permanent feature of reality as we know it. They are viewed from different angles. Among the most significant dimensions (and fundamental to a socio-economic geographer) is the spatial dimension. Its role grows as the approach typical of economics/space of flows is more widely adopted (Castells, 2004; Hudson, 2004); it emphasizes the basic meaning of relations rather than states in contemporary economy. Its significance is also reflected in the fact that the geographic inequalities of development are perceived as the basis of persistence of capitalism (Harvey, 2016) while their existence is simply interpreted as a natural regularity rather than a disturbance of the social and economic systems (Amin, 2004). However, this does not change the fact that, by analysing the mechanisms and regularities of the spatial differentiation of developmental processes, the theoretical bases of regional development assume occurrence thereof as either an effect of arresting the process of development or as their inevitable phenomenon. The first approach relies on a hypothesis of regular development and an assumption that the balance and efforts made to achieve it are a natural state of the economy; it has been employed, among other things, in neo-classical and neo-Keynesian theories as well as stage models. The other approach, determining the so-called natural features of socio-economic development itself, suggests the irregular development hypothesis which says that imbalance in the economy is a driving force of development. It has been used in the growth poles theory, the polarization theory and the endogenous growth theory (Gorzelak, 1989). On the other hand, the framework of the contemporary search for optimum ways of formulating and implementing regional policy and shaping (as part of its intervention) the growth factors is delineated by two concepts (extreme with respect to their assumptions), namely the place-neutral approach and the place-based approach (Churski, 2018). They provide an answer to the new challenges faced by regional policy which stem from the constantly changing global conditions (Churski et al., 2018, 2020). The former takes advantage of the place-neutral approach by relying on the assumptions highlighted in the Report by the World Bank (Reshaping economic…, 2009) including polarization and diffusion of growth accompanied by promoting aspatial public policies which assume intervention without taking into consideration the idiosyncrasies of the specific areas and orienting activities to the locals who can make best use of the effects of the agglomeration, mobility and specialisation in order to improve their living conditions (Gill, 2010). The other search direction - the place-based approach – has been applied to work on the assumptions of Fabrizio Barca’s reforms of the regional policy (2009) promoted by means of the recommendations included in the OECD reports (How regions…, 2009; Regions Matter…, 2009). In this discussion, an opinion prevails that effective regional policy requires re-orientation toward an integrated and territory-oriented approach.

There is ample evidence of developmental differences, reflected in differently identified and defined dichotomous systems like cores and peripheries, growth poles and areas of economic stagnation, metropolises and urban agglomerations and rural and farming areas etc. The ways in which they are delimited have stimulated discussions and disputes. Irrespective of their course and results, spatial differences should be subjected to in-depth studies and analyses with a goal of identifying the changing factors and the growth barriers determined by the place-based capital of the specific areas. It should lay at the basis of activities aimed at convergence of growth in the space. Against this background, particularly interesting are permanently marginalized areas which do not necessarily need to represent peripheries defined as a physical distance. In literature on the subject, they are referred to as inner peripheries (Copus et al, 2017; Czapiewski, Janc, 2009; Pérez-Soba, et al, 2013). As research carried out by ESPON suggests, the existence of inner peripheries results from combinations of undesirable processes, features and evolutionary dynamics which lead to limiting their developmental potential (ESPON, 2017). Inner peripheries are regularly depopulating which results in unfavourable demographic trends; they also stand out for their limited infrastructure resources and poor accessibility of public services (Kluza, 2020). Quite importantly, the existence of inner peripheries is of universal nature – these areas can be identified in various parts of Europe irrespective of a country’s or a region’s level of development, the stage of social and economic changes and the specificity of place-based capital. The peripheral nature of these areas is conditioned predominantly by their limited relations with the environment. These areas are not included into external networks of relations which are at the basis of producing synergy effects and reinforcing the growth process, typical for core areas. They are also characterized by internal deficits related to the quality of the components of place-based capital which, consequently, reflects a low level of internal networking. As a result, it does not provide an attractive environment for business activity. To date, attempts of systematising this category of areas have led to identifying three types thereof (ESPON, 2017): (1) enclaves of economic potential – with limited physical accessibility to the core areas, (2) areas with limited access to basic services rendered for the locals – with underdeveloped services and limited access to them and (3) areas indicating deficits of close internal relations, with low levels of growth resulting from limited competences in cooperation, determined by the quality of social capital (Copus et al. 2017, Widuto 2019). More importantly, in some areas the indicated types can intertwine, which further intensifies the scale of developmental challenges. The distribution of these areas in Europe has some regularities. While 80% of inner peripheries, which are enclaves of economic potential and have limited physical access to the core areas, are represented by rural areas, 1/3 of inner peripheries with deficits of inner closeness is represented by urban areas. A majority of inner peripheries coincide with the range of underdeveloped areas in specific countries. This is particularly true for enclaves of economic potential and areas plagued by deficits of inner closeness whose socio-economic features determine the areas’ poor economic performance. Peripheries occur in rural areas, in poorly populated areas, in distant regions as well as within the reach of metropolitan areas. They may be economically weak or robust, reflecting either positive or negative demographic trends while their marginality may be affected by both endogenous and exogenous factors (Servillo et al., 2016).

2.2. Justification of tackling a specific scientific problem

The SARS-CoV-2 pandemic which started in late 2019 and early 2020 in China and has spread all over the world, has multi-faceted economic and social consequences. Their results will be definitely more severe and far-fetched than in the previous economic shocks (Thorpe, Loughridge, Picton, 2020). The relatively wide range of lockdown, the omnipresent limitations to freedom of movement combined with an unprecedented global stress and anxiety, have resulted in a dramatic drop of consumer and business expenditures which is bound to cause a deep economic recession (Brzeski, Smith, 2020). In fact, it will be an extension of the existing crisis which at its medical stage seems to have been mitigated in China and Central and Eastern Asia (the source locations). This does not hold true for the social and economic stage which will go on at least until quarter 3 of 2020. This stage’s direct effect will include widespread and lasting decrease in income, bankruptcies and closing down of businesses, a rapid growth of unemployment and a considerably higher demand for social security services. These phenomena will exert growing pressure on the banking and financial systems as well as the public investment sector perceived as an effective form of affecting investment demand in times of recession. All this is an indication that actions instigated in many countries and aimed at alleviating the cash policy, with extremely low interest rates, will have a very limited impact on changing the undesirable macroeconomic trends. Time will show if economy support programmes of unprecedented value offered by the governments (the “Mammoth” Assistance Package of USD 2 trillion in the US which represents 10% of the country’s GDP) will bring about the desired effects. Programmes of cash stimulation launched as part of quantitative easing (QE) in many regions of the world following the credit crunch of 2007-2008 have not been evaluated unanimously as positive. While they led to reducing interest rates and restoring trust in the money markets, they failed to stimulate economic recovery in the analysed countries (Łasak, 2017). Notably, these programmes primarily resulted in higher appraised values of financial assets, only marginally feeding the real sector. On the one hand, it only aggravated income discrepancies in the society (resulting in escalation of movements like “Occupy Wall Street” in the US or protests like “Le mouvement des Gilets jaunes” – “the yellow vests movement” in France). On the other hand, it posed new threats in the form of inflated balance sheets of central banks and quick inflation of public debt (Forbes 2020; Sroczyński, 2019; The Economist 2020). Of special importance is the fact that the latest shock caused by SARS-CoV-2 is of different origin therefore resorting to the same tools may be counter-productive and lead to deeply unfavourable economic consequences. As the transmission fields of the latest crisis affect real economy in a much deeper and more direct way, it impacts more public finance (CNBC 2020; The Economist 2020). In these conditions, of special importance is providing an answer to the question about the social and economic consequences of the SARS-CoV-2 crisis for micro-economic trends in the specific areas, for specific industries, sectors and local labour markets. Most certainly, the consequences will change the features of place-based capital in the specific areas and will therefore affect the size and nature of the spatial conditioning of development. This will lead to verification of the validity and effectiveness of the existing paradigm of cohesion policy (Position Statements..., 2020), the domestic regional policy and growth policies implemented locally.

2.3. Justification for the pioneering nature of the project

The pioneering/innovative nature of the project is reflected in its three elements: firstly, in the adopted research plan; secondly, in formulating the assumptions and goals of the research and, thirdly, in the applied empirical data and methods of analysis.

In the course of preparing the research plan, the iterative (adaptive) approach has been used to manage the research project. At every stage of the research, we will make use of knowledge accumulated in the previous stage. “Products” will emerge in the course of the project and at each stage of it, we will be able to verify the assumptions in order to obtain the best possible research results.

As for the research assumptions and goals, the project revolves around the topical social and economic consequences of the Covid-19 pandemic and its impact on the future, specifically with respect to the impact of the consequences of the SARS-CoV-2 crisis on the development of inner peripheries. The project goals include recommendations for interventions of cohesion policy in the realm of changing the directions of developmental measures targeted at inner peripheries.

Empirical data and the methods of analysis are new in comparison with similar, earlier studies (Battaglini, 2017; Copus et al., 2017; Kluza, 2020; Musil & Müller, 2008; Servillo et al., 2016; Śleszyński, 2014; 2016; 2018; Śleszyński et al., 2017; Wójcik et al., 2018). What is new is mostly the use of primary quantitative sources: unpublished data provided by the Ministry of Finance and data obtained as a result of cooperation between the project team and the Association of Polish Cities. The Association of Polish Cities, which has offered assistance in the project, will make available databases of local governments, specifically a System of Self-Governmental Analyses and its tools (Local Development Monitor Programme, Cities Monitor Programme, results of in-depth analyses carried out in numerous cities). These data allow to considerably extend and add credibility to the resources of quantitative information on the socio-economic situation and the labour market in communes in comparison with official data from the Central Statistical Office, commonly used to this end. Inclusion of these data will provide a better understanding of the scope of the effects of the SARS-CoV-2 crisis on specific industries and sectors of the economy as well as the income of the inhabitants on a local level. Among the applied analytical approaches, development and application of a multi-variant approach to systematising inner peripheries in Poland, taking into consideration the impact of the functional regions of medium-size and small towns on underdeveloped areas, will be of pioneering nature. By making use of generally available and unpublished sources of quantitative data, it will be possible to apply models of spatial regression on a local level, formerly not used to this end or to this extent.

2.4. The impact of the project results on the development of the research field and scientific discipline

Inner peripheries occur in nearly all European countries; originally, they were associated solely with the countries of Central and Eastern as well as South-Eastern Europe. The results of numerous surveys indicate predominantly rural areas where the total efficiency, level of growth, access to services and the inhabitants’ quality of life are relatively poorer than in the adjacent areas.

The Inner Peripheries of Russia (Kaganskii 2013), the Czech Republic (Musil & Muller 2008), Scotland (Noguera & Copus 2016), Spain (ibidem) and Italy (Servillo et al. 2016) indicate a similar set of peripheral features where of key importance seems to be the progressing communication exclusion and the negative characteristics of the social and economic structures which pose a great developmental challenge rather than the geographic location or the distance from the centre of business activity.

By referring to the above examples, it is assumed that similar change scenarios are likely also in Poland. Monitoring and analysing the directions of the changes at play seem indispensable to systematising the knowledge of the new challenges to formulating the integrated development policy. For this reason, discussion of the development of inner peripheries in Poland is of great importance and has special cognitive and application values.

The suggested research is certainly more valuable owing to the delimitation procedure; in the subsequent stage of the typology of inner peripheries, it will be based on the relations between units as part of emerging functional ties; it will be independent from administrative divisions and will not assume that new ones will be formed (cf. Bajerski 2008; Markowski 2016; Musil, Müller 2008; Servillo et al. 2016).

Another value of the planned research is the adopted structure based on identifying the factors (factual and potential) typical of the peripheral nature and creating a system monitoring the multi-faceted changes to inner peripheries in the country.

Verification of the applied methods and the assumed modification thereof will allow to define their suitability for carrying out analyses and constructing change scenarios. Taking advantage of the new knowledge, reinforced by high quality unique data of quantitative and qualitative nature on the resilience of inner peripheries to the potential consequences of the economic crisis following the SARS Cov-2 pandemic will allow to increase the effectiveness of measures by making full use of their developmental potential.

The contribution of the research to the current theoretical and methodological debates about defining a solid interpretation framework for inner peripheries on the level of the EU will be of importance to devising a strategy of consistently tackling the peripheral nature leading to enhancing the situation in inner peripheries in the country and on the European continent (cf. Copus et al. 2017; Widuto 2019). We assume that the research findings in the theoretical and methodological aspects will be accompanied by applied results useful for the Association of Polish Cities.