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There is an imbalance in the discussion around local economic development. The predominant focus in the literature is around policy. To some extent, the issue of polity is addressed in the literature, especially with respect to Local or Regional Development Agencies. Politics appear predominantly as an unpleasant framework condition that is complicating the important work of LED practitioners; otherwise, politics are ignored. This imbalance generates inappropriate, unrealistic policies and recommendations when it comes to organising a knowledge transfer on LED between industrialised countries and developing and transformation countries.

Successful territorial development is based on policy networks that consist of various government agencies, the private sector, trade unions, NGOs, and other players. Policy networks have emerged in industrialised countries as a response to the implementation crisis, i.e. the failure of top-down, government-driven, hierarchical planning and policymaking. Policy networks emerged in a context of states that are oriented towards problem-solving. Even if political power plays are a relevant factor, they do not overwhelm the ability of political actors to address issues, to agree on a problem definition, to formulate policies and to implement them successfully.

We cannot readily assume that the state in developing and transformation countries is predominantly of the problem-solving-oriented variety. States in these countries, while formally democratic, are often of the patrimonial, nepotist, clientelist or paternalist variety. For quite a while, the discussion on the state in these countries has highlighted the need for “good governance”. The extent to which these states have made progress towards “good governance” since the 1990s is being questioned in the academic literature. There is no question that state reforms have been going on, often including massive decentralisation processes. Decentralisation is one of the main reasons why LED has come onto the agenda in developing and transformation countries in the first place. However, decentralisation has not necessarily led to the creation of truly democratic, participatory bottom-up decision making processes. Often, the result has rather been the decentralisation of patrimonialism, nepotism, clientelism and paternalism.

This creates a local context where politics affect LED efforts in a different way than they do in industrialised countries. Local governance for LED is frequently not of the network variety, involving various actors, but rather dominated by government, in particular elected officials in executive positions who leverage LED to further their political ambitions and careers. Thus, LED is not driven by a problem-solving orientation but rather follows a political logic of power accumulation. Thus, the problem for LED initiatives is not only, as some authors would point out, the lack of social capital. The problem lies deeper, rooted in a political structure that is oriented to-wards specific interests and does not care much about the common good.

Under these conditions, external support for LED cannot be based on the simple transfer of a proven model from industrialised countries to developing and transformation countries. In order to create conditions for successful LED in these countries, we need an approach that takes their political ideosyncracies explicitly into account. One such approach is the PACA methodology, which has been designed for use in an environment where stakeholders in- and outside the state need to learn a problem-solving approach to a policy issue such as LED.