Evaluation of the geographical scope of the Norwegian regional policy

Jan Mønnesland (), Jon Inge Lian () and Dag Juvkam ()

ERSA conference papers from European Regional Science Association

Abstract: The Norwegian regional policy is a national policy designed in order to support industrial activity in the non-central areas. The underlying logic of the policy is that the non-central areas have a disadvantage compared to the central areas due to the low market density in the home region and longer distances to the central markets. By such a focus, central regions facing structural or business cycle problems are not addressed by this type of regional policy. On the other hand, the peripheral status is assumed to generate observable problems of production and income development. The evaluation of the geographical scope of the regional policy target area will then have to look at geographical indicators measuring periphery disadvantages, as well as direct problem indicators connected to employment, income and population development. The paper develops a set of indicators for designating a target area, and makes a weighting of the indicators according to the aim of the regional policy. The paper generates maps showing the new “optimal” target area, given the new indicators and the limits set by the EEA rules on regional policy motivated state aid. In addition to the ordinary regional support area, Norway also operates regional support through the differentiated labour poll tax. The zone map for this instrument deviates somewhat from the ordinary regional policy target area. In the EEA context, the differentiated labour poll tax is designated according to the scheme allowing for transport cost support in low density areas. To be accepted, an area should then both be eligible for ordinary regional support, and in addition have transport costs which are higher than the support received through the differentiated labour poll tax. The paper presents methods used to define the relevant cost parameters, and how these methods may be applied on the municipal level. Based on these estimates, the paper generates maps which would give the best regional policy effect given the EEA constraints. The constructed maps is then related to the designated area of today, to draw some conclusions about the quality of the designated target areas in the operating schemes.

Date: 2003-08
New Economics Papers: this item is included in nep-geo
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