Compatibility Between Equity and Efficiency

  • Stilianos Alexiadis


Regional policies are mainly development policies and often imply a trade-off between ‘regional equity’ and ‘aggregate efficiency’. A policy improving regional equity may incur losses in the efficiency of the economy as a whole and vice versa. This, however, is a simplistic interpretation. There is a possibility for these aims being complementary rather than competitive. This chapter develops a conceptual framework in order to detect cases of conflict-resolution, namely, cases in which the aims of ‘regional equity’ and ‘aggregate efficiency’ are compatible.


Overcoming trade-offs Development strategy Regional planning Regional policy evaluation 

JEL Classification



  1. Ahluwalia, M., & Chenery, H. (1974). The Economic Framework. In H. Chenery (Ed.), Redistribution with Growth (pp. 38–51). Oxford: Oxford University Press.Google Scholar
  2. Arrow, K. (1979). The Trade-Off Between Growth and Equity. In H. Greenfield et al. (Eds.), Theory for Economic Efficiency: Essays in Honour of Abba P. Lerner. Cambridge, MA: MIT Press.Google Scholar
  3. 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
  4. Baldassari, M., & Piga, G. (1996). Distributive Equity and Economic Efficiency: Trade-Off and Synergy. In M. Baldassari, P. Luigi, & E. Phelps (Eds.), Equity, Efficiency and Growth (pp. 257–274). London: Macmillan Press.CrossRefGoogle Scholar
  5. Barca, F., McCann, P., & Rodríguez-Pose, A. (2012). The Case for Regional Development International: Place-Based Versus Place-Neutral Approaches. Journal of Regional Science, 52(1), 134–152.CrossRefGoogle Scholar
  6. Blakely, E. (1994). Planning Local Economic Development: Theory and Practise (2nd ed.). Thousand Oaks: Sage Publications.Google Scholar
  7. Chenery, H., & Raduchel, W. (1971). Substitution in Planning Models. In H. Chenery (Ed.), Studies in Development Planning (pp. 29–47). Cambridge, MA: Harvard University Press.Google Scholar
  8. Chinitz, B. (1966). Appropriate Goals for Regional Economic Policy. Urban Studies, 3(1), 1–7.CrossRefGoogle Scholar
  9. Cullingworth, B., & Nadin, V. (2006). Town and Country Planning in the UK (14th ed.). London: Routledge.Google Scholar
  10. Dakin, J. (1963). An Evaluation of the “Choice” Theory of Planning. Journal of the American Institute of Planners, 29(1), 19–27.CrossRefGoogle Scholar
  11. Dasgupta, A., & Hagger, A. (1971). The Objectives of Macro-Economic Policy. London: Macmillan.CrossRefGoogle Scholar
  12. De Melo, J. Dervis, K., & Robinson, S. (1978). Planning Models and Development Policy: Computable General Equilibrium Models (Discussion Paper No. 79). Woodrow Wilson School, Princeton University.Google Scholar
  13. Evans, A. (1974). Economics and Planning. In J. Forbes (Ed.), Studies in Social Science and Planning. New York: John Wiley.Google Scholar
  14. Ford, A. (1966). Economic Growth: A Theoretical Outline. In W. Birmingham & A. Ford (Eds.), Planning and Growth in Rich and Poor Countries (pp. 15–61). London: George Allen and Unwin.Google Scholar
  15. Galbraith, J. (1962). Economic Development in Perspective. New York: Fawcett Publications.Google Scholar
  16. Galloway, T., & Mahayni, R. (1977). Planning Theory in Retrospect: The Process of Paradigm Change. Journal of the American Planning Association, 43(1), 62–70.Google 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. Glasson, J. (1992). The Fall and Rise of Regional Planning in the Economically Advanced Nations. Urban Studies, 29(3/4), 505–531.CrossRefGoogle Scholar
  19. Goodall, B. (1987). Dictionary of Human Geography. New York: Penguin.Google Scholar
  20. Hall, P. (1974). Urban and Regional Planning. London: Pelican Books.Google Scholar
  21. 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
  22. Hooghe, L. (1996). Cohesion Policy and European Integration. Oxford: Oxford University Press.Google Scholar
  23. House, J. (1973). Geographers, Decision Takers and Policy Makers. In M. Chisholm & B. Rodgers (Eds.), Studies in Human Geography (pp. 272–305). London: Heinemann.Google Scholar
  24. Huber, W. (2006). Evaluation of the EU Cohesion Policy: Window-Dressing, Formal Exercise of Coordinated Learning Process? Regional Studies, 40(2), 277–280.CrossRefGoogle Scholar
  25. Isard, W. (1956). Regional Science and the Concept of Region. Papers in Regional Science, 2, 1–9.Google Scholar
  26. Kenworthy, L. (1995). Equality and Efficiency: The Illusory Trade-Off. European Journal of Political Research, 27, 225–254.CrossRefGoogle Scholar
  27. Killick, T. (1976). The Possibilities of Development Planning. Oxford Economic Papers, 28(2), 161–184.CrossRefGoogle Scholar
  28. Lucas, R. (1976). Econometric Policy Evaluation: A Critique. In A. Whiting (Ed.), The Philips Curve and Labour Markets (pp. 19–46). Amsterdam: North-Holland.Google Scholar
  29. Malinvaud, E. (1965). Interest Rates and the Allocation of Resources. In F. Hahn & F. Brechling (Eds.), The Theory of Interest Rates. London: Macmillan.Google Scholar
  30. Marglin, S. (1967). Public Investment Criteria. London: Allen and Unwin.Google Scholar
  31. 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
  32. McLure, M. (2013). A. C. Pigou’s Rejection of Pareto’s Law. Cambridge Journal of Economics, 37(4), 775–789.CrossRefGoogle Scholar
  33. Mendez, C., & Bachtler, J. (2015). Prospects for Cohesion Policy in 2014–20 and Beyond: Progress with Programming and Reflections on the Future (European Policy Research Paper Number 14). European Policies Research Centre, University of Strathclyde.Google Scholar
  34. Michel, P., Pestieau, P., & Thisse, J. (1983). Regional Allocation of Investment with Distribute Objectives. Journal of Regional Science, 23(2), 199–209.CrossRefGoogle Scholar
  35. Moore, T. (1978). Why Allow Planners to Do What They Do? A Justification from Economic Theory. Journal of American Institute of Planners, 44(4), 387–398.CrossRefGoogle Scholar
  36. Okun, A. (1975). Equality and Efficiency: The Big Trade-Off. Washington, DC: The Brookings Institution.Google Scholar
  37. Osberg, L. (1995). The Equity/Efficiency Trade-Off in Retrospect. Canadian Business Economics, 3(3), 5–20.Google Scholar
  38. Pen, J. (1965). Modern Economics. London: Pelican.Google Scholar
  39. Perloff, H. (1968). Key Features of Regional Planning. Journal of the American Institute of Planners, 34(3), 153–159.CrossRefGoogle Scholar
  40. Polverari, L., Bachtler, J., & van der Zwet, A. (2015). Evaluating the Effectiveness of Regional Policy (European Policy Research Paper No. 91). University of Strathclyde.Google Scholar
  41. Rawls, J. (1972). A Theory of Justice. Oxford: Clarendon Press.Google Scholar
  42. Regulation (EEC) No 2052/88 of June 1988 on the Tasks of Structural Funds and Their Effectiveness and on Coordination of Their Activity Between Themselves and with the Operation of the European Investment Bank and Other Existing Financial Instruments, Official Journal of the European Community No. L 185/9 of 15 July 1988.Google Scholar
  43. Reiner, T. (1965). Sub-National and National Planning: Decision Criteria. Papers in Regional Science, 14, 107–136.CrossRefGoogle Scholar
  44. Sen, A. (1975). Employment, Technology and Development. Oxford: Clarendon Press.Google Scholar
  45. Stewart, M. (1973). Markets, Choice and Urban Planning. Town Planning Review, 44(3), 203–220.CrossRefGoogle Scholar
  46. Stewart, F., & Streeten, P. (1976). New Strategies for Development: Poverty, Income Distribution, and Growth. Oxford Economic Papers, 28(3), 381–405.CrossRefGoogle Scholar
  47. Stimson, R., Stough, R., & Roberts, B. (2006). Regional Economic Development: Analysis and Planning Strategy. Berlin: Springer.Google Scholar
  48. Thirlwall, A. (1994). Growth and Development (5th ed.). London: Macmillan.CrossRefGoogle Scholar
  49. Todaro, M. (1971). Development Planning: Methods and Models. Oxford: Oxford University Press.Google Scholar
  50. Trevo, H. (1989). A Micro-Level Approach to the Analysis of the Displacement Effects of Regional Incentive Policy: The Case of Finland. Regional Studies, 23(6), 511–521.CrossRefGoogle Scholar
  51. United Nations. (2008). Spatial Planning: Key Instrument for Development and Effective Governance. Geneva: United Nations.Google Scholar
  52. Vanhove, Ν., & Klaasen, L. (1980). Regional Policy: A European Approach. Aldershot: Avebury.Google Scholar
  53. Walker, B. (1981). Welfare Economics and Urban Problems. London: Hutchinson.Google Scholar
  54. Waterstone, A. (1966). Development Planning: Lessons of Experience. London: Oxford University Press.Google Scholar
  55. Webber, M. (1963). The Prospects for Policy Planning. In L. Duhl (Ed.), The Urban Condition (pp. 319–330). New York: Basic Books.Google Scholar
  56. Wishlade, F., & Michie, R. (2009). Pandora’s Box and the Delphic Oracle: EU Cohesion Policy and State Aid Compliance (European Policies Research Centre, IQ-Net Thematic Paper No. 24(2)). University of Strathclyde.Google 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