3.4.5.2 Regional Support Measures
A government can take regional support measures, in the form of grants and investments, using central funds to help areas in need.
A national policy can arrange to locate some government functions to where there is a shortage of jobs. The Driver and Vehicle Licensing Agency for the whole of the UK is located in South Wales for example, in an area which had lost a lot of jobs in coal-mining. This is a straightforward transfer of jobs.
A government can make investments or give grants to provide assistance to geographical areas which are currently experiencing economic difficulties, with the aim of reducing inequality, unemployment, resentment and migratory pressures. This policy is used within many countries – although the “evidence for success is mixed at best” according to Henry Overman, of the London School of Economics, as quoted in an Economist article: Enterprise Zones.
Opponents of regional support measures might argue that they are a tactical political manipulation of government spending (3.3.7.1), which might distribute resources less efficiently than markets. There is always the possibility that public money will be given to businesses that ultimately fail – but the only alternative seems to be that people leave failing districts. The most capable leave first, accelerating the decline, as described earlier (3.4.3.2).
This page is intended to form part of Edition 4 of the Patterns of Power series of books. An archived copy of it is held at https://www.patternsofpower.org/edition04/3452.htm