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- W3212673944 abstract "This paper analyzes within a spatial endogenous growth setting the impact of public policy coordination on agglomeration. Governments in each of the two symmetric regions provide a local public input that becomes globally effective due to integration. Micro-foundation of governmental behavior is based on three different coordination schemes: autarky, full or partial coordination. Scale effects act as agglomeration force and in addition to private capital agglomeration increase the concentration of the public input. Integration promotes dispersion forces with respect to the distribution of physical capital which are based on decreasing private returns. However, within the governments’ decision on the concentration of the public input, increasing integration reinforces agglomeration because it promotes the interregional productive use of the public input. Taking feedback effects between the private and the public sector into account leads to mutual reinforcement, hence agglomeration forces almost always dominate and the spreading equilibrium becomes unstable. If convergence is a separate (additional) political objective, it needs sustained additional political effort. • Concentration of the public input is shown to depend on the coordination scheme. • Scale effects increase the concentration of public input and of capital agglomeration. • Integration promotes dispersion forces with respect to physical capital agglomeration. • Integration reinforces agglomeration due to increased concentration of public input. • Convergence almost cannot occur with jointly optimizing public and private agents." @default.
- W3212673944 created "2021-11-22" @default.
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- W3212673944 date "2022-06-01" @default.
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- W3212673944 title "Institutional design and spatial (in)equality — The Janus face of economic integration" @default.
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- W3212673944 doi "https://doi.org/10.1016/j.ejpoleco.2021.102137" @default.
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