Devolution and the economy: a Scottish perspective

In their interesting and challenging chapter John Adams and Peter Robinson assess the consequences for economic development policy of the devolution measures enacted by the UK Labour government post 1997. Their chapter ranges widely over current UK regional disparities, the link between devolution and economic growth, the balance of responsibilities in policy between Whitehall and the devolved administrations, and finally, they raise questions about the developing "quasi-federal" role of Whitehall in regulating or coordinating the new devolved policy landscape. In response, we propose to focus on four issues that we believe are key to understanding the economic consequences of devolution both at the Scottish and UK levels. First, we argue that the view of Scotland's devolutionary experience in economic policy is partial and so does not fully capture the nature and extent of change post 1999. Secondly, we examine the role of devolution in regional economic performance. There is much in their paper on this topic with which we agree but we contend that there are significant omissions in the analysis, which are important for policy choice. Our third section highlights an area not discussed in depth by Adams and Robinson's paper: the funding of the devolution settlement. Here we consider some of the implications of funding arrangements for economic performance and the options for a new funding settlement. Finally, we deal with the difficult issue of co-ordination between the centre and the devolved regions. We contend that co-ordination is largely conspicuous by its absence. Moreover, where coordination is deployed it reflects an inadequate understanding of the extent to which the economies of the regions and devolved territories of the UK are linked.