Can institutions adapt to new models of economic governance? : case studies in North East England and Tees Valley

Abstract

This thesis draws lessons for economic governance from two case studies of a model of local development introduced by the UK government in 2010. Its temporal context is the decision of the coalition government to abolish the regionalism introduced by the Labour government in 1997/98 and replace it with a model of localism based on functional economic areas (FEAs). Its spatial context is North East England, where the two case studies have been conducted to illustrate how localism is working in practice as a governance system. The thesis studies the governance of devolution in the North East Combined Authority (NECA) and in Tees Valley as a political, economic and institutional issue, analysing the responses of local leaderships to the new model and its formal institutional arrangements. It finds that informal institutions in the shape of identity, socio-cultural values and political traditions and practices can exert a powerful influence on local leadership groups and hence the establishment and operations of new formal institutions. The thesis discusses the different approaches taken by the new formal institutions to development, and the resulting economic outcomes. It concludes that governments intending to devolve powers for economic purposes must take full account of regional and/or local circumstances, including the political. Trying to impose an economic governance model on an unwilling locality does not work, and a bottom-up approach should be adopted. Economically, it finds that at this stage, and with so many spatially blind factors affecting the regional economy, it is impossible to say whether the transition from regionalism to localism is having any economic effect, though early signs are largely disappointing. The thesis also examines the accountability and inclusiveness of the new governance and finds problematic issues in relation to both. It concludes with recommendations for institutional reform. In what is the quite recent and continuously evolving institutional landscape of localism in England, the thesis makes a significant addition to a still under-researched field.