Political Geography, Vol. 17, No. 8, pp.

959–988, 1998
Pergamon  1998 Elsevier Science Ltd. All rights reserved
Printed in Great Britain
0962-6298/98 $19.00 ⫹ 0.00
PII: S0962-6298(97)00090-5

Restructuring the local state:

economic governance or social
regulation?

Martin Jones

Institute of Geography and Earth Sciences, University of Wales, Aberystwyth,

SY23 3DB, UK

Abstract. There can be no doubt that major changes are underway at the
scale of the local state. Since the late 1970s, the Keynesian welfare state
partnership between local government and central government has been
challenged through the emergence of quasi-autonomous non-governmental
organisations (quangos). Concurrently, local government has been rein-
vented, private-sector style, through the introduction of quasi-markets and
contract culture. It is now de rigueur to characterise this challenge within
the discourse of a shift from government to governance. This is because
governance captures notions of interorganisational and intersystemic steer-
ing. Focusing specifically on the ESRC’s ‘Local Governance Programme’—
launched in 1993 to engage with the transformation of the structure of
government beyond Westminster and Whitehall—the paper claims that the
agenda for economic governance research is increasingly becoming
descriptive; where the primary object of enquiry is to detail how the new
institutions intermesh with local government to produce unevenly
developed local governance. Using the example of changes in U.K. job-
training governance, the paper argues that governance research must not
loose sight of the place of quangos as sites for state-articulated social regu-
lation and social control. This is not to deny the role of local geographies
of governance within capitalist transformation but to restate the role of
the nation state—political geography (with politics)—when analysing local
state transformation.  1998 Elsevier Science Ltd. All rights reserved

Keywords. local state, economic governance, workfare and trainingfare,

social regulation, scale

Introduction
There can be no doubt that major changes are underway at the scale of the local state—
that space occupied by ‘those separate state bodies, organisations and offices which exist
on a subnational level’ (Duncan et al., 1988: 107). Since the late 1970s, the Keynesian
welfare partnership (the post-war settlement and its ‘white-heat’ 1960s-style corporate
compromise) between local government and central government has been challenged
through the emergence of ‘centrally sponsored local institutions’ (Duncan and Goodwin,
1988: 127). Viewed from the economy–state interface, industrial and urban policy initiat-
ives indicative of this change include Enterprise Zones, Urban Development Corporations,
960 Restructuring the local state: economic governance or social regulation?
Enterprise Agencies, Training and Enterprise Councils, and Local Enterprise Companies.
Added to this list, examples from social policy, in general, include Housing Associations,
Housing Action Trusts, and National Health Service Trusts. The list could continue (see
Local Government Information Unit, 1995; Hall and Weir, 1996).
In some cases, this challenge involves the transfer of resources from local government
to centrally sponsored local institutions (through UDCs and Housing Associations). In
other cases, civil service state structures have been privatised and superseded by private
companies (through TECs and LECs). In more recent cases, central government orches-
trated joint ventures between the public and private sector (through City Challenge, Busi-
ness Link and the Single Regeneration Budget) have also been fostered. In all three types
of case, the new quasi-autonomous non-governmental (quango) local state, is character-
ised by: a specific and tightly defined ‘single-minded’ (Cabinet Office, 1988: 5) policy
remit; a strong local focus, referred to as ‘central government localism’ (Martin, 1989:
54); a strict output-related funding contractual relationship with central government
claimed to deliver ‘cost effective services’ (Ridley, 1988: 26); and the presence of notable
business elites, the ‘new magistracy’ (Davis and Stewart, 1993: 8) who ‘know the cities
from the inside and have the will to change them’ (Cabinet Office, 1988: 5). Meanwhile,
traditional local government has been ‘reinvented’ (Osborne and Gaebler, 1992), private
sector-style, through the introduction of quasi-markets, achieved using mechanisms such
as the Compulsory Competitive Tendering for services (Cochrane, 1993).
It is now de rigueur to roll together these features of local transformation within the
discourse of a shift from structured government to fluid governance (Rhodes, 1995;
Stoker, 1995a). Because governance emphasises interorganisational and intersystemic ste-
ering, this discourse is deemed appropriate for capturing ‘the increasingly differentiated
range of agencies and organisations that have responsibilities for strategic decision making
and service delivery within localities’ (Stoker, 1996: 2). This governance context has been
so influential that the Economic and Social Research Council (ESRC) launched a ‘Local
Governance Programme’ (hereafter LGP) in 1993 to engage specifically with the trends
noted above. Focusing specifically on the LGP, this paper claims that the agenda for
research is largely becoming descriptive—one where the primary object of enquiry is
mainly to tease out how these new institutions and their policy complexities intermesh
with local government to produce (and reproduce) unevenly developed local governance.
The paper argues that although this agenda is important, research must not lose sight of
the place of quangos as sites for state-articulated social regulation. Under the surface,
local governance has a brutal logic. Because institutional change is driven as much by
national crisis management practices aimed at achieving local social control, as it is by
the needs of the economy—giving rise to a primacy of political factors involved in the
architecture of contemporary of local governance—there is more to governance than the
complexities of inter-institutional and intra-spatial co-ordination. This is not to deny the
role of local geographies of governance within capitalist transformation but to restate
the role of the nation state—political geography (with politics)—when analysing local
state transformation.
This argument is made by, first, charting the emergence of the LGP. To focus dis-
cussion, the paper then examines those strands of the LGP relating to economic govern-
ance under two theoretically distinct paradigms: ‘regulation–theoretic contextual analysis’
(regulation theory and the emerging regulation approach—RA) and ‘local sociologies of
translation’ (regime theory, rational choice theory, and the policy network approach).
This paradigmatic analysis has no pretension of being a comprehensive review. Indeed,
because projects are tarred with the same paradigmatic brush, there may, in fact, be less
 Martin Jones 961
coherence within the LGP than the paper at first implies. This said, the LGP is set up
deliberately as a ‘straw man’ in order to question the broader social, economic and polit-
ical role of governance and the new public management. The role of the paper, then, is
to establish several grounded theoretical guidelines in terms to which it will return in
reflecting upon the emerging body of LGP research to recent observations on the restruc-
turing of job-training governance in England. This approach is deployed to provoke a
debate within the Political Geography readership.

The emerging local governance research agenda

It is important to view the emergence of the LGP within the historical context of ESRC-
funded research. During the 1980s, the ESRC funded two major projects concerned with
the recomposition of the state: the intergovernmental relations initiative (IGR) and
research initiative into the relations between government and industry (GIR). These pro-
jects mainly sensitised political science to the notion of a shift away from corporatism
to sectoral policy networks and communities. It was argued that networks affect policy
outcomes and that future research needed to focus on subnational and sectoral policy
studies (Rhodes and Marsh, 1992). The importance of local translation (through space)
was stressed further in the ESRC Changing Urban and Regional System (CURS) initiative.
This project (loosely) applied Massey’s spatial division of labour thesis to the changing
industrial geography of Britain, by focusing on 7 locality studies (Cooke, 1989). The CURS
initiative was criticised for its lack of theoretical application (Smith, 1987).
As locality research gave way to the growth of numerous ‘post-Fordisms’ and the regu-
lation theoretic ‘industry’ (Thrift, 1994: 370) of the late-1980s—with an emphasis on the
de-statisation of politics, the statisation of civil society, the marketisation of the economy,
struggles over the socialisation of flexible production (Jessop, 1992), and the rise of spa-
tial polarisation viewed through local modes of social regulation (Peck and Tickell, 1992;
Goodwin et al., 1993)—the issue of the local state and democratic deficit (within glo-
balised times) was thrust back onto the research agenda. Accordingly, LGP director Gerry
Stoker (1995b: 1), has highlighted 4 major research aims, articulated through the 27
research projects (conducted between April 1993–April 1997):
(1) to document the transformation of the structure of government beyond Westminster
and Whitehall by examining the development of a system of local governance in
which local authorities are joined by a range of other public, private and voluntary
sector organisations;
(2) to develop a cumulative multi-theoretic approach to the study of local governance
by comparing and contrasting the strengths and weaknesses of a range of current
theoretical approaches rather than espousing any one approach;
(3) to place the changing British system of local governance in an international con-
text; and
(4) to understand the way government is experienced by the public as citizens and con-
sumers.
It is not the place here to review the LGP in its entirety, as research covers 10 subject
areas: finance, community power and politics, economic development, new management
and public services, cross national comparison, intergovernmental relations and manage-
ment, citizen and participation, equalities, labour market, and history. Instead, the paper
discusses the emerging research findings related to economic governance in its broadest
sense—incorporating interest groups into the state apparatus for the purposes of econ-
962 Restructuring the local state: economic governance or social regulation?
omic development. Sensitive to the emphasis placed on multi-theoretic approaches, the
following two sections unravel the interpretations of local governance by way of a struc-
tured discussion on, first, the two mentioned paradigms and, second, research findings
from a number of individual research projects related to economic governance.

Governance paradigm I: regulation—theoretic contextual analysis

It is not an overstatement to claim that regulation theory has dominated theoretical
enquiry in certain key areas of human geography since the late-1980s—most notably
urban, regional and local economic development, and in the changing nature of work
and industrial strategy (see Amin, 1994). For some, its progression beyond, at times,
coded language—to trace what the early French political economists really meant—has,
however, limited the extension of its basic tenets to lower levels of analysis and even its
popularity in Marxist circles has been challenged (Steinmetz, 1994; Gough, 1996). Regu-
lation theory makes several claims which are summarised here as (Tickell and Peck,
1992):
쐌 capitalism is always prone to periods of crisis but occasionally displays periods of long-
run stability known as regimes of accumulation;
쐌 regimes of accumulation are composed of a structural-coupling between an accumu-
lation system (form of production) and a mode of social regulation (MSR)—extra-econ-
omic dimensions, such as institutions, habits, customs and norms;
쐌 a structural-coupling involves co-evolution mediated by class struggle and is a
chance discovery;
쐌 examples of successful structural-couplings through time include the Fordist post-war
period of capital expansion which broke-down in the early-1970s; and
쐌 the present (post-Fordist or after-Fordist) capitalist period is one of experimentation
based on several suggested capitalist forms—flexible specialisation, flexible accumu-
lation, reflexive accumulation, and neo-Fordism—the durability of which has been
open to debate.
Given that this framework opens up the possibilities of exploring uneven transitions
across time and space (Hay and Jessop, 1995), it should not be surprising that two pro-
jects have adopted a regulationist–theoretic stance to analyse the changing role of the
local state. Stoker has gone as far as to suggest that ‘those influenced by regulationist
ideas will make valuable contributions in the future to [local governance research] as
they seek to refine and develop the approach’ (Stoker, 1995c: 119).
Jessop’s regulationist–theoretic research project ‘economic restructuring in Dartford
and Manchester’ highlights the strength and weaknesses of the RA. The strength of the
RA is its ability to situate the state and the economy in a macroeconomic historical con-
text. This strength also represents a key (local) weakness, namely the tendency to ‘read-
off’ transformations within local governance from transitions supposedly underway at the
macroeconomic scale, inferring a causal relationship between the two scales. The result
is the construction of a stereotypical Fordist/post-Fordist template, which is imposed onto
the local level, in the process of signposting elements of the local economy that could
fit into Fordist/post-Fordist categories (Hay, 1995a; Jones, 1997a). This practice is often
found in those writings concerned with the emergence of post-Fordist institutions
(Stoker, 1989, 1990; Mayer, 1992, 1994; Stoker and Mossberger, 1995).
Jessop avoids this by playing to the regulationist strengths and, therefore, engages with
national-level analysis. As regulationists are at pains to emphasise that structural coupling
 Martin Jones 963
emerges from struggles primarily at the level of the nation state, Jessop recasts the
Fordist/post-Fordist paradigm and suggests that Fordism was associated with the Keyne-
sian welfare national state (KWNS) and post-Fordist MSRs form part of an emerging
Schumpeterian workfare state (SWS), or more recently, a Schumpeterian post-national
workfare regime (SWPN) (see especially Jessop, 1993, 1994, 1995a, 1997a).
Whereas the KWS is associated with securing the long-run expansion of Fordism, by
managing aggregate demand and economic stability, the SWS promotes ‘innovation-driven
structural competitiveness’ in the field of economic policy (hence Schumpeter) and the
enhancement of flexibility in the field of social policy ‘away from redistributive concerns
based on expanding welfare rights in a nation-state towards more productivist and cost-
saving concerns in an open economy’ (Jessop, 1993: 18). More importantly, the SWS is
held to be able to resolve the crisis of Fordism (Jessop, 1993: 11; compare with Jessop,
1995a). Furthermore, whereas the KNWS scripted a role for local government as part of
a local welfare state, a ‘hollowed-out’ SWS (attributing responsibility to local and regional
states) encourages local competition through place-based partnerships between ‘local
unions, local chambers of commerce, local venture capital, local education bodies, local
research centres and local states [which] enter into arrangements to regenerate the local
economy’ (Jessop, 1994: 272). Jessop adds that ‘in this sense we can talk of a shift from
local government to local governance’ (Jessop, 1994: 272).
In terms of geography, the SWS form takes on three ideal-types: the neoliberal SWS,
neocorporate SWS and the neostatist SWS. Real-concrete examples of the SWS (at both
national and local scales) consist of the combinations of differing ideal-types (compare
with Esping-Andersen, 1989). Jessop has argued that it is the task of ‘subsequent work’
to explore real-concrete dimensions in detail (Jessop, 1993: 35). In reality, this task has
been difficult to execute (although, see Hay, 1994; Peck and Jones, 1995). Jessop has
admitted that this might be because ‘there are yet no adequate explanations of the struc-
tural transformations and/or strategic reorientation of the local state. At best we have
more or less plausible regulationist contextualisations of these shifts’ (Jessop, 1995b:
321, emphasis original). This said, he has recently explored the feasibility of governance
frameworks for building-down from regulation theory and this leads him to focus on
‘governance complexity’ (Jessop, 1997a). Mapping national, regional and local complexity
is the future research agenda.
Painter and Goodwin’s research project ‘British local governance in the transition from
Fordism’ also works within the regulationist paradigm and builds on previous work con-
ducted on applying regulation theory to the shifting local state (Painter, 1991; Goodwin
et al., 1993). Whereas Jessop’s work acknowledges the regulationist enigma—the prob-
lem of ‘reading-off’ local transformation from broader macroeconomic change (Jones,
1997a)—Painter and Goodwin make a concerted effort to work with the regulationist
grain, knots and all. It is, however, their adherence to the claim that the RA is not a
theory per se but a critical realist informed methodological framework—argued to be
inadequate on its own for analysing contemporary local governance—that clouds an
ability to see detailed changes at the (real-concrete) local state level from inevitable
uneven development resulting from local reactions to after-Fordist restructuring. In one
sense, it appears that geographies of governance take precedence over the real regulatory
processes used by the state to secure social policy objectives and political unity. These
dilemmas are discussed below.
Goodwin and Painter, like most geographers, ‘remain sceptical’ about the durability of
post-Fordism as a theoretical paradigm and an empirical reality (Goodwin and Painter,
1996: 636; see also Goodwin, 1996). They see social regulation as an ‘on going process
964 Restructuring the local state: economic governance or social regulation?
[spatially] constituted through material and discursive practices’ (Painter and Goodwin,
1995: 335). They add that a ‘suitably developed [RA] can provide a helpful framework
within which to interpret a number of significant contemporary changes in the political
economy of “advanced” capitalist countries’ (Painter and Goodwin, 1995: 335). This
being the case, two caveats are added for caution. First, the ‘explanation of changes in
the local state and local governance falls outside the scope of regulation theory’ because
explaining the character of local governance requires ‘a theory of the state and empirical
historical and geographical research, as well as a theory of their impact on (economic)
regulation’ (Painter and Goodwin, 1995: 347, emphasis original). Second, it is claimed
that this does not make the RA redundant because what is required is ‘an investigative
frame which joins a geographically sensitive regulation theory based on social processes
to a critical political sociology of the local state and local governance based on an investi-
gation of the material and discursive practices in which they are grounded’ (Painter and
Goodwin, 1995: 347).
Painter and Goodwin offer such a template by redefining the mode of social regulation,
a ‘redundant concept’, as ‘regulation as a process and practice’ (Goodwin and Painter,
1997: 18). Because stability is, in fact, a rare phenomenon, the emphasis placed on pro-
cess stresses the importance of contingent readings of local governance as the emerging
capitalist phase. From these readings the durability of the current epoch can then be
debated. Goodwin and Painter (1996: 644–645) draw attention to the need for ‘detailed
case studies . . . to build up a picture of extensive change’. In the absence of case studies
a series of research questions are posed. It is asked; which organisations are involved in
the delivery of specific local public services; what new forms of management have been
introduced; what are the relationships between TECs, UDCs, voluntary bodies, private
companies and local authorities; what class and other alliances characterise local politics?
Working within these questions, Painter (1997a) has extended the idea of ‘regulation
as process and practice’ through Bourdieu’s notion of ‘habitus’; ambiguously defined as
‘structuring structures predisposed to function as structuring structures’ (Bourdieu, 1990:
53). Painter (1997a: 139) claims that as habitus outlines the ‘field’ and ‘spatial structure’
of local governance, there are possibilities for the uneven development of sites of regu-
lation and counter regulation, according to the uneven translation (and resistance) of
grounded knowledge networks. Exploring how translation works, in practice, is advanced
as the future regulationist research agenda. Painter (1997b) also plays the socio-cybernetic
card (on which, see Rhodes, 1995) by claiming that the metaphors of process and prac-
tice can be extended through a branch of systems theory known as autopoeisis. This
anti-essentialist approach—when applied to governance—argues that the processes and
practices of regulation are locally embedded and path-dependent (compare with Jessop,
1990). The local is presented, albeit with caveats, as an independent dynamic.

Governance paradigm II: local sociologies of translation

This emphasis on the field of process and practice, provides a link to the other main
emerging theoretical paradigm—local sociologies of translation. These refer to three dis-
tinct theoretical or (more accurately) metaphorical positions used throughout the LGP:
regime theory, rational choice theory, and the policy network approach. These positions
are presented as translation metaphors because, unlike regulation theory, their emphasis
is concerned with the ‘networking challenge[d]’ geographies of time–space specific
events (Cooke and Morgan, 1993: 545), in contrast to (post-hoc) observations on the
durability of historical epochs. In one sense, local sociologies of translation answer Thrift
 Martin Jones 965
and Olds’s call for a refigured analysis on the ‘topological presupposition of the network’
within geography, that is, a perceived need to map the ‘social determinants of the econ-
omic’ (Thrift and Olds, 1996: 331). In another sense, local sociologies of translation share
a similarity with the ‘new economic sociology’ (Ingram, 1996), in that importance is
placed on the post-structuralist assertion of networked agency—namely that complexity,
richness and diversity challenges totalizing discourses and ideologies—in the remaking of
the capitalist space economy. Because governance brings into play notions of networked
negotiation, agenda setting, interorganisational and intersystemic steering (Jessop, 1995b,
1997a), it is again not surprising that at least five LGP projects work with the local socio-
logies of translation paradigm.
If Parisian regulation theory could claim to be the European academic growth industry
of the late-1980s, the North American siblings regime theory and growth machine theory
have a strong claim for being the place that academics frequently hang-out in the late-
1990s. Both stress the importance of the political economy of place and networked co-
operation between the public and private-sector within local economic development
(Ward K. G., 1995). When combined with Cox and Mair (1988)’s claims about the depen-
dency of firms on the locality, these approaches form part of a broader New Urban Politics
(NUP) (see Cox, 1993; Cox and Wood, 1997; Ward, 1996; Wood, 1996). NUP, therefore,
contrasts sharply with the Castells-style urban politics of old, revolving around struggles
(urban social movements) for the rights of collective consumption (Pickvance, 1977).
The starting point for urban regime theory is the shortcoming of 1950s and 1960s-style
community power debates. Here, Hunter argued that the city was governed by a ruling
elite. This position was challenged by pluralists such as Dahl and Lindblom, who argued
that interest groups had the ability to exercise influence over decision making and local
government frequently acted as resolver of conflict (for summaries, see Harding, 1995).
Updating this debate in globalised (SWS) times, NUP’s basic claims are that driven by a
search for competitiveness within the space-economy, place-bound actors enter into col-
lective arrangements to promote the local as site for accumulation. This necessity leads
to different forms of partnerships (or regimes) in different, mainly urban, spaces. The
specific form of regimes is determined by local political actors and institutions, and the
nature of specific economic development projects (compare, Elkin, 1987; Stone, 1989).
The attractions of the NUP are obvious. Its basic reading allows the governance
researcher to explore the different ways in which regimes are being established in local
and national contexts. This fact is acknowledged by Stoker, who argues: ‘Regime theory
holds substantial promise for understanding the variety of responses to urban change’
(Stoker, 1995d: 54, emphasis original).
This call-to-arms statement has been taken up by Harding’s project ‘coalition-formation
and urban redevelopment: a cross-national study’. Harding’s position on the exportability
of the ethnocentric NUP, from the U.S. to the U.K., was well known before he undertook
detailed empirical research. Harding (1991: 299) has argued that the ‘voluntarism’ of
growth machine theory was insufficiently sensitive to the particularities of spatially consti-
tuted political actors outside the U.S., but that the more ‘contextual factor’ of regime
theory held promise for exploring the different, cross-national, ways in which the partner-
ships are developing for mutual benefit (Harding, 1994: 359). Regime theory is further
legitimised by claims that it offers a way out of the sterile nature of U.K. political science,
argued to be trapped by ‘minutiae of institutional change’ (Harding, 1994: 368).
Harding argues that because NUP allows the study of local politics outside local govern-
ment-centric research, the contextual factor at work in regime formulation is the bigger
picture of globalisation. Following a much less sophisticated line of argument to Jessop’s
966 Restructuring the local state: economic governance or social regulation?
hollowing-out thesis, globalisation is claimed to be instrumental in reducing the ability,
capacity and frequency of the national state to act as a mechanism for securing economic
governance (see especially, Harding, 1994: 369–371). As globalisation is presented as an
inevitable external force and nation states appear to be heading in the same (governance)
direction—albeit it at different speeds—Harding argues that differing regime develop-
ments can be explained by specific ‘state–market relations’ (Harding, 1994: 371). These
are defined elsewhere as ‘local economic structures, nonlocal property actors, the role
of the public sector, and the precise nature of the mutual accommodation made within
coalitions’ (Harding, 1991: 310). Teasing out different state–market relations becomes the
motive of research.
Drawing on 5 cities—Hamburg, Copenhagen, Amsterdam, Manchester and Edin-
burgh—Harding uses reputational analysis (the identification of locally active individuals
collated from media sources) to map the local business elite and comparative decision
making practices. His findings only marginally progress the analytical claims of the NUP.
First, although it is claimed that there has been a resurgence in networking and collabor-
ation, this does not represent the basis for a growth machine (Harding, 1996b: 45).
Second, UK cities are characterised by public–private partnerships, whereas European
cities are involved in public–public partnerships. This highlights particular national polit-
ical contexts and the different way in which the private-sector are institutionalised as a
collective force.
Third, despite the claim that there is a possible ‘new community power’, complete
with democratic pluralist networks into the decision making process (Harding, 1996a),
Harding concludes that on the evidence of the case studies: ‘partnership boards feel that
the power they have to change institutional behaviour is limited either because the terms
and conditions under which they operate limits their room for manoeuvre or because
they . . . are driven by their executives’ (Harding, 1996b: 62). This contradiction, pointing
to the role that those identified by reputational research play in public policy, is not
explored.
The attractiveness of regime theory is also recognised by Dunleavy, Dowding, Margetts,
Rydin and King who in their project ‘metropolitan governance and community study’
examine how new forms of public management have created new urban governance
structures (TECs, social housing organisations and hospital trusts), and how this feeds
into local politics and policy outcomes. According to their project brief (Stoker, 1995b),
the aims of the project are to ‘map the consequent increase in the number of decision
making units and examine the implications for the accountability of public bodies’. Fur-
thermore: ‘it will greatly contribute to the understanding of who “runs” London’. Theor-
etically, this project sets out to mobilise theories of growth coalitions and local regimes
with a modernised form of community power theory using a rational choice perspective.
The research finding reveals mixed successes on, first, developing the proposed theoreti-
cal direction and, second, helping ‘decision makers understand the new context in which
they are operating’ (Stoker, 1995b). Mixed success could, of course, be due to the
shackles of rational choice theory, which according to H. Ward (1995: 92) ‘is descriptively
implausible’ and its current status is reduced to a ‘straightjacket’, unable to grasp the
realities of politics, time and space.
Rational choice also emerged from the U.S. community power debate of the 1950s and
1960s. In contrast to elite and pluralist perspectives, rational choice claims that collective
action is a myth. Instead of adopting the position whereby regime-like collaboration is
deemed necessary for the mutual benefit of those involved on urban politics, rational
choice theorists argue that policy making is a game involving a series of trade-offs and
 Martin Jones 967
decisions based on the location and strategy of other actors. Individuals (actors or
institutions) maximise their benefits at any one point in time, in relation to the options
available. Dowding (1996) uses the example whereby U.S. welfare recipients move states
to maximise their benefits. Dunleavy et al. apply an institutional rational choice model
to the shifting nature of community power structures in London. As London specific
examples are not detailed, given the infancy of published findings from the LGP, only
general observations can be made on this approach (compare with Rydin, 1998). They
ambitiously claim that ‘it is time to return power to centre stage in urban analysis’ and
that institutional rational choice analysis ‘enables us to understand the problems . . . of
power . . . without disappearing into metaphysical wilderness’ (Dowding et al., 1995:
266).
Using the same reputational research approach deployed by Harding, the authors argue
that the reputation of powerful individuals and institutions is a key constituent to under-
standing how local politics, as a ‘bargaining’ process, works in practice (Dowding et al.,
1995: 273). The intention is to construct a reputation and budgetary database detailing
those individuals, groups and agencies involved in London governance and then to exam-
ine how these groups lever in and share resources. From this, it is further claimed that
the production, provision and consumption of collective goods can be mapped. As regime
theory is held to focus on who gets what as well as who governs, a middle-range version
of rational choice theory is tentatively proposed, based on the fusion of these two neo-
pluralist approaches. This is identified as a ‘new research agenda in urban politics’
(Dowding et al., 1995: 277).
If the direction of research discussed above appears reminiscent of the U.K. policy
network approach, it is not surprising that Dowding has previously claimed that this
branch of political science was, in fact, not a theory but an extended metaphor. He
argued: ‘the [policy] network analysis is more of a map of the policy process, than a fully
fledged explanation of it’ (Dowding, 1995: 157). The policy network approach, of course,
emerged out of heated debates in the 1970s and 1980s between U.K. corporatists and
pluralists over explaining how the economy was governed. Its main advocate, Rhodes,
made the claim that corporatism—negotiated interest group mediation secured through
national-level peak organisations—was ‘too rigid and too inclusive’ (Rhodes, 1986: 240),
since it encompassed corporate bias, bargained corporatism, and societal corporatism.
More flexible terms such as policy communities and policy networks were introduced
to allow for the different sectoral ways in which policy was implemented and governed.
Sensitising the policy network approach to unevenly developed economic governance
is the object of John and Cole’s project ‘intergovernmental management and local policy
networks’. John and Cole explore the way that local networks mediate and structure
contrasting institutional arrangements in local economic policy making. Using a multi-
theoretical approach, they note that policy networks provide, at best, a ‘classification
scheme’ (John and Cole, 1995: 304) and suggest that by drawing on the contextual
properties of U.S. regime theory and the geographical specifities of the localism thesis—
recognised as the contribution of the CURS initiative to political science—the compara-
tive dynamics of networked power can be studied. This possibility is explored through
case studies of network mapping in Britain and France, focusing on four cities; Leeds,
Southampton, Rennes and Lille. John and Cole combine the repututation approach for
identifying decision makers with sociometric mapping techniques, to record the fre-
quency of contacts between individuals in these localities. This enables them to draw
out the unevenness of network formation, which is attributed to ‘the character of the
locality and on it history of political control’ (Cole and John, 1995: 95).
968 Restructuring the local state: economic governance or social regulation?
In particular, John and Cole note that despite convergence between the two nations,
based on the proliferation of new agencies in both contests, the nature of U.K. policy
making in economic governance is more centralised than the French experience. Support-
ing Harding’s claims on European cities, French economic governance is characterised
by decentralisation to a more powerful form of local government and a strong dirigiste
presence of regional and national government (represented by the civil service), both
mediated by the mayor. Despite the claim that networks in both national contexts are
beginning to ‘reap the rewards of co-operation’ (Cole and John, 1995: 107), it is acknowl-
edged that the ‘context of local politics in the 1990s, in Britain and France, emphasises
fragmentation and a measure of policy confusion’ (Cole and John, 1995: 106). This com-
ment raises the question of the structured contexts within which networks operate and
the role that they play in the realpolitik of public policy implementation. As with most
of the projects in the LGP, these issues are not discussed, never mind flagged-up as poin-
ters for further critical evaluation.

The makings of cafeteria political economy?

This paper could continue, at length, to detail further LGP research deploying a net-
working approach. Briefly, Morgan and Rees, in their project ‘new structures of local
economic governance: a comparative analysis’, for instance, have made claims on the
usefulness of a wide range of networking approaches for studying trust-building in South
East Wales and the West of England. They criticise the restricted national-level framework
of regulation theory, claimed to have ‘completely overlooked’ subnational uneven devel-
opment and assert that ‘history and geography only shape the environment—they do not
determine it’ (Garmise, 1995: 2, 4). Drawing on the experiences of Baden Württemborg,
Catalonia, Rhône-Alpes, and Lombardy—which possess strong regional institutional net-
works—the localist (trump) card is played with the statement ‘it seems clear that local
institutions are not merely hostage to larger political and economic forces, but do indeed
imprint local responses’ (Garmise et al., 1995: 38; compare with Morgan, 1997a). This
leads to the assumption that by merely fostering networks, a successful regional and local
economy will follow (compare with Morgan, 1997b). This approach to local economic
development and social cohesion as been termed ‘connexity’ (Mulgan, 1997), aimed at
bringing about a supply-side revolution. Demand is not an issue. Lastly, Murdoch and
Marsden’s project ‘exclusive space? Networks of participation and forward planning in
Buckinghamshire’, although at the margins of economic governance, draws heavily on
actor-network theory (Murdoch, 1995, 1997; Murdoch and Marsden, 1995). Their bottom
line is that networked agency matters. Commenting on recent interest in actor network
theory and the networking literatures in general, Hay argues: ‘in conceiving of all social
processes as network interactions, we would merely empty the concept of all analytical
content and rob ourselves of any theoretical work’ (Hay, 1995b: 9). MacLeod has added
that, in reality, the positive contributions made by the networked state to regional and
local economic development are debatable (MacLeod, 1996). The point is that networks
are not new and are as much a product of national (and local) confusion and decline,
as the re-emergence of old industrial spaces in previously dominant regional economies
(Lovering, 1995, 1996).
Could we be on the verge of cafeteria political economy in the social sciences, whereby
the temptation is to combine several theories to construct a multi-theoretical approach
appropriate for exploring the unevenness and complexities of the labyrinth of economic
governance? This certainly appears to be the case based on a particular reading of pub-
 Martin Jones 969
lished research from the local governance programme, set within Stoker’s (1995c: 102)
plea for theory-enriched ‘social commentary’. Whilst there is a place for multi-theoretic
approaches to the study of economic governance, the anti-essentialist jumble created by
using theories as collective means to a descriptive end, renders many research projects
theoretically unintelligible at the local level. At worst, we are left with a complex version
of empiricism, void of any structural common sense. In turn, none of those projects
discussed seem to have much to say about ‘local’ economic governance. Jessop seems
to imply the possibility of more or less hermetically sealed local types, while Painter and
Goodwin seem to end up back with local case studies.
Regulation theorists can, to an extent, be excused from criticism because they are
inevitably trying to grapple with the macro and the micro, and are perhaps desperately
in need of a theory of the state and political action, after which uneven development
can then (and only then) be explored. Painter’s application of ‘habitus’ is not much more
sophisticated than (Jessop’s 1990; see also 1997b) ideas on societalization which, accord-
ing to Betramsen (1991: 138), can mean ‘any social relation and any social practice’.
Additionally, it is debatable whether ‘regulation as process’ progresses Goodwin’s pre-
vious critical realist-informed claims on local causality and the unevenness of local social
relations (Duncan et al., 1988). Used in its current (blunt) guise, regulation theory seems
to hinder concrete research, not aid its development. MacLeod’s (1997); see also MacLeod
and Jones, 1999) work on third-generation regulation theory—focusing on the political
construction of space and the politics of representation—offers hope for the regulation
approach. Third-generation regulation theory emphasises the articulation of the local and,
therefore, does not treat local governance as exclusively local, or merely governance.
Rather, attention is paid to the reshuffling of spatial scales and the role of discourse in
creating and legitimising state restructuring for the implementation of public policy
(Jenson, 1993; Jones, 1997a).
By contrast, regime theory over emphasises localism and voluntarism. Its overt neo-
pluralist tendencies (Judge, 1995) assume that the localisation of policy making opens
up the opportunity for constructive relationships between the public and private-sector.
Regime theory does explore the geographies of regime formation, in contrast to assuming
that growth machines are the dominant tendency. Whether this amounts to local descrip-
tion or structural explanation, is open to question. The end product is invariably the
construction of typologies, with the conclusion that more case studies are the way for-
ward (Stoker and Mossberger, 1994). Stoker has added that regime theory will ‘come of
age’ if it develops a ‘track record of empirical research’ (Stoker, 1995d: 70). Advocates
of this position may wish to take note of Harvey’s comments on the CURS initiative,
where he argued that there was a danger that empirical analysis which does not enrich
theory amounts to ‘little more than a proverbial hill of beans’ (Harvey, 1988a: 213).
Surely the key question to ask is under what circumstances different interest groups
come together as a coalition and what are the material gains—the levers and drivers? On
this issue, (Harding’s 1996a; 1997) logic on globalisation, somehow, necessitating the
need for local coalitions, is questionable. Globalisation is not a liberating force, as the
internationalisation of capital is both mediated by and occurs in and through local and
national state policies (Dicken, 1994; Weiss, 1997). Many of the claims of the end of the
nation state (Ohmae, 1993; Horsman and Marshall, 1994) have been used as political
discourse to legitimise the free market mentality of neoliberalism and state restructuring.
Harding gives the game away in his claim that some of the actors involved in local econ-
omic development ‘feel they are being used politically—so that Governments can distance
themselves from the actions of public companies, for example’ (Harding, 1996b: 62).
970 Restructuring the local state: economic governance or social regulation?
The fact remains that state power is projected through (structured) actors. Perhaps,
then, the agenda is to search for those factors which are non-local or extra-local (Ward,
1996). This is probably what Harding means when he claims that regime formation is
the ‘product of a number of economic and political pull and push factors’ (Harding,
1996a: 650). This criticism can equally be applied to the rational choice framework,
which again assumes that the plurality of the policy process goes hand in hand with local-
isation.
Addressing this line of argument, Ward (1997a; 1997b; see also Jones and Ward, 1997)
argues that, in the case of contemporary U.K. urban policy, the ‘regime-like’ nature of
the partnerships required to access resources through the Single Regeneration Budget
(SRB) Challenge Fund are determined by tightly defined bidding guidelines set by central
government. Such guidelines are the non-local factors, which in turn define the actors
of the game. The competitive process to access resources is likened to a ‘grant-grabbing
coalition’, not a growth coalition (Jones and Ward, 1998). This analysis is confirmed by
other studies of U.K. urban politics. Cochrane et al. claim that Manchester’s attempts to
position itself as a world city—by participating in Olympic bidding as a sports-led regener-
ation strategy—involved a re-scripting of the discourses of competitiveness and the incor-
poration of leading private-sector players into the forum of local economic development
to legitimise local state strategy (Cochrane et al., 1996). Manchester’s Olympic bids failed
and the broader project highlighted the fragmentation of business interests. This brings
in question the value of reputational analysis. Just because elites frequently appear in the
local media, this does not necessarily mean that they are ‘directing the show’ (Strange,
1997).
The concerns raised so far can be boiled down to a series of probing questions on
state politics and the role of the private sector in legitimising the transformation of the
local state. For instance, is governance really just governance, or has state restructuring
brought with it degrading material effects on those public services dealing with aspects
of social regulation? Expressed differently, is there more to governance than the details
of who sits on quango and partnership boards? As most of these issues appear to have
taken a back-seat role in the LGP, the following section addresses these questions using
the example of job-training governance.

Governance observations: restructuring job-training, U.K.-style

Job-training governance is not a trendy topic to study. Indeed, of all the LGP projects
only Doogan (1997)’s research on ‘local governance and labour market fragmentation’
engages with links between the institutionalisation of economic activity, service delivery
and employment policy. This section discusses the rise and, more importantly, the social
regulatory role of Training and Enterprise Councils (TECs) in England. It does not make
any claims about TECs in Wales or the Local Enterprise Companies (LECs) in Scotland
(on which, see Davies, 1995; MacLeod, 1996). This example is not used to dismiss the
two paradigms. Theory can only take political—economic explanation so far. Its role is
to stress the effects that economic governance has on the design, targeting, delivery, and
receipt of a particular branch of social and public policy at the national and local level
(compare with Pollitt et al., 1997). Following a conventional policy analysis, an enriched
state regulationist theory is offered in the concluding section.
82 TECs and 22 LECs were launched in 1988 (the height of radical Thatcherism) with
a projected annual expenditure of £3 billion to deliver a radical new approach to govern-
ment-supported training programmes for adults and young people, and enterprise support
 Martin Jones 971
for small and medium-sized firms. TECs are, therefore, not just isolated institutional
experiments—a spur of the moment attempt to inject a hint of private-sector involvement
in training—they handle significant amounts of public money, and are at the leading edge
of local state restructuring from government to governance. TECs have complete spatial
coverage of England and play a central role in the redrawing of local state boundaries;
they represent a general attempt to introduce deregulation and privatisation through priv-
ate sector dominated boards; and they operate performance-based contracting with train-
ing providers in their locality to procure outputs and achieve central-government dictated
targets. This significant anglo-centric, one-eyed, institution can be used to shed light on
the place of ‘local’ governance.
In the LGP, TECs do get the occasional mention. Stoker (1990) previously saw TECs
as emblematic of a post-Fordism MSR. He, however, does not go as far as to agree with
Mayer (1992: 259), who states that TECs ‘mobilise and co-ordinate local potential for
economic growth’. Stoker’s recent position is that because Fordist channels of communi-
cation between business interests and local authorities were relatively weak and TECs
fulfil a functional role in the fostering of ‘collaborative relationships with business’
(Stoker, 1995a: 11), they are mechanisms for public–private partnerships. This statement,
however, does not consider the politics behind the need to involve business interests,
nor does it discuss what TECs actually do. The post-Fordist local state is held to require
new forms of political representation (Jones, 1997a). John and Cole argue that TECs are
associated with neo-elitism and that they ‘replace locally elected bodies’ (Cole and John,
1995: 96; see also Miller and Dickson, 1996). Garmise (1995) details the role of TECs in
business support services. Nowhere is there any discussion of the training programmes
that TEC govern and the role that they play in labour market and welfare restructuring.
Certainly, geographies of economic governance within the national ‘TEC picture’ do
exist. TECs are, however, about more than the ‘interdependence of governmental and
non-governmental forces’ leading to a local mixture of ‘complexity and diversity’ (Stoker,
quoted in House of Lords, 1996: 32). Although Harding (1994: 379) argues that the great
thing about the local governance programme is that it ‘heralds a welcome shift of empha-
sis in the social sciences [away from] program evaluation and monitoring studies’, it is
precisely policy analysis which is needed to assess the role of governance. This claim
chimes with Hamnett’s (1996: 373) acknowledgement of the need to keep ones ‘empiri-
cal eyes open’ and Berry’s (1994) call for more geographically sensitive policy analysis.
Perhaps the last place to start with TECs and local economic governance is at the local
level. TECs need to be seen as a national political project (Peck and Jones, 1995) whose
spatial form does take on an interesting series of local variations. Merely reading TECs at
the local level and believing their overblown rhetoric, however, can lead to mistrans-
lations. Outside the LGP Bennett, for instance, sees TECs as part of a shift towards local
empowerment and business services (Bennett et al., 1994). This enterprise thesis claims
that TECs were introduced to give local business a flexibility to make training pro-
grammes—aimed at up-skilling to increase human capacity—match local needs. There is
no politics in this interpretation. The object of enquiry becomes a new-right public choice
approach, based on how many TECs there need to be and which local spaces they should
occupy to enable allocative resource efficiency (Bennett, 1994). This argument would fit
nicely with the direction of findings emerging for the local governance programme,
namely that there are different degrees of complexity and fostering networks leads to
economic growth. This reading of TECs would appear to miss the real role of job-training
governance; managing the crisis of unemployment (Peck and Jones, 1995) and neatly
expressed as ‘the displacement of the ethos of the welfare state with that of the “active
972 Restructuring the local state: economic governance or social regulation?
society”’ (Dean, 1995: 569). As this was the national political strategy which set the
agenda for local governance, it warrants a detailed analysis. At the very least, local detail
must, therefore, be placed with a national regulatory context. The nation state matters.
For some this approach is not possible because ‘traditional public administration’s access
to policy makers has declined’ (Stoker, 1995c: 102).
By contrast, access to national policy makers informs the analysis offered here (see
Jones, 1998). The entire period of the 1980s was a search for an appropriate institutional
fix in local economic development, hence the imposition of UDCs and the continual
interest in institutional (‘privatism’) innovations on the other side of the Atlantic
(Barnekov et al., 1989). TECs are no exception to this trend. In the late-1970s, the Con-
servatives inherited the tripartite corporate quango Manpower Services Commission,
anchored at the local level through consensual politics translated through Area Manpower
Boards. The AMBs, a weak political compromise based on incorporating labour (the trade
unions) and capital (the Confederation of British Industry—CBI) into the state apparatus,
approved a series of training programmes for the young (the Youth Training Scheme)
and adults (the Community Programme). The Conservatives wanted to replace the AMBs
with an employer-led body. The argument was not only that corporatism was a flawed,
bureaucratic and ineffective mechanism, but that training needed to be delivered by
employers because employers ‘knew more than any “expert” what skills were actually
going to be needed’ (Thatcher, 1993: 670). This comment, however, does not acknowl-
edge the fact that since the 1884 Samuelson Committee, the lack of investment by
employers in training has been acknowledged as one of the main reasons for Britain’s
slipping economic position (see Training Agency, 1989). The Conservatives examined
the feasibility of empowering the largely moribund chambers of commerce through the
Local Empower Network (LEN) project. This failed due to the spatial fragmentation of
chambers (Jones, 1996a). Thus, through a series of complex politically-mediated pro-
cesses the business-led and privatised North American Private Industry Council (PIC)
model was adopted. Record low-unemployment in December 1988 gave the opportunity
to dismantle the MSC and implement localism to bring about a, so-called, ‘skills revolution’
(Department of Employment, 1988).
The story does not stop here. The adoption of the PIC model was legitimised on the
successes of Boston PIC, the only PIC which managed to obtain substantial funding from
private sector sources. This PIC contained a neo-elitist board structure—a two-thirds rep-
resentation for the private-sector and the remaining seats from the public sector. Boston
PIC was used as the role model for the English and Welsh TECs and the Scottish LECs
(Jones, 1998). There was a sociology of translation which took the form of policy-bor-
rowing, articulated through policy advisors, used to justify objectives set by employment
ministers. This fact has been acknowledged by political scientists (King, 1996), but the
social, economic and political consequences of the whole-scale adoption of ‘fast policy’
(Jessop, 1995c: 1620) have not been explored. Because of the willingness of the private
sector in Boston to muck-in and invest in the locality, the same was expected for Britain.
This did not happen. National context and the whole raft of central–local relations mat-
ters. Although the private sector captains of industry were asked to govern TECs/LECs
and be role models for local employers, between 1989–1993, allowing for price inflation
employer investment in job-training in the U.K. fell by 50% (see Jones, 1997b).
Following Marsh and Rhodes (1992), the TEC experience could, of course, point to an
‘implementation gap’—that term used to capture the instance whereby policy implemen-
tation does not live up to its legislative expectations. The real role of governance, how-
ever, requires a deeper reading of policy making. In the case of job-training policy, govern-
 Martin Jones 973
ance restructuring—‘from corporatism to localism’ (Peck, 1994)—brought with it
irreversible implications for the social and economic regulation of labour markets. There
is more to governance than the representational make-up of who sits on partnership
boards, because TECs were never really introduced to deliver locally sensitive job-training
for the unemployed. Governance, TEC-style, is driven by the shifting objectives of social
policy, which affects the links between economic governance and social regulation (as
class struggle, social displine and control). In a sense, ‘the social’ (Rose, 1996) needs to
be restated to put ‘local’ governance in its place.
At the same time as searching for an institutional fix to secure employer support for
training policy, the 1980s represented major changes in the wage–labour nexus. YTS, for
instance, represented an attempt to price the young back into work at the cheapest point
of entry. Employers were encouraged to take on a ‘trainee’ and were heavily subsidised,
according to former Employment Minister Alan Clark, to ‘get people off the Register’
(Clark, 1993: 22). Between 1979–1995, 4.5 million young people experienced YTS (and
its later acronyms YT and Youth Credits) and, therefore, its effects should not be triv-
ialised. YTS was used as the main route to take school-leavers away from the dole and
into the workplace, in the process restructuring class and employment expectations. The
same philosophy was applied to adult training, where the problem with unemployment
was diagnosed as motivational—welfare state benefits priced jobseekers out of the labour
market—and not that industrial restructuring had left a declining stock of jobs. Restart
and Jobclubs followed. Flexible labour markets were a priority at all costs (for a summary
of these arguments, see Finn, 1986, 1987, 1988).
Within this political context, throughout the 1980s steps were made to link social
security policy with employment policy, to create a national competitive advantage based
on cheap labour costs, reduce those on the unemployment count and roll-back the wel-
fare state. The 1986 Social Security Act, for instance, replaced Supplementary Benefit
with Income Support and Family Income Supplement with Family Credit. This signified
a move from ‘out-of-work’ benefits’ to ‘in-work-benefits’, thereby attempting to remove
the unemployment trap. Added to this the 1985 Social Security Act reaffirmed the Employ-
ment Secretary’s power to make training programmes compulsory in return for benefit.
YTS was, effectively, made compulsory under the 1988 Employment and Social Security
Acts (which effectively removed the dole for school leavers) and the 1989 Social Security
Act enforced the ‘actively seeking work’ clause to weed out the so-called workshy. The
late-1980s also saw the introduction of proposals to abolish the Wages Councils (covering
2.5 million workers) and the remaining Industrial Training Boards (ITBs)—the only regu-
latory mechanisms to secure high-wages and employer investment in future skill needs.
This deregulatory environment and the use of training programmes to restructure the
relationship between welfare and work, has been labelled ‘trainingfare’: the term used
to denote the British path to workfare (Jones, 1996b). Viewed from the national-level
TECs, in partnership with the Employment Service, inherited this social regulatory legacy.
This national-level analysis of TECs does not deny the existence of subnational govern-
ance, as a national reading frequently aggregates local processes. A serious reading of
local governance, however, should at least consider the national political environment
as central to research in order to appreciate the role of state restructuring in favour of
privatism and partnerships—the mechanisms of public policy implementation. This is
because the changes discussed above have been occurring at the same time as the talk
about regional and local partnerships, fuelled by property-led regeneration and European
Commission investment projects aimed at bringing about structural competitiveness.
In a sense, there is a need to keep one’s eyes on the other side of the Schumpeterian
974 Restructuring the local state: economic governance or social regulation?
workfare state, that concerned with going beyond the discourse and into the reality of
policy (Lovering, 1995). Some reject much of this analysis and any suggestion that there
could be something more to local economic governance, than governance, is akin to
scare mongering: ‘This whole enterprise is entirely speculative. Very little is know about
the changing contours of local governance on a comparative basis, let alone of the factors
which are driving that change or the implications that will follow’ (Harding, 1996a: 650).
Harding might be right; after all, there are 82 TECs in England and Wales and each of
them has its own contours of skill provision. Equally so, are TECs any different from
reforms in other national contexts and why all the fuss? The European Commission (1996)
and Organisation for Economic Development and Co-operation (OECD) (Fay, 1996) have
argued that TECs are an innovative example of local decentralisation and this trend is
beginning to be replicated throughout Europe. If this is the case, it is worth looking at
the local governance of TECs to see whether there is a new community power emerging
based on ‘active citizenship’ (on which, see Kearns, 1995), and if there are lessons for Eur-
ope.
To cut a long story short, TECs are only local in the sense they exhibit the facets of
localism. Their boards are composed of local business elites who, when applying repu-
tational analysis, may appear to be in charge. Furthermore, the annual surveys of TEC
directors continually reveal an ideological commitment to enterprise and this could lead
to a reading based on active citizenship and local empowerment (Financial Times, 1995).
This does not, however, square with the reality of a budgetary structure which only
leaves 10% for enterprise ambitions, the remainder being dedicated to low-grade training
schemes: Training for Work (TfW) and Youth Training (YT). Local private sector elites
have in effect been licensed to govern trainingfare, under the guise of enterprise, because
the operating agreement requires a specific private sector dominated board composition.
A material goal of TECs, of course, was to produce boards which were ‘small, select
and powerful’ (Main, 1990: 87, emphasis original) based on mobilising the ‘right people’
(Stratton, 1990: 72)—those who ‘support[ed] the aims of the Council’ (Department of
Employment, 1988: 41). Private sector domination means that local communities are mar-
ginalised and do not have a statutory seat at the table (Jones, 1996c; Hart et al., 1996).
This argument does not deny that there is a local governance of trainingfare. The con-
tours and landscapes of TEC policy-styles and performance are influenced by a dialectical
relationship between the make-up of centrally allocated policy initiatives and spatial con-
tingencies. In abstract terms, TECs were presented with a national blueprint, whose geo-
graphical form is conditioned by a series of embedded local conditions. Peck’s research
on the geographies of labour market governance (Peck, 1992, 1995a, 1996) acknowledges
the importance of the following local conditions, which reinforce the importance of
state–market relationships highlighted by those working on the local governance pro-
gramme:
쐌 the institutionalisation of business politics;
쐌 the role of individual business leaders and key companies;
쐌 the history of relationships between the public and private sector;
쐌 the structure of the local labour market;
쐌 the prior nature of the local training infrastructure;
쐌 the institutionalisation of trade union support;
쐌 the pre-existing voluntary and community sector networks.
As ever, there is a real (academic) danger of treating uneven development as an interest-
ing facet of economic and cultural complexity, at the risk of not looking at the links
 Martin Jones 975

Figure 1. Ratcheting-up Youth Training (YT) attainment (Source: Weighted Inter-TEC Comparison
Tables 1992–1996).

between the governance of space and social regulation, namely the translation of train-
ingfare across space. Sure, space is heightened in the so-called post-Fordist ‘New Times’
and actor-networks and the processes of regulation are perhaps more important than
ever before. At the same time, however, social exclusion and socio-spatial inequalities
are rife (see Philo, 1995). What are networks active in reproducing? These points get to
the bone of contention in this paper, that quangos are sites for state-articulated social
regulation and control. Buttressing this argument, the exploitation of uneven develop-
ment is part of a social control strategy; it represents a policy goal, not a policy failure.
The uneven development of local economic governance is clearly illustrated in Figure
1 and Figure 2. Drawing on the annual Inter-TEC Comparison (a.k.a. league) Tables, this
shows the success of TECs in achieving National Vocational Qualifications (NVQs) in

Figure 2. Ratcheting-up Adult Training (TfW) attainment (Source: Weighted Inter-TEC Comparison
Tables 1992–1996).
976 Restructuring the local state: economic governance or social regulation?
Youth Training (YT) and Adult Training (TfW). NVQs, introduced in 1988, reinforce the
employer-led, free market ideology of TECs. In contrast to the vocational education and
training (VET) system of the old (Fordist) period-based on time-served apprenticeships
and state interventionism to ameliorate market failure—NVQs put the future of training
in the hands of employers and are recognised in 90% of occupations. Trainees are
required to demonstrate their competence, often through a system of work-based port-
folio building at a number of levels; NVQ level 1 representing the basic attainment target
(routine tasks) and NVQ level 3 being equivalent to an A-level. The system is steered by
a ‘governance mix’ at the local level, consisting of a partnership between TECs, colleges,
employer, training providers and the careers service.
In Figures 1 and 2, the TECs are listed in a rank order established with the launch of
the first series of tables in 1992–1993—high being the most successful and low the least
success. Not only do these figures show that there is an increasing unevenness in govern-
ance through time—indicated by the fact that the standard deviations (recording the
spread of the performance) for the data set between 1992–1996 have increased from
9.41 to 13.70 (TfW) and 7.89 to 9.07 (YT)—it also appears that TECs are delivering more
qualifications for those participating in labour market programmes. The national average
for TECs gaining NVQs for a 100 leavers has increased by 59.06% (TfW) and 62.02% (YT).
On face value, it appears that governance is associated with a gradually increasing but
uneven road to the skills revolution. For governance theorists, the spatial interactions
between TECs and their local labour markets and training infrastructures can help to
explain the differing performance highlighted by the two figures. Uncovering the geo-
graphies of this process is a local governance project in its own right (see Jones, 1998).
With most neoliberal reforms in public policy implemented through the emergence of
the new governance, however, there is a statistically manipulated rhetoric and a material
(social regulatory) reality. The National Council for Vocational Qualifications has claimed
that by 1996, 1.3 million NVQs had been awarded. Former Minister of State for Education
and Employment, Lord Henley, writes: ‘NVQs are a British success story and we will do
all we can to make sure it continues’ (Henley, 1997: 10). These claims have been rebutted
by Robinson, whose research based on the Labour Force Survey, reveals that only 660,000
people had been working towards NVQs. Of those NVQs awarded, 84% are at levels 1
and 2, and one in 10 (65,000) are in hairdressing (Robinson, 1996). This puts any claim
of a high-skills route to post-Fordist nirvana, under question. A training fiasco is perhaps
a more appropriate characterisation (see Ainley, 1997).
Added to this, research has revealed that the assessment procedure is far from inde-
pendent, with 40% of assessors admitting that they pass sub-standard students (Eraut et
al., 1996). Furthermore, the system of output-related funding (ORF) used by the govern-
ment to embed and procure results, creates incentives for fraud. To date, the total level
of discrepancies identified by the National Audit Office and the Committee of Public
Accounts (1996), amounts to £136 million. Several police raids on private sector training
providers were instigated in 1996 to seize records and check for bogus claims. The princi-
pals of trust suggested by the governance literature (Jessop, 1995b), appear to be lacking
in the implementation of public policy.
If this polemical analysis plays-down the role of space and institutional agency
(‘regulation as process and practice’), it is interesting to note that TECs have played an
active role in the training fiasco. It has already been established that the fundamental
contradiction with TECs is the rhetoric of enterprise/local economic development and
the reality of governing training programmes for the unemployed. One reading of this
situation would point towards a looming legitimation crisis because, on Habermas’s
 Martin Jones 977
(1976) terms, policy implementation requires material concessions for those undertaking
governing. To cut another long story short, the history of TECs has been one whereby
(male) business elites—undemocratically self-selected through actor-networks revolving
around golf and country clubs, the Freemasonry ‘brotherhood’, and/or more formal CBI,
Institute of Directors (IoD) and chamber of commerce connections—have been granted
the freedom to run TECs as private companies and generate profits (operating surpluses
stored as accumulated reserves) from government training funds, to be applied to local
projects deemed strategically important. Local flexibility has been a marked concession
on the part of central government (Jones, 1995). This could be read as local
empowerment, as TECs appear to be everywhere on the enterprise scene (Jones, 1996d).
Despite the fact that TECs front Business Link partnerships and are the lead partners
in many SRB bids, the net effect of these trade-offs has been an increased commercialis-
ation of the training programmes. As private companies and also as part of the legi-
timation compromise, TECs have been granted the freedom to operate increased levels
of ORF and driven by the new public sector management and its private-sector ethics
(see Clarke et al., 1994), they are selective in their contracting with training providers,
to secure training at the cheapest cost. Additionally, league tables have been required
by central government to ensure the distribution of value for money and demonstrate
measurable policy implementation. Although Figures 1 and 2 reveal increased perform-
ance, this has been achieved at a social and economic cost, from which the long-term
implications of local economic governance can be predicted.
Figures 3 and 4, constructed from the Inter-TEC Comparison Tables, reveal the realpol-
itik of local economic governance. At the same time as increasing (dodgy) qualifications
for programme leavers, the cost of training outcomes (of which an NVQ is one option)
have been reduced dramatically between 1992–1996. In 1992/93 the landscape of train-
ing costs was uneven and training policy showed some sensitivity to local labour market
needs. The standard deviation for the cost of training outputs data set in 1992–1993, for
instance, was £633.92 (TfW) and £894.95 (YT). By 1995–1996, this has been reduced
to £178.46 (TfW) and £244.59 (YT). This ratcheting-down process—producing a ‘local
convergence’—is encouraged by competitive league tables, business ethics, the search

Figure 3. Ratcheting-down regulatory standards in Youth Training (YT) (Source: Weighted Inter-
TEC Comparison Tables 1992–1996).
978 Restructuring the local state: economic governance or social regulation?

Figure 4. Ratcheting-down regulatory standards in Adult Training (TfW) (Source: Weighted Inter-
TEC Comparison Tables 1992–1996).

for local flexibility and the freedom to make profits. Table 1 details the cost-cutting and
reserve accumulation process in more detail.
Again, this looks like a win–win situation as TECs appear to be delivering more for
less and providing value for money to central government. This is sadly not the case, as
league tables and continually changing targets are part of a ratcheting-down process based
on inter-local competition. There are no winners, as every TEC has to do better next
time. In order to juggle different performance targets and continually make annual profits
for a business dominated board, at the same time as declining programme budgets, TECs
have been encouraged to deliver low-cost training. The presence of a low-cost regime,
compacted by the removal of the statutory responsibility for employers to invest in long-
term skill needs, means that high-skill training (engineering, allied occupations, and infor-
mation technology) is not a viable strategy (see Prism Research, 1996). This has impli-
cations for economic growth, as a low-cost regime fuels the growth of low-skilled and
part-time work which, in the long-run, may destroy those local economies unable to
survive on contingent labour markets. South Thames TEC, of course, was declared bank-
rupt in December 1994 (with debts of £8.2 million) when it tried to develop training
outside the central government, target-frenzy, regime (see Jones, 1997c).
It should also be no surprise that the marketisation of public services, through govern-
ance, is associated with massive degrees of social exclusion. A low-cost regime penalises
those people in society requiring individually tailored and prolonged government-sup-
ported training. Those adults with special training needs (literacy and numeracy
difficulties), for instance, require more than the short-term training limit imposed by TfW.
A recent trenchant voluntary sector critique of education and training has highlighted
that over 160,000 people between the ages of 16–18 are excluded from YT and a source
of income, 250,000 people aged 18–25 are long-term unemployed, and 227,000 people
aged 18–20 are not in employment, education or training (Bewick, 1997). This has serious
implications for the pursuit of crime as a source of income, individual pride and status,
and a general breakdown of local social cohesion (Audit Commission, 1996a). It is little
wonder, then, that the incoming Labour Government in May 1997 decided to articulate
their flag-ship ‘New Deal’ programme—to reduce unemployment amongst 18–24 year
 Table 1. Changing TEC system: More for less? (Source: Weighted Inter-TEC Comparison Tables 1992–1996)

Year: TfW cost per TfW NVQs per YT cost per YT NVQs per 100 TEC budget Operating Accumulated
output 100 leavers output leavers surpluses reserves

1990/91 n/a n/a n/a n/a £1.737 bn £37,918,908 £36,661,000

1991/92 n/a n/a n/a n/a £1.519 bn £109,389,029 £150,374,000
1992/93 £2437.22 24.82 £3316.52 33.14 £1.447 bn £56,704,639 £206,572,000
Martin Jones

1993/94 £1463.64 36.69 £2764.10 42.28 £1.490 bn £20,050,441 £226,730,000

1994/95 £1141.18 43.38 £2147.25 46.11 £1.468 bn £2,251,053 £226,535,000
1995/96 £776.00 39.48 £1954.00 53.03 £1.292 bn £33,352,406 £259,805,560
1992-96 − 68.16% + 59.06% − 41.08% + 62.02% − 10.71%
979
980 Restructuring the local state: economic governance or social regulation?
olds—through the Employment Service using wage subsidies, in contrast to the stabilis-
ation and/or enhancement of employer-led training and enterprise (see Jones, 1998).
Issues of social exclusion (and inclusion) may need to be explored further in studies of
local governance.

Coda: the need for a relational theory of the state?

This paper has provided a tentative summary and critique of the emerging findings from
the ESRC ‘Local Governance Programme’ related to economic development. In the cur-
rent (anti-essentialist) post-structuralist/post-modernist world, local (economic) govern-
ance holds many meanings. This paper has argued that the current discourse of a shift
from local government to local governance, although tentative, needs to be debated and
discussed. It is perhaps the case that there has always been governance and that it was
local government and the civil service arm of central government which governed at the
level of the local state since the post-war settlement. Governance is not necessarily new.
The current crisis phase of capitalism, whichever label is applied, does represent the
blurring of the public–private divide acknowledged by commentators. This paper has
taken this shift as given because, the key question with transition models is not one of
semantics. This paper has also taken as given that different national and local contexts
are responding to change and challenge in different ways; there is and always has been
a geography of local government and local governance. Uneven development is not new.
It is becoming apparent that the pressing question is what does local governance mean?
Case studies are interesting to explore the national and local (uneven) ways in which
governance processes, practices, and messages are being translated. When localities are
faced with the continual imposition of localism, however, it is the relationship between
different local areas in the governance game that is more important than excessive local
description. This analytical trail leads to perhaps the most important question, objective
4 of the ESRC local governance programme, namely, how governance is being experi-
enced by the public as citizens and consumers.
The excursus into the complexities of job-training restructuring has attempted to shed
light on these important issues. It has been suggested here that the TEC experience
points towards the formation of an emerging local workfare state, removing the rights
for universal Keynesian-style benefits and shunting the unemployed through training
schemes into low-paid work. Local economic governance, therefore, creates new mech-
anisms and spaces for social regulation; and trainingfare is, obviously, not the basis for
a sustainable period of capitalist expansion. Trainingfare represents a complex
(contracting) process through which the state has managed to secure the basis for
expanding social control by restructuring the Fordist MSR, in favour of the interests of
capital over labour. It is not a sustainable institutional fix for post-Fordist prosperity.
Different ‘single-eyed’ case studies may reveal examples of active citizenship leading
to local empowerment. Recent Audit Commission reports into education and services for
the young in general, however, confirm a social–spatial polarisation and exclusion thesis
(Audit Commission, 1996a, b). It would a real shame if the forthcoming ESRC ‘Cities:
Competition and Cohesion Research Programme’ did not engage with these issues.
It is also apparent that the integration of theoretical work on the local governance
programme has been weak. Indeed, Thrift has argued that when applying regulation
theory with theories of globalisation and theories of local change, it is evident that there
is a ‘lack of theory’, not too much (Thrift, 1994: 378). Take, for instance, the claim made
by Painter and Goodwin that local governance is a response to the crisis of Fordist crisis
 Martin Jones 981
management. They claim that attacks on local government are part of an explicit ‘object
of regulation’ and it ‘was this which generated the substantive shift from government to
governance’ (Goodwin and Painter, 1996: 639). This is an interesting argument and is,
more importantly, more complex that the globalism–pluralism basis of some regime
theory accounts—governance does not appear out of nowhere.
Painter and Goodwin’s argument, however, only tells part of the story. What they lack
is a relational theory of the state and its scalar manifestations (although they do make a
call for one), namely how the state reconstitutes the MSR by mobilising support for its
policies and ideologies, suppressing those interests groups which pose a threat, and lastly,
institutionalising support (compare with MacLeod and Goodwin, 1999). This structured
context, stressing political process and practice, is also absent from rational choice
theory, the policy network literature, and regime theory—all of which have more than
a hint of pluralism. Readings which miss political process and practice ultimately feed
into how political projects are constructed. Mulgan (1997)’s work on the connexity of
networks, an integral thesis of the centre-left think-tank DEMOS, suggests that networked
capitalism is more feasible than state managed intervention. Networked capitalism
(connexity) is presented as a project to deliver social inclusion. As with the debates on
stakeholder societies (see Lister, 1997), inclusion would appear to be a hollow promise
under this system of governance.
If Stoker (1995c) is right when he claims that regulation theory holds the key to under-
standing local governance, much work remains to be done. With regards to filling in
some of the gaps in the analysis of regulation theory, Walker makes an important point
when he claims that orthodox uses of the RA provide an ‘impoverished theory of growth
and crisis’ (Walker, 1995: 169). Added to this, Harvey had previously claimed: ‘within
the regulation school [there is] little or no attempt to provide any detailed understanding
of the mechanisms and logic of transitions. This, it seems to me, is a pressing but extra-
ordinarily difficult task’ (Harvey, 1988b: 115). Although Jessop is perhaps best known
recently for his work on regulation theory, his neo-Gramscian strategic–relational reading
of the state provides an angle on some of the issues raised by these concerns and, more
importantly, the logic of transition eluded to by those working on the local governance
programme. This work was developed before regulation theory was widely popularised
in the social sciences outside France. The strategic–relational approach has yet to be
demonstrated adequately in national, regional, or local contexts.
The basic claims of the strategic–relational approach, drawing on the distinct
approaches of Gramsci, Offe and Poulantzas (see especially Jessop, 1985; also Jones,
1997a, 1998) and emphasising the importance of institutions, can be summarised as fol-
lows:

쐌 the state is dependent on the accumulation process but cannot manage the economy
by itself, it is no capitalist;
쐌 the state is not a neutral (pluralist) apparatus open to all social groups, nor is it a
closed (elitist) instrument, it is a sorting mechanism in favour of those groups
(strategically significant sectors of the population) and actors (institutional agents)
needed to legitimise policy implementation, whose geographical location is dependent
on the balance of class forces;
쐌 policy making is driven by the primacy of politics and relates to models of economic
growth (accumulation strategies), which may be complemented and reinforced by
political and ideological practices (hegemonic projects);
982 Restructuring the local state: economic governance or social regulation?
쐌 ideology and policy making are anchored through the support of (national) state pro-
jects which represent the institutionalisation of state power and state strategy;
쐌 national state projects seek the basis for a new MSR through their interaction with the
institutions of civil society at the level of the local state. The local state is, therefore,
an agent and an obstacle;
쐌 policy making is not always functional because there are trade-offs between the insti-
tutional agents, the strategically significant sectors of the population, those in charge of
the political machinery, opposition groups and the interaction between accumulation
strategies and global capital (mode of growth). In sum, form problematises function;
and
쐌 geographical complexities (uneven development) occurs as national state projects are
societalised in different local contexts. The form of state projects is influenced by pre-
existing institutional conditions and, therefore, a series of local path dependencies
occur within nationally-bound contexts.

To add some speculation to how this framework might operate in specific time–space
conjunctures, contemporary local economic governance can be deconstructed along the
following planes of analysis. First, local governance can be understood as a form of
national crisis displacement based on the need to articulate interest groups into the state
and resolve the crisis of crisis management. As the state is dependent on the accumulation
process, when its management is threatened, displacement tends to occur from the econ-
omic to the political sphere (compare with Hay, 1996). This is because the economy
does not have the internal capacity to resolve crisis and instead accommodates crisis
through the restructuring of accumulation strategies, deploying new hegemonic projects
and alternative state projects with new forms of representation. Hence, structural econ-
omic crises (in the case of Fordism) are displaced into political/institutional projects and
new forms of representation are sought to support the ideological and material effects
of policy aimed at ameliorating crisis.
In the British case, the crisis of the late-1970s and early-1980s was a crisis of nationally
articulated corporate economic management. As crisis management is also associated
with the ‘reshuffling of the hierarchy of spaces’ (Lipietz, 1994: 36) to create room for
the mobilisation of interest groups and construct discursive and ideological projects, at
particular points in the history of any national space economy, a ‘scale division of the
state’ exists. This concept is borrowed from Cox and Mair who suggest that a scale-
sensitive reading of Massey (1984)’s ‘spatial division of labour’ thesis can be recast as a
‘scale division of labour’, referring to ‘the division of activities between different levels
of the hierarchy of spatial scales’ (Cox and Mair, 1991: 200). Here, scale is actively pro-
duced and reproduced (compare Smith, 1984; Delaney and Leitner, 1997). The same
concept can refer to the state, which locates certain functions of economic management
and social/public policy at different levels; national, regional, local (Moulaert et al., 1988;
Peck and Tickell, 1992). In the case, again, of the U.K., throughout the 1980s the local
state became the site for re-regulation because the proposed solution to national corpora-
tism management and representation was bipartite localism—spatially-targeted partner-
ships between the state and private sector individuals (Peck, 1995b).
UDCs and TECs, for instance, can be classed as national state projects aimed at securing
bipartite localism by penetrating the niches of civil society to mobilise a private sector
elite into the state apparatus. Those involved in state projects (the institutional agents)
are granted material conceptions and symbolic rewards (seats on quango boards and
promises of local flexibility) in return for the implementation of public policy aimed at
 Martin Jones 983
dealing with economic and political crisis. Institutional agents are not a ruling class, as
they act within structurally determined contexts. To quote Goodwin and Duncan (1986),
the restructuring of the UK local state in the 1980s was about ‘political mobilisation’.
The geographies of local governance or political mobilisation—in the case of national
state projects—relate to the interaction between the unfolding national state project
architecture and the local balance of class and political forces: ‘capitalism . . . transforms
what it inherits’ (Smith, 1984: 142).
This reading of the national construction of local economic governance and its
resulting uneven geographies has been termed elsewhere the ‘spatial selectivity of the
state’ (Jones, 1997a); a situation in which the state privileges scales, spaces and places
to achieve, amongst other things, political and ideological control. The changing spatial
selectivity of the state and how the political manipulation of scale interacts with the
restructuring of consumption—thereby reproducing landscapes of exclusion and
inclusion—are important agendas for future local governance research. There is a real
danger, under ‘New Labour’, of getting sucked into debates on citizens’ juries, elected
mayors, the location and composition of the Scottish Parliament and Welsh Assembly,
and Regional Development Agency (RDA) boundaries without, first, asking what the long-
term objectives of policy really are.

Acknowledgements
This paper was researched and written whilst I was a Simon Fellow at the University of Manchester,
School of Geography. I wish to express my thanks to the University of Manchester for providing a
stimulating and supportive environment in which to work on some of these ideas. I am grateful to
Bob Jessop, Gordon MacLeod, Jamie Peck, Kevin Ward, Andy Wood, and the three anonymous
referees for their comments on an earlier version. I remain—of course—responsible for the contents
of the final paper.

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