D E P A R T M E N T OF P O L I T I C A L A N D S O C I A L S C I E N C E S E U I W O R K I N G P A P E R N o . 31 P O S S I B I L I T I E S A N D L I M I T A T I O N S O F A R E G I O N A L E C O N O M I C D E V E L O P M E N T P O L I C Y IN T H E F E D E R A L R E P U B L I C O F G E R M A N Y . by K L A U S T O P F E R ìli N O V E M B E R 1982 EUI G 2 0 6 5 0
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T h i s p a p e r is d i s t r i b u t e d fo r d i s c u s s i o n an d c r i t i c a l c o m m e n t q u o t e d or c i t e d p e r m i s s i o n of a n d s h o u l d n o t b e w i t h o u t p r i o r t h e a u t h o r © K l a u s T o p f e r P r i n t e d in I t a l y in N o v e m b e r 1 9 8 2 E u r o p e a n U n i v e r s i t y I n s t i t u t e B a d i a F i e s o l a n a
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P o s s i b i l i t i e s a n d L i m i t a t i o n s of a R e g i o n a l E c o n o m i c D e v e l o p m e n t P o l i c y in t h e F e d e r a l R e p u b l i c o f G e r m a n y 1. I w a n t to d i v i d e m y l e c t u r e i n t o t h r e e s e c t i o n s , n a m e l y : i n t e n t i o n s , r e a l i t y a n d th e n e c e s s a r y r e o r i e n t a t i o n a n d a d j u s t m e n t of r e g i o n a l e c o n o m i c p o l i c y in t h e F e d e r a l R e p u b l i c . I t h i n k it is v e r y i m p o r t a n t t o i n c l u d e t h i s l a s t s e c t i o n a n d m a k e s o m e r e m a r k s a b o u t a r e o r i e n t a t i o n . W e a r e d e a l i n g h e r e w i t h a f i e l d o f p o l i t i c s t h a t h a s a l w a y s b e e n c o n t r o v e r s i a l a n d t h a t w i l l c o n t i n u e t o g a i n in s o c i o - p o l i t i c a l i m p o r t a n c e . T h e r e f o r e I c a n n o t j u s t s t o p a f t e r e l a b o r a t i n g the a c t u a l a n d s c i e n t i f i c w e a k n e s s e s , s h o r t c o m i n g s a n d l i m i t a t i o n s o f p u b l i c a c t i o n s in t h i s a r e a . It w o u l d b e i m p o s s i b l e w i t h i n the a v a i l a b l e t i m e to d e s i g n a " n e w r e g i o n a l p o l i c y " w h i c h w o u l d be c o m p l e t e a n d c o n c l u s i v e in its g o a l s a n d i n s t r u m e n t s as w e l l as i n it s p l a n n i n g r e l a t i o n s h i p s a n d e x e c u t i v e r e s p o n s i b i l i t i e s ; t h a t is n o t m y i n t e n t i o n . I w i l l o n l y t r y to p o i n t o u t a n e e d fo r a s h i f t o f e m p h a s i s a n d s o m e i m p o r t a n t e l e m e n t s for f u r t h e r i m p r o v e m e n t s a n d p u t t h i s u p f o r d i s c u s s i o n , 2. T h e r e a r e t w o m o r e r e a s o n s w h y s o m e t h o u g h t s a b o u t r e o r i e n t a t i o n a n d a d j u s t m e n t o f r e g i o n a l p o l i c y
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2 - Its i n t e n t i o n s a n d r e a l i t y , its p o s s i b i l i t i e s a n d l i m i t a t i o n s h a v e a l r e a d y b e e n a n a l y z e d f r o m all d i f f e r e n t a n g l e s : p o l i t i c i a n s of al l l e v e l s , s c i e n t i s t s , l a b o u r u n i o n l e a d e r s a n d m a n y o t h e r s h a v e t r i e d t h e i r h a n d s a t it; t h e r e s u l t is c o m m o n d i s a p p o i n t m e n t a n d d i s i l l u s i o n m e n t . T h e f i r m c o n v i c t i o n t h a t t h e u n d e r l y i n g c o n c e p t h a s to be r e c o n s i d e r e d b e c a m e a c o m m o n p l a c e . - T h e p r e s s u r e to a c t is i n c r e a s i n g r a d i c a l l y d a i l y . R e a r r a n g e m e n t s in t h e w o r l d w i d e d i v i s i o n o f l a b o u r , t h e s c a r c i t y o f c e r t a i n p r i m a r y e n e r g i e a n d o f s o m e o t h e r i m p o r t a n t r a w m a t e r i a l s , w i t h the r e s u l t i n g e x o r b i t a n t p r i c e i n c r e a s e s , and, la s t b u t n o t l e a s t , c y c l i c a l a n d s t r u c t u r a l w e a k e n i n g s s t r a i n e d th e r e g i o n a l d e v e l o p m e n t p r o c e s s e s to b r e a k i n g p o i n t a n d b r o u g h t f o r t h t h e i r w e a k s p o t s . A s s o o n as t h e y a r e n o t c o v e r e d up b y a c o m p r e h e n s i v e , a l l - a b s o r b i n g g r o w t h i m p u l s e , r e g i o n a l c r i s e s b e c o m e a g a i n i m m e d i a t e l y n o t i c e a b l e fo r t h e p e o p l e i n th e a f f e c t e d a r e a s . I T h e I n t e n t i o n s o f R e g i o n a l P o l i c y
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as th e s p a t i a l e l e m e n t o f p u b l i c e c o n o m i c p o l i c y has b e e n p u r s u e d in t h e F e d e r a l R e p u b l i c at l e a s t s i n c e 1969. In t h a t y e a r t h e j o i n t p r o j e c t " I m p r o v e m e n t in t h e R e g i o n a l E c o n o m i c S t r u c t u r e " w a s i n t r o d u c e d . ( B e f o r e t h e n , r e g i o n a l p o l i c y w a s c a r r i e d o u t m o r e o r l e s s u n s y s t e m a t i c a l l y ) . T h i s j o i n t p r o j e c t is a c o m m o n p r o g r a m o f t h e F e d e r a l G o v e r n m e n t a n d a l l t h e S t a t e s (Lander) t h a t e n s u r e s u n i f o r m p l a n n i n g a n d f i n a n c i n g o f a t a s k w h i c h the c o n s t i t u t i o n d e c l a r e s to b e t h e i r j o i n t re sp on si bi li b' (Article 9 / a ) . T h e j o i n t p r o j e c t w a s se t up w i t h a t r i p l e a i m in m i n d : - to m a k e t h e b e s t p o s s i b l e u s e o f t h e t e r r i t o r i a l r e s o u r c e s , t h a t is, t h e a v a i l a b l e f a c t o r s of p r o d u c t i o n i n t h e v a r i o u s r e g i o n s . T h i s g r o w t h o b j e c t i v e w a s c o m b i n e d w i t h t h e d e m a n d f o r f u l l - e m p l o y m e n t , w h i c h in t u r n is t i e d to t h r e e i n d i c a t o r s : a) no n e t o u t - m i g r a t i o n b) n o b e l o w - a v e r a g e e m p l o y a b i l i t y r a t i o s , e x p e c i a l l y f o r w o m e n (an e m p l o y a b i l i t y r a t i o is th e p r o p o r t i o n o f p e r s o n s e m p l o y a b l e , i.e.
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4 e i t h e r e m p l o y e d o r l o o k i n g for e m p l o y m e n t , to al l p e r s o n s at e m p l o y a b l e a g e in t h e s e c t o r of th e p o p u l a t i o n u n d e r c o n s i d e r a t i o n . ) c) no o p e n u n e m p l o y m e n t . c l o s e l y r e l a t e d is t h e s t a b i l i t y o b j e c t i v e . H e r e w e h a v e to c o n s i d e r t w o c o m p o n e n t s : a) c y c l i c a l f l u c t u a t i o n s in t h e v a r i o u s r e g i o n s a r e to b e r e d u c e d a n d a p p r o x i m a t e d at l e a s t to t h e p a r a m e t e r s f o r t h e e c o n o m y as a w h o l e , a n d b) s t r u c t u r a l s t a b i l i t y is to b e s e c u r e d by r e d u c i n g m a r k e d r e g i o n a l m o n o s t r u c t u r e s . T h i s is e s p e c i a l l y i m p o r t a n t i n v i e w of th e o n e - s i d e d u t i l i z a t i o n o f t h e l a b o u r m a r k e t s . n e x t c o m e s t h e e q u a l i z a t i o n o b j e c t i v e . It a i m s at p r o c u r i n g j u s t a n d e q u a l l i v i n g c o n d i t i o n s i n a l l r e g i o n s ; t a r g e t i n d i c a t o r is t h e r e d u c t i o n o f i n t e r r e g i o n a l i n c o m e d i s p a r i t i e s , i .e . it d e m a n d s a) e q u a l w a g e r a t e s f o r t h e s a m e t y p e o f w o r k , a n d
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b) a p p r o x i m a t i o n o f t h e i n c o m e p y r a m i d s b e t w e e n r e g i o n s . c) In a d d i t i o n , it is o f t e n r e q u i r e d t h a t r e g i o n s be a d e q u a t e l y a n d e q u a l l y p r o v i d e d w i t h i n f r a s t r u c t u r e f a c i l i t i e s a n d t e r t i a r y s e r v i c e s . In s h o r t , it c a n b e s a i d t h a t t h e t a r g e t s of r e g i o n a l e c o n o m i c d e v e l o p m e n t p r o m o t i o n a r e t h e r e g i o n a l a g g r e g a t e s 'i nc om e' a n d 'job o f f e r s - e m p l o y m e n t ! A q u a l i t a t i v e d i f f e r e n t i a t i o n , t h a t is, a d i s t i n c t i o n r e g a r d i n g the q u a l i t y o f jo b s t h a t h a v e b e e n c r e a t e d , is n o t u n d e r t a k e n . T h e s a m e h o l d s t r u e fo r t h e i n c o m e t a r g e t : i m m a t e r i a l p o r t i o n s as w e l l as t h e s p e n d i n g s i d e a r e i g n o r e d . 2.) A t th i s p o i n t it is n e c e s s a r y t o c h a r a c t e r i z e t h e g o a l s o f r e g i o n a l p o l i c y a l i t t l e b i t m o r e c l e a r l y . I t h i n k t w o a s p e c t s a r e e s p e c i a l l y i m p o r t a n t : a) O u r c o n s t i t u t i o n i n s t r u c t s t h e p o l i c y - m a k e r to e s t a b l i s h a n d m a i n t a i n a n e q u a l q u a l i t y of l i f e in a l l p a r t s o f t h e c o u n t r y . ( A r t i c l e 72, s e c t i o n 3). It s e e m s t h a t t h i s i n i t i a t e d in
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6 r e g i o n a l p o l i c y a n o r m a t i v e i n f l u e n c e of th e n a t i o n a l a v e r a g e . It is p a r t i c u l a r l y o b v i o u s f o r th e s t a b i l i t y a n d t h e e q u a l i z a t i o n o b j e c t i v e s . B u t it a l s o h o l d s t r u e for t h e g r o w t h o b j e c t i v e , w h i c h is p u r s u e d u n d e r t h e r e s t r i c t i o n o f a c t i v e s p a t i a l m e l i o r a t i o n ( r e h a b i l i t a t i o n , r e o r g a n i z a tion) . (This m e a n s , t h e m o b i l i t y o f c a p i t a l is p r o m o t e d a n d n o t t h e m o b i l i t y o f th e l a b o u r f o r c e : Jobs to p e o p l e i n s t e a d of p e o p l e to jobs.) So, as y o u c a n see, t h e r e is no c o m p o n e n t in t h e s e g o a l s o f r e g i o n a l p o l i c y , t h a t is i n t e n t i o n a l l y a i m e d at r e g i o n a l d i f f e r e n t i a t i o n . L e t m e d e l i b e r a t e l y e x a g g e r a t e a l i t t l e : T h i s p o l i c y h a s a t t a i n e d it s f i n a l g o a l , w h e n th e v a r i o u s i n d i c a t o r v a l u e s a r e th e s a m e for a l l r e g i o n s , t h a t is, w h e n r e g i o n a l d i f f e r e n c e s o r d i s t i n c t i o n s a r e a b o l i s h e d . A t its c o r e t h i s p o l i c y a i m s a t w h a t I w a n t to c a l l d e - r e g i o n a l i z a t i o n ; a n d it a n t i c i p a t e s it. T h e r e f o r e it is o n l y c o n s i s t e n t t h a t a s t r o n g t e n d e n c y t o w a r d s d e - r e g i o n a l i z a t i o n c a n a l s o b e d e t e c t e d a t t h e i n s t r u m e n t a l l e v e l : (1.) T h e a f o r e m e n t i o n e d j o i n t p r o j e c t " I m p r o v e m e n t i n th e R e g i o n a l E c o n o m i c S t r u c t u r e is
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th e m o s t d i s t i n c t f o r m o f j o i n t p o l i t i c a l r e s p o n s i b i l i t y a n d a c t i o n of th e F e d e r a l G o v e r n m e n t a n d the S t a t e s . It is b a s e d on t h e g r o w t h p o l e t h e o r y a n d t h e r e f o r e t r i e s to w o r k t h r o u g h a d i r e c t p r o m o t i o n of i n d u s t r i a l j o bs by s u b s i d i z i n g i n d u s t r i a l i n v e s t m e n t in r e t a r d e d a r e a s ; i n d u s t r y - o r i e n t a t e d i n f r a s t r u c t u r e p r o j e c t s in t h e s e a r e a s c a n a l s o b e s u b s i d i z e d . T h e w a y t h i s p r o g r a m is s e t up, it e n f o r c e s a r i g i d , f o r m a l i z e d p r o c e s s a n d i n f l e x i b l e r e g u l a t i o n s fo r t h e u t i l i z a t i o n of f u n d s . It w a s d e s i g n e d m o r e w i t h v e r t i c a l h a r m o n i z a t i o n i n m i n d t h a n wTi t h h o r i z o n t a l p r i o r i t i e s . T h i s c o u n t r y - w i d e s t a n d a r d i z a t i o n o f indicators., t a r g e t v a l u e s a n d sc on, w h i c h h a s b e e n p r a c t i s e d in m a n y d i f f e r e n t r e s p e c t s a n d at v a r i o u s l e v e l s , is c e r t a i n l y o n e o f th e f a c t o r s r e s p o n s i b l e fo r an i n f l a t i o n o f t h e n u m b e r of p l a c e s t h a t a r e e l i g i b l e f o r d e v e l o p m e n t f u nd s. (2.) O f g r e a t s i g n i f i c a n c e , t o o , is t h e f a c t t h a t t h e a d m i n i s t r a t i o n s i n t h e v a r i o u s f i e l d s
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8 a r e o r g a n i z e d v e r t i c a l l y , e s p e c i a l l y in t h e i r d e c i s i o n a n d c o m m u n i c a t i o n p r o c e s s e s . (One ha s to i m a g i n e t h e s e a d m i n i s t r a t i v e d e p o r t m e n t s as s i n g l e c o l u m n s , w h e r e c o m m u n i c a t i o n s f u n c t i o n f o r m t o p to b o t t o m a n d v i c e v e r s e , b u t n o t h o r i z o n t a l l y b e t w e e n d i f f e r e n t d e p a r t m e n t s ; t h e y a r e n o t i n t e r c o n n e c t e d w i t h o n e a n o t h e r ) . Y o u f i n d t h is " c o l u m n t h e o r y " c o r r o b o r a t e d w h e n l o o k i n g at h i g h w a y c o n s t r u c t i o n as w e l l as in r e s e a r c h a n d t e c h n o l o g y p o l i c y , i n m u n i c i p a l t r a n s p o r t a t i o n f i n a n c i n g as w e l l as in th e l o c a t i o n of f e d e r a l a g e n c i e s , a n d t h e r e ar e n u m e r o u s o t h e r e x a m p l e s . As K a g e n e r p u t it. r a t h e r d r a s t i c a l l y ; T h e s e d e c i s i o n s a r e t a k e n in d e p a r t m e n t a l b l i n d n e s s ; or , in m y o w n w o r d s : d e - r e g i o n a l i z e d . T h e r e is a s t e a d y p r e s s u r e o n th e r e s p e c t i v e l y l o w e r t e r r i t o r i a l a u t h o r i t y to u s e u p t h e a l l o c a t e d funds, a n d t h a t s w e e p s a s i d e a l l o t h e r p r i o r i t i e s a n d r e g i o n a l n e c e s s i t i e s . b) T h e w a y r e g i o n a l p o l i c y is d e s i g n e d a t p r e s e n t , o n l y m a t e r i a l c r i t e r i a a r e t a k e n i n t o consideraticr
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or, w i t h S t o h r a n d T o d t l i n g : it o n l y r e l a t e s to t h e c o n d i t i o n s of " h a v i n g " a n d n e g l e c t s i m m a t e r i a l n e e d s , l i ke l o c a l s o l i d a r i t y a n d i d e n t i t y , p a r t i c i p a t i o n o r d i f f e r e n t p e r s o n a l p r e f e r e n c e s , t h a t f i n d t h e i r e x p r e s s i o n in d i f f e r e n t c u s t o m s , h a b i t s a n d p r i o r i t i e s . As m e n t i o n e d a b o v e , t h i s a l s o h o l d s t r u e for t h e q u a l i t a t i v e c o m p o n e n t s o f i n c o m e , as for e x a m p l e c l e a n a i r, l i t t l e n o i s e , an i n t a c t e n v i r o n m e n t , s u f f i c i e n t a n d u n d i s t u r b e d a r e a s fo r r e c r e a t i o n , a n d so on, as w e l l as for t h e s p e n d i n g s i d e of i n c o m e . It is n o t s u r p r i s i n g t h a t a r e g i o n a l p o l i c y w h i c h is a i m e d at l e v e l l i n g al l m a t e r i a l d i f f e r e n c e s , s h o u l d r e s o r t to a s p a t i a l s t r u c t u r e t h a t g u a r a n t e e s th e b e s t c o n d i t i o n s fo r t h e r e q u i r e d r e s u l t s , t h a t is, t h e g e n e r a t i o n o f m a t e r i a l i n c o m e . So w h a t w e a r e f a c e d w i t h is a c o n s e q u e n t l y p u r s u e d c o n c e p t o f u r b a n i z a t i o n in t h e s e n s e o f d e c e n t r a l c o n c e n t r a t i o n ; b u t t h e r e is a n i n c r e a s i n g t e n d e n c y t o w a r d s c o n c e n t r a t i o n a n d a d e c r e a s i n g t e n d e n c y t o w a r d s d e c e n t r a l i z a t i o n (For e x a m p l e : in t h e f i r s t s t u d i e s a c c o m p a n y i n g th e s t a r t o f r e g i o n a l p o l i c y .
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in t h e n e c e s s a r y s i z e for a g r o w t h p o l e , t h a t is, for an a g g l o m e r a t i o n t h a t c o u l d g u a r a n t e e a p r o c e s s of s e l f - s u s t a i n i n g g r o w t h , w a s f o u n d t o b e 3 0 . 0 0 0 i n h a b i t a n t s ; m e a n w h i l e , in la t e r s t u d i e s , t h i s n u m b e r w e n t u p to 1 0 0 . 0 0 0 ) . In th e l a s t c o n s e q u e n c e , all t h i s l e a d s to a n i n c r e a s i n g s h a r e of r e g i o n s w i t h p a s s i v e s p a t i a l m e l i o r a t i o n ( r e o r g a n i z a t i o n ) , t h a t is, r e g i o n s w i t h n e t o u t m i g r a t i o n , w h e r e l a b o u r l e a v e s in o r d e r to look f o r t h e c o m p l e m e n t a r y f a c t o r s e l s e w h e r e , a n d no t v i c e v e r s a . F o r t h e s e r e g i o n s , o t h e r f u n c t i o n s h a v e to be f o un d, a n d th e t h e o r e t i c a l f o u n d a t i o n w a s s u b s e q u e n t l y d e l i v e r e d : " p r i o r i t y r e g i o n s " a r e n o w th e a n s w e r ; t h e s e a r e r e g i o n s t h a t are a s s i g n e d c o m p e n s a t o r y o r r e s e r v e f u n c t i o n s for * t h e r e s t o f th e e c o n o m y . A n d w h e n t h e r e is t no o t h e r p o s s i b l e use, t h e y a r e c a l l e d r e g i o n s for e c o l o g i c a l c o m p e n s a t i o n . II R e a l i t y a n d R e s u l t s o f R e g i o n a l E c o n o m i c D e v e l o p m e n t P r o m o t i o n W h a t a r e th e r e s u l t s o f a p o l i c y t h a t s e t o u t to
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e l i m i n a t e d i f f e r e n c e s in l i v i n g c o n d i t i o n s b e t w e e n r e g i o n s a n d to p r e v e n t c r i t i c a l r e c e s s i v e d e v e l o p m e n t s in t h e s e a r e a s ? A p o l i c y t h a t p u t u p w i t h c o n s i d e r a b l e d i s t r i b u t i o n p r o b l e m s a n d t h a t s h e l l e d o u t c o n s i d e r a b l e a m o u n t s o f m o n e y - t h e s t a t i s t i c s s h o w i n v e s t m e n t s u b s i d i e s b y t h e F e d e r a l a n d S t a t e G o v e r n m e n t s o f m o r e t h a n 2 . 0 0 0 m i l l i o n D M fo r th e y e a r s 1972 t i l l 1975. In t h e b e g i n n i n g t h e r e w a s a t i m e o f e u p h o r i c n e w s a b o u t its s u c c e s s e s : m o r e t h a n 1 2 0 . 0 0 0 j o b s c r e a t e d or s e c u r e d a n n u a l l y (in th e S a a r l a n d a l o n e a t o t a l of 4 0 . 0 0 0 , t h a t is, e v e r y f o u r t h j o b in i n d u s t r y ) , a b o v e a v e r a g e g r o w t h r a t e s in t h e s u b s i d i z e d r e g i o n s , a l e s s e n i n g of o u t - m i g r a t i o n , r e d u c t i o n o f i n c o m e d i s p a r i t i e s , as w e l l as i m p r o v e m e n t s in t h e s u p p l y o f i n f r a s t r u c t u r e . It w a s o b v i o u s l y d e e m e d u n n e c e s s a i to h a v e t h e s e r e s u l t s t e s t e d m o r e t h o r o u g h l y , l e t us sa y f o r t h e q u a l i t y o f j o b s o f f e r e d , t h e t y p e s o f b u s i n e s s e s t h a t w e r e a t t r a c t e d , t h e r e l a t i v e l y c o n s t a n t i n f r a s t r u c t u r e d i f f e r e n t i a l s , t h e s e g m e n t a t i o n o f th e l a b o u r m a r k e t , t h e ' p i c k i n g - u p e f f e c t ' o f s u b s i d i e s (that m e a n s , i n v e s t m e n t s u b s i d i e s h a d n o e f f e c t o n t h e l o c a l i z a t i o n d e c i s i o n ;
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12 a f i r m w o u l d h a v e s e t t l e d In a p a r t i c u l a r r e g i o n a n y w a y , e v e n w i t h o u t s u b s i d i e s , b u t t h e y n e v e r t h e l e s s g o t th em ; a n d n o w the c o r r e s p o n d i n g j o b s a p p e a r in the s t a t i s t i c s as h a v i n g b e e n c r e a t e d b y r e g i o n a l p o l i c y m e a s u r e s ) . A l s o , it w a s n o t a s k e d h o w p e r s i s t e n t th e a t t r a c t e d i n d u s t r i e s a n d t h e c r e a t e d jobs are. T h i s e u p h o r i a w a s f o l l o w e d by a s o b e r i n g e x p e r i e n c e d u r i n g t h e r e c e s s i o n , w h i c h px'oved t o be a d i f f i c u l t t e s t fo r th e s u c c e s s e s o f r e g i o n a l p o l i c y : t h e h i g h e s t u n e m p l o y m e n t r a t e s o c c u r e d in t h o s e a r e a s , t h a t w e r e e l i g i b l e for r e g i o n a l p o l i c y f u n d s ; t h e n e w l y a t t r a c t e d i n d u s t r i a l f a c i l i t i e s s h o w e d p e r s i s t e n c y p r o b l e m s and, e s p e c i a l l y in r u r a l a r e a s , t h e y o f t e n t u r n e d o u t to be " b a c k - p a c k p l a n t s " (This m e a n s t h e y a r e o n l y a d d i t i o n a l assernblv o p e r a t i o n s o f b i g g e r c o m p a n i e s , w h i c h d o n o t r e q u i r e m u c h q u a l i f i e d la b o u r ; at t i m e s o f h i g h d e m a n d , t h e y ar e e r e c t e d in a r e a s w i t h c o m p a r a t i v e l y c h e a p l a b o u r d u r i n g a r e c e s s i o n t h e y a r e o b v i o u s l y th e f i r s t to b e s h u t d o w n ) . T h i s w a s g o i n g h a n d in h a n d w i t h i n c r e a s i n g o u t - m i g r a t i o n a n d e s p e c i a l l y a d e e p - d r a w i n g e r o s i o n o f t h e l a b o u r m a r k e t , n o t as a
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c o n s e q u e n c e of r e s i d e n t i a l p r e f e r e n c e s , b u t u n d e r e c o n o m i c p r e s s u r e . D e s p i t e n o t a b l e e x c e p t i o n s , t h e a t t r a c t e d s u b s i d i a r y p l a n t s p r o v e d to b e p a r t i c u l a r l y s u s c e p t i b l e to c y c l i c a l p r e s s u r e s . T h i s is e s p e c i a l l y t r u e f o r the s t a n d a r d i z e d , s i n g l e - p r o c e s s p r o d u c t i o n u n i t s , w h i c h m a d e u p m o s t of t h e o c c u r i n g i n d u s t r i a l r e l o c a t i o n , d u e to the s e l e c t i v e e f f e c t s o f t h e a p p l i e d s u b s i d i z a t i o n m e t h o d s . In t h e w a k e o f th e i m p r o v e m e n t s in t r a i n i n g a n d e d u c a t i o n , t h e l o w q u a l i f i c a t i o n r e q u i r e m e n t s of th e n e w l y c r e a t e d j o b s b e c a m e m o r e a n d m o r e n o t i c e a b l e ; t h e r e l a t i o n of w h i t e c o l l a r to b l u e c o l l a r w o r k e r s is v e r y o f t e n u n f a v o u r a b l y c o m p a r e d to t h e r e s p e c t i v e r e g i o n a l a v e r a g e , (if t h e r e l o c a t e d p l a n t is r e l a t i v e l y b i g l a b o u r m a r k e t i n r e l a t i o n to t h e r e g i o n a l fas a w h o l e w i l l b e i n f l u e n c e d n e g a t i v e l y ) . U s u a l l y , t h e r a t i o is a l s o u n f a v o u r a b l e w h e n c o m p a r e d to t h e p a r e n t f i r m (Ford, for e x a m p l e ) . C o m p a n i e s t h a t d o r e l o c a t e u s u a l l y b r i n g t h e i r o w n q u a l i f i e d p e r s o n a l w i t h t h e m . In t h e f i r s t c a r e f u l l y c o n d u c t e d q u a n t i t a t i v e a n a l y s i s o f r e g i o n a l p o l i c y ( H a n s m e y e r ) it t u r n e d o u t t h a t o n l y o n e i n o n e h u n d r e d j o b s h a s d i r e c t l y o r
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14 I n d i r e c t l y b e e n c r e a t e d by i n v e s t m e n t t h a t h a d b e e n s u b s i d i z e d d u r i n g th e p r e c e e d i n g s i x y e a r s . In s u m m a r y : N o t o n l y w e r e th e g o a l s o f r e g i o n a l p o l i c y n o t m e t , in as m u c h as t h e t a r g e t s f o r th e e c o n o m y as a w h o l e w e r e v i o l a t e d ; b u t w h a t is m o r e , the r e g i o n a l d i s p a r i t i e s h a v e c l e a r l y b e e n i n t e n s i f i e d . T h e w e a k e r r u r a l a r e a s a n d t h e o l d i n d u s t r i a l r e g i o n s h a d to c a r r y the m a i n b u r d e n d u r i n g t h e l a s t r e c e s s i o n . T h e d e s i r e d e f f e c t s d i d n o t occur - the s e p a r a t e s e c t o r a l c r i s e s h i t th e e f f e c t e d r e g i o n s to t h e i r f u ll e x t e n t . (For e x a m p l e : t h e c o a l a n d steel i n d u s t r y , s h i p y a r d s , the t e x t i l e a n d c l o t h i n g i n d u s t r y , and, i n c r e a s i n g l y , t h e e l e c t r i c a l i n d u s t r y ) U n d e r the m a x i m s of th e p r e s e n t r e g i o n a l p o l i c y , d e v e l o p m e n t p r o b l e m s w i l l i n c r e a s e e v e n f u r t h e r : - We a r e f a c e d w i t h a d e c r e a s i n g p o p u l a t i o n a n d s h i f t s in th e a g e p y r a m i d r e s u l t i n g in m o u n t i n g d i f f i c u l t i e s fo r t h e i n f r a s t r u c t u r e s u p p l y (to p u t it c r u d e l y : e x c e s s k i n d e r g a r d e n s a n d s c h o o l s , n o t e n o u g h h o m e s fo r t h e e l d e r l y ) , fo r b a s i c t e r t i a r y s e r v i c e s , for t h e c o n c e p t of
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d e c e n t r a l c o n c e n t r a t i o n . A t the s a m e t i m e t h e r e is an i n c r e a s i n g n u m b e r of e m p l o y a b l e p e r s o n s a n d an i n c r e a s i n g d e m a n d for jobs. D u r i n g t h e l a s t c o u p l e o f y e a r s w e h a v e w i t n e s s e d c o n s i d e r a b l e c h a n g e s in the i n t e r n a t i o n a l d i v i s i o n o f l a b o u r , in r a w m a t e r i a l a n d e n e r g y p r i c e s a n d so on. As a r e s u l t th e r e l o c a t i o n p o t e n t i a l a n d th e r o o m fo r g r o w t h a n d fo r i n c r e a s e s in t h e n u m b e r of i n d u s t r i a l jo bs a r e s h r i n k i n g . W e a r e f a c e d w i t h t h e t a s k o f s h i f t i n g o u r industrial s t r u c t u r e t o w a r d s m o r e h i g h t e c h n o l o g y p r o d u c t i o n of g o o d s a n d s e r v i c e s , w h i c h in t u r n p r o d u c e s a c o n s i d e r a b l e t r e n d t o w a r d s i n - c r e a s i n g l o c a l c o n c e n t r a t i o n . T h e s h a r e of t h e t e r t i a r y s e c t o r is r i s i n g . B u t it h a s l o c a l i z a t i o n r e q u i r e m e n t s t h a t c a n n o t b e i n f l u e n c e d w i t h th e i n s t r u m e n t s c u r r e n t l y at o u r d i s p o s a l . T h e p r e s e n t s y s t e m d o e s n o t a l l o w s u b s i d i e s fo r t h e a t t r a c t i o n o f s e r v i c e i n d u s t r i e s . T h e i m p o r t a n c e of i n d i c a t o r s of i m m a t e r i a l w e l f a r e is r i s i n g , c o m b i n e d w i t h a g r o w i n g c o n s c i o u s n e s s
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16 for r e g i o n a l d i f f e r e n c e s ( e n v i r o n m e n t a l c o n c e r n s , i d e n t i t i e s ). a n d d i f f e r i n g p r e f e r e n c e s r e g i o n a l a n d l o c a l T h e r e s u l t s of t h e p r e c e d i n g p o l i c y a n d its s u c c e s s e s a r e fact, t h e y h a d t o b e e x p e c t e d t r u e t h a t t h i s p o l i c y h a s m o s d e - r e g i o n a l i z e d in its g o a l s t h e n its r e s u l t s c o u l d c a u s e d e v e l o p m e n t p e r s p e c t i v e s (in o f a r e g i o n ) o n l y b y c h a n c e . a n a l y s i s o f r e g i o n a l n o t s u r p r i s i n g ; in . B e c a u s e if it is t l y b e e n c a r r i e d o u t a n d m a j o r i n s t r u m e n t s , a c h a n g e in r e g i o n a l t h e e c o n o m i c s i t u a t i o n It c o u l d o n l y h a v e b e e n th e c a s e if t h e c o n s t e l l a t i o n o f c o n d i t i o n s w i t h i n a r e g i o n c o r r e s p o n d e d a c c i d e n t a l l y to the a s s u m p t i o n s o f t h i s p o l i c y . O t h e r w i s e (in t h e o t h e r r e g i o n s ? ) th e r e g i o n a l i m p l i c a t i o n s o f b o o m s w e r e s t r e n g t h e n e d , a n d t h o s e of r e c e s s i o n s w e r e w e a k e n e d . As h a s b e e n p r o v e d a g a i n a n d a g a i n t h i s p o l i c y d i d n o t i n d u c e i n v e s t m e n t s , b u t r e w a r d e d t h o s e w h i c h w o u l d h a v e b e e n u n d e r t a k e n a n y w a y ; it d i d n o t r e d u c e e c o n o m i c d i f f e r e n c e s , b u t e x p l o i t e d them; it d i d n o t d e v e l o p t h e i n f r a s t r u c t u r e in a c c o r d a n c e w i t h r e g i o n a l
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n e e d s , b u t m a d e a d d i t i o n s w h e r e v e r b o t t l e n e c k s a p p e a r e d . M o s t o f th e e f f e c t s a n d s u c c e s s e s t h a t d i d o c c u r w e r e t h e r e s u l t o f m a r k e t f o r c e s a n d the r e s p e c t i v e s t a g e o f t h e b u s i n e s s c y c l e (Again, a g o o d e x a m p l e is t h e S a a r l a n d : p o s i t i v e c h a n g e s w e r e no t d u e to t h e --
---instruments of regional development promotion, but among other things, to the available labour supply and wage rate advantages) In the same manner the effects of this policy will depend on these forces during a recession and will then prove to be a failure. A de-regionalized regional policy could not have hoped to realize changes in the spatial structure, even in the sense of its own restricted intentions.
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18 -III. Reorientation and Adjustment
Reality and future demands that can already be foreseen require a reorientation, a shift of emphasis.
This position is widely accepted and relates to varions elements of regional policy: a demand for improved, "highly sophisticated" methods for regional development prognoses, for forecasting results and effects of political measures in this field, and for the analysis of spatial structures (delimitation of regions that are eligible for funds); chances of goals and an improved set of instruments have been called for; it has even been suggested, that we are dealing here with problems, which can only be solved by replacing the predominant ex-post coordination of economic processes by deliberate ex-ante coordination (Euttler- Gerlach-Liepmann)
I think, form what has been said so far, it became obvious, that a "Regionalization of Regional Policy" has to be at the centre of its reorientation. This cannot be attained by isolated improvements in the methods of analysis and prognosis, despite the undeniable importance of this field of scientific research.
Regionalization of regional policy means above all that we have to get away from the vertical structures of communication and decision, and arrive at a more horizontal orientation. To fulfil this aim first of all the available set of instruments
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has to he reconsidered and reorganized. Even if the goals of regional policy should remain unchanged, the measures that are to be taken must be determined with the particular preferences of the individual region in mind. They cannot be allowed to be subjected to vertically orientated departmental priorities or to the smallest common denominator of Federal and State politics. Such improvements of the instruments of regional policy have repeatedly been called for and have been proposed in concrete forms, without any conclusions being drawn in practical politics. Even in the current crisis, the threshold of "cognitive dissonance
has not yet been crossed. This
presumption is supported by the lack of systematic controls of results. In my view definite consequences for the instrumental leve; should be drawn in three areas:
- consequences due to the change of the basic data:
assistance for innovation, research and development, risk financing; the whole tertiary sector should be eligble for funds; industrial parks as a more efficient measure. - less assistance for vertically integrated companies
(tendency towards spatial separation of functions), more assistance for investments that really have a chance to be the nucleus of a self-sustaining regional development process (small and medium - size businesses; small business promotion)
- increased availability and disposal of funds at the regional
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?o
-An <; ;ple : For the Saarland the funds of the jot«.t project
"r\, rovenient in the Regional Economic Structure" have been increased; but this money cannot all he spent sensibly, as th'n are not enough investment projects that would qualify for these funds. At the same time there is no money for more ir..; orient things life innovation assistance or support for small and medium - size firms. But due to the strict vertical orga- ization of the administrative system, there is no chance to transfer money from one department to another.
proposal is to install a procedure similar to the one practised by the bank for reconstruction loans (Kreditanstalt fur V’iecerauf-tauy when dealing with development projects of third world
c:m .tries. ("Bank for regional development promotion").
Alternatively the individual regions should have a certain
percentage of the funds at their own free disposal
,
combined witha special project.
- Also; less earmarked grants from the states to local administrations, e in centives for them to use their own initiative to warrant more regional differentiation. (Especially in areas with special legalization advantages (nuclear power plants, heavily polluting industries) regional acceptance should be strengthened, for example with the help of lower electricity prices.).
The development towards a Stohr and Tootlino demand closure
stronger regionalization of instruments - "explicit instruments for selective spatial
- is insufficient and inconsistent without varions levels
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a regionalization of the intentions, i, e. of the development coals. This would be the only way to check the in. creasing trend towards a levelling of preference patterns and to male use of differentiation as an important chance for regional development. At the same time this would open up the possibility to go beyond the criteria of "having", that is beyond material needs as targets for regional policy measures.
It is quite surprising that so much has been said and written about b e e n d i s c u s s e d qualitative growth, but the regional consequences have nevedwhen
growth-rates become very small. In short, what has been suggested
for the instrumental level does also apply to the coals: No top-down directions, but uninpeded and independent development ct the lower levels. Stohr and Tcidtling reach the conclusion that the preservation and encouragement of regionally different preference patterns depends to
a large extent on a regional dis-apgrecation of administrative and political institutions, and they demand: "kfnen in doubt, decide for the lower level."
This concept of regional development planning is a legitimate competition for the vertically orientated strategy of equalization. Here it was not my job to deduce typical regional goal structures. But if they are established, they will have to take into account that some regions don't have a growth potential in the traditional sense. As Kevin Alien put it: Do we as economists Know enough about the economics of decline?
Of course, the accusation is to be expected that this means flinging the door wide open for a positive legitimation of passive spatial
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iv-1 ioption (reorganization). Stiens for example charges: this is an extensive- spatial bleckwashirig under ecological pretences. In answer to this let me make 3 remarks:
(1) The more v.ddly the accepted strategy of urbanization,
based on the growth pole concept, is pursued, the more passive spatial melioration (reorganization) is tolerated - but concealed and therefore of no use for the development of positive assignments of functions to these regions.
On the other hand: V.'ith a suitable set of instruments that is able to accomodate individual regional goals, there will certainly be a tendency towards a consious division of labour between regions.
Under this concept the equalization objective is interpreted as a mandate for spatial differentiation according to regional preference
patterns, and not so much an intervention aiming at levelling
out ell differences.
(2) You cannot talk constantly about democratic- participation, local self government or a strengthening of the federative system, and at the same time reject a decision for regional differentiation.
V.'agoner for example believes that to a certain extent negative coordination is not too high a price to pay for the political and social advantages of federalism and local self government.
(3) It makes more sense to maintain in all types of regions minimum in 2 2
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services II.an to continue to pay regionally undifferentiated subsidies for industrial relocation. These suggestions do not roan a surrender in view of inevitable trends of development, nor do they provide a legitimation for planning arid politics to follow these trends.
I arc well aware that many problems of such a regionalized regional policy have not even been touched upon: Suitable frames of
reference for a region, numerous financing problems, the question of rewards for regions that accomodate compensation functions, re inly ecological priorities, or that allow investments with
special localization requirements. My preceding remarks have probably been overemphasized at times and deliberately they p-ovoke objections. I accepted this in c tier to illustrate my
basic concern: A regionalized regional policy with ex-post coordination instead of a centralized regional policy with cx-ante coordination.
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EUI No. No. No. No. N o . No. No. No. No. No. No. No. No. W O R K I N G P A P E R S : 1 : J a c q u e s P E L K M A N S 2 : J o s e p h H. H. W E I L E R 3 : A l d o R U S T I C H I N I 4 : M a u r o C A P P E L L E T T I / D a v i d G O L AY 5 : L e o n a r d G L E S K E 6 : M a n f r e d HINZ 7 : W i l h e l m B U R K L I N 8 : A t h a n a s i o s M O U L A K I S 9 : M a n f r e d E. S T R E I T 0 : K u m a r a s w a m y V E L U P I L L A I 11 : K u m a r a s w a m y V E L U P I L L A I 12 : K u m a r a s w a m y V E L U P I L L A I / G u g l i e l m o C H I O D I 13 : G u n t h e r T E U B N E R G u n t h e r T E U B N E R : T h e E u r o p e a n C o m m u n i t y an d the N e w l y I n d u s t r i a l i z e d C o u n t r i e s : S u p r a n a t i o n a l i s m R e v i s i t e d -R e t r o s p e c t i v e a n d P r o s p e c t i v e T h e E u r o p e a n C o m m u n i t i e s A f t e r T h i r t y Y e a r s : S e a s o n a l i t y in E u r o d o l l a r I n t e r e s t R a t e s J u d i c i a l R e v i e w , T r a n s n a t i o n a l : a n d F e d e r a l : Its I m p a c t on I n t e g r a t i o n : T h e E u r o p e a n M o n e t a r y Sy s t e m : P r e s e n t S i t u a t i o n and F u t u r e P r o s p e c t s : M a s s e n k u l t u n d T o d e s s y m b o l i k in d e r n a t i o n a l s o z i a l i s t i s c h e n A r c h i t e k t u r
: T h e 'Greens' a n d the 'New P o l i t i c s ' G o o d b y e to the T h r e e - P a r t y S y s t e m ? : U n i l a t e r a l i s m or th e S h a d o w of C o n f u s i o n : I n f o r m a t i o n P r o c e s s i n g in F u t u r e M a r k e t s - A n E s s a y on t h e A d e q u a c y of an A b s t r a c t i o n : W h e n W o r k e r s S a v e and In ve st : S o m e K a l d o r i a n D y n a m i c s : A N e o - C a m b r i d g e M o d e l of I n c o m e D i s t r i b u t i o n and U n e m p l o y m e n t : O n L i n d a h l ' s T h e o r y of D i s t r i b u t i o n : R e f l e x i v e R a t i o n a l i t a t d e s R e c h t s : S u b s t a n t i v e an d R e f l e x i v e E l e m e n t s in M o d e r n L a w N o . 14 :
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P U B L I C A T I O N S O F T H E E U R O P E A N U N I V E R S I T Y I N S T I T U T E 1982 E U I W O R K I N G P A P E R S : No, 15: J e n s A L B E R : S o m e C a u s e s and C o n s e q u e n c e s of S o c i a l S e c u r i t y E x p e n d i t u r e D e v e l o p m e n t in W e s t e r n Eu rope, 1949 - 1977 No. 16: Ian B U D G E : D e m o c r a t i c P a r t y G o v e r n m e n t : F o r m a t i o n and F u n c t i o n i n g in T w e n t y - o n e C o u n t r i e s No. 17: H a n s D A A L D E R : P a r t i e s an d P o l i t i c a l M o b i l i z a t i o n : A n I n i t i a l H a p p e n i n g No. 18: G i u s e p p e DI P A L M A : P a r t y G o v e r n m e n t and D e m o c r a t i c R e p r o d u c i b i l i t y : T h e D i l e m m a of N e w D e m o c r a c i e s No. 19: R i c h a r d S, KA T Z : P a r t y G o v e r n m e n t : A R a t i o n a l i s t i c C o n c e p t i o n No. 20: J ü r g S T E I N E R : D e c i s i o n P r o c e s s an d P o l i c y O u t c o m e : A n A t t e m p t to C o n c e p t u a l i z e th e P r o b l e m a t t h e C r o s s - N a t i o n a l L e v e l No. 21 : J e n s A L B E R : T h e E m e r g e n c e of W e l f a r e C l a s s e s in W e s t G e r m a n y : T h e o r e t i c a l P e r s p e c t i v e s a n d E m p i r i c a l E v i d e n c e No. 22: D o n P A T I N K I N : P a u l A. S a m u e l s o n an d M o n e t a r y T h e o r y No. 23: M a r c e l l o D E C E C C O : I n f l a t i o n an d S t r u c t u r a l C h a n g e in t h e E u r o - D o l l a r M a r k e t No. 24: M a r c e l l o D E C E C C O : T h e Vi ci o u s / ' V i r t u o u s C i r c l e D e b a t e in th e * 20s a n d the ’ 70s No. 25: M a n f r e d E. S T R E I T : M o d e l l i n g , M a n a g i n g , an d M o n i t o r i n g F u t u r e s T r a d i n g : F r o n t i e r s of A n a l y t i c a l I n q u i r y No. 26: D o m e n i c o M a r i o N U T I : E c o n o m i c C r i s i s in E a s t e r n
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EU I No. No . No. No. N o . No. No. No. N o . W O R K I N G P A P E R S : 28: F r a n c i s C. C A S T L E S / P e t e r M A I R 29: K a r l H O H M A N N 30: M a x K A A S E 31 : K l a u s T O E P F E R 32: R o n a l d I N G L E H A R T 33: M o s h e L I S S A K 34: J e a n - P a u l F I T O U S S I 35: R i c h a r d M. G O O D W I N / K u m a r a s w a m y V E L U P I L L A I 36: M a r i a M A G U I R E L e f t - R i g h t P o l i t i c a l : S c a l e s : S o m e E x p e r t J u d g e m e n t : T h e A b i l i t y of G e r m a n P o l i t i c a l P a r t i e s to R e s o l v e t h e G i v e n P r o b l e m s : the S i t u a t i o n in 1982 : T h e C o n c e p t of P o l i t i c a l C u l t u r e : Its M e a n i n g for C o m p a r a t i v e P o l i t i c a l R e s e a r c h : P o s s i b i l i t i e s a n d L i m i t a t i o n s of a R e g i o n a l E c o n o m i c D e v e l o p m e n t P o l i c y in the F e d e r a l R e p u b l i c of G e r m a n y : T h e C h a n g i n g S t r u c t u r e of P o l i t i c a l C l e a v a g e s A m o n g W e s t E u r o p e a n E l i t e s and P u b l i c s : B o u n d a r i e s an d I n s t i t u t i o n a l L i n k a g e s B e t w e e n El it es : S o m e I l l u s t r a t i o n s f r o m C i v i l - M i l i t a r y E l i t e s in I s r a e l : M o d e r n M a c r o e c o n o m i c T h e o r y A n O v e r v i e w E c o n o m i c S y s t e m s and : t h e i r R e g u l a t i o n : T h e G r o w t h of I n c o m e M a i n t e n a n c e E x p e n d i t u r e in I r e l a n d , 1 9 5 1 - 1 9 7 9
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