| Why do economic policies that work in one place fail in another? This dissertation argues that the social context---the beliefs, norms, and economic institutions of a given area---is a crucial intervening variable between policy and economic outcomes. This issue is explored through the process of regional economic change in Britain under the free market-oriented Conservative governments of Margaret Thatcher and John Major. The hypothesis is that regional economic differentials during this period are the result of differences in regional social contexts.;Following an introductory chapter that examines the existing approaches for understanding, differentials in economic outcomes, the dissertation examines the results of Conservative economic policies, both at the national level and regional level (Chapters 2 and 3). Regional differences in social contexts (measured by labor and capital flexibility, and the nature of the dominant "economic paradigm") are then compared against economic performance, showing a close correlation between social context and economic outcomes. Market oriented contexts (southern England) performed better while market resistant contexts (northern England, Scotland, and Wales) had lower growth (Chapter 3). The question is explored in greater detail through a case study of a single region---the West Midlands---which shows that the economic decline of the region is a function of weaknesses in shortcomings in attitudes and institutions (i.e., militant unions, poor management, a low skills base, etc.).;The fifth chapter explores a key alternative explanation for regional differentials, the "social capital hypothesis". Although the social capital model offers a powerful explanation for understanding Italian regional economic development (its primary empirical focus), it does not work when applied to Britain because of an overemphasis on the ability of the state to create business networks and an undervaluation of individualistic traits, such as entrepreneurialism.;In conclusion, economic policies are refracted through the "prism" of social context, which may bend the results in either favorable or unfavorable directions. As such, economic policies work best when implemented in social contexts that match the behavioral assumptions of the policy. |
