DEMOCRACY, SUBSIDIARITY AND MULTILEVEL GOVERNANCE IN EUROPE

University of Szeged − Faculty of Law and Political Sciences − International and Regional Studies Institute
International Relations (MA)

Part 3

SUBSIDIARITY AND MULTILEVEL GOVERNANCE

To understand what multilevel governance (MLG) covers or may cover in the 21st century,
first, we have to figure out the possible meanings of its two component parts: multilevel and
governance. Multilevel governance is usually discussed among the EU integration theories,
rather than governance theories, even though a flexible and well-functional governance model
should take into account the main features of a multilevel system, too, in other words
political-cultural hierarchies in-between police regimes and systems, as well as vertically
disperse governance and management levels of public administration at national, regional,
local and transnational level.

Governance as such refers to policymaking and implementation of activities backed by the

shared goals of citizens and different organizations (both private and public ones), who may
or may not have formal authority. By contrast, government occurs when those with legally
and formally derived authority exercise political powers. According to
Graham−Amos−Plumptre governance is defined “as the interactions among structures,
processes and traditions that determine how power and responsibilities are exercised, how
decisions are taken, and how citizens or other stakeholders have their say” (Governance
Principles for Protected Areas in the 21st Century, 2003, p. 2). Herbert H. Werlin looks at
governance as an integrated system between the soft form and the hard form of political
power and decentralization of this power by various methods; Farazmand highlights that
“local regional and cultural distinctiveness demands application of governance models that
are suitable to local conditions” (Governance in the age of globalization: challenges and
opportunities for South and South-east Asia, 2013, p. 361). These determinations would also
fit the concept of MLG in general.

In order to conceptualize governance as a phenomenon Ferrel Heady provides three

governance theories: 1) organizational, 2) cultural, and 3) structural-functional theory. The
first one is based on Max Weber’s concept of rationality and bureaucracy, looking at
governance as a finely ordered system of subordination and superordination, still the third one
argues that the success of a political system depends on political structures’ capacity to
perform various actions (planning, rule-making, implementation, etc.). The cultural theory is

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 DEMOCRACY, SUBSIDIARITY AND MULTILEVEL GOVERNANCE IN EUROPE
University of Szeged − Faculty of Law and Political Sciences − International and Regional Studies Institute
International Relations (MA)

the most abstract one that emphasizes the ‘values’ of a semifeudalistic system of government,
like discouragement of individualism, social rather than legal sanctions, customary rather than
contractual relations, emphasis on authority by birth rather than merit, etc. (Public
Administration: A Comparative Perspective, Sixth Edition, 2001). Heady’s organizational and
structural-functional theory might be applicable on MLG, because MLG is a system of
subordination and superordination in which the structural parts perform various functions in
accordance with their capacity and other principles such as subsidiarity, proportionality,
efficiency, legitimacy, etc.

Like governance as such, MLG does not have a generally accepted definition. In literature and
practice it is referred to as multitiered governance, polycentric and multi-perspectival
governance, FOCJ (functional-overlapping-competing jurisdictions), fragmegration
(combination of fragmentation and integration), consortio, condominio, etc., but for purposes
of this course we determine MLG as dispersion of authority away from central government:
upwards to supranational
level, downwards to
subnational jurisdiction, and
sideways to public/private
networks. MLG covers 1)
traditional cooperation and
division of jurisdictions
among public actors at
different levels of
governance (supranational /
international, national,
subnational, local), 2)
informal or semiformal cooperation among representatives of civil sector, including
international, national and regional NGO-s, federations, associations, offices, local institutions
and interest groups, 3) partnership among international investors, national and regional
business and local enterprises, 4) horizontal, inter-sectorial collaboration between public and
private sector, and civil society. The last option means cooperation between different sectors
at the same stage and/or at different stages (e.g. national NGOs and regional government
offices, local institutions and local enterprises).

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 DEMOCRACY, SUBSIDIARITY AND MULTILEVEL GOVERNANCE IN EUROPE
University of Szeged − Faculty of Law and Political Sciences − International and Regional Studies Institute
International Relations (MA)

In this course we study primarily the vertical dimension of MLG regarding the possible ways
of dispersion of authority from central government and/or supranational entity downwards to
subnational jurisdictions.

An effective MLG assumes decentralization and application of principle of subsidiarity both

de jure and de facto. Historically decentralization of governance dominated, strong
centralized governments emerged only in the XVII century in form of absolutist monarchies.
In modern liberal democratic states, from the XIX century concept of local self-governance
has developed on two tracks and resulted the so-called English and the French model of local
government. In the English model there are two separate independent systems: local
authorities have a number of responsibilities and the same work independently, without any
interference of central and transferring their operations to the local level so that they do not
possess the powers of supervision of local authorities. On the other side, in France the state
system has been strongly centralized for a long time, local government almost did not exist
(until 1982) and exercised quite narrow scope of work in its own jurisdiction.

Centralization and decentralization are not “either-or” conditions. Although decentralization

can help cut complex bureaucratic procedures and it can increase national government
officials’ sensitivity to local conditions and needs not all functions can or should be financed
and managed in a decentralized fashion. Under centralization the concentration of
management and decision-making power is at the top of an organization’s hierarchy, the
important decisions are taken by the highest level, by the central authority. By contrast,
decentralization is the transfer of authority and responsibility for public functions from the
central government to subordinate or quasi-independent government organizations. Its types
in political sense include political, administrative and fiscal decentralization. In economic
sense there is one more type, the so-called market or economic decentralization that shifts
responsibility for functions from the public to the private sector through privatization and
deregulation.

Political decentralization characterizes the mentioned English model which aims to give
citizens or their elected representatives more power in public decision-making, more
influence in the formulation and implementation of policies. Administrative decentralization
(present in the French model) seeks to redistribute authority, responsibility and financial
resources for providing public services among different levels of government, but central
usually retains the ultimate control (deconcentration and delegation are its major forms). And
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University of Szeged − Faculty of Law and Political Sciences − International and Regional Studies Institute
International Relations (MA)

finally, fiscal decentralization can take many forms, as well, such as 1) self-financing, 2) co-
financing or co-production arrangements, 3) intergovernmental transfers, 4) municipal
borrowing and the mobilization of either national or local government resources through loan
guarantees, etc. The different types of decentralization are not independent of each other: one
of the forms of fiscal decentralization is usually associated with the other two types of
decentralization (political and administrative), political and administrative decentralization
might be supplementary solutions within one system/state, regarding the concrete social field
in which decision making is going to be decentralized, etc.

Did you know?

Devolution is a type decentralization (by some opinions an administrative one that underlies most political
decentralization) in which the central gives more, even normative power to the local administration, but the
devolved powers of the subnational authority ultimately reside in central government, thus the state remains,
de jure, a unitary state. The best-known representative of this process is the United Kingdom.

As it was mentioned before, MLG is usually discussed among the European integration
theories which are aimed to explain the process and outcome of integration in Europe. MLG
is a newer integration theory that has emerged, according to the two key writers Liesbet
Hooghe and Gary Mark, because in recent years authority and sovereignty has moved away
from national governments in Europe, not just to the supranational level with the EU, but also
to subnational levels. Because other theories of European integration disregard the significant
numbers of different actors from all of the different levels of governance in Europe, MLG has
become an independent theory along the traditional ones, as neo-functionalism,
intergovernmentalism or institutionalism. Hogghe and Marks classified the different types of
MLG by answering on questions: how different jurisdictions interact with each other
(hierarchy, asymmetrical or mutual dependence, relative independence); are jurisdictions
general-purpose or specialized, stable or fluctuating; are jurisdictional territories exclusive or
overlapping? Type I governance is basically federalism: power sharing among limited number
of governments operating at just few levels; still Type II governance is an alternative vision of
MLG in which number of jurisdictions (that are rather functionally specific that multitask) is
vast, operating at diverse territorial scales. Although Type I is not limited to federalism and
traditional intergovernmental relations, government continue to be the central actor, while
transnational movements, public-private partnerships, corporations also play important, but
minor role. Notwithstanding the recent trends of regionalization, devolution and

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 DEMOCRACY, SUBSIDIARITY AND MULTILEVEL GOVERNANCE IN EUROPE
University of Szeged − Faculty of Law and Political Sciences − International and Regional Studies Institute
International Relations (MA)

decentralization in the EU, dispersion of authority in Spain, Italy, the UK, Belgium or France
follows the logic of Type I, and not Type II. Traditionally the EU countries are the main
representatives of this type of MLG. In case of Type II there is no dominant actor or class,
rather a wide range of private and public actors (both domestic and international) compete or
collaborate in shifting coalition. This model is present both in some Western European
countries and in the USA, providing solutions in MGL context for private-public,
international-national and transnational cooperation, especially in frontier regions of
bordering states. It may well be prevalent at the local level.

TYPE I GOVERNANCE TYPE II GOVERNANCE

Multitask jurisdictions Task-specific jurisdictions

Jurisdictions with mutually
exclusive territorial boundaries
Limited number of jurisdictions and Large number of jurisdictions
jurisdictional levels
Quasi-permanent system
Characteristics
Limited costs of coordination
because of a “shadow of hierarchy”
Usually single court system
Institutional changes are difficult
Territorially overlapping
jurisdictions
Many jurisdictional levels
Flexible system
Minimalizing interjurisdictional
coordination
Low level of distributional
conflict
Ad-hoc, policy specific
architecture

Table 1. Systematic characteristics of the two types of governance in the Hogghe-Marks theory of MLG

Introduction of MLG may be justified for the same reasons as decentralization: more
democracy, proper answers for local specific problems and swift reactions on
local/subnational needs because of involvement citizens (or their representatives) in decision
making process at lower level. In Europe, within the framework of the CoE the first step
toward more decentralization at subnational level was made by organizing a ‘simple’
conference of 124 local elected representatives of 13 European countries in Strasbourg in
1957. The now so-called the Congress of Local and Regional Authorities has become one of
the principal institutions of the CoE comprising a Chamber of Regions and a Chamber of
Local Authorities. Although it has primarily consultative functions the Congress prepares the
country reports on the standing of local and regional democracy, ensures that the principles of

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 DEMOCRACY, SUBSIDIARITY AND MULTILEVEL GOVERNANCE IN EUROPE
University of Szeged − Faculty of Law and Political Sciences − International and Regional Studies Institute
International Relations (MA)

the CoE documents in this field are properly implemented, participates in local/regional
elections as independent observer, etc.

Did you know?

The word ‘subsidiarity’ is derived from the latin term ‘subsidium’ which means ‘to help or to aid’. Originally,
subsidiarity was nurtured in its development in Catholic social theory not only as a social principle, but also a
political and governmental principle. Pope Pius XI on 15 May 1931, in his Encyclical Letter, Quadragesimo
Anno, titled ‘The Reconstruction of the Social Order’, advocated for a social hierarchy starting with the
individual, and progressing upwards to the community, to organizations and corporations, and finally the
State. He recommended action at an individual or lower level, wherever possible, as being preferable to
action at a higher level, such as at a community or corporate level.

In 1985 the CoE adopted the European Charter of Local Self-Government (ECLSG), a
cornerstone treaty for local democracy, signed by all 47 member states of the CoE. The
Charter was prepared by the Congress as a result of a long-lasting process that has begun even
before the formation of the Congress, in 1953, by adoption of a political declaration framed in
the European Charter of Municipal Liberties. Today the ECLSG is referred to as the Magna
Carta for local communities that establishes and protects the rights of local authorities and
defines the main elements of local democracy. Although the Congress has drafted a similar
text on regional authorities, as well, in order to begin regionalization or reform the existing
local/regional structures, the document has remained only a non-binding Reference
Framework up to this day. The Reference Framework of Regional Democracy based on the
so-called Helsinki principles from 2002 and the draft European Charter for Regional
Democracy, follows the structural logic of the ECLSG, but it puts heavier emphasize on the
principle of subsidiarity, territorial cohesion and (federal) loyalty. The Reference Framework
regulates some issues in more details, than the ECLSG: provides a definition on regional
authorities, expressly relies on the subsidiarity principles concerning the relationship between
regional and other entities, enumerates the concrete fields of regional competences (regional
culture, economic development, education and training facilities, social welfare and public
health, protection of natural resources and sustainable development, etc.), explicitly mentions
financial/economic solidarity with under developed regions, on one side, and political
solidarity with national government, on other side, contains a separate provision on good
governance, etc. Henceforth, in the next table, this analogy between the two mentioned
documents is going to be illustrated.

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University of Szeged − Faculty of Law and Political Sciences − International and Regional Studies Institute
EUROPEAN CHARTER OF
LOCAL SELF-GOVERNMENT
Legal foundation in domestic legislation and/or constitution
Definition of
-
subnational entity
Local self-government denotes the right
and the ability of local authorities, within
the limits of the law, to regulate and
Concept manage a substantial share of public affairs
under their own responsibility and in the
interests of the local population. (Article
3/1)
shall be prescribed by the constitution or
by national law,
normally be full and exclusive,
they may not be undermined or limited by
another authority except as
provided for by the law,
shall be consulted, insofar as possible, in
due time and in an appropriate
way in the planning and decision-
Scope of powers making processes for all matters
which concern them directly
powers shall be exercised by councils or
assemblies composed of members
freely elected by secret ballot,
may possess executive organs responsible
Bodies to them (assemblies)
shall be able to determine their own
Administrative internal administrative structures,
structure without prejudice to more general
statutory provisions
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International Relations (MA)
REFERENCE FRAMEWORK FOR
REGIONAL DEMOCRACY
in domestic legislation and/or constitution
Regional authorities are territorial
authorities between the central government
and local authorities. This does not
necessarily imply a hierarchical
relationship between regional and local
authorities. (Article 1/1)
Regional self-government denotes the
legal competence and the ability of
regional authorities, within the limits of
the constitution and the law, to regulate
and manage a share of public affairs under
their own responsibility, in the interests of
the regional population and in accordance
with the principle of subsidiarity. (Article
2/1)
shall be defined by the constitution, the
statutes of the region or by
national law,
adoption and implementation of policies
specific to the region,
decision-making powers may include
legislative powers,
when powers are delegated to regional
authorities, they shall be allowed
discretion to adapt the exercise
thereof to regional conditions,
within the framework set out by
the constitution and/or the law,
be involved in state decision-making
affecting their competences,
shall be represented or consulted, with
regard to international
negotiations of the state
shall have a representative assembly,
elected through direct, free and
secret suffrage
executive functions, where they are not
exercised directly by the
representative body, shall be
entrusted to a person or a body
answerable to it
shall freely determine the internal
structures of their administrative
system and their bodies, within
the framework defined by law
 DEMOCRACY, SUBSIDIARITY AND MULTILEVEL GOVERNANCE IN EUROPE
University of Szeged − Faculty of Law and Political Sciences − International and Regional Studies Institute
not mentioned by name, but defined:
Public responsibilities shall generally be
exercised, in preference, by those
authorities which are closest to the citizen.
Subsidiarity Allocation of responsibility to another
principle authority should weigh up the extent and
nature of the task and requirements of
efficiency and economy. (Article 4/3)
assemblies of citizens, referendums or any
other form of direct citizen
Direct democracy participation where it is permitted
by statute
may only be exercised according to such
procedures and in such cases as
are provided for by the
constitution or by statute,
shall normally aim only at ensuring
compliance with the law and with
constitutional principles,
may be exercised with regard to
Administrative expediency by higher-level
supervision authorities in respect of tasks the
execution of which is delegated to
local authorities,
shall be exercised in such a way as to
ensure that the intervention of the
controlling authority is kept in
proportion to the importance of
the interests which it is intended
to protect
Good governance - accountability,
co-operate and, within the framework of
the law, to form consortia with
other local authorities,
belong to an association for the protection
Right to associate and promotion of their common
interests and to belong to an
international association of local
authorities
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International Relations (MA)
mentioned in the Introduction by name,
and defined in a footnote,
regional self-government denotes the legal
competence and the ability of
regional authorities … in
accordance with the principle of
subsidiarity,
the relationship between regional
authorities and other sub-national
territorial authorities shall be
governed by the principle of
subsidiarity.
citizens’ assemblies, referendums or any
other form of direct citizen
participation, where it is permitted
by law
only according to such procedures and in
such cases as are provided for by
constitutional or legislative
provisions,
shall normally only aim at ensuring their
compliance with the law,
may also include an appraisal of
expediency,
shall be exercised ex post facto and any
measures taken must be
proportionate to the importance of
the interests which it is intended
to protect,
national or federal authorities’ power of
temporary substitution to act in
lieu of regional authority organs
may be exercised only in
exceptional cases
shall comply with the principles of
informed decision-making and
evaluation of decisions made, as
well as pursue aims of flexibility,
openness, transparency,
participation and public
performance of public tasks at regional
level shall comply with the
principles of good administration
and good quality of public
services.
may be members of international
organizations of regional
authorities,
shall have the right to be involved in or to
be represented in the activities of
the European institutions,
may co-operate with territorial authorities
of other countries
 DEMOCRACY, SUBSIDIARITY AND MULTILEVEL GOVERNANCE IN EUROPE
University of Szeged − Faculty of Law and Political Sciences − International and Regional Studies Institute
financial resources of their own, of which
they may dispose freely within
the framework of their powers,
shall derive from local taxes and charges
of which, within the limits of
statute, they have the power to
determine the rate,
grants to local authorities shall not be
earmarked for the financing of
Financial resources
specific projects,
for the purpose of borrowing for capital
investment, local authorities shall
have access to the national capital
market within the limits of the
law
protection of financially weaker local
authorities
(financial equalization procedures)
Solidarity
Relations with
other subnational - the limits of the law, define their
entities
right of recourse to a judicial remedy,
changes in local authority boundaries shall
Legal protection not be made without prior
consultation of the local
communities concerned
Table 2. Comparison between the ECLSG and the Reference Framework for Regional Democracy
In the EU regional questions were put on political agenda by the adoption of the Maastricht
Treaty (1992) and setting up the Committee of the Regions in 1994. The original idea was to
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International Relations (MA)
in the implementation of their own
competences, regional authorities
shall be able to rely in particular
on resources of their own at
which they shall be able to
dispose freely,
regional taxes, other revenues decided by
regional authorities, fixed shares
of state taxes, non-earmarked
funding from the state and
constituent territorial authorities,
in accordance with the law,
for the purpose of borrowing for capital
investment, regional authorities
shall have access to the capital
market within the limits of the
law.
the relationship between regional
authorities and central
government shall be based on the
principle of mutual loyalty and
equal dignity and shall entail
respect for the unity, sovereignty
and territorial integrity of the
state,
shall contribute to the central
government’s economic and
social cohesion objectives and to
central government activities
aimed at achieving comparable
living conditions and balanced
development throughout the
national territory, in a spirit of
solidarity between regional
authorities,
protection of financially weaker regional
authorities shall be ensured
through financial equalization
procedures.
Regional authorities and other sub-national
territorial authorities may, within
mutual relationship and they may
co-operate with each other.
right of recourse to a judicial remedy,
regional boundaries shall not be altered
without prior consultation of the
region(s) concerned
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University of Szeged − Faculty of Law and Political Sciences − International and Regional Studies Institute
International Relations (MA)

form a fully-fledged institution, representing the ‘third level’ of European decision making,
but finally the Committee has become a merely ‘advisory body’. Notwithstanding its soft
constitutional status among the EU bodies and institutions, the Committee has succeeded to
reveal the importance of local/regional authorities in the EU’s political, economic and social
processes, among others, by launching the subsidiarity monitoring network and adopting the
Charter for Multilevel Governance.

Did you know?

The principle of subsidiarity was formally enshrined by the Maastricht Treaty, and it has been incorporated
into environmental policy by the Single European Act (1987), however, albeit without referring to it
explicitly as such. In its judgment of 21 February 1995 (T-29/92), the Court of First Instance of the European
Communities ruled that the principle of subsidiarity was not a general principle of law, against which the
legality of Community action should have been tested, prior to the entry into force of the TEU. The Treaty of
Amsterdam annexed to the EC Treaty a ‘Protocol on the application of the principles of subsidiarity and
proportionality’. The overall approach to the application of the principle of subsidiarity agreed at the 1992
European Council in Edinburgh thus became legally binding and subject to judicial review via the protocol on
subsidiarity.

The principle of subsidiarity and MLG have become visible to wider public due the EU.
According to the Article 5 of the Treaty on EU, “[u]nder the principle of subsidiarity, in areas
which do not fall within its exclusive competence, the Union shall act only if and in so far as
the objectives of the proposed action cannot be sufficiently achieved by the Member States,
either at central level or at regional and local level, but can rather, by reason of the scale or
effects of the proposed action, be better achieved at Union level.” But the content and form of
Union action shall not exceed what is necessary to achieve the objectives of the Treaties. So,
in the EU context subsidiarity and proportionality always go together. Similar approach
applies in the ECLSG, as well, but in that case allocation of responsibility to another authority
should weigh up requirements of efficiency and economy.

The original aim was to guarantee a degree of independence for a lower authority in relation
to a higher body, or in other words, subsidiarity has become the governing principle of every
MLG system, especially in the EU. In the recent years the EU institutions have tried to find
ways to better involve regional and local authorities in EU policy making and delivery, bridge
the gaps and increase the potential of a MLG culture throughout the EU policy cycle, and
build up networks between political bodies and administrations from the local to the European
levels and vice-versa, including different models of transnational cooperation.

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 DEMOCRACY, SUBSIDIARITY AND MULTILEVEL GOVERNANCE IN EUROPE
University of Szeged − Faculty of Law and Political Sciences − International and Regional Studies Institute
International Relations (MA)

Literature review and related readings

• Council of Europe, European Charter for Local Self-Government, ETS. 122, 1985.
• Council of Europe Reference Framework for Regional Democracy, 2009.
• European Parliament, Fact Sheets on the European Union – 2019, The Principle of
Subsidiarity. Available at: http://www.europarl.europa.eu/factsheets/en/home
• Evans, Michelle Dr (2013) “The Principle of Subsidiarity as a Social and Political
Principle in Catholic Social Teaching,” Solidarity: The Journal of Catholic Social
Thought and Secular Ethics, Vol. 3: Iss. 1, Article 4. Available at:
https://researchonline.nd.edu.au/solidarity/vol3/iss1/4
• Hooghe, Liesbet and Marks, Gary, “Types of Multi-Level Governance,” European
Integration online Papers (EIoP), Vol. 5, No. 11, October 12, 2001. Available at
SSRN: https://ssrn.com/abstract=302786 or http://dx.doi.org/10.2139/ssrn.302786
• John Graham Bruce Amos Tim Plumptre, Governance Principles for Protected Areas
in the 21st Century, The Fifth World Parks Congress Durban, South Africa, Institute
on Governance, 2003.
• Kirchmair, Lando, “International Law and Public Administration: The European
Charter of Local Self-Government,” Pro Publico Bono 3 (2015): 124−135.
• Mohammed Asaduzzaman, Petri Virtanen, “Governance Theories and Models,” In:
Global Encyclopedia of Public Administration, Public Policy, and Governance, A.
Farazmand (ed.) Springer International Publishing Switzerland, 2016.

Self-check questions and topics for discussion

• What is the core argument for MGL, and what are the benefits and the obstacles to
an effective MLG system?
• Provide pros and cons of a centralized and a (politically) decentralized system!
Whether decentralization in all areas is the best solution for a country’s benefit?
• According to the Hooghe-Marks theory of MLG there are two types of governance.
Compare them with the existing models you already know!
• Why is the European Charter for Local Self-Government Magna Carta for local
communities? What are the experiences regarding its implementation in national
laws?
• Enumerate the conceptual differences between the two CoE documents on local
and regional self-government!
• Which are the principles of good governance, especially in MLG context?
• What are the methods to increase a MLG culture in Europe?

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