local institutions, place-based development

Place-based circular economy transition strategy

VELTHA’s direct experiences and collaborations with regional authorities in SCREEN and REPLACE projects, as well as in the Policy Lab, lead to the acknowledgement of the local institutions as key players in the promotion of the transition toward a circular economy: in fact, these have a deep knowledge of their territories and the availability of European indirect funding to dedicate to the transition. 

The strategical framework to promote the transition toward a circular economy developed within the SCREEN and REPLACE projects, not only embraces the view of institutionalists by considering institution as the sum of the formal (public authority, law, etc) and the informal (social and economic actors, traditions, etc) components but it encompasses the place-based economic development theory.

The latter emerges to contrast the then-dominant economics thinking supporting place-neutral approaches, which apply the same solution in order to solve similar problems in different geographical areas, without accounting for the peculiarities of the context (Chien, 2008). The resulting development model consists of “spatially-blind” strategies, namely policies designed without explicit consideration to space, as the most effective way of generating efficiency, guaranteeing equal opportunities, and improving the lives of individuals wherever they live and work (World Bank 2009). This theoretical background is promoted by the World Bank in its 2009 report, supporting agglomeration and encouraging people mobility: if individuals move where they expect to be better off, this will generate incomes, productivity, knowledge and aggregate growth (World Bank, 2009, p. 77, 135). From this perspective, spatially-blind policies are also “people-based” since these represent the best approach to deliver an improvement in people’s lives while guaranteeing equal access to opportunities. The underlying assumption relies on the mobility as the factor leading to a more even geographical distribution of wealth, resulting in the convergence of lagging areas. 

On the other side, the place-based approach gives centrality to the geographical context, conceived in terms of social, cultural, and institutional characteristics and focusing on the interaction between geography and institutions. As Barca et al outline, at the heart of economic development and success there are the unique aspects of a locality and the ability to create and strengthen a comparative advantage; and, for Storper et al, it’s the capacity of territories to root economic activity in the local social, institutional, and economic fabric at the heart of economic success. 

As presented in the previous article, the proposed strategy fully considers institutions as social constructs including formal and informal components and their relationships, thus these are highly space-specific and these peculiarities must be accounted in order to create a framework capable of untapping and exploiting embedded local potentialities.

As explained in literature by many scholars, a one-size-fits-all top-down approach limits the capability of a territory of expressing its potential for development, that’s why SCREEN and REPLACE strategy relies on the

combined action of formal and informal institutions to allow the transition toward a circular economy: that’s why the framework proposed is bottom-up, requiring the involvement of stakeholders. The strategical framework developed promotes place-specific actions, leveraging on the role of public authorities within an inclusive regional governance system.

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