From Kapodistrias to Kallikrates: intraregional cooperation and local governments institutional reforms in Eastern Macedonia and Thrace

Abstract

Intraregional cooperation is considered a crucial intangible asset of local communities strengthening local competitive advantages. Equally important, local government's institutional reform is an opportunity for improving intraregional cooperation. This paper assesses the association of intraregional cooperation and local government's institutional reforms in Eastern Macedonia and Thrace. Crucial terms of Kapodistrias and Kallikrates reforms are examined, namely, social capital, local entrepreneurship, local government's functions and intergovernmental cooperation. The methodology is based on an extensive form game between central state and region, and equilibrium is estimated through a closed–type questionnaire as well as by per capita intergovernmental grants. Results clearly demonstrate that central government's dominant strategy was the implementation of Kallikrates reform and that reform success was highly dependent upon social capital and strong local entrepreneurship.