Entrepreneurial regions at a dead end: competition, management by objectives and decentralization less effective, efficient and legitimate

Regions are often viewed like businesses that compete with each other for people, investments and jobs. Private-sector instruments are being adopted in this context without providing evidence for positive management outcomes and clarifying the conditions under which their application is meaningful. Against this background, the German Federal Ministry of Food and Agriculture (BMEL) tested three instruments as part of a pilot programme: the selection of regions eligible for financial assistance through a competitive process, management based on quantifiable targets and the comprehensive decentralization of decision-making, including the administration of those funds that BMEL allocated to the regions. Based on 124 interviews, 61 participant observations and documentary research, we contribute to the literature on rural governance and entrepreneurial regions in showing that these instruments are less effective, efficient and legitimate than New Public Management theory purports. We argue that these deficits do not result essentially from an inappropriate use of the instruments as often proposed but from general problems associated with actor constellations, institutions and the policy context. Therefore, we suggest not to use the instruments tested and recommend instruments focusing on regional needs, mutual learning and democratically legitimized institutions.