Economic development can be either regionalized or dispersed throughout a nation. Advantages associated with regional development are discussed by Simon Flynn and how this impacts growth, welfare, inflation, income distribution, and regional economic inequality (2014). Most nations are focused on regional development and have gained some success in finding growth and stability.
Nations that seek to diversify their development throughout the country may have some difficulty finding enough capital to raise the nation as a whole. However, by focusing on regional areas it is easier to funnel resources for greater economic enhancement. Modern regional development seeks to develop the core as well as the peripheral area around that core for maximum appeal.
Each nation has their individual strategies for regional growth and development. Some include equitable income distribution, GNP increase, GDP increases, productivity development, and international competition (Kim & Kim, 2002). These concepts are not mutually exclusive. For example, GNP and GDP are associated with income opportunities and competitive position.
Regional development can create greater international economic integration. These follow four patterns or steps such as Free Trade Agreements, Customs Unions, Common Markets, and Economic Unions (Holden, 2003). Integration of regional interest is not permanent and can change forward or backward depending on market needs. When successful, regional trade agreements can improve upon the flow of goods, services, and information throughout an area.
Economists are more accepting of regional integration because it is these sub-national levels that appear to create the greatest economic momentum. The actors within the market can use their abilities to adjust their local institutions and resources to market needs easier than what can be done an on a national scale. When regional economic integration works well it leads to growth and stability for the whole nation.
Regional economies divert resources to creating stronger infrastructure, job growth, and industry development. Old institutions may need to change when they are outdated or no longer foster growth. In the regional development process both private and public stakeholders should have similar goals in development. They can create greater ability to utilize resources for the best overall position within the global marketplace.
Flynn, S. (2014). Economics of regional development. Research Starters Business.
Kim, E., & Kim, K. (2002). Impacts of regional development strategies on growth and equity of Korea: A multiregional CGE model. Annals of Regional Science, 36(1), 165.
Holden, M. (2003). Stages of economic integration: From autarky to economic union. Government of Canada Depository Services Program. Retrieved March 24th, 2014 from http://publications.gc.ca/collections/Collection-R/LoPBdP/inbrief/prb0249-e.htm