Unravelling Decline: Institutional Effects on the Evolution of Urban Garment Clusters

Abstract This paper examines the decline of Barcelona's Trafalgar Garment District (TGD) from the 1950s to 2016, by combining the institutional context model with an agency‐centred perspective. Drawing on secondary sources and in‐depth interviews with firms, associations and policy‐makers, we investigate how regulations, organisations and institutions interacted across the national, regional and local spatial levels. The findings indicate that the TGD decline was shaped by an indirect divergence between multi‐scalar regulations and local institutions. National and regional policies upgraded garment‐related manufacturing, while local regulations favoured knowledge‐, tourism‐ and service‐based uses. These regulatory orientations displaced resources, legitimacy and opportunities away from wholesale specialisation. At the same time, maintenance agency reproduced inefficient institutions based on rivalry, weak co‐operation, cost‐reduction strategies and stabilised expectations of decline. This study extends the institutional context approach to cluster decline and identifies avenues for its refinement.