ABSTRACT
There is a lack of joint collaborative action and trust between administrative levels. Effi-
cient partnership would require relevant institutional set-up but currently it is scanty at the
county level and is hampered by disagreements between power groups locally often
dictated by national party offices. A combination of centralized state agencies and tiny
municipalities are, according to several state institutions (e.g. National Audit Office,
Chancellor of Justice) in the interest for the ruling coalition. The same power-“trap”
applies in municipalities where a trend of authoritarianism can be followed: whereas in
67% of municipalities with less than 1500 inhabitants, the biggest party gathered over
50% of votes in the local council in 2005 (Sootla & Kattai, 2010), by 2009 this number
stood at 73% (Sootla, 2011). This confirms Barca’s argument (2009, p. 21): “These
local elites /. . ./ can often choose the economic institutions that best suit their own inter-
ests, in doing so, acting as ‘rent-seekers’, exploiting their power to extract a return way
beyond their contribution to value-added”. Both local and national elites have been inter-
ested in the reduction of power at the regional level. A free rein in the utilization of ERDF
resources enabled the central government to replace investments previously funded
through tax revenues and to reduce personal income tax rate from 26% to 21%.
