Allocation of European Structural Funds, decentralization and strategic spatial interactions

This paper analyzes the relationships between the degree of decentralization of a public policy and the emergence of horizontal strategic interactions. The Structural Fund allocation process is investigated by determining how the governance structure of the Cohesion Policy affects the development of strategic spatial interactions between regional governments. A political agency model was developed. The main proposition is that the appearance of spatial interactions increases with the degree of policy decentralization. From the empirical analysis, this theoretical proposition is confirmed by showing that spatial interactions are more intense when the policy governance is decentralized.