Graduation Year


Date of Submission


Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts


International Relations

Reader 1

William Ascher

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Lithuania is internationally recognized as a high-income developed country, but the high standard of living is limited only to a small minority of citizens. While the capital is emerging as a financial center and a hub for information technology, cities in the Western and Central parts of Lithuania are rapidly declining. Formerly industrial regions, Šiauliai, Panevėžys, Alytus, Utena, Tauragė, Telšiai and Marijampolė, now suffer from massive emigration, brain drain, high unemployment rates, and an increased risk of poverty and social exclusion among residents. Unlike larger cities, poorer counties have not been magnets for foreign direct investment and have benefited little from large-scale infrastructural projects. This thesis explores the weaknesses and strengths of the declining regions and assesses the Lithuanian government’s capacity to enact an industrial strategy to help reduce regional disparities. The analysis is also based on Dani Rodrik’s framework for the institutional infrastructure and the design of an industrial policy. The thesis culminates in a list of policy recommendations, considering the distinctive problems facing the declining regions.