Directorate for Public Governance and Territorial Development

Linking Regions and Central Governments: Contracts for Regional Development

 

Chapter 1 | Chapter 2 | Chapter 3 | Chapter 4 | Chapter 5 | Chapter 6
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ISBN Number: 9789264008755
Publication Date: 
April 2007
Pages: 196
Number of tables: 22
Number of graphs: 2

 

Linking Regions and Central Governments: Contracts for Regional Development

The last 15 years have brought a dramatic change in public decision making and public policy building.  A trend toward decentralisation has meant that more and more sub-national governments now find themselves responsible for providing a host of public goods and services.  Rarely, however, can they "go it alone."  Co-ordination among levels of government is imperative.  Given this environment, how can arrangements among levels of government be made effective?

Contract theory provides important insights into the various types of agreements between different levels of government.  These contractual arrangements between levels of government are unavoidable, particularly in a regional development context, which is characterised by complex interactions and incentives between national and sub-national actors.  However, there is no "optimal" contractual arrangement that fits all co-ordination contexts.  How then should governments decide which arrangements to pursue? This book offers a unique analytic framework for assessing multi-level governance arrangements.  It explores how four key considerations affect the choice of contractual arrangements:

 

  • the relative expertise among contracting parties;
  • the complexity of the policy domain;
  • the degree of interdependence among the actors; and
  • the enforcement context in which the contract operates.

Each of these considerations is subsequently applied to five case studies of regional development policy:  Canada, France, Germany, Italy, and Spain.  The book reveals the importance of contractual arrangements for customized management of interdependencies, for clarifying responsibilities among actors, for dialog, and for learning.

This book will be of interest for policy makers and practitioners seeking to identify and design new and better mechanisms for effective multi-level governance, for NGOs and firms engaged in regional development, and for academics interested in multi-level governance and regional policy.


 Chapter 1. A Contractual Approach to Multi-Level Governance

This chapter develops an analytic framework for understanding how the economic theory of contracts applies to multi-level governance and what these theories suggest with respect to the selection of a contractual approach.  It begins with an overview of the relevant theories, presents an analytic typology of contracts, and assesses the most effective contract design for different co-ordination contexts.  The analytic framework developed in this chapter is applied to each of the case studies in subsequent chapters.


Chapter 2. The Case of France

This chapter applies the analytic framework presented in Chapter 1 to the use of Contrats de Plan Etat-Région (CPER) as the primary mechanism for regional planning in France. It begins with an overview of the organisation of French government and the recent history with regard to decentralisation. It then provides an in-depth look at the overarching co-ordination context and the CPER as a contractual mechanism, before turning to an analysis of the CPER in practice.


Chapter 3. The Case of Italy

This chapter examines the use of Accordo di Programma Quadro (APQ), a multi-faceted instrument for regional policy in Italy.  After providing an overview of the decentralisation context in Italy, the chapter describes the policies, institutions, and instruments associated with regional development policy.  It offers a detailed summary of the APQ and the co-ordination context in which it operates, followed by an assessment of this mechanism using the analytic framework provided in Chapter 1.  The chapter concludes with a series of policy recommendations for enhancing the APQ.


Chapter 4. The Case of Germany

This chapter provides an overview of regional policy and the use of contracts among levels of government in Germany.  While contracting is not common in Germany, attention is given to the use of “joint tasks” and competitive tenders, specifically for the InnoRegio programme.  The case study incorporates an overview of German federalism and a discussion of the contracting mechanisms (as applied prior to the 2006 constitutional reform).  The chapter concludes with policy advice derived from the analysis.


Chapter 5. The Case of Spain

This chapter applies the analytic framework presented in Chapter 1 to the use of the Convenio de Colaboración in Spain.  The chapter begins with an overview of the decentralisation context, followed by a description of the contracting mechanism. Three detailed case studies demonstrate how the Convenio de Colaboración is applied in practice: the economic development of coal mining counties, the economic development of Teruel, and the control and management of the Synchrotron light laboratory. The chapter concludes with lessons learned from the Spanish case.


Chapter 6. The Case of Canada

This chapter examines the use of inter-governmental agreements as contracting mechanisms for Canadian regional development policy. It begins with a review of the decentralisation context, followed by a brief summary of Canadian regional development policy.  The chapter then turns to three case studies, each of which describes a different inter-governmental agreement: The Vancouver Urban Development Agreement, The Canada-Manitoba Economic Partnership Agreement, and The Canada-Nova Scotia Gas Tax Transfer Agreement.  The analytic framework presented in Chapter 1 is used to assess the “fit” between the co-ordination contexts and contractual arrangements that characterise each of these three agreements.


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