Munich Personal RePEc Archive

The ‘Trade-off’ between Spatial Equity and Economic Efficiency Revisited: Evidence from the US States

Alexiadis, Stilianos and Eleftheriou, Konstantinos (2010): The ‘Trade-off’ between Spatial Equity and Economic Efficiency Revisited: Evidence from the US States.

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Abstract

The principle aims of regional policy can be encapsulated in terms of ‘spatial equity’ and ‘economic efficiency’. Establishing the relation between these two aims is of fundamental importance. Conventionally, however, it is assumed that there is a conflict or a ‘trade-off’ between them. In this paper, a hopeful view, i.e. that the two aims are complementary rather than competitive, is put forward. The validity of this view is examined empirically using data for the US States covering the period 1972-2005. The obtained results map an instructive framework for regional policy where the scope for reducing regional inequalities is not incompatible with improvements in economic efficiency.

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