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Cover von: Regional Cohesion Maintenance, Spillovers, and Imperfect Labor Mobility
Emilson C. D. Silva, Naoto Aoyama

Regional Cohesion Maintenance, Spillovers, and Imperfect Labor Mobility

Rubrik: Articles
Jahrgang 70 (2014) / Heft 1, S. 116-127 (12)
Publiziert 09.07.2018
DOI 10.1628/001522114X679174
Veröffentlicht auf Englisch.
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Beschreibung
We follow Wellisch (1994) in examining the efficiency of regional policymaking in a model with interregional spillovers and in which individuals are attached to regions for cultural reasons. In addition, we assume that regions desire to maintain their social cohesion. We postulate that regional cohesion maintenance can be adequately formalized in terms of Rawlsian regional welfare functions. We show that in the absence of material (e.g., initial incomes, worker abilities) differences across individuals and with identical consumption tastes, regional governments behave efficiently, internalizing interregional spillovers, provided they anticipate perfect incentive equivalence promoted by labor mobility.