The scope for institution-building at the sub-national scale offered by the Structural Funds has been explored most enduringly in the theory of multi-level governance. The origins of this lie in the proposition by Marks (1993) that the emerging political order in Europe may exist beyond the debate between an integrated supranational institution in the process of acquiring sovereignty from national governments and an intergovernmental arena for decision-making formed out of national governments. Marks (ibid) suggested instead a model in which governments situated at multiple scales – supranational, national, regional and local – engage in continuous negotiation. Multi-level governance was formulated in the context of the 1988 Structural Funds reforms that greatly expanded the role of sub-national bodies in the Cohesion Policy. The responsibilities assumed by local and regional bodies in designing the Community Strategic Frameworks (CSFs) and OPs, the close contact between these bodies with the Commission over the course of the programming periods as a result of consultation and monitoring arrangements, and the establishment of offices in Brussels by sub-national institutions in order to maintain close links with the Commission, all
evidence a relationship that connects the EU with the regions while bypassing national governments. The tendency towards heterogeneity in European regions, in terms of powers, size and identity, however, complicates the pathways by which governance networks operate in multi-level governance.
Marks’s (ibid) formulation, in which decision-making powers are delegated upwards, to
supranational institutions, and downwards, to sub-national institutions, parallels Jessop’s (1997) ‘denationalisation’ thesis. While based on the specific empirical example of the EU, multi-level governance’s concerns with an increasing complexity in governance arrangements, a proliferation of sub-national jurisdictions, a greater involvement of non-state actors in decision-making, and the consequent challenge to state power (Bache, 2004) are shared with wider discourse on the rise of regional political power and the erosion of the nation state.
The complexity of governance arrangements whose vertical relations are explored through multi- level governance are also observable in their horizontal relations through the notion of partnership. Partnership was, as noted, one of the principles of the 1988 reforms to the Cohesion Policy,
indicating the involvement of national, sub-national and supranational actors in the design and implementation of programmes. Harding (1997: 307-8) explains the rise of multi-level governance and partnership in terms of the changes in vertical and horizontal relations in governance: ‘as a result of ... changes in orientation, policy and institutions, horizontal links between institutions and
sectors have become more common and vertical links between levels of government have begun to rely less upon formal controls and more upon informal bargaining and deal-making [exemplified in a shift in the mode of decision-making on development projects from] clear lines of authority,
accountability and public consensus to networking, problem-solving and elite consensus’.he partnership principle encouraged a more bottom-up approach to development, in which multiple tiers of government, together with non-governmental partners, would engage in the design, implementation and monitoring of regional policy. Within the range of sub-national partners, the notion of social partnership includes actors from the private and third sectors, in an
acknowledgement that the actions necessary to reach a particular objective within a designated area may require a wider range of stakeholders than those in government. While in some member states social partnership between employers, employees’ representative bodies and government is
institutionalised, in others, such as the UK, social partners have been recognised solely as a requirement of the Structural Funds process (Mays, 1995).
While partnership has been seen as a vehicle for the integration of business elites into policy-making circles, such that benefits to be accrued relate to an introduction of business practices and a
channelling of business expertise into local and regional government (Carley, 2000), social partnership broadens the range of partners with the intention of empowering local communities, widening forms of representation, engaging new forms of expertise and producing new and more cooperative types of strategic decision-making that go beyond party political divisions (Bassett, 1996).
Bailey and de Propris (2002) argue that, if the 1988 reforms, and increase to, the Structural Funds, are viewed from the perspective of Rawls’ (1971) notion of justice, they can be seen as a ‘levelling of the playing field’, in terms of the distribution of initial endowments of resources, prior to the
introduction of the Single European Market, from which point fair competition along market principles could take place. The flaw in this process, according to Bailey and de Propris (2002) is the difference in institutional capabilities among regions, which determine their ability to compete. Regions’ institutional capabilities depend upon the strength of formal sub-national government and arms’ length agencies, as well as private and third sector stakeholders, whose presence has been found to be weaker in lagging regions than in better performing regions (Carley, 2000; Bassett, 1996; Harding, 1997). A tendency resulting from these discrepancies in institutional capacity is that relatively well performing regions that are entitled to Structural Funds on the basis of localised areas of economic decline within them are able to more successfully access and utilise the Funds than are regions more in need of investment yet lacking in institutional structures. As noted by Harding
(1997: 302): ‘While EU regional programme resources are distributed according to needs criteria, at the margin they are likely to be captured by areas with a track record in intergovernmental and public-private partnerships, particularly when they are also adept at selling themselves and their strategies in Brussels’.
Figure 2: Territorial policy networks post-1992. (Source: Marks, 1993.)