CHAPTER 6
Policy Package 3. Underpin Private Sector Interest in Nonleading Areas Policy Package 3 (adapted from table 2.3) Package 3. Underpin private sector interest in nonleading areas
“Incentives” (“spatially focused policies”)
Sometimes nonleading areas do move ahead to leading-area status (e.g., Tunisia’s centereast, Morocco’s Tanger-Tétouan)
Areas where the private sector sees unrealized growth potential
Beware of incentives and inducements to locate businesses in lagging areas
Our first policy package was aimed at leveling the playing field for development. It was applicable to all lagging areas. The second policy package was about helping lagging areas to benefit from spillover connectivity, and only places close enough to growth poles stood to gain. Now we will look at the third policy package, where the aim is to realize a lagging area’s economic potential. Regional economic development strategies have a poor track record and should not be entered into lightly. If the lagging-area problem is likely to resolve itself in an acceptable time frame through out-migration, a targeted regional economic development approach will be redundant. If the lagging area in question lacks the human and natural resource base to attract private investment, a targeted regional economic development approach will be unsuccessful. Investing in people and leveling the playing field for development (Policy Package 1) should, therefore, always be the foundation of a lagging-area strategy. However, sometimes it does make sense to layer a targeted regional development approach on top of Policy Package 1. It makes sense where out-migration is not going to solve the lagging-area problem and where there is a genuine prospect of competitive private cluster development. 247