Regional Disparities, Growth, and Inclusiveness

36 Pages Posted: 9 Mar 2021

See all articles by Nicola Spatafora

Nicola Spatafora

International Monetary Fund (IMF)

Holger Floerkemeier

International Monetary Fund (IMF)

Anthony J. Venables

University of Oxford; Centre for Economic Policy Research (CEPR)

Date Written: February 2021

Abstract

We discuss regional disparities in economic performance and living standards. We first set out some key facts, and provide a conceptual framework to help analyze whether such disparities are efficient, or instead reflect market and/or policy failures. We examine whether policy attempts to reduce regional disparities necessarily involve a trade-off between equity and efficiency. We then investigate whether policymakers should focus on boosting the economic performance of lagging regions-or, conversely, accept the presence of regional disparities, and instead assist households in lagging regions through transfer payments, investments in education, health, and other basic services, and by facilitating out-migration.

JEL Classification: R11, R12, R58, J30, E23, E25, O18, J20

Suggested Citation

Spatafora, Nikola and Floerkemeier, Holger and Venables, Anthony J., Regional Disparities, Growth, and Inclusiveness (February 2021). IMF Working Paper No. 2021/038, Available at SSRN: https://ssrn.com/abstract=3799630

Nikola Spatafora

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Holger Floerkemeier (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Anthony J. Venables

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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