UK Economic Policy Research Articles

Lionel Robbins: Political Economist

It is hard to think of a more committed public intellectual in Britain in the twentieth century than Lionel Robbins—except, of course, John Maynard Keynes. For six decades Robbins engaged in public debate on economic policy issues in lectures and talks, contributions to newspapers and magazines, and articles and books. He had the opportunity to influence UK economic policy directly during the Second World War. After the war he exerted a strong influence on government policy toward the arts and higher education. The irony is that he is also known for his apparent claim in his best-known book, An Essay on the Nature and Significance of Economic Science, that academic economists should not indulge in such activity. The present essay describes how he fulfilled what he saw as his duty to use his expertise to enlighten nonexperts, especially once he became professor of economics at the London School of Economics in 1929.

Immigration policy under New Labour: Exploring a critical juncture

Under the Labour governments of 1997–2010, UK economic immigration policy was transformed from one of the most restrictive to one of the most liberal in Europe. This development was especially puzzling given the noted path dependence of immigration policy, as well as the absence of any public demand for liberalisation. In this article we explain immigration policy liberalisation under Labour using the concept of a ‘critical juncture’: a short window of opportunity in which structural influences on political action are relaxed. Based on over 50 elite interviews, the article argues that during Labour’s second term in office (2001–2005) three factors combined to cause policy liberalisation: a strong economy with labour and skills shortages; a government ideologically committed to globalisation; and institutional reforms to the policymaking machinery that introduced new actors, both governmental and non-governmental, into the immigration policy field. While none of these factors would have been sufficient on their own, together they were sufficient combined causes for immigration policy change.

Michael Porter’s cluster theory as a local and regional development tool: The rise and fall of cluster policy in the UK

There has been much written on industrial agglomeration, but it is Michael Porter’s cluster theory, above all others, which has come to dominate local and regional economic development policy. His work has been adopted by the OECD, EU, national and local governments the world over. He and his consultancy group have led reviews of national economic growth strategies in dozens of countries. This rise to prominence, however, is in the face of widespread critique from academics. Cluster theory’s theoretical foundations, its methodological approach and practical implementation have all been unpicked, leading some to label little more than a successful brand riding the wave of new regionalist fashions. Despite libraries of incredibly useful books and articles on clusters, there remains an absence of work which interrogates the translation of clusters into, and then through local and national policy. The aim of this article is to go some way to remedying the situation by examining the influence of Porter’s cluster theory charted through an examination of UK regional development policy in the 1990s and 2000s. To help map the journey of clusters into and through UK economic development policy actor-network theory is adopted as an explanatory framework.

What can ecological data tell us about reasons for divergence in health status between West Central Scotland and other regions of post-industrial Europe?

The link between the effects of de-industrialization (unemployment, poverty) and population health is well understood. Post-industrial decline has, therefore, been cited as an underlying cause of high mortality in Scotland's most de-industrialized region. However, previous research showed other comparably de-industrialized regions in Europe to have better and faster improving health (with, in many cases, a widening gap evident from the early to mid-1980s). To explore whether ecological data can provide insights into reasons behind the poorer, and more slowly improving, health status of West Central Scotland (WCS) compared with other European regions that have experienced similar histories of post-industrial decline. Specifically, this study asked: (1) could WCS's poorer health status be explained purely in terms of socio-economic factors (poverty, deprivation etc.)? and (2) could comparisons with other health determinant information identify important differences between WCS and other regions? These aims were explored alongside other research examining the historical, economic and political context in WCS compared with other de-industrialized regions. A range of ecological data, derived from surveys and routine administrative sources, were collected and analysed for WCS and 11 other post-industrial regions. Analyses were underpinned by the collection and analysis of more detailed data for four particular regions of interest. In addition, the project drew on accompanying literature-based research, analysing important contextual factors in de-industrialized regions, including histories of economic and welfare policies, and national and regional responses to de-industrialization. The poorer health status of WCS cannot be explained in terms of absolute measures of poverty and deprivation. However, compared with other post-industrial regions in Mainland Europe, the region is distinguished by having wider income inequalities and associated social characteristics (e.g. more single adults, lone parent households, higher rates of teenage pregnancy). Some of these distinguishing features are shared by other UK post-industrial regions which experienced the same economic history as WCS. From the collection of data and supporting analyses of important contextual factors, one can argue that poor health in WCS can be attributed to three layers of causation: the effects of de-industrialization (which have impacted on health in all post-industrial regions); the impact of 'neoliberal' UK economic policies, resulting in wider inequalities in WCS and the other UK regions; and an as-yet-unexplained (but under investigation) set of factors that cause WCS to experience worse health outcomes than similar regions within the UK.

Barriers and solutions to HE progression for Early Years’ practitioners

Shifts in UK social and economic policy have focused on education and care in the Early Years as key to improving social inclusion, skills acquisition and longer term social and economic prosperity. The implications for practitioners in the sector have been significant as roles, functions and foci have been renegotiated through the processes of professionalising the workforce. Drawing on the outcomes of a qualitative study of the career trajectories and aspirations of Early Years educators working in the private, voluntary and independent sector, this paper explores the processes of professionalisation as they collide with the lived experiences of practitioners at the chalk face. The project, funded by the Lifelong Learning Network, aimed to achieve understanding of the influence on career development decision making, particularly in relation to progression to higher education. Our findings suggest that many practitioners fall into the category of ‘non-traditional learners’ and that socio-cultural issues may be key factors in determining decision-making about career development. By bearing witness to the lived experience of practitioners we argue that the processes of workforce development must place greater emphasis on the contestable nature of professionalism and the plurality of professional identity and that Universities are key to achieving this.

The World Economy from the 1980's to the Global Crisis

The OECD countries, led by the US and the UK, adopted supply-side and monetaristic economic policies, to overcome the stagflasionist crisis, seven years after the end of the “Golden Age” of capitalism (1973). The tendency for the average rate of profit to fall and the nourished financial capital’s demand for globalization, contributed to this policy shift. On the other hand, international financial institutions like the IMF and the World Bank, also changed their credit policies related to the developing countries and imposed on them the “open and pro-market”, Structural Adjustment Programmes. During those years, new protectionism in world trade expanded its sphere of influence, while the debt problem aggravated. Following the dissolution of the Soviet Block and the collapse of Soviet Union, financial liberalization and globalization gained momentum and capital flows assumed a speculative and shortterm character. As a result, as imbalances increased, inequalities deepened. At the beginning of the 2000’s, the efforts to overcome stagnation by provoking financialization resulted in the formation of bubbles and increased fragilities, leading to the outbreak of the Global Crisis of 2007.

Just Enough: Empowering Fixed-Line Telecommunications Consumers Through a Quality of Service Information System

Information, it is said, is power, and the proliferation of web-based information systems (IS) has made the potential for empowerment by information available to an increasingly large user population. The empowerment of consumers through quality of service information is a key component of modern UK economic and competition policy in order to both resolve certain information asymmetries between traders and consumers and facilitate switching, i.e. the ability of consumers to switch suppliers of goods and services. Using a case study approach, this paper concentrates not on the intricacies, physical design or specific information content of the IS itself but on the regulatory approach taken by the UK telecommunications regulator, Ofcom, to provide it. It considers how the mechanisms set up to provide and audit appropriate, comparable and reliable information actually favour the interests of the traders rather than the consumers. The result is that thos people at whom such information is undoubtedly aimed (consumers) and who need it to make rational choices in the market are actually disempowered, particularly those vulnerable groups who may have special information requirements. It concludes that if consumers are to be properly empowered by information in such systems, the regulator must do more to better protect the consumer interest and provide them with information they actually need and not the information that the traders are willing to provide.

What is Small Business Policy in the UK for? Evaluation and Assessing Small Business Policies

PROFESSORJAMES CURRAN IS EMERITUS professor at Kingston University, England, and was formerly director of its Small Business Research Centre. Since 1980 the United Kingdom small business population has increased greatly. Small businesses have also acquired a key role in UK economic policies paralleled by a huge development in support structures to promote them. Despite broad rhetorical claims that policies and support help develop a strong enterprise culture and promote UK economic prosperity, the precise outcomes of these policies have been difficult to pin down. As policies developed over the twenty years, the evaluation of their achievements has also proved difficult because of methodological problems. This paper examines the problems of evaluating small business policies and support and draws out some key implications for their future in the UK It concludes that even allowing for the problems of evaluation, one of the best and clearest supported findings is of poor take-up of the support offered. In other words, although small businesses have become much more important in the UK economy, it is unlikely that this has been due to state intervention. Because of the well-entrenched unanimity on the value of small business support in the UK, little attention has been given to whether the support represents good value for public money. Small and medium-sized businesses now account for well over half of business turnover and jobs in the UK. Not only can there be doubts about whether the policies and support are cost effective but more importantly, the question can be asked whether such policies are needed at all any more.

Policy Networks and Policy Learning UK Economic Policy in the 1960s and 1970s

Policy networks are advanced as an alternative to the Westminster model of the UK polity but the theory lacks an internal dynamic and has typological problems. This article applies Peter Hall’s (1993) concept of ‘social learning’ to policy networks and maps the networks found in two case studies of British economic policy making: Hall’s own study of the shift from Keynesianism to monetarism in the 1970s and the author’s research on the advent of ‘Keynesian‐plus’ in the early 1960s. The article advances three main propositions. Firstly, that integrating the concept of social learning can dynamize the policy network model. Secondly, the case studies suggest that different network configurations are associated with different orders of policy change but that Hall’s definition of ‘third order change’ may be too restrictive. Thirdly, policy networks can be much more complex and fluid then is generally claimed, sometimes becoming so extensive that they might be termed a ‘meta‐network’.

Economic policy making in the UK: to what extent should this be endorsed by other EU member countries?

The UK has often looked abroad in search of a successful approach to managing the economy, e.g. lessons were taken up in the 1960s from French planning, from worker participation in Germany in the 1970s, from monetarism in the USA in the 1980s and, in the 1990s, from Japan and South East Asia, until the current crisis. Shows how economic policies from outside the UK have influenced the UK economy. Also questions whether now, in the late 1990s, there has been a change in direction and a situation has been reached whereby other countries in Europe and beyond are actually looking towards the UK for guidance in the field of economic policy making. Much was made of the benefits of UK economic policy making during the recent Blair Government’s presidency of the EU. Moreover, it needs to be questioned whether individual governments will, in future, have much influence on economic policy making, with the creation of a single currency. Draws upon evidence from countries including Spain, France and Germany and considers various theoretical explanations concerning globalisation and European integration; also questions whether the UK economic model will continue to prosper or whether, like its fashion equivalent, it comes and goes. The current weaknesses are considered.

The Interfaces between Policy Makers, Markets and Modellers in the Design of Economic Policy: An Intermodel Comparison

Economic policy makers wish to bring about the 'best' set of economic circumstances within the constraints set out by the economic system. A natural way to express this problem formally is in terms of a policy maker who maximises a given objective function (or equivalently, specifies a set of policy priorities or trade offs) in the light of a set of beliefs regarding the workings of the economy. As detailed models representing views of how the economy works have been available for over twenty five years, it is natural to formalise this notion within the context of the large macroeconometric models and to use optimal control techniques. The basic technology for carrying out such exercises has been available for many years (Ball Committee on Policy Optimisation I978). Optimal policy exercises published ex ante and described by Bray (I 994) on the Treasury model and by Westaway (I995) on the National Institute of Economic and Social Research models yielded policies which would have avoided some of the major economic policy errors that have been made in recent years. This in itself does not validate such policies, but it justifies their further development. Comparisons have been made between optimal policies derived from different models by Whitley et al. (I992) and Bray et al. (I993). This paper simulates current UK economic policy making by policy optimisation exercises on the Treasury, Oxford Economic Forecasting (OEF), London Business School (LBS) and National Institute of Economic and Social Research (NIESR) models, earlier versions of which were used in the above comparisons. In this exercise, recommendations for instrument trajectories and expected outturns for the economy differ substantially. This is because of differences not merely in the picture the different models give of the objective behaviour of the economy, and the assumptions they make about policy makers' objectives and priorities. It is also because of the assumptions made about the way economic agents and the authorities learn, and form expectations, and the nature of the strategic games they are playing.

Can the UK expolit the international oil market? A game thoretic approach

The UK-OPEC oil production policies are investigated within a game theoretic framework. It is shown that it is undesirable for UK economic policy makers to engage in an economic ‘war’ over oil production with OPEC, for it is the UK that loses and OPEC that gains in such a conflict. In a non-game framework an expansion of UK oil production would benefit the UK economy by increasing output growth and reducing inflation. Yet in a non-cooperative Nash game OPEC responds to this increase of UK oil production by reducing its own output and by cutting idle production plants. As a result, OPEC preoduces near full capacity and is able to raise the international price of oil, which increases OPEC oil revenues but reinforces the inflationary impacts of added UK oil production.