Are Place-Based Policies a Boon for Everyone?

Abstract: Despite the widespread implementation of locally targeted "place-based" interventions, their optimal design and effectiveness in addressing regional economic disparities remains open. Proponents argue that they can leverage powerful agglomeration economies and benefit underserved areas. Critics highlight potential pitfalls like inefficiency, gentrification and negative spillovers. Evaluating their effectiveness is challenging due to policy heterogeneity and data limitations, as existing evidence presents a mixed picture: Some programs seem to contribute to job creation and poverty reduction, while others exhibit negligible or even detrimental effects. Ultimately, a balanced approach is recommended. Place-based policies should be considered alongside other interventions within a comprehensive strategy addressing regional disparities.

Keywords: Economic Development; Place-Based Policies; Employment stabilization policies; Incentives;

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Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2024-02

Volume: 24

Issue: 7