Posted by Andy Pike, 3 June 2013

Growing recognition of the role of institutions in academic and policy circles has invigorated discussion about what they are, how they work and what they might bring and detract from effective local and regional development. Simplistic arguments that institutions are necessarily bureaucratic hindrances to the free and fair operation of the market economy have been questioned. Similarly, the case for institutions as a kind of ‘magic dust’ capable delivering successful economic development in any circumstances has been challenged.

 In defining institutions, many studies fall back upon Douglas North’s idea of institutions as the ‘rules of the game’ within a society that shape how actors – public, private and civic – relate and behave. Making this a bit more concrete, we can identify two main types of institutions – formal and informal (Figure 1). Formal institutions are ‘hard’ or codified, typically written down and documented. They include things like charters, constitutions, laws, regulations, rules and requirements. They are manifest in contracts, legal statutes and property rights. Informal institutions are ‘soft’ or tacit, often existing in the minds and practices of the actors involved rather than being formalised and codified. They include things like conventions, habits, norms, routines, traditions and values. We see them manifest in phenomenon like trust, social capital and networks.

Figure 1: Types of institutions

Defining institutions and distinguishing their different kinds only brings us so far. Integral to the debate has been the question of their role and contribution to development regionally and locally. As countries across the world wrestle with the challenges of economic development, particularly in the wake of the global financial crisis and in some countries state austerity, questions of institutional design, purpose and contribution have come to the fore.

In theory, institutions can play a positive role in providing public goods, addressing ‘market failures’, reducing uncertainty, reducing transactions costs, promoting efficiency and tailoring policy to regional and local contexts. These potential roles are manifest in a range of things institutions actually do on the ground:

• diagnosing and interpreting regional and local economic growth issues
• leading and decision-making
• formulating strategy and priorities to articulate courses of action and paths of development
• providing voice for regions and localities in multi-level and multi-actor systems of government and governance
• co-ordinating, integrating and mobilising actors to facilitate dialogue and negotiation
• fostering linkages between public, private and civic sectors
• generating, pooling and directing resources
• setting the framework and incentives that shape the individual and collective choices and behaviours of economic actors.

But the role of institutions is not always and everywhere positive. There are a number of potentially negative contributions institutions make that can inhibit local and regional development. These include: unfunded mandates when they are given or accept responsibility without resources; bureaucracy, lock-in and sclerosis hampering flexibility and responsiveness; duplication and fragmentation stimulating competition for resources; capture by elite actors and rent-seeking by particular interest groups; and, corruption. Indeed, recent work by the OECD on Promoting Growth in All Regions identified a number of ‘institutional bottlenecks’ that can trap regions and localities in low growth trajectories:

• poor mobilisation of stakeholders
• lack of continuity and coherence in the implementation of policies by institutions
• institutional instability
• lack of a common and strategic vision
• lack of capacity
• gaps in multi-level governance frameworks.

Central to shaping institutions for local and regional development, then, is a sharper understanding of what they can and can’t do as well as moulding their features to work effectively within particular regional and local contexts.

Posted by Mike Coombes, Monday 10 December 2012

There has been research in CURDS on commuting patterns for much of its 35 year history and the policy relevance of this work continues to grow, as recent studies show.

The coalition government has rolled out its predecessor’s plans for Local Economic Partnerships (LEPs), together with the policy that each LEP should cover a “functional economic area” such as a city region. Here lies the research problem: the generally acknowledged template for such areas is provided by the Travel to Work Areas – defined in CURDS using commuting data – but most of these are too small to be LEPs. The government chose to let LEPs define their own areas and when these are ‘tested’ against commuting patterns many are found to not be real local economic market areas (PDF).

Of course the geography of the labour market revealed by commuting patterns is a not a complete picture of a local economy, and yet it often reflects wider issues of accessibility and interaction. One recent study of the recently opened second Tyne Tunnel showed how quickly this new facility affected commuting and, in similar ways, brought benefits to the local economy more generally.

Within a year of its opening over 70% of local businesses considered that reduced commuting times for employees using the tunnel raised their productivity due to, for example, improved punctuality and morale.  Recruitment practices changed to exploit the effective increase in labour catchment areas to more areas across the river (as anticipated by spatial economic theory). Just over half the businesses recognised real financial benefits which could also arise from reduced vehicle operating costs. This is seen as a ‘concrete’ example of how investment in transport in the North – which is minimal in comparison to that in London – could help the region contribute more to economic growth.

In various ways then, the changing geography of commuting patterns reflects how Britain’s local economies adjust over time. Yet each commuter has made choices about where to live and work which are the result of the unique circumstances of themselves and their household. As a result, there are some commuting patterns whose key drivers may not be economic. One example in recent CURDS research was the finding that migrants to rural areas had some of the longest commuting journeys in England. They commute further than would be expected even after other factors are taken into account, reflecting decisions made for what may be ‘lifestyle’ reasons that will be difficult to change by policies aiming to reduce the environmental impacts of such long commuting.

The link between commuting patterns and migration patterns was also seen in CURDS research on urban areas in the North where few journeys to work are lengthy, however it seems they might have been shorter still if people there were less ‘rooted’ to their local towns.

Thus in commuting patterns we can learn much about the geography of local economies, as well as seeing reflections of more social dynamics which also drive migration patterns. This research will soon be renewed with data from the 2011 Census: only the Census provides this vital information on flows of commuters and migrants between every locality in Britain so it will be an immeasurable loss to future geographical research if there is no reversal of the government proposal to hold no future Censuses.

Posted by Andy Pike, Friday 9 November 2012

Enhancing our understanding of the ability of places to bounce back and rebound from disruptive economic change has become part of the zeitgeist in academic and policy circles across the world. A burgeoning debate has rumbled on about what constitutes and explains the ‘resilience’ of places in the face of financial crises, dangerous climate change and extreme weather events – CURDS has been actively contributing to the theory and practice of such issues:

• Towards the resilient region (PDF: 458KB)
• Resilience, adaptation and adaptability? (PDF: 539KB)

Novosibirsk – a city of 1.5m people – in the Siberian region of Russia has demonstrated its ability to rebound from a close to 5% hit on its output following the global financial crisis which impacted the Russian economy hardest in 2009. The city has already bounced back to 5-6% GDP growth in 2012. Current CURDS research suggests several elements appear to have contributed to Novosibirsk’s resilience:

• ‘Mixed’ economy – following the collapse of the Soviet Union in the early 1990s and transition toward capitalist forms of economic organisation, Novosibirsk’s economy has evolved from the domination of the centrally planned command economy and the military-industrial complex toward a much more ‘mixed’ economy in which the state – federal, regional and municipal – remains key and the private sector has flourished with a diversified mixture of sectors (primary, secondary, tertiary and quaternary) and economic actors especially SMEs
• Geographical advantages – Novosibirsk’s location at the bridge between Europe and Asia – the old geographical centre of the Soviet Union – has underpinned its position as a transport hub, historically connected by Trans-Siberian road and rail routes and more latterly supporting its growth as a logistics centre linking its emergent and transition economic neighbours such as Kazakhstan.
• Innovation – in undergoing transition from the centrally-planned to the mixed market economy in Novosibirsk, the key economic actors have emphasised the importance of innovation both in parlaying the scientific and technical resources of the military-industrial complex into new avenues of growth and building a support infrastructure of technical centres, ‘technoparks’ (pictured above), business incubators and the like to embed and nurture innovation as part of the city’s economic growth model
• Crisis-hardened – the difficult days of transition during the early 1990s and the currency crisis in the late 1990s appear to have bred in the people and institutions in Novosibirsk a knack of coping with fragile and uncertain economic conditions and an ingenuity that seems capable of underpinning repeated recovery and reinvention.

CURDS is currently contributing to a review of entrepreneurship and small and medium-sized enterprise (SME) policy in Russia led by the OECD Local Economic and Employment Development (LEED) for the Ministry of Economic Development of the Russian Federation and the Russian Vnesheconombank. This follows the greater emphasis placed upon the critical role of new start-ups and SMEs in economic growth following President Putin’s aspiration for 60-70% of employment and 50% of GDP to be accounted for by SMEs by 2020.

Post by Andy Pike on 22nd October 2012

Local and regional development has traditionally focused upon localities and regions in the historically industrialised and urbanised higher-income countries across the world – especially in Europe and North America. Development Studies has been concerned with more recently industrializing and urbanizing nations particularly in Africa, Asia-Pacific and Central and Latin America. Such strands of work have tended to run in parallel with limited interaction and cross-fertilization historically. Each has been marked by evolving concepts, theories and language: ‘First’, ‘Second’ and ‘Third World’; ‘Developed’ and ‘Less Developed Countries’; ‘High’, ‘Middle’ and ‘Low Income Countries’; ‘Less Favoured’ and ‘Disadvantaged Regions’; ‘Emerging economies’; ‘Transition economies’; and, ‘Post-socialist economies’. The terms ‘global North’ and ‘global South’ have emerged more recently as a way of capturing these broad groupings of countries.

Yet there is growing recognition that such enduringly disconnected approaches are limiting in an increasingly globalised and inter-dependent world, creating gaps in our understanding and fragmenting our collective knowledge. The traditions of disciplinary and sub-disciplinary demarcations continue, reflecting academic culture, institutionalization and the political economy of the academic publishing business. They shape our perspectives but risk constraining explanation, policy formulation and praxis in addressing global development challenges including prosperity, livelihoods and wellbeing, demographic shifts, equalities, food and energy security, climate change, financial system instability, poverty and socio-spatial inequalities.

To begin to bridge these boundaries, our recent work on local and regional development with Andrés Rodríguez-Pose and John Tomaney  has sought to develop a more international outlook and focus. In putting together the Handbook for Local and Regional Development  – recently awarded the Best Book Award 2012 by the Regional Studies Association’s international membership  – our aim was deliberately to bring together leading voices to address the challenges of development regionally and locally in an international context. In a Local and regional development in the global North and South (PDF: 206KB), we argue for much stronger connection and deeper interaction concerning local and regional development within and between the global North and South.

Conversation can benefit research across different camps by encouraging challenge and reflection upon prevailing ways of thinking to identify and frame new research questions, problems, gaps and contradictions, and innovative ways of tackling them. Our research outlines the basis for such dialogue in several shared concerns:

• Challenging ‘one-best-way’ and ‘one-size-fits-all’ universal models of ‘development’
• Asking ‘what kind of local and regional development and for whom?’
• Addressing common issues including socio-spatial inequalities, spatially imbalanced growth, inter-territorial competition, sustainability and government and governance.
• Developing greater sensitivity in handling the contexts of particular places and more general and broadly-based understandings.

There are no doubt other areas of potential discussion. But we see these issues as cross-cutting concerns of relevance across (sub-)disciplines capable of encouraging conversation. Rather than providing any kind of singular framework, attempting to answer all the questions or prematurely concluding what we envisage as an ongoing dialogue, our intention is to encourage discussion on these connecting themes better to tackle vital issues of local and regional development within and between the global North and South.