Flaws and myths in the case for Scottish fiscal autonomy

Paper argues that some of the claimed advantages of fiscal federalism "may not be as robust as asserted by its proponents". The incentive of retained tax revenues would be no greater under fiscal autonomy than under forms of fiscal federalism or decentralisation. It is an assumption that the return of higher tax revenues would provide an incentive to Scottish politicians to promote growth. "There is a lack of empirical evidence that the pursuit of higher revenues and expenditure is a paramount concern for sub central governments." The case for fiscal autonomy implies that local politicians are forward-looking and have low time discount rates, "not a characteristic normally associated with the practice of politics"

Is devolution good for the Scottish economy? A framework for analysis

This briefing sets out a framework for addressing the question: Is devolution good for the Scottish economy? We are currently implementing the approach and shall report the results in due course. We begin with two observations. Economic issues were clearly not the sole, or even the primary, motivation for Scottish devolution. However, given the current priority given to the decentralised delivery of policies to improve productivity the effect is of considerable interest. Devolution being 'good for the Scottish economy' is not necessarily the same thing as being 'good for the Scottish people'. If, for example, Scotland wanted to become 'greener', this could imply a desire for slower growth than in the rest of the UK. We set out below the aggregate effects and the specific mechanisms through which devolution might be expected to impact on the economy

The demand for industrial-development certificates and the effect of regional policy

The demand for industrial development certificates and the effect of regional policy, Reg. Studies 23,301-314. Attempts to cstimate the effects of UK regional policy are frequently restricted by lack of data. However, this paper uses the statistics resulting from the policy of Industrial Development Certificate (ID C) control to construct a space-factor-demand model of the demand for industrial floorspace. The IDC data set is viewed as reflccting observations on successive stages of a factor-demand model and allowance is made for spatial substitution as well as the more usual factor substitution possibilities. The effects of different regional policy instruments are modelled including the transmission mechanism through which IDC policy exerts its effect on Development Areas (DAs). The results of estimation appear to provide considerable support for our hypotheses: applications for ID C and hence demands for floorspace in D As are found to increase as national output rises; individual incentives are shown to have induced factor substitution suggesting that incentives for industrial buildings and plant and machinery are not additive in their effect on factor demands; own-location factor substitution effects of incentives appear to dominate any spatial substitution effects that they may have generated directly; factor availabilities appear to have induced a predominant spatial substitution effect; and finally, ID C policy appears to have played a significant role in reducing the spatial isolation ofD As and enhancing the effectiveness ofthe financial incentives

New firm formation in British counties: comparing the 1990s with the 1980s

New firm formation has continued to play a key role in regional development policies across the globe for more than twenty years. Successful policy requires a clear understanding of the underlying determinants of the business birth rate and there is good reason to believe that the fundamentals may be subject to change. Armington and Acs (2002) argue for a fresh examination of the subject in the United States, in part because of developments in spatial theory including the new economic geography (Krugman 1991a, 1991b, 1994) and endogenous growth theory (Romer, 1990; Nijkamp and Poot, 1989) and because of the evolution of the regional economy. They contend that the motivation for much of the literature on new firm formation in the 1980s was high levels of unemployment in traditional US industrial regions. But the focus of the literature today is different, emphasising high technology start-ups as a critical driver of the new economy. In this paper, we pose a similar question for the UK regions. Specifically, we seek to apply and develop the model tested by one of the present authors and colleagues on 1980s data, to data for the 1990s (Ashcroft, Love and Malloy, 1991). The paper is in five parts. First, we discuss the measurement of new firm formation in the UK regional context. Secondly, we identify some stylised facts on the variation of new firm formation in British counties in the 1980s and 1990s. The third part of the paper specifies the model used in our work on the 1980s and discusses the earlier findings. Part 4 tests the model on data for the 1990s, retests for key variables rejected on 1980s data and introduces new variables to reflect developments in theory and the evolution of UK regional economies. The final part of the paper compares the explanation of new firm formation in the 1980s with the estimates for the later period. In this section implications for policy and future directions for research are considered

New Wealth for Old Nations: Scotland's Economic Prospects

New Wealth for Old Nations provides a guide to policy priorities in small or regional economies. It will be of interest to policymakers, students, and scholars seeking avenues to improved growth, greater opportunity, and better governance. Some of the world's leading economists combine their research insights with a discussion of the practicalities of implementing structural reforms. Scotland is the ideal case study: the recent devolution of government in the United Kingdom offers a natural experiment in political economy, one whose lessons apply to almost any small, advanced economy. One fundamental conclusion is that policy can make a big difference to long-term prosperity in small economies open to flows of knowledge, investment, and migrants. Indeed the difficulty in introducing growth-oriented policies lies more in the politics of implementing change than in the theoretical diagnosis. Public sector governance is consequently a key issue in creating a pro-growth consensus. And faster growth must be seen to improve opportunities for the population as a whole. Further, setting out the evidence - as this book does for Scotland - is vital to overcoming entrenched institutional barriers to policy reform. The first chapter is by Jo Armstrong, John McLaren, and the editors; and the subsequent chapters are by Paul Krugman, William Baumol, Edward Glaeser, Paul Hallwood and Ronald MacDonald, James Heckman and Dimitriy Masterov, Heather Joshi and Robert Wright, Nicholas Crafts, and John Bradley

Entrepreneurial interest, vision and the self-employment choice decision in uk regions

Entrepreneurial interest, vision and the self-employment choice decision in UK regions, Regional Studies. This paper takes the standard model of self-employment choice and extends it to allow for differences in the potential for self-employment amongst employees. Four groups of entrepreneurs are hypothesized: actual, potential, latent, and non-entrepreneurs. Both the standard model and the 'sequential' model are estimated on a UK data set, allowing for both 'super' and standard region variations. The sequential model offers distinct advantages over the standard model. The results have implications for national and regional entrepreneurship policy because they reveal a clear distinction between the factors governing interest in entrepreneurship and those influencing start-up from within the interested group

Anisotropy and interface structure in sputtered Co/Pt multilayers on Si

The inter-relation between magnetic and structural properties of a series of Co/Pt sputtered multilayer films of constant period but differing number of repeats has been investigated. Independent measurements of the perpendicular anisotropy using vibrating sample, alternating gradient field and torque magnetometry were in excellent agreement. Previous measurements showing a large increase in effective anisotropy at about 15 bilayers were confirmed. Low and high angle X-ray scattering showed that the roughness of the interfaces was correlated in all samples and that the interfaces were sharp with no detectable interdiffusion. No systematic trends in roughness, in-plane correlation length or crystallographic texture could be detected with increasing bilayer repeat. The samples with higher perpendicular anisotropy had both lower Co and Pt thickness than the other samples, although this enhancement does not seem to be associated with the thickness variation. The interfaces in these samples had a fractal parameter h of unity, compared with 0.5 for the other samples