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The Economy of an Agglomeration: The Case of London

Department of Economics, University of Reading, PO Box 219, Whiteknights, Reading RG6 2BU, UK

Alan Evans

Department of Economics, University of Reading, PO Box 219, Whiteknights, Reading RG6 2BU, UK

The development of London over the last 30 years is discussed in the context of Chinitz's seminal paper on major US agglomerations. The optimism originally voiced in the 1960s over the future of major urban agglomerations has not been borne out by experience, for a variety of reasons, some purely economic and some the outcome of policy. Even relative to comparable major European cities, London did worse than would be expected given its industrial structure. The Location of Offices Bureau and Office Development Permits have been discussed as a source of decentralisation of employment, but in fact had only limited effects. The reversal of the long decline in Central London employment shown up in the early 1980s by the Cordon Counts was to some degree a rearrangement of commuting patterns, and had in any case faltered by the late 1980s. The operation of the British land use planning system in constraining development in the South-east may also have discouraged firms from expanding in London. This factor may have continued to operate despite the winding-down of regional policy.

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