Conflicts in Regional Policy

  • Stilianos Alexiadis


Using Optimal Control Theory, it is possible to obtain a set of allocation policies that allow policy-makers to maximise total output in the economy. The objective function associated with this problem is explicitly focused upon aggregate efficiency. This aim, however, does not exhaust the possibilities of all economic choices/actions. There are several other aims, which regional policies are called to give solutions. Are these aims compatible or are they contradicting each other? The limitations of the existing theoretical frameworks are identified in this chapter. Some theoretical schemes, in which compatibility in the aims of regional equity and aggregate efficiency arises as a distinct possibility, are also discussed.


Trade-off Equity Efficiency Dual objective function Policy weight 

JEL Classification



  1. Bachtler, J., Wishlade, F., & Yuill, D. (2003). Regional Policies After 2006: Complementary or Conflict? (European Policy Research Paper Number 51). European Policies Research Centre, University of Strathclyde.Google Scholar
  2. Bagchi, A., Olsder, G., & Strijbos, R. (1981). Regional Allocation of Investment as a Hierarchical Optimization Problem. Regional Science and Urban Economics, 11(1), 205–213.CrossRefGoogle Scholar
  3. Bański, J. (2010). Dilemmas for Regional Development in the Concepts Seeking to Develop Poland’s Spatial Structure. Regional Studies, 44(5), 535–549.CrossRefGoogle Scholar
  4. Borts, G., & Stein, J. (1964). Economic Growth in a Free Market. New York: Columbia University Press.Google Scholar
  5. Chinitz, B. (1966). Appropriate Goals for Regional Economic Policy. Urban Studies, 3(1), 1–7.CrossRefGoogle Scholar
  6. Chisholm, M. (1968). Rural Settlement and Land Use. London: Hutchinson University.Google Scholar
  7. Clinch, J., & O’Neill, E. (2009). Applying Spatial Economics to National Spatial Planning. Regional Studies, 43(2), 157–178.CrossRefGoogle Scholar
  8. Courbis, R. (1979). The REGINA Model: A Regional-National Model for French Planning. Regional Science and Urban Economics, 9(2–3), 117–139.CrossRefGoogle Scholar
  9. Dawkins, C. (2003). Regional Development Theory: Conceptual Foundations, Classic Works, and Recent Developments. Journal of Planning Literature, 18(2), 131–172.CrossRefGoogle Scholar
  10. Domazlicky, B. (1978). The Regional Allocation of Investment: A Neoclassical Model. Journal of Regional Analysis and Policy, 8(2), 1–13.Google Scholar
  11. Ecaus, R. (1967). Planning in India. In M. Millikan (Ed.), National Economic Planning (pp. 305–378). Cambridge, MA: National Bureau of Economic Research.Google Scholar
  12. Evans, A., & Martin, S. (1991). Socially Acceptable Distortions of Competition: Community Policy on State Aid. European Law Review, 2, 79–111.Google Scholar
  13. Ezcurra, R., & Rodríguez-Pose, A. (2014). Trade Openness and Spatial Inequality in Emerging Countries. Spatial Economic Analysis, 9(2), 162–182.CrossRefGoogle Scholar
  14. Fagerberg, J., & Verspagen, B. (1996). Heading for Divergence? Regional Growth in Europe Reconsidered. Journal of Common Market Studies, 34(3), 431–448.CrossRefGoogle Scholar
  15. Foster, C., & Smith, J. (1969). Allocation of Central Government Budgets Over City Regions. Urban Studies, 6, 210–226.CrossRefGoogle Scholar
  16. Garcia-Milà, T., & McGuire, T. (1992). The Contribution of Publicly Provided Inputs to States’ Economies. Regional Science and Urban Economics, 22(2), 229–241.CrossRefGoogle Scholar
  17. Gardiner, B., Martin, R., Sunley, P., & Tayler, P. (2013). Spatially Unbalanced Growth in the British Economy. Journal of Economic Geography, 13(6), 889–928.CrossRefGoogle Scholar
  18. George, D. (1988). Mathematical Modelling for Economists. London: Macmillan.CrossRefGoogle Scholar
  19. Grigg, D. (1973). Geographical Studies of Economic Development with Special Reference to Agriculture. In M. Chisholm & B. Rodgers (Eds.), Studies in Human Geography (pp. 18–84). London: Heinemann.Google Scholar
  20. Haveman, R. (1977). On Evaluating the Regional Impact of Public Policy. In E. Smith (Ed.), Explorations in Economic Research: New Directions in Federal Economic Development Programs, 4(3), 429–444, National Bureau of Economic Research.Google Scholar
  21. Higgins, B., & Savoie, D. (1995). Regional Development Theories and Their Applications. New Brunswick: Transaction Publishers.Google Scholar
  22. Hirschman, A. (1958). The Strategy of Economic Development. New Haven: Yale University Press.Google Scholar
  23. Hodder, B. (1973). Economic Development in the Tropics (2nd ed.). London: Methuen.Google Scholar
  24. Hoff, K., & Stiglitz, J. (2001). Modern Economic Theory and Development. In G. Meier & J. Stiglitz (Eds.), Frontiers of Development Economics. Oxford: Oxford University Press.Google Scholar
  25. Intriligator, M. (1964). Regional Allocation of Investment: Comment. Quarterly Journal of Economics, 78(4), 659–662.CrossRefGoogle Scholar
  26. Keeble, D. (1968). Models of Economic Development. In R. Chorley & P. Haggett (Eds.), Socio-economic Models in Geography (pp. 243–302). London: Methuen & Co.Google Scholar
  27. Kendrick, D. (1971). Mathematical Models for Regional Planning. Regional and Urban Economics, 1(3), 247–287.CrossRefGoogle Scholar
  28. Kenworthy, L. (1995). Equality and Efficiency: The Illusory Trade-Off. European Journal of Political Research, 27, 225–254.CrossRefGoogle Scholar
  29. Leven, C. (1964). Establishing Goals for Regional Economic Development. Journal of American Institute of Planners, 30(2), 100–110.CrossRefGoogle Scholar
  30. Mancha-Novarro, T., & Garrido-Yserte, R. (2008). Regional Policy in the European Union: The Cohesion-Competitiveness Dilemma. Regional Science Policy and Practice, 1(1), 47–66.Google Scholar
  31. Martin, P. (1998). Can Regional Policies Affect Growth and Geography in Europe? World Economy, 21(7), 757–774.CrossRefGoogle Scholar
  32. Martin, P. (1999). Are European Regional Policies Delivering? European Investment Bank Papers, 4(2), 10–23.Google Scholar
  33. Martin, P. (2000). The Role of Public Policy in the Process of Regional Convergence. European Investment Bank Papers, 5(2), 69–79.Google Scholar
  34. Martin, R. (2008). National Growth Versus Regional Equality? A Cautionary Note on the New Trade-Off Thinking in Regional Policy Discourse. Regional Science Policy and Practice, 1(1), 3–13.CrossRefGoogle Scholar
  35. Mera, K. (1967). Trade-Off Between Aggregate Efficiency and Interregional Equity: A Static Analysis. Quarterly Journal of Economics, 8, 658–674.CrossRefGoogle Scholar
  36. Mera, K. (1973). On the Urban Agglomeration and Efficiency. Economic Development and Cultural Change, 21, 309–324.CrossRefGoogle Scholar
  37. Mera, K. (1986). Population Stabilisation and National Spatial Policy of Public Investment: The Japanese Experience. International Regional Science Review, 10, 47–65.CrossRefGoogle Scholar
  38. Merriman, D. (1990). Public Capital and Regional Output: Another Look at Some Japanese and American Data. Regional Science and Urban Economics, 20(4), 437–458.CrossRefGoogle Scholar
  39. Michel, P., Pestieau, P., & Thisse, J. (1983). Regional Allocation of Investment with Distributive Objectives. Journal of Regional Science, 23(2), 199–209.CrossRefGoogle Scholar
  40. Myrdal, G. (1957). Economic Theory and Underdeveloped Regions. London: Duckworth.Google Scholar
  41. Nijkamp, P., & Rietveld, P. (1982). Multiple Objectives in Multilevel Multiregional Planning Models. In M. Albegov, A. Andersson, & F. Snickars (Eds.), Regional Development Modeling: Theory and Practice (pp. 145–168). Amsterdam: North-Holland Publishing Company.Google Scholar
  42. O’Farrell, P. (1970). Regional Development in Ireland: Problems of Goal Formulation and Objective Specification. Economic and Social Review, 2(1), 71–92.Google Scholar
  43. O’Farrell, P. (1971). The Regional Problem in Ireland: Some Reflections Upon Development Strategy. Economic and Social Review, 2(4), 453–480.Google Scholar
  44. O’Farrell, P. (1974). Regional Planning in Ireland—The Case for Concentration: A Reappraisal. Economic and Social Review, 5(4), 499–514.Google Scholar
  45. Ohtsuki, Y. (1971). Regional Allocation of Public Investment in an n-Region Economy. Journal of Regional Science, 11(2), 225–233.CrossRefGoogle Scholar
  46. Osberg, L. (1995). The Equity/Efficiency Trade-Off in Retrospect. Canadian Business Economics, 3(3), 5–20.Google Scholar
  47. Polverari, L., & Michie, R. (2011). Complementarity or Conflict? The (In)coherence of Cohesion Policy (European Policy Research Paper No. 78). University of Strathclyde.Google Scholar
  48. Porter, M. (1990). The Competitive Advantage of Nations. New York: Free Press.CrossRefGoogle Scholar
  49. Pullen, M. (1966). Regional Development in the United Kingdom. In W. Birmingham & A. Ford (Eds.), Planning and Growth in Rich and Poor Countries (pp. 107–141). London: George Allen and Unwin.Google Scholar
  50. Reiner, T. (1963). Organising Regional Investment Criteria. Papers in Regional Science, 1, 63–72.CrossRefGoogle Scholar
  51. Reiner, T. (1965). Sub-national and National Planning: Decision Criteria. Papers in Regional Science, 14, 107–136.CrossRefGoogle Scholar
  52. Renner, G. (1947). Geography of Industrial Localization. Economic Geography, 23(3), 167–189.CrossRefGoogle Scholar
  53. Richardson, H. (1973a). Elements of Regional Economics. London: Penguin.Google Scholar
  54. Richardson, H. (1973b). Urban Economics. London: Penguin.Google Scholar
  55. Richardson, H. (1974). Regional Growth Theory. London: Macmillan.Google Scholar
  56. Richardson, H. (1977). Aggregate Efficiency and Interregional Equity. In H. Folmer & J. Oosterhaven (Eds.), Spatial Inequalities and Regional Development (pp. 161–183). North Holland: Martinus Nijhoff.Google Scholar
  57. Robinson, J. (1962). Economic Philosophy. London: Penguin.Google Scholar
  58. Robock, S. (1960). Regional and National Economic Development in India. Papers in Regional Science, 6, 65–81.CrossRefGoogle Scholar
  59. Rodríguez-Pose, A., & Fratesi, U. (2004). Between Development and Social Policies: The Impact of European Structural Funds in Objective 1 Regions. Regional Studies, 38(1), 97–113.CrossRefGoogle Scholar
  60. Rostow, W. (1960). The Stages of Economic Growth: A Non–communist Manifesto. Cambridge: Cambridge University Press.Google Scholar
  61. Siebert, H. (1969). Goal Conflicts in Regional Growth Policy. Zeitschrift für Nationalökonomie, 29(1–2), 19–28.CrossRefGoogle Scholar
  62. Silva, J., & Leichenko, R. (2004). Regional Income Inequality and International Trade. Economic Geography, 80(3), 261–286.CrossRefGoogle Scholar
  63. Stevens, B. (1958). An Interregional Linear Programming Model. Journal of Regional Science, 1(1), 60–98.CrossRefGoogle Scholar
  64. Stewart, F., & Streeten, P. (1976). New Strategies for Development: Poverty, Income Distribution, and Growth. Oxford Economic Papers, 28(3), 381–405.CrossRefGoogle Scholar
  65. Stilwell, F. (1972). Regional Economic Policy. London: Macmillan.CrossRefGoogle Scholar
  66. Sydsæter, K., Strøm, A., & Berck, P. (2005). Economists’ Mathematical Manual. Berlin: Springer.CrossRefGoogle Scholar
  67. Tabata, Y. (1976). Regional Economic Models and Continuous Programming. Regional Science and Urban Economics, 6(2), 193–204.CrossRefGoogle Scholar
  68. Veblen, T. (1899). The Theory of the Leisure Class: An Economic Study of Institutions. New York: B.W. Huebsch.Google Scholar
  69. Vietorisz, T. (1967). Locational Choices in Planning. In M. Millikan (Ed.), Economic Planning (pp. 39–130). Cambridge, MA: National Bureau of Economic Research.Google Scholar
  70. Williamson, J. (1965). Regional Inequality and the Process of National Development: A Description of the Patterns. Economic Development and Cultural Change, 13(4), 1–84.CrossRefGoogle Scholar
  71. Wishlade, F. (2008). Competition and Cohesion—Coherence or Conflict? European Union Regional State Aid Reform Post-2006. Regional Studies, 42(5), 753–765.CrossRefGoogle Scholar
  72. Yamano, N., & Ohkawara, T. (2000). The Regional Allocation of Public Investment: Efficiency or Equity? Journal of Regional Science, 40(2), 205–229.CrossRefGoogle Scholar

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Stilianos Alexiadis
    • 1
  1. 1.Department of Strategic Planning of Rural Development, Evaluation & DocumentationGreek Ministry of Rural Development and FoodAthensGreece

Personalised recommendations