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Linking Regions and Central Governments: Contracts for Regional Development

  • Year: 2007
  • Author: OECD
  • Publisher: Organisation for Economic Cooperation and Development
  • Published Location: Paris, France
  • ISBN: 9789264008755
  • Country: Canada, France, Germany, Italy, Spain

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.

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