Macro Evaluations of the Impact of Regional Policy in Britain: a Review of Recent Research1

Abstract

Regional policies may be assessed from at least three separate perspectives: their impact on the regional distribution of economic activity (their primary purpose), their aggregate efficiency effect on the economy (contribution to national output net of resource cost) and their financial impact on the national Treasury (net Exchequer costs). This paper reviews the considerable effort directed since the turn of the 1970s towards evaluation of these effects in Britain. So far as the impact of policy on the regional distribution of economic activity is concerned, the paper classifies studies according to quantitative methods used (simple statistical analysis, shift-share analysis and regression analysis) and emphasises the strengths of the latter over the others, showing that, without as yet being used entirely satisfactorily, models useful for policy assessment are developing. So far as aggregate policy effects (economic and financial) are concerned, there is more ground to be broken, although the outline of a basic model is emerging.