ABSTRACT
The economic relations between regions are different from those between countries, and still more different from those postulated in classical international trade theory. There are apt to be widespread senses of grievance in a region whenever central government economic policy is thought to be such as to discriminate against it. The three circumstances mentioned – relatively low incomes, relatively high unemployment and net outward migration – are, of course, often found together. Inequality of personal incomes between regions gives prima faciecause for concern. In most economies income differences between individuals within any region are very large in comparison with differences between regional average levels. The ground for national concern about inter-regional income differences arises from their significance as symptoms of a mislocation of productive resources. Inter-regionally unequal earnings and full employment of resources is better than an imposed equality of earnings that results in any substantial degree of unemployment. Unemployment-induced poverty will be more unevenly spread.
