Irish Regions Office Website

June 30, 2009

Study shows devolving responsibilities assists economic progress

'From Subsidiarity to Success: The impact of decentralisation on economic growth', an independent two-year pan-
European study, commissioned by the Assembly of European Regions, has found that countries which balance the
distribution of powers by devolving significant responsibilities from central government to other tiers are performing
considerably better than highly centralised states at maximising the economic growth potential of their territories.

Part One of the study combines qualitative and quantitative analysis to produce a Decentralisation Index based on five indicators in order to ascertain the degree of devolution on a scale from 0 to 100. Of the 26 European countries surveyed, Switzerland (70) was found to be the most decentralised while Bulgaria (25) is the most centralised.

Ireland, assessed in relation to the powers of local authorities, registers an overall 41, below the European average of 45. This includes relatively high scores for ''Vertical'' (50, ranked 9th) and ''Financial'' decentralisation (49, ranked 9th as ''both qualitative and quantitative (income and expenditures) indicators show a considerable degree of financial means in the regions.''). By contrast, Ireland's devolution status is ranked much lower in terms of the ''Administrative'' (23, rank 21st – ''mainly due to a very low share of regional public sector employment''); ''Functional'' (33, ranked 20th); and ''Political'' (41, ranked 18th) indicators. A clear imbalance between decision making (25) and implementing power (74) is also noted.

Part Two, investigates the impact that devolving power has upon economic variables such as GDP, growth and innovation output. It concludes, through employing extensive data and empirical analysis, that this approach is a key determinant of economic success, and offers evidence that national performance can be improved by providing egions with greater influence at national level, more decision-making independence, financial resources, and competences in recreation and culture, infrastructure, education and research, and health care.

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Posted by iroronan at June 30, 2009 01:07 PM