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CEP discussion paper
Does light touch cluster policy work? Evaluating the tech city programme
Max Nathan
August 2019
Paper No' CEPDP1648:
Full Paper (pdf)

JEL Classification: L53; L86; O31; R30; R50

Tags: cities; clusters; technology; economic development; synthetic controls

Despite academic scepticism, cluster policies remain popular with policymakers. This paper evaluates the causal impact of a flagship UK technology cluster programme. I build a simple framework and identify effects using difference-in-differences and synthetic controls on rich microdata. I further test for timing, cross-space variation, scaling and churn channels. The policy grew and densified the cluster, but has had more mixed effects on tech firm productivity. I also find most policy ‘effects’ began before rollout, raising questions about the programme’s added value.