The intersection of productivity and governance capacity in spatial inequality: the case of England’s devolution periphery

Abstract

Effective local and regional governance is important for tackling economic inequality between regions. However, a common problem is that the effectiveness of governance institutions also has an unequal spatial distribution. The relationship between regional distributions of productive and governance capacity is therefore crucial for a state’s ability to revitalise lagging regions. In this paper, we consider England’s ongoing attempt to address spatial inequality through asymmetric decentralisation. Applying a projected geography of England’s emerging devolution settlement, we identify a ‘devolution periphery’, located primarily in the east and west, which is lagging in both productive capacity and governance capacity. This contrasts with a governance core in the north and a productive core in the south, with Greater London an outlier excelling in both. To interpret these findings, we assess spatial inequality and the history of spatial rebalancing in France, Germany, and Italy, identifying key risks and success factors. Given that the UK fails on each of these, and given the compounding effects of weak productive capacity and weak governance capacity, we predict that England’s ‘devolution periphery’ is likely to fall further behind in the coming years. We conclude by drawing out four paradoxes facing policymakers when attempting to tackle spatial inequality.