This paper examines whether a deconcentration policy between a core and a peripheral region within a country may increase national welfare. The type of cost and benefits involved and the type of models needed to specify them are first discussed theoretically, and then estimated empirically by means of a comprehensive scenario study for two regions of the Netherlands. The empirical study concludes that a deconcentration scenario might result in net national benefits of several tens of billions of guilders. For this reason a spatial deconcentration policy may well improve the welfare of nations.
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Elhorst et al. (1999) studied this question.
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