Blockchain Papers

Kaloyan Stoychev

This paper analyzes the institutional constraints on the effective implementation of the LEADER/Community-Led Local Development (CLLD) approach in Bulgaria and proposes a concrete institutional model for overcoming them. The study proceeds from the premise that the approach holds substantial potential as a territorially oriented instrument for local development, but that its effectiveness is limited by a structural contradiction between the decentralized conceptual logic of LEADER/CLLD and the centralized institutional framework of its national implementation in Bulgaria. The analysis shows that the current distribution of functions between the Ministry of Agriculture and Food, as Managing Authority, and the State Fund “Agriculture” – Paying Agency creates a structural asymmetry, whose measurable consequences are systemic delays in contracting and disbursing project funds, limited procedural flexibility, and insufficient specialized administrative capacity. As an institutional response to these deficits, the paper proposes the creation of a specialized executive agency under the Rural Development Programme, with functions covering the administrative management of projects, methodological support for Local Action Groups (LAGs), monitoring and evaluation, and coordination of multi-fund financing. Two options for the institutional positioning of the agency are examined — as an independent structure under the Ministry, or as a specialized unit within the existing administration — and these are compared with established European practices (Austria, Germany, Ireland). The study concludes that overcoming the structural contradiction requires not a change in the conceptual philosophy of the approach, but a targeted institutional reconfiguration aimed at increasing the autonomy of Local Action Groups.

Marzanna Poniatowicz, Paweł Konopka, Agnieszka Piekutowska

The paper refers to the twelve principles of fiscal decentralization, proposed by Roy Bahl (Bahl’s Rules for Fiscal Decentralization – BRfd), with special emphasis on the first Bahl’s rule (regarding the comprehensiveness of the fiscal decentralization, CSfd). The purpose of the research was to estimate the level of CSfd in OECD countries. Thus, the objective was to construct a synthetic measure of the first Bahl’s rule (CSfd) which constitutes the value added of this research. The goal was also to rank countries as the main idea was to advance empirical assessment in the field of fiscal federalism and to provide practical guidance for shaping public finance policy including policies on the collection of public revenues and the allocation of public expenditure. This directly corresponds to the research problem of the very limited number of tools available for measuring fiscal decentralization. Based on Hellwig’s method of linear ordering two rankings were developed using the Euclidean metric and the Mahalanobis metric. The results indicate that the most comprehensive fiscal decentralisation systems in 2022 were found in the Slovak Republic, Switzerland and Canada (ranking based on the Mahalanobis metric). When the Euclidean metric is used, Switzerland emerges as the leader, followed by Spain and Austria. First published online 4 June 2026

Sara B

The European Union faces a structural confidence crisis in 2026, characterised by stagnating Eurozone growth (below 1.2%), deepening North–South fiscal tensions, East–West security divisions, and a fundamental redefinition of the transatlantic security relationship. Existing centralised coordination mechanisms have proven too slow and insufficiently adaptive to manage these simultaneous pressures. This paper introduces the European Octopus Model — a strategic geopolitical framework that reconceives EU governance through four geographically specialised "legs" (South, East, North, West), each leveraging its proximate regional environment, coordinated by a single AI-powered digital governance platform: the European Octopus Coordination Council (EOCC). The model adopts a Direct Benefit First principle (70% of project returns to the executing state; 30% to a collective fund), supported by a self-financing Hybrid Crisis Reserve Fund and a network of four Strategic Industrial Cities operating as Special Economic Zones. The framework is grounded in the Global Reflection Economic Theory (GRE), which treats institutional trust as a measurable economic asset and positions citizen co-production — rather than top-down institutional imposition — as the primary driver of sustainable productivity. Quantitative projections, drawing on IMF, IEA, ECB, and Eurostat baselines, suggest that full model implementation could raise Eurozone GDP growth to 1.7–1.9% by 2027 and 2.0–2.3% by 2028, against a baseline of 1.0–1.2%. The paper further provides a three-scenario comparative analysis, a 2026–2028 implementation roadmap, and an honest assessment of governance transition risks. "This framework builds upon and complements my previous geopolitical analysis developed in 'Europe in the Dark Decade' (Sara B., 2025)"

Elena Rusu Cigu

This paper explores the relationship between fiscal decentralization, green finance, and the digital economy in driving sustainable development, using a balanced cross-country panel dataset spanning 2014–2022, for 29 European countries. Employing dynamic panel estimation techniques, including system generalized method of moments (GMM), the research investigates how fiscal decentralization, green finance, and the digital economy (each of them individually and through interaction mechanisms), dynamically shape sustainable development performance in the presence of endogeneity and temporal persistence. The findings reveal strong inertia in sustainable development, which depends on its previous level. Fiscal decentralization has complex effects: revenue autonomy supports sustainability, whereas expenditure autonomy may undermine it, suggesting differences in how resources are used efficiently at the local versus central levels. Digitalization acts as a catalyst, boosting the effectiveness of environmental taxes and enhancing local spending outcomes. However, if fiscal administrations are not digitally integrated, digitalization may weaken the benefits of decentralized revenues. This study advances the literature by integrating fiscal, financial, and digital views, providing new insights into policy coordination.

Olha Pikhotska

The article presents a comprehensive study of the transformation of intergovernmental fiscal relations in Ukraine under the dual influence of the fiscal decentralization reform of 2014–2020 and the unprecedented wartime shock of 2022–2025, alongside the emergence of a donor-conditional post-war reconstruction architecture. The author delineates the basic categories: intergovernmental fiscal relations, fiscal federalism, fiscal and budgetary decentralization. The author substantiates the thesis that the Ukrainian reform implemented predominantly budgetary rather than fiscal decentralization due to the dominance of shared taxes without local control over the base and rate. The impact of Law No. 3428-IX, which redirected the «military» personal income tax to the state budget from 1 October 2023, and the freezing of the reverse subvention is analyzed as an institutional precedent that distorts horizontal equalization. Growing territorial disparities are identified between the capital (39 % of municipal-level revenues in 2024), western agglomerations, and frontline communities that lost up to 45 % of revenues. The article reveals the risks of a «two-channel» community financing system through the Ukraine Facility of 50 billion euros for 2024–2027, the World Bank SURGE programme, and the European Investment Bank instruments. The author proposes a hybrid model of transformation of intergovernmental fiscal relations involving a differentiated PIT allocation rate depending on the status of the community, the replacement of the reverse subvention with a territorial solidarity fund based on a multifactor distribution formula, and an integrated project cycle with external donor instruments. Six substantive theses concerning the further architecture of the system are formulated with reference to the fiscal rules of the European Union and the subsidiarity principle of the European Charter of Local Self-Government. Particular attention is paid to the institutional strengthening of the meso-level following the Polish experience of establishing regional accounting chambers and associations of self-government.

Arijeta Neziraj Elshani

No abstract is available for this record.

Dobrotă Gabriela, DAN NICOLETA, BUTĂNESCU-VOLANIN REMUS-CONSTANTIN

Public finance sustainability represents a fundamental pillar of macroeconomic stability and a key determinant of the ability of states and local communities to cope with major economic shocks. Against the backdrop of successive crises over the past two decades—financial, health-related, and geopolitical—the relationship between fiscal sustainability and community resilience has gained increasing attention in both economic scholarship and European institutional debates. The aim of this article is to examine the linkage between fiscal sustainability and the resilience of local communities through an integrated approach that combines cross-country analysis at the European Union level with an in-depth assessment of Romania’s experience. The study relies on Eurostat data covering the period 2015 2023 and focuses on fiscal indicators, the degree of fiscal decentralization, and the capacity of local communities to translate public resources into economic and institutional resilience. The methodological framework includes descriptive and comparative analysis, alongside the construction of a composite Community Resilience Index. The empirical findings reveal substantial disparities across EU Member States and indicate that fiscal sustainability, when accompanied by functional fiscal decentralization and strategically oriented public investment, is associated with higher levels of community resilience. In the case of Romania, the gap between a relatively moderate level of public debt and comparatively low community resilience is largely explained by limited local fiscal autonomy and persistent institutional constraints.

Elton Stafa, Anthony Levitas

Abstract This chapter discusses the Albanian model for the equalization of financial disparities between urban and rural municipalities, especially after the 2014 Territorial and Administrative Reform (TAR). This reform reduced the number of local governments, merging 373 rural and urban entities into 61 larger municipalities. It aimed to streamline and harmonize service provision across regions and municipalities, but challenges persist due to the limited financial resources of local governments. The chapter explores the country’s intergovernmental financial framework, including recent reforms, which enhanced municipal responsibilities and financing. Despite reforms Albanian municipalities are heavily reliant on intergovernmental transfers, with unconditional grants playing a crucial role in equalizing financial resources. While the stability and allocation of the unconditional grants has improved since 2017, rural municipalities still struggle due to higher service costs and lower fiscal capacity compared to urban centers. There are also major differences between larger urban areas and the capital, Tirana. The chapter concludes that while Albania has made strides in decentralization, further reforms are necessary to address the ongoing fiscal inequalities between urban and rural local governments, underscoring the need for more robust equalization and financing mechanisms to bridge the gap between urban and rural municipalities.

Serhii Yushko

The implementation of the decentralization reform in Ukraine and its impact on the development of regions and territorial communities, the formation and implementation of local budgets impact the interests of state and local self-government bodies, business structures, and residents of newly formed communities. Problem Statement. The impact of the decentralization reform introduced in Ukraine on the formation of budget indicators and the distribution of funds between the state and local budgets. Purpose. The study of changes caused by the decentralization reform in the formation of the revenue part of local budgets, the distribution of revenues between levels of the budget system, the state of budgetary decentralization of funds, the significance of intergovernmental transfers and local taxes and fees in filling local budgets and their impact on the level of their financial autonomy. Methods. General scientific methods are used, namely: description, comparison, monographic, theoretical generalization. Results. The transformations of the budget and tax legislation of Ukraine carried out within the framework of the decentralization reform are characterized, and their impact on the formation of budget revenues is determined. Generalizing indicators were studied, which made it possible to assess the state of budget decentralization in Ukraine. The evaluation of changes in the role of interbudgetary transfers and local taxes and fees in filling local budgets, and their impact on indicators of financial autonomy of the latter, is given. Conclusions. The processes of unification of territorial communities as the first step within the framework of the decentralization reform in Ukraine affected the formation and volumes of the revenue part of local budgets, influenced their composition and volumes of expenditure. Budget and tax transformations had an ambiguous impact on local budget revenues, causing additional revenues on the one hand, and losses for various groups of budgets on the other hand. The indicators of budget decentralization calculated in the article unequivocally showed a reduction in the dynamics of the share of local budgets in the consolidated budget of Ukraine both at the stage of the initial allocation of funds and as a result of their final redistribution. At the same time, a significant change in the proportions of the distribution of resources between some groups of local budgets was recorded in the direction of an increase in the share of funds concentrated in the budgets of territorial communities and a decrease in the share directed to regional and district budgets. It has been demonstrated that changes in the absolute and relative indicators of interbudgetary transfers in local budget revenues are due mainly to the adjustment of approaches to the financing of some expenses, rather than to the strengthening of the income autonomy of local budgets. In the conditions of the growing role of local taxes and fees in the formation of local budget revenues, the risks of possible intervention of the central government in the processes of administration of the specified payments, adjustment of the rules for their calculation and payment remain relevant for local authorities. This may negatively affect the financial autonomy of budgets, endanger the proper and timely performance of the tasks assigned to it by the local self-government.

Liburn Mehmetaj

The rise of decentralized autonomous organizations (DAOs) is reshaping how organizations manage operations and finances. Switzerland, with its strong legal system, advanced technology environment, and supportive regulations, is becoming an attractive hub for DAOs. This chapter explores the reasons behind Switzerland's appeal, including its principles-based legal framework, regulatory clarity in financial market regulation established by FINMA, economic stability, and a vibrant startup ecosystem. Additionally, the country's tradition of direct democracy, political stability, and strong privacy culture align well with the decentralized ethos of DAOs. Despite the absence of specific DAO legislation, Switzerland offers a unique combination of regulatory flexibility and economic resilience, making it an ideal location for DAOs seeking a secure and innovative environment.

Maryna Domashenko, Serhii S. Drabynoha

In modern conditions, taking into account decentralization, martial law and economic instability in Ukraine, local communities are forced to look for alternative sources of financing to ensure sustainable development. One of the most effective tools for attracting resources for the implementation of socioeconomic, infrastructure and humanitarian projects is international grant financing. Grants are provided by international organizations, foundations, governments and private donors to implement programs that contribute to the development of social, scientific, technological, environmental and other areas of strategic importance. Unlike loans, grants are free financial assistance and are provided on a competitive basis and with clearly defined conditions, including the use of funds and reporting on results. The article studies the impact of international grant financing on the economic development of a local community, namely the Bakhmach urban territorial community. The theoretical foundations of international grant financing are considered; the dynamics of budget revenues and expenditures of the community are analyzed; an assessment of the contribution of grant funds to the development of individual areas (education, healthcare, social protection, etc.) was carried out. A practical analysis of the activities of the Bakhmach urban territorial community showed that international grant funding has a positive impact on economic development, modernization of infrastructure, improvement of the quality of education and medicine, expansion of social protection and activation of cultural and sports life. Thanks to the grants involved, the community managed to implement a number of important initiatives, including the construction of a shelter for a lyceum, modernization of educational offices, creation of a crisis room for victims of domestic violence, updating medical equipment, repair of cultural centers and other projects that directly affected the well-being of the population. The prospects for further research in this area are the development of practical recommendations for improving the interaction between local authorities and international donors.

Eltun Yulat Ibrahimov, Tagiyev Qasim Ilqar

Over the past decade, digital assets have transformed from a niche technological experiment into a mainstream financial instrument, attracting institutional investors, governments, and retail traders. With the increasing adoption of blockchain technology, cryptocurrencies are reshaping traditional financial systems, offering new mechanisms for wealth creation, transaction efficiency, and decentralized financial services. This article explores the profit opportunities and risks associated with the cryptocurrency market, highlighting its rapid evolution and significant impact on the global financial landscape. A key focus of this study is the investment potential within the cryptocurrency sector. It examines various opportunities, including short-term gains driven by market volatility, long-term asset appreciation, passive income through staking, and innovative financial models within decentralized finance (DeFi). However, the cryptocurrency market is fraught with substantial risks alongside these profit opportunities. Extreme price fluctuations remain a defining characteristic, often leading to significant losses for uninformed investors. Regulatory uncertainty poses another challenge as governments worldwide struggle to develop clear frameworks, with potential legal restrictions impacting the market’s stability. Security vulnerabilities, including exchange hacks, smart contract exploits, and phishing attacks, add another layer of risk, making cybersecurity a crucial concern for market participants. Furthermore, the lack of consumer protection mechanisms means that investors may have little recourse in cases of fraud, theft, or technical failures. By analyzing these factors, this article provides a balanced perspective on the potential rewards and dangers of investing in digital assets. The study is supported by academic research, industry reports, and real-world market trends, offering valuable insights for investors, policymakers, and financial analysts. As cryptocurrencies evolve, understanding their opportunities and risks is essential for making informed financial decisions in this rapidly changing landscape.

Chukwunonso Simon Ugwu

No abstract is available for this record.

Teerooven Soobaroyen, Huseyn Guliyev, Monika Wieczorek-Kosmala

PURPOSE: The purpose of this concept paper is to address the role of governance in the process of regional transition, by analyzing the concept of transition and its implications for regional sustainability, and highlighting their socio-technical, institutional, and governance dimensions. METHOD: This study is based on the selected review of the literature providing insights into sustainability transitions, regional development, and decentralization. FINDINGS: Transition is a long-term, multidimensional shift shaped by innovation, societal pressures, and governance structures. Regional transitions integrate development and sustainability agendas but often face barriers such as technocratic bias, limited social participation, and misaligned public finance. Decentralization models ‒ political, fiscal, and administrative ‒ shape how regions navigate these transitions. ORIGINALITY/VALUE: The study synthesizes transition theory with regional development and decentralization frameworks, offering an integrated perspective on how governance arrangements influence sustainable regional transformation. KEYWORDS: governance, regional transition, decentralization. JEL: R11, R58.

В. Г. Панченко, Kyrylo Oliinyk

The scientific hypothesis of the article assumes that inequality in access to digital infrastructure, inequality in digital skills and digital literacy, inequality in the use of digital technologies are new forms of social stratification and forms of manifestation of various digital divides. We argue that digital inequality objectively acquires new forms of manifestation. Digital and spatial inequality coexist in at least two forms of manifestation – digital periphery and digital gentrification. Digital periphery is the result of the formation of territories with limited access to digital infrastructure, which in the context of digitalization of economic processes inevitably leads to economic marginalization. An analysis of the literature has shown that digital gentrification is considered as a consequence of the increase in the cost of housing in areas with developed digital infrastructure due to the internal migration of digital workers. We believe that this approach to defining digital gentrification requires further study, because in the era of digitalization, digital technologies not only change the physical space of cities, but also create new forms of spaces – digital environments, digital platforms, digital communities. This allows us to develop the concept of "digital gentrification" as a phenomenon that describes the processes of displacement, exclusion and transformation in digital space. The purpose of the study is to determine the essence of digital gentrification and its typology, which will allow us to characterize the positive and negative consequences of gentrification processes for inequality from the perspective of socio-spatial transformation. We define the digital environment as the communication environment of digital devices and the environment of digital inequality. By considering the digital environment as the basis of a complex network of digital interactions, we can better understand the differences that arise in access to technologies, their use, and technology-related skills. In the context of spatial inequality, the household is a key entity, since its socio-economic situation directly depends on spatial opportunities: access to infrastructure, jobs, social services, environmental conditions, etc. The spatial localization of the household determines its inclusion in socio-economic processes and opportunities for development. In the context of digitalization, the concept of "household" is significantly modified. Under the conditions of digital transformation, traditional households are being modified into “digital communities” (groups of individuals united by common interests or goals in the digital space, who carry out economic activities) or “virtual collectives” (temporary associations of individuals for the implementation of short-term projects such as crowdsourcing initiatives) or into decentralized autonomous organizations (forms of collective economic activity based on blockchain technologies and smart contracts). Hybrid households are being formed – distributed households. We propose to consider digital gentrification as a process of transformation of digital interaction spaces and digital platforms, which is characterized by a change in the nature and intermediary functions of the digital environment, accompanied by a revaluation of digital assets in the interests of new user groups or data-driven companies, marginalization or displacement of initial users, forced simplification of digital specialization due to the development of ICT, which allowed us to distinguish platform gentrification, spatial digital gentrification, infrastructure digital gentrification, algorithmic gentrification, cultural digital gentrification, informational gentrification, economic digital gentrification, professional digital gentrification, virtual-spatial gentrification.

Takudzwa Wayne Mhaka

Can blockchain-based decentralized autonomous organizations (DAOs) revolutionize regional integration, or is it an evanescent promise? This research addressed the crisis of confidence that has been haunting institutions like the African Union (AU) and the European Union (EU), whose central authorities could not deliver on transparency and inclusivity. The objectives were to unbundle DAOs' potential, assess their place in regional architectures, and propose a hybrid governance model. Mixed-methods with qualitative case analysis of the AU, EU, and Aragon DAO complemented with 30 interviews of stakeholders and comparison grounded the research. Findings showed DAOs' potential in making transparency more possible, as the $10 million Aragon's treasury example showed, and enrolling people in it but with accompanying hurdles from digital divides (37% internet reach in Africa) and resistance from elites. A hybrid solution that stacked DAOs for open decision-making, traditional control for stabilization, and interface modules for useability emerged. Five proposals that involved piloting DAOs for transparency, modeling inclusive voting, investing in infrastructures, creating regulations, and fostering cultural dialogue charted the way forward. This research compelled regional leaders to act with haste, coupling code with human trust to make government inclusive. It enriched theory and practice of contemporary governance and foresaw an achievable world where oneness was not elite-driven but common.

Sophie Barbier, Helmut von Glasenapp

An investment can be described as structural if it contributes to financing the structural transformation of the economy and thus making it sustainably competitive. Experience shows that private investments alone are not sufficient due to externalities associated with this type of investment. A mixed public and private financing method is essential and it will help to accelerate the transformation. The challenge of the next European Union (EU) Multiannual Financial Framework (“post-2027”) will be to promote the development of this f inancing method. In this respect, the European budget will have to rely on four pillars: prioritize and plan, activate expenditure, decentralize implementation and strengthen steering. It is on this basis that Europe will be able to finance its structural investments and achieve the structural transformation necessary to maintain and develop its long-term competitiveness within the framework of a new European Competitiveness Pact.

Ирина Ткаченко, Ivan Chechulin

Introduction. The purpose of this study is a systematic analysis of the stakeholder relations on the issue of the formation and management of decentralized capital repair funds. The high social significance of capital repairs of residential real estate, coupled with a high degree of wear and tear, determines the need for coordinated and effective stakeholder interaction, the involvement of public authorities in co-financing expenses and the development of effective mechanisms for the rational allocation of funds from decentralized capital repair funds formed in special accounts in banking organizations and protecting them from inflationary processes. Materials and methods. The authors explore institutional factors in the implementation of major renovations of apartment buildings, identify the key stakeholders of these processes, their interests and risks, and reveal the presence of an agency problem. Based on statistical data and regulations, the authors conduct economic modeling of the formation of a decentralized capital repair fund using the example of an existing homeowners' association, and calculate target indicators for the efficiency of capital repair fund management. Results. The conducted research revealed inconsistency of the current management approaches and the impossibility of forming major overhaul funds in sufficient size to replace elevator equipment after the shelf life expiry without external financing. The authors conduct a study of the agency problem that arises when managing funds placed in special accounts for major overhaul, and identify the presence of informal institutional factors that prevent the formation of a "mature real estate owner". Discussion. Based on the results of the study, the authors proposed regulatory measures that could positively affect the effectiveness of relations on the issue of formation and management of decentralized capital repair funds. In addition to regulatory measures, the authors consider it necessary to involve municipal deputies in awareness-raising activities aimed at creating a “mature property owner.” The scientific novelty of this study consists in the development of management and regulation methods for the formation of decentralized capital repair funds on the basis of the synthesis of stakeholder and institutional approaches.

Nathan Schneider

Abstract The class of technology variously referred to as Web3 or crypto has been heralded as a democratizing force for economics and governance. This chapter argues that, to the extent such hype is justified, it is only partly due to the affordances of the technology itself. Perhaps more important is the amnesia it has induced, as an innovative paradigm whose novelty inclines people to neglect once-stable norms. In both economics and governance, crypto offers opportunities for greater democracy, but following through on them is guaranteed by neither the technology nor the amnesia it invites.

Oana Camelia Iacob Pargaru, Carmen Elena Spiridon, Ovidiu Andrei Cristian Buzoianu, Nicolae Gabriel Uta

Abstract When a Romanian entrepreneur is looking for European funds to finance his business, it is essential for him to understand the terms of the loan and the details about the financier, just like in any other loan agreement. The aim of this article is to present the challenges of projects implemented with funding from European Union funds. The research methodology involved a literature review followed by an analysis that examines different categories of public structures, including deconcentrated or decentralized units of central public administration, local public administration units, autonomous kings, state commercial companies or local authorities, units of state education and research, hospitals, and intercommunity development associations. The findings of the research highlighted the specific types of organizations that received financial support from EU-funded programs. Thus, the funds allocated to Romania by the European Union, considered from the point of view of the investment strategy and their non-refundable nature, constituted a substantial asset for the development of the Romanian economy and society in the short, medium and long term. In addition, these funds represented an element of budgetary sustainability. The results of the projects that were financed from European funds are numerous. Each of these is an illustration of a successful effort that has the potential to give rise to additional initiatives of equal significance in the context of the new opportunities that the European Union will fund.

Dr.Natasha Hoda, Msc.Majlinda Velçani, Prof. Asc.Dr. Parashqevi Draçi, Blerina Sadiku

<p style="margin-left:0cm; margin-right:0cm; text-align:justify"><strong>The financial situation of local government units in the Albania, even though it has improved compared to the decades ago, is still delicate and full of challenges for the future. Financial resources, without neglecting the capacity building of th

Romaric Nazon

Local taxes with fiscal power for local authorities arte gradually being dismantled by State tax reductions which lead to the abolition of these taxes. The financing of decentralization is therefore increasingly dependent on the sharing of national tax revenues. The impossibility of local fiscal autonomy prompts a rethinking of the complex fiscal relations between the State and local authorities. The re-creation of a local fiscal power would go through consultation and co-decision between the State and the local authorities but also, in particular, with the crisis of representative democracy, through a better association of local elected representatives and citizens. However, veticality today characterizes the relationships between these actors.

Nils C. Bandelow, Johanna Hornung, Ilana Schröder

Over the past decade, technological changes have had a strong influence on society and science worldwide. Information and communications technology, big data, and artificial intelligence are only some digital innovations that have been transforming the research and practice of public policy. The impact of such technologies has recently become even more noticeable, for instance, through the prominence of machine learning chatbots. This raises several questions such as how to adapt institutions and regulatory processes to digital transformation, how such innovations can be used to enhance the design and implementation of policies, and how public policy and administration scholars should understand and make use of technologically driven futures. This third jubilee issue of Review of Policy Research (RPR) comprises six original articles which present a range of theoretical and empirical contributions to answering such questions. In the opening article, Kim et al. (2023) address the rising popularity of policy labs and examine to what extent they enhance the understanding and addressing of critical policy problems. To this end, they reviewed over 130 data-based policy labs across the world and their contribution to policy capacity. Most policy innovation labs are located in Europe and North America, initiated by governments or universities, and use various data types with a dominance of administrative data. Following the policy capacity framework by Wu et al. (2018), the authors differentiate between analytical, operational, and political policy capacity at the individual, organizational, and systemic level. The findings show that data-based policy labs enhance analytical and operational policy capacity at different levels but that they have only limited effects on providing political-based policy capacity. The article concludes with a future research agenda and suggestions for strategies to improve political capacity within policy innovation labs. These include promoting individuals' policy acumen as well as strengthening the environment for collaboratively learning about policy processes and political values on the organizational and systemic levels. Torfs et al. (2023) contribute to this issue with an application of the Punctuated Equilibrium Theory (PET, Baumgartner et al., 2009, 2018) to analyze how institutional shifts impact digital policy change. Following an evolutionary perspective, the authors explored two decades of Belgian federal digital policy and its periods of policy stability (equilibrium) and change (punctuation). To this end, they analyze explanatory factors for negative and positive feedback mechanisms and the role of policy entrepreneurs. The methodological approach combines a distributional application of the PET with an explaining-outcome congruence case study, using documents, interviews, data on media coverage, regulation, and budgets. The authors illustrate that digital policy in Belgium is characterized by longer periods of stability and two periods of punctuation. It is shown that institutional shifts did impact Belgian digital policy. However, their explanatory power is limited as they lead to both positive and negative feedback mechanisms. More decisive factors in explaining digital policy (in)stability are attention allocation, policy entrepreneurs, and the political system. Torres and Fowler (2023) contribute to research on policy entrepreneurship with a study on the strategies bureaucrats used to change decision-making processes in the US National Aeronautics and Space Administration (NASA). More specifically, the authors investigate how individuals drove organizational re-thinking on public participation and initiated the adoption of participatory technology assessment (pTA) within the space agency. The analysis of public documents and interviews reveals three main entrepreneurial strategies that helped shift the status quo and support citizen interaction in program design. The paper shows that the entrepreneurs reached out to and connected audiences across organizations in small-scale meetings where they presented a positive, solution-oriented reinterpretation of the program. In this discourse, they took a mediating position to have control over the narrative and decision-making process. Therefore, policy entrepreneurs, program-related group formation, and framing played an important role in the initiation of policy change within NASA. Di Giulio and Vecchi (2023) present further evidence for the influence of policy entrepreneurs and group formation on policy change with a case study on the public sector digitalization in Italy. After failed attempts to adopt digital technologies in the Italian public sector, the digital transformation agenda launched in 2016 was the first one to effectively induce policy change, despite the political instability at that time. Following theory-building process tracing (Beach & Pedersen, 2013), Di Giulio and Vecchi operationalize mechanisms that may explain this success, with a specific focus on related institutionalization processes. For this, they empirically investigate Italian innovation policymaking from 1993 to 2021. The results show that the Italian government used several strategies to increase organizational capacity and coordination as part of the 2016 digital agenda. This included engaging and appointing new professionals, restructuring the roles of governing bodies, and establishing new governmental agencies for digital transformation. This helped to build a community of policy entrepreneurs accountable for public sector digitalization which further created a bandwagon effect among implementers. Mukherjee et al. (2023) analyze how regulatory actors and processes surrounding digital innovation influence the creation of collectively shared and institutionally supported ideas of technological futures. Building on the concept of sociotechnical imaginaries (Jasanoff, 2015), the authors conducted 33 interviews with regulators of two emerging technologies in the USA, namely the genome editing technology CRISPR-Cas9 and Connected and Autonomous Vehicles (CAV). The in-depth interviews were used to understand how involved actors envision technology-driven futures and the social structures that enable them. In both cases, experts related ideas on technologically driven futures to questions on institutional authority, technological novelty, and risk management. However, the CRISPR and CAV stakeholders' narratives also differed along these aspects. For instance, the authors found that interviewees' imagined futures reproduce their respective regulatory environments, including power relations and intraorganizational boundaries. Mukherjee et al. argue that such differences across regulatory sectors, including institutional arrangements, norms, and practices, influence the imaginary formation around technologies and how they shape the future. Zeng et al. (2023) present another study on digitalized administration processes with an analysis of platform governance in China. The authors elaborate on the advantages of platform-based organizational processes and reflect, however, that the concept of Government as a Platform (GaaP) has been less promising. Zeng et al. argue that the platform-enabled government (PEG) concept which aims to accommodate institutional boundaries is better suited to improve collaborative governance than the GaaP with its focus on eliminating boundaries. The authors test the implementation and impact of 123 PEG cases in China across three policy areas, namely, administrative review, law enforcement, and contact tracing. The results support that PEG is an effective form of holistic governance as it enables to integrate functions of multiple departments in one workflow while respecting institutional boundaries. For instance, PEG facilitates cross-boundary exchange while enabling officials to retain intellectual property rights. The study indicates that PEG is supported by decentralized political systems and middle-tier platforms.

Jarle Trondal, Stefan Gänzle, Benjamin Leruth

2021 marked the official start of a post-Brexit era for the European Union (EU) since the United Kingdom (UK) had only fully withdrawn when the transition period lapsed on 31 December 2020. The transition period prevented the EU and the UK from falling off a cliff before a mutual Trade and Cooperation Agreement (TCA) was to be ratified and implemented into UK law by Parliament before 1 January 2021. This cumbersome process marked the pinnacle of a three-decades long period of European integration which saw the political architecture of the EU gradually shift from a system characterized by integration to one that is more succinctly marked by differentiation. Using Brexit and the Covid-19 pandemic as cases in point, we argue that differentiation has become the system property of the EU's institutional polyarchic architecture. While differentiation has sometimes been conceived as being mostly temporary in nature, we may think of a differentiation of the EU's political order as a permanent and systemic property. Differentiation is both an empirical and a theoretical phenomenon. Empirically, it has been on the rise ever since the ratification of the Maastricht Treaty in 1992. As Euroscepticism progressively became more mainstream, disintegrative tendencies feature more prominently in Europe's political order (Bátora and Fossum, 2020; Gänzle et al., 2020). Membership withdrawals or centrifugal moves away from the EU, such as Brexit or Switzerland calling off negotiations on a partnership agreement in 2021, have therefore been coined conceptually as differentiated disintegration (Schimmelfennig, 2018). Similarly, reverse processes of ‘de-differentiation’, such as the Danish people's decision in May 2022 to revert the former opt-out in EU defence (Politico, 2022), have occurred, too. Prior to the landmark process of Brexit, European integration generally followed the ‘ever closer union’ model – as famously stated in the preamble to the Treaty of Rome of 1957. Even so, European integration was never truly uniform but shaped by mechanisms of differentiated integration (Leuffen et al., 2022). In addition to policy-centred vertical differentiation (that is, the variation in the level of centralization across policies), such as most prominently in Economic and Monetary Union (EMU), the EU has encountered various forms of horizontal differentiation. This includes an internal dimension with EU countries opting out from certain policies both de jure and de facto (Hofelich, 2022), as exemplified by Denmark and Sweden's non-adoption of the common currency as well as an external dimension with non-EU countries, such as Norway and Switzerland, opting into selected policies (Leuffen et al., 2022). Today, the EU can therefore be considered as an institutionally polyarchic architecture of concentric circles with a core of club members surrounded by countries that have managed to negotiate opt-outs from specific policy areas; countries willing to join; and various neighbourhood agreements involving both European and non-European countries (for example, Gstöhl and Lannon, 2018). Studies of European differentiation have underlined that it is paramount to conceive of differentiation as a comprehensive phenomenon that is not tied to specific directions of either integration or disintegration (Gänzle et al., 2020; Leruth et al., 2022; Olsen, 2007). Yet, while differentiation was initially considered as a temporary phenomenon (through the concept of ‘multi-speed Europe’), we nowadays witness the emergence of permanent forms of differentiated political order(s) within the EU, for instance through the form of opt-outs from the Eurozone. This study suggests that forms of macro-level differentiated political order in the EU may lead to transformations at the meso-level, which in turn may affect the institutional robustness of the EU. Ultimately, differentiation may serve as a vehicle for the long-term sustainability and institutional robustness of the EU. This argument is supported by studies showing that the survival of international organizations (IOs) is associated with the size of their executive capacity (Debre and Dijkstra, 2020). This also suggests how institutional features of IOs may assume a paramount role of robust global governance. It is also necessary to emphasize the attractiveness of studying the robustness of a differentiated European political system in turbulent times (Ansell et al., 2017). Clearly, the robustness of institutions may be taken for granted during periods of stability (Olsen, 2007). During periods of turbulence or crisis, however, established institutions may become subject to contestation, requests for reform, and objects of scholarly studies. Rather than leading to fragmentation and dissolution of institutions, we maintain that manifestations of differentiation foster resilience of the political order of the EU. After a concise conceptualization of differentiation, we examine how the EU has dealt with both internal and external differentiation at the meso-level using Brexit and Covid-19 as cases in point. Second, in our view, differentiation is and will continue to be prominent in the years to come, hence we sketch out an institutionalist research agenda which suggests how macro-level differentiation – for example, with respect to polity-level differentiation – may lead to meso-level institutional responses. Finally, we close by discussing implications for the post-Brexit and post-pandemic future of differentiation. As a strategy of integration, the roots of differentiation can be traced back to a report produced under the direction of Leo Tindemans (1975), which laid the conceptual foundations of a ‘multi-speed Europe’ (Stubb, 1996). Yet, scholarly debates on differentiated integration only started in the early 1990s – against the backdrop of the legally enshrined British and Danish opt-outs in terms of currency union and defence for example. With subsequent discussions on further constitutionalizing forms of differentiated integration, the enhanced cooperation mechanism was introduced in the Treaty of Amsterdam. Considering these developments, Stubb (1996, p. 283) defined differentiated integration as ‘the general mode of integration strategies which try to reconcile heterogeneity within the European Union’ in terms of time, space, and matter. From a theoretical perspective, other scholars also focused on the scope and limits of differentiated integration in the EU (for example, de Neve, 2007; Holzinger and Schimmelfennig, 2012; Leruth and Lord, 2015; Schimmelfennig et al., 2015; Sitter and Andersen, 2006). The financial and economic turmoil of 2007–2008, subsequently followed by socio-economic and political unrests of many kinds, brought the EU into a new multi-faceted poly-crisis (Riddervold et al., 2021). The future of European integration became increasingly questioned, as domestic Eurosceptic actors pushed for reducing the scope of core EU powers, opt-outs or even withdrawing from the Union as a whole. Brexit eventually opened a new chapter in the study of differentiation (Leruth et al., 2019). Some of the recent literature on crisis, disintegration and differentiation in Europe also combines explanations based on collective actors' cost–benefit calculations – such as the promotion of equality of opportunity among EU members (Jones, 2018) and institutionalist explanations focusing on how crises are channeled through and mediated by pre-existing institutional frameworks and resources (for example, Bátora and Fossum, 2020). Brexit thus largely reinvigorated differentiation as a central focus of research in EU studies. In contrast to previous iterations of differentiation – which were exclusively used to qualify forms and grades of integration – the term has now come to be applied in instances of both integration and disintegration. Both growth and reduction of the level, scope and membership of IOs remain unequal and therefore differentiated. Differentiation applies to the institutional, policy and territorial dimensions of such processes. With regards to the institutional dimension, differentiation is relevant for grasping the settlement of both emergent organizations and organized systems. Institutions and organized systems are temporary sets of rules and procedures, demography, locations, beliefs and norms. Different approaches to differentiation are particularly helpful in conceptualizing the settlement of emergent political orders such as the EU that involve multiple tiers of authoritative decision-making. The EU has been depicted in a two-pronged way both as ‘a conceptual battleground and an institutional building site’ (Olsen, 2010, p. 81) with a varied mix of organizational forms, governance patterns and ideas about legitimate forms and speeds of integration. Institutional differentiation was eventually understood as ‘new institutional spheres [that] have split off from older ones and developed their own identities’ (Olsen, 2010, p. 142). From an institutional theory perspective, differentiation ultimately ensures a form of interdependence that ties institutional spheres together. In such a highly dynamic process of institutionalization, de-institutionalization and re-institutionalization, European integration is constantly being reconfigured. Varieties of organizational structures and institutional norms in the EU contribute to institutional change within EU member states. It has been observed that both intergovernmental, supranational as well as non-majoritarian institutions tend to encourage patterns of institutional differentiation. Egeberg and Trondal (2017) demonstrate that EU agencies have become vehicles for integrating regulatory bodies also from non-EU member states. In addition, they document an acceleration in the creation of new decentralized agencies over time not only in terms of numbers but also in terms of powers and quality. The ‘agencification’ of both EU (non)member-states and the EU administrations serve as an institutional infrastructure for differentiated administrative integration (Trondal, 2014) through a differentiated inclusion of administrative bodies from member and non-member states in EU governance. Central agencies in Switzerland, EEA/EFTA countries, candidate and neighbouring countries are offered access to EU decentralized agencies' management boards, leading the latter to become privileged fora for external differentiated integration (Lavenex, 2022). During the Covid-19 pandemic, EEA countries coordinated their response strategies with the European Centre for Disease Prevention and Control (ECDC). Since agency officials generally enjoy a considerable degree of independence from their states' central administration, and that their involvement in EU networks is thus relatively insulated from political intervention form their governments, they are highly sensitive to governance processes at different levels of government (Egeberg and Trondal, 2009). The result is a differentiated and semi-autonomous polycentric patchwork of memberships and associations in EU administrative networks. In March 2020, the global Covid-19 pandemic eventually hit Europe; it affected most policy domains of the EU and substantially put solidarity amongst member states to a test. Although the EU has only limited competence on public health, which remains largely under the control of member states (European Court of Auditors, 2021), the EU was criticized for its lack of coordination, for not acting immediately concerning medical equipment for Italy and not reintroducing internal borders (Wolff and Ladi, 2020). The EU's immediate health policy responses mostly rested on the use of pre-existing resources and institutions: the ECDC, the health emergencies system, the Joint Procurement Program (JPP) and the RescEU civil protection mechanism. The initial EU response to the crisis was differentiated partly because the ECDC was dwarfed by the many national agencies it was supposed to coordinate, the lack of an independent budget line, and its sole support by an administrative agency with no independent legal basis (Consumers, Health, Agriculture and Food Executive Agency, CHAFEA). As a result, member states responded quite differently to the crisis, largely reflecting different government systems, governance traditions, policy styles, attention structures and pre-existing crisis routines within each country (Askim and Bergström, 2021; Zahariadis et al., 2021). On the issue of fiscal support to struggling EU member states, an existing political division lingering from the Eurozone crisis between so-called ‘frugal’ Northern countries and the Southern member states reemerged, yet with one crucial difference: Germany appeared to have changed its stance on the matter (Schulz and Henökl, 2020). This resulted in the approval of the unprecedented €750 billion NextGeneration EU recovery plan. With a view to violations of the rule of law in Poland and Hungary, the recovery plan included access clauses tied to the fundamental principles of the EU via the Rule of Law Conditionality Regulation, which acted as preventative mechanisms against further democratic backsliding in both countries, thereby implying that differentiation cannot be applied when it comes to these core values. Legal challenges were unsuccessfully launched by the governments of both countries, yet there were still major concerns over the inaction of European institutions to tackle democratic backsliding in Poland and Hungary. However, the Commission's decision to endorse Poland's recovery and resilience plan in June 2022 was met with strong skepticism, given the government's refusal to loosen control over the judicial system (The Guardian, 2022). Existing patterns of territorial differentiation led to institutional differentiation among national health agencies. Health agencies in Norway and Sweden, for example, activated different strategies first to combat the virus nationally and second in their adoption of advice and services from the ECDC. Contrary to the general observation of tight agency networks among the Nordic countries (Schrama et al., 2020; Stie and Trondal, 2020), the Norwegian and the Swedish health agencies adopted opposite strategies in both regards, for example regarding the implementation of lockdowns and with regards to their referral to the ECDC. Reflecting different domestic institutional designs and past choices, the Norwegian and Swedish governments differed in how they framed and managed the crisis – as a healthcare crisis (in Norway) and a public health crisis (in Sweden; Askim and Bergström, 2021). This observation moreover reflected general patterns of EU differentiation, in which administrative differentiation of the EU contributed to provide institutional architectures for meso-level differentiation (Leruth et al., 2022). One effect was that a non-EU member state (Norway) coordinated Covid-19 responses vis-à-vis the EU more extensively than an EU member state (Sweden). Subsequent internal differentiation occurred once vaccines were deemed safe by peer-reviewed studies: as the EU and the European Medicines Agency were criticized for initially slow-paced decisions to approve vaccines and organizing an effective rollout program, some countries such as Hungary and Slovakia relied on non-European Medicines Agency-approved vaccines such as the Russian Sputnik V (Politico, 2021). Brexit is a second illustrative case providing on how administrative networks in the EU resources for meso-level institutional differentiation. polity-level transformations as with the produced by Brexit, actors their in EU administrative while at the time some variation to institutional and 2021). 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