One crisis, one region, two municipalities: The geography of institutions and change agency in regional development paths

How do regions change their development path? We contribute to the growing literature on agency in regional development by combining it with a focus on the institutions that shape, support and constrain change agency in pursuit of different types of development paths. We answer the call for micro-level perspectives on regional economic change, using an in-depth and comparative case study approach. The labour market region of Olofström-Karlshamn in South East Sweden experienced a period of exceptional decline following the economic crisis and crisis in the automotive industry in 2008, when more than 1000 jobs were lost in a labour market of 46,000. Within this single labour market, two municipalities perceived, experienced and handled the crisis very differently. In Olofström, this triggered the formation of new collaborations that enabled local actors to upgrade their development path, whereas the crisis did not greatly affect the already ongoing efforts aimed at path importation in Karlshamn. To explain this difference, our comparative study shows that the layering of formal and informal institutions produced unique institutional contexts at the local level, which guide the behaviour, collaboration and vision of local actors. We build on original, micro-level material from 23 interviews and supporting documents to make the following contributions to the growing literatures on the role of agency and institutions in shaping regional development paths: (i) Local institutional context conditions the activation of change agency; (ii) Change agency must be investigated – and performed – in close connection to its geographical context.