Policy spillovers in a regional target-setting regime

David Learmonth, J. Kim Swales

Research output: Contribution to journalArticle

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.
LanguageEnglish
Number of pages28
JournalEnvironment and Planning A
Publication statusPublished - 2005

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expenditure
expenditures
regime
welfare
regional policy
policy
target setting
present

Keywords

  • targets
  • regional policy
  • regional development agencies
  • spatial spillovers
  • economics

Cite this

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Policy spillovers in a regional target-setting regime. / Learmonth, David; Swales, J. Kim.

In: Environment and Planning A, 2005.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Policy spillovers in a regional target-setting regime

AU - Learmonth, David

AU - Swales, J. Kim

N1 - European Regional Science Association August 2-6, 1090 Vienna, Austria

PY - 2005

Y1 - 2005

N2 - 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.

AB - 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.

KW - targets

KW - regional policy

KW - regional development agencies

KW - spatial spillovers

KW - economics

UR - http://www.gla.ac.uk/media/media_4286_en.pdf

UR - http://www-sre.wu-wien.ac.at/ersa/ersaconfs/ersa05/papers/341.pdf

M3 - Article

JO - Environment and Planning A

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