The causes and consequences of spatial disparities

Reflecting the agenda covered by CEPR’s Research and Policy Network (RPN) on Spatial Disparities and Policy, this debate looks for answers to important questions: What drives spatial disparities in economic performance? Does the evidence suggest that gaps have widened or narrowed, and does the picture differ across countries? What should policy do about spatial disparities, and should policy focus on place, or just on people? What do we know about who benefits from place-based policies, and about what an effective set of policies looks like?

Debate Moderators

Gilles Duranton

Professor and Dean's chair in real estate The Wharton School of the University of Pennsylvania

Fellow, International Trade and Regional Economics / RPN Steering Committee, Spatial Disparities and Policy

Henry Overman

Professor of Economic Geography London School Of Economics And Political Science

In many countries, Covid-19 exposed and amplified disparities in economic and health outcomes across regions, cities, and neighbourhoods. Together with an ongoing backlash against the uneven effects of globalisation and technological change, this has pushed concerns about ‘left-behind places’ even further up the policy agenda. In this debate we ask for contributions on what causes disparities, what policy should do about them and, whether spatial disparities should remain a policy priority in the face of an energy crisis and increases in the cost of living.

Economics has lots to tell us about these questions. Differences in earnings across places are largely driven by the location decisions of the highly-skilled and the firms that employ them: a self-reinforcing process leading some places to thrive while others fail and generating spatial disparities that are stubbornly persistent. But many factors underlie these decisions. Gathering evidence from a wide range of countries on the importance of these different factors and on the consequences of spatial disparities is crucial to understanding what might be done to tackle them. As is evidence on whether these gaps have narrowed or widened and what has caused these changes over time.

Many countries are grappling with the problems of spatial inequality, leading to wide-ranging policy interventions and a wealth of evidence on their effects. What do we know about what works, when and why? And on who benefits from these policies?

Contributions on what is happening to spatial disparities, the causes and consequences of these disparities and evidence on the types of government investment that deliver long-run gains to places or to the people – rich or poor - that live in these places are welcomed. Please submit your contributions to the moderators by email via Helen Simpson.

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