Factors affecting government location decisions, with regard to the New South Wales decentralisation programme
thesisposted on 2022-03-28, 18:01 authored by Glen Hartley Searle
The study examines factors affecting one type of government location decision, namely, giving incentives to industrialists to set up or expand in socially desirable locations. Data are drawn from the New South Wales decentralisation programme up to 1969, concentrating particularly on the 1965 to 1969 period. The first part establishes the background to the empirical study comprising the remainder of the thesis. In the first chapter the need for a study of this type of decision- making is examined, and several features distinguishing such decisions from private sector industrial location decisions are discussed. The second chapter gives the background of the decentralisation programme itself, in terms of its particular theoretical rationale, its evolution, and the resulting spatial and sectoral pattern of assistance. The next chapters develop and apply a programming model of government location decisions of the programmed type. The model is a linear programming one. Its objective function is a utility function which is empirically estimated by examining the preferences revealed in past decisions concerning decentralisation assistance. The model is initially applied to the decentralisation programme assuming semi- normative conditions. The most extensive part of this application is the development of quantitative criteria of goals hypothesized to apply to the Department of Decentralisation's programmed decisions; in particular, econometric estimates of the employment change resulting from a given loan are developed. The model's predictions , under semi-normative conditions, of a sample of loans made in 1968/69 are fairly close to the actual pattern, except that loans between zero and the full amount of the respective requests are not satisfactorily accounted for. Similar results are achieved when the model is applied under conditions of bounded rationality. A decision rule model, allowing for other than "all or nothing" loans, is then tested but does not result in improved prediction. Two behavioural aspects of the programmed decision process - the variation in relevant factors from case to case, and the influence of the decision environment - are then shown to contain significant explanatory elements. Chapter 8 considers three types of nonprogrammed decisions: suggestions by the Department as to suitable locations for new industry; bargaining between applicant companies and the Department on the terms of assistance; and the implementation of new policies. The penultimate chapter investigates intra- organizational factors, and highlights differences between senior and other officers in the reasons given for, and the importance of, their decisions. The conclusion develops an empirical model of the Department ' s loan decision process, based on the sequential linkage of elements found to be significant in previous chapters. In addition, the importance of political factors on the one hand, and large companies on the other, in regard to the location of assistance is stressed.