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1. Changes in the central-local paradigmThe government of cities and urban and metropolitan governance are part of a broader global-local issue. But while the concept of “global” has received an extraordinary recognition over the last two decades, a pervading mistrust towards the “local” continues to be part of the dominant political and economic cultural approaches. “Local” is still understood as synonymous with closed, isolated, something that acts as an obstacle to development. In the Italian case, this is true particularly as far as the dominant political culture of the last twenty years is taken into account. The national rhetoric of State policy-making and the localist approach of Northern League are only apparently in opposition: in fact, they have in common a “production of the locality” which is typical of the past. Both approaches see the “local” as a by-product of the Nation-State, either in term of passive policy-taker or in term of direct opponent of State policies and globalization. Only some intellectual groups linked to Italian federalism (a tradition going back to Carlo Cattaneo and Altiero Spinelli) and some segments of the scientific literature have conceived the “local” in a more universal way. In the European urban tradition it often entails a “complete” society like the city, open to relations, to contamination with other places and cultures (see for example Bagnasco 1999, Bagnasco and Le Galès 2001, Trigilia 2005). The selfsame “global” is born out of this opening. This does not mean ignoring the limits of “localism”, but rather criticising and attempting to overcome it. This, especially in a phase like the current one in Italy, in which more than in the past cities are development drivers that have not found adequate forms of governance. Institutional boundaries of de iure Italian cities are less and less able to capture the economic and social dynamics of de facto urban development (Calafati, Veneri 2010). It is as if the increasing economic and functional weight of the cities were not in any way corresponding to their institutional role that tends to be minored nowadays. You only have to run through the ranking of the global cities to find Milan stably up among the front-runners, while the government of the city is without any tools to govern the metropolitan dimension. The same goes in differing degrees for the other Italian cities.The main responsibility of this paradox can be attributed to the Italian national governments that have been systematically avoiding any institutional reform endowing more powers, functions and resources to cities. It is as if along the two axes, that of space and that of power, that encounter each other in the issue of the city, the creation of new spaces (city-regions, post-metropolis, global cites, global city-regions etc.) had sped on ahead, while the institutions are still anchored to the resilience of the matryoshka-like powers (municipality-province-region-state) with zero or scanty innovation.Hence this paper is dedicated to the evaluation of the role that policies at “local” level might play to favour the overcoming of an even more serious limit: the permanent unresolved problem of the “central” as a development policy driver along the global-local axis. Local policies take on a different meaning depending on whether one is dealing with: a) the local outcomes of top-down policies; b) bottom-up policies that manage to build more general frameworks through networking.The latter policies were announced in an introductory text to the literature of governance, underscoring the change from a form of public policy based on the central authority of the state to a form of government based on the creation of inter-organizational networks (Mayntz 1993). To give the announced change a stylised form, it appears as a change from a top-down sequence of the type:The main outcome of the change in paradigm was intended and indeed actually leads to multiplying the paths of development ‘conceded’: from the standard type central&#62;local policies to many types of local&#62;global approaches.This change has been due to the growing limits of the central government in drawing up and implementing public policies; limits located at four levels of analysis:On the one hand the central authorities suffer problems of implementation, in that they are not able to apply the norms they define.On the other hand there are problems of motivation, that lead the target-groups and localities for which the norms are drawn up and at which the policies are aimed at, to fail to comply with them.Thirdly, there are problems of knowledge, in that the central legislator does not know the causal relationships necessary for the solution of the initial problem.Lastly, problems of governability exist, that is the impossibility of intervening with the tools available.Due to these limits, each local subsystem offers resistance to the central political injunctions, and becomes impenetrable from the outside to the central authorities, both in cognitive terms and in terms of influence.To tackle these limits, the central authorities can only increase the degree of decentralisation and devolution: entrusting a growing capacity to adapt, react and solve problems to the various local subsystems.This is what is illustrated in the scheme shown above. In this scheme, the local actors that have become more autonomous from the intervention of a central state, the rationality of which appears severely limited, structure the public policies and partnerships with private bodies. This is a strongly bottom-up approach in which coalitions of local actors are set up, define a shared vision of their own development project and, on this basis, negotiate with the extra-local, central and European authorities, in a framework of growing competitive cooperation between territories.This process of devolution does not translate into a generalised laissez-faire if one condition is respected : that this self-organization helps in coming closer to some solutions of the initial problems. The autonomisation of complex bodies, like in our case the systems of local governance, in fact increases the possibility of governability, seen against a picture of laissez-faire of individual aggregated action, in which the target-groups and localities operate individually. This is the case of attempts made in Italy over the last two decades to design and implement local systems in a framework of multilevel governance.On the other hand this stylised scheme does not sufficiently account for the active presence that the central state continues to have throughout the entire process, with different and articulated perspectives. The centre cannot merely be relegated to the role of transit of resources towards the periphery, because the change of the selfsame paradigm presses for a new role for the centre. It is a question of rating, controlling, evaluating, giving incentives, spreading information on local experiments underway. This new profile of the centre is what can make the difference for local politics. But the centre can also play a different role of recovering control, bringing back to central agencies a part of the powers devolved to the local authorities by way of tools of normative automatism. In the case of Italy, the state has played roles of active contractual partnership with local systems by way of so-called “programmazione negoziata” (“negotiated programming”) between central and local governments. It is through the pacts and contracts of “programmazione negoziata” that central and European resources have been granted to local authorities: the allocation being made on condition that projects for local development are set up with the joint participation of local government and the associations of private interests.A long cycle of intense decentralisation occurred in Italy from the 1990s on; it has been followed by a partial phase of recentralisation from the first decade of 2000 on. The parts 2 and 3 of this article reconstruct the wave of decentralisation in Italian public policies. Part 4 explores the ambiguities and the reasons behind the weaknesses of “programmazione negoziata”. Part 5 is dedicated to the recentralised reaction to some partially contradictory trends underway. Part 6 offers an alternative vision founded on place-based European policies, obviously not only valid for Italy but to be fully placed in the European context. 2. Decentralisation policies in the European contextThe Italian “programmazione negoziata” (negotiated programming) that developed in the 1990-2000 decade was not an isolated or specifically national episode: even if in Italy the phenomenon was more widespread compared to other European countries along with peculiar forms of organization and governance, that can be explained by the particular strength of local Italian economies and the societies that structured them in time (Trigilia 2001).The Italian “programmazione negoziata” and “patti territoriali” (concerted agreement for local development) were in fact part of a wider trend towards “social pacts” common to main advanced industrialised countries (Regini 1999, OCSE 2000). The general trend observed is the one of governments that, whatever their political color, encouraged the devolution towards lower levels and loosened the hold of central public bureaucracy on service provision in many fields. The central government though reformed above all by self-limiting itself and disengaging itself from certain policy areas, while the local government units looked to the “centre” as a necessary even if not always trustworthy ally.Both perspectives offer a disjointed and fragmentary rather than a formative and organised vision of government (Sabel, O’Donnell 2000).As far as the European context is concerned, the Italian experience in particular can be rated in direct comparison with the French experience. In both countries, the processes of decentralisation and devolution of public policies have maintained a profile different to those of the Anglo-Saxon models of new public management (Bobbio 2000).During the 1980’s, the Anglo-Saxon experience was the first to develop the “culture of contract” in public administration and an extensive decentralisation of services according to the model of the “enabling government”. It was a model in which the government enabled other subjects to perform functions of service delivery formerly carried out by public administration. At the basis of this evolution, the Anglo-Saxon model of new public management introduced elements of accountability, responsibility and contractualisation of public action. This was particularly experimented in the field of local government.But once the objectives had been set and their implementation assigned via contract to the various actors, the public action came up against new problems of coordination. What incentives did the single actors actually have (local government, special agencies, voluntary organisations, private actors) in coordinating their respective actions over and beyond the pursuit of their own single fragmentary objective? The logic of the task prevailed over the question of coordination. The problems of implementation worsened to the degree that each and every policy had to be negotiated with an ever greater number of organizations, and the necessity of organizative interdependence became crucial in a framework of growing fragmentation (John 2001).3. The policies of decentralisation in the Italian caseThe Italian “Programmazione negoziata” can be referred to two prior events, in both of which the dialogue between central government and economic and social actors takes on an important role. Here lies an Italian peculiarity, where instead of state-centered policies or public-private partnerships, a greater role is assigned to inter-associative concerted agreement.The first prior event is constituted by the great triangular agreement on Incomes policy (1992-1993) and even before that, the “concertative agreement for developing the Italian Mezzogiorno”, better known as Patto per il Sud (Pact for the South). These agreements between central government, the unions and employers’ associations in governing the macroeconomic variables began to introduce the implementation of local resources (with the proposal of “relocation packages” for Southern Italian regions) and the identification of workers’ and employers’ associations as “development drivers”.But this prior event did not lead to the creation of a new methodology. Rather, negotiated programming was devised by the political-administrative culture of the institutions and the social partners in a gradual and contradictory manner. Indeed, prior to being formally defined, it was inherited from previous experiences deriving both from general economic programming of the sixties and seventies, and by local experiments of political and social actors in the 1980’s.The ambiguity of its origins is visible, on the one hand by going back to “contrattazione programmata” (programmed bargaining), the first example of target plan involving the structuring of the territory with the objective of reducing the territorial imbalances between the Mezzogiorno and the North of the country. Other spurious elements can be traced back to law 64 of 1986 reforming the so called extraordinary intervention in the Mezzogiorno. This reform law used the concept of “accordo di programma” (program agreement) meaning an “integrated and coordinated initiative of Regions, local authorities and other public entities and state administrations, even autonomous ones, for the implementation of measures laid down in the three year development program to favour activities leading to the redevelopment, modernisation and expansion of the production facilities and the exploitation of local resources”. This was an agreement negotiated entirely within the public sector bodies, in order to foster local development.An important element of innovation occurred in 1990 with the law 142, which role in redesigning central-local relations was crucial. The “accordo di programma” (program agreement) became an ordinary tool for economic programming. Law 488 of 1992 abolished the extraordinary intervention in the Mezzogiorno and extended the concept of “economically depressed area” to the entire country. The formalisation of the tools of “programmazione negoziata” in 1995 hence constituted a step in a complex procedure. The context of the implementation of the negotiated programming then burgeoned in a continuous, hybrid evolution; this was the case of the territorial agreements for employment promoted by the EU, under the European Confidence Pact for Employment. Here one has the unusual situation of an Italian best practice being adopted on a European scale and a broadening of the multi-level negotiation framework. The high normative complexity of the same can be seen by the fact that many types of pacts can be distinguished: first generation pacts approved by community procedures, second generation pacts (1998–1999), new pacts (2000-2001) with the new procedures fully operational, pacts approved in 2001 in the centre-north of the country for the areas hit by flooding, hydrogeological instability and earthquakes. A systematic evaluation of this complex issue was not carried out.Indeed this main side of the normative evolution intersected with other policy components and segments. The “localism” of the first generation of territorial pacts was the response from the local actors or stakeholders in the Mezzogiorno, that attempted to respond via local coalitions to the consequences of the end of the extraordinary intervention. These coalitions were actually presenting high risks in collusive and distributive terms. Such distributive coalitions aimed at obtaining public funds were widespread in the early 1990’s, but suffered a partial setback with the assertion of a centralised system of direction: after the ‘voluntary’ phase of the territorial pacts promoted by the Italian Council of Economy and Labour (CNEL), a more ‘normalized’ phase occurred featuring the leading role of the Department of Development Policies and Cohesion (DPS) of the Italian Ministry of the Treasury. This was the most significant phase in the attempt to construct a “new centre” in the policies of local development in Italy.The result of this phase (Trigilia 2005), even though partially positive, should not cover up aspects of central enlightenment. In fact, some results were obtained in certain Southern Italy districts and regions in terms of jobs and business creation and infrastructures building. But central government ended up by compromising these results. In particular the idea that the centre might entrust the direct management of the local experiments to the Regions proved quite problematic. If, on the one hand, this favoured policies aimed at changing centre-periphery relations, on the other hand it gave the regional governments and bureaucracies a powerful alibi to return to the traditional distributive logic. An emblematic case was that of the resolution of the Italian Committee for Economic Programming (CIPE) to entrust a quota of the funds to the Regions in order to favour processes of strategic urban planning. The idea was to extend to the Mezzogiorno a European best practice already known in the central-northern Italian cities. The outcome was the uncontrolled proliferation in the Mezzogiorno of tens if not hundreds of urban strategic plans whose only function appears to have been the distribution or syphoning off of central public resources.In the subsequent years, the regulatory system suffered uncertainties and setbacks, with the transfer of competencies (from the Economic Ministry to the Ministry for productive activities, subsequently Ministry for economic development) and the continuous swaying between bureaucratic recentralisation and the devolution to the Regions of the directorship of the pacts.Alongside the issue of the hybrid construction of the normative systems, negotiated programming presented another characteristic profile: that of the territorial diversification of its implementation. As well as in the regions of the Mezzogiorno where it originated, the policy was also significantly distributed in the regions of central-northern Italy. The process of its adoption witnessed an “epidemic” curve in the subsequent years, a true and proper rush after the territorial pact, probably to be put down to a decline in its effectiveness.Regional and territorial differences emerged. In the central-northeastern regions dominated by industrial districts (Tuscany, Emilia-Romagna, Veneto), local activism was not univocal: it was based in some cases on a strong commitment of local governments, in others the employers’ associations stepped in. Thus in Tuscany it was the local governments that developed tools of territorial governance to create local collective competition goods. Against this, in Veneto the employers’ associations took on this role, on the basis of a political mandate given by the local authorities to “private governments” (Burroni 2001). In those years, the performances of the regions of the “Third Italy” diverged: the northeast took off, the centre drew to a halt. More recently, one sees a strong attraction of the urban, district and functional areas of Tuscany (along the Florence-Pisa-Livorno axis) and of the Marches (along the Rimini-Pesaro-Ancona axis) towards the Northern Italy system.The local governance in the regions with an industrial tradition in North-western Italy also followed divergent paths. In these regions a complex mosaic of production systems had been created: on the one hand the metropolitan neo-tertiary systems of Milan and Turin (under reciprocal attraction); on the other hand those more similar to the industrial districts typical of “Third Italy” manufacturing production (from Biella to Ivrea, to Varese, Lumezzane, Valsesia), lastly the old industrial areas seeking alternatives to obsolete industrial specialisation (from Liguria to lower Piedmont). The use of negotiated programming seems to have been more efficient in the governance of territorial clusters in crisis, but metropolitan areas, areas in decline and agricultural areas were covered by territorial pacts as well. In many areas of Northern Italy there has been a thickening in the fabric of cooperation between different institutions and public-private partnerships, but what has been lacking is an evaluation of the impact of these forms of territorial coalition. It is possible that the spread of these tools of local governance have helped to overcome the traditional Northeast (small firm districts) and Northwest (big industrial regions) dichotomy. Both now appears to be broadly integrated in the meta-urban system of Northern Italy (Perulli, Pichierri 2010). A global polycentric city-region covering most the North of Italy with a population of over 25 million inhabitants (comparable with Tokyo or Southern California) has emerged. It has no real equivalent elsewhere in Europe. The governance of this new scale of territory is for now only the subject of experiments.The complexity increases if one considers the various forms of concerted territorial agreements, not limited to “programmazione negoziata”. In Lombardy there has been a spread of the “accordo di programma” (program agreement), alongside cases of territorial pacts or more informal local or regional concerted agreements in areas of industrial decline, greenfield or backward areas. It is interesting that the correlation between territorial pacts and the pre-existing endowment of social capital has disproven any form of determinism à la Putnam (Piselli e Ramella 2008).In this context the crucial role of central government in local policies appears to have remained the principal unsolved problem. The contribution of the central state in fact appears decisive, and the vision of territorial pacts and negotiated programming as essentially bottom-up policies has turned out to be fairly limiting. But the capacity of the central state to evaluate and reward, to carry out an effective selection, and to redevise along with the Regions and the local systems a different experimental policy is what is really missing. “Programmazione negoziata” developed in parallel (without really matching it) with the institutional reform based on subsidiarity principle introduced in the same years by the Bassanini laws. Franco Bassanini as Minister in the Prodi government (1996-1998) led the only Italian attempt aimed at “reinventing government” in the last 20 years. He developed a reform of the State, both central and local, inspired by a mix of Clinton and Blair reforms. Bassanini laws in application of the principles of decentralisation and subsidiarity also provided for bureaucratic simplification and the co-partnership of local subjects and stakeholder associations in the running of public services.Indeed the selfsame legislation of the Regions indicated the associated intermunicipal management of services and their entrustment to subjects outside the public administration according to forms of “horizontal subsidiarity”. This means that the public sector decentralised tasks to private bodies. However the institutional coordination of the local powers did not intersect with contracting out. In the same time the “vertical coordination” among public institutions (central and local State) was unable to make clear and transparent the ongoing logic of subcontracting. The result was the hollowing out of many public functions without a clear strategic choice (public-private partnership, state control and market logic were mixed in an unclear and opaque way). It was this very intersection between central and local, state and market principles which inspired the Bassanini reforms. In Anglo-Saxon new public management the necessity of the cross-cutting of projects has led to the creation of a new central bureaucracy capable of assuming a “panoramic” capacity: yet at the same time they have not been capable of coordinating themselves with the advantages of the local knowledge offered by the informal networks. The unsolved need of having a form of “panoramic” coordination alongside the proliferation of networks and organisations dedicated to the single tasks, also seems to be present in the Italian case.The Regions and centres of regional bureaucracy should perform the role of intersection with the flowering local projects and with the fragmentary dispensing of services entrusted via contract to local networks or key employers’ organisations. But this outcome is not at all ensured, and the processes are unclear and murky. For the moment what has been obtained is a reproduction of regional neo-centralism and of bureaucratic patronage (with widespread corruption in public-private contracts).How one turns these aporias into an open and federative planning system (Sabel, O’Donnell 2000) is as yet an unsolved question. The solution of this issue presupposes a pragmatic “new Centre” (national, regional, supranational), capable of devising extensive projects and monitoring performances: but at the same time capable of eluding technocratic temptations and new ‘cages’. Indeed a new Centre independent from particularistic and collusive pressures would demand:local systems, above all urban and metropolitan, capable of proposing their own strategic plans and of implementing them, also in the light of the proposals of other local competing systems;a role of the new Centre as a junction for the information flowing from the different operative units.4. The ambiguities and weaknesses of decentralizationThe task at hand is now to understand in retrospect the weaknesses of decentralized public policies and “programmazione negoziata” experimented thus far.If we consider the main tools of “programmazione negoziata”, the territorial pacts, from the standpoint of qualitative research (Piselli, Ramella 2008), it emerges that the territorial pacts exhibit a wide diversity of styles and policy orientations. A more distributional orientation has been that of local coalitions, which have certainly been numerous, held together primarily by the possibility of receiving central State’s grants guaranteed by the pact. The distributive nature of territorial pacts has effectively made them an extension of other methods of collusive policies. In these cases, the territorial pact does not accompany any change to the political environment, nor contributes to the construction of new actors in the guise of “collective entrepreneurs” for the purpose of local development. Even though the creation of agencies and other administrative tools has been generally applied, these tools have remained weak in terms of vision for the local area, playing the role of receptacles for central resources transferred by the regional governments. Often the old local élite has been reproduced without having introduced any “circulation” or innovation. The winners have turned out to be the local and regional bureaucracies, which have consolidated their respective roles and rent-seeking policies.In other cases, the setting up of local coalitions seems to have followed a different kind of logic, one which can be termed more ‘constitutive’. For example, this is the case of territorial pacts developed as part of environmental innovation policies, accompanied by clear ruptures in the land management model and by the emergence of new groups and leaders. In these cases, alongside the classic financial incentives for local businesses, new external material or immaterial economies are created, and the administrative tools play an active role (including the creation of new local leadership). In these cases, the very image of the local area appears changed, due to actions, both internal and external, with the purpose of generating social capital and developing a new local identity. The common thread of these more constitutive experiences is that of ‘constructed’ competitive advantages, which the locality has managed to secure itself in order to better compete. In other words, such local policies have created local collective competition goods and external economies for the firms and the society as a whole. According to Piselli and Ramella’s survey (2008), it is the case of both Southern Italy (Foggia, Locride, Nord Barese, Sangro Aventino, Vibo Valentia) and Northern Italy (Canavese, Ferrara, Maremma, Rovigo, Valdichiana) pacts. It is significant that the places in which these policies have been most successfully implemented have been small and medium-size cities, sometimes through strategic urban planning. In the case of cities, this happened with the involvement –to a much greater degree than in the case of the pacts for rural areas- of private collectives of individuals, business entities, universities, innovation groups, urban managers and bank-funded foundations.This two-fold dynamic of coalition-building corresponds to a certain difference in policy ‘styles’, to use Richardson’s (1982) definition. More negotiated styles of pact building contrast with more anticipatory styles. The former are typical of coalitions more oriented toward the capture and distribution of additional resources, while the latter predominate in political environments oriented toward the generation of constructed advantages, longer-term urban planning and the emergence of new local élites, often more technocratic and more focused on efficiency. Here we are considering the highly polysemic concept of negotiated programming defined as the reproduction of reciprocal recognition rituals among consolidated groups obtaining a certain stability of their territorial system. Such a model clearly leads to a rather insubstantial disposition toward policy change with regard to administrative structures or to the locality’s future.5. The economic crisis and the re-centralizing responsesThe first decade of the 2000s heralded many signs of the crucial importance, but also the weakness, of local development policies in times of crisis.The Italian macroeconomic data for 2000-2010 are unforgiving: public expenditure net of interest rose by 1.7% per year, while real GDP grew by only 0.25%. The Italian state continued to spend well beyond the growth of the real economy: its 10,000 spending centres now amount to 50% of GDP. The distribution of public spending is as follows: 50% is spent at the national level, and 50% is spent at the local level. Spending increased as part of explicit policies on the part of government officials. Furthermore, spending did not increase for public investments: these underwent an expansion during the 40 year period between 1950 and 1990, and diminished between 1990 and 2010.Between 2000 and 2010, local policies were subjected to the effects of a general trend of re-centralization.The state has halted the devolution process, and it has been helped in this by the economic and financial crisis: the newfound respect for European threshold on public deficit and the cutting of public funds translate into fewer transfers from the centre to the periphery. Tab 1. Local and state coverage of local expenditures (values in%)195119802009Local revenue62940Co-partnerships1910State transfers287447Debt862Source: Giarda 2011In the last 30 years the local coverage of local expenditures has increased, and the State transfers have decreased. Today the fiscal autonomy of local entities is under attack. The rise of the deficit and that of public debt are fervently blamed in the media on out-of-control spending by local and regional entities and the growing number of levels of government participating in the same policy areas (the so-called “costs of politics”). Of course, in this attack on local policies everything is tarred with the same brush: both “good” and “bad” local policies are lumped together under the same bad name. For example, spending by Regional governments on healthcare continues to grow due to a regional system that rewards interests and not merit, while cuts are being made to education and routine funding of universities, threatening the autonomy of schools and public universities and contributing to Italy’s decline in research and development.In an Italy burdened with a public debt equal to 120 % of GDP, the central State considers a priority the control and cut of local expenses : this is much more valuable than any claim to obtain fiscal federalism. During the current phase of re-centralization, it should not be taken for granted that a coherent central “blueprint” exists. What has emerged rather, especially during the Tremonti phase (Silvio Berlusconi’s Minister for Economy who has most clearly demonstrated the ambiguous re-centralization policies implemented in Italy during the 2000s), is the logic of across-the-board cuts for local governments, and even, as in the “Bank for the south” proposal, the danger of re-creating a central agency like the Cassa per il Mezzogiorno. In the mean time, no work has been done to address the inefficiencies of the state and its spending apparatus, both centralized and local.The last decade has been marked by an “astonishing hiatus” 1 between the dynamism of regional economies (especially in Northern Italy, but also in segments of the South) and government responses. When the fifth title of the Italian Constitution was amended in 2001 heavily shifting power towards the regional governments, no federalist-type institutional blueprint followed. Both the State’s exclusive powers and the State-Regions competing powers were strengthened, with the double effect of:consolidating the old national and ministerial centralism as a opaque praxis of state/regional dealings and multiplying occasions for state/regional conflicts;introducing a new regional centralism which in the Northern Italy has had clear effects of de-coordination among regional governments (no common policy on the environment, innovation, public health or research) and punishment of the cities (Milan receives no support from Lombardy just as Turin receives no support from Piedmont and Venice receives none from Veneto, etc.), while in the South the effect of reinforced regional power has been the transit of State and EU funds into self-referential spending mechanisms, often simply to middlemen and patron/client arrangements.The confused debate surrounding fiscal federalism has not led to any practical model that might find a balanced application. The urgent need to empower supra-municipal and metropolitan systems, expected since 1990, is still waiting for the implementation of “metropolitan cities,” recognized by the Italian Constitution but destined to remain on paper. In such a way the “nominal” government of cities (i.e. the municipal government) has left out all new forms of “real” territorial development, which are (as effectively delineated in Donolo 2011):the metropolitan areathe city/regionthe extended urban systemthe urban environment (city as ecosystem).In the meantime, no urban policy has been promoted : the only policy implemented during the course of the decade 2000-2010 has been an explicitly anti-city one with the suppression of the ICI (local property tax) for Italian municipal government. Only recently the property tax (named IMU) has been re-introduced by the Monti government, but in the context of a dire need to reduce the public debt and without reinforcing the municipal share. There is nowadays no “urban agenda” in Italy favouring development and cohesion in light of the cities’ role as new subjects of regional governance. The current forms of government, both of the cities and of the regions, would have to be profoundly changed. For now, the announcement of a reduction in the role of the provincial government, a condition as yet not implemented by the Monti government, is a response exclusively to the demands of budget cuts, in any case necessary. An effort to coordinate urban policies among different ministries has thus far only been announced. Italian regional policy, after the time of the DPS -Department of Development Policies and Cohesion- and the impulse that derived from it in the 1990s, has in the meantime been reduced to a routine. This is a residual policy, in the sense that it mobilizes a small percentage of resources according to “place-oriented” criteria. On the contrary, all ordinary policies should be “context-oriented”: indeed they lead to different effects depending on the institutional context in which they operate (as the former director of Banca d’Italia Mario Draghi highlighted in 2009). For this reason, the rate of unused European structural funds by municipalities in Southern Italy has once again increased: the local institutional context, compounded with paralysis in the Ministries, often impedes effective flows of European resources. But the central State is no better. Infrastructural policies have been labeled in political rhetoric as the State’s solution to the demands of local systems, but no governance system or central/local strategic planning have been attempted. This is demonstrated, moreover, by the number of disputed installations/infrastructural works in Italy, which grew between 2005 and 2008 from 12 to 30 in the Northwest, from 11 to 37 in the Northeast, from 7 to 20 in Central Italy and from 11 to 39 in the South (Bucchi, Neresini 2010). More generally, the central government’s grip on local governments’ spending has led in recent years to the suspension or cancellation of many strategic projects in the country (from investments in subways in the cities to environmental preservation in the countryside, first of all in the Po river basin, to soil protection, especially in the South, to artistic and cultural heritage development projects). Public works vital for the cities (soil protection, railway infrastructure in the South, a new railway connection between the main Italian port of Genoa and Milan metropolitan region) that have long been postponed have only partially, and in the context of a drastic disciplining of the deficit, been approved by the Monti government.This “return” of central power in times of crisis, which has established itself in Italy in a largely contradictory fashion, appears to be a sign of general trends affecting all of Europe. The re-nationalization of anti-crisis policies (weakly coordinated by the European Union) risks reversing an entire front of global/local policies focused on the new territorial, metropolitan and regional systems. The regional systems would certainly require a decisive local reform, no more “nation for nation” but fostered and planned on a European scale.And yet what has come to pass is a decisive re-affirmation of policies guided by the central states, favoured by the European Union, itself heavily influenced by national governments. The Union, although allied with local and regional governments in promoting trans-national experimental projects, has ended up limiting itself to the method of “open coordination” entrusted to complaisant collaboration among national governments. No new governance architecture has accompanied the implementation phase of the Lisbon strategy. Moreover, neo-liberal political groups supporting the expansion of market mechanisms have accused local governments of hurting the mobility of labour and production factors and impeding adjustments and efficiency. ‘Blind policies’, based on the capacity for fostering the free movement of labour and capital, have taken the upper hand. Concerns surrounding land and space, considered unimportant if not dangerous, have been relegated to municipal programs (LEADER, URBAN) without any effect on the complex of development policies announced in Lisbon at the beginning of the decade. At the European level, sector-based policies (for now the emphasis on cross-cutting and cross-sector policies consists merely in words) have once again come to hold a dominant position, and even national sector-based policies. The priorities have rested above all with accessibility (and hence: material infrastructures), knowledge (hence: investments in research), and job creation (therefore: human capital). But beyond the rhetoric, the prevalence of sector-based policies has translated into an impoverishment of the vast range of local experiments underway. The framework of contractual agreements between subjects of multi-level governance has not led to innovations in favour of new coalitions of local individuals and groups. In fact, the role of contractor with regard to the EU has remained a privilege of national states, with regional governments occasionally having the chance to play the part of subcontractors. In this way, the responsibility of managing policy has been re-centralized: from regional authorities to national ones like in Holland and Sweden, and from local to regional ones like in Flanders and Scotland (Barca 2009).Furthermore, a basic ambiguity has favoured the role of administrative regions (NUTS 2) as if they themselves were the equivalent of local governments: but often the regional governments have not favoured the role of the cities and local systems in the least, reproducing national centralism in miniature. In such a way, the territory has been handled like an entity with no personality, a simple recipient for top down interventions (including those of the regional bureaucracies).Finally, the logic of the European Union has led to the replication of the guidelines established in Brussels, and not to the emergence of original local strategies and ideas: the tendency toward uniformity, the propagation of policies that are all the same, has largely prevailed thanks to the forces of organizational inertia.6. An alternative: place-based policiesAn alternative to the decentralisation-recentralisation dilemma and the indication of a necessary change of direction emerge from the most recent literature (see Barca 2009). The main axes to be followed are: the orientation towards place-based policies, the creation of industrial commons, and the fostering of the local and regional identity of areas. This approach today clashes with the short-term effects of the serious crisis that exploded in 2008 and that worsened in the subsequent years, in particular with the reinforcement of the prerogatives of the national governments in terms of growth policies. If the logic should prevail that the States are to tackle the crisis each on their own, the new governance in favour of place-based policies would be penalised. Indeed the Greek crisis is opening a new phase that seems to lead to a partial ceding of national sovereignty in favour of control at a community level (with the creation of a first embryo of a European monetary fund, a current outcome of the financial emergency).Elements for a new model, in a direction that redefines the relations of European governance, emerge from recent research work. Contracting for innovation (Gilson, Sabel, Scott 2009) is an overcoming of the theory of the contract that, starting from Coase, has opposed market to internal governance of the firm. Now market contractual relations between firms are studied as part of wider governance mechanisms. Contracting for innovation means that each firm only draws up a part of the knowledge required, and knows full well that the other firms are drawing up other parts of knowledge necessary for producing the innovation. In this way a single new regime is created that merges and transforms contract elements, bilateral governance and hierarchical management. How does this merging of hitherto opposing principles (market, hierarchy) come about? The new regime functions by providing everybody the information (exactly what Keynes invoked at the time of the Great Depression) on the capacity and the will to cooperate of the various different parts, namely the different firms that are to take part in the innovatory effort. With this exchange of information the participants are bound to communal but not clearly defined (indefinable ex ante) contracts by increasing the switching costs, that is what the firm would lose if it decided to exit from the contractual relation and the common project. Or the firms are bound by the alerting of the parts to the possibilities of breaking-off before the costs of the failure of relations become ruinous. That is to say it is the reciprocal ties and the investments in knowledge common pools constructed in time that unite the parts in a strange, incomplete and undefined communal contract.“Experimentalist Governance”(Sabel, Zeitlin 2008) is the model that interprets the new trends of institutional architecture in the West, and in particular in the EU. In this field of relations between States and other subnational actors (and large interest groups), no contract is capable of ‘defining’ anything ex-ante. The new model is based on four components :the setting of framework goals by a level that sees the EU and the member states united;the implementation of the goals entrusted to a unit at a lower level (national Ministries or agencies, but new local or regional agglomerations would be welcome) that are called upon to work towards the achievement of the goals independently;a peer review (system of reporting and evaluation among peers) to connect up the different national and local results obtained, comparing the performances achieved with different procedures, and thus spread the best practices;objectives, metrics and procedures periodically reviewed by the actors of the upper level that set the same, to which new participants considered necessary for a complete and fair deliberation of the same can be added.This circular vision of the process sees the institutional actors proceeding via adjustments, exchanges of information and reciprocal adaptation: somewhat like the enterprises in the Contracting for Innovation model. But in what way is the hierarchy present in the model? The multi-level governance, the networking and informality do not explain all. There is the level of the EU with the distinctive role of promulgating the authoritative framework and supervising its attainment. There is then a member state and agency level that applies the framework proceeding to all the necessary adaptations.This experimenting hence contains the advantages of both decentralised experimentation as well as centralised coordination. The former are those of the method of open coordination, of the common interwoven implementation strategy, of the opening of the circle of actors that can be involved and the alternatives that can be taken into consideration. On the second front the principle of “authority” and of hierarchy appears, that accompanies the “market” of contractual behaviour of the actors.Attempting to translate the model proposed into a guide for local policies is possible. In general terms one would witness a greater orientation towards place-based policies. However the sub c) component stands as the greatest critical feature of the model: that which establishes the circulation and selection of the best practices. Today this phase is entrusted to peer-reviews that are anything but transparent, being devoid of incentives and sanctions for the national and sub-national actors. On the one hand the umpteenth isomorphic effect leading to duplicate policies is to be avoided, on the other it should be ensured that the coalitions of local actors formed under the process are effectively given powers.On this count, distinction should be made between at least three trends that coexist in the current panorama of European policies.Tab 2. The three trends of European Union policiesPolicies ofCohesionCompetitivenessGlocalsType of goodsPublic goods, fundsLocal collective competition goods,club goods Network goods, functional goods Scale and scopeInternally orientedExternally orientedBoundary spanningFocal actorsMultilevel focus on centraladministrationsMultilevel focus on local administrationsMultilevel focus on transnational and interregional actorsGoalsAssistance, territorial re-equilibrium,polycentrism,social inclusionSupport for the urban-metropolitan “innovation drivers”Trans-territorial cooperation,new assemblagesSectorsTransport, telecommunication,environment,public servicesUrban infrastructure,innovation,training,company servicesInstitution-buildingFunctional neoregionalism.Styles of policyConcertative- collusive, catch-allAnticipative-managerial, selectiveNetworkingResourcesEuropean, mainly managed by central administrationsEuropean, mainly managed by local administrationsEuropean, mainly managed by global city-regionsExamplesGerman Laender, Italian Mezzogiorno, PolandCities of URBACT II European programsBaltic SeaDanube RegionNorthern Italy? a) The traditional regional cohesion policies. Developed during European programming from 2007-2013, they have led to unsatisfactory results, favouring the national redistribution of resources (as much as 70 % of the same are managed by the States, only the remaining 30 % by the Regions) and the logic of expenditure is not related to selected priorities and effective evaluations. In view of the new cycle 2014-2020, the reform of these policies towards a place-based approach, wished for in the Barca Report (2009), would favour the selection of goals, the emphasis on indicators and results and a new contractual mechanism in favour of mobilising the sub-regional actors.b) The policies for the competitiveness of local and regional areas. Activated mainly by the cities committed to strategic planning via coalitions with local actors, these policies have been at least in part put into light again by the crisis. In some cases, it is a question of new plans for reconverting the city, or the extension of already existing strategic urban plans, in others austerity plans to cut expenditures (Valencia), yet again in others, local adaptations of state plans (Leipzig). Significant innovation is being experimented for incentivating the urban reconversion towards clean energy as in the Climate and Innovation Fund (Rotterdam), or in offering strategic sites for future urban regeneration projects (Newcastle), or to favour creative industries for the young (Tallin, see URBACT 2010). In a significant Italian case (Trento), initiatives for cohesion (with the introduction of a minimum guaranteed income) have been combined with undertakings favouring competitivity (in favour of innovation and industrial research) (Autonomous Province of Trento 2009).c) Macro-regional policies on a ‘glocal’ scale. While in the past the macro-regions have been associated with logics of sub-national identity (from Catalonia to Wales to Bavaria) with all the risks associated, the emerging cases include areas of different countries or regions associated by characteristics or challenges that they have in common. The dimensions of the macro-regional territory are not defined by national sovereignty, but by common economic functions. The production of macro-regional policies has the purpose of producing a third type of asset as opposed to the public or collective asset : namely functional and relational assets. These are qualified by the considerable network externalities that they produce between contiguous or at any rate interconnected economic and social systems. Experiences are underway in the Baltic Sea region (that comprises several states), in the Danube region, in Benelux, in the successful ETCGs (European Territorial Cooperation Groups) and in the development of the so-called services of general interest. In some cases these are merely functional interstate coalitions for the common development of key functions (such as the storage of trans-frontier gas between France and Germany). In all these policies, that are to a various extent ‘macro-regional’, assemblages of interregional, often supranational territories are achieved, guided by the sharing of strategic functions. The functional and territorial dimensions are interlinked, and appear less conflictual than in the past. A case that could be relocated in the ‘glocal’ horizon is Northern Italy in its dimension as an open and trans-frontier global city-region. The great ‘functions’ of Northern Italy (mobility of goods and knowledge, networks of companies, polycentric urban system, network of public utilities etc.) surpass the single regions and draw out a dense weft of macro-regional relations on a European scale. If we examine each of these functions, a territorial map of interrelations, densities and nodes or junctions emerges : this would upturn the current tendency which is that of starting from the institutional borders to define the policies. For example the logistic region of Northern Italy will probably be defined by high-Tyrrhenian and high-Adriatic ports arch, and the arch of the Alpine passes. The field of research and innovation will include universities, polytechnics, research centres and enterprise incubators from Turin to Trieste including Pisa. The environmental basin of the North and the ecosystemic services not only cover the Po Valley but also the Apennines. The production of local collective competition goods would demand a transregional governance that is currently absent : what derives is a problem of under-production of these goods that is totally independent from the “Northern question” or the “sack of the North” as in the political rhetoric. The question of a new transregional territorial ‘assemblage’ now constitutes a policy priority for Italy’s North. But it is also so for the Italian State. A systemic vision on a macroregional scale would enable a reduction in the inefficiencies and waste and increase the competitive capacities in all sectors, from universities to health, from transport to structures to foster innovation.While up to now the regionalist issue was part of conservative national ideology or of secessionism, the prospects indicated here go in a different direction. It is in fact a question of redrawing European supranational systems united by socio-economic and spatial-functional dynamics rather than local subjectivity and national identity. Of course this is not the case of current nationalisms and European free-riders. In part the scenario designed here is coherent with projects of European spatial planning, and the territorial and cross-cutting analyses of the actuation of European policies in the space of the Union. A new geography of cross-border macro-territories heads in this direction: a European core, a renewed Northern-Baltic area, a Balkan assemblage, a great Mediterranean maritime belt, etc. An ‘extended’ Northern Italy, that we have only sketched out above, acts as a well-anchored platform to this European design, but ready to move in a European federalism of economic macroregions and urban networks.