The regional development policies in highly developed countries with a market based economy, including the policies on development of remote regions aimed at ensuring the sustainable socio-economic development and a political stability through the reduction and, furthermore, elimination of differences in regions in terms of income of population, unemployment, housing conditions, access to education, health services, culture and information, their quality, possibilities to live in an ecologically clean environment and etc. .
These policies are to achieve many goals and objectives and vary depending on particular country and region’s conditions. For instance, the objective of the regional development policy in Denmark is to increase the contribution of the regions in national development through advancing the level of development of different regions of the country, whereas in Great Britain the regional development policy aims at ensuring each region to be able to develop independently, increase the total revenues of each region, to reduce the rate of unemployment and reduce the population migration that potentially can negatively affect the development.
A number of quantitative measures and criteria have been used to define the scope and the main directions of the regional development policies. These indicators have been divided into six main groups: living standards (real income per capita, unemployment rate, etc.); structure of industry, production and sales of goods, general level of socio-economic development; human development indicators, environmental conditions, natural resources and geographical location . However, countries select one or several of above criteria upon consideration of their own specifics. For example, European Union uses unemployment rate, GDP per capita and level of income of population for defining the scope and main directions of regional development policies to be implemented in its member countries. It implements a special regional development policy in those regions where the unemployment rate exceeds the country average by 10%. For defining the comprehensive policy regarding the development of the particular regions, the Scandinavian countries and Switzerland pay more attention on the environmental conditions and geographical location, France focuses on the level of urbanization, Portugal focuses on the possibility to access this particular region, and the Great Britain attaches an importance to the density of population and remoteness of this particular region from center.
Given the fact that in developed countries the differences in level of living standards and rural-urban divide have been reduced further, the regional development policies implemented in those countries become more specific. For instance, since 1980s these countries pay more attention to tax decrease, provision of advisory services, training support and promotion of free competition in connection with the economic liberalization, restructuring and privatization.
The democratic countries with a market based economy accentuate on main three directions, such as provision of financial support, improvement of business environment and improvement of planning, management structure and mechanisms while implementing the regional development policies and promoting development of underdeveloped regions. Some would call them as tools and instruments for implementation of regional development policy [Join Bachtler., (1998)].
Financial support is extended through public investment, extension of concessional loans, granting tax discounts or tax holidays, discounts in depreciation of fixed assets, rewards for employment generation and provision of transportation preferences
A particular country makes a decision on types of financial support to extend depending on country’s specifics and needs. For instance, in Austria the financial support is mostly extended in a form of investment and reward for employment generation, Belgium provides investment, concessional loans and rewards for employment generation, France grants tax discounts or tax holidays and provides investment, in Germany support is provided as investment and concessional loans, in Greece it is in a form of investment, concessional loans, tax discounts or tax holidays and recovery of depreciation cost of fixed assets, in Sweden the financial support is provided as investment, reward for employment generation and preferencial transportation, and in Great Britain it is investment, provision of concessional loans, tax discounts or tax holidays and reward for employment generation. From the recent while providing the financial support an emphasis is given to improvement of the competitiveness through economic restructuring and renewal of the technology.
From recent while providing support a more emphasis is given to improvement of the competitiveness of the region in domestic and international markets through economic restructuring and advancing the technology.
Support in improving the business environment becomes an important tool for implementation of regional development policies these days. It is focused first of all on improvement and upgrading of social (health, education, culture and science, etc) and industrial (energy, roads, telecommunication and etc.) infrastructure, production and services management, financial and banking system, various stock exchanges and information network. It becomes a common practice to organize various training for population of underdeveloped regions on acquainting knowledge and skills to conduct businesses.
As the core responsibilities and activities of the government of any country naturally directed towards the improvement of the business environment this opportunity is being widely applied and used in regional development policies in recent years.
Improvement of planning and management structure and mechanisms are increasingly used as an important tool in developing countries for the regional development. Planning of the regional development plays a significant role in coordinating the policies on economic and social sectors in national and regional interests.
The Western European countries attach a high importance to the planning of regional development. It allows the policy makers on regional development to influence the appropriate allocation of financial and other resources at the national level. Moreover, the nationwide long- and short term regional development programs have been developed and implemented resolving development related issues.
The improvement of the regional development management system is also in a focus. Here, an agency with a capability to combine the national and sectoral interests at the regional level plays an important role.
The Regional development agencies, that carry out their activities in economic and macro regions as well as in local areas can be mentioned as an example. In addition, there are Regional development funds in many contries along with national ministries in charge of developing and monitoring the implementation of regional development policies.
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