In response to the rise in uneven growth across the national space and the corresponding growth of certain regional economies, regions are mobilised by national governments as territories for
economic development activity, within a context of changing relations with the nation state of which they are a part, as multi-level and multi-scalar frameworks of governance come into being. The
formation of regions as new state spaces, though, can be seen both in the light of the new regionalist logic, where they run in parallel to the new production spaces and form the geographically-situated architecture of shared conventions and institutions; and in terms of neoliberal approaches in which regional competitiveness policies are a response to the
abandonment of spatially redistributive policy. In the latter interpretation growth, competitiveness and labour market flexibility are administered at the regional scale in an effort to address specific urban and regional challenges and to allow regions to compete across national borders. In either understanding they are an attempt on the part of the state to regain legitimacy in the face of failure by intervening in the promotion of development at the scale at which economic processes are regarded as functioning (Brenner, 1999).
Important to both interpretations is the notion that a new regional regulatory framework is in operation, in which an alternative mode of governance is implemented that emphasises horizontal over vertical relations and the use of partnership, flexibility and negotiated outcomes. Thus ‘metropolitan governance is being redefined from a vertical, coordinative and redistributive relationship within a national administrative hierarchy into a horizontal, competitiveness and developmentalist relationship between subnational economic territories battling against one another at European and global scales to attract external capital investment’ (Brenner, 2003: 303).
4.2.2.3 The Changing Role of the Private Sector in Local and Regional Governance
While changes in the nature of local economies and of local economic policy has tended to be understood by reference to the evolution of local economic initiatives, local government, institutions and the experience of particular cities and regions, the relationship between government and the private sector in local economic policy has been to some extent overlooked in European literature on urban and regional change that privileged the role of the state (Harding, 1997). This relationship is dealt with directly by the US urban politics literature, which moves beyond an understanding of the politics of local economic development that assumes that local power resides in local
government to examine the role of different agencies in shaping strategies, selecting projects and reaping the rewards from these.
Two major concepts of the political mobilisation of private sector interests to have arisen out of the US urban politics literature are the ‘growth coalition’ and the ‘urban regime’. The notion of the growth coalition (Logan and Molotch, 1987) is based on the interest taken by land and property owners in US cities in the local economy, due to the correlation between local economic
performance and land values, together with the mobilisation of local government by such local growth interests in order to further their own economic aims. The urban regime takes a broader view, conceptualising the governance arrangements adopted by political and economic interests in an attempt to reproduce their power (Wood, 2004). In contrast to the instrumental positioning of business interests in growth coalitions, in urban regimes actors are bound together in a mutually interdependent regime by economic, political and institutional forces (Stone, 1993). Politicians align themselves with business interests due to their holding of productive assets and dependability for investment capital, though non-business groupings may also exist, such as environmentalists and, in the UK, professional local government (Lawless, 1994). Thus urban regimes may or may not be dominated by business interests while growth coalitions are by definition business-led.
However, the tendency of European literature on the politics of urban and regional growth to focus on the role of the state is endorsed by some authors engaged with the focus of US literature on the role of private sector actors. This is because the role of the state, both national and local, is seen as being of primary importance in the European context, as the size, scope and political composition of the state in the US and European nations differs greatly (Wood, 2004), while in the UK party political dominance in local government is much greater than in the US (Bassett, 1996), professional
hierarchies in local policy-making are more influential, and no local tax base exists from which public-private partnerships can be locally funded (Lawless, 1994). Additionally, while in the US mobilisation of business at the local level is for the most part voluntary and autonomous, in the UK the motivation for this has come from political rather than business quarters, as business is
mobilised as part of an ideological and political project (Wood, 2004).
This points to the importance of the role played by national government in local economic partnerships in the UK, where in place of the bottom-up urban coalitions of the US literature are found centrally-orchestrated policy partnerships. If a key advantage of growth coalitions and urban regimes is their provenance in local interaction and idea generation, this benefit would not be available to UK urban regeneration partnerships, where local interests are the co-optees, rather than the propagators, of change. Harding (1997: 298) notes of the relative effectiveness of centrally and locally orchestrated institutions: ‘ultimately networks and institutions appear to work best when they form around ideas and aspirations that can motivate key decision-makers. When they are formed in lieu of ideas, or because they are imposed in some way, they are generally less effective’. The reduced role of business in UK urban regeneration partnerships may also be due to the smaller prospects of economic gain in UK cities compared to those in the US, where a much greater
true given the tendency for public-private partnerships in the UK to be based on the urban
regeneration of peripheral cities rather than the continued growth of successful local economies, as in the examples of Atlanta and Los Angeles surveyed in the US literature (Stone, 1989, 2001; Rubin and Stankiewicz, 2001). Wood (2004), Bassett (1996) and Rogerson and Boyle (1996) found that, in contrast to the role assigned to business interests in the US literature, the engagement of business with local economic development partnerships in the UK tended not to be due to any direct prospect of economic gain. Indeed, an interest and sense of responsibility towards the local area was found to be a significant motivating factor in each of these cases. The prospects of economic gain have been found to be a factor in some cases, either directly, through winning of development deals around particular projects, or indirectly, through the opportunity to network with other stakeholders or to influence strategic choices (Harding, 1997). As remarked by Valler et al (2000), though, such forms of action resemble Peck’s (1995) observation that business leaders are opportunistically ‘shaking’ rather than purposefully ‘moving’.