Metropolisation and regional inequalities in Central and Eastern Europe: The role of demographic change

Abstract

Metropolisation has become one of the defining features of regional development in Central and Eastern Europe. Since the beginning of the transition period, capital city regions have attracted an increasing concentration of economic activity, highly skilled labour and population, while many peripheral regions have experienced economic stagnation and demographic decline. Regional disparities are typically assessed using GDP per capita, which is generally interpreted as a measure of economic performance. However, because GDP per capita is an indicator combining both economic output and population size, demographic change may influence its dynamics and consequently the interpretation of regional convergence.

The paper examines the extent to which demographic processes modify the observed pattern of regional inequalities in eleven Central and Eastern European countries during the period 2000–2023. Rather than analysing demographic variables as determinants of economic growth, the study focuses on the arithmetic relationship between GDP, population, and GDP per capita. A simple decomposition framework is applied to separate the economic component of GDP per capita growth from the demographic component resulting from population change. The empirical analysis compares capital city NUTS3 regions, treated as proxies for metropolitan areas, with the remaining regions of each country. In addition, the study examines differences within peripheral regions by comparing areas characterised by the weakest economic performance with those experiencing the strongest population decline.

The results demonstrate that capital city regions consistently record faster GDP growth than the rest of their countries, confirming the continuing concentration of economic activity. However, this picture changes considerably when GDP per capita is analysed. Population growth in metropolitan regions mechanically reduces the observed rate of GDP per capita growth, whereas population decline in many non-capital regions inflates per capita indicators despite relatively weak economic performance. Consequently, part of the apparent convergence observed in GDP per capita does not reflect genuine convergence in economic activity but results from demographic adjustment. In several countries, including Poland, Slovakia and Estonia, demographic processes are sufficiently strong to reverse the interpretation of convergence when GDP per capita is compared with GDP measured in absolute terms.

The analysis also reveals considerable cross-country variation in the structure of demographic effects. In some countries, convergence is mainly influenced by rapid population concentration in capital city regions, whereas in others it is driven by depopulation of peripheral areas. Demographic processes contribute to reducing observed disparities within peripheral regions themselves, as areas with the weakest economic performance are not necessarily those experiencing the strongest population decline.

The findings suggest that GDP per capita should be interpreted as a hybrid indicator reflecting both economic performance and demographic dynamics. Consequently, analyses of regional convergence and evaluations of cohesion policy should explicitly account for demographic processes in order to avoid misleading conclusions concerning the scale and direction of regional development.