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Place-based economic policies: international lessons for South Africa

22 May 2023
Publication Type: Discussion Document
JEL Code: F63, I32, O18, R58
Discussion Document 11

Place-based policies are designed to support targeted sub-sectors in an economy, either bounded by a specific geographic area, or belonging to a specific industry requiring incentives to redirect private-sector-led economic growth. This research surveys international literature on place-based policies in urban settings and discusses evidence on whether these policies generate net growth or alter distributional outcomes, especially in cities in developing countries. 

  • Why do place-based policies matter? And how do they fit in to the broader development context? 
  • What are the arguments for and against place-based policies relative to space-blind policies? Should they focus on being logistics or innovation-driven hubs?
  • What about transport corridors like China’s Belt and Road Initiative in response to the infrastructure backlog in Africa? What are the bottlenecks in lagging regions? Are clusters under place-based policies more resilient? 
  • What do empirical studies suggest about the effectiveness of place-based policies within different development contexts? Which policies are more successful at enhancing efficiencies and generating distributional impacts? 
  • Why might place-based policies fail either at policy design or policy implementation stages? What are the potential unintended outcomes? 
  • What can we learn from the recent history of place-based policies in South Africa, and how can we integrate learnings from international experience in this regard? What challenges does the rapidly declining state capacity pose to place-based policies in South Africa? 

 

This research provides valuable insights into the practical outcomes of implementing place-based policies and sheds light on the strengths and unintended consequences which policy makers ought to be made aware of.  

Discussion Document 11
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