A Study on Balanced Regional Development : Its Policy Implications in Knowledge-based Economy

Abstract

This paper deals with the issue of economic development among regional economies in the knowledge-based economy. There would be two types of growth paths among them, balanced or unbalanced one. The former means that all or most regional economies grow evenly while the latter does that they grow unevenly. The first question is which growth path among regional economies is efficient for the national competitiveness. That is, we examine the possible relationship between the balanced regional development and national competitiveness. While most (quickly) developing countries experience the problem of unbalanced regional development, there are, however, no rigorous discussions about what balanced regional development means, its benefit and costs, basically why it is necessary and how it can be achieved. Without answering them, the policy effort of balancing regional economic development may cause time and resource-consuming conflicts among selfish regional economies. This paper shows theoretically that balanced regional economic development improves the efficiency of national economy, the degree of which may be measured by the distribution of the marginal productivity of capital among regional economies. That is, the balanced regional growth among regional economies is a necessary condition to maximize national competitiveness.And the fact that the current economy is knowledge-based has an important policy implication on this issue. It is shown that in the knowledge-based economy, balanced regional development of regional economies may not be attained in the market without government intervention. Finally, several policy suggestions are provided to achieve the balanced regional development among regional economies and to maximize the national competitiveness.