Local and Regional Development

Andy Pike, Andrés Rodriguez-Pose, John Tomaney

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317664147
• Edition: 2
• Topic: Architecture
• Subtopic: Aménagement urbain et paysager

Actors and institutions in localities and regions across the world are seeking prosperity and well-being amidst tumultuous and disruptive shifts and transitions generated by: an increasingly globalised, knowledge-intensive capitalism; global financial instability, volatility and crisis; concerns about economic, social and ecological sustainability, climate change and resource shortages; new multi-actor and multi-level systems of government and governance and a re-ordering of the international political economy; state austerity and retrenchment; and, new and reformed approaches to intervention, policy and institutions for local and regional development.

Local and Regional Development provides an accessible, critical and integrated examination of local and regional development theory, institutions and policy in this changing context. Amidst its rising importance, the book addresses the fundamental issues of 'what kind of local and regional development and for whom?', its purposes, principles and values, frameworks of understanding, approaches and interventions, and integrated approaches to local and regional development throughout the world. The approach provides a theoretically informed, critical analysis of contemporary local and regional development in an international and multi-disciplinary context, grounded in concrete empirical analysis from experiences in the global North and South. It concludes by identifying what might constitute holistic, inclusive, progressive and sustainable local and regional development, and reflecting upon its limits and political renewal.

Part I Introduction

1 Introduction

Local and regional development

DOI: 10.4324/9781315767673-1

1 Introduction: local and regional development

The challenges of local and regional development are faced by actors across the world. Indeed, the transformation of the economic, social and environmental prospects and potentials of localities and regions are central to the story of globalisation. But local and regional development is a highly uneven process, producing diverse economic, social and environmental outcomes as localities and regions wrestle with processes of growth, decline and adaptation. The aim of Local and Regional Development is to show why this issue has gained salience for international, national, regional and local institutions of government and governance. It highlights the evolving contexts of local and regional development and the challenges they present, especially to local and regional actors in connecting and reconciling top-down and bottom-up approaches (Chapter 2). This chapter explains the aims and structure of the book and introduces its main themes.

1.1 The challenges of local and regional development

Powerful economic, social and environmental as well as cultural and political forces are at work in the remaking of localities and regions. Over recent decades, international and cross-border flows of trade, finance, people and culture have accelerated, leading to greater integration of hitherto separate and sequestered national economies, and have formed the backdrop to the rise and decline of localities and regions. The term “globalisation” has slipped from the lexicon of social science into popular and political discourse to explain these processes. Although widely used in attempts to “explain” economic, social and environmental changes and their outcomes, globalisation is frequently discussed with imprecision. The nature and meaning of globalisation is contested in academic and political debates. Broadly, globalisation refers to the simultaneous marketing and sale of goods and services around the world requiring global systems of production, distribution and consumption supported by global regulation of trade and finance. In some accounts – which were especially influential in the 1990s and 2000s – the accelerating global flows contribute to the emergence of an increasingly borderless, “flat” and slippery world in which people, investments and multi-national companies are perfectly mobile and free to locate in any part of the globe (Christopherson et al. 2008; MacKinnon and Cumbers 2011). In this context national, regional and local governments were thought to have less capacity to intervene in their development and to regulate and shape social, economic and environmental outcomes. Such accounts tend to present globalisation as an inevitable, irreversible and, ultimately, benign process that increases human social welfare (Friedman 2005; Ohmae 1990, 1995). Through the 1990s and most of the 2000s, globalisation was associated with rising incomes across the world in ways that appeared to lend support to the global optimists and the idea that a new era of development had been born (McMichael 2012) (Figure 1.1).

Figure 1.1 Indicators of globalisation

Source: Adapted from http://www.economist.com/blogs/graphicdetail/2015/10/global-trade-graphics

International trade and investment have existed for centuries, but what seems distinctive about the current period is the intensity and encompassing nature of trans-national integration. According to Castells (1996: 126–171), development now occurs in the context of a global “space of flows”. Transformative technological changes, such as the shift to a knowledge-based and digital economy, are both cause and consequence of globalisation. Global trade agreements create the legal and regulatory frameworks that facilitate the free movement of finance, commodities, goods, services and people across national borders. These frameworks of market liberalisation take both bilateral and multilateral forms between nation states, but in each case place limits on the actions of government and governance institutions at the national, regional and/or local levels. International organisations such as the World Bank, the International Monetary Fund (IMF), the World Trade Organisation (WTO), the G7 and the European Union (EU), historically dominated by the interests of the most economically prosperous countries, play a key role in the design of these frameworks and in the creation and promotion of the ideas that support them intellectually. Latterly, new trade agreements such as the Trans-Pacific Partnership (TTP) and Transatlantic Trade and Investment Partnership (TTIP) seek further to broaden and deepen investment and trade liberalisation. Globalisation has also been driven by the expansion of capitalism and the market economy following the end of communism in the centrally planned economies of central and eastern Europe and the collapse of the Soviet Union, the growth of digital information and communication technologies, and the increased outsourcing of production and the development of globalised value chains. For Friedman (2005), these factors create the possibility of a “flat world”, which allows all places to participate in and benefit from globalisation so long as they are home to competitive businesses. But national economies are characterised by markedly different degrees of openness and integration with the global economy, shaped by their particular variegations of capitalism and historical evolution of their political economies (Peck and Theodore 2007). Countries such as the Netherlands and Singapore are highly open to trade and investment, whereas Japan and India have relatively low levels of inward investment and manufactured imports.

Alongside globalisation, recent decades have seen intensifying processes of urbanisation. In 2007, for the first time in human history, more than half of the world's population lived in cities (OECD 2015; UN-Habitat 2010). Moreover, recent urbanisation has been associated with a proliferation of mega-cities – with populations of at least 10 million (Figure 1.2). Among other things, the growth of the urban population and the concentration of economic activity in key cities cast doubt on the proposition that “the world is flat” (cf. Friedman 2005). Instead, it is more accurate to see the world as “spiky” (Florida 2005), “curved” (McCann 2008) and characterised by “mountains” of economic activity (Rodríguez-Pose and Crescenzi 2008) that are shaped by how places become “sticky” and attract and embed economic activities, assets and resources. In this perspective, market liberalisation and globalisation work not to “flatten” the world, but to concentrate economic activities especially in city-regions that prove attractive to financial and productive capital and provide conditions conducive to innovation (OECD 2014a). China's globalisation has seen its cities such as Shanghai assume global characteristics and influence (Plate 1.1). Transnational corporations are the primary “movers and shapers” of the world economy, and the growth of foreign direct investment (FDI) is typically taken as a proxy of the rate of globalisation (Dicken 2015; UNCTAD 2015) (Chapter 7). Global or world cities are important insofar as they are locations for the headquarters of the world's dominant firms and the financial centres that support their development and the business and other services which grow around these (Taylor et al. 2011). Such cities are attractive to highly qualified, skilled and mobile people, whether these are richly remunerated “symbolic analysts” (Reich 1992) or members of the “creative class” (Florida 2002) who staff the key industries, but also to the lower skilled migrants, refugees and asylum seekers who, typically, find work in the services industries that underpin the growth of global cities or in the manufacturing industries that are driving urbanisation in some parts of the world (Wills et al. 2012).

Figure 1.2 The world's megacities, 2007 and 2025

Source: Adapted from UN-Habitat (2008: 1)

Plate 1.1 Globalisation and a global city – Pudong, Shanghai, China

Source: Authors' image, 2014

Heightened levels of social and spatial inequality mark the era of globalisation. Analysis has focused on how the gains of globalisation have been appropriated by a small social elite and how wealth is accumulating in fewer and fewer hands – the so-called “1 per cent” (Piketty 2014; Stiglitz 2013). Piketty (2014) emphasises how the returns to wealth are outstripping the rate of growth in the economy, reflecting the increased role of asset appreciation, inheritance and ownership in the more prosperous economies of the global North and beyond. While in some accounts social and spatial inequalities are considered positive for growth because they provide incentives for enterprise (Glaeser 2013), recent research has highlighted the negative impacts on wider society and economy. Wilkinson and Pickett (2010) demonstrate how income differences within a society and the size of the gap between the highest and the lowest income earners has a significant effect on the entire society, eroding trust, increasing anxiety and illness, encouraging excessive consumption and even influencing crime and murder rates. In more prosperous countries, a smaller gap between rich and poor means a happier, healthier and more successful population. There are important gender and ethnic dimensions to patterns of inequality between and within countries and regions (Perrons 2012). In Nordic countries, levels of labour market equality between men and women are very high, but in the UK there are significant differences between employment participation rates between regions (Perrons and Dunford 2013). There are very different levels of women's involvement in the workforce in China and India with high levels in the former and low levels in the latter. Forms of ethnic and religious discrimination can be expressed in urban and regional inequalities too (Altman 2004) (Chapter 8). Rising inequality contributes to the erosion of a shared sense of citizenship, weakening social solidarity and entrenching the political power of elites (Crouch 2013; Oxfam 2014). Increasing inequality has wider economic impacts, causing a drag upon further growth because it limits the expansion of demand and consumption on the part of those groups who experience stagnating or declining relative incomes which have the greatest propensity to consume (Cingano 2014; Morgan Stanley 2014; Ostry et al. 2014, Standard & Poor's 2014). Politically, in the wake of the global financial crisis and the “Great Recession”, the uneven distribution of the benefits and costs of globalisation formed the backdrop to the waves of protest that caught the attention of the world – symbolised by the Occupy Wall Street (OWS) movement that began in Zuccotti Park in New York City in 2011 and spread internationally, fomenting new political groupings across the world such as Podemos (Spain) and Syriza (Greece) in recession-hit Europe (Chapter 9).

In the context of globalisation and rising inequalities, the map of regional and local prosperity has become more sharply etched (Figure 1.3). Significant differences in levels and rates of growth, unemployment and poverty exist between localities and regions across the world. In many, if not most, countries inequalities in economic and social conditions have widened, although their size and pattern varies. In China, industrialisation and urbanisation have produced a complex pattern of urban/rural and inter-provincial inequalities that has favoured the eastern coastal region, reflecting a mix of policy choices, territorial competition and market forces (Chapters 7 and 8). In the EU, prior to 2008 the geography of prosperity saw convergence between Member States, but widening inequalities within states marked by a growing dominance of capital cities within national economies, with significant variation of the range of inequalities within different countries, although this pattern was disrupted by the effects of the Great Recession and attendant austerity (European Commission 2014) (Chapter 3). In some parts of the world, the rapid growth of large and capital cities has been matched by the emergence of “shrinking” cities and regions, places where economic contraction and population decline are entrenched (Haase et al. 2013, 2014). Social and spatial inequalities have also grown within cities in many countries in both the global South and North. In global cities across the world, rising socio-spatial inequality is manifest in concentrated poverty and unemployment and a lack of affordable housing. Relationships between central business districts and suburbs, ghettos and gentrifying districts contribute to complex urban morphologies marked simultaneously by conspicuous consumption and social exclusion, mediated by welfare and land-use planning regimes (McGranahan and Martine 2014).

Figure 1.3 Coefficient of variation of GDP per head, employment rate (15–64) and unemployment rate, EU–27 NUTS 2 regions, 2000–2013

Source: Adapted from European Commission (2014: 3)

Politically, the era of globalisation during the 1990s and 2000s was understood initially as an extension of a western model of market liberalisation and production. In the aftermath of the Second World War, much discussion of development concepts, policy and practice drew upon experiences from the global North (McMichael 2012) (Chapter 2). Researchers in the global South contested the appropriateness of this one-way traffic, questioning the relevance of development theories formulated in very different historical, political and economic contexts to explain their predicament (Yeung and Lin 2003; Connell 2007). The dramatic rise of China as a global economic power and as an incipient ideological and strategic hegemon, especially in the global South, represents a political challenge to the tenets of what has been known as the “Washington Consensus” on development (Rodrik 2006; Stiglitz 2002; Williamson 1989). The creation of new acronyms such as BRICs (Brazil, Russia, India, China) and MINTs (Mexico, Indonesia, Nigeria, Turkey) point to the growing importance and visibility of emerging economies characterised by rapid industrialisation, urbanisation and a rising middle cl...