City-Region Governance, Policy Variation and Economic Performance

Advocates for devolution of responsibility for economic development have frequently made a link between the governance of city-regions and their economic performance. The evidence they adduce for this does not clearly bear this out, since there are problems in defining the scale of the cities under consideration, the scope of the powers involved and robust indicators of economic performance. However, it is likely that where the governance area of a city-region matches its economic area, its performance will be enhanced. Empirical work with developing UK city-regions leads to a conclusion that an argument based on policy variation and fiscal federalism provides a stronger argument for cityregions than one based on links between their governance and their economic performance.