Beyond mere side-payments? Underappreciated properties of EU policies in fostering local cooperation

Cooperation among economic actors is known to be a way of enhancing productivity in economies characterised by high fragmentation in land and business ownership. Such cooperation is often thwarted by collective action problems that are particularly difficult to resolve in institutionally thin, low-trust settings. How can such problems be overcome? Applying Ostrom’s (1990) concept of “facilitative political regimes”, this paper argues that EU cohesion and agricultural policies can play a crucial role in fostering trust and cooperation among economic actors at the local level, and it examines the extent and mechanisms through which they have done so in a fragmented economy, Greece. The paper draws on qualitative evidence collected through fieldwork in four areas of Greece where specific types of cooperation were observed in the agri-food and tourism sectors, compared to four otherwise similar (matching) cases where such patterns of cooperation failed to occur. In total, the paper relies on 86 semi-structured interviews, documentary evidence and the local press. The paper finds that EU policies have played an enabling role for the emergence of cooperation in Greece, compensating for some deficiencies in the macro-institutional framework. As expected by Ostrom’s account of facilitative political regimes, the EU’s reformed agricultural and cohesion policies have played this role by incentivising stakeholders to define their own rules; by requiring member-states to set up functional, multi-level systems to enforce those rules; and by providing financial support to cover the upfront costs of cooperation. Although a facilitative political regime cannot substantively impose cooperation on local actors, it can reduce the obstacles to achieving productive synergies. By emphasising the underappreciated local effects of the EU’s day-to-day expenditure and regulatory policies as “facilitative political regimes”, the paper contributes to our understanding of the impact of European integration on local economic development, with implications for both theory and policy.