Article | Last updated: 2015-06-29 | Ministry of Local Government and Modernisation
For more than 50 years, regional and rural policy has been part of a national policy for value creation, with an emphasis on strengthening the growth potential of the areas outside the largest urban areas. But there has been changes in content.
50 years ago, government policy was concerned with building up the whole country and stimulating desired structural changes. With the establishment of the Rural Development Fund (DU) in 1961, a national regional policy was created. This took place in a time when there was a stronger faith in planning, both economic planning and physical investments. Infrastructure development was a central concern. Industrial development was regarded as the key to economic growth and as a thereby the development of the welfare state. The Rural Development Fund worked towards ensuring industrialisation reached all parts of the country.
Establishment of industry and businesses
During the 1970s, the main goal was to establish businesses and workplaces. The differentiated regional investment tax was introduced in 1971 and the differentiated employer's contribution in 1975. Rural taxation legislation was also introduced, in addition to regional support for transportation.
Policies changed in the 1980s. There were fewer large industrial projects, and with the liberalisation of interest and credit policies, the state became less important as a source of capital. There was less faith in official planning, and new methods for governing society were introduced, including goal management and competitive tendering. This led to a change in the regional and rural policies, from extending the balanced localisation of new businesses, to encouraging all small and large communities to capitalise on their strengths. In technical terns this is called endogenous economic development. As a consequence, municipal business funds were introduced as a trial project in 1987. These funds were made generally available in 1991.
County authorities given management role
The county authorities' role in regional development was reinforced in 2004. The county authorities were given greater responsibility for the administration of rural and regional policy instruments. This gave rise to a regionally-adjusted initiative, based on strategies grounded in regional partnerships.