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Public Sector Size and Peripherality

Listed author(s):
  • Rhydian James
  • Peter Midmore
  • Dennis Thomas
Registered author(s):

    This paper develops a model that shows how a country can endogenously become differentiated into a private-sector dominated ‘core’ region and a public-sector dominated ‘periphery’. A large public sector is closely associated with peripheral economies, although it is unclear to what extent it is a cause of peripherality rather than a symptom. The paper takes a minimum public sector size, dependent on each region's population, to present a public sector increasing in volume relative to falling population. This modelling activity is an attempt to quantify empirical and quantitative observations on the size of regional public sectors in terms of the new economic geography, and demonstrates that under various conditions a relatively large public sector can be beneficial for a peripheral region. RÉSUMÉ La pr#xe9;sente communication d#xe9;veloppe un modèle montrant la façon dont un pays peut devenir, de façon endogène, diff#xe9;renci#xe9; dans une r#xe9;gion essentielle domin#xe9;e par le secteur priv#xe9;, et une « p#xe9;riph#xe9;rie » domin#xe9;e par le secteur public. Il existe des rapports #xe9;troits entre un secteur public important et des #xe9;conomies p#xe9;riph#xe9;riques, bien que l'on ne puisse d#xe9;terminer dans quelle mesure il s'agit d'une cause de p#xe9;riph#xe9;ricit#xe9; plutôt que d'un symptôme. Cette communication utilise une taille minimale de secteur public, en fonction de la population de chaque r#xe9;gion, pour pr#xe9;senter un secteur public augmentant en volume relativement à la diminution de la population. Cette activit#xe9; de mod#xe9;lisation est une tentative de quantification d'observations empiriques et quantitatives sur la taille des secteurs publics r#xe9;gionaux sur le plan de la nouvelle g#xe9;ographie #xe9;conomique, et d#xe9;montre que, dans certaines conditions, un secteur public d'envergure relativement importante peut être b#xe9;n#xe9;fique pour une r#xe9;gion p#xe9;riph#xe9;rique. EXTRACTO Este estudio desarrolla un modelo que muestra cómo un pa#xed;s puede llegar a diferenciarse endógenamente como una región ‘central’ dominada por el sector privado y una ‘ periferia’ dominada por el sector público. Un sector público amplio se asocia estrechamente con econom#xed;as perif#xe9;ricas, aunque no está claro hasta qu#xe9; punto es una causa de la periferalidad en lugar de un s#xed;ntoma. El estudio toma un tamaño m#xed;nimo de sector público, dependiente de la población de cada región, para presentar un sector público que aumenta en volumen en relación con una población decreciente. Esta actividad de modelación es un intento de cuantificar observaciones emp#xed;ricas y cuantitativas sobre el tamaño de los sectores públicos regionales en t#xe9;rminos de la nueva geograf#xed;a económica, y demuestra que bajo varias condiciones, un sector público relativamente grande puede ser beneficioso para una región perif#xe9;rica. 公共部门规模和边缘性 摘要 : 本文提出了一种新的模型 , 使一个国家内生分化成私营部门主导的‘核心’区域和公共部门主导的‘外围’区域 。大量公共部门都与外围经济紧密相连 , 尽管尚不清楚它们在多大程度上决定了是边缘化还是虚拟化。本文参照各个地区的人 口数目相应地采用最小的公共部门规模 , 证明在人口下降时公共部门体积增加。这一建模过程是为了尝试使用新的经济地理学 方法对区域公共部门规模的经验和定量观察结果进行量化。结果显示在多种不同情况 下,相对大的公共部门对外围区域有益。

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    Article provided by Taylor & Francis Journals in its journal Spatial Economic Analysis.

    Volume (Year): 7 (2012)
    Issue (Month): 4 (December)
    Pages: 447-460

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    Handle: RePEc:taf:specan:v:7:y:2012:i:4:p:447-460
    DOI: 10.1080/17421772.2012.722666
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    1. Kristian Behrens & Carl Gaigné & Gianmarco I.P. Ottaviano & Jacques-François Thisse, 2006. "Is remoteness a locational disadvantage?," Journal of Economic Geography, Oxford University Press, vol. 6(3), pages 347-368, June.
    2. Brakman, Steven & Garretsen, Harry & Schramm, Marc, 2006. "Putting new economic geography to the test: Free-ness of trade and agglomeration in the EU regions," Regional Science and Urban Economics, Elsevier, vol. 36(5), pages 613-635, September.
    3. Miguel Gómez-Antonio & Bernard Fingleton, 2012. "Regional productivity variation and the impact of public capital stock: an analysis with spatial interaction, with reference to Spain," Applied Economics, Taylor & Francis Journals, vol. 44(28), pages 3665-3677, October.
    4. Rikard Forslid & Gianmarco I.P. Ottaviano, 2003. "An analytically solvable core-periphery model," Journal of Economic Geography, Oxford University Press, vol. 3(3), pages 229-240, July.
    5. Gianmarco Ottaviano, 2003. "Regional Policy in the Global Economy: Insights from New Economic Geography," Regional Studies, Taylor & Francis Journals, vol. 37(6-7), pages 665-673.
    6. Henry G. Overman, 2004. "Can we learn anything from economic geography proper?," Journal of Economic Geography, Oxford University Press, vol. 4(5), pages 501-516, November.
    7. Philip McCann, 2005. "Transport costs and new economic geography," Journal of Economic Geography, Oxford University Press, vol. 5(3), pages 305-318, June.
    8. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    9. Bernard Fingleton, 2005. "Towards applied geographical economics: modelling relative wage rates, incomes and prices for the regions of Great Britain," Applied Economics, Taylor & Francis Journals, vol. 37(21), pages 2417-2428.
    10. Bernard Fingleton & Manfred Fischer, 2010. "Neoclassical theory versus new economic geography: competing explanations of cross-regional variation in economic development," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 44(3), pages 467-491, June.
    11. Vincent Dupont & Philippe Martin, 2006. "Subsidies to poor regions and inequalities: some unpleasant arithmetic," Journal of Economic Geography, Oxford University Press, vol. 6(2), pages 223-240, April.
    12. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    13. Pasquale Commendatore & Ingrid Kubin & Carmelo Petraglia, 2008. "Productive Public Expenditure in a New Economic Geography Model," Economie Internationale, CEPII research center, issue 114, pages 133-160.
    14. Bernard Fingleton & Miguel Gómez-Antonio, 2009. "Analysing the impact of public capital stock using the NEG wage equation: a panel data approach," Working Papers 0912, University of Strathclyde Business School, Department of Economics.
    15. Brulhart, Marius & Trionfetti, Federico, 2004. "Public expenditure, international specialisation and agglomeration," European Economic Review, Elsevier, vol. 48(4), pages 851-881, August.
    16. Sara Davies, 2011. "Regional resilience in the 2008--2010 downturn: comparative evidence from European countries," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 4(3), pages 369-382.
    17. Luis Fernando Lanaspa & Fernando Pueyo & Fernando Sanz, 2001. "The Public Sector and Core-Periphery Models," Urban Studies, Urban Studies Journal Limited, vol. 38(10), pages 1639-1649, September.
    18. Nicola James, 2009. "Regional analysis of public sector employment," Economic & Labour Market Review, Palgrave Macmillan;Office for National Statistics, vol. 3(9), pages 37-43, September.
    19. Paul Pecorino, 2009. "Monopolistic Competition, Growth and Public Good Provision," Economic Journal, Royal Economic Society, vol. 119(534), pages 298-307, January.
    20. repec:adr:anecst:y:1997:i:47:p:06 is not listed on IDEAS
    21. Rodney Ramcharan, 2009. "Why an economic core: domestic transport costs," Journal of Economic Geography, Oxford University Press, vol. 9(4), pages 559-581, July.
    22. Roos, Michael W. M., 2004. "Agglomeration and the public sector," Regional Science and Urban Economics, Elsevier, vol. 34(4), pages 411-427, July.
    23. Frédéric Robert-Nicoud, 2005. "The structure of simple 'New Economic Geography' models (or, On identical twins)," Journal of Economic Geography, Oxford University Press, vol. 5(2), pages 201-234, April.
    24. Stefan Gruber & Anna Soci, 2010. "Agglomeration, Agriculture, and the Perspective of the Periphery," Spatial Economic Analysis, Taylor & Francis Journals, vol. 5(1), pages 43-72.
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