Hostname: page-component-cd9895bd7-jkksz Total loading time: 0 Render date: 2024-12-25T17:35:23.698Z Has data issue: false hasContentIssue false
  • English
  • Français

UK INTERREGIONAL INEQUALITY IN A HISTORICAL AND INTERNATIONAL COMPARATIVE CONTEXT

Published online by Cambridge University Press:  28 July 2020

Andre Carrascal-Incera ,
Philip McCann ,
Raquel Ortega-Argilés  and
Andrés Rodríguez-Pose
Andre Carrascal-Incera
Affiliation:
City-REDI Institute, Birmingham Business School, e-mails: a.carrascalincera@bham.ac.uk; R.OrtegaArgiles@bham.ac.uk.
Philip McCann
Affiliation:
University of Sheffield Management School, e-mail: p.mccann@sheffield.ac.uk.
Raquel Ortega-Argilés
Affiliation:
City-REDI Institute, Birmingham Business School, e-mails: a.carrascalincera@bham.ac.uk; R.OrtegaArgiles@bham.ac.uk.
Andrés Rodríguez-Pose
Affiliation:
Department of Geography and environment, London School of Economics, e-mail: A.Rodríguez-Pose@lse.ac.uk.
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper explores the nature and scale of inter-regional and inter-urban inequalities in the UK in the context of international comparisons and our aim is to identify the extent to which such inequalities are associated with strong national economic performance. In order to do this, we first discuss the evolution of UK interregional inequalities relative to comparator European economies over more than a century. We then focus specifically on comparisons between the UK and the reunified Germany. These two exercises demonstrate that the experience of the UK has been rather different to other countries. We further explore UK inter-urban inequalities in the light of international evidence and then explain why observations of cities only tell us a partial story about the nature of interregional inequalities, especially in the case of the UK. Finally, we move onto an OECD-wide analysis of the relationships between economic growth and interregional inequality. What we observe is that any such relationships are very weak, and the only real evidence of a positive relationship is in the post-2008 crisis period, a result which points to differentials in regional resilience rather than inequality-led growth. Moreover, once former transition economies are removed from the sample, the relationship disappears, or if anything becomes slightly negative. As such, the international evidence suggests that the UK’s very high spatial inequalities have hampered, rather than facilitated, national economic growth.

Keywords

RegionscitiesinequalitygrowthR11R12O47O50
Type
Research Article
Information
National Institute Economic Review , Volume 253 , August 2020 , pp. R4 - R17
Copyright
© National Institute of Economic and Social Research, 2020

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

Andre Carrascal-Incera, Philip McCann and Raquel Ortega-Argilés were supported financially for this research by the ESRC Rebuilding Macroeconomics Network Social Cooperation Sub-Programme under the Grant Entitled “The Long-Run Consequences of Adverse Economic Shocks: UK Regional and Urban Inequalities”. We thank Paolo Veneri and Eric Gonnard of the OECD for the calculations comparing the UK with Germany and for the top-bottom ratio functional urban area calculations.

References

REFERENCES

Ahrend, R., Farchy, E., Kaplanis, I. and Lembcke, A. (2014), ‘What makes cities more productive? Evidence on the role of urban governance from give OECD countries’, OECD Regional Development Working Papers 2014/05, Paris: OECD.Google Scholar
Atkinson, R.D., Muro, M. and Whiton, J. (2019), The Case for Growth Centers: How to Spread Tech Innovation Across America, Brookings Metro Program, December, See: https://www.brookings.edu/wp-content/uploads/2019/12/Full-Report-Growth-Centers_PDF_BrookingsMetro-BassCenter-ITIF.pdf.Google Scholar
Barca, F., McCann, P. and Rodríguez-Pose, A. (2012), ‘The case for regional development intervention: place-based versus place-neutral approaches’, Journal of Regional Science, 52, 1, pp. 134–152.CrossRefGoogle Scholar
Bartolini, D., Stossberg, S. and Blöchliger, H. (2016), ‘Fiscal decentralisation and regional disparities’, OECD Economics Department Working Papers No. 1330, Paris: OECD.Google Scholar
Blöchliger, H., Bartolini, D. and Stossberg, S. (2016), ‘Does fiscal decentralisation convergence foster regional convergence?’, OECD Economic Policy Paper, No. 17, Paris: OECD.Google Scholar
Blöchliger, H. and Égert, B. (2013), ‘Decentralisation and economic growth – part 2: The impact on economic activity, productivity and investment’, OECD Working Papers on Fiscal Federalism No. 15, Paris: OECD.Google Scholar
Broadberry, S. and Klein, A. (2012), ‘Aggregate and per capita GDP in Europe, 1870–2000: continental, regional and national data with changing boundaries’, Scandinavian Economic History Review, 60, 1, pp. 79–107.CrossRefGoogle Scholar
Carniti, E., Cerniglia, F., Longaretti, R. and Michelangeli, A. (2019), ‘Decentralization and economic growth in Europe: for whom the bell tolls’, Regional Studies, 53, 6, pp. 775–89.CrossRefGoogle Scholar
Collier, P. (2018), The Future of Capitalism, London: Penguin Books.Google Scholar
Collier, P. and Venables, A.J. (2018), ‘Who gets the urban surplus?’, Journal of Economic Geography, 18, pp. 523–8.CrossRefGoogle Scholar
Cowell, F. (2011), Measuring Inequality, Oxford: Oxford University Press.CrossRefGoogle Scholar
de Dominicis, L. (2014), ‘Inequality and growth in European regions: towards a place-based approach’, Spatial Economic Analysis, 9, pp. 120–41.CrossRefGoogle Scholar
European Commission (2014), Investment for Jobs and Growth: Promoting Development and Good Governance in EU Regions and Cities, Sixth Report on Economic, Social and Territorial Cohesion, Brussels: European Commission Directorate-General for Regional and Urban Policy.Google Scholar
Dijkstra, L., Garcilazo, E. and McCann, P. (2013), ‘The economic performance of European cities and city-regions: myths and realities’, European Planning Studies, 21, 3, pp. 334–54.CrossRefGoogle Scholar
EY (2020), Beyond Brexit ‘Levelling up’ the UK: UK Regional Economic Forecast English Regions, Cities and Towns, 25 February, see: https://www.ey.com/en_uk/growth/ey-regional-economic-forecast-2020.Google Scholar
Ezcurra, R. and Pasqual, P. (2008), ‘Fiscal decentralization and regional disparities: evidence from several European Union countries’, Environment and Planning A, 40, pp. 1185–201.CrossRefGoogle Scholar
Ezcurra, R. and Rodríguez-Pose, A. ( 2013), ‘Political decentralization, economic growth and regional disparities in the OECD’, Regional Studies, 47, 3, pp. 388–401.CrossRefGoogle Scholar
Ezcurra, R. and Rodríguez-Pose, A. (2014), ‘Government quality and spatial inequality: a cross-country analysis’, Environment and Planning A, 46, pp. 1732–53.CrossRefGoogle Scholar
Fratesi, U. and Rodríguez-Pose, A. (2016), ‘The crisis and regional employment in Europe: what role for sheltered economies?’, Cambridge Journal of Regions, Economy and Society, 9(1), pp. 33–57.CrossRefGoogle Scholar
Gal, P. and Egeland, J. (2018), ‘United Kingdom: reducing regional disparities in productivity’, OECD Economics Department Working Papers, No.1456, Paris: OECD.Google Scholar
Giles, C. (2019), ‘Britain’s regional divide is smaller than it first appears’, Financial Times, 9 May, see: https:// www.ft.com /content/ d965d8c2-71af-11e9-bbfb-5c68069fbd15.Google Scholar
Giles, C. (2020), ‘Levelling-up: how wide are the UK’s regional inequalities?’, Financial Times, 2 March, see: https://www.ft.com/content/c9db4c66-5971-11ea-a528-dd0f971febbc.Google Scholar
Harrington, M. (2020), ‘Working class-wellbeing has been assaulted by the free market right and the liberal bourgeois left’, New Statesman, 31 January–6 February.Google Scholar
Henrickson, C., Muro, M. and Galston, W.A. (2018), Countering the Geography of Discontent: Strategies for Left-Behind Places, Brookings Metropolitan Program, November, see: https://www.brookings.edu/wp-content/uploads/2018/11/2018.11_Report_Countering-geography-of-discontent_Hendrickson-Muro-Galston.pdf.Google Scholar
Jennings, W., Brett, W., Bua, A. and Laurence, R. (2017), Cities and Towns: The 2017 General Election and the Social Divisions of Place, Centre for Towns and New Economics Foundation, October, see: https://neweconomics.org/2017/10/cities-and-towns-2017-election.Google Scholar
Kitsos, A., Carrascal-Incera, A. and Ortega-Argilés, R. (2019), ‘The role of embeddedness on regional economic resilience: evidence from the UK’, Sustainability, 11, 14, pp. 1–19.CrossRefGoogle Scholar
Leunig, T. and Swaffield, J. (2007), Cities Unlimited: Making Urban Regeneration Work, London: Policy Exchange.Google Scholar
Maddison, A. (2006), The World Economy: Volume 1 A Millennial Perspective; Volume 2 A Historical Perspective, Paris: OECD.CrossRefGoogle Scholar
Martin, R., Sunley, P., Gardiner, B., Evenhuis, E. and Tyler, P. (2018), ‘The city dimension of the productivity problem: the relative role of structural change and within-sector slowdown’, Journal of Economic Geography, 18, 3, pp. 539–70.CrossRefGoogle Scholar
McCann, P. (2016), The UK Regional-National Economic Problem: Geography, Globalisation and Governance, London: Routledge.CrossRefGoogle Scholar
McCann, P. (2018), ‘The trade, geography and regional implications of Brexit’, Papers in Regional Science, 97, 1, pp. 3–8.CrossRefGoogle Scholar
McCann, P. (2019), ‘Perceptions of regional inequality and the geography of discontent: insights from the UK’, Regional Studies, 53, 5, pp. 741–60.Google Scholar
OECD (2011), OECD Regional Outlook 2011: Building Resilient Regions for Stronger Economies, Paris: OECD.Google Scholar
OECD (2012), Redefining “Urban”: A New Way to Measure Metropolitan Areas, Paris: OECD.Google Scholar
OECD (2013), OECD Regions at a Glance 2013, Paris: OECD.Google Scholar
OECD (2015), The Metropolitan Century: Understanding Urbanisation and its Consequences, Paris: OECD.Google Scholar
OECD (2018), OECD Regions and Cities at a Glance 2018, Paris: OECD.Google Scholar
OECD (2019a), OECD Regional Outlook: Leveraging Megatrends for Cities and Rural Areas, Paris: OECD.Google Scholar
OECD (2019b), OECD Regions and Cities at a Glance 2019, Paris: OECD.Google Scholar
OECD (2019c), OECD Making Decentralisation Work 2019, Paris: OECD.Google Scholar
OECD (2020), Enhancing Productivity in UK Core Cities: Connecting Local and Regional Growth, Paris: OECD.Google Scholar
ONS (2017), Exploring Labour Productivity in Rural and Urban Areas in Great Britain: 2014, UK Office for National Statistics.Google Scholar
Raikes, L., Giovannini, A. and Getzel, B. (2019), Divided and Connected: Regional Inequalities in the North, the UK and the Developed World, Institute for Public Policy Research North, IPPR North, November, see: https://www.ippr.org/files/2019-11/sotn-2019.pdf.Google Scholar
Rodríguez-Pose, A. (2018), ‘The revenge of the places that don’t matter (and what to do about it)’, Cambridge Journal of Regions, Economy and Society, 11, pp. 189–209.CrossRefGoogle Scholar
Rodríguez-Pose, A. and Ezcurra, R. (2010), ‘Does decentralization matter for regional disparities? A cross-country analysis’, Journal of Economic Geography, 10, 5, pp. 619–44.CrossRefGoogle Scholar
Rodríguez-Pose, A. and Ezcurra, R. (2011), ‘Is fiscal decentralisation harmful for economic growth? Evidence from the OECD countries’, Journal of Economic Geography, 11, pp. 619–43.CrossRefGoogle Scholar
Roses, J.R. and Wolf, , N. (eds) (2019), The Economic Development of Europe’s Regions: A Quantitative History Since 1900, Abingdon: Routledge.Google Scholar
Royuela, V., Veneri, P. and Ramos, R. (2019), ‘The short-run relationship between inequality and growth: evidence from OECD regions during the Great Recession’, Regional Studies, 53, 4, pp. 574–86.CrossRefGoogle Scholar
Shambaugh, , J. and Nunn, , R. (Eds) (2018), Place-Based Policies for Shared Economic Growth, Brookings Hamilton Project, Washington DC, see: https://www.brookings.edu/multi-chapter-report/place-based-policies-for-shared-economic-growth/.Google Scholar
The Economist (2019), ‘Thirty years after the Berlin wall fell Germans still don’t agree on what reunification meant: discontent may even be growing’, 31 October, see: https://www.economist.com/europe/2019/10/31/germans-still-dont-agree-on-what-reunification-meant?cid1=cust/dailypicks1/n/bl/n/2019115n/owned/n/n/dailypicks1/n/n/UK/337747/n.Google Scholar
The Lancet (2018), ‘Measuring performance on the healthcare access and quality index for 195 countries and territories and selected subnational locations: a systematic analysis from the Global Burden of Disease Study 2016’, GBD 2016 Healthcare Access and Quality Collaborators, 391, pp. 2236–71, 2 June.Google Scholar
Theil, H. (1967), Economics and Information Theory, Amsterdam: North-Holland.Google Scholar
Thießen, U. (2003), ‘Fiscal decentralisation and economic growth in high-income OECD countries’, Fiscal Studies, 24, 3, pp. 237–74.CrossRefGoogle Scholar
UK2070 Commission (2020), Make No Little Plans: Acting at Scale for a Fairer and Stronger Future, February, see: http://uk2070.org.uk/wp-content/uploads/2020/02/UK2070-FINAL-REPORT.pdf.Google Scholar
Veneri, P. and Murtin, F. (2019), ‘Where are the highest living standards? Measuring well-being and inclusiveness in OECD regions’, Regional Studies, 53, 5, pp. 657–66.CrossRefGoogle Scholar
World Bank (2009), World Development Report 2009: Reshaping Economic Geography, Washington DC: World Bank.Google Scholar
Zymek, R. and Jones, B. (2020), UK Regional Productivity Differences: An Evidence Review, Industrial Strategy Council, see: https://industrialstrategycouncil.org/sites/default/files/attachments/UK%20Regional%20Productivity%20Differences%20-%20An%20Evidence%20Review_0.pdf.Google Scholar
Supplementary material: File

Carrascal-Incera et al. supplementary material

Appendix

Download Carrascal-Incera et al. supplementary material(File)
File 162 Bytes