INTERACTION BETWEEN REGIONAL AND INDUSTRIAL-POLICIES - EVIDENCE FROM 4 COUNTRIES

After World War II, policies to promote industrialization-both to subs titute for manufactured imports and to encourage exports based on unsk illed labor-often successfully complemented regional polices to better distribute economic activity. The recent shift toward high technology , however, has strongly favored major urban areas, undermining efforts at regional decentralization and stabilization. Furthermore, countrie s are increasingly abandoning top-down regional policy and passing on responsibility for development to provincial and local levels, setting off vigorous interregional competition for economic activity and ofte n favoring a few, relatively well-endowed regions. Evidence from Brazi l, Japan, the Republic of Korea, and the United States shows how the r ecent emphasis on high-tech exports and decentralized regional policy may reinforce polarization and slow progress toward eliminating region al growth and income differentials.