With some notable exceptions the regional development debate in Europe has been dominated by exogenous models to such an extent that ‘development' tends to be conceived as something that is introduced to, or visited upon, less favoured regions (LFRs) from external donors, be they states or firms. Laudable though it was in social welfare terms, this kind of regional policy did little or nothing to stimulate localised learning, innovation and indigenous development within LFRs. Indeed, the latter were considered, and sometimes considered themselves, as passive receptacles for decisions taken elsewhere by others. In some of the most intractable regions - like Sicily and Campania for example - the problems of development are compounded by a corrupt and fatalistic political culture, where people feel themselves to be the powerless victims of circumstance, where local action seems pointless because, as the great novel of the Mezzogiorno put it, everything changes only for ‘things to stay as they are' (Lampedusa, 1960). In these inauspicious circumstances the most important item on the developmental agenda is political reform and institutional renewal.
We raise these issues at the outset because the developmental programmes we focus on in this chapter invariably stand or fall on their ability to build social capital, that is a relational infrastructure for collective action which requires trust, voice, reciprocity and a disposition to collaborate for mutually beneficial ends. This focus on relational assets is part of the ‘institutional turn' in regional development studies, a conceptual shift which has been triggered in part by growing dissatisfaction with dirigisme and neo-liberalism, the classical development repertoires which sought to privilege either state-led or market-driven processes regardless of time, space and milieu. The institutional perspective echews the bloodless categories of ‘state' and ‘market' in favour of a more historically-attuned theoretical approach in which the key issues are the quality of the institutional networks which mediate information exchange and knowledge-creation, the capacity for collective action, the potential for interactive
learning and the efficacy of voice mechanisms (Sabel, 1994; Amin and Thrift, 1995; Storper, 1997; Morgan, 1997; Cooke and Morgan, 1998; Maskell et al, 1998; Amin, 1999).
In the following sections we examine these issues from a number of different vantage points: in section 2 we examine some institutional dimensions of regional development in Europe; section 3 charts the rise of a new paradigm for regional innovation policy in the European Union (EU); section 4 offers a preliminary assessment of this policy in practice, using Wales as a case study; and section 5 concludes by distilling some of the wider lessons of experimental regionalism in Europe.