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Policy spillovers in a regional target-setting regime

Learmonth, D. and Swales, J.K. (2005) Policy spillovers in a regional target-setting regime. Environment and Planning A. ISSN 0308-518X

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    Abstract

    The present UK government has introduced a decentralised, target-driven framework for the delivery of regional policy in England. This paper analyses the operation of such a regime when there are spatial spillovers about which the government is uninformed. It stresses the simple idea that spillovers in such a setting normally lead to a sub-optimal allocation of policy expenditures. A key result is that the existence of negative spillovers on some policies generates expenditure switching towards those policies. The extent of the expenditure switching is related to a number of factors: the size of the spillovers; the initial policy weights in the government's welfare function; the number of agencies; the extent of their knowledge of spillovers; and their degree of collusion. Such expenditure switching is generally not welfare maximising.

    Item type: Article
    ID code: 8749
    Notes: European Regional Science Association August 2-6, 1090 Vienna, Austria
    Keywords: targets, regional policy, regional development agencies, spatial spillovers, economics, Commerce, Economic Theory
    Subjects: Social Sciences > Commerce
    Social Sciences > Economic Theory
    Department: Strathclyde Business School > Economics
    Strathclyde Business School > Fraser of Allander Institute
    Related URLs:
    Depositing user: Strathprints Administrator
    Date Deposited: 14 Oct 2009 13:44
    Last modified: 07 Dec 2013 17:35
    URI: http://strathprints.strath.ac.uk/id/eprint/8749

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