Narratives as a coordinating device for reversing regional disequilibrium

Journal article

Substantial differences in productivity, accompanied by growing social and political discontent, have widened across UK regions in the last 40 years, creating a dysfunctional spatial equilibrium; a coordination failure that has so far proved resistant to change. In this paper, we link such persistent regional disequilibria with current socio-psychological theories about the role of narrative in decision-making under radical uncertainty to explore how and why ideas held collectively within a social network can become the coordinating device for a range of decisions within networked communities that have extra-market effects (externalities), analogous to the role that prices play within markets. Drawing on findings from a pilot interview study in two UK regions, we show the potential for local leadership to use well-constructed narratives to coordinate fragmented agents to cooperate on a common purpose and more generally propose a framework to understand how low-income equilibria become stable but might be re-set. In this way we bring new insights into the need for an expanded economic theory of knowledge applicable to expectation and preference formation in conditions of radical uncertainty.

Authors: Collier, P; Tuckett, D

• Publication status: Published
• Peer review status: Peer reviewed
• Publisher: Oxford University Press
• Journal: Oxford Review of Economic Policy
• Volume: 37
• Issue: 1
• Pages: 97-112
• Publication date: 2021-04-05
• DOI: 10.1093/oxrep/graa060
• EISSN: 1460-2121
• ISSN: 0266-903X
• Language: English
• Keywords: FFR