The Resilient Region: Regional Economic Impact Mitigation of Corona Measures

While many countries introduced regionally differentiated policy measures for COVID-19, the Netherlands opted for national binding measures at an early stage of the pandemic. Using data on the impact of the first lockdown on consumer and producer behavior, scenarios with different intensities of measures, and analyzes of regional coherence and substitution, the researchers showed that differentiated regional policies could have reduced a significant part (up to a third) of the GDP* loss due to the COVID-19 measures. The self-organizing capacities of the regional economic system fueled this limitation, with regional variation in policy being a sufficient condition. Coordinated policy measures aimed at supporting specific regional industry clusters could guarantee maximum impact reduction, but were difficult to achieve due to the complexity of possible policy options. This required full information of the impact of different combinations of regional policies, knowledge about region-specific future developments and coordination capacities in regional governance that were not present. The results of this analysis are important for future economic resilience strategies to unexpected events and demonstrate the need for regional governance learning. * GDP stands for Gross Domestic Product