DP12473 The revenge of the places that don't matter (and what to do about it)

Author(s): Andrés Rodríguez-Pose
Publication Date: November 2017
Keyword(s): cities, economic development, place-sensitive policies, populism, regions, territorial inequality
JEL(s): F63, O18, R11, R12
Programme Areas: International Trade and Regional Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=12473

Persistent poverty, economic decay, and lack of opportunities are at the root of considerable discontent in declining and lagging-behind areas the world over. Poor development prospects and an increasing belief that these places have 'no future' – as economic dynamism has been posited to be increasingly dependent on agglomeration economies – have led many of these so-called 'places that don't matter' to revolt against the status quo. The revolt has come via an unexpected source: the ballot-box in a wave of political populism with strong territorial, rather than social foundations. I will argue that the populist wave is challenging the sources of existing well-being in both the less-dynamic and the more prosperous areas and that better, rather than more, place-sensitive territorial development policies are needed in order to find a solution to the problem. Place-sensitive development policies need, however, to stay clear of the welfare, income-support, and big investment projects of past development strategies if they are to be successful and focus on tapping into untapped potential and on providing opportunities to those people living in the places that 'don't matter'.