<p>Regional development policy has long relied on both place-based and person-based interventions, yet evidence on their effectiveness remains mixed. Some programs generate substantial local gains, while others displace activity, crowd out private investment, or create unintended distributional effects. We propose that much of this variation can be explained by the alignment between the underlying market failure and the chosen policy instrument. Place-based interventions are most effective when the constraints are spatial, such as missing infrastructure, remoteness, or underdeveloped agglomeration economies, while person-based programs are better suited to individual-level inefficiencies, including skill mismatches, mobility barriers, or information frictions. We synthesize the literature on unintended consequences of both approaches and organize the discussion around five central mechanisms: spatial reallocation and displacement, agglomeration economies, market access, psychological and behavioral responses, and intergenerational spillovers. This framework illustrates how unintended consequences can arise even when policies achieve their immediate objectives, and why similar interventions produce divergent outcomes across settings. By emphasizing the role of market failures in shaping these mechanisms, we offer a conceptual lens for interpreting mixed empirical findings and for informing regional development policy design.</p>