Reconciling Practice with Theory in the Micro-Evaluation of Regional Policy

Colin Wren

International Review of Applied Economics, 2007, vol. 21, issue 3, 321-337

Abstract: This paper seeks to reconcile evaluative practice with theory, focusing on the micro-evaluation of UK regional industrial policy. Two issues are examined: the measurement of the pecuniary external effects, including displacement and linkages; and the concept of 'additionality', which is central to the industrial survey approach. It argues that current evaluative practice is at odds with theory, but while cost-benefit analysis simplifies the measurement of the external effects, it has other features that may limit its appeal. On 'additionality', the paper traces its evolution, and shows that it is a multi-dimensional concept. It argues that in practice the use of 'additionality' is deficient as it ignores the firm's private funds and all forms of deadweight transfer.

Keywords: Evaluation; regional policy; external effects; cost-benefit analysis (CBA); 'additionality' (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (6)

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DOI: 10.1080/02692170701390312

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