Regional development and the action of public investment : the FNDR and the ERDF, a comparative analysis
Regional economic growth and development is triggered by a combination of many factors such as public sector intervention, national and regional policies, and private sector investments. Regional development funds, through the application of pertinent objectives, focusing, participation, and co-ordination can certainly make an important contribution on regional development. In Chile one of the main public sector policy instruments for regional development are the Regional Investment Funds. The role of these funds in the economic and social development of regions in difficulty or whose development is lagging has significantly increased in recent years. The country has had a regional development fund, the "Fondo Nacional de Desarrollo Regional" (FNDR) since the mid-1970s. This fund, modest in its beginning, was significantly increased starting in 1985 due to loans from the Inter American Development Bank. The FNDR has played an important role providing basic social infrastructure in regions. However, despite the increasing amount of resources channelled to regions, twenty five-years of existence of the FNDR, and almost a decade since establishment of Regional Governments in Chile, few improvements can be recorded in the way the Regional Funds are being used or on their overall effect on regional development. The main purpose of the study is to analyse the action of the regional development fund of Chile (the FNDR) and its relationship with the overall objective of regional development. Two different empirical approaches evaluated specific effects of the FNDR. The first was concerned with the analysis of particular aspects of the fund labelled as the "key elements" in the running of the FNDR. The second presents and compares the experience of a similar fund for regional development. The fund selected to carry out this comparison was the European Regional Development Fund (ERDF). The specific questions to the "key elements" address three different aspects of the existence and performance of the fund: questions 1 and 2 deal with the very existence or the overall aim of the fund; questions 3 and 4, with the way the fund is being allocated and used; and question 5 is rather different as it tries to explore the possibility of finding other potentials for regional development, not exploited as such, due to the dominance and statutory primacy of the fund.