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The article reviews perceptions of regional problems in Australia and opposing views of regional policy. It argues that regional conditions vary widely and that much of non-metropolitan Australia is not in decline, casting doubt on the existence of a divide and on arguments that the divide can, and should, be addressed by government. The article also argues that views on policy reflect perceptions of the nature and causes of regional problems, and of the capacity and desirability of government being involved in shaping regional outcomes. Current regional policy approaches, characterized by ‘pragmatic incrementalism’, are outlined and explained. [ABSTRACT FROM AUTHOR]

Over the past 7 years Australia has been undergoing substantial economic reform under a collaborative Federal and State government program known as national competition policy. These reforms have increased the nation's productivity and international competitiveness, and are generally held responsible for Australia's increased growth rate in gross domestic product (GDP) per capita over the past decade. However, the reforms have been carried out against a background of increased interregional disparities, to which the reform program may have partly contributed. In this study we examine a number of Australian studies that have used computable general equilibrium modeling to uncover the regional economic consequences of national competition policy. [ABSTRACT FROM AUTHOR]