Chapter 15: The New Economic Geography and Regional Development Policies
Harry W. Richardson INTRODUCTION This chapter discusses, among other issues, the implications for South Korea of the United Kingdom’s regional and urban development policies (policies that have been in place in various forms for almost 80 years), and places the discussion in the context of the New Economic Geography (NEG). The chapter includes several major findings: NEG helps to explain the dominance of Seoul in the South Korean economy and the persistence of unbalanced spatial growth; the goals of promoting regional development are difficult to achieve; the costs of regulation are very high, impairing economic growth and global competitiveness; preserving and building upon the Seoul Capital Region’s role is critically important (despite the problems that its huge size, congestion and soaring house prices create); and a government office dispersal strategy, whatever its merits, was an overly simplistic solution to the complexities of regional and urban policies. On this last point, the chapter offers some suggestions based on British experience as to the directions that Korea might like to consider. There is no space to go through the United Kingdom’s history in great detail, but it is possible to draw a few broad generalizations from Britain’s long experience in this public policy area. THE NEW ECONOMIC GEOGRAPHY The concept of the New Economic Geography can be traced to Krugman (1991). In fact, there is very little new about NEG; almost all the concepts in the theory were well known and widely discussed long before 1991 (for example increasing returns to scale,...
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