Spatial policy since the global financial crisis

Danny Mackinnon, Nadir Kinossian, Andy Pike, Vincent Béal, Thilo Lang, Max Rousseau, John Tomaney

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Danny Mackinnon, Nadir Kinossian, Andy Pike, Vincent Béal, Thilo Lang, et al.. Spatial policy since the global financial crisis. European Urban and Regional Studies, 2024, 18 p. 10.1177/09697764241287376 . hal-05183134

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# Spatial policy since the global financial crisis

**Danny MacKinnon**

Newcastle University, UK

**Nadir Kinossian**

Leibniz Institute for Regional Geography, Germany

**Andy Pike**

Newcastle University, UK

**Vincent Béal**

Jean Monnet University of Saint-Étienne, France

**Thilo Lang**

Leibniz Institute for Regional Geography, Germany

**Max Rousseau**

CIRAD, France

**John Tomaney**

University College London, UK

## Abstract

Renewed political concern about geographical inequalities in the wake of the global financial crisis of 2008 raises questions about the ability of the prevalent pre-crisis model of development to generate more spatially balanced and inclusive economies. In this article, we connect spatial polarisation and the ‘geography of discontent’ to the extended crisis of neoliberal capitalism after the 2008 crisis. The article provides a conjunctural analysis of spatial policy since the crash, viewing this period as one of economic stagnation, instability and turbulence. It interprets recent reorientations of spatial policy involving the adoption of new strategies for ‘left-behind places’ as part of an ongoing process of regulatory experimentation seeking to address discontent and spatial polarisation as symptoms of the legitimacy crisis of late neoliberalism. Thus far, we argue, such policies tend to treat the symptoms of ‘left-behindness’, rather than

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addressing the wider structural causes of decline and marginalisation, meaning that they are unlikely to reduce spatial inequalities and assuage discontent.

Keywords

Geography of discontent, left-behind places, neoliberalism, spatial policy, state capitalism

Introduction: the political
economy of geographical
inequalities redux

Renewed political concern about geographical ine-
qualities in the wake of the 2008 global financial
crisis is raising questions about the ability of the
prevalent pre-crash model of development based on
competitiveness and growth to generate more spa-
tially balanced and inclusive economies (Kinossian,
2018, Martin et al. 2018). In particular, a stark pro-
cess of polarisation has occurred between the
dynamic ‘superstar’ city regions which have benefit-
ted from globalisation and the growth of a knowl-
edge-based economy and many former industrial
regions and rural areas ‘left behind’ by these shifts
(Fiorentino et al., 2024a; Görmar et al., 2019;
Kemeny and Storper, 2020). Such spatial polarisa-
tion has generated a new ‘geography of discontent’
as these ‘left-behind’ places have emerged as hot-
spots of support for populist parties and movements
(McCann, 2020; Rodríguez-Pose, 2018). In response,
prominent researchers and policy-makers, including
former critics of place-based policy (Austin et al.,
2018), have called for the development of new and
enhanced spatial policies for ‘left-behind places’,
which have emerged as major sources of concern
internationally (Fiorentino et al., 2024b; Martin
et al., 2021).

In this article, we connect spatial polarisation and
the ‘geography of discontent’ to the extended crisis of
neoliberal capitalism after the 2008 crash (Mamonova
and Franquesa, 2020; Peck and Theodore, 2019). This
crisis is manifested in terms of the ‘economic impov-
erishment, social polarisation and political disenfran-
chisement’ found in many ‘left-behind’ regions, linked
to ‘decades of neoliberal reform and erosion of the
welfare state’ (Mamonova and Franquesa, 2020: 714),
compounded by austerity policies and the squeeze on
living standards since 2008 (Gray and Barford, 2018;

Torre, 2022). The crisis of neoliberal capitalism, we argue, is evident too in the realm of spatial policy, particularly in terms of how post-industrial and rural areas have been marginalised by the adoption of competitiveness strategies focused on the most economically dynamic city regions as ‘engines of growth’ (Benko and Dunford, 1991; Wojan, 2017).

Following the study by Peck and Theodore (2019: 246), we regard neoliberalism as ‘an emergent mode of regulation’ defined by efforts to extend market relations and competition to an expanding range of economic and social activities, requiring state action to construct markets and discipline individuals in accordance with market norms (Le Galès, 2016; Pinson and Morel Journel, 2016). Our analysis is informed by regulation theory, subject to recent rein-vigoration (Rayaprolu, 2022), which is concerned with the institutional and social forms involved in the regulation of capitalism as a mode of production (Aglietta, 1979). From this perspective, neoliberal strategies of extending market relations are part of an ongoing process of regulatory experimentation aiming to construct a new institutional and geo-graphical fix to stabilise global capitalism (Harvey, 1985). Increased spatial polarisation and the emer-gence of the ‘geography of discontent’ since 2008 highlight the inability of such regulatory experimen-tation to foster economic opportunity and prosperity, social cohesion and a sense of belonging (De Ruyter et al., 2021; Sandbu, 2020).

The article contends that reorientations of spatial
policy since the 2008 crash involving the adoption
of new strategies for ‘left-behind’ places can be
understood as part of an ongoing process of regula-
tory experimentation seeking to address the legiti-
macy crisis of late neoliberalism. Linking to earlier
work on the shift from ‘spatial Keynesianism’ to
neoliberal strategies in the 1980s and 1990s
(Brenner, 2004), we suggest that the introduction of
new policies for ‘left-behind places’ in recent years
can be seen as representing the beginning of an
analogous shift in spatial policy aimed at reducing
spatial disparities and managing political discon-
tent. Thus far, however, we argue that such policies
fall short of these aspirations, largely treating the
localised symptoms of decline and discontent rather
than addressing their broader structural causes.
Indeed, these new spatial policies for ‘left-behind
places’ can be seen, in part, as supplementary, flank-
ing mechanisms designed to respond to discontent
and spatial polarisation as contradictions of (late)
neoliberalism (Jessop, 2002), channelled through
tangible place-based investments (Jennings et al.,
2021). Yet such policies seem unlikely to prove suf-
ficient to sustain and reproduce the wider neoliberal
project of market-oriented reform, which may fuel
pressures for the introduction of more redistribu-
tionist policies (Doussard, 2024).

This article provides a conjunctural analysis of
spatial policy since the global financial crisis, based
on a distinctive methodological ethos concerned with
the analysis of theoretically open and politically fluid
situations (Peck, 2023). From this perspective, ‘the
heterogeneity’, ‘atypicality’ and ‘indeterminacy’
(Peck, 2023: 8) of the post-crisis period provide an
opportunity for the construction of new understand-
ings through the examination of the specific features
and directions of spatial policy, seeking to contextu-
alise and situate them in spatiotemporal terms. As
such, the article seeks to work across different levels
of abstraction, relating specific forms and examples
of spatial policy to ‘evolving midlevel formulations
and connective concepts’ (e.g. late neoliberalism,
‘geography of discontent’, state capitalism) (Peck,
2017: 9). It is based on the extensive review of aca-
demic literature, policy documents, press articles and
blogs. The article adopts a European focus, with a
particular emphasis on the cases of France, Germany
and the United Kingdom, drawing on our cross-
national comparative research in these countries.¹ It
is structured as follows. The next section reviews
debates on neoliberalism, regulation theory and spa-
tial policy. The paper then sets out the context of
post-2008 spatial policy, focusing on late neoliberal-
ism, the geography of discontent and state capitalism.
This is followed by a consideration of the content
and direction of post-2008 spatial policy, covering

three main forms of policy: metropolitanisation stra-
egies designed to support the growth of large city
regions; competitiveness policies for smaller cities
and towns; and place-based industrial policies. The
final section concludes the article.

Neoliberalism, regulation and
spatial policy

Viewing neoliberalism as an ‘emergent mode of reg-
ulation’ provides a processual and variegated under-
standing of neoliberalisation as an ongoing process
(Peck and Theodore, 2019: 246). In response to criti-
cisms of this constructivist understanding as overly
encompassing and universalising (Pinson and Morel
Journel, 2016), we define neoliberalism in terms of
state-assisted efforts to extend market relations,
helping to distinguish it from other structuring influ-
ences (Le Galès, 2016).

The concept of a mode of regulation is derived
from the work of the French regulation school
(Aglietta, 1979). Its crucial theoretical insight is that
the expanded reproduction of capitalism depends on a
range of social norms and institutional practices
(Boyer, 1990). This observation underpins the focus
on modes of regulation as institutionalised bundles of
social norms, habits and practices which mediate and
structure the relationship between production and
consumption such that a more or less coherent regime
of accumulation is stabilised in the medium to long
term (Boyer, 1990; Lipietz, 1986). From this perspec-
tive, neoliberalism is understood as a response to the
structural crisis of the Fordist regime of accumulation,
operating as part of a process of regulatory experi-
mentation in search of a new ‘institutional fix’ (Peck
and Tickell, 1995).

As an emergent mode of regulation, neoliberal-
ism has demonstrated an ability to adapt and mutate
in response to crises, evolving through a number of
distinct stages (Peck et al., 2016). Jessop (2016)
identifies four main stages in the Anglo-Saxon
‘heartlands’ of neoliberalism since the 1970s. First,
the ‘roll back’ of the institutional forms and regula-
tory structures inherited from the post-war Fordist–
Keynesian regime. Second, efforts to ‘roll forward’
neoliberal reforms and institutions, evident through
policies such as privatisation, deregulation and
structural adjustment. Third, a moment of ‘blow-
back’ as the unintended consequences of marketisa-
tion generated resistance, instability and recession,
leading to the adoption of more ameliorative ‘third-
way’ strategies. This period became associated with
the hegemony of a ‘progressive neoliberalism’, par-
ticularly in the United States and United Kingdom,
based on an amalgam of market-based reform and
the recognition of minority rights and environmen-
talism (Fraser, 2017). It incorporated compensatory
and flanking mechanisms, such as support for com-
munity organisations and the social economy to
manage the tensions and contradictions generated by
marketisation (Jessop, 2002). Fourth, late neoliberal-
alism based on bank bailouts and entrenched auster-
ity after the global financial crisis (Whiteside, 2016).
This period has been characterised by the eruption of
political discontent, taking both a progressive form
in the shape of social movements against austerity in
the early 2010s, and a regressive one through the
growth of reactionary populism since 2016 (De
Ruyter et al., 2021). Both forms of discontent high-
light that the legitimacy crisis of late neoliberalism
as the hegemony of ‘progressive neoliberalism’ has
fractured, creating a ‘hegemonic gap’ which reac-
tionary populist movements are trying to fill by
mobilising a politics of resentment against political
and economic elites (Fraser, 2017).

Spatial policies are generally designed to address
spatial differences in output and employment
through geographically targeted initiatives (Dunford,
1988; Martin et al., 2021). They are part of the mode
of regulation, which establishes a set of institutional-
ised norms and goals to govern territorial develop-
ment and the relationships between regions
(MacLeod and Jones, 1999). Spatial policies aim to
reinforce the regime of accumulation through the
formulation of specific accumulation strategies or
growth models and to foster legitimation by main-
taining consensus and containing social tensions
(Dunford, 1988; 1990; Jessop, 1990). Established
spatial policy goals may be abandoned or modified
in response to contradictions in the accumulation
process and emerging forms of crisis as part of the
process of regulatory experimentation, particularly
during the contested transitions between regimes of
accumulation (Dunford, 1988).

Informed by regulation theory and strategic-rela-
tional state theory (Jessop, 1990), Brenner (2004)
provides an influential periodisation of spatial poli-
cies in Western Europe, framed by an underlying
shift from ‘spatial Keynesianism’, based on redis-
tributive regional policies, to ‘urban locational poli-
cies’ in the 1980s and 1990s. Urban locational
policies involved increasing decentralisation to local
and regional authorities, alongside efforts to channel
state support and investment to the most globally
competitive city regions. To a considerable degree,
this shift was informed and justified by neoliberal
ideas, notably, the promotion of economic competi-
tiveness over social and spatial equity; the adoption
of growth-first strategies; the pursuit of urban entre-
preneurialism and efforts to attract mobile capital;
and the curtailment of previous redistributionist spa-
tial policies (Brenner, 2004; Peck and Tickell, 2002).
The focus of urban locational or metropolitanisation
policies on the most competitive city regions reflects
their central role within an emergent post-Fordist
regime of accumulation driven by finance and real
estate (Boyer, 2000; Hofman and Aalbers, 2019). In
this context, urban locational policies have fostered
increased regional divergence (Kemeny and Storper,
2020; Martin et al., 2021), despite the persistence of
some redistributionist spatial policies, not least
European Union (EU) cohesion policy (European
Commission, 2022b).

The post-2008 setting for spatial policy

While an emergent post-Fordist regime of accumula-
tion based on finance and real estate supported a
period of stable growth in the 1990s and 2000s
(Boyer, 2000; Hofman and Aalbers, 2019), it has
been characterised by economic stagnation, instabil-
ity and turbulence since 2008 (Martin et al., 2018).
According to the study by Kotz (2018: 30),

the current structural crisis has taken the form of
stubborn stagnation despite unprecedented monetary
stimulus, with slow economic growth, a low rate of
capital accumulation, stagnating real wages, worsening
economic security for working people – conditions that
have helped to produce new political polarizations.
Europe particularly has experienced a slowdown in productivity, which predates the 2008 crisis, starting around 2003 (Boyer, 2018). While the finance-led regime still allows for high profit rates, it no longer provides the stability to support demand stimulation through asset bubbles or debt-financed consumer spending (Kotz, 2018). In the remainder of this section, we identify three political-economic configurations that are shaping the post-financial crisis conjuncture.

## Late neoliberalism

As indicated earlier, the phase of ‘late neoliberalism’ since 2008 is defined by the bailout of banks and protracted fiscal austerity (Jessop, 2016; Whiteside, 2016). Acting as a central means of post-crisis stabilisation, austerity was framed by a narrative that attributed responsibility to states for excessive debt and borrowing while absolving banks and financial institutions from blame (Blyth, 2013). The impacts of austerity have been acute at the urban scale, particularly in ‘left-behind places’ beyond the major metropolitan centres as local government spending and welfare programmes have been scaled back (Barford and Gray, 2022; Torre, 2022), often accompanied by boosterist strategies to promote these places and attract investment (Davies and Blanco, 2017).

The experience of austerity policies since 2008 has exacerbated the legitimacy crisis of neoliberalism by squeezing income and living standards, affecting economically lagging regions most acutely (Mamonova and Franquesa, 2020). This reduction of living standards eroded the foundations of the ‘pro-gressive neoliberal’ coalition of the 1990s and 2000s, undermining the claim that neoliberal capitalism is beneficial for the majority (Fraser, 2017). Austerity policies have reinforced the increase in regional inequalities that has occurred in many European countries since the 1980s (Agnello et al. 2016; Rosés and Wolf, 2021), accentuating the contrast between the concentration of wealth, talent and opportunity in metropolitan areas and the slow decline and marginalisation of many peripheral regions (Kemeny and Storper, 2020; Martin et al., 2021). These processes have contributed to the feelings of abandonment and

decline in ‘left-behind’ areas (Rousseau et al., 2022), undermining the unifying effects of state provision (King and Le Galès, 2017).

## The ‘geography of discontent’

Increased political discontent in Europe since 2016 points to a deepening legitimacy crisis of neoliberalism (Peck et al., 2016). It has become particularly evident in rural and post-industrial areas experiencing economic decline and austerity (Mamonova and Franquesa, 2020; Torre, 2022). This ‘geography of discontent’ (McCann, 2020) expresses a pattern of political polarisation whereby older, less-educated workers with conservative values are associated with suburbs, towns and the countryside, while younger, more-educated voters with liberal values are concentrated in inner metropolitan areas (Kenny and Luca, 2021). Broadly, it is fuelling the growth of reactionary forms of populism, which combine ‘a hyperreactionary politics of recognition with a populist politics of distribution’, typically manifest in attacks on immigration and calls for large-scale infrastructure spending (Fraser, 2017: 23).

As indicated above, ‘left-behind places’ have been portrayed as hotbeds of discontent, based on experiences of economic decline and feelings of political abandonment (Artelaris, 2022; MacKinnon et al., 2024). According to Rodriguez-Pose’s influential argument (2018: 190), ‘the places that ‘don’t matter’ have increasingly used the ballot box (and, in some cases, outright revolt) to rebel against the feeling of being left-behind; against the feeling of lacking opportunities and future prospects’. As such, reactionary forms of populism have tended to attract higher levels of support in poorer areas that have suffered lengthy periods of decline in which voters feel abandoned and without much hope of improving their prospects (Hannemann et al., 2024). The literature has identified economic and demographic decline as geographically uneven drivers of populist support, alongside factors such as anti-immigration sentiment and support for authoritarian values (Dijkstra et al., 2020; Essletzbichler et al., 2018). Yet increased support for reactionary populism is not confined to ostensibly ‘left-behind’ areas and can also be found in affluent regions and dynamic cities
(Crulli and Pinto, 2023; Dorling and Tomlinson,
2018; Essletzbichler and Forcher, 2022).

The geography of discontent is apparent in the United Kingdom, France and Germany, although it is far from absolute and has different national and regional manifestations (King and Le Galès, 2017; McCann, 2020). In the United Kingdom, the divide between major cities and provincial towns and rural areas was central to both the vote to leave the EU (Brexit) in the 2016 referendum and the Conservative Party's victory in the 2019 General Election, when it won a number of 'Red Wall' seats in North and Midlands from the Labour Party (Jennings and Stoker, 2019). While many of these seats were won back by the Labour Party in 2024, this was accompanied by high levels of support for Reform, the right-wing populist party (Tartar and Pogkas, 2014). Disaffection is also evident in much of the so-called 'peripheral France' (Guilluy, 2014), where feelings of abandonment have been exploited by far-right parties in recent elections (Rousseau et al., 2022). In Germany, support for the far-right Alternative für Deutschland (AfD) party) is highest in Eastern Germany and rural areas, based on its ability to project itself as an alternative to the established political system (Förtner et al., 2021).

State capitalism

The return of state capitalism since the 2000s can be
seen, in part, as a response to the failures and limita-
tions of late neoliberalism in the face of a range of
forces, such as financial crashes, economic stagna-
tion, geopolitical rivalries, climate change and global
pandemics (De Ville, 2023; Whiteside et al., 2023).
Encompassing diverse forms of regulatory experi-
mentation, the growth of state capitalism since the
2000s is based on ‘a multiplication of state-capital
hybrids (including sovereign wealth funds, state
enterprises, policy and development banks) and . . .
the concomitant development of muscular forms of
statism (encompassing industrial policy, spatial
development strategies and economic nationalism)’
(Alami and Dixon, 2023: 78). While it is overly sim-
plistic to counterpose an apparent ‘return’ of the
state with its ‘retreat’ under neoliberalism (Whiteside

et al., 2023), the influence of economic nationalism
means that some industrial policies and spatial strat-
egies may be directed against specific aspects of
neoliberalism, such as globalisation and trade liber-
alisation, seeking to address the ‘geography of dis-
content’ (Rodrik, 2023).

Much of the early impetus for the revival of industrial policy came in response to the 2008 crisis, addressing a need to promote growth and adapt the finance-led regime of accumulation, particularly its overreliance on financial and business services at the expense of manufacturing (Warwick, 2013). A further expansion of industrial policy is evident since 2019 in the context of increased geopolitical tensions, the growth of political populism, accelerating climate change, and the disruptive effects of the COVID pandemic (Martin, 2021). This emergent form of industrial policy is more explicitly protectionist, based on a ‘homeland economics’ that privileges the interests of domestic firms, workers and communities over international investors and corporations (Rodrik, 2023; Williams, 2023), evoking a populist ‘politics of distribution’ (Fraser, 2017). When linked to the identification of green energy and digital technologies as distinct industrial trajectories (Dunford, 1990; European Commission, 2022a), these policies support the emergence of a new or expanded regime of accumulation. This form of industrial policy is most fully developed in the United States through a set of measures designed to accelerate green transition, assert US technological leadership over China and tackle regional inequality and discontent by investing in underdeveloped (‘left-behind’) areas (Westwood, 2023).

In summary, the reinforcement of neoliberal ideas
after the crisis through protracted austerity has deepen-
ed spatial inequalities and intensified decline in
‘left-behind’ areas (Martin et al., 2021). These spa-
tially uneven effects of austerity have fostered a
‘geography of discontent’ (McCann, 2020) and
prompted calls for a reorientation of spatial policy to
support ‘left-behind places’ (Martin et al., 2021).
Reflecting the expanded post-crisis role of the state
(Alami and Dixon, 2023), this discontent is contrib-
uting to the growth of state activism through indus-
trial policies and spatial strategies which target
underdeveloped and declining areas.
## The evolution of spatial policy since 2008

Informed by regulation theory, this section provides an assessment of how the interaction between the three political–economic configurations discussed in the previous section is reshaping spatial policy in Europe. This reshaping can be seen as involving a modification of urban locational policies in response to the limitations of the finance-led accumulation regime and neoliberal mode of regulation in privileging larger cities and marginalising outlying districts. We highlight three main forms of spatial policy: reinforced metropolitanisation; the extension of competitiveness policies to smaller cities and towns; and new place-based industrial policies. This account is necessarily selective given the degree of flux and instability (Tooze, 2022), aiming to contextualise and situate these key elements of the post-crisis conjuncture (Peck, 2023), rather than providing a comprehensive overview, which would require more space than we have available here. As expressions of regulatory experimentation, these three forms of spatial policy are not fully developed and coherent, but partial and often contradictory. While discernible across the three countries we cover, they have unfolded in a geographically uneven manner.

### Reinforced metropolitanisation

Resonating with the established global city discourse (Lang and Török, 2017), the idea of city regions as the key engines of economic growth became a ‘dominant narrative’ internationally in the immediate aftermath of the 2008 financial crisis (Rodríguez-Pose, 2018). Inspired by the ‘New Economic Geography’ (Cheshire et al., 2014), the World Bank’s (2009) influential ‘Reshaping Economic Geography’ report argued that spatially unbalanced economic growth should be accepted by policy-makers, reflecting the benefits of urban agglomeration in enhancing innovation and productivity (Cheshire et al., 2014). According to the city-centric logic of the metropolitanisation agenda, growth will spread or ripple out from central cities to smaller towns and their surrounding rural hinterlands (Pike, 2018). Driven by this dominant international narrative, the concept of

metropolitanisation gained further ground in Europe after 2008, building on the urban locational policies of the 1980s and 1990s (Brenner, 2004).

The reinforcement of metropolitanisation policies is evident in the United Kingdom, France and Germany since 2010, aimed at promoting regional and national economic growth and enhancing the global competitiveness of the larger city regions (Brenner, 2004; Pike et al., 2019). In the United Kingdom, despite the commitment to spatial rebalancing in the aftermath of the 2008 crisis (Martin et al., 2021), London continued to receive a disproportionate share of public investment, particularly in transport, research and development and culture (Coyle and Sensier, 2020; O’Brien and Miscampbell, 2020). High-profile initiatives included major transport schemes such as Crossrail 1 (£14.8 billion) and Thameslink (£6.5 billion) (Pike et al., 2019). At the same time, the secondary ‘core’ cities outside London attracted increased attention as national governments sought to address their relative economic under-performance by devolving new funding sources and powers (Table 1). Similarly to London, Paris has been the focus of large-scale infrastructure investment, notably through the Grand Paris Express mass transit network (£38 billion) and subsequent projects to support the Paris Olympics (£3.8 billion) (Faure, 2021), outweighing policies for other cities (Table 1). In Germany, by contrast, the institutional framing and infrastructural development of metropolitan regions are shaped by the participating municipalities rather than national government (Demazière et al., 2022), highlighting the nationally and regionally variegated ways in which metropolitanisation policies are enacted.

Continued metropolitanisation since 2008 has been accompanied by processes of asymmetric decentralisation (Morgan, 2018), alongside growing customisation as institutional arrangements are adapted to the needs of different territories (Organisation for Economic Cooperation and Development (OECD), 2019). Mayoral Combined Authorities (MCAs) have been set up in a number of city regions in England, for instance, becoming the key receiving bodies for devolved powers and resources (O’Brien and Pike, 2019). In France, the intermunicipal institutions of the largest cities have been considerably strengthened:
<table><caption>**Table I.** Examples of metropolitan policy programmes in the United Kingdom, France and Germany since 2008.</caption><thead><tr><th>Programme</th><th>Period of operation</th><th>Purpose and focus</th><th>Funding</th></tr></thead><tbody><tr><td>United Kingdom<br>Wave I city deals</td><td>2012</td><td>Eight English 'core' cities outside London, providing financial flexibilities and powers to promote local economic growth</td><td>£2.3 billion (bl) over 30 years</td></tr><tr><td>Devolution deals</td><td>2014</td><td>Devolved a range of powers to city-regional authorities to promote economic growth</td><td>£6.5 bl over 30 years</td></tr><tr><td>Transforming cities<br>fund</td><td>2017–2023</td><td>Provides funding for investment in transport infrastructure, with ring-fenced allocations for selected city regions with Mayoral Combined Authorities (MCAs)</td><td>£2.45 bl</td></tr><tr><td>City region sustainable<br>transport settlements</td><td>2022–2027</td><td>Increasing growth and productivity through infrastructure investment, focused on eight major city regions outside London</td><td>£6.263 bl</td></tr><tr><td>France</td><td></td><td></td><td></td></tr><tr><td>Démarche<br>EcoQuartiers</td><td>2009</td><td>Design, build and manage cities sustainably</td><td>€0 (label to apply for other funding)</td></tr><tr><td>Démarche EcoCités</td><td>2009</td><td>Support sustainable urban development and innovation</td><td>€660 million (ml; and label to apply for other funding)</td></tr><tr><td>Germany</td><td></td><td></td><td></td></tr><tr><td>Metropolitan regions</td><td>Varied</td><td>Governance and planning of functional urban areas. Global competitiveness. The existing 11 metropolitan regions are 'bottom-up' initiatives.</td><td>N/A</td></tr></tbody></table>

Sources: Demazière et al., 2022; Fransham et al., 2023; National Audit Office (NAO) 2022; http://www.ecoquartiers.logement.gouv.fr/demarche/; https://www.ecocites.logement.gouv.fr/.

the 2014 MAPTAM law (Modernisation de l'Action Publique Territoriale et Affirmation des Métropoles) and the 2015 NOTRe law (Nouvelle Organisation Territoriale de la République) created the legal status of *Métropoles* and gave new powers and greater autonomy to city-regional institutions (Demazière, 2021). In the already decentralised German policy context, metropolitan regions are created 'from below' and represent 'variable forms of cooperation between municipalities, districts and private actors (including universities)' (Demazière et al., 2022: 60). Yet, echoing the neoliberalising logic of metropolitanisation in the United Kingdom and France, the formation of metro regions in Germany (e.g. Frankfurt Rhine-Main) also reflects the perceived need to strengthen

the global competitiveness of the national economy which lacks a 'global city region comparable to greater Paris in France and greater London in the UK' (Demazière et al., 2022: 62; Miessner, 2020).

In response to growing concerns about spatial inequalities and discontent (Martin et al., 2021; Rodríguez-Pose, 2018), recent iterations of the metropolitanisation agenda emphasise the 'responsibility' of cities to their hinterlands (Rauhut and Humer, 2020), emphasising urban-rural links and partnerships and the role of smaller cities and towns in supporting the development of rural areas (European Commission, 2022b). This form of regulatory experimentation points to the capacity of the metropolitanisation agenda to adapt to
contradictions of the accumulation process and emerging political tensions, although such experimentation seems unlikely to fully resolve these tensions and assuage discontent.

## Extension of competitiveness policies to smaller cities, towns and rural areas

New discourses of local and regional development have emerged as politicians have sought to address the ‘geography of discontent’ by crafting narratives to attract voters in economically ‘left-behind’ areas (Jennings et al., 2021). These narratives aim to respond to voters’ feelings of being abandoned and marginalised by established elites and institutions, promising new forms of investment and support to reverse decline and create opportunity (Béal et al., 2021; Fransham et al., 2023). They take different forms in different countries, reflecting distinct political and economic perceptions of the ‘left-behind’ problem, specific rationales for intervention and the legacies of previous policies (Fiorentino et al., 2024b). In the United Kingdom, for instance, the Conservative Party under Boris Johnson appealed to traditionally Labour voting areas in the North and Midlands of England by undertaking to ‘level up’ growth and opportunity across the country. Meanwhile, the French Government of President Macron has sought to respond to the discontent of ‘peripheral France’ (Guilluy, 2014) through a renewed emphasis on territorial cohesion (Adam et al., 2022). This agenda was expressed through the establishment of the new government department, *Ministère de la Cohésion des Territoires*, and of the new state agency, the *Agence nationale de la cohésion des territoires* (ANCT) in 2020 (Béal et al., 2021). By contrast, appeals to ‘left-behind places’ are less evident in the federal state of Germany where wealth redistribution has been embedded into politics and spatial policy for decades, fulfilling the constitutional norm of equal living conditions throughout the country.

Reflecting the new concern with addressing geographical inequality and discontent, spatial policy has been extended in geographical focus and coverage, moving beyond large urban centres to encompass towns, smaller and medium-sized cities, and rural areas through the introduction of

new place-based programmes (Table 2). While towns received some support in prior decades, they have risen up the political agenda in recent years in the context of concerns about urban shrinkage and demographic decline (Grabski-Kieron and Boutet, 2022).

The renewed focus on small towns emerged earliest in Germany where the federal government launched Smaller Towns and Municipalities – Regional Cooperation and Networks (as part of Urban Development Support Programme) in 2010, aiming to strengthen their role as anchors in rural regions (Dehne et al., 2022: 110). In France, the government established the *Action Coeur de Ville* (ACV) programme to revitalise the centres of medium-sized towns in 2018, followed by the *Petites Villes de Demain* programme for small towns in 2020 (Table 2). Thus far, 234 towns have received support under ACV, with total funding of 5 billion Euros (ANCT, n.d.; Demazière and Sykes, 2021). Established in 2019, the United Kingdom’s £3.6 billion Towns Fund is designed to support economic regeneration (Ministry of Housing, Communities and Local Government (MHCLG) 2019). It is allocated through competitive bidding, in common with other levelling up initiatives (Table 2). The selection of the 101 towns to receive funding sparked political controversy with Conservative-held areas more likely to be successful (Hanrett, 2021). The Towns Fund has been succeeded by the announcement of a new Long-Term Plan for Towns which provides £20 million endowment-style funding for each of 55 selected towns over 10 years (Department of Levelling Up, Housing & Communities (DLUHC) 2023). In general, the focus of towns programmes has been broadly similar across the three countries, aiming to address decline through competitiveness strategies developed for larger cities, emphasising measures to increase their attractiveness and promote growth, alongside additional aspects, such as quality of life and heritage (Dehne et al., 2022). These measures involve a focus on town centre and high street revitalisation, enhancement of the public realm (including lighting, footpaths, street furniture, public art and planting trees and flowers) and improved transport accessibility.
<table><caption>**Table 2.** Examples of competitiveness policy programmes for smaller cities, towns and rural areas in the United Kingdom, France and Germany.</caption><thead><tr><th>Programme</th><th>Period of operation</th><th>Purpose and focus</th><th>Funding</th></tr></thead><tbody><tr><td>United Kingdom<br>Towns Fund</td><td>2020</td><td>Economic regeneration, skills &amp; enterprise, connectivity</td><td>£3.6bl</td></tr><tr><td>Levelling up fund</td><td>2021–2025</td><td>Capital investment in infrastructure</td><td>£4.8bl</td></tr><tr><td>UK community renewal fund</td><td>2021–2023</td><td>Support for communities ahead of UK Shared Prosperity Fund</td><td>£220ml</td></tr><tr><td>Long-term plan for towns</td><td>2024–2034</td><td>Economic regeneration and growth</td><td>£1.1bl</td></tr><tr><td>France<br>Action Cœur de ville</td><td>2018–2022<br>(then 2022–2026)</td><td>Promote the revitalisation of town centres and coordinate resources</td><td>€5bl 2018–2022<br>(and €5bl 2022–2026)</td></tr><tr><td>Petites villes de demain</td><td>2020-</td><td>Improve the quality of life in small towns and surrounding rural areas, focusing ecological transition</td><td>€3bl</td></tr><tr><td>Villages d'avenir</td><td>2023-</td><td>Support development projects in rural municipalities of less than 3500 inhabitants</td><td>N/A</td></tr><tr><td>Germany<br>Central investment programme for medium-sized companies<br>ZIM (Zentrale Investitionsprogramm Mittelstand)</td><td>2017–ongoing</td><td>Increase the innovative strength and competitiveness of Small- and Medium-Sized Enterprises (SMEs)</td><td>€555ml (2020)</td></tr><tr><td>Small towns and municipalities – Supra-regional Cooperation and Networks (Kleinere Städte und Gemeinden – überörtliche Zusammenarbeit und Netzwerke)</td><td>2010–ongoing</td><td>Urban regeneration in small cities and communities in sparsely populated and rural areas.</td><td>N/A</td></tr></tbody></table>

Sources: BMEL, 2019; DLUHC, 2023; Dehne et al., 2022; Fransham et al., 2023; NAO, 2022; https://www.zim.de/ZIM/Redaktion/DE/Downloads/Richtlinien/richtlinie-zim-aenderung-06-2021.pdf?__blob=publicationFile&v=1.

Competitiveness policies have evolved differently in Germany where greater stability is again evident. Recent programmes focus on firm and innovation alliances, rather than specific geographies, although they tend to prioritise disadvantaged regions. The context of spatial policy is characterised by a relative continuity, incremental adaptation and the principle of ‘countervailing influence’ (Gegenstromprinzip) which implies the need to balance the interests of all levels of governance involved in the policy process (Gustedt et al., 2022: 10).

In general, the federal system of government and constitutionally protected ‘sovereignty’ of municipalities precludes radical policy shifts common in more centralised countries such as France and the United Kingdom.

While seeking to address the limitations of metropolitanisation strategies, the above programmes for towns, smaller cities and rural areas remain broadly consistent with neoliberalism through their continued attachment to increasing the national and international competitiveness and attractiveness of
places. As spatial policies, they aim to mobilise untapped economic potential through investing in overlooked towns and cities beyond the major city regions, although this is generally couched in terms of equalising access to opportunities not outcomes. Within these frameworks, smaller cities and towns are expected to find their economic niches and establish new strategies to ‘catch up’ and converge with national productivity levels.

Despite their localist rhetoric, competitiveness policies for towns and smaller cities entail increased political centralisation in France and the United Kingdom through national government control over the allocation and awarding of funds, often reflecting electoral and political objectives (Diamond et al., 2023; Torre, 2022). Yet this centralisation coincides in a contradictory manner with continued decentralisation of the political responsibility for economic underperformance and the delivery of initiatives to address it. Such decentralisation involves local authorities playing a key role in the local implementation and planning of national programmes, for example, through agreeing deals or contracts with central government (ANCT, n.d.; MHCLG, 2019).

Rather than breaking with neoliberal frameworks, these policies largely represent an extension of existing competitiveness policies to ‘left-behind places’, alongside the inclusion of additional elements, such as quality of life, heritage and ‘pride in place’ (Fransham et al., 2023). In part, they act as flanking and compensatory measures for the inability of market-oriented policies to spread growth beyond the major cities (Jessop, 2002). Driven by electoral objectives, such policies provide tangible investment and mobilise local identities in attempts to gain or retain the support of voters (Jennings et al., 2021; Rousseau et al., 2022). As such, they tend to treat the symptoms of decline and discontent, such as run-down high streets and high vacancy rates, rather than addressing their broader structural causes, such as the loss of manufacturing employment and the concentration of knowledge economy functions and services in larger cities (Fiorentino et al., 2024a; Jennings et al., 2021). Furthermore, as the examples of France and the United Kingdom indicate, they remain underfunded relative to the continued concentration of infrastructure investment in the major metropolitan centres (Coyle and Sensier, 2020;

Faure, 2021). This suggests that these forms of regulatory experimentation are unlikely to prove effective in reducing spatial inequality and discontent.

*Place-based industrial policies.* In Europe, place-based industrial policies are evident at the EU scale and nationally (European Commission, 2023a). Smart specialisation became a key strategic focus during the 2014–2020 period of cohesion policy, representing both an EU-wide response to the global financial crisis, and an effort to better compete with the United States and China (Wigger, 2023). Smart specialisation policies predate the emergence of the ‘geography of discontent’ since 2016 and have proved unable to address its roots, relying largely on a technological conception of innovation which is divorced from prevalent forms of social innovation and cultural identification in peripheral areas (Mamonova and Franquesa, 2020; Torre, 2022).

Nationally, place-based industrial policies are evident in the United Kingdom, France and Germany, aiming to strengthen innovation capacity and promote regional growth (Table 3). These are more spatially concentrated in the United Kingdom, focusing on large city regions, which means that they overlap with metropolitanisation strategies, but more geographically dispersed in France (Table 3). A strong concern with disadvantaged regions in Germany has been reinforced by the establishment of the Structural Strengthening Act (Strukturstärkungsgesetz) to support just transition in lignite regions, with additional support from the EU Just Transition Fund (Furnaro, 2024).

Since 2020, the EU has bolstered its commitment to industrial policy, driven by three trends: the expansion of industrial policies by other countries, notably the United States and China; its expanded climate ambitions; and, geopolitical tensions, intensified by the energy crisis stemming from the Russian invasion of Ukraine. In response, the EU has established a Green Industrial Plan based on four pillars: a simplified regulatory environment; faster access to funding; enhanced skills; and, international trade (European Commission, 2023a). Yet these ambitions remain underfunded compared to the United States and China, particularly the former’s Inflation Reduction Act (IRA), with the EU relying on a combination of reallocated money and £10 billion of new funding from member states, leaving an
<table><caption>**Table 3.** Examples of place-based industrial policies in the United Kingdom, France and Germany.</caption><thead><tr><th>Programme</th><th>Period of operation</th><th>Purpose and focus</th><th>Funding</th></tr></thead><tbody><tr><td><strong>United Kingdom</strong></td><td></td><td></td><td></td></tr><tr><td>Strength in places fund</td><td>2017</td><td>Support innovation-led regional growth</td><td>£400ml</td></tr><tr><td>Innovation accelerators</td><td>2022</td><td>Develop innovation clusters to boost economic growth, focusing on three city regions: Glasgow, Greater Manchester and the West Midlands</td><td>£100ml</td></tr><tr><td>Investment zones</td><td>2024–2029</td><td>Development of clusters to increase local innovation capacity, focusing on eight city regions with MCAs in England, and four in the devolved nations (Scotland, Wales and Northern Ireland).</td><td>£960ml</td></tr><tr><td><strong>France</strong></td><td></td><td></td><td></td></tr><tr><td>Poles of competitiveness</td><td>2004</td><td>Promote the development of collaborative research and development projects in 55 clusters (2019–2022)</td><td>Unknown</td></tr><tr><td>Territoires d'industrie</td><td>2019–2022 (then 2023–2027)</td><td>The industrial revitalisation of rural areas and small- and mid-sized towns (183 areas)</td><td>€2.7bl</td></tr><tr><td><strong>Germany</strong></td><td></td><td></td><td></td></tr><tr><td>Innovation and structural change<br>Innovation und Strukturwandel (I&S)</td><td>2019–ongoing</td><td>Promote private-sector-based regional innovation alliances in Eastern Germany</td><td>€600ml up to 2025</td></tr><tr><td>Regional entrepreneurial alliances for innovation<br>RUBIN – Regionale unternehmerische Bündnisse für Innovation (part of I&S)</td><td>2019–ongoing</td><td>Support alliances of Small and Medium-Sized Enterprises (SMEs) and Higher Education Institutes to develop a common basis for innovation</td><td>€5–12ml per project</td></tr><tr><td>Change through innovation<br>WIR! – Wandel durch Innovation der Region (part of I&S)</td><td>2017–ongoing</td><td>Support new regional alliances and sustainable innovation-based structural change in structurally weak regions</td><td>€184ml</td></tr><tr><td>Structural strengthening act<br>Strukturstärkungsgesetz</td><td>2020</td><td>Support green energy transition in remaining lignite and coal regions</td><td>€40bl to 2038</td></tr></tbody></table>

Sources: Dehne et al., 2022; DLUHC & HM Treasury, 2023; France Stratégie, 2020; Fransham et al., 2023; Furnaro, 2024). https://agence-cohesion-territoires-gouv-fr translate.goog/territoires-dindustrie-44?_x_tr_sl=fr&x_trABL=en&x_tr_HL=en&x_tr_PTO=SC#scrollNav-2; https://www.innovation-strukturwandel.de/strukturwandel/en/home/home_node.html; RUBIN Regionale unternehmerische Bündnisse für Innovation (bmbf.de); WIR! – Wandel durch Innovation in der Region–BMBF Innovation & Strukturwandel (innovation-strukturwandel.de).

estimated shortfall of some £80–90 billion (Di Sario and Leali, 2023). Yet the new industrial and geoeco- nomic policies of the EU represent a shift towards a new market activism that breaks with previous

decades of neoliberal governance designed to pro- mote competition (McNamara, 2023).

In conjunction with the EU's Temporary Crisis and Transition Framework, introduced in response to
the war in Ukraine, the place-based dimension is addressed by allowing member states to provide more support to clean tech production in lagging regions, up to an aid intensity of 35 per cent in the most disadvantaged areas and 20 per cent in other disadvantaged areas, ensuring compatibility with Cohesion Policy (European Commission, 2023b).² In addition, the Commission seeks to tackle the regional innovation divide in the EU by fostering ‘Regional Innovation Valleys’ (RIVs) that build on smart specialisation policy and the Partnerships for Regional Innovation initiative (European Commission, 2022a). More broadly, recent interventionist forms of regulatory experimentation include fiscal measures, such as tax incentives and the issuing of mutualised debt, new coordination initiatives by the European Commission, regulatory changes and the Important Projects of Common European Interest (IPCEI) initiative, alongside more externally oriented measures that use trade and investment agreement to advance the EU’s strategic interests, in contrast to its previous commitment to liberal globalisation (McNamara, 2023).

Conclusion

This article has reviewed changing approaches to
spatial policy in Europe since the 2008 global
financial crisis, informed by regulation theory and
theorisations of neoliberalism. It has extended
these frameworks to the post-2008 period, which is
characterised by economic stagnation and multiple,
interlocking crises. While the immediate responses
to the 2008 crash showed strong continuities with
conventional neoliberal approaches, new political-
economic discourses and policies emerged from
2016 in response to the legitimacy crisis of late
neoliberalism, fracturing the hegemony of the pro-
gressive neoliberal consensus of the late 1990s and
2000s (Fraser, 2017). Incorporating elements of
populism, economic nationalism and protection-
ism, the resultant new ‘homeland economics’ pro-
motes the interests of domestic firms, workers and
communities over those of international investors
and institutions (Rodrik, 2023; The Economist,
2023). This approach is not only evident in the
United States but also in the European Union,

where a new market activism is replacing the previ-
ous commitment to global trade liberalisation
(McNamara, 2023).

The three key forms of post-2008 spatial policy discussed above are still evolving as part of the post-crisis conjuncture, making them harder to assess than the earlier shift from spatial Keynesianism to urban locational policy (Brenner, 2004). They have also evolved unevenly between countries, making generalisation difficult. Metropolitanisation is the most established, representing a continuation and reinforcement of urban locational policy. Based on the efforts to address the ‘geography of discontent’ and the problems of ‘left-behind places’, competitiveness strategies for towns and smaller cities are a distinctive feature of the post-2008 conjuncture. Thus far, however, this form of crisis-driven regulatory experimentation has largely retained the neoliberal attachment to growth, attractiveness, and city and town centre revitalisation (Dehne et al., 2022). These policies for towns and smaller cities can be seen as compensatory, flanking measures to ameliorate the tensions and contradictions generated by the finance-led regime of accumulation after the financial crisis, but they are surely insufficient to secure the sustained reproduction of neoliberal modes of regulation. While place-based industrial policy remains wedded to conventional paradigms of technological innovation and clustering, it is more clearly counterposed to prior neoliberal commitments to international competition and trade liberalisation as part of a new market activism (McNamara, 2023). The prioritisation of ‘left-behind’ places through financial incentives does, moreover, represent a departure from urban locational policy, introducing an element of spatial redistribution by channelling resources towards these regions (Westwood, 2023). Ultimately, however, these new forms of spatial policy tend to treat the symptoms of ‘left-behindness’ rather than addressing the wider structural causes of decline and marginalisation.

In overall terms, debates over the direction of
spatial policy are caught up in the legitimacy crisis
of late neoliberalism (Fraser, 2017; Peck and
Theodore, 2019), as growing concerns with spatial
inequalities and the ‘geography of discontent’
challenge the long-standing emphasis on metro-
politan growth. While the new focus on ‘left-
behind places’ reflects increased pressures for
spatial redistribution, emergent policies are largely
based on theories and models derived from the
experiences of metropolitan regions (Dehne et al.,
2022; Kinossian, 2018). As such, these places con-
tinue to lack distinctive locally based responses
and solutions to their problems, relying instead on
prevalent ideas of competitiveness, innovation and
attractiveness adopted from policies for larger city
regions (Dehne et al., 2022). In response, our
ongoing research suggests that a revised approach
to ‘left-behind places’ is required, based on:
increased levels of financial resourcing; relative to
investment in metropolitan regions, long-term
political commitment; more integrated regional
development and planning that links towns, cities
and rural areas; support for local infrastructure and
services; and fuller engagement with local resi-
dents and communities. These place-based policies
should be supported by more progressive and dis-
tributive forms of regulation at the national and
supranational scales (Feldman et al., 2021).

Acknowledgements

The authors thank the editor and two reviewers for their
constructive comments on earlier versions of this article.
The usual disclaimers apply.

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) disclosed receipt of the following finan-
cial support for the research, authorship, and/or publica-
tion of this article: The research informing this article is
funded by the Economic and Social Research Council
(ESRC), grant reference ES/V013696/1, in conjunction
with L'Agence nationale de la recherche (ANR) and
DFG Deutsche Forschungsgemeinschaft under the Open
Research Area scheme.

ORCID iD

Danny MacKinnon ID https://orcid.org/0000-0003-2901-5081

Notes

1. All three countries have entrenched geographical inequalities and have experienced a rise in spatial polarisation and political discontent in recent years (Förtner et al., 2021; McCann, 2020; Rousseau et al., 2022). The United Kingdom can be seen as one of the heartlands of neoliberal reform since the 1980s, while the more statist and corporatist models of France and Germany, respectively, have been subject to pragmatic and partial policy adjustment in response to neoliberal restructuring pressures (Jessop, 2016).

2. Similarly, the IRA provides an additional 10 per cent of tax credits to ‘economically distressed communities or traditional energy communities’ (The White House, 2023: 5).

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