ABSTRACT
This chapter analyses the nature of regional disparities as well as the policy response, a broad regional division is used as the basis for analysis. It comprises a set of seven main cities and four groups of administrative districts - Kurzeme (Western Latvia), Zemgale (Southern Latvia), Vidzeme (Northern Latvia) and Latgale (Eastern Latvia) - which are linked to historical regional divisions. Administrative territorial reform will need to address the problems, possibly providing for the enlargement of higher level administrative units on a voluntary basis. The approach to regional development policy in Latvia is focused on measures which encourage the creation of a favourable economic environment rather than direct financial support in a particular territory. Regional policy in Latvia has undergone a recent period of rapid development. Latvia inherited a good infrastructure provision from former Soviet times although much of it is expensive and obsolete.
