Economic Policies and Local Development: Some Reflections

Abstract

Every national system is also a sum of all its regional economies. Then, there are economically differentiated regions within nations. If the foregoing is true, a crucial problem for economic policy is determining which policies should be pursued at the national level (national policies), and on what grounds, and which should instead be developed at the local, regional level (local policies). What policies influence the development and competitiveness of regional economies? This article tries to discuss these issues.The first causal relation to examine is that between national economic policies and the competitiveness of a country's regions. The picture grows even more complex if we consider that there are national policies which have explicitly geographical objectives. Then, why not count on national policies, even locally differentiated ones? Having answered this question this paper addresses the opposite issue: why should we not view the entirety, or at least the largest part, of national economic policy--and development policies in particular--as simply the sum of local economic policies? How can one distinguish between the local effects of national economic policies and those of local development policies? A further problem is providing a satisfactory definition of regions (i.e. the areas in which policies are to be implemented) and of their boundaries.