Applying the principles of Optimal Control Theory to the problem of regional allocation of investment can be a useful tool for demonstrating how the trade-off between regional equity and overall efficiency can be overcome. This book poses the following questions: are spatial inequalities harmful for overall efficiency? How is the economist to assist the policy-maker in establishing generally applicable criteria or policies when the aims include equity as well as efficiency? Alexiadis analyses the 'equity versus efficiency' dilemma in the allocation of scarce resources, expressing the argument in mathematical terms; an issue of particular importance in development planning and programming.
This is invaluable reading for final year and postgraduate students of regional, development and mathematical economics, as well as researchers, policy makers and all those working in regional development institutions.
Stilianos Alexiadis is Economics Researcher in the Division of Documentation and Agricultural Statistics at the Ministry of Rural Development and Foods, Greece. Alexiadis holds a PhD in Economics from Manchester Metropolitan University, UK, and has teaching experience at Piraeus University and in higher education colleges in Greece. His research interests include regional growth, regional convergence, regional policy, policy evaluation, cumulative growth, technology clusters and R&D labour distribution.
Foreword by Peter Nijkamp.
1 Setting the Overall Context
1.1 The Scope for Optimality in Economic Growth
1.2. Optimality in Regional Policy
1.3 The Trade-off between 'Regional Equity' and 'Aggregate Efficiency'
1.4 Structure of the Study
2 Regional Allocation of Investment
2.2 Optimality: General Principles
2.3 Regional Growth and Allocation of Investment
2.4 Optimal Allocation Policies
2.5 The Switching Time
3 Conflicts in Regional Policy
3.2 The Necessity of Regional Policy
3.3 Regional Policy: A Substitution between Equity and Efficiency?
3.4 Trade-off and Regional Allocation of Investment
3.5 Regional Allocation of Investment and Regional Equity
3.6 Introducing 'Equity' in the Objective Function
4 Compatibility between Equity and Efficiency
4.2 Redefining the Aim of 'Regional Equity'
4.3 Overcoming the Dilemma of Regional Policy
4.4 Some Extensions
4.5 Implications for Regional Planning
Maximising total consumption