1 The Role of Sub national Levels of Government in Local Development Dr Edgar Morgenroth Economic & Social Research Institute

2 Introduction Ireland has a very centralised government structure This contrasts with most other developed countries Thus, the functions available to local and particularly regional levels of government are very limited Can they make any difference?

3 Globalisation Globalisation means that the regional and local level is becoming more important! Contradiction?? Increased competition e.g. on taxes means that there is convergence in some of the key macroeconomic locational factors.

4 Corporate Tax Rates Source: Devereux, Griffith and Klemm, 2002

5 Globalisation More and more firms are becoming multinational – do not automatically locate at home Firms are selective in their locations: - Labour market (highly educated workforce) - Services (e.g. water, waste, communications) - Transport (access to markets and supply) - Other firms (agglomeration economies)

6 Implication Many of these factors are either directly or indirectly influenced by local and regional government. But what is local or regional? Are the functions properly allocated?

7 Implications – the Region Almost half of the resident workers of the Mid- East commute to Dublin There is also some commuting in the other direction (e.g. to Leixlip) The Greater Dublin Region extends to the Mid- East and beond!!

8 Implications - Institutions Institutions should reflect the extent of the region (co-ordination failures??) There should be some rebalancing of responsibilities between the different layers of government The Regional Authorities should be given more functions (e.g. Water, sewerage, solid waste, transport).

9 Implications - Policy The importance of the regions should be reflected more strongly in policy NDP has two Regional OP’s – token gesture in that together they account for just 12.5% of the NDP expenditure Ideally the whole NDP should have a regional perspective – on the absence of this is there a role for more than two regional OP’s??