ABSTRACT
Lovering (1991) has been prominent amongst those criticising Scott’s integration of regulation theory with the growth of new industrial districts. He argues that there is no reason why the decline of internal economies of scale and increasing market uncertainty should lead to increasing horizontal and vertical disintegration. Lovering suggests that whether uncertainty translates into rising or falling internal economies depends upon the context of economic practices and institutions. In focusing upon transaction costs in isolation, he argues that Scott is using a ‘simple ahistorical rational calculus’ (Lovering, 1991, p. 163) divorced from a particular social context.
