Why place matters: public economics and their application in a spatial context: paper published by CLG

Why place matters is the second in a series of papers highlighting key pieces of economic and analytical work undertaken by the Department of Communities and Local Government. It is intended as an introduction to the principles of public economics, and how these apply in a spatial context.

The paper identifies the economic reasons why place matters, uses this as a rationale for spatial policies and highlights the policy implications, including theimportance of intervening at the right spatial level. The paper goes on to explore the underlying principles for the allocation of responsibility for economic policies across different government levels and then applies these principles to six economic policy areasin the context of the Review of Sub-National Economic Development and Regeneration.

The paper is also concerned with the economics of why place matters. It does not consider wider social, environmental and political reasons of why place matters, eg political structures or cultural identity. It is aimed at those in the public sector and beyond, with an interest in Communities and Local Government’s policy responsibilities, including those who need to understand the spatial implications of policy.

This second paper is published alongside the Prosperous Places: Taking Forward the Review of Sub-National Economic Development and Regeneration (Communities and Local Government 2008). It highlights some of the underpinning Communities and Local Government analysis which fed into–and supported a number of recommendations of–the Review of Sub-National Economic Development and Regeneration; including empowering local authorities to promote economic development and neighbourhood renewal, while recognising the benefits of supporting local authorities to work together at the sub-regional level.

The first paperin the series (Communities and Local Government, 2007) provided a conceptual framework for analysing the rationale for Communities and Local Government’s policy interventions, based on the three main rationales for government intervention known as the 'three Es': efficiency; equity; and the environment.