The attractiveness of a region can be measured by the social welfare functions within the framework of spatial economics. Long-run sustainable regional growth requires the attractiveness of a region to keep the centripetal forces of the local population and economic activity. This paper focuses on regions where spatial exclusion, caused by the organization of a transportation network, has already been observed. While the relevant studies on this subject separately investigate the economic behavior of households, firms, and the local government, this paper attempts to integrate them into a single framework as a unit of the regional economic agent to reveal the mutual relationships. The integrated framework applies the notion of the spatial social welfare function, including accessibility or the concepts of supply and the market areas of goods and services that should vary with the order of urban hierarchy. This paper also studies alternative spatial formation as a widely cooperative regional affiliation that can be useful for countries where the total national population and the extent of economic growth are constantly diminishing. Finally, the analysis investigates how to coordinate widely cooperative regional affiliations, and explores possibilities for adapting this specific framework for regional economic development.

JEL Classification:D62, I31, O18, R58