What if certain policy actions that a country takes to promote international integration also promote regional divergence at home? Different policy options available to regions and countries for promoting inward foreign direct investment are considered in a global production networks framework. Theory and evidence suggest that certain pro-integration policies can be divergence-promoting. Mixed evidence for France for the period 1990–2019, including longitudinal statistics and interviews with managers at regional investment promotion agencies, supports this conclusion. If policy itself is encouraging regional divergence, this would help explain the origins of, and also potentially remedies to, the ‘discontent’ in Europe’s peripheral regions. It would also raise questions about the political and social consequences of pro-integration policy prescriptions that flow from the New Economic Geography.
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