Reconfiguring European States in Crisis

Desmond King (ed.), Patrick Le Galès (ed.)

https://doi.org/10.1093/acprof:oso/9780198793373.001.0001
Published: 2017 Online ISBN: 9780191835209 Print ISBN: 9780198793373

CHAPTER

6 The Territorial State 

Michael Keating

https://doi.org/10.1093/acprof:oso/9780198793373.003.0006 Pages 121–136

Published: February 2017

Downloaded from https://academic.oup.com/book/9418/chapter/156265914 by Universiteit Leiden - LUMC user on 14 April 2023

Abstract
The ideal-type European state is a territorially bounded polity, which encloses coterminous economic,
social, and political systems. The ‘end of territory’ in the face of national and, later, transnational
integration, has frequently been pronounced. Rather than deterritorialization, we are witnessing a
reterritorialization as economic, social, and political systems migrate to new levels, above, below, and
across states. This is the process of rescaling. States have responded by institutional reform, seeking to
recover control of systems that have escaped their purview. Territories have also been constructed
bottom-up by political entrepreneurs. There have been signi cant divergences in public policy among
regions. Rescaling and the construction of territory are inherently political and contested processes.

Keywords: rescaling, regions, territory, space, regional government

Subject: Comparative Politics
Collection: Oxford Scholarship Online

The Territorial State

Territory has come and gone as an organizing concept in the social sciences. At one extreme is a territorial
determinism, which derives social order from geographical space. At the other is recurrent modernization
narrative that sees space as a characteristic of traditional societies, and continually announces the end of
territory. New understandings of territory enable us to escape from this dualism and reintegrate territory as
an organizing principle. In this view, territory is socially constructed and reconstructed according to time
and place. It is initially de ned topographically but then ‘ lled in’ and given meaning sociologically.
Territories rarely have xed, impermeable boundaries but are often loosely bounded and take di erent
shapes for di erent purposes. Finally, territory is contested, as drawing boundaries will always include
some people and exclude others and will a ect the balance of power and advantage. In a world in which the
right and ability of the nation-state to de ne territory has diminished, competition over the de nition of
economic, social, and political space has intensi ed.

The European state is essentially a territorial space, which contains multiple economic, social, and political
systems on which it seeks to impose a single set of boundaries. Many states can be traced back to mediaeval
times, but it was during the nineteenth century that states extended their functional and territorial reach to
become the predominant in uence in shaping economic and social relations. State boundaries were
consolidated as it became necessary to specify them on maps and on the ground (Sahlins 1989). To the
despotic power of the regalian state was added what Mann (1993) calls infrastructural power, a capacity to
shape social and economic life so that social relations were ‘caged’ within national boundaries as the two
evolved symbiotically and often in tension. The nation came to underpin political legitimacy, rstly under
p. 122 monarchical regimes and then through the people or demos. States imposed standard languages and
cultural norms and fostered shared identities. Both capitalism and the working class grew in symbiosis with
 the expanding states (Sassen 2008), which thus framed and enclosed class relations. During the twentieth
century, the welfare state built on the nation while in turn building the nation.

Stein Rokkan (1980, 1999) represented this as a form of boundary-building in successive waves but never
entirely complete, so that territorial cleavages remained within the modern state and economic systems,
religion, language, and identity did not necessarily coincide. During the 1970s and 1980s, scholars showed
how territorial distinctiveness was not merely the legacy of the past but was reproduced in industrial
societies (Tarrow et al. 1978). Territorial management was recognized as a crucial task of the modern state,
achieved through institutions, public policies, and party systems (Rokkan and Urwin 1982, 1983, Keating
1988).

The apogee of the integrated nation-state was the mid-twentieth-century ‘Keynesian welfare state’,
bringing within the same boundaries responsibility for macroeconomic management and social welfare,
and facilitating social compromises. States reproduced national identity through education, the media, and

Downloaded from https://academic.oup.com/book/9418/chapter/156265914 by Universiteit Leiden - LUMC user on 14 April 2023

welfare provision, and this in turn legitimated the state on a democratic basis. Yet the need for territorial
management remained. States grappled with the territorial administration of their responsibilities, with
waves of local government reform intended to modernize delivery mechanisms and renew local elites.
States sought to integrate their territory economically through regional policies and spatial planning
mechanisms. Such ‘spatial Keynesianism’ was a positive-sum game, which could help declining regions by
providing investment; prosperous regions by relieving congestion; and the national economy by mobilizing
otherwise idle resources. Regional policy also had a welfare element, assuring national levels of prosperity
throughout the territory and so combatting potential secessionisms.

By the end of the twentieth century, these territorial compromises came under strain. There was much talk
of ‘globalization’, the erosion of the nation-state in the face of worldwide economic and cultural
integration, and of the ‘end of territory’ in the face of universal order. Combined with contemporary
arguments about the ‘end of history’ (Fukuyama 1992) this appeared to demolish two dimensions of the
social world and keys to its understanding—space and time. In fact, what has been happening is not so
much deterritorialization as reterritorialization or the rescaling of state activities to multiple levels (Keating
2013).

Functional Rescaling

States have found increasing di culty with macroeconomic management in the face of global free trade,
p. 123 nancial markets, and transnational corporations. At the same time, there is an increasing recognition of
local and regional factors in explaining development and relative wealth and poverty. The New Economic
Geography (Krugman 2011) challenges aspatial models of development by factoring in distance. Beyond
that, there is a rediscovery of the importance of local linkages in production (Storper 1997, Scott 1998), an
idea that harks back to Marshall (1920). Regions and localities are recognized not merely as locations of
production but as local production systems (Crouch et al. 2001). Some theories are strictly economic,
focusing on interdependence and clustering of rms and suppliers, but others are more institutional, seeing
spatial proximity as the basis for exchanging ideas and for innovation. Others again are more deeply
sociological, seeking explanations in the structure of local societies or even in cultural norms and practices.

Spatial Keynesianism has faltered in the face of di culties in diverting private capital and limitations on
state scal capacity. The consensus on diversionary regional policy has collapsed as even wealthy regions
seek investment and know that moneys transferred to their pooper compatriots will not necessarily come
back in the form of orders for the products. It has been suggested that comparative advantage, in which all
states, regions, and localities have an optimal niche in the division of labour, has given way to absolute, or
competitive, advantage (Scott 1998). While this may be debateable as a proposition in economic theory
(Lovering 1999), cities and regions have been discursively constructed as competitors and that policy
rhetoric has shifted decisively towards competition. This allows states to disengage from diversionary
regional policies, managed at state level, towards decentralized strategies focused on territories themselves.
It also encourages local and regional politicians to use the development theme as a way of mobilizing
support. Neoliberals welcome the resulting competitive regionalism as a way of disciplining governments to
cut social overheads and taxes and to deregulate (Ohmae 1995, Alesina and Spolaore 2003). Social democrats
worry about a ‘race to the bottom’, which could undermine the welfare settlement.
 During the twentieth century the welfare state was largely national for three linked reasons. First, the
nation was seen as the best unit for a ective solidarity, based on shared identity. Second, the state was the
largest available unit, most e ectively able to mobilize resources and insure against asymmetric shocks.
Third, regulating markets and welfare at the same level facilitated the social compromise between capital
and labour that underpinned the welfare bargain. Now the principle of national solidarity is challenged by
competitive regionalism and by the rise of other levels of a ective solidarity, undermining the rst
argument. The largest political unit is no longer the state but the European Union, undermining the second
argument. The third argument is modi ed by changes in the eld of welfare itself, away from passive
income support towards active labour market policies. These in turn have concentrated on local and
p. 124 regional levels, where labour markets operate. Rediscoveries and reconceptualizations of poverty also
have a strong territorial dimension, as there are multiple dimensions, which may be interconnected in
particular places. So we have had deprivation, multiple-deprivation, and social exclusion, which share the
idea that the locality is a spatial level at which multiple, interlinked problems can be addressed most
e ectively. This is not to say that social deprivation is essentially spatial since its local manifestations may

Downloaded from https://academic.oup.com/book/9418/chapter/156265914 by Universiteit Leiden - LUMC user on 14 April 2023

be the result of wider processes of labour market restructuring, but the local level is the one at which many
of the policy instruments operate.

Culture and language, far from deterritorializing in an age of instant long-distance communication, have,
in many ways, reterritorialized. Maintaining a language requires spatial proximity for casual interaction,
and the institutions for its reproduction, such as schools and public administration, are territorially based.
So the language boundary in Belgium has been reinforced, French in Canada is increasingly dominant in
Quebec and retreating elsewhere, and Catalan and Basque are strongly bound to their home regions.

European Spatial Frames

The European market single creates a space and opportunity for rescaling, and the European Union itself
has been an actor in rede ning space and reshaping territorial systems. State borders have not been
suppressed, but their functional signi cance is transformed. They no longer obstruct movement of goods,
services, capital, and workers. Within the Eurozone, they do not delimit currency areas, while in the
Schengen area they have disappeared as a physical barrier. This has facilitated the emergence of new
functional spaces and encouraged competitive regionalism within European space.

The EU has also sought to rede ne space through policy. The original rationale for European-level regional
policy was similar to that of post-war national policies. Market imperfections prevent the free ow of
factors of production, so intervention is needed to integrate lagging territories into the single market. There
was a need for compensation to regions that lost out in inter-regional competition. Politically, poorer states
and regions needed evidence that the European project was bene tting them. To bring the policy into being,
however, required a bargain among member states, and this was supplied through successive enlargements
until by the 2000s; structural policy had become the second largest item in the community budget.

Through its policies, the Commission has di used the new regionalist paradigm of economic development,
including the idea of regional competition, and has imposed a certain spatial grid through its statistical
regions (NUTS). A more ambitious scheme for de ning European space was the European Spatial
p. 125 Development Perspective adopted in the early 1990s, as a basis for planning on a continental scale
(Herrschel and Newman 2002). In the 2000s, the EU sought to move beyond the old idea of regional policy
towards a broader concept of ‘territorial cohesion’ (Faludi 2006). Territorial cohesion was included as a
third dimension of cohesion in the Lisbon Treaty, and in 2007 the Leipzig declaration of regional
development ministers promised a new territorial perspective from the Commission. The Commission has
more recently adopted a strategy for macro-regions: large areas such as the Danube region, the Baltic, or
the North Sea.

O cially, policy is still linked to completion of the internal market, with repeated assurances that cohesion
assistance is not compensatory social policy but part of the successive Lisbon and Europe 2020 agendas for
competitiveness. Yet there have been political spillovers. Structural policy serves as a gesture to the idea of
‘social Europe’, in the absence of explicit social programmes to compensate losers from the single market.
It is played up by regional politicians, in order to demonstrate their lesser dependence on the state, and the
drawing of regional boundaries follows political as well as purely technical criteria. Structural policy is
under continuous pressure from the Commission’s directorate-general for competition policy, suspicious
 of spatial arguments and interventionism, and from the Court of Justice. The Commission, member states,
and regions contest the de nition of regions, and control and content of policy. So what is presented as a
matter of functional logic is rapidly penetrated by political and economic interests.

Political Rescaling

Competitive regionalism encourages politicians to emphasize shared territorial interests, to broaden their
support base when traditional political cleavages are weakening. In the past, territorial discontent was often
framed as a ‘revolt of the poor’, the losers from modernization and change. Nowadays a revolt of the rich is
more likely as politicians in wealthy regions jib at territorial redistribution, whether through regional
policy, scal equalization, or the territorial distribution of welfare costs and bene ts. This has become a
vocal complaint in southern and western Germany, Flanders, Catalonia, and northern Italy.

Downloaded from https://academic.oup.com/book/9418/chapter/156265914 by Universiteit Leiden - LUMC user on 14 April 2023

There has been a revival of minority nationalisms, challenging the territorial con guration of the state.
Some of these are irredentist, identifying with the majority in a neighbouring state. This is common in
Eastern and Central Europe, where the aligning of state and identity has always been problematic. Others
seek nation states of their own. Many national movements in contemporary Europe, however, are
ambivalent about statehood itself and seek new forms of nation-building within the supranational
European architecture (Keating 2001). The nation remains the locus of sovereignty but this is shared with
p. 126 other levels, while functional capacity is dispersed across tiers of government. During the 1990s and
early 2000s, there were movements for a ‘Europe of the Regions’, seeking to link the sub-state and
supranational levels and construct a space of action for the former. As the movement faded in the face of the
indi erence of the member states, minority nationalist movements have often moved back towards
traditional forms of statehood and sovereignty but then, when called on to de ne their ambitions, have
reverted to post-sovereigntist formulas. So the traditionally moderate Catalan nationalists of Convergència
i Unió have now demanded their ‘own state’, which may or may not be ‘independent’. Flemish nationalism
has moved beyond federalist and confederal rhetoric but still falls short of traditional statehood. Scottish
nationalists promote independence, but wish to retain much of the infrastructure of the UK state, including
the pound sterling. Traditional conceptions of territory get in the way of understanding these
developments, implying, as they do, that territory must be xed and de ned. Modern understandings of
territory, which see it as socially constructed, with looser and more penetrable boundaries, not all
coinciding, are more helpful here.

The selective resurgence of minority nationalism is not caused by functional rescaling, but rescaling
provides the context and the opportunity. New political spaces are being constructed, often using historical
materials but in essentially modern conditions. Regional and national political movements span the entire
ideological spectrum. What they do have in common is the e ort to rede ne the political community at a
di erent level. Such rede nitions are rarely consensual since the redrawing of boundaries includes some
people and excludes others, and the design of territorial institutions a ects the balance of political power.
Rescaling is therefore a highly political and contested process.

The Urban Condition

From the 1970s, cities became objects of new, place-based public policies founded on a speci cally urban
social and economic dynamic. There is no consensus on the nature of urbanity as a factor or process, and
successive frames have been applied at various times and places. Analyses of deprivation and social
exclusion have identi ed an urban dynamic in the reproduction of poverty. Social mobility, a traditional
function of the city, seemed not to be working for sections of the population who were trapped into a cycle
of despair. Social services appeared ine ective in eliminating, as opposed to managing, poverty. Urban
regeneration schemes, by displacing populations, may have broken the fragile connections among
neighbourhood, jobs, and social integration. Sectoral policies, in planning, housing, education, and
employment, were poorly integrated or not even working. More recently, cities have been identi ed as
engines of growth.

p. 127 The external framework for cities has changed as they are drawn into transnational networks beyond
national borders, and urban leaders have emphasized cities’ roles in competitive development. Yet this is
 selective, drawing some sectors into international chains while others remain territorially rooted. So urban
space is both being opened up and disaggregated.

Sectoral policy issues are refracted at the urban level in a distinct way, but there is no single narrative of the
city as a social system or object of policy. There are dynamic, growing cities but urban poverty persists even
within the same places (Savitch and Kantor 2002). Promotion of economic growth allows civic elites to
postulate a common city interest in development, yet growth increases inequalities (Keating 1988). It is
precisely the combination of these diverse trends that characterize the urban condition. New social
movements have emerged at the city and neighbourhood level, focused on these emerging issues and
cleavages and arguments about the use of space. Environmental movements challenge the market valuation
of space in the name of other values or a broader interest. Movements of the unemployed or homeless
postulate new meanings of social inclusion and entitlement. These new tensions have undermined older
forms of political representation and created new social alliances and cleavages.

Downloaded from https://academic.oup.com/book/9418/chapter/156265914 by Universiteit Leiden - LUMC user on 14 April 2023

There have been competing attempts to reframe the urban condition and to x it, at di erent scales. The
‘global city region’ concept presents cities as detached from their national contexts and embedded in global
chains of trade, migration, and communication (Sassen 2000, Scott 2001). City-regions have also featured
in national policies and structural reforms, with a return to the idea of the metropolis. Le Galès (2002) has
drawn attention to the importance in Europe of medium-sized towns. Policy at whatever level pays
obeisance to social, economic, and environmental dimensions at the same time, talking of sustainable
development as the ideal—but the eld remains contested. Local political entrepreneurs have sought to
master change by postulating themselves as the guardians of a uni ed city interest, which can assure
internal cohesion while projecting the city internationally. Urban leaders compete with those at the wider
regional level in de ning and mastering functional change. States and the EU seek to simplify and x the
new spatial scales with a view to regulating them, but spatial dynamics are constantly defying such logics
(Dematteis 2000).

State Response

Rescaling poses a challenge to old modes of territorial administration, provoking states to seek new scales
of intervention in order to capture matters that have escaped their purview. The European project seeks to
regulate markets, provide security, and later manage common environmental problems at a more
p. 128 appropriate scale. At the sub-state level, states have put in place new mechanisms, including
deconcentrated arms of central government, agencies, intergovernmental mechanisms, and regional
government. Metropolitan government was in fashion in the 1960s, went out of fashion in the 1980s, and
came back again in the 2000s. The justi cation for new levels of intervention has often been a technical one,
calling for depoliticized management. In fact, there is no ‘optimal’ scale for the provision of any service or
regulatory activity, since this is a normative question and the scale depends on what one is trying to achieve.
Competitive regionalism is promoted by some on the market liberal side of the political spectrum as a
means of disciplining government. Social democrats have often favoured centralization for opposite
reasons, although more recently some of them have re-embraced localism.

So rescaling is intensively political as the de nition of scale and the drawing of boundaries advantage some
interests and disadvantage others. The institutional structure of regions also shapes power relationships
and a ects the political agenda. As government seeks more authoritative structures for policy delivery and
excluded interests seek entry into the new political arenas, there is some convergence of interests on elected
government as the best institutional x. We see this process in Europe, as problems of coordination,
especially in the Eurozone, point to stronger institutions. The design of European institutions, such as the
removal of monetary policy from democratic control and the extension of this into scal policy and
spending, has provoked a range of oppositions, to bring powers back to the national level or to democratize
the European level. The way that competition policy has been designed and implemented, and the way it has
trumped social considerations, provokes a similar reaction. At the sub-state level, competitive regionalism
has often privileged business interests, while excluded social interests have sought ways of entering the
arena.

There has been a debate on the movement from ‘government’ to ‘governance’ (Bellamy and Palumbo 2010),
which suggests a less hierarchical and more networked mode of policymaking. The term governance seems
to be used particularly in relation to Europe and to regions. Yet in practice we may be seeing the opposite: a
 move from European and regional governance towards government in the sense of accountable bodies with
1
their own resources, powers, and competences.

Building Territories

Functional rescaling creates the context for the formation of territorialized systems of action, but it does
not ‘cause’ them nor determine their shape. States have reorganized territorial government but this does
p. 129 not necessarily shape politics or society. Territories are built by social and political actors and vary from
one place to another as the territorial cleavage is politicized in di erent ways. Some (such as Scotland,
Catalonia, and Flanders) are discursively constructed as nations, presenting rival claims to sovereignty and
identity (Keating 2001). Others are presented as regions, located within rather than against the nation-
state, as in Germany. In other cases, the city is at the centre of the project—and sometimes the regional and
urban projects compete for predominance. While claims are often rooted in history and contested

Downloaded from https://academic.oup.com/book/9418/chapter/156265914 by Universiteit Leiden - LUMC user on 14 April 2023

historiographies, representations of territorial characteristics have generally shifted from passéiste and
traditionalist theme towards modernity, economic dynamism, and competitiveness. In some cases (for
example the Lega Nord), the city or region is presented as an exclusive space, with migrants and other
‘outsiders’ excluded. Others (such as the Scottish National Party) use inclusion to maximize their appeal
and legitimate their project. Some movements in contested territories have distanced themselves from
neighbouring ethnic nationalisms by constructing a multiethnic or multicultural identity. This has
happened in the Balkans (Stjepanovic 2012), in Friuli-Venezia-Giulia (Rost and Stölting 2007), and in
Silesia, where local identity avoids the choice between German and Polish (Zaricki and Tucholskan 2007).

Parties are often the agents of change. Autonomist parties have strengthened in the United Kingdom, Spain,
Belgium, and Italy, while the German Linke provides a party of territorial defence. State-wide parties in
these countries have come under stress, as they need to present di erentiated appeals in di erent parts of
the state—except in Belgium, where they have disappeared. As the regional level becomes a political arena
in its own right, di erences in party competition and in voting between state-wide and territorial elections
have widened. The trend to direct election of mayors and presidents of regions has permitted the formation
of di erent electoral coalitions and encouraged these leaders to make territorially based appeals which can
extend their electoral base.

The standard view is that the process of state-building and boundary-drawing shapes the articulation and
representation of social and economic interests, turning them inwards and at the same time extending them
across the state territory where they take a sectoral or class form. Function thus extinguishes territory, and
it is at the national level that social and economic compromises are forged. This contrast of function and
territory is misleading. Any social or economic interest group has a functional scope and a territorial reach,
even when this is state-wide. Territory itself may also become the basis for common interests, just as class
or sector might be. There has long been an interplay between function and territory, as class and sectoral
interests are refracted at di erent levels; rescaling has enhanced the territorial dimension, but without
eliminating functional ones. Social alliances and con icts may take on a new shape at di erent levels while
territories emerge as spaces for the mediation of interests.

p. 130 The e ects of functional rescaling and governmental restructuring may be complementary or con icting.
Pastori (1980), Trigilia (1991), and Le Galès (1997) have argued that we may have ‘regions without
regionalism’ or a ‘paradox of the regions’, in that regional governments have been established but politics
and interest articulation still operate within the nation-state framework. My work suggests that this is
changing, albeit selectively, as sectoral interests adapt to new spatial logics (Keating 2013, Keating and
Wilson 2014).

Business and labour are both being cross-pressured by rescaling. Business has bought into the ‘new
regionalist’ ideas about economic development, which recognize the importance of territory, but does not
want to be captured by territorial institutions or competing interests. So it seeks to institutionalize regions
and cities through corporatist mechanisms in which it has a privileged place, and to de ne the territorial
agenda narrowly as economic development. Small businesses are more territorial in orientation because
they depend on the public goods produced by territorial governments and are closer to demotic territorial
identities. Business in strong regions likes competitive regionalism, with a restriction on inter-regional
transfers, but fears the division of national markets and big business is suspicious of local protectionism.
Multilevel government allows mobile business to venue-shop among levels for favourable treatment, but
 large rms tend to prefer regulation over the widest level and are not particularly interested in regulatory
arbitrage.

Trades unions are similarly cross-pressured. Many struggles, particularly over plant closures, take on a
territorial form but unions do not favour competitive regionalism, fearing the race to the bottom. They have
welcomed new territorial institutions as a way of regaining in uence lost due to the decline of corporatist
mechanisms at state level and collective bargaining in the work place, but insist on maintaining state-wide
standards on labour regulation and social protection. Where there are identity-based political movements,
unions, as mass-membership organizations, are directly a ected and must take the territorial dimension
into account.

As regions and cities become institutionalized as spaces for policymaking, new social alliances and
compromises emerge. Productivist alliances of businesses and unions can be found, with environmental
movements on the other side. Formerly cohesive territorial lobbies can be fractured by the arrival of

Downloaded from https://academic.oup.com/book/9418/chapter/156265914 by Universiteit Leiden - LUMC user on 14 April 2023

regional government, which forces groups to compete for the same resource base and over policies and
priorities. Regional governments foster regional interest groups as interlocutors and to legitimize the
region-building project by incorporating social and economic interests. So they have established
mechanisms for social partnership and compromise, including social and economic councils, quasi-
corporatist mechanisms paralleling those at state level, and consultative procedures. All of this has served
to ‘ ll in’ local and regional spaces and foster ‘regions with regionalism’.

p. 131
Territory and Public Policy

Regions and cities have been spaces for public policy since the post-war years, as states adopted a territorial
dimension to modernization, planning, and welfare. Increasingly, they have become sites of policymaking.
Regional and urban governments have gained policy capacity, but this remains uneven (Pasquier 2004) and
they remain embedded in multilevel systems. The rescaling of interest groups has generated territorial
policy communities: constellations of groups with a presence at the territorial level, appreciating policy
choices through a territorial perspective and engaging in policy dialogue, contestation, and compromise
(Keating and Wilson 2014). This has produced policy di erentiation over a number of spheres. Economic
development strategies have usually followed the ‘new regionalist’ logic, stressing local factors, human
capital, and insertion into the European and global economies, but with varying stresses on social and
environmental implications. Regional and urban welfare systems have emerged, not as substitutes for
national welfare states, but as local adaptations or supplements (Ferrera 2005). Each has chosen its
favoured bene ciaries, be these old people, young people, or families. The most marked di erences have
been in the organization of public services, ‘New Public Management’ as opposed to traditional modes of
delivery, and universalist versus selective principles of eligibility. Region-building may be an objective in
itself, pursued through sectoral policies in order to construct a political community or underpin its
economic viability. So minority nationalist movements have latched on to the new regionalism to give
substance to their self-government aspirations.

Traditional theories of decentralization and public goods argue that redistributive policies are best handled
at the state level, while allocative matters can be handed down. This distinction has become more di cult,
since most public policies have a redistributive element. Economic development is promoted as something
that bene ts everyone locally, but there are always winners and losers. New Public Management is
promoted on grounds of allocative e ciency but it does have redistributive e ects, as does the choice of
universal or selective services. So sub-state territories have become the location of substantive choices in
policymaking and of signi cant policy divergence (Keating 2013).
 A New Spatial Order?

There is a functionally determinist literature, which argues that systems of regulation and institutions scale
p. 132 themselves to the ‘optimal’ level according to the prevailing conditions of production and the needs of
the task in question (Alesina and Spolaore 2003). Scale is a political issue, depending on the aims of policy
that anyone is trying to achieve as well as understandings of political community. Neoliberals seek to
promote competition and to insulate economic regulation from distributional politics. The creation of
regional development agencies would be one example; the European Central Bank, doubly removed from
national politics by its supranational scale and its operational independence, would be another. Others seek
multipurpose and politicized government, to strike a new balance between the economic and the social or to
forge new social compromises. Views about the boundaries of the political community di er, linked to
identity as well as interests and likely majorities. Territorial identities are stronger or weaker and more or
less politicized.

Downloaded from https://academic.oup.com/book/9418/chapter/156265914 by Universiteit Leiden - LUMC user on 14 April 2023

Rescaling does not, therefore, produce a new territorial grid, replicating the old state-based one but at a
di erent territorial level. Rather, there are multiple spaces, from the global to the neighbourhood, that are
more or less integrated and consolidated. Functional rescaling and the crisis of territorial management
create a new context, but the outcome depends on territorial identities, political competition, strategies of
territorial actors, and the e ects of institutions in creating and reproducing territorial spaces. Where these
all point in the same direction (as in Scotland, Catalonia, or Flanders), we have a strong territorial logic,
rivalling that of the nation-state. In other parts of Europe, space is unorganized and weakly
institutionalized below the level of the state. In between, there is a variety of experiences.

As regional governments have consolidated, inter-regional competition intensi es since

institutionalization serves to de ne issues territorially. Transfers that were implicit in national
programmes become intergovernmental and transparent. The resulting redistributive issues are intractable
in the absence of agreed principles of territorial justice. There is scal equalization in multilevel systems in
Europe but it is always contested and di cult to operationalize. The aim is that all areas should be able to
provide the same services, taking into account resources and needs; but the point of regional government is
to do things di erently. Reform involves visible winners and losers. So states have failed in grand schemes
of scal reform and have proceeded incrementally and sequentially. Central governments have absorbed
many of the costs of decentralization although there is a sleight of hand here since, if central government
pays for equalization, it is taxpayers in wealthy regions who foot the bill.

There is no resolution to the territorial question since it hinges on contested matters of identity, political
advantage, and, increasingly, distributive politics. There are centrifugal tendencies but also centripetal
ones, as politicians use territory to play into national politics and state-level institutions. There is no
alternative territorial grid to replace the state; even secessionist movements have realized the impossibility
of recreating the old state at a new level.

p. 133 The economic crisis after 2008 has had contradictory e ects. Some regional leaders, unable to a ord the
cost of services, have sought to transfer tasks back to the state. States try to hand down to the local and
regional level the scal discipline that Europe has imposed on themselves and try to rationalize territorial
government, suppressing levels. Yet, even as the state seeks to reassert control, it continues to lose e ective
capacity. At the same time, leaders of stronger regions have pressed for more autonomy and scal
decentralization and less equalization. So the e ects have been highly asymmetrical, as territory plays into
the intractable distributional issues of present times.

Territory is not a remnant of a pre-modern political order or a distraction from ‘real’ issues about class and
sector. It remains, rather, an essential dimension in the understanding of social, economic, and political
life, shaping critical issues of economic development, social cohesion, identity, and institutions.

Acknowledgements

The work on which this is based was supported by an ESRC Professorial Fellowship, 2013.
 REFERENCES
Alesina, Alberto and Spolaore, Enrico. 2003. The Size of Nations. Cambridge, MA: MIT Press.
Google Scholar Google Preview WorldCat COPAC

Bellamy, Richard and Palumbo, Antonino (eds) 2010. From Government to Governance. London: Ashgate.
Google Scholar Google Preview WorldCat COPAC

Crouch, Colin, Le Galès, Patrick, Trigilia, Carlo, and Voelzkow, Helmut. 2001. Local Production Systems in Europe. Rise or Demise?
Oxford: Oxford University Press.
Google Scholar Google Preview WorldCat COPAC

Dematteis, Giuseppe. 2000. Spatial Images of European Urbanization. In Arnaldo Bagnasco and Patrick Le Galès (eds) Cities in
Contemporary Europe. Cambridge: Cambridge University Press.
Google Scholar Google Preview WorldCat COPAC

Downloaded from https://academic.oup.com/book/9418/chapter/156265914 by Universiteit Leiden - LUMC user on 14 April 2023

Faludi, Andreas. 2006. From European Spatial Development to Territorial Cohesion Policy. Regional Studies 40(6): 667–78.
Google Scholar WorldCat

Ferrera, Maurizio. 2005. The New Boundaries of Welfare. Oxford: Oxford University Press.
Google Scholar Google Preview WorldCat COPAC

Fukuyama, Francis 1992. The End of History and the Last Man. New York: Free Press.
Google Scholar Google Preview WorldCat COPAC

Goetz, Edward.G. 2008. Words Matter: The Importance of Issue-Framing for Urban Planners and the Case of A ordable Housing.
Journal of the American Planning Association 74(2): 222–9.
Google Scholar WorldCat

Herrschel, Tassilio and Newman, Peter. 2002. Governance of Europeʼs City Regions: Planning, Policy and Politics. London: Taylor
and Francis.
Google Scholar Google Preview WorldCat COPAC

p. 134 Keating, Michael. 1988. State and Regional Nationalism: Territorial Politics and the European State. Brighton: Wheatsheaf.
Google Scholar Google Preview WorldCat COPAC

Keating, Michael. 2001. Plurinational Democracy: Stateless Nations in a Post-Sovereignty Era. Oxford: Oxford University Press.
Google Scholar Google Preview WorldCat COPAC

Keating, Michael. 2013. Rescaling the European State: The Making of Territory and the Rise of the Meso. Oxford: Oxford University
Press.
Google Scholar Google Preview WorldCat COPAC

Keating, Michael and Wilson, Alex. 2014. Regions with Regionalism: The Rescaling of Interest Representation in Six European
States. European Journal of Political Research 53(2): 106–24.
Google Scholar WorldCat

Krugman, Paul. 2011. The New Economic Geography, Now Middle Aged. Regional Studies 45(1): 1–7.
Google Scholar WorldCat

Le Galès, Patrick. 2002. European Cities: Social Conflicts and Governance. Oxford: Oxford University Press.
Google Scholar Google Preview WorldCat COPAC

Lovering, John. 1999. Theory Led by Research: The Inadequacies of the New Regionalism. International Journal of Urban and
Regional Research 23(2): 379–95.
Google Scholar WorldCat

Mann, Michael. 1993. The Sources of Social Power, Volume II: The Rise of Classes and Nation-States, 1760–1914. Cambridge:
Cambridge University Press.
Google Scholar Google Preview WorldCat COPAC

Marshall, Alfred. 1920. Principles of Economics. London: Macmillan.

Google Scholar Google Preview WorldCat COPAC
 Ohmae, Kenichi. 1995. The Rise of Regional Economies. New York: Free Press.
Google Scholar Google Preview WorldCat COPAC

Pasquier, Romain. 2004. La capacité politique des regions. Une comparaison France/Espagne. Rennes: Presses universitaires de
Rennes.

Pastori, Giorgio. 1980. Le regioni senza regionalismo. Il Mulino 10(2): 268–83.

Google Scholar WorldCat

Rokkan, Stein. 1980. Territories, Centres, and Peripheries: Toward a Geoethnic- Geoeconomic-Geopolitical Model of
Di erentiation within Western Europe. In Jean Gottman (ed.) Centre and Periphery: Spatial Variations in Politics. Beverly Hills, CA:
Sage.
Google Scholar Google Preview WorldCat COPAC

Rokkan, Stein. 1999. State Formation, Nation-Building and Mass Politics in Europe: The Theory of Stein Rokkan, edited by

Downloaded from https://academic.oup.com/book/9418/chapter/156265914 by Universiteit Leiden - LUMC user on 14 April 2023

Peter Flora, Stein Kuhnle, and Derek Urwin. Oxford: Oxford University Press.
Google Scholar Google Preview WorldCat COPAC

Rokkan, Stein and Urwin, Derek. 1982. Introduction: Centres and Peripheries in Western Europe. In Stein Rokkan and
Derek Urwin (eds) The Politics of Territorial Identity: Studies in European Regionalism. London: Sage.

Rokkan, Stein and Urwin, Derek. 1983. Economy, Territory, Identity: Politics of West European Peripheries. London: Sage.
Google Scholar Google Preview WorldCat COPAC

Rost, Dietmar and Stölting, Erhard. 2007. Introduction. In Dietmar Rost, Erhard Stölting, Tomasz Zaryscki, Paolo Pasi,
Ivan Pedrazzini, and Anna Tucholska (eds) New Regional Identities and Strategic Essentialism: Case Studies from Poland, Italy and
Germany. Münster: LIT.
Google Scholar Google Preview WorldCat COPAC

Sahlins, Peter. 1989. Boundaries: The Making of France and Spain in the Pyrenees. Berkeley: University of California Press.
Google Scholar Google Preview WorldCat COPAC

Sassen, Saskia. 2000. World Cities in a Global Economy, 2nd edition. Thousand Oaks, CA: Sage.
Google Scholar Google Preview WorldCat COPAC

Sassen, Saskia. 2008. Territory, Authority, Rights: From Medieval to Global Assemblages. Princeton, NJ: Princeton University Press.
Google Scholar Google Preview WorldCat COPAC

Savitch, H.V. and Kantor, Paul. 2002. Cities in the International Marketplace. Princeton, NJ: Princeton University Press.
Google Scholar Google Preview WorldCat COPAC

p. 135 Scott, Allen. 1998. Regions and the World Economy: The Coming Shape of Global Production, Competition, and Political Order.
Oxford: Oxford University Press.
Google Scholar Google Preview WorldCat COPAC

Scott, Allen (ed.) 2001. Global City-Regions: Trends, Theory, Policy. Oxford: Oxford University Press.
Google Scholar Google Preview WorldCat COPAC

Stjepanovic, Dejan. 2012. Regions and Territorial Autonomy in Southeastern Europe. In Alain G. Gagnon and Michael Keating
(eds) Political Autonomy and Divided Societies: Imagining Democratic Alternatives in Complex Settings. Basingstoke: Palgrave.
Google Scholar Google Preview WorldCat COPAC

Storper, Michael. 1997. The Regional World: Territorial Development in a Global Economy. New York and London: Guildford Press.
Google Scholar Google Preview WorldCat COPAC

Tarrow, Sidney, Katzenstein, Peter J., and Graziani, Luigi (eds) 1978. Territorial Politics in Industrial Nations. New York and
London: Praeger.
Google Scholar Google Preview WorldCat COPAC

Trigilia, Carlo. 1991. The Paradox of the Region: Economic Regulation and the Representation of Interests. Economy and Society
20(3): 306–27.
Google Scholar WorldCat

Zaricki, Tomasz and Tucholskan, Anna. 2007. Regional Identity in Three Polish Voividships. In Dietmar Rost, Erhard Stölting,
 Tomasz Zaryscki, Paolo Pasi, Ivan Pedrazzini, and Anna Tucholska (eds) New Regional Identities and Strategic Essentialism: Case
p. 136 Studies from Poland, Italy and Germany. Münster: LIT.
Google Scholar Google Preview WorldCat COPAC

Notes

1 This recalls Goetzʼs (2008) argument about governance being a path to government.

Downloaded from https://academic.oup.com/book/9418/chapter/156265914 by Universiteit Leiden - LUMC user on 14 April 2023