Locally Drawn Economic Development and Regional Integration

This dissertation asks the question to what extent functional policy-making authority allocations determine the applying of successful policy instruments by local governments in optimising their ability to provide local public goods given system specific transaction costs. I will develop a model to formulate the contextual relations and the behavioral uncertainties related to the employment of specific coordination mechanism. This model comprises, first, the subordination of local governments to the national policy making authorities and the susceptibility of local governments to local communities' policy demand, second, the local, national and European institutional incentives. According to this model, central governments will both decentralise policy authority necessary for the provision of local public goods to local governments and will seek supra-national integration into a larger political-economic entity, such as the European Union.