Abstract
This paper examines the factors underlying the take-up and effectiveness of the revised Regional Development Grant scheme, an instrument of U.K. regional policy operated between 1984 and 1988. Assistance under this scheme was available either as a proportionate capital grant or as a lump-sum marginal employment subsidy. Using a cost function approach and a Cobb-Douglas production function, conditions are derived determining take-up. Simulation suggests that assistance will generally be taken up as a job grant, and this is borne out by empirical evidence. Some implications for effectiveness are drawn. Copyright 1991 by Scottish Economic Society.
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