Can Decentralization Alleviate Labour Market Dysfunctions in Marginal Jurisdictions? Active Labour Market Policies in Nova Scotia and Saxony-Anhalt

An influential discourse now promotes decentralization in the active labour market policy field. Drawing upon evidence from Nova Scotia and Saxony-Anhalt, two marginal jurisdictions within the Canadian and German federations, this article questions the decentralization argument. The institutional setting of policy making in these two jurisdictions differs in fundamental ways, but policy outcomes have been unsatisfactory because subnational governments in each region la ked the resources to exploit the particular advantages of their setting. Decent ralization may be workable in the active labour market field, but policymakers who wish to pursue it should first consider the kinds of obstacles, such as those identified here, that it can face.