Devolution and economic growth in England’s City Regions

Devolution is argued to reduce spatial inequalities by improving policymaking, tailoring policies and thus promoting (inclusive) economic growth. To assess this argument in the English context, I study the performance of the six regions that received increased powers via Mayoral Combined Authority status in 2017 under the Cities and Local Government Devolution Act (CLGDA) 2016. Using data spanning from 2011 to 2022 and a difference-in-differences approach with heterogeneous treatment effects, I analyse the influence of the first six years of devolution on economic growth. The findings show that devolved areas did not experience faster than expected growth. Moreover, within devolved areas, the estimated growth effect of devolution was more favourable for already wealthy districts than for poorer ones. In combination, these results paint a negative picture for the influence of the CLGDA 2016 as a tool for reducing between- or within-region economic inequalities, adding to a weight of literature questioning the efficacy of devolution in England.