Is Population Dispersion Policy Necessary?

D. Pines

Working Papers from Tel Aviv

Abstract: It is common to explain the market failure in efficiently distributing the population among urban areas by externalities associated with unpriced transportation congestion and external scale economies in the supply of private and public goods. Consequently, in prescribing the appropriate corrective policy, Pigovian taxes and subsidies are considered to be the first-best while measures to directly affect the population distribution among cities are considered to be only second-best policy. This paper shows that the above diagnosis may be misleading and, consequently, the implied prescription may be either ineffective or even harmful. In such cases a population dispersion policy is necessary for achieving efficient resource allocation.

Keywords: POPULATION; PUBLIC GOODS; REGIONAL DEVELOPMENT (search for similar items in EconPapers)
JEL-codes: H23 H41 R12 R58 (search for similar items in EconPapers)
Pages: 17 pages
Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:fth:teavfo:18-99

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