Urban Growth Policies: The Need to Set Realistic Expectations

This paper reviews local growth promotion policies in the light of an analysis of the drivers of differential urban growth. It starts by arguing that major shifts in urban functions interacting with European integration and the wider process of internationalisation, have produced incentives to create local growth promotion agencies. The supporters of such agencies and the agencies themselves naturally have to make claims both as to their necessity and their likely success. An analysis of growth drivers, however, shows that there is only a restricted scope for local – indeed any – policy to influence city growth. Moreover, some existing policies work directly against urban economic growth. The most successful policies are likely to be the efficient execution of well known functions, including policies to reduce the costs of city size and efficient public administration. There is a danger, therefore, not only of raising expectations with respect to the potential contribution of local growth promotion agencies but of such agencies concentrating on inappropriate actions which are more visible but likely to be less effective.