European Regional Science Association
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European Regional Science Association
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The abstract for paper number 348:
Ugo Fratesi, IEP and CERTeT
Università Bocconi, Milano, Italy
Regional Policies and Their Effects the National Economies
Regional policy is undergoing major modifications; among these, the halt to the growth of national and EU contributions, the increasing importance of bottom-up policies and the introduction of new instruments. At the same time, the theories on growth and localisation developed in the past 15 years have evidenced new links between concepts like growth, agglomeration, transport costs, innovation.
Despite of this, there still is too often confusion on the main purposes of each policy, in particular if it is to redistribute welfare between regions (equality policies) or to promote national competitiveness by reducing congestion (efficiency policies), objectives which are sometimes conflicting. Moreover, it is not always clear when competition between the regions composing a country has positive effects for the whole country and when the aggregate effects are instead negative. The result of this is that the means are not always the more appropriate and that regional policies often lack of coherence the one with the other with, consequently, very weak effects.
Due to the shortage of funds and the increasing competition between states and between the US and the EU, it is first important to distinguish which regional policies belong to the efficiency group and which to the equality one; then, it is important to compare regional policies with other policies with similar objectives (as, for equality, personal income redistribution or, for efficiency, innovation support) to discover which ones are better suited to achieve the needed results with lower costs. Finally, it is important to further investigate which policies are more fruitful if implemented in a context of regional competition and which ones should remain top-down.
The above issues will be addressed, first, with a revision of the existing contributions in order to evidence the general tendencies of the literature, the results that can already be considered as achieved and the limits that restrict the production of usable policy prescriptions. Secon,d we will investigate the relation between national competitiveness and regional policy with the introduction of actual types of both top-down and bottom-up policies in extended versions of existing models of growth and agglomeration. This in order to identify when and how Pareto-superior results can be produced.
Unfortunately full paper has not been submitted.