Regional uneven development: ideas and approaches
To be presented at the Department of Geography, Harokopio University, 15 March 2013
Where did the idea of uneven development originate? I’d argue that the concept originally developed within Marxian political economy to describe – among other things – relations between political classes, relations between the forces and relations of production and relations between companies. Subsequently, however, it became generalised across a wide range of approaches in the social sciences and substantive domains, not least that of regional uneven development, but in the course of this often lost its connections to its Marxian roots, with important implications both theoretically and practically. I want to explore some of this in this talk, exploring how geographers and other social scientists have thought about these issues.
But let’s begin with a few comments about the empirical reality of uneven development. Think about Europe today: at a global scale there are changing relations between ‘North’ and ‘South’; within the EU there is pronounced uneven development between its North and South; and within the countries of Europe, strong evidence of intra-national uneven development. Crucially, then, we need to start from a recognition that it is endemic to capitalist development at all spatial scales, including the regional (by which I simply mean spatial units below the scale of the national – although there is a lively debate in geography and the social sciences as to how we should define regions, which I want mainly to park for now but we could perhaps come back to later in discussion). While recognising that there are relationships between uneven development at different spatial scales – for example, the global shift in industrial production has been linked to new growth regions in China but regional economic decline in parts of the EU – I want to focus today on the regional.
Empirical evidence is so widespread that, with the exception of the proponents of neo-liberalism, there is a general acceptance of the fact of regional uneven development and that this is an endemic feature of capitalist development and is not something that can be eliminated. Whether it can be managed and its effects ameliorated so that it remains within politically and socially acceptable limits is a much more contentious issue. And I’ll touch on this later as well.
A corollary of this widespread agreement as to the inevitability of regional uneven development, however, is that a variety of approaches to understanding and explaining it have been constructed, some of which are compatible and complementary, others of which are competitive and incompatible. Life is further complicated by those approaches that also seek to problematise the very notion of ‘development’ itself, though – as with the debate about concepts of the region – for reasons of time I will largely bracket these out for now.
As we live in neo-liberal times, though, I thought that before reviewing some of the major perspectives on uneven development, I’d begin with a brief consideration of those neo-liberal approaches that assume that uneven development would cease to be an issue if only people behaved as rational economic actors and allowed market forces to establish equilibrium conditions and thereby abolish uneven development.
So what is the neo-liberal stance?
The denial of the necessity and inevitability of uneven development
The essence of neo-liberal approaches is an assertion that freeing up markets, so that capital and labour can flow to where they are most efficiently deployed, will lead to an equalisation of factor returns and convergence between regions and/or to a balanced pattern of regional development. Labour and capital, it is claimed, will – or more accurately could – move from areas of surplus to areas of shortage in response to differential in wage rates and profit rates, respectively. Thus, labour should move from poorer, less developed to richer, more developed regions; conversely, capital should move in the opposite direction until wage and profit rates are equalised across regions, resulting in an efficient, balanced and stable pattern of development. Just as some like Fukuyama heralded the end of history, this would in effect herald the end of geography!
Let’s just say that here are a number of difficulties with this perspective, both empirical and theoretical. Firstly, empirically, there is very little if any evidence of actual patterns of regional development following the path to strong convergence. Moreover, in those few cases where there is some evidence of weak convergence, as in the EU in the 1970s and 1980s, this can be attributed more to the effects of state regional policies than to market forces.
Secondly, theoretically, for markets to operate in the unfettered way assumed by neo-liberal perspectives, it is necessary to make a series of sweepingly implausible assumptions about the knowledge and motives of actors (much in the same way that the neo-classically inspired location theories that were seen as cutting edge in economic geography in the 1960s required a similar suite of heroic assumptions).
So, for example, people are assumed to be economically rational, based on a particular definition of rationality as utility maximising; people are to have full and perfect knowledge – which of course is an impossibility in a real economy in which activities occur over time and space. These assumptions enable the mathematics of the models to work – but they are models of a mythical world. The focus is on the mathematical elegance of the solution, rather than the relevance of the model to the real-world geography of uneven development. There is a strong sense of déjà vu here.
But, recognising all this, while this is a highly implausible view of the world, it is one that has had considerable traction with economic policy makers. Fortunately, others in the academic community hold rather different views about uneven development, however. Let’s turn to some of them, beginning with …
Cumulative causation and uneven development
In contrast to those who argued that regional uneven development could be eliminated if only market forces were allowed to operate in an unfettered manner, others see the play of market forces as setting in motion processes of cumulative causation.
These processes reinforce uneven development, as economically ‘successful’ and ’unsuccessful’ regions became locked into their respective – and symbiotically related -trajectories of growth and decline.
Perhaps the best known of these is Gunnar Myrdal’s influential Theory of Cumulative Causation (1957). Myrdal’s approach directly challenges the view of self-equilibrating markets and the proposition that movements of capital and labour are in opposite and self-regulating directions. As a result, such movements do not, as he put it, “call forth countervailing changes but, instead, supporting changes, which move the system in the same direction as the first change but much further”. As a result, “the play of the forces in the market tends to increase, rather than decrease, the inequalities between regions”.
The pattern of spatial interaction between growing and stagnating regions is therefore an important aspect of Myrdal’s explanation of differential regional growth and decline. Myrdal sees flows of capital, labour and commodities developing spontaneously in such a way as to support growth in growing regions, as enterprising individuals and capital migrate into these regions. The corollary of this is thereby to reinforce the peripheral status of the origin regions and the gap between them and the regions of growth. In parallel to these flows, commodities produced in the successful growth regions flood as imports into the remaining regions, undercutting local businesses and causing loss of capacity and employment.
In short, a variety of “backwash effects” emerge that militate against growth in peripheral regions while sustaining it in the growing economic core regions.
Interestingly, Hirschman independently developed an interpretation that was remarkably similar to Myrdal’s, with one important difference. That is, that in Hirschman’s view, if an imbalance between regions emerges as a result of “polarization effects” during the early stages of growth, counter-balancing forces will “in time” come into being to restore an equilibrium position. This is OK as far as it goes. But – and it’s a big but – if counter-balancing forces will “in time” come into being, the issue of how much time will pass before this is the case becomes a quite critical one. To borrow from Keynes, in the long run we’re all dead and the prospect of regional convergence at some point in an unknown future is not necessarily an attractive one.
Some four decades after the pioneering work of Hirschman and Myrdal, Paul Krugman also set out to explore the rationale for cumulative causation and the dynamics and processes of uneven development. We shouldn’t under-estimate the importance of this, for whatever the limitations of Krugman’s approach – and they are significant – this was perhaps the first time that more “mainstream” economists began to acknowledge the significance of the spatial patterning of economies. And the fact he subsequently was awarded a Nobel Prize perhaps reinforces the point. So what does he have to say about regional uneven development?
His “new economic geography” (perhaps more accurately described as “new geographical economics”) involves quite formal mathematical analysis of endogenous growth. It remains rooted within an otherwise neo-classical framework that remains committed to methodological individualism and a very thinly socialised explanatory account of the processes of cumulative causation.
Krugman’s approach focuses upon the balance between two sets of key counter-posed forces, between centripetal and centrifugal forces, in determining the extent and form of the regional concentration of economic activities.
Centripetal forces, those which tend towards spatial concentration, include market size, co-operative and functional linkages between firms, dense labour markets with a diversity of available skills, and external economies of scale, such as knowledge spill-overs.
Centrifugal forces, some “push” and some “pull”, are those that tend towards spatial de-concentration, notably labour immobility, lower land and property prices and rents, and external diseconomies of various sorts such as those arising from congestion. Within the range of centripetal and centrifugal forces, Krugman emphasises economies of scale and transport costs. Now this emphasis is not accidental and it is significant. For these are variables that are more amenable to quantitative measurement.
As such, they are consistent with – indeed one might argue, necessary for – his methodological preference for building mathematical models.
Within these models, then, there is a tendency for spatial clustering that is positively correlated with economies of scale and negatively correlated with transport costs. They are characterised by growing regional divergence and a core-periphery pattern of economic development. This is a result of specialisation leading to increased efficiency, comparative advantage and cumulative growth in ‘core’ regions. This is because firms there benefit from cost savings and/or revenue increases as a result of mutual interaction and intra-regional co-operation.
Krugman acknowledges that regional specialisation can begin accidentally but, having done so, then evolves and deepens as economies of scale and external economies will lead to cumulative growth, leading in turn to lock-in and path dependency (concepts central to an evolutionary approach). The net result is thereby to reinforce regional unevenness and uneven development as a consequence of processes that are internal to the workings of capitalist economies.
This is a very important point to make – that is, in Krugman’s view – although he wouldn’t express it in these terms – the social relations of capital will unavoidably lead to regional uneven development, irrespective of issues such as an uneven distribution of natural resources. Others however have taken a different approach to Krugman, one that lacks the systemic perspective – however partial – that he offers.
So, in contrast to the main emphases of the new economic geography/new geographical economies inspired by Krugman’s work, other economic geographers and others (such as the business economist Porter, with his emphasis upon clusters and regional development) have in parallel sought to develop explanations of regional uneven development much more in cultural and institutional terms.
As Allen Scott has pointed out, “a strictly economic logic will only take us so far in understanding industrial organizational processes … [T]ransactional systems are always and of necessity embedded in historically determinate social conditions”. This again – echoing views expressed earlier by others such as Polyani – is a very important point.
In seeking to explore and develop this process of social embedding and the socio-cultural constitution of economies, cultural and institutional analysts such as Storper, Malmberg and Maskell, Amin and Thrift and Cooke and Morgan have drawn upon notions of knowledge, innovation and learning, of untraded interdependencies’ and the non-economic relationships that underpin regional economic success, or on concepts of institutional capability and ‘thickness’, as the reasons for increasingly divergent regional economic performance.
Their key proposition is that successful regions are seen as those that possess the “right” sort of institutional structures, which have rich patterns of supportive social relationships beyond the workplace and the boundaries of the company. Such relationships and structures facilitate successful economic practices and flows and easy exchange of both codified and tacit knowledge. These latter help ensure that knowledge of ‘best practice’ diffuses within the regional economy and that knowledge flows and interaction underpin vibrant regional innovation systems.
Whilst clearly such issues have always been crucial in underpinning regional economic success, they are claimed to be of added salience in the context of contemporary ‘knowledge-based economies’ (although how any economy could exist without being knowledge-based is difficult to conceive).
Conversely, poorly performing regions are seen to be locked into institutional structures and forms of knowledge that may once have been relevant to regional economic success but are now obsolete, rendered redundant by wider processes of economic change and changes in spatial divisions of labour. This remains the case despite policy-induced attempts to change the institutional and knowledge bases of these poorly performing regions.
However, when we assess the claims made by the proponents of such approaches, we need to be aware of the evidence that they draw on – and conversely, the evidence they ignore. Crucially, there is a distinct spatial selectivity in the regions chosen as case studies, as they typically focus upon case studies of the “successful” ones – such as those of the ‘Third Italy’ or Silicon Valley. As a result, they provide often rich and detailed insights into the reasons for the economic success of individual regions – and usually by implication the reasons for the “failure” of others. And providing such in-depth regional case studies and the cultural and institutional bases of successful regional economies is important and is certainly OK as far as it goes.
But – and here’s another important but – what do they leave out as a result? As well as what is present, what is absent? Crucially, such studies lack the capacity to provide insights into the wider overall patterns of regional uneven development and the reasons for them and the inter-relationships between economic ‘success’ in some regions and ‘failure’ in others.
In short they are unable to provide an analysis of regional uneven development as a systemic, necessary and unavoidable feature of capitalist economies – and in that sense represent a regression from the perspectives of Myrdal … and those of Marx and Marxian analysts, to whom I want to now turn. I do so as I want to argue that without a systemic perspective and understanding, we will lack an adequate understanding of the causes of regional uneven development and even the possibility of tackling the problems that result from this. And more specifically we’ll lack an adequate understanding of the causes of the current crisis in Europe and its particular geography, causes both rooted in and further amplifying uneven development.
Marxian Political Economy and Uneven Development
Let me begin by summarising my argument so far. That is, leaving aside the neo-classical anomaly, the approaches that I’ve discussed so far, in various ways, all seek to account for uneven regional development and set out the reasons why growth or decline becomes a cumulative and self-reinforcing process. They all see regions becoming locked into their respective trajectories of growth or decline once these have been established. This is important – once the initial trajectory emerges, then the future of a region as successful or not – as it were – seems to be already inevitably determined.
This is essentially – though implicitly – an evolutionary perspective on regional development, in which the past at least strongly conditions, maybe even rigidly determines, the future. There are certainly many regions that can be described and interpreted in these terms. However, the historical geography of capitalist development is also replete with examples that do not fit into this simple dichotomy. Some regions switch from growth to decline, others from stagnation outside the scope of capital to become centres of growth.
Other regions – the north east of England, the Ruhrgebiet, Wallonia, Nord-Pas-de-Calais, the industrial mid-west of the USA (those often described as ‘old industrial regions’) – that were once centres of capital accumulation and cumulative economic growth, then ‘flipped’ and became regions of decline, characterised by capital flight, devalorisation and disinvestment.
Subsequently, to varying degrees, they have experienced a limited degree of renewal, based upon new inflows of capital. Such dramatic reversals from trajectories of growth to decline to renewed growth of a different type and scale cannot be captured or explained by the approaches I’ve considered so far. They require a different sort of conceptual and explanatory approach.
This is provided by Marxian political economy, with its emphasis upon the inner dynamics of the capitalist mode of production – that is, the particular combination of social relations and technologies that define capitalist economies as capitalist – with its emphasis upon competition among and within the structurally defined classes of capital and labour as the driving force of the capitalist economy. Individual companies seek to compete in a range of ways – via innovative products and production processes, for example.
But what is of particular relevance in the context of regional uneven development is that they also compete by seeking out locations that are particularly profitable and so favourable for capitalist production. These can include both locations in which existing products can be produced more profitably with existing production technologies and locations in which new innovative processes and or products can be introduced as companies pursue strategies or ‘weak’ and ‘strong’ competition, respectively..
Thus as an integral part of their competitive strategies, companies in the past would explore such options within the boundaries of “their” national territories. Now however, they are regularly scouring the globe for new locations that will enable them to produce more profitably and so gain a competitive edge over their rivals.
This has some very important consequences: that is, as Costis emphasized a long time ago, they both routinely transfer value between regions via exchange relations within and between companies and routinely devalorise capital and disinvest from some regions while investing in others. The latter regions could be other successful regions, or regions previously not penetrated by capitalist relations of production or they could be regions that have been abandoned by other companies (or national states) as locations for profitable production. Choice of region will depend upon product and process, seeking to match the characteristics of region with the requirements of particular activities.
Thus regions may sequentially experience successive waves of investment and disinvestment, expressed as sequences of regional industrialisation, deindustrialisation and reindustrialisation, of economic development and decline as part of the processes of combined and uneven development that are structurally inscribed as integral to capitalist development. Again – as with Myrdal et al – spatially uneven development is seen as a product not just of the uneven distribution of natural resources and the influences of nature on economic geographies but as arising but of the constitutive social relations of capital.
While Marx’s own work contains suggestive comments and hints about regional uneven development and its significance for capitalist development, these were not fully or systematically developed by him. Subsequently, however, others such as Gramsci and Lenin, working in various strands of the Marxian tradition, further developed Marx’s insights and the analysis of uneven development at various spatial scales.
It was not, however, until the 1960s and the work of Ernest Mandel that regional uneven development began to be more systemically integrated into Marxian political economy, extending the reach of that approach in the process. Mandel specifically recognised the centrality of intra-national uneven development and the production of “regional problems” to the accumulation process. He argued that “unevenness of development as between different parts of a single country” is an essential pre-condition for capital accumulation and that its significance had been greatly under-estimated in previous Marxian analyses. It is also worth noting that other social scientists – not least Nicos Poulantzas – were also paying increasing attention to issues of spatially uneven development as a part of this re-invigoration of Marxian approaches.
However, the development of Marxian political economy to take account of regionally uneven development as a structurally necessary feature of capitalist development owes most to David Harvey, especially in his magisterial account of The Limits to Capital (1982), in many ways best regarded as a reconstruction of an historical geographical materialism.
In this Harvey located the issue of regional uneven development within the context of his “third cut” at crisis theory and the way in which capital both produces and uses spatial differentiation as part of its repertoire of tactics to offset falling profitability, as part of its successive attempts temporarily to resolve crises. In locating regional uneven development in this way as part of his “third cut” at crisis resolution, Harvey, importantly, locates regional uneven development as a systemic feature of capitalist economies. Capitalist development was thus explicitly conceptualised as necessarily and unavoidably uneven, simultaneously encompassing regions of growth alongside those of decline and integral to the crisis-prone process of capital accumulation.
Harvey’s thinking on this was further developed by Neil Smith with his concept of “a see-saw theory of uneven development” as a way of seeking to grasp the dialectical relations between development and underdevelopment.
In Smith’s approach, as in Harvey’s, the contradictory character of capitalist development results – inevitability and unavoidably – in capital eroding the place-specific conditions of profitable production as part of the developmental process. As a consequence, and in response to differences in profitability and those things that determine it – such as labour market conditions or pollution regulation – capital flows into and out of regions, in the process generating growth or decline as well as helping (un)make regions as socio-material ensembles.
I can do no better than let Neil Smith speak for himself on this. As he put in his 1984 book, “Underdevelopment, like development proceeds at every spatial scale, and capital attempts to move geographically in such a way that it continually exploits the opportunities of development without suffering [the] economic costs of underdevelopment. That is, capital attempts to see-saw from a developed to an underdeveloped area, then at a later point back to the first area which is by now underdeveloped, and so forth. Capital seeks not an equilibrium built into the landscape but one that is viable precisely in its ability to jump landscapes in a systematic way. This is the see-saw movement of capital, which lies behind the larger uneven development process “.
Thus the “see-saw theory” represents capital’s attempt to secure what Harvey had earlier conceptualised as a “spatial fix” via systematic mobility and a sort of dynamic equilibrium rather than fixity and a static equilibrium.
Via this theorisation, Smith helps us grasp the rationale for the constant ebb and flow of capital into and out of regions that lies at the heart of processes of regional uneven development.
However, this still leaves the question of which regions experience which sorts of trajectories of growth and decline, and why this is so, rather open and progress on this front was primarily a result of Doreen Massey’s seminal work, brought together in her book Spatial Divisions of Labour – another canonical text for students of uneven development.
Massey sought to develop a different and more pro-active conception of regions. She sought to challenge a view that sees the fate of regions as simply the end product of the decisions of capital, as layers of investment and disinvestment are sedimented sequentially into or stripped out of a region at capital’s behest, with regions as little more than passive objects resulting from the logic of capital.
In contrast, Massey emphasised the need to take account of both the natural and socially produced attributes of regions. She argued that the activities of people in their place, seeking to make and defend the economic viability of their regions, is critical in understanding which regions experienced which sorts of growth, decline and revival.
In short, in her view, the economic success or failure of regions was a result of the interplay between regionally specific attributes and processes and wider systemic forces shaping flows of capital. It is worth pointing out that subsequently she was to develop more sophisticated conceptions of “regions” and of the way in which they became intertwined via processes of combined and uneven development. In this sense, there are points of convergence between the sort of explanatory approach that Massey developed and more recent cultural and institutional perspectives on why some regions ‘succeed’ while others ‘fail’, provided that these can be connected with more systemic explanations of uneven development.
I now want to turn to a rather different set of issues …. That is
The role of the state in managing regionally uneven development: managing tensions and avoiding crises
Regions may develop what Harvey, influenced by the work of Raymond Williams, refers to as a “structured coherence”, generating a sense of regional identity and interest shared by a range of social groups and forces, expressed via a particular “structure of feeling”. Such a structure of feeling and attachment to a region can, when linked to uneven regional economic development, often become the trigger for a variety of regionalist campaigns, as different alliances of social groups come together to defend or promote a shared regional interest. Think of the Basques, the Catalans, the Corsicans etc..
These campaigns can take a variety of forms. The expression they take is always a contingent issue, depending on the specifics of time, place and politics. They might involve action to protect existing economic activities or to attract new ones to peripheral regions. They might involve pressures to reduce income transfers from economically successful to less successful peripheral regions, or, conversely pressures to increase central state resource allocations to economically less successful peripheral regions. They could involve campaigns that directly challenge the authority of the national state, seeking to establish more devolved forms of regional governance that give more powers and resources to regions – or, more precisely to those empowered to speak and act on behalf of the region.
This is to see regions, As Alain Lipietz put it, as active subjects that can act “for themselves” and exert a greater degree of influence over their own economic well-being, although it is worth noting that such moves may be contested within the region itself (as they were in north east England …). More radically, demands may extend beyond greater devolution of powers to autonomy and independence, challenging the territorial coherence of a national state.
In one form or another, then, the political effects of regional uneven development may be to generate pressures to alter patterns of resource allocation via the state and keep state expenditures within acceptable limits. Or they may be to restructure the state itself in an effort to smooth the path of regional economic growth, secure the legitimacy of state action, or to secure the territorial integrity of the national state and avoid various potential forms of crisis). This is, to say the least, a tricky balancing act.
How, when and why have states gone about it? Beginning in the UK in the late 1920s, regional uneven development ceased to be seen simply as an inevitable and unremarked feature of industrial capitalism. Instead, it became seen as a potential political problem, a potential source of social unrest and dissent and a brake on national economic growth, to which the state “had” to respond.
Subsequently, such regional policies became developed in more sophisticated ways and became part of the policy repertoire of virtually all national states as they sought to manage the map of regional uneven development.
Consequently, such policies must seek to defuse the unavoidable tensions and latent conflicts that arise as a result of a region being simultaneously a socially-produced place with multiply dimensional meanings and attachments for a variety of people and a part of a socially-produced space in which capitals seek to make profits.
For much of the time, this conflict remains latent, submerged, at worst simmering, as the tensions remain within tolerable limits. But the tendency towards boiling over and erupting into regional crisis never disappears; it always is (and must be) immanent in the social relations of capital. This has an important consequence. That is, that for most – if not all – regions in a capitalist economy their relationships to the ebb and flow of the accumulation process in processes of uneven development, is critical to their (re)production as places. Just as capital needs people as labour-power, in a capitalist economy people need capital as a source of wage income ….
Let me begin to wind up …
So what can I say by way of conclusion?
Few would deny the reality of regional uneven development as a chronic feature of capitalist development, and as such it is something that will certainly be with us for the foreseeable future. The weight of empirical evidence, along with the insights provided by a variety of theoretical positions, renders any other conclusion both unreasonable and implausible. This is certainly true of Europe today.
That said, there is clearly a variety of theoretical perspectives that seek to explain why this is so rather than consensual agreement on matters of theory. While some of these perspectives at least suggest that regional uneven development can be avoided, the point more generally at issue is which of the variety of competing perspectives as to the persistence of regional uneven development is the most appropriate explanation.
However, because of the ways in which regional inequality impinges upon daily life for so many people, regional uneven development long ago ceased to be seen simply as a feature of capitalist development of interest to human geographers and other social scientists and became a political issue of some significance, one that national states have felt obliged to address for the last 80 or so years. Revealingly, despite this, regional uneven development remains a striking feature of the contemporary economy.
Thus in seeking to manage the tensions generated by the pressures that arise precisely because of the regionally uneven character of economic development, national states have devised and implemented a repertoire of regional polices for regions as objects of central state policies and/or have devolved power and responsibility to regions to become active subjects and deal with their own developmental issues. Through these varied policy responses, national states seek to ensure that their national territories remain (or become) key nodes in global capital flows, containing the tensions between the imperatives of accumulation and the socio-political pressures that might build up to challenge the legitimacy of the state.
Given this, it is a sobering comment upon the limits to the capacity of national states – and in Europe the EU – to shape the trajectories of uneven development that regional inequalities and regional uneven development remain as chronic and persistent features of capitalist economies, both the most advanced and the most backward, and will do so in the future. And on that sobering note, I’ll end.
RH Athens 2013