Regional Policy as Indicator of Readiness for Structural Change: The Case of Latvia

Performance of structural change could be mentioned as one of the most important factors for economic growth. This is indicated by theoretical and empirical evidence. The performance of structural change, although, is not dependent only on intention, but on the readiness also. The regional policy both at national and local levels could be an indicator for evaluation of such readiness for providing structural change. This due to the following reasons: (1) regional policy can provide inclusion and evaluation of wide range of resources necessary for structural change; (2) regional policy can alter the course of structural change and (3) regional policy can modify spontaneous structural change into the policy-driven structural change. Latvia experienced very wide amplitude of GDP’s variations during the relatively short period of time. On the other hand, Latvia presents high regional differentiation and sectoral composition of the economy is among main reasons for such situation. The overall sureness of the European Union indicates on necessity to reach stability of the economic growth through the development of tradable goods’ sectors. This, in turn, means that Latvia should be able provide changes in the sectoral composition of economy. How far Latvia is ready for this process? The answer on the question could be found in the evaluation of the regional development policies. The article explain how the regional policy can indicate on readiness for structural change in economy as well as highlights aspects where regional policy can be useful. DOI: 10.5901/mjss.2014.v5n13p39