Correcting market failure? Stalled regeneration and the state subsidy gap

Gray, N. (2022) Correcting market failure? Stalled regeneration and the state subsidy gap. City: Analysis of Urban Trends, Culture, Theory, Policy, Action, 26(1), pp. 74-95. (doi: 10.1080/13604813.2021.2017193)

[img] Text
260288.pdf - Published Version
Available under License Creative Commons Attribution Non-commercial No Derivatives.

678kB

Abstract

This paper develops the neologism state subsidy gap to underscore the necessity of state intervention in the formation and potential closure of rent gaps. The state subsidy gap is the economic gap that must be bridged by the state to make a currently unviable urban investment scenario potentially profitable for private developers. The pertinence of this conception is particularly apparent in old industrial, relatively impoverished cities where global capital is less likely to dump its surpluses with secure expectation of profitable returns. The issue is exacerbated in economically risky neighbourhoods encompassing fragmented land ownership, poor infrastructure and large-scale areas of urban devalorisation. Such conditions necessitate substantial derisking public intervention if ‘market failure’ is to be addressed—yet success is never guaranteed and is far from universal. It is argued that much closer attention to the stalling, interruption or failure of urban regeneration projects is imperative given the extent of public expenditure and the limited social outcomes arising from attempts to correct market failure. Here, the concept of the state subsidy gap shows its value, shedding light on unjust social outcomes, exposing capitalism’s inherent vulnerabilities, and illustrating the dependence of private capital on public interventions for its reproduction.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Gray, Mr Neil
Authors: Gray, N.
College/School:College of Social Sciences > Adam Smith Business School > Management
Journal Name:City: Analysis of Urban Trends, Culture, Theory, Policy, Action
Publisher:Taylor and Francis
ISSN:1360-4813
ISSN (Online):1470-3629
Published Online:13 January 2022
Copyright Holders:Copyright © 2022 The Authors
First Published:First published in City: Analysis of Urban Trends, Culture, Theory, Policy, Action 26(1):74-95
Publisher Policy:Reproduced under a Creative Commons Licence

University Staff: Request a correction | Enlighten Editors: Update this record