Regional Disparities, Growth, and Inclusiveness

Author/Editor:

Holger Floerkemeier ; Nikola Spatafora ; Anthony Venables

Publication Date:

February 12, 2021

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

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.

Series:

Working Paper No. 2021/038

Frequency:

regular

English

Publication Date:

February 12, 2021

ISBN/ISSN:

9781513569505/1018-5941

Stock No:

WPIEA2021038

Format:

Paper

Pages:

35

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