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«Sub-National Island Jurisdictions as Configurations of Jurisdictional Powers and Economic Capacity: Nordic Experiences from Åland, Faroes and ...»

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Island Studies Journal, Vol. 4, No. 2, 2009, pp. 139-162

Sub-National Island Jurisdictions as Configurations of Jurisdictional Powers and

Economic Capacity: Nordic Experiences from Åland, Faroes and Greenland

Agneta Karlsson

Director, Åland International Institute for Comparative Island Studies

Mariehamn, Åland Islands


Abstract: This paper is concerned with the relationship between jurisdictional powers and

economic and innovative capacity in the context of sub-national island jurisdictions (SNIJs). The “jurisdictional powers thesis”, prominent in the present island studies debate, is confronted and discussed with reference to an empirical, comparative, study of the three Nordic SNIJs: the Åland Islands, the Faroe Islands and Greenland. The paper takes as its point of departure an ideal-type SNIJ which is characterized by a good match between jurisdictional powers and economic capacity; it then analyzes the three cases in terms of this ideal-type. Three different types of configurations emerge, representing three types of “deviations” from the ideal-type SNIJ; these are discussed in terms of their development potentialities.

Keywords: Åland, economic capacity, Faroes, Greenland, innovative capacity, jurisdictional powers, resourcefulness, sub-national island jurisdictions (SNIJs).

© 2009 – Institute of Island Studies, University of Prince Edward Island, Canada.

Introduction In recent years the economic-strategic potential of jurisdictional powers has become a prominent research issue within the discipline of island studies (Baldacchino & Milne, 2000; Baldacchino, 2006). Various species of insular jurisdictions, ranging from micro- states to divergent forms of sub-national island jurisdictions (SNIJs), have been analyzed and compared in terms of their economic success (Armstrong et al., 1998; Armstrong & Read, 2000; Bertram & Poirine, 2007). The result is a growing number of taxonomies and classification schemes that reflect the existence of a multiplicity of political and economic configurations amongst the global population of islands (Watts, 2008) and, one might add, the truly entrepreneurial capacity of many an island community (Bertram & Poirine, 2007).

Economically successful islands are not just the subject of “a temporary spell of good fortune” (Baldacchino, 2000: 68), but should also be considered as sites where intelligent strategic agents make creative and innovative use of their material and immaterial resources, including their jurisdictional powers. Baldacchino & Milne (2000) maintain that such a “resourcefulness of jurisdiction” cannot be ignored if we are to better understand the modus operandi of a multitude of successful island economies.

Criticizing the traditionalist “volatile economy” approach to island studies, they state:

A. Karlsson “Our research suggests that this lacuna in economic theory needs to be addressed so that constitutional resources, particularly in small states, are seen and measured for the large reservoirs of economic potentiality that they really are. Legal personality permits jurisdictions of various degrees of autonomy to act for themselves in economic strategy and planning, and to use their powers most intelligently to build more diversified, self-reliant economic communities” (ibid.: 8).

The ‘resourcefulness of jurisdiction’ thesis, along with the conceptualization of island communities as strategic agents (rather than as victims of unfortunate circumstances), has inspired a comparative study of the three North European (Nordic) SNIJs: Åland, Faroe Islands and Greenland.1 Thanks to an interpretative, naturalistic approach and qualitative, in-depth empirical research methods,2 this study explores various meanings and expressions of political autonomy and economic capacity, both historical and contemporary, in the three SNIJ contexts. Each SNIJ has been approached as a case or a bounded system. Based upon the empirical data collected, the study has constructed three alternative configurations of jurisdictional powers and economic capacity. These configurations capture the empirically experienced inter-relations between jurisdictional powers and economic capacity in each of the three SNIJ cases; they also indicate which strategic and dynamic challenges the significant actors of each SNIJ might face.

From a political economy perspective, it has been suggested that SNIJs represent “the best of all possible worlds” and that “these island jurisdictions deploy many of the benefits associated with political sovereignty while they are delegating responsibilities to, enjoying the security provided by, and reaping the material benefits of, remaining in association with a larger, and typically richer, patron” (Baldacchino, 2006: 860). This and similar statements suggest that the transition from a SNIJ to a fully fledged state would, at least from an economic angle, not be a commendable path of development. The partnership with the metropole is, in itself, a most important resource which should be protected, managed, and exploited (Baldacchino & Milne, 2008b).

This idea of a SNIJ comes close to a Weberian ideal-type construct (Weber 1947/1969).

The very purpose of an ideal-type is to offer a ‘pure’ (


and logical) typification of an empirical phenomenon and a natural conceptual starting-point for empirical endeavours.

Deviations from the ideal-type should be identified in various empirical settings so as to accumulate an increasingly more differentiated (and, simultaneously, deeper) knowledge of the phenomenon: in this case, the SNIJ. The ideal-type SNIJ suggests that jurisdictional 1 The study was initiated and has been administered by Statistics and Research Åland (ÅSUB). It was funded by The Nordic Council of Ministers as well as by Nordregio, Stockholm. Four individual reports: Karlsson (2007a, 2007b, 2008) and van Well (2008) (the last one on Bornholm) and a final one, summarizing the findings of the individual studies (Karlsson et al., 2009) have been published. The authors of these reports express their deep gratitude to the funding institutes.

2 The in-depth case studies of the three SNIJs are based upon 22 personal interviews with significant political, economic and administrative actors. The interviews were conducted: (1) in Åland in January 2007;

(2) in the Faroes in March 2007; and (3) in Greenland in November 2007. Extensive documentary studies have supplemented the empirical research.

140 Åland, Faroes and Greenland as Sub-National Island Jurisdictions

powers are resourceful; that they represent a true resource in the strategic and economic development of an island community. Referring to the configurative “realities” of the study, one might say that the ideal-type SNIJ is characterized by a perfect match between jurisdictional powers and economic capacity: that is, jurisdictional powers can be fully and intelligently utilized so as to match the state and current potential of the economy.

This paper reports the results of confronting the ideal-type SNIJ with three different island situations and suggests that there are still some important lessons to be learnt about the interrelations between jurisdictional powers and economic capacity. There is not always a perfect match between the two: either the jurisdictional powers are not enough to be truly resourceful; or the economic capacity is such that formal jurisdictional powers cannot be fully utilized. Still, when there is a match, important cross-fertilization and synergies occur.

By means of empirical illustrations and configurative representations, this paper aims to offer a differentiated picture of the complex politico-economic realities of SNIJs. Before some pivotal points of these empirical realities can be described and represented the two principal constructs – jurisdictional powers and economic capacity – need to be defined.

Jurisdictional Powers and Economic Capacity: The Constructs and their Meanings

It should be clear by now that the two most important analytical tools of this study are the constructs of jurisdictional powers and economic capacity. With these tools the empirical realities of the three SNIJs have been captured, given meaning and typified. In the process, the meanings of the constructs themselves have being changed and new elements of definition have been introduced. The journey that the constructs have undertaken, of course, reflects the differentiated empirical experiences that have been made in this study.

Jurisdictional powers

Following politico-economic convention, this study considers both de jure and de facto powers as significant components of the overall jurisdictional powers of a SNIJ. The de jure dimension consists in what is allowed by the statute books: the formal, regulatory, juridical and constitutional room for political manoeuvre. The de facto dimension includes those additional strategic and administrative skills, customary powers as well as those socio-political relationships and networks upheld by the significant political actors and which may not be defined at law (Karlsson et al., 2009).

The skills that the political system of a SNIJ exhibits in handling its own affairs are basically a question of learning, or of accumulating collective knowledge (Maskell et al., 1998; Kitson et al., 2004). The formal constitution might, or might not, offer opportunities for accumulating such critical administrative knowledge and, in the end, of developing more skilful policy-makers. Political entrepreneurship and innovative development strategies do not exist in a socio-political vacuum but are based upon the specific learning opportunities that the local constitutional context offers. The degree of dynamism built into

141A. Karlsson

a formal constitution affects the de facto jurisdictional powers by the means of learning.

But just as important as the learning opportunities are the social relationships and networks of the SNIJ élite system (Baldacchino, 2005). The relationship capital (Kitson et al., 2004) which the leading actors are – or are not – in the possession of is constituted by both intraregional and external relations. Most important among the latter are those with the metropole (Baldacchino & Milne, 2008a). The capacity to both accumulate and mobilize a relationship capital is critical to the de facto jurisdictional powers of the SNIJ.

In the empirical process of the study, it became clear that intra-regional roles and relationships, rooted in the political culture of the region, were key to explaining the de facto jurisdictional powers of that region. A region can be conceptualized as a community of political practices (Wenger, 1998) that incorporate institutionalized patterns of interactions between the political élite and – what is important here – the business sector of that region. To the extent that the political élite assumes only a “junior partner” role (Sejerstedt, 1996) relative to the business sector in the economic development of the region, it also becomes more reluctant to take upon itself a significant entrepreneurial responsibility. Economic strategies are left to the business sector to decide upon and to implement. The tools of political economy, although at hand, are not given a significant role in the processes of policy-making. The opposite may be just as true. Then, the political culture of the region gives the political actors a more prominent role to assume in the development of economic strategies and, consequently, policy-instruments become important in the moulding of the economic future of the SNIJ. Basically, the political culture of a SNIJ touches upon the form of the overall economic system that it exhibits (Whitley, 1999; Fellman et al., 2008).

Even more important to the national mobilization of a SNIJ - and the resourcefulness of jurisdictional powers - are both the collective self-confidence and the identification patterns of its citizens (Srebrnik, 2000; Asheim, 2004). If significant groups of citizens identify themselves with the metropole rather than with their local community, there is a tendency to ignore the resourcefulness of local, formal, jurisdictional instruments.

Financial and psychological reliance upon the patron also tends to hinder the development of a strong localized (and proto nationalist?) self-confidence: essential to a de facto mobilization of jurisdictional powers.

While the de jure jurisdictional powers rest upon a formal constitutional platform, the de facto jurisdictional powers reside in processes of learning, in social relationships and networks, in political cultures and in a collective feeling of self-confidence. Needless to say, the de facto jurisdictional powers of a SNIJ add real powers beyond the formal constitution.

Economic capacity

Economic capacity is a complex and dynamic phenomenon the elements of which are highly interconnected. As suggested by Baldacchino & Milne (2000), the economic capacity of a SNIJ is defined as the abilities (and skills) of the significant actors of a region to utilize existing and new resources in an efficient and innovative manner in order to pro

–  –  –

actively deal with external and internal challenges and crises, as well as with external and internal possibilities and opportunities. Basically, the economic capacity of a SNIJ concerns its long-term ability to produce wealth and welfare for its citizens.

A key element of the economic capacity of a region is the existence of a core competency (Prahalad & Hamel, 1998; Boye, 1999). Specialized economies have long been at the very core of economic discourse and the concept of core competency rests, harmoniously, in that discourse. This concept focuses not only upon the level of specialization of a regional economy but also upon its inherent potential for growth and (related) diversification.

Moreover, it is indicative of the sustainable competitive advantages that certain specialized regions maintain over time (Porter, 2003; Coenen & Asheim, 2006). A strong core competency is the very platform of a strong regional cluster and is, as such, also the carrier of cultural and identity-related elements (Paasi, 1986).

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