From the 1940s to the 1970s, British governments steered manufacturing businesses to peripheral regions designated as needing more employment. This approach was delivered through a Regional Policy that deployed industrial location controls and financial incentives. Effectiveness varied over time but was dramatic in the mid-1940s, when it boosted the regional stock of secondary manufacturing to the extent that its legacy remains visible today. The literature describes how this Regional Policy was a peacetime policy, albeit one formulated during the war. This article, however, proposes that the most successful phase of Regional Policy was an extension of wartime policies governing regional manufacturing businesses producing munitions. It uses a case study of Wales to make two arguments. One is that the Regional Policy associated with the postwar period began to be implemented before the war had ended. The other is that the Board of Trade pursued the policy through repurposed wartime governance mechanisms within an economy that remained subject to onerous state controls. The case outlines a short but consequential burst of assertive state involvement that shaped business activity throughout much of regional Britain, echoing Philip Scranton and Patrick Fridenson’s arguments concerning “the state always being in” given its role in shaping markets, business behavior, and regulations.

Many policies target the economic and social consequences of regional inequality. This study experimentally investigates factors explaining the public degree of consent to financial transfers to disadvantaged regions. The main hypothesis of this study is that most people use the deservingness-heuristic not only to judge individuals but also to judge regions. We argue that people advocate interregional transfers based on perceived deservingness determined by recipient region’s need, lack of responsibility for the need, likelihood of reciprocity, and by a shared identity. To support this hypothesis, we conducted a factorial survey in Germany asking respondents to rate transfers to needy regions under different hypothetical conditions. We demonstrate, as predicted by the deservingness hypothesis, that consent to transfers to other regions is positively influenced by the extent of need and, in particular, past effort of the recipient region as well as by a shared identity. The results suggest that regional policies are particularly accepted when they target needs caused by factors beyond the control of recipient regions.

Within the framework of the soft budget constraint problem, this article investigates the impact of a legislative reform that increased regional tax autonomy on the propensity of Spanish regional governments to incur a deficit. For this purpose, a dynamic panel data model is estimated, using data for the period 1984–2019. The sample shows a breakpoint in 2002, when the reform of the regional financing system came into force, providing Spanish regions with greater tax autonomy, more fiscal competency, and lower intergovernmental transfers. Results show that the budget constraint has hardened, as regions have fewer incentives to accumulate budgetary deficits with the expectation of future compensations from the central government. A comprehensive review of the evolution of other factors previously identified as determinants of soft budget constraints, and the analysis of two regions not included in this financing system, suggest no other possible explanation for these results.

The “historical alternatives” approach calls for research into the role of national institutions and public policies in the resilience or decline of industrial districts. Policies in support of small and medium-sized enterprises (SMEs) were launched in various Western economies in the second half of the twentieth century. This article focuses on the paradigmatic Italian case and investigates the importance of government subsidies for SMEs on firms located in a southern and a northeastern district, between 1971 and 1991. This discussion deepens our understanding of the role of national policies in the reemergence of industrial districts in the decades of the Second Industrial Divide. It also indicates the importance of firms’ utilization of subsidies and their ecosystem as complementary to the policy's effectiveness.