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A cost-benefit approach to the evaluation of regional selective assistance

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  • Kim Swales

Abstract

The ‘Green Book’ and the recent EGRUP report support exchequer cost per job as a key input in the ex-ante appraisal of individual applications for Regional Selective Assistance (RSA) and the ex-post evaluation of the RSA scheme as a whole. In this paper, following a recommendation in the House of Commons Trade and Industry Committee’s report on regional policy, the merits of an alternative, explicitly cost-benefit, framework are outlined. This approach incorporates the administration and compliance costs of the subsidy, costs at present ignored in RSA evaluation studies. An optimal ex-ante appraisal rule is developed. This takes the form of a cost-per-job ceiling, and a representative value is calculated for this figure.

Suggested Citation

  • Kim Swales, 1997. "A cost-benefit approach to the evaluation of regional selective assistance," Fiscal Studies, Institute for Fiscal Studies, vol. 18(1), pages 73-85, February.
  • Handle: RePEc:ifs:fistud:v:18:y:1997:i:1:p:73-85
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    File URL: http://www.ifs.org.uk/fs/articles/fsswales.pdf
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    References listed on IDEAS

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    1. Ashcroft, Brian & Swales, J. K., 1982. "Estimating the effects of government office dispersal : An application of demand constrained shadow wages," Regional Science and Urban Economics, Elsevier, vol. 12(1), pages 81-97, February.
    2. Hare, Paul G, 1975. "Regional Investment Criteria and Shadow Wage Rates," Scottish Journal of Political Economy, Scottish Economic Society, vol. 22(3), pages 305-320, November.
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    Cited by:

    1. David Brooksbank & David Pickernell, 2001. "Changing the Name of the Game? RSA, Indigenous and Inward Investors and the National Assembly for Wales," Regional Studies, Taylor & Francis Journals, vol. 35(3), pages 271-277.
    2. Devereux, Michael P. & Griffith, Rachel & Simpson, Helen, 2007. "Firm location decisions, regional grants and agglomeration externalities," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 413-435, April.
    3. Munday, Max & Pickernell, David & Roberts, Annette, 1999. "The Effectiveness of Regional Grant Aid: A Welsh Perspective," ERSA conference papers ersa99pa321, European Regional Science Association.
    4. Felsenstein, Daniel & Fleischer, Aliza, 1999. "Capital Assistance and Small Firm Growth: Implications for Regional Economic Welfare," ERSA conference papers ersa99pa395, European Regional Science Association.
    5. Michael Devereux & Rachel Griffith & Helen Simpson, 2004. "Agglomeration, regional grants and firm location," IFS Working Papers W04/06, Institute for Fiscal Studies.
    6. Kim Swales, 2008. "The Relative Efficiency of Automatic and Discretionary Industrial Aid," Working Papers 0812, University of Strathclyde Business School, Department of Economics.
    7. John B Parr, 2015. "Neglected aspects of regional policy: a retrospective view," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 33(2), pages 376-392, April.

    More about this item

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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