government to which political power and/or administrative tasks have been allocated and which are executed within a given territory of that nation-state (Van Braam, 1986). The concept of ‘regional government’ refers to a regional level of government representation and intervention. In this conceptual context, the definition of ‘region’ is “a meso-level political unit set between the national or federal and local levels of government” (Cooke, 2001:953). ‘Regional governance’ then refers to the ‘process of execution’, the way in which regional government executes these administrative tasks and/or political power. In this study, the quality of regional governance is assessed at four different levels of analysis. To better understand why the degree of regional autonomy matters to Regional Innovation System scholars, this section starts with clarifying five key notions linked to a region’s formal administrative position. These are: the type of power allocated; the amount of power allocated; the basis of power allocation; the difference between ‘power’ and ‘influence’; and the state traditions affecting how power is executed. A region’s administrative position is the managerial room for manoeuvre of regional government within the spatial distribution of power in a government system.
3.2.1 From the viewpoint of government system types
On the first notion, the type of power allocated, all states beyond a minimum population size threshold face the need to satisfy spatial requirements of ‘democracy’ and ‘administration’. This is achieved through ‘decentralisation’, a process by which power is delegated to lower levels in a territorial hierarchy of governments within a state (Smith, 1985). At least two main forms of decentralisation have been distinguished in the literature: ‘political’ and ‘administrative’ (Smith, 1985; Van Braam, 1986) ‘Political’ decentralisation refers to those instances where ‘political’ authority (as opposed to ‘administrative’, managerial authority) is delegated to sub-national governments. Devolution of political power entails the creation of “political institutions (…) with the right to make policies for their areas over which they have
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jurisdiction (…) [and the disposal of] some independent revenues” (Smith, 1985:9). Political decentralisation is based on democratic principles such as representation of the people, and accountability of government is ‘downwards’ to its voters.
‘Administrative’ decentralisation refers to those instances where ‘bureaucratic’ authority is delegated from central government administration to lower tiers of central government in the region or to other sub-central authorities (Ribot, 2002, quoted in Yuliani, 2004). Because administrative decentralisation is about the delegation of administrative tasks and managerial responsibilities as opposed to power to sub-national organisations, the accountability of these organisations is ‘upwards’ to the central government (Hooghe et al., 2010).
Besides the type of power (‘political’ versus ‘administrative’), regional governments also differ in the amount of power allocated, the second notion. The amount of power varies between different government system types, but also within similar types. Bullmann (1996) distinguishes between four ideal-types of government systems (see Table 3.1). Lijphart (1999) does not view government systems in terms of distinct categories, but prefers to speak of a ‘continuum’ of countries from the most concentrated amount of power held by the central government to the least and all the degrees in between. Of the thirty-six democracies he studied, Germany and the United Kingdom were located at the extremes of the regional autonomy continuum; Germany, being a federal government system, and the United Kingdom, being a centralised unitary government system.
In addition, the amount of power also varies over time. Research done by Hooghe et al. (2010) showed that the direction of change in the post-World War II era has been overwhelmingly towards ‘regionalisation’ as opposed to ‘nationalisation’. Their database on forty-two democracies shows 56 reforms that weaken regional authority as opposed to 337 reforms that strengthen regional authority, yielding a ratio of 1:6 (Hooghe et al., 2010:67). Confirming Lijphart’s empirical finding, the Regional Authority Index developed by Hooghe et al. (2010) places Germany among the countries with the highest level of regional autonomy of all the countries in their database (29.3 in 1994, start of RITTS), whereas the United Kingdom ranks among those countries with the lowest score (9.9, same year).
The third notion is about the basis of power allocation, which is fundamentally different between federal and unitary government systems. In federal government systems, such as Austria, Belgium, and Germany, the division of power between central and regional governments is through constitutional allocation; it is constitutionally ‘guaranteed’. As Hooghe et al. (2010:60) put it, federalism is a “constitutionalized system of regional authority which neither the centre nor constituent units can unilaterally change”. Which tier makes the final decision is written into the constitution and any violation is subject to judicial review by the country’s Supreme Court. ‘Regional discretion’ – to tackle regional issues with customised policies – is held high as a value of governing the country and is institutionalised in the system (Lijphart, 1999).
In centralised unitary government systems, such as the United Kingdom, any devolution of power to sub-national governments is a political decision taken unilaterally by central government. Central government can equally reverse it. No judicial review is possible on this legislative enactment, since Parliament is the ultimate sovereign authority to judge legislation (Lijphart, 1999). ‘Homogeneity’ across the nation-state is held high as a governing quality, resulting in a uniform, ‘one-size-fits-all’ approach to government policies and programs. In
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unitary and centralised government systems, the national interest takes precedence over local interests; in federal and decentralised government systems, regional interests are assessed against national interests and vice versa.
The fourth notion deals with the difference between ‘power’ and ‘influence’. Some authors refer to the difference in power attribution as the difference between ‘self-rule’ and ‘shared rule’ (Fabre, 2009; Marks et al., 2008). Regional governments in federal states are characterised by ‘self-rule’ which is the authority exercised by a regional government over those who live in its territory (Marks et al., 2008). Self-rule refers to the capacity of sub- national governments to make decisions without risking being overruled by the central government (Fabre, 2009). ‘Shared rule’ refers to the ability of regional governments in unitary states to influence central decision-making (Fabre, 2009). Four dimensions of ‘influencing’ are distinguished, which is defined as the extent to which regional government can co-determine (Marks et al., 2008):
national legislation (law-making);
national policy in inter-governmental meetings (executive control);
the distribution of national tax revenues (fiscal control);
constitutional change (constitutional reform).
Obviously, the extent of shared rule differs in unitary states, but the point is that regional governments in these multi-level, yet centralised government systems also have channels to express regional needs. And vice versa, regions in federal states still constitute intermediate government levels subject to superordinate governance. In absolute terms, therefore, regions are ‘neither autonomous nor sovereign in terms of relations with the nation-state or supranational institutions’ (Braczyk et al., 1998). For Public Administration scholars this underlines the need to first consider all roles of regional government and investigate how regional government in a particular region acts on these roles before concluding that for contextualised policy-making some government system types matter more than others. The fifth and final notion deals with state traditions affecting the way in which power is executed. In the typology developed by Hesse and Sharpe (1991) on ‘state traditions’ or ‘families of states’ in Europe, the ‘South-European family’ views regional government first and foremost in its function as governing a ‘community’, whereas the ‘Anglo-Saxon family’ views regional government more in its function as ‘public service deliverer’ (Toonen et al., 1998:19). And ‘legalism’ corresponds more to the ‘Continental-European family’ that views regional government as an integral part of a wider governmental system (Toonen et al., 1998:19).
Reacting to this typology, Page & Goldsmith (1987), Page (1991), and Goldsmith (1996) pointed out that different government traditions also exist at the sub-national level. Southern European countries, they observed, share ‘political localism’ characteristics, whereas northern European countries demonstrate more ‘legal localism’ characteristics. “In a system characterized by legal localism, there is a high degree of administrative regulation from above, while where there is political localism, informal relationships – such as clientelism or more formal settings such as the French cumul des mandats – become important” (Loughlin, 2001:11).
Expressed differently, the ‘workings’ of regional governments within similar government systems can differ because of different ‘traditions’ of understanding the role of regional
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government and the way in which power is executed. Table 3.1 presents a classification of government system types.
Table 3.1: Four ideal-types of government systems 1 Classic unitary states
Have sub-national government only at the local level. Regional structures may exist for administrative purposes, but they are strictly subordinated to the central state. e.g. Denmark, Finland, Greece, Ireland, Luxembourg, Sweden, the United Kingdom 2 Decentralised (or devolving) unitary states
Have undergone a process of reform to establish elected regional authorities above the local level. The regional tier enjoys a certain degree of constitutional protection and autonomy, as well as a certain degree of administrative and political decentralisation.
e.g. France, the Netherlands, Portugal 3 Regionalised unitary states
Are characterised by the existence of a directly elected tier of regional government with constitutional status, wide-ranging autonomy and legislative powers. These countries have gone furthest down the road of regional devolution among the unitary states in the EU.
e.g. Italy, Spain 4 Federal states
Involve a constitutional sharing of powers and the co-existence of sovereignties. The regional tier exists in its own right and cannot be abolished or restructured unilaterally by the federal or central government.
e.g. Austria, Belgium, Germany
Source: Bullmann (1996:5).
3.2.2 From the viewpoint of regional innovation policy
The notions discussed above serve to explain why typologies of government states in distinct categories such as Bullmann’s (1996) have limited explanatory power as to why some regions are better at contextualised policy-making than others. The five key notions linked to a region’s administrative position indicate important dimensions of variation and demonstrate that similar government systems can display considerable variation in regional authoritative decision-making. To that variation has to be added the specific organisational characteristics of a particular policy area creating further variation in a regional government’s room for manoeuvre.
The Regional Innovation System concept emerged at a time when countries were experimenting with technology transfer and innovation, a new policy area distinct from science and technology (S&T) policies. The latter were traditionally designed and implemented by national ministries in both federal and unitary states. With the emergence of this new policy area, innovation policy, new government actors at different government tiers entered the policy arena in both federal and unitary government systems.
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In federal government systems, regions found themselves with a relevant degree of autonomy and resources to “make a strengthening of the regional institutional infrastructure possible, i.e. that more R&D institutes, vocational training organizations, technology centres (…) are involved in firms’ innovation processes” (Isaksen, 2003:66). Regionally designed, funded, and executed innovation policies became commonplace in federal systems while federal government continued with the design, funding and execution of science and technology policies. As a result, Canadian scholars Wolfe and Holbrook (2000), for example, argued that in order to understand the national innovation system of Canada, a federal state, one must first understand its regional innovation systems.
In unitary government systems, the emergence of innovation policy shook up the rather uniform system where S&T policies were the premise of central government and S&T instruments had been executed in a non-spatial, ‘one-size-fits-all’ mode. The result was a much greater variety in the organisational set-up of innovation policy across unitary government systems. Three possibilities seemed to materialise (Isaksen, 2003:67).
Regionally designed, funded, and executed innovation policies not unlike those in federal states occurred in regionalised unitary states such as Spain and Italy. Throughout the 1990s, Spain embraced the possibilities offered by this new policy area and new regional innovation-related institutions were established. In Italy, important innovation policy tools continued to be designed and executed by the central government in Rome. Nevertheless, given the country’s territorial distribution of power, innovation policy offered Italian regions the possibility of engaging in regional enterprise and innovation support (Cooke & Morgan, 1998). Lombardia, Italy’s economic power region, actively seized this new opportunity passing regional laws to accelerate the uptake of innovation by its SMEs (Isaksen, 2003). Other Italian regions, such as Apulia, chose to continue operating through nationally designed policy instruments for innovation, using national funds and implementing a more standardised approach (Isaksen, 2003).
Regionally designed, but nationally or EU-funded initiatives were the second possibility that materialised in Europe’s unitary states. The Dutch regions (known as ‘provincies’) are a good example of regions in a decentralised unitary government system that perceived regional innovation policy as a unique opportunity to give this particular government tier more visibility, conveying the message of being in charge of meaningful policy matters (Isaksen, 2003).
The third possibility that emerged were nationally (or EU-) designed and executed regional innovation policies. Regions in countries such as Denmark, Norway, and the United Kingdom mainly organised regional innovation policy through nationally and/or EU-oriented innovation policy schemes, and financial resources and decision-making power was mainly found at the national level (Isaksen, 2003).