Regional disparities in economic development: lessons learned from the United States of America

In addition to tax cuts another approach used has involved workforce training or education training programs. Here the focus would be to provide education or skills training to workers. There is a significant body of literature that correlates worker productivity and wages to education. Business location studies, as noted above, are influenced by workforce skills. The conclusion here would be that providing more education and job training skills in economically undeveloped area would perhaps then induce more businesses to invest in an area. Education thus would offset regional economic imbalances.

There are at least four reasons why workforce investments have not succeeded in offsetting regional disparities. First, the primary focus of workforce development has had less of a geographic and more of an individual strategy. By that, while educational programs may be offered in a specific locality, the programs are directed to individuals who often take that training and emigrate to a different location or region. Workforce training and education are mobile and the benefits individual and they travel with individuals.

Second, the research suggests that many of the workforce training programs have produced mixed results. Basic primary and secondary education programs do help in improving worker skills, but studies of retraining programs raise questions regarding their efficacy. In some cases, they improve wages for some populations but their overall ability to transform the economic advantages of a region are in dispute.

Third, Holzer has indicated that the amount of money available for workforce training has gone down dramatically since the 1960s and 1970s [19]. There is simply too little invested in such programs now to make a difference. This decrease in public investment reinforces the point made above that addressing regional disparities is not a major policy issue in the United States.

Given the little investment made in workforce development it is not clear that it is sufficient to offset other factors that may cause regional disparities. For example, some regionals still enjoy advantages in natural or artificial amenities, or some regions or places may still be too remote. These factors may still make it too costly or not profitable enough to invest in a specific region. Thus, it may be however much is invested in worker training or education it may not benefit the region because workers move or because this investment cannot offset other variables that produce regional differences.

A third traditional strategy to addressing uneven economic development is through infrastructure investments. Such investments would be undertaken to upgrade roads or bridges in some areas, perhaps also investing in programs to address some of the problems related to remoteness. While the American Civil Engineering society has noted the deficiencies in infrastructure investment in the United States [2], the focus of their concern has been on maintenance of existing dilapidated roads and bridges and less if at all on investments in remote communities to offset economic disadvantages. Moreover, while money will be invested in infrastructure projects to link expanding suburban communities to the rest of a region, or in urban areas slated for redevelopment, there is no overall national, state, or local investment strategy that uses infrastructure as an explicit tool to offset uneven development.

At best, some states, such as Minnesota, have sought to increase investments in Internet or broadband access to offset a digital divide across parts of the United States, but again there is no consensus or strategic policy to do this as a specific strategy to address uneven economic development.

Conclusions

economic america regional geographic

The United States is like many if not every country in the world in that it experiences uneven economic development. There are many reasons for this spatial pattern. Classical theory would describe regions as varying in natural amenities, infrastructure, and remoteness, but other theories can also point to factors such as education and historical forces as contributing if not primary causes of uneven development. While the US has sought to address some aspects of uneven development, it either has not done so in a place-based (as opposed to an individual based strategy), or with a consistent and intentional strategy. Instead, the problem of uneven development has either be explicitly ignored by US policy makers, or left as a problem for the market place to solve.

If any lessons can be taken from the US and applied elsewhere to countries such as the Russian Federation, there are three. The first that uneven development may be a problem which is impossible to eliminate. Some regions may be so remote or lacking in amenities that they will always lag in terms of development compared to other regions. Income or business subsidies may offset the worst of the problems, but they may not be sufficient to actually addressing what appears to be a structural problem. The second is that there does not appear to be any easy or simple solution to the problem of uneven development. There is no one strategy to addressing the problem, with perhaps a multi-pronged approach necessary to address the many factors that have caused a region to lag economically. Finally, if a country or government does wish to address uneven development then it needs to develop a strategy and investment policy, simply assuming that the free market will fix the problem is not a sufficient strategy.

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