Social indicators of efficiency and equity convergence in four distressed regions

Objectives: The primary objective of this study is to develop a rationale for evaluating social alternatives. Basically this involves formulating a set of social characteristics (social indicators) which mirror or proxy for efficiency and equity. Social indicators can thus be employed to judge national versus regional welfare tradeoffs as incremental changes are made. Furthermore, such indexes provide a mechanism which can continuously monitor the system in effect, provide data for evaluation of alternatives. Specific objectives are the following: i) to use theory to frame the parameters of the problem; ii) to isolate theoretical cases appropriate to distressed regions, and the choices which apply in such cases; iii) to formulate variables indicating the situations in objective (ii) above; iv) to test the adequacy of these variables as social indicators with empirical data; and v) to suggest social indicators to monitor policy impacts and guide decisions. The organization of this study follows the order of the objectives. Chapter II will review classical welfare theory. It will illustrate the conditions for optimum social welfare. Further, the conditions are outlined for Pareto relevant decisions which in essence are the basis for public policy action. Thus it will specify the parameters of the problem, and develop the efficiency-equity contrasts. Chapter III will illustrate the policy alternatives in three specific cases. The general case is movement from a point of disequilibrium to a socially optimum point given fixed resources and resource mobility. It will demonstrate the superiority of labor redistribution over capital redistribution as a means to optimize welfare in a full employment economy. Case II will illustrate the alternatives when labor resources are not fully employed. It will demonstrate the efficiency and equity advantages of capital redistribution when capital-labor ratios are inflexible. Finally, Case III will explore the options when unemployed labor resources are also immobile. It will assimilate the characteristics of immobility into indicators for policy evaluations. Chapter IV will describe the methodology employed in testing the empirical adequacy of the variables as social indicators. It will explain the regression models used to measure marginal efficiency and equity changes. Chapter V will present the results for the tested indicators. It will demonstrate the efficiency benefits of development policies which, in general, provide employment to a region's natives and never before employed populations. It will also show the importance of certain indicators such as sex and employment status of the spouse to particular regions in generating efficiency benefits from employment. Lastly, it will assess the performance of the efficiency indicators as consistent indicators of equity. The performance will demonstrate that candidate efficiency population characteristics are also consistent indicators of populations deserving equity benefits. Chapter VI will present the summary of the findings. It will show that social indicators can be used to monitor and guide practical policy actions.