ramsay's regional policy nightmares (slight return)

but reykjavik! but dallas! but tilbury!

I find myself once more thinking about my regular bugbears in economic geography, and particularly about “scatterplot agglomerationism”, the belief that the single factor which accounts for economic productivity is either size, population density or some gerrymandered version of adjusted population density which takes into account transport times. (The subtitle of this post basically summarises my issues here – we have one of the highest output per capital in Europe at a scale somewhat smaller than Rotherham, a massive urban sprawl which nonetheless works, and a London suburb with extremely good transport connections that’s nonetheless one of the poorest places in the country.)

As long term readers will know, my view is that the scatterplots tend to reverse the direction of causation (or at very least, underestimate the extent to which things are endogenous). If something grows it will get bigger, productive industries like to cluster together and when people have somewhere worth going to they build transport links to it. The opposite view is what I’ve called “bastard Jane Jacobsism” – a sort of concept that density and agglomeration spontaneously generate economic activity, that the natural condition of human beings is to be starting businesses and they are only prevented by not being in close enough proximity to one another. It’s the theory behind the Oxford Cambridge Arc; the prediction that the next generation of Micro Men will discover one another by chance meetings in pubs in newbuild towns that don’t even have a hairdresser shop.

My alternative suggestion was summarised in a post last year – regional problems of underdevelopment are the result of specific bad decisions from the past, which can only be solved by making specific good decisions in the future. And that the TV series “Gordon Ramsay’s Kitchen Nightmares”, as well as acting as an excellent summary of Malcom Sparrow’s “Problem-Centric Regulation”, gives a model for how regional policy can be improved.

But revisiting that post a year on, I’m less convinced. I think the central point – that regional authorities often need someone to get in their face and say “you’re in denial big boy”, then offer practical advice and a large chunk of capital investment – is valid. But I now worry that I might not have been starting from a point of respect for the problem. How did governance get so bad? Why has economic development not worked?

And I’m worried that maybe I should have been joining this up to another recurring “bit” on this ‘stack. In 2023, I wrote, in a review of the book “The Big Con” by Mariana Mazzucato and Rosie Collington:

“[…] Like a doctor curing a patient, a consulting firm that did its job properly would make itself redundant. The temptation is instead to act as a corporate Dr. Feelgood, prescribing solutions that ease clients’ pain in the short term while sapping their independence and health in the long term. Mazzucato and Collington call this phenomenon “infantilization” where Stafford Beer called it “decerebration”; the book notes that it has also been described as “consultocracy” by British government researchers and “brochuremanship” by the former director of NASA.

“It leads to a kind of self-fulfilling prophecy. Having invited the consultants in out of a belief that the private sector can handle complicated things like technology and economic studies better, the public sector eventually succumbs to the consultants’ upselling of projects that encroach further on government’s core functions. This sets up a chain of events ensuring that the client’s own competence gradually declines, rendering it unable to plan, let alone innovate, and finally bringing it to a stage where it’s completely dependent on outside help,

This is an interesting description of the relationship between central government and management consultancy. But it’s an absolutely frightening description of the relationship between central government and local government. By centralising power in the name of efficiency (and the prevention of “postcode lotteries”, an idiotic British phrase that means “any variation or innovation”), local authorities have been organisationally infantilised, decerebrated, consultocratised and brochuremanned.

That doesn’t mean the individual people are any worse than civil servants in Whitehall, far from it! It just means that when they know what needs to be done, they have no organisational means of doing it. And by degrading the organisational capacity, the original decision to centralise is justified. So local government gets to a state where it is barely capable of its two vestigial functions – performing a small set of statutory duties, and asking for more resources from London.

And so, but Reykjavik! It’s a city with some useful natural resources, mainly geothermal power. But that can’t be the whole explanation; look how quickly it developed a tourist industry in the wake of the banking and currency crisis. The big advantage that Reykjavik has over, say, Manchester or Liverpool is the absolute knowledge that it can’t ask anyone else to solve its problems, and the related confidence that nobody is going to step in and tell it what to do.