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Economics of devolution/decentralization in the UK: Some questions and answers

Peter McGregor () and John Swales ()

Regional Studies, 2005, vol. 39, issue 4, 477-494

Abstract: McGregor P. G. and Swales K. (2005) Economics of devolution/decentralization in the UK: some questions and answers, Regional Studies 39 , 477-494. The paper explores the economic implications of the radical process of devolution, decentralization and delegation of decision-making and policy delivery initiated by the post-1997 UK Labour Government. It is argued that the economies of all the presently devolved regions ultimately suffer if the Barnett Formula is rigorously imposed. It is shown that the efficiency of devolving fiscal authority involves a balance of positive and negative elements (depending on wage bargaining and migration responses). It is then argued that delegation/devolution of regional economic development policies, while exploiting regional information advantages, neglects regional economic interdependence, so there are potential gains from greater cooperation/coordination.

Keywords: Economics of devolution; Decentralization; Fiscal federalism; Barnett Formula; Tartan tax; Regional economic development; Economie de la decentralisation; Decentralisation; Federalisme fiscal; Formule Barnett; Taxe ecossaise; Amenagement du territoire; Wirtschaftliche Seite der Machtubertragung; Dezentralisation; Finanzfoderalismus; Barnettsche Formel; Tartan tax; Regionalwirtschaftliche Entwicklung; Implicaciones economicas de la descentralizacion; Delegacion de poderes; Federalismo fiscal; Formula de Barnett; Impuesto Tartan; Desarrollo economico regional; JEL classifications: H1; H7; R1; R5 (search for similar items in EconPapers)
Date: 2005
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DOI: 10.1080/00343400500128523

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Handle: RePEc:taf:regstd:v:39:y:2005:i:4:p:477-494