Decentralisation of competencies and local development agencies in North-Eastern Italy

Abstract

Despite the economic success of north-eastern Italy, some of its areas, such as those closest to the Adriatic coast, are still experiencing difficulties in industrialisation. Since the 1960s, some development policies have been implemented to stimulate economic restructuring. After the disappointing performance of centrally planned initiatives, most development policies are now the responsibility of local authorities. In fact, institutional and constitutional reforms have increased the competencies and the autonomy of lower levels of government, which have also been allowed greater responsibility in development initiatives. The establishment of development agencies is therefore increasingly left to local collective action.1 This paper examines the effectiveness of such bottom-up initiatives driven by local institutions, and attempts to identify the best forms and the best regulatory framework for such activities.

Keywords:

• Decentralisation
• local development agencies
• local collective action

Notes

1. Most communes have less than 2000 inhabitants and are thus too small to engage directly in development policies on their own.

2. Among the few, we can quote the ‘territorial agreements’, a totally bottom-up policy design, with only marginal government financing.

3. This surviving central agency is only managing some programmes for financing new firms and is mainly concerned with Southern Italy. The structure of agencies and their connection with government therefore differ substantially from the UK, even though Sviluppo Italia is similar to a ‘task force’ (Pike, 2001) and the agencies discussed here are loosely comparable with RDA as described by Roberts & Benneworth (2001) and Liddle (2001). In fact, the organisations studied here are the result of sub-regional initiatives acting in limited portions of territory.

4. Local initiatives also include those resulting from central state decrees, then shifting to the initiative and responsibility of local administrations.

5. By ‘clientelism’ we mean a set of vertical distributive relationships between a patron and several ‘clients’ who exchange favours for political support.

6. Following the classification of March & Olsen (1989) we can divide institutions into aggregative and integrative. The former display a distributive attitude in the mediating of organised and differentiated interests. The latter is a more organic organisation of regulation, more oriented to the general interest.

7. The situation starts to resemble what Frey & Eichenberger (1999) call Functional Federalism.

8. The Province of Rovigo lies in the southern part of Veneto at the estuary of the Po river.

9. A total rigidity in the area of activity is established and the partners representing the majority of shares (the communes and the province) are, in that region, organically connected to the directives of regional administration.

10. The agencies tended to over-engage personnel, to perform slackly and badly implement their programmes.

11. In general, production with low positive externalities such as chemical factories.

12. Moreover, many big plants established in the industrial zones had a crowding-out effect on small entrepreneurship, increasing the opportunity costs of starting small businesses.

13. The price can reach €250 in more developed areas of the same regions.

14. This agency comprises nearly 70 communes representing 1/2 of the province of Padua and some 10–15 from other provinces (Venice, Rovigo and Vicenza).

15. It should be remembered that the term private is used here for private law companies with a majority of capital held by public administrations, which are specifically regulated. The public agencies, however, due to the mentioned reforms, have become ‘economic public bodies’ obliged to fulfil both legal and economic principles.

16. The difficulty of comparing balance sheet data is that some agencies are public and produce only an income/expenditure budget. As a consequence we have harmonized all data in this scheme.