The School of Geography, Politics and Sociology

Student Profiles

Anja McCarthy

Project title: The changing shape of the local state and its institutional arrangements in the broadening field of economic development and regeneration

Supervisors: Professor Andy Pike and Professor Andy Gillespie

This project aims to understand and explain the changing shape of the local state and its institutional arrangements in the broadening field of economic development and regeneration, in an international context. In the wake of the economic downturn from 2007, novel approaches have been sought to rebalance economies in sectoral and geographical terms in the context of a heightened emphasis upon the role of institutions in economic growth and competition between emergent spatially-blind and place-based policy models.

The research objectives are to:

  • review critically the emergent concepts and theories on the local state in the context of new approaches to local and regional economic development and policy 
  • identify the new and emergent forms of institutions, governance arrangements and policy for local and regional economic development in an international context
  • map the actors and explain the structures, roles, strategies, relationships and processes involved in local and regional economic development for the case area and comparative international case studies
  • develop analytical frameworks able to assess the effectiveness of the new approaches

The research is a collaborative project developed jointly with Newcastle City Council. As a local authority in England, the City Council is subject to the new and changing governance arrangements for local and urban development in England reflecting the coalition government agenda of rebalancing, decentralisation and localism.

Research context

Conceptually, current debate about local and regional economic development and policy hinges upon two contested claims. Proponents of the ‘New Economic Geography’ believe that market-based processes lead to the geographical concentration of diverse economic activities regardless of context (Krugman, 1991) and “are designed without explicit consideration of space” (World Bank, 2009: 24). The inherent and inevitable spatial disparities in economic activities that result prefigures a ‘spatially blind’ approach to policy based upon a ‘one size fits all’ approach focused upon underpinning agglomeration economies and working with the grain of market processes – effectively reinforcing unbalanced sectoral and spatial growth patterns.

In contrast, economic geography emphasises the causal importance of context and the need to develop place-based approaches to policy that are more effective because they are tailored to the particularities of places and specifically the context-dependent nature and importance of institutions as sources of local growth (Acemoglu, et al, 2004; North, 1995; Rodríguez-Pose, 2010; Rodrik, 2004). More explicitly recognising the importance of rebalancing economies sectorally and spatially, this view has been expressed in the 2009 Barca Report on the reform of the European Cohesion Policy, which recommended this insight should shape regional policy, and shared by the OECD (2009).The assertion being that even the best spatially blind development strategy can be undermined by poor institutional environments. Whilst presenting divergent starting points, it is also suggested that the approaches may be more complementary rather than conflicting (Rodríguez-Pose, 2011: 356).

Against this backdrop of new and competing approaches, this project seeks to better understand and explain how and why these approaches have emerged and become influential in reshaping the goals, rationales and governance of local and regional economic development policy in an international context.

First, the research seeks to review the concepts and theories of governance and institutions as they relate to local and regional economic development in the literatures on state rescaling, ‘hollowing out’, decentralisation and retrenchment. Whilst the concepts of governance and institutions in territorial development have been well researched (Rodríguez-Pose 2010), the relationship with the state in this process appears less understood in terms of facilitating transition and providing legitimacy (OECD, 2007) and in the process of decentralising powers and incentives (Centre for Cities, 2010). Second, the extent and nature of the changes in institutions, governance arrangements and policy require systematic review and survey in an international context. Third, we know little of exactly how and why the structures, strategies, relationships and processes involved in local and regional economic development and policy are being transformed and to map the actors and explain their particular forms of reorganisation in an international context. Last, how we might assess the effectiveness of the new approaches has been under-researched.