2. Regional and local economics Slide 1 Aims n Examine the regional problems experienced by other major OECD countries up to the late 1970s n Review the policies employed by governments and other agencies to ameliorate regional disparities n Compare and contrast the policy approaches adopted by the major OECD countries. n Study carried out by OECD in latter part of 70’s, aim to promote economic growth and best practice. n Background - economic slowdown, industrial restructuring, rising unemployment, widening economic disparities. n Concentrate on Canada, France, West Germany, Italy, Japan, USA and UK An international problem: Regional policy in other major OECD countries. Regional and Local Economics (RELOCE) Lecture slides – Lecture 7b

3. Regional and local economics Slide 2 National situation n Canada - Unemployment on the high side - labour force growing faster than the population - GNP growth 8.5% pa - structural change (services) n France - Unemployment increasing - labour force growth driven by immigration - GDP increased 66% in 9 years - productivity up -structural change (industry & services) n Germany - Unemployment increasing - labour force growing migrant workers - GNP growth 4.7% pa - structural change (manufacturing & services) n Italy - Unemployment on the increase - increasing labour force and high emigration - GNP growth 5.6% pa - high levels of fixed investment - low incomes - structural change (manufacturing & services) Regional and Local Economics (RELOCE) Lecture slides – Lecture 7b

4. Regional and local economics Slide 3 National situation (Cont.) n Japan - Little official unemployment - high population densities - GNP grown 2.5 times in 10 years - massive industrial expansion Rural urban drift n USA - Unemployment on the high side (8.5%) - GNP growth 5.3% pa - uneven development - largest economy - income levels high n UK - Unemployment increasing <4% - labour force restructuring - GNP growth 2.5% pa - structural change (manufacturing decline) Regional and Local Economics (RELOCE) Lecture slides – Lecture 7b

5. Regional and local economics Slide 4 Regional problems n Canada – Spatial development uneven - disparities in per capita income, investment and unemployment n France – Rural urban shift - overheating and slowdown - growth in Paris decline in countryside and old industrial areas - disparities in per capita income n Germany - Rural urban shift - uneven employment growth - disparities in per capita income - distressed areas small with week industrial structure n Italy - Dualism - backward south, little industrialisation - relative disadvantage widespread and concentrated - Rural urban drift Regional and Local Economics (RELOCE) Lecture slides – Lecture 7b

6. Regional and local economics Slide 5 Regional problems (Cont.) n Japan – Spatial development uneven - disparities in per capita income - signs of counter urbanisation - congestion - over and under concentration n USA – post urbanisation - population and industrial displacement - energy - transport - metropolitan constraint - rural poverty - urban distress n UK - Some counter urbanisation - industrial contraction concentrated - disparities - migration - stagnation - worn out infrastructure Regional and Local Economics (RELOCE) Lecture slides – Lecture 7b

7. Regional and local economics Slide 6 Regional policies n Canada – (2% of national budget) Industrial incentives (Capital and Labour): Infrastructure (depressed areas only): Social and resource development (training and natural resource) n France – (0.5% of total government budget) Employment guidance (location controls, subsidy): Urban town policy (growth poles, land and urbanisation): Infrastructure (transport and communications) n Germany - (0.13% of national income) Industrial incentives (Grants, tax incentives, government contracts): Infrastructure (industrial sites, tourism, training) n Italy - 10% of central government spending) Direct action by the State (land reform, investment, location controls): Industrial incentives (Capital, tax breaks, graded): Cassa per il Meezzogiorno (Infrastructure, training) Regional and Local Economics (RELOCE) Lecture slides – Lecture 7b

8. Regional and local economics Slide 7 Regional policies (Cont.) n Japan – (0.73% of public consumption) Industrial incentives (to move): Infrastructure (grants to local government): Nation- wide planning system (agencies - land use ED, venture finance) n USA – Federal measures (infrastructure, spending, grants, tax): Departmental and agency (public works, training): Economic Development Administration (business loans, grants, planning) n UK - (1.9% of government expenditure) Industrial incentives (Capital and Labour): Infrastructure (sites, social capital, rural development): Relocation (controls, dispersal, strategic planning) Regional and Local Economics (RELOCE) Lecture slides – Lecture 7b

9. Regional and local economics Slide 8 Regional policy organisation n Canada – Centralised but with local delivery n France – Centralised with regional co-ordination n Germany - Shared between Federal and Regional Government n Italy - Central government co-ordination regional bodies Regional and Local Economics (RELOCE) Lecture slides – Lecture 7b

10. Regional and local economics Slide 9 Regional policy organisation (Cont.) n Japan – Central government ministries, special bodies, local government. n USA – Federal objectives, criteria & funding local delivery n UK - Centralised, local input land use (within national guidelines) no national plan Regional and Local Economics (RELOCE) Lecture slides – Lecture 7b

11. Regional and local economics Slide 10 Regional and Local Economics (RELOCE) Lecture slides – Lecture 7b

12. Regional and local economics Slide 11 n All major OECD countries have regional disparities and problems n Difficult to estimate a comparative measures of expenditure across all countries - Italy, the UK and Canada are amongst the highest spenders n European countries employ far more instruments aimed directly at stimulating industry than those in Japan and the Americas. n Almost all countries use subsidised loans or loan guarantees, investment grants and make available industrial land/sites, n Few offer grants towards employment and labour costs, state shareholding or overt preferential treatment in award of government contracts Conclusions Regional and Local Economics (RELOCE) Lecture slides – Lecture 7b

13. Regional and local economics Slide 12 Further reading  Organisation of Economic Co-operation and Development, (1977) Regional Policies - The Current Outlook, OECD, Paris  Organisation of Economic Co-operation and Development, (1976) Regional Problems and Policies - In OECD Countries, Vol.1, OECD, Paris  Organisation of Economic Co-operation and Development, (1976) Regional Problems and Policies - In OECD Countries, Vol.2, OECD, Paris  Organisation of Economic Co-operation and Development, (1980) Regional Policies - In the United States, OECD, Paris  Organisation of Economic Co-operation and Development, (1979) The Role of industrial Incentives in Regional Development, OECD, Paris Regional and Local Economics (RELOCE) Lecture slides – Lecture 7b