Policy-based evidence making

Heads up: on 30th May I’ll be in Warwick to help give an advanced training session on  ‘Knowledge for Policy, Knowledge of Policy’, organised by the university’s Centre for Interdiscplinary Methodologies.

Evidence-based policymaking was a central trope of New Labour’s time in office.  The idea’s gone in deep: the Coalition is regularly taken to task for ideological policymaking – perhaps one reason  why the Cabinet Office has just announced a major network of ‘What Works’ Centres.

One immediate objection to evidence-driven policy is that evidence doesn’t tell you what you ought to do.  Political values and judgements – even ‘ideology’ – have their place, especially if the alternative is the apolitical solutionism that Evgeny Morozov has been taking to pieces recently.

There’s also an important role for an experimental state which builds an evidence base where none exists.  Sometimes this is pretty uncontroversial, as in the small nudges being tried out by the Government’s Behavioural Insights Team. It’s tougher to make the case in bigger areas of policy – such as devolution to local govt and communities, which has  never been seriously tried in the UK, where the risks of failure are massive, and where there are limits to what we can learn from abroad.  Here, the need for careful piloting is running up against Ministerial enthusiasm for transformational change.

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What does this mean for researchers, especially academics? It’s important to have a clear sense of the policymaking process,  especially the invisible work which goes on between formal consultations and policy events; how policymakers treat different  kinds of evidence and actors in those processes, and the shifting positions of academics and think tanks in the ideas market.

I’ve co-founded a think tank, worked in central government and am now working in academia, so I’ll be bringing some of  these experiences to the seminar.  Also speaking will be Dave O’Brien (City University) and Will Davies (Warwick), who’s organising the session.  Both have similarly heterodox experiences, so it should be a fascinating day … see this post by Will, for instance.

Details here.

That’s not my name

Last week I was at LSE for a seminar on place and neighbourhood branding, ably organised by CityDiplo. Also on the panel were Suzi Hall (LSE Cities) and Ian Stephens (Saffron). It was a great evening, with a sharp and highly engaged audience.

I ran through some new work on the politics of naming in East London’s digital economy, and how the competing brands of Silicon Roundabout and Tech City are playing out on the ground (which I’m writing with Emma Vandore and Georgina Voss).

Suzi gave a great run-down of her work on ordinary streets and vernacular spaces in South London, and Ian delivered a nice overview of official branding strategies for Nine Elms.

The CityDiplo team have now put up a podcast of the session. Presentations should follow shortly.

High Speed Two, cities and the North-South divide

The Government has just unveiled the route map for the UK’s high speed rail network. So will HS2 help the cities on the line? Will it narrow the North-South divide, as some Ministers claim? And what about places left out?

Here’s what I wrote back in 2010, when the detailed modelling was done, and drawing on the international evidence. The punchlines are:

So what does HS2 mean for cities? Urban firms and travellers are the big winners, which is good news for cities if more productive businesses raise wages or employment. Some cities get the kudos of being on the line, and may get a regeneration boost from new stations – although that could turn into a windfall gain for developers. But fairly few firms will relocate, and agglomeration impacts will be pretty small.

On this basis, HS2 isn’t likely to fundamentally change the UK’s economic geography. Rather, it will speed up the economic geography we already have.

… Those who gain from HS2 (business, core cities, those in ‘the North’) are strongly in favour; those who lose (communities and homeowners along the line) are vehemently against. Local opponents of HS2 are hardly irrational – quite the opposite. So rather than handing a windfall gain to business by pegging HS2 fares to conventional fares, HS2 tickets should be pricier – at least in first class.  That provides another way for taxpayers to recoup some of the initial outlay. … The agglomeration benefits for Phase 2 (Manchester and Leeds) seem much larger than Phase 1 (London to Birmingham). Why? Rather than connecting two relatively distant cities, Phase 2 links a lot of nearby places (e.g. Sheffield/Meadowhall to Leeds in 20 mins), and provides indirect access to big cities not on the line (e.g. from Manchester to Liverpool). The fact of HS2 thus strengthens the case for complementary investments like the Northern Hub, which will bring Liverpool, Manchester, Sheffield and Leeds closer together.

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Two other points. First, as John Tomaney argued on radio 4 this morning, the evidence suggests HS2′s economic impacts are pretty complex, and the net effect isn’t clear. Like him and others, I’m basically an agnostic.

Second,  to repeat – it’s crucial to spend money on better links between Northern cities and more London-centric high speed lines. As Richard Leese suggested in the same piece, for policymakers this is not an either/or. Thankfully Ministers agree, and are feeding cash into boring but important investments like the Northern Hub, as well as the bigger and shinier HS2.

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Update, May 2013: The National Audit Office has published its own report, which echoes many of these points.

City Deals: The Second Wave

Some thoughts from yesterday’s City Deals workshop, fronted up by Nick Clegg and Greg Clark, and ably compered by Alex.

The major announcement was that 20 cities and city-regions get the chance to bid for a ‘Wave 2′ deal. It’s a competition – the Cabinet Office sift bids around the turn of the year. Successful pitches will get a ‘core package’ plus local options, then go live sometime in 2013.

There was also lots of reflection on the wider Deals process – now almost a year old.  I got quite excited about all this back in December. Some real challenges are now emerging.

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Some immediate points on the Wave 2 proposals. First, we need more detail on the sift criteria, and a sense of how many cities will get through. I suspect the Cabinet Office and HMT may have different views on this. Officials are also working on core package specifics. I’d expect skills, transport and finance to feature – and perhaps, Earnback-type arrangements for everyone?

Second, not all the 20 are city-regions. Ministers say local groups should self-organise. But the evidence says fitting the right policy asks to the appropriate scales is crucial. Relying on local political coalitions may not result in genuine functional economic areas.

Some wider issues:

1/ What can we expect? Ministers were very confident that City Deals will achieve substantive economic change: ‘the leadership of cities is incredibly important to their success’, said one. But the evidence is ambiguous on whether these direct effects actually exist. There may be indirect links from empowered leadership to growth – say, if this helps secure investment, or produces innovative policies. City Deals will help test that argument.

2/ It’s the process, stupid - as I’ve said, this is a long game. Getting the systems right is crucial – on negotiation and sift in the short term, and delivering culture change in the longer term. Like industrial strategy, the Deals system has to be flexible, and allow for failure.

As Dani Rodrik argues, in some ways process is more important than content in these situations. City Deals are basically experiments, and some won’t work out. The right institutional setting and rules are fundamental – not least to identify failure quickly. So it’s good that Core Cities will get a chance to renegotiate Deals in future, for example. Wave 2 cities should also get this.

3/ Whitehall as blockage – Clegg, Clark and others were very open about problems persuading some parts of Whitehall to engage (shades of Blair’s ‘scars on my back’ speech?).

Some of these blockages were already emerging last year, and Ministers and the Cities Policy Unit have done well to minimise these. But I guess one reason for the Wave 2 announcement is to keep the pressure up, co-opt city leaders in the cause, and build a critical mass of devolutionary pressure.  There will be severe tests of political leadership ahead, especially on welfare and benefits.

4/ Peer support and mentoring – Central government is investing in mentoring for cities – each gets a Cities Unit ‘partner’, alongside a senior ‘sherpa’ for each LEP. The Core Cities group also says it’s interested in peer support advising Wave 2. This is welcome stuff, which will be essential for some of the candidate cities. However …

5/ Too far, too fast? - Central government capacity is now getting very stretched. The officials are good, but there’s only so many of them. Even if over half the Wave 2 candidates are sifted out, this still doubles the workload. And there was some talk yesterday of a Wave 3, covering rural areas, before 2015.

This rapid roll-out has already drawn some fire from New Economy Manchester. There’s clearly  a political argument for acceleration. But Ministers should be very careful it doesn’t come at the expense of effective delivery. Official capacity needs beefing up. And again, process is key. Individual Deals should move forward at different speeds; some will be renegotiated; some may need a pause.

Olympic Economics

Back in the spring – remember? – a lot of people were getting annoyed by the Olympics.

For Londoners, Dan Hancox wrote, “it’s as if someone else is throwing a party in our house, with a huge entry fee, and we’re all locked in the basement.” Roll forward to September and it feels as if a gigantic, city-wide, four-week bender has finally petered out. Everyone had a good time, and nobody fired any missiles.

As the weather turns, though, more sober assessments of the Games are appearing. The Centre for Cities has published a careful five-point legacy plan. And the Economist Intelligence Unit has put out Legacy 2012, a collection of essays on the summer’s economic and social repercussions.

You can download it here. I’ve got the lead piece, written pre-Games, which (post-Games) now seems a bit grumpy.

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Here are the headlines, and some reflections with the benefit of hindsight:

First, the direct economic benefits of 2012 to London are pretty small. This is the overwhelming message from the economic evidence, and the experience of past Games. Predictions of a hit to local retail and tourism also turned out to be correct.

Second, the major hard gain is the physical regeneration of the Olympic site. We can argue about whether winning the Games ‘created’ this, or just accelerated it. But some Londoners (homeowners, certainly) got more out of it than others.

It’s telling that the Centre for Cities suggests a ‘separate’ employment and skills strategy is needed for East London – so what positive effect did the Games have on local people’s employment chances?

Third, the indirect economic effects on the UK may be pretty big – as they have been for Korea, China and Spain. Hosting the Olympics is a massively powerful policy signal, and the Games are a platform from which to tell a story about the UK’s place in the world.

Work by Rose and Spiegel, published in the Economic Journal, suggests that on average, Olympic host countries get a whopping 20% trade boost. (Amazingly, even losing bidders pick up some positive trade effect.) The host city stands in for the nation at Games time, so that London effectively was the UK for foreign viewers. Boris clearly understood this before David Cameron.

More prescient than he knew, Tony Blair is fumbling for the political economy argument in this Vanity Fair interview (thanks to Will Davies for the spot):

For a country like Britain, it’s a great thing for us to have the Olympics here. We can afford to do the Olympics. We’re Britain. We’re not some Third World country.

For countries like Korea and China the story is ‘we’re arrived’. For Britain, perhaps – ‘we’ve still got it’?

So perhaps we’ve all been looking in the wrong place. If the message is the legacy, the biggest economic impacts of 2012 may be the long term boost to British soft power.

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The other takeaway  is that economists vastly under-estimated the intangible benefits from the Games. Pre-Games analysis suggested the ‘willingness to pay’ was dwarfed by the £9.3bn budget, but our medal hauls in both Games have clearly changed the calculus.

Perhaps we should have spotted this coming – Goldman Sachs suggest that host countries typically win 54% more medals than usual. That sporting success doesn’t come for free, as Will points out here. But Team GB’s glorious performances are likely worth several billions in – fleeting? – goodwill.

Will City Deals succeed?

Last week Ministers unveiled substantial new powers for English cities. How will these work out at street level?

I’ve posted some thoughts on the prospects for City Deals on the SERC blog.

I think City Deals could profoundly change the way central and local government work together. For urban policy geeks like me that’s pretty exciting. However, I’ve kept the analysis as calm as possible. Both Whitehall and cities face some major obstacles to making City Deals work, and we won’t see the results for a while yet.

Now read on …

Tech City at City Hall

I gave evidence to the London Assembly Economy, Culture and Sport Committee  on Tech City yesterday.  On the panel with me were Eric van der Kleij (Tech City UK), Kulveer Ranger from the Mayor’s Office, Theo Bertram (Google), Georg Ell (Yammer) and Jeff Lynn (Seedrs).

You can see the 90s-style ‘webcast’ here. There’s some entertaining political gunfighting between Kulveer Ranger and some of the Labour members for the first 20 minutes, and then a good hour of discussion after that.

Happy viewing!

What’s the point of Outer London?

I left today’s LSE/Demos Outer London seminar scratching my head. What is ‘Outer London’ for? It doesn’t make much sense – except as a voting bloc. Given we’re less than a year from Mayoral elections, though, perhaps that’s the point.

Here are some brief thoughts from the day. (Disclosure: I’m affiliated with Demos’ new Centre for London, but these views are my own.)

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There are different ways of thinking about cities. Planners focus on systems and zones. Economists think about markets, and clusters of people and firms. Sociologists look at communities, neighbourhoods and relationships. In practice, we need all of these lenses to understand real world places.

London has many distinctive features. For now let’s pick two. First, it’s a ‘city of villages’ – over time, the capital has emerged from dozens of small centres merging in a single urban mass. Second, it’s a mega-city-region. London’s economic system spills over political boundaries and across much of Southern England.

Given this, drawing lines around bits of London is a bit of an arbitrary exercise. Using official definitions of ‘Inner’ and ‘Outer’ London to make policy is actively unhelpful. 

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This became very clear during the morning. Demos’ Paul Hildreth took a classic systems approach, tracing links between Outer London and the rest. But his slides demonstrated just how hard this is to do. Data on people flows, industry mix, residence types and productivity all show how interconnected the London system is. 60% of Londoners live in the outer Boroughs, but most don’t stay there: commutes within Outer London make up less than a third of total journeys. 

Alan Mace from LSE London took a communities angle, presenting some very rich data on three outer boroughs. These showed some classic suburban features – stable populations and a strong sense of belonging. But it’s not clear these neighbourhoods are distinctively different from inner suburbs like parts of Hackney or Islington – or that similar to other outer communities. In the Q&A, it became obvious how heterogenous ‘Outer London’ neighbourhoods actually are.

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 As Scottish law would say, Outer London is ‘not proven’ – either as an economic space or a state of mind. But it does work in political terms.

Boris won the 2008 Mayoral election largely on the basis of outer boroughs’ votes. Ken, learning from past mistakes, began his 2012 comeback bid in Croydon. No surprise that Boris is re-launching the Outer London Commission less than a year before the vote, with £10m to spend on Outer London town centres before May (and £40m after).

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What does this mean for policy? The political imperative means Outer London features heavily in the new London Plan, which launches on 11 July. Economic and social realities mean there are tensions in the Plan’s overall strategy, and in the gap between policymaking and impact on the ground.

On strategy, the Plan has a welcome focus on thinking across ‘mega-London’, and identifies high-growth development hotspots across the capital. But it then goes on to set out a number of Outer London-specific policies on the economy, transport and quality of life.

On impacts, OLC chair Will McKee rightly said at the seminar that planners can’t turn market forces around, and need to work opportunistically within the business cycle. So given the deep trends taking retail off high streets and onto the internet, what can the OLC’s £50m town centre fund actually do? It is unlikely to have more than a marginal effect on retail employment. Better, as Mary Portas suggests, to take a hard look at how shopping behaviour is changing – then intervene where sensible to help high streets adapt. 

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Outer London is driven by electoral realities, more than economic or social truths. Let’s hope the next Mayor, whoever they are, recognises which of these is the best basis for policy in the capital.

Londonism

 Die Zeit has just published a big feature on London as high-powered, on-trend, chaotic world city. There’s a quote from me, plus a cinematic passage in which the journalist and I wander around Hackney Wick before stopping off for a latte.

Also featured are Boris Johnson, Mark Kleinman from the GLA and a grumpy-sounding Hanif Kureishi. You can read the whole thing here. Or for non-German speakers, there’s Google Translate.

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ps more fame: in case you missed it, the Guardian have done a nice writeup of my Munich / Silicon Valley report.

The Triumph of the City

The Ed Glaeser roadshow has rolled out of town. Last week the great man spoke at LSE, ippr, Demos, Centre for Cities and Policy Exchange, also finding time for a Guardian podcast, CfC video and an FT op-ed. Phew! He didn’t even change blazer - here he is on the Daily Show wearing it again (at about 14:30).

Until now Glaeser has been a bit of an academic’s academic. With his new book, The Triumph of the City, he’s making a bid for public intellectual territory. Saskia Sassen, Peter Hall and Richard Florida have had this space to themselves for the past decade, so it’s good to see someone else step up.

 Here’s the podcast and video of his LSE lecture. Below, my quick notes.

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 1) Cities still matter because they’re ideas engines. In a knowledge-driven economy, products and services are getting progressively more complex. Cities help manage this by bringing people face to face, helping ideas spread, and cross-pollinating new ones. As the returns to skills increase, cities help people get smarter.

This is actually a very old argument, dating back to Jane Jacobs (1970) and Alfred Marshall (1918). Glaeser brings it to life with some terrific examples of ‘urban ideas chains’ – such as the birth of Detroit’s auto industry from shipbuilding (engines) and carriage works (wheels and bodies), and the growth of financial services in NYC.

2) Technology is making cities more important, not less. Rather than killing distance, social media and the internet are producing more immersive, interactive urban environments. Again, plenty of evidence (Bill Mitchell, Castells) says that online and offline are complements, not substitutes. Glaeser rightly plugs this into the development of smart cities and the internet of things. Adam Greenfield’s incoming book will tie a lot of this together.

3) We need to build cities up, not out. Glaeser thinks Jane Jacobs was right about cities, but wrong about neighbourhoods. Long term, planning controls in urban cores tend to price poorer people out of the city. Similarly, high density cities tend to be greener, but if they restrict space, people relocate to lower-density, car-dependent communities. The answer is to allow denser development and more high-rises. 

4) In the West, urbanisation is basically done. The cities of the future are happening elsewhere. 50% of the planet now lives in cities – but the biggest urban transformations are happening in South and East Asia. This is also where the need for sustainable urban development is highest. LSE’s green cities project for UNEP echoes much of this.

5) Cities are good for poor people. But we shouldn’t save failing cities. Agglomeration economies benefit everyone. Like Stewart Brand, Glaeser sees slums as hives of enterprise – but where public infrastructure and planning has failed. Glaeser also argues that in declining cities, policy should focus making the population more skilled and mobile – rather than improving decaying urban environments. 

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A few reflections. First, is there anything bad about cities? At LSE, Glaeser suggested diminishing returns don’t really matter. I’m not so sure. Above is a classic urban economics ‘net wage’ curve. Up to point B, agglomeration effects rise with city size. Diseconomies like congestion and pollution then start to kick in. At point C, in theory, everyone leaves. In practice, this doesn’t happen – but plenty of real world cities are probably between the two (Bangkok, Lagos, LA?).

Second, Glaeser’s prescription for struggling cities might be internally robust, but in the real world it’s a very hard sell – as he found out when encouraging the US Government to move people out of New Orleans post-Katrina. Glaeser’s right that declining places can’t be preserved forever. But as I’ve argued, it’s the job of elected city leaders to make these choices – not national government. 

Which brings me to devolution. Glaeser was surprisingly lukewarm on this. He argued that when central government is weak (e.g. in a failing state), then devolution is essential. But only central government can handle redistribution, or economies of scale in service provision. This chimes with my reading of the literature. Devolution doesn’t translate directly into economic growth – although it helps indirectly, by allowing city leaders more flexibility and room to innovate. As the Coalition pushes localism ever further, Ministers should keep these caveats in mind.