Loughlin, John. "Reconfiguring the State: Trends in Territorial Governance in European States". Regional and Federal Studies, Vol.17, No.4 (2007): 385-403.

Loughlin, John. "Reconfiguring the State: Trends in Territorial Governance in European States". Regional and Federal Studies, Vol.17, No.4 (2007): 385-403.

• Multi-level governance theory argues that regional policy-making -- specifically that of the EU -- is composed of two stages: an intergovernmental formulation stage where nation-states divide the EU budget amongst themselves based on national interests and relative power; and a neo-functionalist implementation phase where international, national, regional, and local actors all cooperate on EU policy (386).
• Since the 1970s there has been enormous economic change in the West. The Fordist system of manufacturing, with a focus on heavy industry, has collapsed in the West and migrated to Far Eastern countries. This was brought about by the globalization of capital following the collapse of the Bretton-Woods system (386-387).
• The nation-state is a modern invention, dating from around the French Revolution, based on the idea that 'nations' ought to be self-governing and that states should be based on national groups. During the same period, industrial capitalism developed and imperial expansion occurred. These trends only experienced a major transformation in Europe after the brutality of the Second World War (387).
• The experience of the Great Depression and the Second World War lead European states to make the transition from 'disorganized capitalism' to 'organized capitalism', resulting in the Welfare State. This transition changed the concept of citizenship from negative freedoms to positive rights (387).
• Although several variations exist, all welfare states have certain traits in common: they were built based on the wealth of the post-war economic boom and followed that economic expansion, they believe in equitable development between individuals and across regions, employ Keynesian economics to support state intervention in society and industry, and that these notions enjoyed broad multi-party support (388).
• Welfare states follow certain patterns of relations between central and local government. They are intensely centralized with a focus on redistribution to advance all regions and communities to a national standard. Under this system, regional government were responsible for implementing national policy, not for creating policy themselves (389-390).
• Opposition to the welfare state originally came from the 'New Left' movement, which blamed the welfare state for artificial stifle revolution and human individuality through excessive bureaucracy. They, and others, also critiqued its oppressive social norms (388-389).
• The main challenge to the welfare state, however, came from the 'New Right' movement in political science and economics, who called for a retreat of the state and an expansion of individual freedom. Instead of the state, the New Right argued for greater reliance of free markets, eventually producing the dominant concept of 'Neoliberalism' (389).
• During the late 1960s and early 1970s, the welfare state underwent a series of crises beginning with mass deficits and worsening during the oil crises of 1973 and 1979. The decline of industrial capitalism and Fordist production in the West contributed to the overthrow the system as the Bretton-Woods system collapsed and the West reinvented itself as a service economy (390).
• The election of Margaret Thatcher in 1979 and Ronald Reagan in 1980 led to adoption of Neoliberal policies in major countries, leading to massive deregulation, budget cutting, state retreat, and a return to economic inequality as an acceptably method of encouraging change. Neoliberal change expanded to other industrialized state, as well as Latin America and later some former Soviet states (390-391).
• The conceptualization of the state has changed fundamentally in the Neoliberal era,  with the responsibility of the state now longer being societal change, but instead stimulating the pre-existing forces of market and society. Public administration has been reimagined as a form of business where costs are reduced (391).
• Many left-wing parties in Europe have had to change their policies and priorities in line with neoliberal realities, creating a number of 'Third Way' parties who have tried to maintain some commitment to the principles of the welfare state while still using Neoliberal economics (391-392).
• The lack of emphasis on regional equality in the Neoliberal model implies decentralization where a number of political and economic responsibilities are devolved to regional or local government on the logic that differentiated responsibilities will lead to increased efficiency through competition (393).
• Earlier attempts at decentralization within the welfare state refer to administrative decentralization that eased the excessive pressure on the central government, but Neoliberalism also advocates political decentralization, where regional and local government are actually given decision-making authority over policies (393).
• The trend of political decentralization was encouraged by the Council of Europe, which began measuring the strength of local-level democracy in Europe, and the EU, which changed its budget to allocate funds directly to regional government bodies (394-395).
• Decentralization in Europe usually does not involve fiscal decentralization, meaning that local governments are given new responsibilities without the additional resources to fulfill these roles. This often occurs at the behest of the EU and under the guise of increasing local democracy (398).
• Many countries in Europe feature decentralized systems devoid of administrative hierarchy. In France, the UK, and the Netherlands, regional governments do not have direct control over local governments, forcing the two to work inside of a voluntary partnership rather than a hierarchy (399).
• "Although neither the nation-state nor the Welfare State has been ‘abolished’, there have been significant changes with regard to their nature, role and functions, particularly with regard to their internal forms of territorial organization. There has been a significant strengthening of regional and local autonomy" (400).