The development of periphery in an industrialised country: the case of Basso Ferrarese in Italy

This paper combines and finalises two previous pieces of research by Melloni [2008] and Palmieri [2008]. It presents and discusses the results obtained applying CGE, NEG and New-NEG models to the Italian area of the “Basso-Ferrarese” and compares them with new CGE simulations that have been specifically designed for the same area, taking into considerations the peculiar and unique territorial factors that characterise the study-area. In the first part, we introduce a preliminary comparison between the different results obtained with the previous simulations and, subsequently, we discuss them in the context of the territorial factors judged as more relevant for the area of Basso Ferrarese. In particular, we summarise the results obtained through simulations made with the CGE, NEG and the New-NEG models. Those counterfactuals study several aspects of the economy of Basso Ferrarese and deal with the expected impact of possible shocks in different areas. In particular, the CGE model analyses the effects on the economy of the study-area of four different shocks. Two of them, a change in labour supply and a change in the infrastructures endowment/cost, are related to the supply side (and are analysed also by the NEG and New-NEG models); the third one is a demand-side shock, an increase in the demand for tourism-services (as well as increases in other demand components, less interesting for the Basso Ferrarese case). Finally, the fourth shock is related to a possible change of the CAP, in other words an external shocks which is particularly relevant for the TERA case as agriculture plays a major role in the economy of remote rural areas. The second part introduces a new set of CGE simulations that have been developed taking in full consideration the characteristics of the territory so to offer a more punctual and precise view over the perspectives for future development and the implications for the policy-makers. The third part deals with a final comparison of all the results obtained, in particular concentrating its focus on the movements of the labour supply and the effects of trade integration. In the fourth part, we discuss the results and we present the possible policy-scenarios according to the results of the simulations.