Regional development policies
October 9, 2010 Leave a comment
From VoxEU – a paper on the dilemma of where to put economic development efforts – on the lagging regions or the leading regions or both? I like the economic activity charts. I need better 3D charting software!
Anyway – an interesting paper about the concentration of economic activity and the problems about trying to make economic activity happen in the lagging regions:
This poses an apparent dilemma. Should policymakers abandon lagging regions, at least until a country accumulates so much wealth that it can waste some of it on incentives for economic activity in these places? The 2009 World Development Report provides a better solution. Policymakers should instead promote economic integration of lagging with leading places.
Even for those who have recognised the futility of providing economic incentives for staying and striving in lagging regions – such as the discouraged regional development specialists who worked for decades in Italy’s Mezzogiorno – the temptation is to think of highways, railroads, and airports as the main instrument of integration. The World Development Report emphasises that the most potent instruments for integration are spatially blind improvements in institutions; put more simply, the provision of essential services such as education, health, and public security.