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Economic Rationales For and Against Place-Based Policy


  • Kilkenny, Maureen
  • Kraybill, David


Most economists understand that "place-based" policies are justified by (i) place uniqueness (spatial heterogeneity), (ii) undesirable spatial consequences of economic growth and change, (iii) inefficiencies due to jurisdictional fragmentation, (iv) significant spatial interdependencies between metro and non-metro places, and (v) the potential to generate greater nation-wide welfare gains using place-based rather than other policies. This paper lays out the economic rationales both for and against place-based policy. The pitfalls and shortcomings of place-based policies include that the policies may (i) generate nothing but rents for the property owners in targeted places, (ii) attract or retain (trap) poor people in poor areas, (iii) distort business as well as human migration decisions, (iv) enable the postponement of necessary adjustments, (v) create dependencies, and are (vi) subject to abuse by place-based politicians.

Suggested Citation

  • Kilkenny, Maureen & Kraybill, David, 2003. "Economic Rationales For and Against Place-Based Policy," Staff General Research Papers Archive 11730, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:11730

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    Cited by:

    1. Elena G. Irwin & Andrew M. Isserman & Maureen Kilkenny & Mark D. Partridge, 2010. "A Century of Research on Rural Development and Regional Issues," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(2), pages 522-553.
    2. Rebecca M. Blank, 2005. "Poverty, Policy, and Place: How Poverty and Policies to Alleviate Poverty Are Shaped by Local Characteristics," International Regional Science Review, , vol. 28(4), pages 441-464, October.
    3. Jolley, Jason & Nousaine, Aaron & Huang, Carolyn, 2012. "Effective at the Margins: Outmigration and Economic Development in Rural North Carolina," Sustainable Agriculture Research, Canadian Center of Science and Education, vol. 1(1).
    4. Enver, Ayesha & Partridge, Mark D., 2008. "Rural-Urban Migration and the Intergenerational Transmission of Wealth," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6475, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Rodríguez-Pose, Andrés & Hardy, Daniel, 2015. "Addressing poverty and inequality in the rural economy from a global perspective," LSE Research Online Documents on Economics 63257, London School of Economics and Political Science, LSE Library.
    6. Cristina Gradea, 2013. "Analysis And Planning Of Regional Development - Contextual Variables To Develop A Model For Monitoring Financial Indicators At Regional Level," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 6, pages 180-184, December.

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