Urban Problems in Western Europe

An Economic Analysis

Paul C. Cheshire, Dennis G. Hay

• Publisher: Taylor & Francis
• Year: 2017
• Print ISBN: 9781138296084
• eBook ISBN: 9781351585392
• Edition: 1
• Topic: Social Sciences
• Subtopic: Sociology
• Index: Social Sciences

This major study, first published in 1989, examines Western Europe's urban problems in unprecedented breadth and depth. It is a synthesis of research which had three main aims: to establish an informed view of the state of urban Europe in the most systematic and consistent way possible; to investigate document and analyse the various causes of urban problems; and to analyse general trends and similarities, as well as discovering what was local and particular. This book should prove invaluable to students, researchers and professionals concerned with urban affairs, whether they be geographers, planners, economists or policy-makers.

1 Introduction

This book draws on the results of research funded by the European Commission. As a result of pressure from both the European Parliament and national governments, the Commission decided¹ to set up a study on urban development and urban problems in the countries of the European Community (EC). The aims of this study were first to inform the Commission on the state of urban Europe in the most systematic and definitionally consistent way possible; secondly to investigate, to document and to analyse the various causes of urban problems; and to discover any general trends and similarities that could be found as well as what was local and particular. A special focus was to be given to the possible interrelationship between urban problems and those of regions. There was then to be a survey of the different policies that had been applied to urban problems in the Community’s member countries. The final element in the study brief was to consider, in the light of the foregoing work, whether there should be urban policy at the level of the Community. If our recommendation was that the Commission should take action in the field of urban policy, we were to recommend what form that action should take. Some of the questions that should be addressed in this case were: what functions, aims, monitoring devices and instruments should it have? What was the most appropriate policy framework and how could the existing policy instruments of the European institutions be applied or modified to suit the needs of urban policy? The more specific parts of our remit have not been addressed in this book, but they are discussed in Cheshire et al. (1988). Here we have tried to synthesize the work and to draw out the more general conclusions that relate to analysis and to urban policy.

In the US in the late 1960s, and in Europe by the mid-1970s, there was a growing sense that cities were in trouble, and that their functions were changing. In Europe that perception perhaps first emerged in the UK, and has been strongest there. But progressively during the course of the 1970s, individual countries of the EC developed their own national urban policies in response to their perceptions of the needs of their cities. The UK was the first to do this, followed by the Federal Republic of Germany (ERG), the Netherlands, France, and most recently, Italy. Now only Greece and Belgium of the former Community of ten have no recognizable national urban policy. Although the problems of growing cities in Southern Europe are acute, it is probably true to say that in this part of Europe the focus is still on the problem of regional development rather than on urban problems. The change in perceptions about cities has predominantly taken place in the countries of Northern Europe, and it is connected primarily to questions of urban decline.

It is, of course, obvious that all cities are different, in history, function, topography and character. But their development responds to similar economic, social and cultural forces – more so in recent years than in any previous historical period, because of the increase in international interdependence, the extent of linkages and the speed of communications. It is on general trends, therefore, that we now focus. Our central theme can be briefly summarized. It is that urban change and economic change are inextricably interdependent. This means that if the relevant current economic developments can be identified, it is possible to forecast current and also, because of lags, future urban development. If we can identify where economic recovery is likely to come from, we can draw implications about future patterns of urban change. In addition, we can draw general conclusions about the most appropriate functions of urban policy and about how urban policy can reinforce economic recovery rather than impede it. Urban revitalization is not intrinsically competitive with economic recovery but, as is argued below, it is complementary to it.

The historical process of urban development

Cities originally grew in rich agricultural regions; an agricultural surplus was a necessary condition for their development. They grew as administrative, cultural, military and commercial centres which supported their regions. Before industrialization, however, the mass of the people were tied to the countryside by a labour-intensive peasant agriculture. One of the most significant achievements of the industrial revolution was that industrial and commercial methods were applied to agriculture which vastly increased agricultural labour productivity. As Marx and Engels put it, industrial capitalism ‘freed the mass of the people from the idiocy of rural life’ (Marx & Engels 1848). The industrial revolution created the industrial city. Prototypical examples were Manchester which grew from 100 000 to 1 m people in the 50 years to 1850, and Birmingham, which a little later grew from a collection of metal working villages to the showpiece of the industrial world, also in about 50 years. Similar developments, as is well known, were occurring elsewhere in Europe, in North America and, more recently, in Japan. Comparable processes are still in train in the cities of the third world.

The growth of the factory system and of the transport network 200 years ago freed people from the countryside, but it tied them to the densely packed cities. As we argue in Ch. 3, canals and, more particularly, railways offered great economies of scale for long distance movement of goods and they thereby provided great locational advantages for manufacturing and distributional activities at access points to them. However, short-haul goods movement and, more particularly, the movement of people remained very expensive. The growth of the manufacturing sector and the relative, in most cases absolute, decline of the agricultural sector, was associated with strong centralizing forces. It produced a spatial reorganization – the industrial city – as the mechanism of living needed to accommodate the new system of production.

These forces of centralization gave way to suburbanization as early as the mid-19th century, as horse and electric trams and commuter railways made the transport of people cheaper, and as incomes rose. People could afford to buy more space in the suburbs than they had been able to in the cities, and cheaper transport allowed them to continue to work in the city.

Most recently – from the 1950s in the US and from the 1960s in Europe – suburbanization has given way to decentralization or ex-urbanization. Both people and economic activity related to goods handling, have become diffused over whole regions. These trends are related to yet further developments in transport and production technology and to changes in relative costs. Railways have given way to motorways and trains to lorries, for the movement of goods; labour-intensive cargo handling methods have given way to containerization and bulk transport; capital and land intensity in manufacturing industry have increased. The older congested urban industrial locations not only had more expensive land but large sites were difficult to assemble because of fragmented ownership.

These changes were associated with changing relative prices. Such price changes were most obvious in transport and communications. Less obviously, they have been associated with a fall in the cost of city centre space relative to outer city, suburban and exurban space. For example, office space in the satellite subcentre of Reading, 60 km from central London, was one-fifth the cost of that in central London in 1965; but by 1985 it was one-half the central London rate. Similar adjustments occurred with respect to the unit costs of industrial and residential space. At the same time the costs imposed by congestion on goods handling activities increased as the volume of lorry traffic grew and as time costs rose.

These changes caused city centres to go from being low cost locations to high cost locations for the production and distribution of goods, and the jobs and the people that are associated with these activities have therefore decentralized strongly. Another way of looking at essentially the same phenomenon is to see the changing structure of costs and the technological changes as allowing goods handling activities to exploit the longstanding lower land and labour costs in ex-urban locations. These cost advantages had not previously offset the agglomeration economies and lower transport costs of central locations.

This process of decentralization at the level of the urban region (and even beyond the boundaries of the urban region as it might have been defined 20 years ago) was accompanied by another change. The increasing globalization of economic activity and the falling relative costs of bulk, long-distance transport have produced an international restructuring of activity (Glickman 1980). More labour intensive industrial processes have transferred to newly industrializing countries. To a limited extent this has benefited certain low wage regions of EC countries; for example, industrial employment in Greece, Ireland and Portugal has grown (see Ch. 7). The result has been a ‘deindustrialization’ of many of the older industrial regions.

Deindustrialization and decentralization are two distinct phenomena, however, and they have differentially affected different types of cities. As we show in Ch. 7, decentralization has been most important in the largest cities, especially those in which the demand for space was buoyant. Larger size produces a higher premium for central locations and a strong local economy, especially a buoyant service sector for which space costs are relatively less important than they are in the case of manufacturing, drives up space costs and so produces an additional incentive to redevelop. Cities such as Brussels, Frankfurt, Düsseldorf, Kobenhavn, Amsterdam or London have been particularly affected. Deindustrialization, on the other hand, as we show in Chs 5, 6 and 7, most severely affected the older industrial cities that specialized in the more labour-intensive and heavy industries of the industrial revolution. So cities such as St Etienne, Charleroi, Valenciennes, Essen, Duisburg, Manchester, Liverpool, Sunderland, Glasgow or Birmingham were most severely affected. In general, except for a handful of cities in Italy, Greece, Portugal and France, all major EC cities lost manufacturing employment during the 1970s, with losses of employment ranging up to half the 1970 total.

These two forces of decentralization and deindustrialization have produced, then, a serious and traumatic loss of function for major cities. The extent of the impact has varied with the location, the function and the context of the city but, when these factors have been present together, they seem to produce that combination of population loss and problems that has come to be called urban decline.

One element of the research described in this book was to try to quantify the incidence of urban problems in different cities and to relate that indicator to a measure of population change. In that way problems of urban decline could be distinguished from those of urban growth. We discuss this work in Ch. 4. Summarizing the position of a major city in one number does not, of course, produce an indicator that is capable of exact interpretation nor one which can wholly reflect the complexity and variation that is actually present. Nevertheless by using the best techniques and data available and by taking care to avoid at least two of the major conceptual pitfalls that have bedevilled the interpretation of previous comparable work, we have produced rankings that are apparently robust and capable of straightforward interpretation.

This analysis suggested that urban decline was concentrated in the old cities of the industrial revolution. Port cities also emerged as a second, but not mutually exclusive, general type of problem city. Containerization and the introduction of roll-on-roll-off ferries produced a sharp reduction in direct employment in port cities. In addition, these changes in freight handling generated a loss of function for ports as processing locations for goods being transhipped. The goods in a container can be processed where the container is unpacked. This seems to have produced at least a degree of problems in nearly all the specialized port cities of Western Europe, even including the exceptionally successful port of Rotterdam.

A third type of problem relates to changing peripherality. It is necessary to distinguish between absolute peripherality and changing peripherality. Certain regions of Southern Europe have historically been peripheral to Europe and to other concentrations of economic and political power. This is not only in geographic terms but also socially and in terms of trade patterns. Urban problems are essentially, however, problems of adjustment. Some but not all areas of the EC countries which traditionally have been peripheral, are becoming less peripheral as they establish closer links with the Western European economy. The creation of the Common Market has restructured trade flows and this restructuring will intensify up to and following 1992. This process has increased the economic advantages of core regions. As we show in Ch. 7, this is significantly related to differential rates of urban growth. The converse of this, however, is that some areas have become more peripheral in an economic and social sense and have lost advantage.

All of these factors combine in the case of Liverpool which serves as an extreme example of the impact of the forces experienced in varying degrees by most other large industrial cities. It has suffered from decentralization, it has suffered deindustrialization as an older manufacturing city; it has suffered as a port and again as a port serving a declining industrial region; and, finally, it has suffered from a severe increase in peripherality.

In Chs 3 and 4 we discuss another type of urban problem that can be identified – the problem of poor cities that are rapidly growing. This is linked to a fourth general force for change, agricultural restructuring. Although agricultural restructuring continues in Northern Europe, it had become of mild consequence by the mid-1970s; expressed as rates of loss, employment in agriculture declined very evenly across all the countries of the EC, but in terms of the numbers of people involved, it varied greatly. In the countries of Northern Europe, even in France and Germany, the absolute job losses in agriculture were no longer large enough to have a serious impact on migration, labour supply or patterns of urban growth. In Southern Europe, however, agricultural restructuring was still the dominant force and a major factor in urban development. In Greece, and in parts of Spain and Portugal, this was still because of basic rural–urban migration. In southern Italy this was still a factor, but equally important was the high rate of natural population increase in cities which was due to the recent large-scale influx of migrants from rural areas. Urban growth in the context of impoverished rural regions is quite a different phenomenon from that in the lush pastoral context of most of France, Denmark, the FRG or the UK. Growing cities that experienced problems were not growing because they were nodes of attraction but because they were the only available alternative for those people propelled from the rural regions. Indeed, in many ways they are nodes of disadvantage since they lacked the resources to accommodate growth and the adaptive capacity to make the transition to mature urban metropolitan regions. Some may not even have benefited from becoming less peripheral. A few, mainly in France (for example Bordeaux), appear to have adapted successfully, but many simply found that their traditional local economies were in more direct competition with more efficient centres.

From this viewpoint, urban problems can be seen as adjustment costs caused by the impact of the forces discussed above, acting on the adaptive capacity of the urban socioeconomic structure. Cities have new functions; the functions of some have been greatly reduced and the functions of all will be transformed. The adjustment costs are a direct function of the extent of the impact of these forces in a particular city, of the capacity of the city to change and the extent to which it can successfully attract new functions. The more rapidly a local economy can adjust, the lower the overall costs are likely to be. There are, however, strong forces of inertia. There is the inertia of what is already there: in other words, of the concentrations of capital, structures and cultural inertia which cities represent. The institutional, social and organizational flexibility of a city, in turn, reflects the flexibility of the wider society of which the individual city is an expression. It is clear that, because of inertia, adjustment to change can be slow and painful.

Forces for urban revival: employment

So far the discussion has focused on the dark side; on the forces that have produced urban decline and problems of growth. Trends, however, are not remorseless and linear. There are feedback mechanisms in the system which tend to produce at least some self-adjustment and new tendencies emerge which stimulate a change in direction.

The decline of manufacturing employment in the EC has not been a purely urban phenomenon but while manufacturing employment was falling, service employment was growing. If we look at Northern Europe – the countries for which there are the best run of data and which, collectively, account for 72% of employment in the countries of the present EC12 – we can see that service employment increased from 52 to 61% of the total between 1974 and 1984. There are, moreover, good reasons for believing that growth will continue.

The significance for urban development of this shift to service employment is considerable. The loss of manufacturing employment from cities has been enormous; so even if past rates of loss continued, the absolute importance of that loss for the urban economy would be decreasing because a given rate of loss now involves absolutely fewer jobs and those jobs are a small fraction of total urban employment. In addition, some specialized manufacturing activities are likely to remain in cities and some, like clothing, may tend to return, so even the rate of manufacturing employment loss may ease. Given the now large absolute contribution of service employment to the urban economy, a similar argument suggests that a continuing constant rate of growth of service employment will have an increasing positive impact on the urban economy because it will involve absolutely and proportionately more jobs.

In addition, and more importantly, service employment has a far stronger urban orientation; not only that, but the fastest growing sectors of service – finance, insurance, hotel and catering, retailing and ‘other’ services – have a still stronger urban orientation. The reasons for this relate both to the economic advantages and to the economic disadvantages of cities. As we discuss in Ch. 3, cities have always offered special economic advantages. They provide superior communications and they provide access to a wide range of contacts, to markets, to specialized bought-in inputs and to specialized labour. Location in an urban centre is essential for any business that requires face to face contact. Typically services depend on personal delivery (consider, for example, health care, education, tourism, legal services or specialized shopping) or on ‘deals’ (finance, insurance, consultancy or interbusiness sales are examples). Those economic disadvantages that are particularly characteristic of cities, such as congestion, high unit space costs, fragmented land ownership and high costs of transport for bulky goods, are much less significant for services. Furthermore some disadvantages, such as industrial pollution, have fallen in both absolute and relative terms in cities and others, such as land prices and availability, have fallen relatively. Thus mobile services still tend to be attracted to urban locations. It is reasonable to expect that most growth of output and employment over the next 10 to 20 years will be in services and this therefore provides strong grounds for believing that an urban employment revival is likely. Not only that, but because the advantages provided by urban areas are an essential input into many service activities, the city provides the necessary setting for that growth to occur. This suggests that stronger cities can assist with the wider process of economic recovery.

People

There are also developments in train which are reducing the pressures which previously led to decentralization of people from cities. Most people are still tied to particular places by their jobs, but their choice of where to live is less constrained by this fact than ever before. People are no longer tied to the countryside by a peasant agriculture nor are they tied to the ...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Urban Problems in Western Europe: A Postscript
• Table of Contents
• Acknowledgements
• List of tables
• Abbreviations
• 1 Introduction
• 2 Background and the use of Functional Urban Regions
• 3 Problems of urban decline and growth: a review
• 4 Urban areas in the EC: problems of decline and growth 1971–84
• 5 The analysis of case studies
• 6 Growth and decline: the range of European urban experience
• 7 Urban problems and patterns of change
• 8 A review of urban policy
• 9 Policy implications
• References
• Data appendix
• Index