Local Economic Development Policies and Local Government Autonomy in Sweden and Britain CHRISTINE HUDSON v • o- o * P 33$ to o A lA AGAINST ALL ODDS Local Economic Development Policies and Local Government Autonomy in Sweden and Britain AKADEMISK AVHANDLING Som med vederbörligt tillstånd av rektorsämbetet vid Umeå universitet för vinnande av filosofie doktorsexamen framlägges till offentlig granskning vid statsvetenskapliga institutionen Hörsal C, Samhällsvetarhuset Fredagen den 29 oktober 1993» kl 13.15 av Christine Hudson MSocSc AGAINST ALL ODDS - Local Economic Development Policies and Local Government Autonomy in Sweden and B ritain. Christine Hudson, Department of Political Science, University of Umeå, S-901 87 Umeå, Sweden. ISSN 0349-0831, Research Report 1993:3 Distribution: Department of Political Science, University of Umeå, S-901 87 Umeå, Sweden. ABSTRACT This thesis makes a comparative study of local government autonomy in Brita in and Swed en within the local economic development policy area. It argues for local government autonomy to be viewed in terms of both a vertical dimension concerning local government's autonomy vis-à-vis national government (national context) and a horizontal dimension relating to its autonomy vis-à-vis local social and economic forces (local context). A policy area approach is advocated as the strength of, and the balance between, factors influencing local government autonomy, both vertically and horizontally, may be modified by the parti cular characteristics of the policy area. For example, the local economic development policy area is characterized as a grey zone respecting the intergovernmental relationship and a "mixed-economy" concerning the public-private sector relationship. The concept of autonomy is distinguished into policy-making independence (measured as local authority cooperation with other actors in economic development policies) and capacity for action (measured in terms of four local authority roles in the local economy). These are tested empir ically regarding the influence of the local context and the relationshi p between them examined. The dominant trend in both countries is that the more local authorities intervene in the local economy (extend their capacity for action), the greater their cooperation with other actors (the more restricted their policy-making independenc e). Key words: Local government, autonomy, local economic development policies, comparative perspective, policy area approach. Local Economic Development Policies and Local Government Autonomy in Sweden and Britain CHRISTINE HUDSO N Department of Political Science University of Umeå, Sweden Research Report 1993:3 ISSN 0349-0831 © Chris Hudson Printed at the University of Umeå AGAINST ALL ODDS - Local Economic Development Policies and Local Government Autonomy in Sweden and Britain. Christine Hudson, Department of Political Science, University of Umeå, S-901 87 Umeå, Sweden. ISSN 0349-0831, Research Report 1993:3 Distribution: Department of Political Science, University of Umeå, S-901 87 Umeå, Sweden. ABSTRACT This thesis makes a comparative study of local government autonomy in Britain and Sweden within the local economic development policy area. It argues for local government autonomy to be viewed in terms of both a vertical dimension concerning local government's autonomy vis-à-vis national government (national context) and a horizontal dimension relating to its autonomy vis-à-vis local social and economic forces (local context). A policy area approach is advocated as the strength of, and the balance between, factors influencing local government autonomy, both vertically and horizontally, may be modified by the particular characteristics of the policy area. For example, the local economic development policy area is characterized as a grey zone respecting the intergovernmental relationship and a "mixed-economy" concerning the public-private sector relationship. The concept of autonomy is distinguished into policy-making independence (measured as local authority cooperation with other actors in economic development policies) and capacity for action (measured in terms of four local authority roles in the local economy). These are tested empirically regarding the influence of the local context and the relationship between them examined. The dominant trend in both countries is that the more local authorities intervene in the local economy (extend their capacity for action), the greater their cooperation with other actors (the more restricted their policy-making independence). Key words: Local government, autonomy, local economic development policies, comparative perspective, policy area approach. CONTENTS PREFACE iii 1 INTRODUCTION 1 Introducing the Study 1 A Comparative Approach 7 Framework for Analysis 10 Operationalization and Methodology 21 2 THE NATIONAL CONTEXT AND LOCAL GOVERNMENT AUTONOMY 27 Introduction 27 Approaching Intergovernmental Relations 29 General Vertical Autonomy in Britain and Sweden 39 Conclusions 75 3 THE LOCAL AUTONOMY - TWO ELEMENTS 79 Introduction 79 The Two Elements of Autonomy 80 Capacity for Action - An Initial Analysis 82 Local Authority Roles in the Local Economy 85 Policy-Making Independence - An Initial Analysis 101 Conclusions 112 4 CAPACITY FOR ACTION IN THE LOCAL CONTEXT 113 Introduction 113 The Local Context 114 The Local Context and Capacity for Action 118 The Socio-Economic Component or Unemployment Rules OK? 119 The Political Component or Does Politics Matter? 131 The Spatial Component or Bringing the Region Back In? 137 Conclusions 145 5 POLICY-MAKING INDEPENDENCE IN THE LOCAL CONTEXT 149 Introduction 149 The Local Context and Policy-Making Independence 149 The Actors Involved 150 The Socio-Economic Component 152 The Political Component 164 The Spatial Component 170 Conclusions 178 6 PATTERNS OF AUTONOMY 181 Introduction 181 The Relationship 181 An Alternative Model 183 Testing the Relationship 185 Patterns of Autonomy - the Role of the Local Context 192 The Regional Profiles 196 Conclusions 200 7 LOCAL GOVERNMENT AUTONOMY - JUST ANOTHER FAIRY-TALE? 203 Introduction 203 Local Government Economic Development Policies 205 Local Government Autonomy 209 Postscript 211 REFERENCES 215 APPENDICES: Appendix 1: Measuring the Independent Variables 231 Appendix 2: Measure of Association 234 Appendix 3: Characteristics of Municipalities According to Autonomy Pattern 235 ii PREFACE 'The History of every major Galactic Civilization tends to pass through three distinct and recognizable phases, those of Survival, Inquiry and Sophistication, otherwise known as the How, Why and Where phases. For instance, the first phase is characterized by the question How can we eat? the second by the question Why do we eat? and the third by the question Where shall we have lunch?' (Hitch-Hikers Guide to the Galaxy, Douglas Adams (1979) Pan Books Ltd: London, page 159). The process of writing my thesis has been like a journey through the phases of survival (How can I live through this study?), inquiry (Why on earth am I doing this to myself?) and sophistication (Where am I? What does it all mean? Is this the end? Where do I go from here?). It has been a tough road with many ups and downs and there have been times when the words of Stevie Smith have been very appropriate: 7 was much further out than you thought And not waving but drowning. ' (Not Waving But Drowning by Stevie Smith, published in Selected Poems, Penguin: Harmondsworth 1978) Nevertheless, the end is now in view and I would like to express my thanks to all those who have helped me along the way. I am grateful to Professors Benny Hjern and Gunnel Gustafsson at the Department of Political Science, Umeå University. The former for giving me the chance to begin the first phase of this process and the latter for giving me the opportunity to reach the final one! I would like to thank Stina Lindström and Arne Carlsson without whose help the question: How can this manuscript be made fit to print? would never have been answered; Professor Janerik Gidlund, Department of Political Science, Umeå University and Lars Carlsson, Department of Business Administration & Social Science, Luleå University, for valuable comments and advice on dealing with the questions: What does it all mean? and Where do I go from here? Dr Liz Mills, Department of City & Regional Planning, University of Wales, College of Cardiff and Dr Andrew Coulsson, Institute of Local Government Studies, Birmingham University not only for their generosity in letting me use their data on British local government, but also for their invaluable help in dealing with the above questions comparatively! Dr Kerstin Kolam not only for academic help, but also for solving the problem: Where shall we eat? My fellow doctoral students and iii friends at the Department of Political Science, especially Ann-Sofi Rönnbäck, Carina Lundmark, Cindy Kite, Viveca Jonsson and Ulla Fränstam, who have helped me cope with the dark moments of the soul when the questions of: How shall I live through this study? and Why am I doing this to myself? have raised their ugly heads. Last, but by no means least, the biggest thanks must go to my family - to Anders for his loving support and to my sons Anton and Stefan who prove that the best things in life have nothing to do with writing theses! and for answering the question: What does it all mean? Umeå, September 1993 Christine Hudson 1 INTRODUCTION Introducing the Study Local Government Autonomy and Economic Development Policies A local authority does not exist