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Open Access research with a European policy impact...

The Strathprints institutional repository is a digital archive of University of Strathclyde's Open Access research outputs. Strathprints provides access to thousands of Open Access research papers by Strathclyde researchers, including by researchers from the European Policies Research Centre (EPRC).

EPRC is a leading institute in Europe for comparative research on public policy, with a particular focus on regional development policies. Spanning 30 European countries, EPRC research programmes have a strong emphasis on applied research and knowledge exchange, including the provision of policy advice to EU institutions and national and sub-national government authorities throughout Europe.

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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.