The Political Economy of Regionalism

Michael Keating, John Loughlin, Michael Keating, John Loughlin

• Publisher: Routledge
• Year: 2013
• eBook ISBN: 9781136305672
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Examining the effects of economic and political restructuring on regions in Europe and North America, the main themes here are: international economic restructuring; political realignments questions of territorial identity; and policy choices and policy conflicts in regional development.

PART I

THEORETICAL AND COMPARATIVE ISSUES

1

The Political Economy of Regionalism

MICHAEL KEATING

REGIONS AND REGIONALISM

Regionalism in western industrial societies covers a complex and varied set of phenomena, to the extent that some observers have doubted whether the concept has any analytical value at all. Yet, in its varied and changing form, it returns regularly to the political agenda. After a period in which it went out of fashion, it has returned again in the 1990s as states and political and social actors adjust to changes in the global and continental economic and political orders.

From a strictly empiricist and positivist perspective, it might seem logical, before discussing regionalism, to define what is a region. Yet region, like the related concepts of state and nation, defies descriptive definition. It takes different forms in different places and refers to a variety of spatial levels. Moreover, in most states, the region is a contested area, both territorially and functionally. Spatially, it exists somewhere between the national and the local and is the scene of intervention by actors from all levels, national, local, regional and now supranational. Functionally, it is a space in which different types of agency interact and, since it is often weakly institutionalized itself, a terrain for competition among them. Definitions of regions are also value-laden, since they reflect different conceptions of their political character and potential. Some represent them as mere administrative divisions, to be defined in functional terms. Others see them as reflecting communities of interest; some regions define themselves as historic nations or harbour movements with nationalist aspirations.¹ Political entrepreneurs themselves seek to shape the definition of region to reflect their values and interests.

This paper examines the process of regionalism and region-building from the various perspectives and concludes that, while the theme of regionalism is increasing in importance, there is an increased differentiation between types of region and their potential. First, it examines regionalization as state policy, a top-down phenomenon and the way in which this was increasingly politicized, the problems of institutionalization and the subsequent decline in regional policy. Then it looks at regionalism as political demands, or bottom-up regionalism. Finally, it considers the problem of regionalism in the context of global economic change, continental integration and the changing scope of the nation state.

REGIONS AND STATE POLICY

Regional anti-disparity policies emerged in western Europe in the postwar era as an extension of Keynesian macro-economic management. They followed both an economic and a political logic (Biarez, 1989; Keating, 1988b). Economically, the aim was to rectify what were seen as market imperfections in the allocation of resources. Capital tended to flow to central places close to markets, a tendency exacerbated by technological changes which liberated newer industries from their ties to raw materials and waterways. This produced higher levels of unemployment and lower regional incomes in depressed regions, together with overheating and inflationary pressures in the booming areas.

In a pure market economy, adjustment would be automatic. Workers would have to move to where the jobs were, or accept lower wages in order to attract capital to them. This happens to a large extent in the USA, where mobility is seen as normal and proper. In Europe, there was considerable migration into the industrial areas, notably in Italy and Spain. Yet moving the workers was not seen as the only appropriate solution and in some countries it was rejected almost entirely. Partly, this was for economic reasons, to avoid the costs of congestion and stress on housing markets in booming areas, and to exploit available space in the depressed regions. Political incentives existed to favour a policy of work to the workers rather than vice versa. One is the existence of trade unions and nationally negotiated wage rates in several sectors. This prevented wages falling in poorer regions to attract capital and lower-value-added types of production. There is also a more general expectation in European culture, sustained especially by social democratic and some Christian democratic values, that citizens should be entitled as far as possible to equal living standards irrespective of where they live. Citizenship has increasingly been given a substantive social and economic content, with the state responsible for more than mere protection of life and limb. Nation-building and consolidation were also seen to imply a commitment to equalization of living standards, especially where there were historic problems of national integration or separatist pressures. Class settlements reached after the war, and the need to incorporate the working class into the political nation, also limited the ability of governments to pursue policies of wage differentials or involuntary mobility. The political weight of poorer regions themselves also counted. In a nationalized and centralized political system, poorer regions are able to use their political weight to compensate for their economic weakness. This, of course, is a variable, depending on the importance of regions to the national governing coalition, their political marginality and their potential for disruption or separatism. More generally, regional policy was a means of securing the consent of poorer regions to the constitutional state order and the government of the day. Socially, it could relieve the burden on the welfare state, promote social integration and prevent marginalization of groups and places.

Governments therefore adopted a series of diversionary policies. The main instruments were: grants and incentives to private investors to locate in development regions; restrictions on investment in booming locations; the diversion of public-sector investments into development regions; public infrastructure investment in advance of need, to create favourable conditions for growth.

For governments, this could be presented as non-zero sum, with advantages for all. Poor regions could gain investment, jobs and increased living standards. Prosperous regions gained from the moderation of inflationary pressures and pressures on infrastructure and housing markets. The national economy gained from additional production, using idle resources and being able to sustain a higher level of aggregate demand without encountering resource constraints or inflationary pressures. Policy was seen as marginal, not affecting mainstream economic policy or putting in question the basic outlines of national demand management. It was seen as essentially short-term since, when economic conditions equalized, active policy would no longer be necessary. A pattern of self-sustaining growth would be established and regions could then be left to look after themselves while contributing to national economic growth. They would cease to be special regions and be reintegrated into the national economy.

Diversionary policy in its early phases was largely depoliticized and technocratic. Initiatives were in the hands of the technical bureaucracy. Gradually, however, it became more sophisticated and interventionist, with other policy measures to accompany diversionary incentives. Rather than focus on blackspots defined by levels of unemployment, policy was addressed to more broadly defined regions. Growth poles were selected within regions at the locations with the best potential for development, rather than just those with the worst problems. Planning frameworks were developed to link diversionary policies to sectoral initiatives and local land use planning. This required a greater institutionalization of policy and attention to the political and administrative mechanisms for its implementation. Local political, administrative and economic elites were increasingly drawn in as partners in the development project. This led to a greater politicization and made the policy area and its funds an object of increasing contention. Central state intervention had in many cases destabilized existing networks of territorial representation and exchange, leading to a crisis of territorial representation and the emergence of new movements of regional protest (Keating, 1988b).

In the 1980s, the traditional model of diversionary policy experienced something of a crisis. One reason was the experience of policy failures, such as the ‘cathedrals in the desert’, expensive projects which did not link effectively to their local and regional economies, produce spin-off jobs or stimulate a regional multiplier effect. In many cases, regional policy was given inadequate administrative means, consisting of grants and incentives without the necessary co-ordination, monitoring and follow-up. Linkage to sectoral policies and to local land use planning was not always ideal, despite the efforts of states to modernize their local government structure to facilitate this. In some cases, the failure was political, either of will or the result of corruption and patronage. After all, if regions did succeed in achieving self-sustaining growth, they would no longer need regional aid and a powerful instrument of clientelism and patronage would be lost.

More generally, the opening of European and international markets has led to a shift of priorities on the part of national governments. Instead of putting resources into backward regions, they feel increasingly compelled to favour their most dynamic sectors and locations in order to maximize national competitiveness. The increased international mobility of capital makes it more difficult for governments to steer investments, since a firm prevented from investing in its preferred location is able to choose from a variety of European and world sites and no longer feels constrained to go to a development region. EU policies on industrial subsidies and incentives restrict what governments can do, although there are exceptions in the case of approved development areas. Hence governments have moved to sectoral rather than regional aid, guided by national considerations. As the commitment to full employment has been abandoned, social problems, including the management of unemployment, have been separated from mainstream economic management. Social priorities themselves have also been redefined, as has the spatial geography of need. Urban problems have emerged within regions which are, overall, prosperous, so spatial problems have become more complex and policies inconsistent.

THE POLITICS OF REGIONAL POLICY

Early regional policies tended to be undertaken by national governments, pursuing national and partisan goals and acting in a rather centralized fashion. From the 1960s, governments began to involve regions themselves more as they institutionalized the policy. There was a need to involve local collaborators in the design and implementation of national strategy if it was to be effective. There was also a desire to stimulate and tap the energies of dynamic economic elites in the regions, including business leaders, modernizing farmers, trade unionists and professionals – what the French came to call the forces vives. By institutionalizing regional policies, it was also hoped to link them more closely to other spatial initiatives including land use planning and social priorities. There were two modes of institutionalizing regions.

The first might be described as neo-corporatist. Regional economic elites are co-opted into advisory and executive institutions and invited to co-operate with the state in the pursuit of regional development strategies. In this way, policy can continue to be depoliticized, the policy community restricted and the agenda kept rather narrow. In France, Italy and the United Kingdom, advisory committees, including business, trade union and local government representatives along with academic and independent members, were established to work with local offices of national government in devising and implementing regional development strategies.

Neo-corporatist institutions at the regional level were not a great success. There were tensions between the state's view of regions and desire to integrate them into national policy priorities, and demands from within regions themselves. There was an ambiguity in the role of private sector and regional actors, expected to provide a distinct regional input to strategy while administering central government policy. The institutions lacked powers and resources of their own, and the central state was not always able to deliver on its own undertakings. So, with the increased politicization of the issue, these institutions have either atrophied or developed into elected regional governments. In Italy, they rapidly developed into the regional governments which had been promised in the postwar constitution but put on ice for 20 years; the special agencies, however, continued in existence for much longer. In France, the process was slower but between 1972 and 1986, elected regions came into being to replace the old CODER. In Britain, the process stalled in the late 1960s and regional institutions atrophied until the last remnants were abolished by the incoming Thatcher government in 1979. In Germany, regional government already existed in the form of the Länder but these were brought into the regional policy process from 1970. In Spain, there were technocrats in the Franco regime who wanted an institutionalized regional policy, but such was the paranoia of the regime about Catalan and Basque nationalism that the very word region was almost taboo.

The new institutionalization shifted the basis and context of policy. It had been a largely technical matter, handled by central bureaucratic elites. Local politicians merely had to wait for what the French called the ‘manna’ to descend on them. Now the process became more politicized as the political and social implications of development and change came to impinge on the work of local governments. Once local and regional interests were brought formally into the process of policy making and implementation, it became apparent that regional preferences and priorities were not always consistent with those of governments.

REGIONALISM FROM below

Regional demands include cultural issues, questions of autonomy, social priorities and differences in emphasis on economic matters. Some territories are historic nationalities with a memory of independent statehood or separatist demands. Others are culturally or linguistically distinct. Diffusionist and assimilationist theories of the 1950s and 1960s tended to argue that these cultural and political differences were evidence of retarded modernization and would disappear in the face of market integration, social assimilation and the uniform state (Shils, 1975; Smelser, 1966; Lipset, 1985). Where assimilation was not possible, there might be separatism, which would equally tend to create integrated nation states (Deutsch, 1966). Elsewhere (Keating, 1988b) I have argued at some length against this view, which tended to reflect the bias of metropolitan scholars, and have insisted that territorial politics is a permanent feature of the modern state. There is no necessary connection between modernization, however that is construed, and the consolidation of a particular nation state. Historic memories, traditions and solidarities can be political instruments used in the pursuit of contemporary objectives.

Another element in bottom-up regionalism is the pressure for democratization and participation in the face of the centralizing state. From the 1960s, there was a revival of interest in minority languages and culture. This included people in traditional sectors and peripheral regions whose way of life was threatened by the advance of the homogeneous market and of the centralizing welfare state. It also included middle-class urban professional elements who had rediscovered traditional languages and cultures.

Finally, there was a series of crises in traditional sectors of industry and agriculture from the 1970s. These were now increasingly seen in spatial terms, as regions had been mobilized by the very policies of the national government and encouraged to view their problems and articulate their demands in regional terms. Coalitions of territorial defence emerged to fight to preserve existing sectors threatened by modernization or European competition. The result was a crisis of territorial representation in several states in the 1970s, as the postwar model of territorial management broke down and policies and institutions for governing regions were increasingly contested.

Three types of regionalist politics then emerged, in rather uneasy alliance with each other and subscribing to a vaguely defined set of slogans to indicate common concerns. First, there was a defensive regionalism, tied to traditional economic sectors and threatened communities, and committed to resisting change. This was a marked feature of rural areas, such as the arrière-pays of Languedoc and of declining industrial areas, such as west-central Scotland in the 1970s. Second, there was integrating regionalism which sought to modernize the region with the aim of re-inserting it into the national economy but without making claims for continued regional distinctiveness or cultural promotion. This was evident in north-east England and in some of the urban-based territorial notables of France. Third, there was autonomist regionalism, which sought to construct a distinct path to modernization on a programme which could combine autonomy, cultural promotion and economic modernization. This emerged especially in territories with historic claims to nationality. These are conceptual distinctions. Any given movement has to play on one or more of these elements in order to maximize its appeal. The French Communist Party, once it adopted regionalism, tried all at once. Yet there are basic contradictions in the three approaches at the level of policy and practice and over time, one or other conception tends to dominate. It is in the difficulty of combining these three modes of regionalism that the weakness and decline of many of the regiona...

Table of contents

• Cover
• Half Title
• Full Title
• Copyright
• Contents
• List of Contributors
• Contributors
• Introduction
• PART ONE: THEORETICAL AND COMPARATIVE ISSUES
• PART TWO: CASE STUDIES
• References
• Index