Abstract
This paper reviews local growth promotion policies in the light of an analysis of the drivers of differential urban growth. It starts by arguing that major shifts in urban functions interacting with European integration and the wider process of internationalisation, have produced incentives to create local growth promotion agencies. The supporters of such agencies and the agencies themselves naturally have to make claims both as to their necessity and their likely success. An analysis of growth drivers, however, shows that there is only a restricted scope for local – indeed any – policy to influence city growth. Moreover, some existing policies work directly against urban economic growth. The most successful policies are likely to be the efficient execution of well known functions, including policies to reduce the costs of city size and efficient public administration. There is a danger, therefore, not only of raising expectations with respect to the potential contribution of local growth promotion agencies but of such agencies concentrating on inappropriate actions which are more visible but likely to be less effective.
Paper prepared for METROPOLITAN REGIONS: Preconditions and strategies for growth and development in the global economy LINKÖPING, Sweden, 24 to 26 April 2008, Jönköping International Business School.
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- 1.
Interestingly a policy increasingly criticised as being contrary to the long term growth prospects of the poorer regions to which the agency is re-located on the grounds that the main advantage of the poorer regions is lower wage costs and government agencies typically have national wage agreements (and, even more typically, when moving, agree to do so without reduction in wages to workers who move). It is argued that the longer term result is to crowd out private sector employment in such regions and allow the public agencies to attract the most skilled labour. This is quite apart from any possibility that such activities as National Statistics or broadcasting might be subject to agglomeration economies not only affecting their own costs but affecting the costs of private sector firms in the prosperous regions.
- 2.
A combination of the particularly restrictive British system of land use regulation which constricts the supply of all types of space and the strong demand for access to Heathrow by producers and distributors of high value goods and goods the value of which is significantly determined by speed and reliability of delivery (such as parts for complex machine tools, aircraft or medical equipment).
- 3.
This section draws on Cheshire and Gordon 1996.
- 4.
That is in the countries of Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, The Netherlands, Portugal, Spain and the United Kingdom.
- 5.
Nomenclature des Unités Territoriales Statistiques (N.U.T.S.) regions. This is a nesting set of regions based on national territorial divisions. The largest are Level 1 regions; the smallest for which a reasonable range of data is available are Level 3. Historically these corresponded to Counties in the UK, Départements in France; Provincies in Italy or Kreise in Germany.
- 6.
Usually the jurisdiction representing the core city but in some cases – for example in Spain – a regional tier of government (for details see Cheshire and Magrini 2009).
- 7.
An interesting solution which does not rely on universal GPS was devised (but not implemented) for the City of Cambridge in the UK. This was a smart card plus reader which charged for time spent stationary with the engine running or moving for a given period at a given (slow) speed.
- 8.
In general as is argued by Eddington 2006, investment in transport infrastructure should follow demand rather than try to lead it (a form of picking winners). There is scant evidence that new transport infrastructure generates growth in a lagging region but plenty that a lack of infrastructure in a growing, prosperous and congested region imposes significant costs.
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Cheshire, P.C. (2013). Urban Growth Policies: The Need to Set Realistic Expectations. In: Klaesson, J., Johansson, B., Karlsson, C. (eds) Metropolitan Regions. Advances in Spatial Science. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-32141-2_5
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