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Rewarding good firms

Overman, Henry G. (2011) Rewarding good firms. Spatial Economics Research Centre Blog (28 Sep 2011). Website.

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Abstract

Ed Miliband tells us he wants to reward good families and firms. Where there are details, they raise as many questions as answers. Allocating housing on the basis of criteria other than needs throws up big questions. It's not clear to me why we want people to do apprenticeships in firms that have government contracts, etc. Stepping back from the details, Ed Milliband says that what they will do is change the regulatory and tax framework to carefully reward good firms. Fine in principle, but in practice I worry that this sort of thing vastly overestimates the ability of government to intervene in a way that actually achieves it's objectives. Two analogies spring to mind - one concerns the role of the Basel regulations on capital requirements that sought to ensure good behaviour but ended up encouraging banks to hold mortgage backed assets (and derivatives of those assets). The second is a little more in line with my expertise and concerns what policy might do to 'reward innovative firms located in clusters'. For those of you that want the headline message - it turns out to be incredibly difficult to know what we should do (if anything) to reward innovative clusters of firms. For those of you that like the details, read on for a more careful analysis (based on my contribution to the Manchester Independent Economic Review)

Item Type: Online resource (Website)
Official URL: http://spatial-economics.blogspot.co.uk/
Additional Information: © 2011 The Author(s); Online
Divisions: Geography & Environment
Spatial Economics Research Centre
Centre for Economic Performance
What Works Centre
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HF Commerce
H Social Sciences > HJ Public Finance
H Social Sciences > HQ The family. Marriage. Woman
J Political Science > JC Political theory
J Political Science > JN Political institutions (Europe) > JN101 Great Britain
Sets: Departments > Geography and Environment
Research centres and groups > Spatial Economics Research Centre
Research centres and groups > Centre for Economic Performance (CEP)
Research centres and groups > What Works Centre for Local Economic Growth (WWG)
Collections > LSE Spatial Economics Research Centre Blog
Date Deposited: 29 Jun 2017 11:34
Last Modified: 31 Jan 2019 00:18
URI: http://eprints.lse.ac.uk/id/eprint/82768

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