The displacement and multiplier effects of regional selective assistance: A computable general equilibrium analysis

This paper uses a hybrid approach to simulate the effects of Regional Selec tive Assistance (RSA) for Scotland. This combines 'industrial survey' estim ation of the direct impacts and computable general equilibrium (CGE) modell ing of the system-wide effects. The results are compared to those derived u sing the method currently adopted in official evaluation studies of RSA and other regional regeneration policy instruments. The CGE approach captures capacity, labour market displacement and migration effects ignored in exist ing studies. Simulation identifies the conditions under which these effects are likely to be quantitatively important.