Here are five common mistakes in local economic policy – and tips on how to avoid them

Hull: probably not the new Shoreditch. Image: Getty.

By now, it’s not just economists and policy wonks who know that the UK has a big problem with productivity. After one of the worst decades for productivity growth in the UK’s modern history, people and places are feeling the consequences, from stagnant wages to declining living standards.

The government hopes to tackle these issues through the Industrial Strategy, and has tasked local leaders up and down the country to come up with local strategies to address sluggish productivity in their areas.

But the reality is that local leaders have been writing similar economic development strategies for decades, with mixed success. How can they ensure that the new local industrial strategies (LIS) succeed where others have failed?

To help cities contend with that question, the What Works Centre for Local Economic Growth has published a new report on some of the do’s and don’ts of local economic strategies, based on our comprehensive evidence-base, the insights of academics and a large number of discussions with practitioners in central and local government.

So what are some of the key pitfalls that places need to avoid in the LIS? Our report contains many suggestions, but here’s five for starters:

Don’t compare your apples economy to an orange one. For example, trying to understand employment trends in Hull by comparing them to the national average might be counterproductive, given how much the booming southeast labour market skews the national figures.

Look at trends in a basket of cities with similar characteristics instead: iin Hull’s case, that means cities like Middlesbrough, Stoke or Sunderland).

Don’t just try to grow your high tech cluster. Be realistic about local strengths and where growth is likely to come from. Don’t assume the trickle-down fairy will turn any high tech growth you can encourage into improved economic opportunities for those struggling at the bottom end of the labour market.

If you want growth to be inclusive, you need policies that directly target people who are struggling.

Don’t just ask your biggest employer what to do. Chances are, they’ll tell you to do whatever is best for them – which might not be the same as what is best for the wider local economy. For example, new (and expensive) transport links might be top of the wish-list for your large pharma company. But it might be better for all of your employers and residents to invest in basic skills across the board.

Don’t spend lots of money on complicated economic modelling. We’re seeing a worrying tendency for many areas to spend considerable amounts of money commissioning consultancies to develop economic models which can supposedly predict the future impact of different policies for their places. Unfortunately, these models produce spurious accuracy, but precious little insight as to the likely effect of many policies.

Planning for a few likely scenarios can give you a better sense of potential changes in your economy at a much lower cost.

Don’t rush in. Go back to fundamentals and make the economic case for intervention. There are some problems that local policy will not be able to address. Some policies won’t work (how would you know?) and intervention almost always brings unintended consequences. Asking a few critical friends – a panel of independent experts, if possible – will help places get a better perspective.

The government has avoided being prescriptive about LIS, which means places have a free hand to act. Avoiding the mistakes that have been made in the past will be crucial in delivering LIS which really get to grips with the economic challenges their areas face – and start to address the weak growth that places up and down the country have seen over the past decade.

Henry Overman is director of the What Works Centre for Local Economic Growth, and professor of economic geography at the London School of Economics.


The risk of ‘cascading’ natural disasters is rising

A man watches wildfires in California, 2013. Image: Getty.

In a warming world, the dangers from natural disasters are changing. In a recent commentary, we identified a number of costly and deadly catastrophes that point to an increase in the risk of “cascading” events – ones that intensify the impacts of natural hazards and turn them into disasters.

Multiple hazardous events are considered cascading when they act as a series of toppling dominoes, such as flooding and landslides that occur after rain over wildfires. Cascading events may begin in small areas but can intensify and spread to influence larger areas.

This rising risk means decision-makers, urban planners and risk analysts, civil engineers like us and other stakeholders need to invest more time and effort in tracking connections between natural hazards, including hurricanes, wildfires, extreme rainfall, snowmelt, debris flow, and drought, under a changing climate.

Cascading disasters

Since 1980 to January 2018, natural disasters caused an inflation-adjusted $1,537.4bn in damages in the United States.

The loss of life in that period – nearly 10,000 deaths – has been mounting as well. The United States has seen more billion-dollar natural disaster events recently than ever before, with climate models projecting an increase in intensity and frequency of these events in the future. In 2017 alone, natural disasters resulted in $306bn losses, setting the costliest disaster year on record.

We decided it was important to better understand cascading and compound disasters because the impacts of climate change can often lead to coupled events instead of isolated ones. The United Nations Office for Disaster Risk Reduction, or UNISDR, claims: “Any disaster entails a potentially compounding process, whereby one event precipitates another.”

For example, deforestation and flooding often occur together. When vegetation is removed, top soil washes away and the earth is incapable of absorbing rainfall. The 2004 Haiti flood that killed more than 800 people and left many missing is an example of this type of cascading event. The citizens of the poverty-stricken country destroyed more than 98 per cent of its forests to provide charcoal for cooking. When Tropical Storm Jeanne hit, there was no way for the soil to absorb the rainfall. To further complicate existing issues, trees excrete water vapor into the air, and so a sparser tree cover often yields less rain. As a result, the water table may drop, making farming, which is the backbone of Haiti’s economy, more challenging.

Rising risk from climate change

Coupled weather events are becoming more common and severe as the earth warms. Droughts and heatwaves are a coupled result of global warming. As droughts lead to dry soils, the surface warms since the sun’s heat cannot be released as evaporation. In the United States, week-long heatwaves that occur simultaneously with periods of drought are twice as likely to happen now as in the 1970s.

Also, the severity of these cascading weather events worsens in a warming world. Drought-stricken areas become more vulnerable to wildfires. And snow and ice are melting earlier, which is altering the timing of runoff. This has a direct relationship with the fact that the fire season across the globe has extended by 20 per cent since the 1980s. Earlier snowmelt increases the chance of low flows in the dry season and can make forests and vegetation more vulnerable to fires.

These links spread further as wildfires occur at elevations never imagined before. As fires destroy the forest canopy on high mountain ranges, the way snow accumulates is altered. Snow melts faster since soot deposited on the snow absorbs heat. Similarly, as drought dust is released, snow melts at a higher rate as has been seen in the Upper Colorado River Basin.

Fluctuations in temperature and other climatic patterns can harm or challenge the already crumbling infrastructure in the United States: the average age of the nation’s dams and levees is over 50 years. The deisgn of these aging systems did not account for the effects of cascading events and changes in the patterns of extreme events due to climate change. What might normally be a minor event can become a major cause for concern such as when an unexpected amount of melt water triggers debris flows over burned land.

There are several other examples of cascading disasters. In July, a deadly wildfire raged through Athens killing 99 people. During the same month on the other side of the world in Mendocino, California, more than 1,800 square kilometers were scorched. For scale, this area is larger than the entire city of Los Angeles.

When landscapes are charred during wildfires, they become more vulnerable to landslides and flooding. In January of this year, a debris flow event in Montecito, California killed 21 people and injured more than 160. Just one month before the landslide, the soil on the town’s steep slopes were destabilised in a wildfire. After a storm brought torrential downpours, a 5-meter high wave of mud, tree branches and boulders swept down the slopes and into people’s homes.

Hurricanes also can trigger cascading hazards over large areas. For example, significant damages to trees and loss of vegetation due to a hurricane increase the chance of landslides and flooding, as reported in Japan in 2004.

Future steps

Most research and practical risk studies focus on estimating the likelihood of different individual extreme events such as hurricanes, floods and droughts. It is often difficult to describe the risk of interconnected events especially when the events are not physically dependent. For example, two physically independent events, such as wildfire and next season’s rainfall, are related only by how fire later raises the chances of landslide and flooding.

As civil engineers, we see a need to be able to better understand the overall severity of these cascading disasters and their impacts on communities and the built environment. The need is more pronounced considering the fact that much of the nation’s critical infrastructure is aged and currently operate under rather marginal conditions.

A first step in solving the problem is gaining a better understanding of how severe these cascading events can be and the relationship each occurrence has with one another. We also need reliable methods for risk assessment. And a universal framework for addressing cascading disasters still needs to be developed.

A global system that can predict the interactions between natural and built environments could save millions of lives and billions of dollars. Most importantly, community outreach and public education must be prioritised, to raise awareness of the potential risks cascading hazards can cause.

The Conversation

Farshid Vahedifard, CEE Advisory Board Endowed Professor and Associate Professor of Civil and Environmental Engineering, Mississippi State University and Amir AghaKouchak, Associate Professor of Civil & Environmental Engineering, University of California, Irvine.

This article is republished from The Conversation under a Creative Commons license. Read the original article.