illus_castor

This paper analyzes relationships between the degree of decentralization of a public policy and the emergence of horizontal strategic interactions. The structural fund allocation process is analyzed by determining how the governance structure of the cohesion policy affects the development of strategic spatial interactions between regional governments. A political agency model has been developed. In this model, the effect of the governance structure of public policy was modelised by the decision of voters to acquire information on the activities of local governments. The appearance of spatial interactions, resulting from a mechanism of « yardstick competition », increases with the degree of policy decentralization. From empirical analysis of the 2000-06 period, the proposed model is confirmed by showing that spatial interactions are more intense when the policy governance is decentralized. This work highlights a new source of spatial interaction in the allocation of grants from institutional determinants, in addition to socioeconomic factors which have been studied so far.

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