Regional Development: The Reagan-Thatcher Legacy

Abstract

During the 1950s and 1960s, it seemed that our understanding of regional growth processes had progressed far enough for confident policy prescriptions to be advanced. From the vantage point of the 1980s, that assurance seems to have been misplaced. The paper contains a review of the debate on regional growth processes and the policy implications, in the context first of Britain and then more generally. It is shown that there has been a strong move away from the advocacy of traditional redistributive, and essentially zero-sum, policies to the view that intraregional policies to foster the supply potential are more appropriate. This shift in emphasis is partly attributable directly to the current high rates of unemployment. Probably more important has been the associated emergence of the monetarist/supply-side challenge to Keynesian demand-management orthodoxy. This macroeconomic debate is briefly reviewed and the implications for regional policy indicated. In the concluding section, an outline is provided of the supply-side approach to regional development that seems relevant for the foreseeable future, not as a replacement for traditional redistributive policies but as a necessary, and hitherto somewhat neglected, complement.