Regional Competitiveness and Smart Specialization in Europe Place-based Development in International Economic Networks
Place-based Development in International Economic Networks
- New Horizons in Regional Science series
Chapter 3: Regional economic development and competitiveness
The development of important regions is increasingly considered as one of the main contributors to the economic growth of nations (World Bank, 2009). These important regions are generally large agglomerations and important players in the global economy. Countries may follow different regional economic development strategies in an attempt to create these strong regions and stimulate development in lagging regions. Direct policy interventions seem, however, to have only a limited effect and the transformation of lagging into leading regions appears to be largely beyond the control of policy-makers. As a consequence, national policy-makers may follow a laissez-faire approach and leave regional development to regional administrators. Differences in regional economic development, however, affect the regional distribution of income which may trigger national redistribution policies. These redistribution policies interfere with the laissez-faire approach and are problematic when allocating scarce national resources over different regions in combination with soft regional budget constraints. Moreover, the laissez-faire approach does not seem to solve the short-term problems that are the main justification for the place-based development policies that are leading in future cohesion policy (Barca, 2009).
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