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Economics of devolution/decentralization in the UK: Some questions and answers

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  • Peter Mcgregor
  • Kim Swales

Abstract

McGregor P. G. and Swales K. (2005) Economics of devolution/decentralization in the UK: some questions and answers, Regional Studies 39 , 477-494. The paper explores the economic implications of the radical process of devolution, decentralization and delegation of decision-making and policy delivery initiated by the post-1997 UK Labour Government. It is argued that the economies of all the presently devolved regions ultimately suffer if the Barnett Formula is rigorously imposed. It is shown that the efficiency of devolving fiscal authority involves a balance of positive and negative elements (depending on wage bargaining and migration responses). It is then argued that delegation/devolution of regional economic development policies, while exploiting regional information advantages, neglects regional economic interdependence, so there are potential gains from greater cooperation/coordination.

Suggested Citation

  • Peter Mcgregor & Kim Swales, 2005. "Economics of devolution/decentralization in the UK: Some questions and answers," Regional Studies, Taylor & Francis Journals, vol. 39(4), pages 477-494.
  • Handle: RePEc:taf:regstd:v:39:y:2005:i:4:p:477-494 DOI: 10.1080/00343400500128523
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    References listed on IDEAS

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    1. Hall, Peter A. & Taylor, Rosemary C. R., 1996. "Political science and the three new institutionalisms," MPIfG Discussion Paper 96/6, Max Planck Institute for the Study of Societies.
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    Cited by:

    1. Hermannsson, Kristinn & Lisenkova, Katerina & McGregor, Peter G. & Swales, J. Kim, 2010. "Policy Scepticism and the Impact of London-based Higher Education Institutions (HEIs) on the economy of England: Accounting for Alternative Uses of Public Expenditure," SIRE Discussion Papers 2010-97, Scottish Institute for Research in Economics (SIRE).
    2. Andy Pike & Andrés Rodríguez-Pose & John Tomaney & Gianpiero Torrisi & Vassilis Tselios, 2012. "In search of the ‘economic dividend’ of devolution: spatial disparities, spatial economic policy, and decentralisation in the UK," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 30(1), pages 10-28, February.
    3. Lecca, Patrizio & McGregor, Peter G. & Swales, J. Kim, 2010. "Balanced Budget Government Spending in a Small Open Regional Economy," SIRE Discussion Papers 2010-68, Scottish Institute for Research in Economics (SIRE).
    4. Libman, Alexander, 2009. "Essays on Asymmetric Federalism," MPRA Paper 21591, University Library of Munich, Germany.
    5. Linda Ferguson & David Learmonth & Peter G McGregor & J Kim Swales & Karen Turner, 2007. "The impact of the Barnett formula on the Scottish economy: endogenous population and variable formula proportions," Environment and Planning A, Pion Ltd, London, vol. 39(12), pages 3008-3027, December.
    6. Mark Partridge & Dan Rickman, 2010. "Computable General Equilibrium (CGE) Modelling for Regional Economic Development Analysis," Regional Studies, Taylor & Francis Journals, pages 1311-1328.
    7. Ronald MacDonald & Paul Hallwood, 2004. "The Economic Case for Fiscal Federalism in Scotland," Working papers 2004-42, University of Connecticut, Department of Economics.
    8. Kristinn Hermannsson & Katerina Lisenkova & Peter G. McGregor & J. Kim Swales, 2014. "'Policy Scepticism' and the Impact of Scottish Higher Education Institutions (HEIs) on their Host Region: Accounting for Regional Budget Constraints under Devolution," Regional Studies, Taylor & Francis Journals, pages 400-417.
    9. McGregor, Peter G. & Swales, J. Kim & Turner, Karen, 2008. "The CO2 'trade balance' between Scotland and the rest of the UK: Performing a multi-region environmental input-output analysis with limited data," Ecological Economics, Elsevier, vol. 66(4), pages 662-673, July.
    10. Kristinn Hermannsson & Katerina Lisenkova & Peter G McGregor & J Kim Swales, 2011. "Regional Impact Analyses and the Appropriate Treatment of Regional Budget Constraints under Devolution: An Application to the Impact of Scottish HEIs," ERSA conference papers ersa10p1595, European Regional Science Association.
    11. Hermannsson, Kristinn & Lisenkova, Katerina & McGregor, Peter G. & Swales, J. Kim, 2010. "Policy Scepticism and the Impact of Northern Irish Higher Education Institutions (HEIs) on their Host Region: Accounting for Regional Budget Constraints," SIRE Discussion Papers 2010-78, Scottish Institute for Research in Economics (SIRE).
    12. Lisenkova, Katerina & McGregor, Peter G. & Swales, J. Kim, 2010. "Policy Scepticism and the Impact of Welsh Higher Education Institutions (HEIs) on their Host Region: Accounting for Regional Budget Constraints," SIRE Discussion Papers 2010-72, Scottish Institute for Research in Economics (SIRE).
    13. Kristinn Hermannsson & Katerina Lisenkova & Peter G. McGregor & J. Kim Swales, 2014. "'Policy Scepticism' and the Impact of Scottish Higher Education Institutions (HEIs) on their Host Region: Accounting for Regional Budget Constraints under Devolution," Regional Studies, Taylor & Francis Journals, pages 400-417.
    14. K. Lisenkova & P. G. McGregor & N. Pappas & J. K. Swales & K. Turner & R. E. Wright, 2010. "Scotland the Grey: A Linked Demographic-Computable General Equilibrium (CGE) Analysis of the Impact of Population Ageing and Decline," Regional Studies, Taylor & Francis Journals, vol. 44(10), pages 1351-1368.
    15. Munasib, Abdul & Rickman, Dan S., 2015. "Regional economic impacts of the shale gas and tight oil boom: A synthetic control analysis," Regional Science and Urban Economics, Elsevier, pages 1-17.

    More about this item

    Keywords

    Economics of devolution; Decentralization; Fiscal federalism; Barnett Formula; Tartan tax; Regional economic development; Economie de la decentralisation; Decentralisation; Federalisme fiscal; Formule Barnett; Taxe ecossaise; Amenagement du territoire; Wirtschaftliche Seite der Machtubertragung; Dezentralisation; Finanzfoderalismus; Barnettsche Formel; Tartan tax; Regionalwirtschaftliche Entwicklung; Implicaciones economicas de la descentralizacion; Delegacion de poderes; Federalismo fiscal; Formula de Barnett; Impuesto Tartan; Desarrollo economico regional; JEL classifications: H1; H7; R1; R5;

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis

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