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Narratives as a coordinating device for reversing regional disequilibrium

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  • Paul Collier
  • David Tuckett

Abstract

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.

Suggested Citation

  • Paul Collier & David Tuckett, 2021. "Narratives as a coordinating device for reversing regional disequilibrium," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 37(1), pages 97-112.
  • Handle: RePEc:oup:oxford:v:37:y:2021:i:1:p:97-112.
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    File URL: http://hdl.handle.net/10.1093/oxrep/graa060
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    Citations

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    Cited by:

    1. Nyman, Rickard & Kapadia, Sujit & Tuckett, David, 2021. "News and narratives in financial systems: Exploiting big data for systemic risk assessment," Journal of Economic Dynamics and Control, Elsevier, vol. 127(C).
    2. Mark Fenton‐O'Creevy & David Tuckett, 2022. "Conviction, narratives, ambivalence, and constructive doubt: Reflections on six expert commentaries," Futures & Foresight Science, John Wiley & Sons, vol. 4(3-4), September.
    3. Roos, Michael W. M. & Reccius, Matthias, 2021. "Narratives in economics," Ruhr Economic Papers 922, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. Tamás Kaiser, 2023. "Understanding Narratives in Governance: Naming and Framing Regional Inequality in the United Kingdom," Social Sciences, MDPI, vol. 12(4), pages 1-16, April.
    5. Michael Roos & Matthias Reccius, 2021. "Narratives in economics," Papers 2109.02331, arXiv.org, revised Dec 2022.
    6. Forbes, William, 2024. "Unconscious thoughts as a spur and halt on good financial decisioning making," International Review of Financial Analysis, Elsevier, vol. 91(C).
    7. Łukasz Baszczak, 2023. "Ekonomia narracji – początki nowego nurtu," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1, pages 66-81.

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