Public Investment Regional Allocation: Evaluation of applicability of two methodologies

Abstract

Regional allocation of public investment has been considered of a great interest over the years. Regional policy uses investments as a basic developmental tool and it seeks for an effective allocation among the regions. In addition, national economic policy distributes investments aiming at both economic development of less developed regions and maximization of national product. Therefore, an effective allocation by the central government is of a great significance. In addition, national economic policy distributes investments aiming at both economic development of less developed regions and maximization of national product. In this paper, existent methodological approaches, distributing public investment in regions, will be critical reviewed. These models are found in the international bibliography. The features of these methodologies are described in a general context. The flaws and the possibilities of their application for real problem's solution are analyzed. Finally, it is discussed whether there can be an application of either of the examined models on the case of Greece.