This title was first published in 2001. Focusing on new industries, policies and new forms of governance, the internationally renowned contributors to this volume examine the factors promoting the sub-national economic growth that is paradoxically occurring in an era of globalization.

This title was first published in 2001. Focusing on new industries, policies and new forms of governance, the internationally renowned contributors to this volume examine the factors promoting the sub-national economic growth that is paradoxically occurring in an era of globalization.

This article examines the sustainability of the subnational business environment index (BEIs) as a development tool for subnational promotion of private sector growth and competitiveness. We define sustainability as the BEI's continued application after its external support has been concluded. The 13 BEIs examined here have been largely financed by international aid agencies over the past decade. We compare the main features of all the current or recent subnational BEIs we could locate, covering countries in Asia, Eastern Europe, and Latin America. We discuss their origins, financing, conceptual approaches, methodological parameters, intergovernmental linkages, and longevity. A few of them have been applied repeatedly as intended by index proponents, but nearly half of the indices have been discontinued. Two are eminently sustainable and another appears to be. The apparently successful index in El Salvador is highlighted. We conclude that indices face serious limitations, including politicization, weak business sector interest, lack of local funding, and need for an impartial sponsor. Yet indices do show some promise for reform where the index is well developed and where conditions that appear favorable to their successful utilization apply—that is, in countries with a strong private sector, governmental interest, and an open economy.

Despite the large sums available for promoting economic growth locally, little money has actually reached businesses. Of the £3.9 billion that has been allocated in total to these initiatives, only nearly £400 million had made it to local projects by the end of 2012-13. Under the Regional Growth Fund, the largest of the schemes, the Departments will need to spend £1.4 billion this year, compared to the £1.2 billion spent over the previous three years. Some £1 billion of the remaining £3.5 billion allocated to initiatives is currently parked with intermediary bodies such as local authorities, Local Enterprise Partnerships and banks - and the rest with the Departments. The Departments should introduce binding milestones for distributing funds and move quickly to claw back money not being spent - or spent disproportionately on administration - and redistribute it to better performers. Progress in creating jobs is falling well short of the Departments' initial expectations. The Departments' estimate of the cost per job created has also risen from £30,400 in Round One to £52,300 in Round Four - a 72% increase. The Departments also agreed that there is a risk of double-counting, with the same jobs scored more than once to different initiatives. The local growth initiatives have not been managed as a coordinated programme with a common strategy, objectives or plan. The recent creation by the Departments of a single growth directorate and a programme board is welcomed. Concern remains however that the Departments are not yet using the new oversight arrangements effectively.