EVALUATING THE EFFECTS OF BRITISH REGIONAL ECONOMIC POLICY -- A REPLY.

This article presents a reply from Barry Moore and John Rhodes to comment from R. R. MacKay on their evaluation on the effects of regional economic policy (REP) on manufacturing employment in Great Britain from 1963 to 1971. Moore and Rhodes are pleased to be in agreement with MacKay when he says that the observed total regional policy effect between 1963 and 1971 was almost 150,000 manufacturing jobs and that this observed employment gain can be divided equally between the two periods 1967 to 1971 and 1963 to 1967. The authors also agree that the identification of an REP effect requires that account must be taken of the pressure of demand and the time lags associated with the effects of non-REP regional policy instruments. MacKay seeks to avoid the problem of assessing time lags, and to allow for changing activity levels, by adopting an approach altogether different from the authors based on an analysis of the Development Area share of employment expected from industrial development certificate approvals and the national male unemployment rate. The results of this continued work seem to be consistent with the range for the REP effect given in the article, even when the analysis is extended to 1971. Further confirmation that the REP has had a significant effect on employment in Development Areas has been provided by evidence obtained from our industrial enquiry covering 350 firms.