Annex 2: International comparisons

London, UK: Strengthening ties between capital and country

Annex 2: International comparisons

The UK is a highly centralised nation, with the amount of tax revenue collected and spent by central government notably above the OECD average for a unitary state (and the amount controlled by local government significantly below). 139 Compared to other centralised nations, London’s dominance of the national economy and population, whilst notable, is far from exceptional. With 13 per cent of the UK population, Greater London is responsible for 22 per cent of UK GDP. Cities like Tokyo and Seoul are home to a much larger share of their nation states’ population; whereas cities like Moscow, Mumbai and São Paulo are responsible for much more disproportionate shares of their national economy. GVA per capita in Paris is twice that of the French national average, a larger gap than that between London and the UK average. 140

Other British cities lag notably behind London in terms of economic performance. In 2016, only three of the 12 UK cities of over 500,000 inhabitants – London, Bristol and Portsmouth – were more productive than the national average. In Germany, often cited as a more successful ‘multi-nodal’ state, the comparable figure is nine cities out of 14. This is a common feature of federal nations, which often have a planned, deliberate political capital, and multiple cities with more equally sized economies and differing sectoral strengths. Perhaps more alarmingly, however, is that eight of these 14 German cities are more productive than the European average, whereas London is the only UK city where this is the case. 141 So not only are German cities more even in their growth, but they are performing better overall, with the German economy stronger as a consequence.

Real, substantial devolution of meaningful powers, and therefore, of finances, is of course desirable, as the London Finance Commission has argued. 142 For the meantime, however, it is currently more appropriate to compare the London experience to that of capital cities in other centralised nations, such as Paris, Tokyo and Seoul.

Paris and France

Paris, (or its region, Île de France), is home to 18 per cent of France’s population, accounts for 30 per cent of the nation’s GDP, and has twice the national average per capita GVA. 143 Clark and Moonen describe France as an ‘archetypal centralised nation-state dominated by a primate city’, with the Prime Minister, President and central government all historically playing a strong role in planning, developing and funding major infrastructure and other projects in the Paris region. 144

France’s central government also has a long history of intervening through national economic plans to combat territorial inequality. The Commissariat général à l’égalité des territoires (General Commission for Territorial Equality), or CGET, coordinates state aid from the French government and the EU to assist in the economic and social development of the French regions. IPPR North have argued that regional government in France is stronger in the area of transport than is the case in the UK today, with policy and planning set at a regional level, and regional councils tasked with agreeing rail services with the national, state-owned company (SNCF). 145

France has a history of strong local mayors, with five of eight Presidents, and 17 of 23 Prime Ministers having also served as the mayors of French cities or regions since the establishment of the Fifth Republic in 1958. This is not dominated by Paris either – only one of these leaders (Jacques Chirac) was a former Mayor of Paris. 146 The establishment of the Metropole du Grand Paris in January 2016, now responsible for a similar sized population and economy to the Greater London Authority, is an attempt to strengthen the city’s devolved governance. Further powers are to be phased in by 2020. 147

Despite all this, France is still experiencing a version of the ‘major cities versus the rest’ tension experienced in the UK. According to CGET’s 2018 ‘Report on Territorial Cohesion’, the economic crisis of 2007/8 has acted as an ‘accelerator’ of existing trends, increasing territorial disparities, with Île de France becoming increasingly different to the rest of the country. 148 The leaders of French devolved administrations recently issued a joint call for much more radical devolution in France, proclaiming that ‘Notre pays meurt à petit feu de son ultra centralisation’, (‘our country is slowly dying of its over centralisation’). 149 The French general election of May 2017 saw nine out of ten Parisians back the winner, President Emmanuel Macron, in an election that divided along similar geographical and demographic lines to the Brexit vote in 2016. 150


France’s second cities are much more productive than their UK equivalents, despite being equally separate from the capital. France has a more active regional policy and a longer, stronger history of powerful local politics and prominent local politicians. However, the French are also struggling with over-centralisation, as well as a dangerous urban-rural divide, and are beginning to examine ways to better devolve power.

Tokyo and Japan

Tokyo-Yokohama, a vast city-region, is home to 29 per cent of Japan’s population, and produces 31 per cent of its total economic output. Unlike London and Paris, however, Tokyo’s GVA per head is only a little above the national average. 151 Japan has a long history of changing its capital city, traditionally the home of the Emperor, whenever its Emperor changed, but Tokyo has been Japan’s de facto capital since 1869. Tokyo—Yokohama has since become the largest city-region, in terms of population, in the world. 152

Tokyo is the only Japanese city to have metropolitan prefecture status in its own right. Tokyo’s special status means that the entire metropolitan area is regarded as one unit, including 23 special wards that are each treated as individual cities. It has its own governor, an assembly of 127 elected members, and its own powers. The Tokyo Metropolitan Government has control over 16 taxes, which raise around 70 per cent of the city’s revenue spending. 153 Other large cities, such as Osaka, (a commercial centre widely considered Japan’s second city, and described by the Financial Times as ‘a New York to Tokyo’s Washington’), have long pushed for equal status to Tokyo, arguing that the city is advantaged by its special status. 154 However, plans to change Osaka’s status were narrowly defeated in a 2015 referendum. 155

Tokyo is home to the National Diet (the Japanese parliament) and Japanese government departments. Unlike in London and Paris, the relocation of the Diet has been frequently discussed since the 1970s, with disaster resilience a factor, alongside a desire to ‘build a new relationship between legislators, bureaucrats and ordinary citizens. […] People will be able to free themselves from the obsessive belief that Tokyo is at the top of the hierarchy’. 156 Polling suggests that the idea is popular across Japan, with the notable exception of within Tokyo. 157 Despite this interest and frequent discussion, as well as a resolution committing to relocation being passed in 1990 by the House of Representatives and House of Councillors, subsequently becoming an Act promulgated and enforced by the central government in 1992, the relocation Act has been inactive for the past decade.

To date, the only tangible progress appears to be the upcoming move of the Cultural Affairs Agency to Kyoto, itself tied to the Regional Revitalisation Policy of 2015 and not directly to the Act of Relocation. Furthermore, the move will only involve the relocation of less than 230 staff, and is set to take place ‘in several years’. 158 The estimated cost of full relocation, estimated at JPY 2.4–4.4 trillion, cannot be helping progress. 156 Meanwhile, net domestic population flow to Tokyo continues in the hundreds of thousands, despite central government commitments to balance net in/out migration by 2020 and tax incentives for businesses moving HQ functions out of central Tokyo have seen little take up. 160 Like the UK, Japan has tried various elements of traditional regional policy to disincentivise the economic and demographic dominance of its capital, including building industrial New Towns in the 1960s, the introduction of the Shinkansen ‘bullet train’ network, and providing subsidies and other tax incentives to encourage industrial growth outside of Tokyo. 161 Yet the capital’s growth continues.


Tokyo’s success is aided by its relatively strong metropolitan government. However, despite the Japanese government’s commitment to decentralisation over multiple decades, and the potential for large scale disasters in the form of earthquakes, very little progress has been made. The shift of population and business to Tokyo has continued despite measures attempting to stem the flow.

Seoul and South Korea

Seoul is the most dominant capital city of all our three case studies. It is home to just under half of South Korea’s entire population and produces a similar proportion of its national wealth. GVA per head in Seoul is 1.15 times the South Korean average. 162 Seoul has a mayor, but limited fiscal autonomy, and most taxes raised in the capital are collected and spent by the national government. However, like London and Paris, the city is advocating for greater devolution and autonomy, and some limited progress has been made in recent years. 163

Regional policy in South Korea has also attempted and failed to address regional and spatial disparities. 164 Incentivising growth outside of the capital, and increasingly restricting and disincentivising it in the capital, did achieve some reduction in Seoul’s population in the 1990s, but an economic crisis soon saw regional inequalities begin to increase again. 165 Land use regulation, green belt policy, height restrictions on new buildings, and limits on numbers of students in Seoul universities have all attempted to address the capital’s dominance.

In 2005, following three years of debate, the South Korean National Assembly passed a bill to construct Sejong, a new ‘administrative city’ around 120 kilometres south of Seoul, for relocating government ministries and public/semi-public bodies in order to decongest the capital. Originally proposed as a new capital in 2002, subsequent administrations have attempted to stall or alter the purpose of Sejong, but have ultimately managed only to redesignate the city an administrative, rather than capital, city. 166

The relocation of public bodies to Sejong began in 2012. The city had a slow start, with organisations reportedly losing staff as they moved. 167 However, with a target population of 500,000 by 2030, Sejong has already reached nearly 300,000 residents in 2018, and has the highest birthrate of any region in South Korea. 168 The South Korean government also committed to create ten new ‘innovation cities’ outside of the capital, generally based around the sectoral specialism of a public sector body being relocated there from Seoul. Whilst some of these ‘innovation cities’ have grown rapidly, others are struggling with a lack of social infrastructure, and are in some cases seeing public officials move there without their families, suggesting that they are not intending to stay long term. 169 Like Sejong, it is too early to say whether or not they will prove successful in helping to address regional inequalities in South Korea.


It is perhaps too early still to assess whether South Korea’s ambitious decentralisation plans will prove successful. However, there are clear challenges in building brand new cities from scratch, and convincing enough people to move there to create critical mass. South Korea’s ambition for cities outside of Seoul is impressive. Whilst Seoul’s dominance makes direct comparisons with London difficult, the success or failure of ‘innovation cities’ and the nation’s relatively new ‘administrative city’, Sejong, could provide useful lessons for London and the UK in the future. Most importantly, London is not unique. Even New York, which is not a capital, is resented and seen as insular and aloof.

Around the world in 2000 words

This brief investigation of international examples may raise more questions than it answers, but it does provide some lessons for London and the UK.

  • London’s difficult relations with its nation state are common to many other global cities.
  • London’s domination of the UK’s economic and national life is also common to other capital cities in centralised states around the world.
  • London is actually less dominant, in terms of both economic contribution and population size, than some other comparable capitals.
  • Comparable nations have also tried, and failed, to intervene to stop their capital cities becoming increasingly well-populated and economically dominant.
  • For as long as the UK remains a centralised, unitary state, it will prove difficult to truly rectify spatial imbalances.
  • 139 OECD, ‘Tax revenues of sub-sectors of general government as % of total tax revenue’, 2014, table-1-4-attribution-tax-revenues-sub-sectorsgeneralgovernment– total-tax-rev.htm
  • 140 London’s GVA per capita is 1.75x that of the UK average: G. Clark & T. Moonen, World Cities and Nation States, (Moscow Urban Forum, 2015), pp.50-97
  • 141 Centre for Cities, ‘Competing with the continent: How UK cities compare with their European counterparts’, September 2016, uploads/2016/09/16-09-21-Competing-with-the-continent. pdf
  • 142 London Finance Commission, Raising the Capital, May 2013, files_destination/Raising%20the%20capital_0.pdf, and; London Finance Commission, Devolution: A Capital Idea, January 2017, devolution_-_a_capital_idea_lfc_2017.pdf
  • 143 G. Clark & T. Moonen, World Cities and Nation States, (Moscow Urban Forum, 2015), p.71
  • 144 Ibid., p.72
  • 145 IPPR North, Transport for the North: A blueprint for devolving and integrating transport powers in England, March 2015, 140305.pdf
  • 146 CityMayors, ‘French Mayors who became heads of state’,, October 2017, government/french-presidents-mayors.html
  • 147 H. Bessis, ‘The new Parisian equivalent of the GLA will be a much weaker institution’, March 2016, http://www. thegreater-london-authority-will-be-a-much-weakerinstitution/
  • 148 CGET, ‘Report on Territorial Cohesion’, July 2018, http://www.
  • 149 S. Vincendon, ‘Notre pays meurt à petit feu de son ultra centralisation’,, 27/9/18, france/2018/09/27/notre-pays-meurt-a-petit-feu-de-sonultracentralisation_ 1681461
  • 150 BBC, ‘The maps that show how France voted and why’, 12/5/17, BBC News, worldeurope-39870460
  • 151 G. Clark & T. Moonen, World Cities and Nation States, (Moscow Urban Forum, 2015), p.91
  • 152 In terms of metro area (Tokyo-Yokohama has approx. 37 million residents): World Population Review, ‘World City Populations 2018’, 2018, world-cities
  • 153 G. Clark & T. Moonen, World Cities and Nation States, (Moscow Urban Forum, 2015), pp.92-3
  • 154 R. Harding, ‘Osaka to vote on metropolitan status in bid to compete with Tokyo’, Financial Times, 15/5/15, https://www.
  • 155 E. Johnston, ‘Hashimoto announces exit from politics after Osaka rejects merger plan in referendum’, Japan Times, 17/5/15, national/politics-diplomacy/osaka-referendumrejectsmerger- plan-possibly-ending-hashimotos-politicalcareer/#. W7R2oxNKgU0
  • 156 MLIT, ‘Let’s consider relocation of the Diet and other organisations, December 2007, kokudokeikaku/iten/service/panf/pdf/future2_panf_en.pdf
  • 157 MILT, ‘Relocation of capital functions Q&A’, 2010, http://www.
  • 158 Editorial, ‘Relocating government functions’, Japan Times, 7/9/16, editorials/relocating-government-functions/#W7ObZBNKgU0
  • 159 MLIT, ‘Let’s consider relocation of the Diet and other organisations, December 2007, kokudokeikaku/iten/service/panf/pdf/future2_panf_en.pdf
  • 160 Editorial, ‘Reversing population flow to Tokyo’, Japan Times, 10/2/17, editorials/reversing-population-flow-tokyo/#.W2xXS9VKipo
  • 161 H. Srinivas, ‘Japan: Overview of planning’, Japan Urban Observatory, jpoverview.html
  • 162 G. Clark & T. Moonen, World Cities and Nation States, (Moscow Urban Forum, 2015), p.79
  • 163 G. Clark & T. Moonen, World Cities and Nation States, (Moscow Urban Forum, 2015), pp.80-1
  • 164 J-K. Seo, ‘Balanced national development strategies: The construction of innovation cities in Korea’, Land Use Policy, 26, (2009), pp.649-661
  • 165 S. E. Kim, ‘Regional Policy and National Development in Korea’, The Korean Journal of Policy Studies, Vol. 29, No. 1 (2014), pp. 101-122
  • 166 Korea Herald, ‘Sejong City to open Sunday’, Korea Herald, 28/6/12, php?ud=20120628001115
  • 167 L. Jae-Min, ‘Still torn between two cities’, Korea Herald, 2/10/18, php?ud=20181002000297
  • 168 I. Steger & S. Lee, ‘A new capital built from scratch is an unlikely utopia for Korean families’, Quartz, 20/6/18, https:// utopia-for-korean-families/
  • 169 K. Ferrier, ‘South Korea’s innovation cities: If you build them, will anyone come?’, The Diplomat, 22/9/18, https:// build-them-will-they-come/