Regional Policy Evaluation: Ignorance, Evidence and Influence

The present UK government has adopted a "New Localism" in the operation of regional policy (Balls, 2002). This involves the delegation of discretionary powers to locally elected bodies, such as the Scottish Parliament and the Welsh Assembly, and a host of devolved agencies, such as the Regional Development Agencies (RDAs). We fear that because of standard asymmetric information problems, such policies will be extremely difficult to evaluate, which has implications for both their efficiency and democratic accountability. However, even without these particular extended principal agent problems, the effectiveness of regional policy is hard to measure. We illustrate this by discussing the issues raised in evaluating and appraising more conventional policies. In our approach we aim to be complementary with more practical surveys of regional policy evaluation (Taylor, 2002). We argue that evaluation raises issues of allocation, coordination, information and motivation. The optimal policy is difficult to identify, even with a very simple policy framework, because some of the outcomes are necessarily qualitative and others are conflicting. We hope that this discussion will be used to lay the ground for a more focussed future examination of the evaluation issues raised by the present and proposed regional policy framework.