Recognising the economic potential of border areas, national and subnational governments along with the European Union (EU), have introduced regulatory, policy and financial mechanisms to facilitate cross-border co-operation. Despite these efforts, cross-border regions generally perform below non-border regions in key metrics. For instance, in 2021 GDP per capita in the EU’s border regions was 86% of the EU average (100%).
Building More Resilient Cross border Regions CONSIDERATIONS IN GOVERNANCE AND PARTNERSHIPS
- 14 January 2025
The development gaps experienced by border regions can be attributed to fundamental, often structural, barriers they face, including legislative, regulatory and territorial-administrative obstacles, as well as language and cultural differences. For instance, regulatory differences in tax, tariffs, and standards have a significant impact on businesses in cross-border regions. Firms engaged in cross-border trade face costs up to 50% higher than domestic businesses, even within the EU single market. These barriers also impede the capacity of border regions to effectively address disasters whose consequences transcend national boundaries. For instance, a lack of co-ordination among EU Member States when implementing border closures and travel restrictions during the COVID-19 pandemic, contributed to the GDP of cross-border regions dropping by twice as much as that of the EU average.
In 2017, legal and administrative barriers in the EU’s border regions were estimated to result in a loss of 3% of European GDP (EUR 458 billion), which translated to six million fewer jobs in cross-border regions. It is estimated that by addressing even 20% of the existing legal and administrative obstacles, the GDP of cross-border regions would be boosted by 2% and over one million jobs would be created. These figures underscore the urgent need to establish and strengthen governance mechanisms to support socio-economic growth, improve the delivery of public services, and enhance the quality of life in cross-border regions.
This report assesses how multi-level governance arrangements can support resilient cross-border development. It starts by examining why the development of cross-border regions in the EU often lags behind non-border regions, and the multi-level governance mechanisms in place to bolster their performance. Using the five pilot regions as a basis, it then examines cross-border governance arrangements through the lens of the OECD Cross-border Governance Framework. Finally, this report includes considerations for subnational, national and international policy makers in the EU and beyond on how they can strengthen cross-border governance frameworks and enhance the resilience and socio-economic development of cross-border areas.