The regional policy of the Czech Republic
Last decade brought dynamic and radical changes to Europe and its understanding of regional
policy. On the one hand, the European union aims at widening of integration, on the other
hand, the deepening of the integration is the issue number one in connection with the process
of the EMU forming. The member countries as well as accession countries can feel that the
integration can be jeopardise if economic and social disparities are not addressed as a problem
and economic and social cohesion recognised as a political priority number one. In this
perspective the Czech government started to place emphasis on the identification of regional
problems and the best way of addressing them.
Regional policy is generally understood as state intervention into economic and social
development in different parts of the state's territory. An actual profile of regional policy
tends to be strongly dependent on the role of the state in its historical development, on the
affluence of the society, on the severity of regional disparities and on the nature of ruling
political will.
Regional policy in the Czech Republic until the year 1990 can be associated only with
massive redistribution and reallocation of resources. No systematic regional policy was
articulated and numerous problems in the sphere of regional development could be found in
this period, such as an emergence of new peripheral zones.
It is clear that the change of the system at the end of 1980s meant absolute disbelieve in
planning of any form. National as well as regional plans no longer applied. The central
government, however maintained its power (partly because of the abolition of regional
governments at the beginning of 1990s) and its the attitude towards the regional policy
matters remained largely unchanged. State interventions were considered the best solution for
the transformation of the country into the market economy. The character of the regional
Policy Act from 1991 was mainly declarative, though it did indicate principal problems to be
tackled. Trough this act regional policy was declared by the Czech government to be an
integrated part of its economic policy. The main objective was defined as the creation of the
preconditions for a minimal standard of working and living conditions for citizens in all
regions of the Czech Republic.
No substantial regional inequalities could be traced at the beginning of the 1990s.
Nevertheless some aspects of the transformation process presaged the severe problems that
were to become associated mainly with the growth of unemployment. These were: a
substantial decline of heavy industry; a reduction of agricultural sector employees; the very
low inter-regional mobility of the work force or severe environmental problems.
The regional policy is understood as a conceptual activity of the state and regional
authorities with the aim to:
1) contribute to the balanced and harmonious development of the regions,
2) reduce the differences in the levels of development between the regions and
3) improve the regional economic and social structure.
Shortly regional policy was defined as an activity of the state aimed at supporting the
effective functioning of the market economy taking into account the regional economic
differences
The effort to achieve a balanced development cannot be understood as an effort to secure
completely equal development in all regions, instead the aim is to give equal chances to all
regions and make full use of their democratic, natural, economic and any other potential.
The regional policy of the Czech Republic was designed to respect the basic principles of the
structural policy of the EU and the overall aim of economic and social cohesion. In this

respect, allocation mechanism as a part of the institutional framework, have to be set up to
enable the future use of structural funds.
From the viewpoint of the institutional framework it will be necessary to implement the
regional development policy in the Czech Republic both at the national and regional levels.
The regions (higher territorial administrative units) are equipped with functions and economic
tools enabling them to take over the responsibility for their territorial development and
implementation of the regional policy. This is going to be a subject of a successive Act on
Regional Development Support. It takes into account the criticism of the European
Commission (on the application of the Czech Republic for the EU membership) that there is
no regional policy in the Czech Republic and there is nor co-ordination mechanism at the
national level neither legislative, administrative and budgetary framework of integrated
regional policy.
The Principles of the Government Regional Policy define two types of problem regions ­
structurally afflicted regions and lagging regions (economically weak regions). Structurally
afflicted areas were defined as regions with high concentration of traditional industry and high
level of urbanisation and unemployment. Lagging regions were characterised as regions with
low standard of living, high share of employment in the primary sector, low population
density and generally also above the average level of unemployment. These regions comprise
mostly rural areas with lower level of urbanisation and economic development and with rather
preserved environment.
Moving to regional level, Regional Co-ordination Committees (composed of the
representatives of the regions and state administration) were formed to manage the
preparation of regional development strategies.
Regional Development Strategies are perceived to be materials with a long-term perspective,
which will form together with sectoral analysis of the economy the National Development
Strategy of the Czech Republic. This strategy of the Czech Republic was transformed into the
National Development Plan, which should present a background document for the transfer of
resources from structural and pre-structural funds of the EU.
Talking about the regions and its powers and documents at regional level, we also have to
take into account the Eurostat system of statistical classification of the territory NUTS. NUTS
II level is clearly the most essential for the allocation of the Objective 1 assistance from the
structural funds. Following the consultations with Eurostat, the Czech Statistical Office
together with other relevant ministry partners agreed on the 8 NUTS II statistical units created
by the grouping of the 14 regions.
To conclude, it is perceived that the progress made on the way to integrate the Czech
Republic into European regional structures was significant. The Czech Republic is about to
fulfil the general principles of community regional policy in a short period of time. The Czech
Republic has also ambition to build up the competitiveness of regions by strengthening the
role of local entrepreneurs, transfer of innovations and technology and subsequently, through
its sub-national level, gain its position in the Europe of regions.
Territorial units in the Czech Republic (NUTS)
NUTS 5 - municipalities (about 6 200)
NUTS 4 - districts (76 + Praha, legal authority only till 1.1.2003)
NUTS 3 - regions (14)
NUTS 2 - regions of cohesion (8, no legal authority)
NUTS 1 - the whole area of the Czech Republic

Picture 1.: Regions in the Czech Republic (NUTS 3)
Source: NDP
Picture 2.: Regions of cohesion (NUTS 2)
Source: NDP