Regional Economic Development Objectives And Subsidization of Local Industry.

This article focuses on the regional economic development objectives and subsidization of local industry around the world. While the concern of national policymakers with the problem of lagging regions is of recent origin in most countries, the problem itself is an old one. It is therefore not surprising that many state and local governments as well as private-interest groups in the afflicted regions have traditionally attempted to attract industry by offering financial assistance of one form or another. Exemption from local property taxes, provision of site and building at nominal long-term rentals, and low-interest loans are just a few examples of the forms which local subsidization of industry may take. Not only has local subsidization been widely practiced for a long time, it has also been widely condemned. Economists have generally rejected it as an unwarranted interference with the efficiency of resource allocation. Not only has local subsidization been widely practiced for a long time, it has also been widely condemned. Eonomists have generally rejected it as an unwarranted interference with the efficiency of resource allocation.