Can Border-Regions be Economically Optimized?

Abstract

What are the functional differences between a region which is administered by a single political authority and one which is under the jurisdiction of more political authorities? How can border-regions differing in number of political authorities (i.e., spatial structure, or namely, border dimension) be economically differentiated? Theoretically, border-regions with different spatial structures will yield different spatial mechanisms and, furthermore, different economic performances. To quantitatively explore these spatial economic problems, we build a N-dimensional static model of spatial economies in this chapter and apply it to economically compare border-regions with different spatial structures. Using this model, we find that, ceteris paribus, the largest output of an i-dimensional border-region (F ^* _i ) (i=1, 2,..., N)follows a decreasing tendency with respect to i, i.e., F ^*₁ ≥ F ^*₂ ≥ ? F ^* _i ≥ ? ≥ F ^* _N−1 ≥ F ^* _N . In addition, we also present an application of the N-d model in the agricultural production, which shows a substantially increased potential of benefit from the cross-border co-operation after the border-related barriers are removed.