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Volume: 11 Issue: 11 No embe 2025
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Ru h G. Mu honi Kimani, RAJAR Volume 11 Issue 11 No embe 2025
B idging Policy and P ac ice: How Coun y Go e nmen s T ansla e Na ional
Inno a ion Policy in o Local Ac ion
Ru h G. Mu honi Kimani
SZCZECIN, POLAND
ARTICLE INFO
ABSTRACT
Published Online:
22 No embe 2025
Co esponding Au ho :
Ru h G. Mu honi
Kimani
The in e na ional mo e owa ds he de olu ion o policy inno a ion has es ablished a de ining
implemen a ion di ide be ween he p ospec o localized e icacy and he ac o sub-na ional
limi a ions. This a icle examines he Inno a ion pa adox, which poses he ques ion o whe he
coun y go e nmen s ha e he necessa y esou ces, capaci y, and au onomy o implemen
na ional inno a ion agendas e ec i ely. The gap in implemen a ion can be analyzed as he esul
o h ee in e locked s uc u al de ici s. Ini ially, he Capaci y De ici is cha ac e ized by he
absence o echnical expe ise in a eas such as In ellec ual P ope y (IP) and R&D moni o ing,
which is u he exace ba ed by o ganiza ional hinness. Second, he Fiscal Gap exposes
coun ies o a Dependence T ap, in which local ax au onomy educes so e eign y and budge a y
c ises p e en he long- e m in es men necessa y in R&D. Thi d, he Co-o dina ion Failu e is
caused by he e ical misalignmen o cen al s anda diza ion wi h local demands, especially
in discon inuous a eas such as skills policy. The esea ch inescapably concluded ha coun y
go e nmen s in hei p esen o m a e ypically poo ly p epa ed wi h he equi ed specialized
capaci y, dependable esou ces, o e ec i e ope a ional au onomy o pu sue inno a ion
e ec i ely. These h ee s uc u al ac o s—Capaci y De ici , Fiscal Dependence T ap, and
Sys emic Co-o dina ion Failu e — ac oss go e nance ie s a e he main d i e s o he
implemen a ion gap. These ine iciencies do no allow o ansla ing na ional policy objec i es
in o cus omized local economic ac i i y, hus unde cu ing he e en ual a ge s o
decen aliza ion. E ec i e models, such as he In eg a i e Local O ganize , ha e demons a ed
ha local au ho i ies mus ac i ely de elop inno a ion pla o ms o add ess hese gaps. The
s udy sugges s ha policy changes should include a shi owa d ocused capaci y building,
empowe ing coun ies inancially o align esou ces wi h asks, and ins i u ionalizing Mul ile el
Go e nance sys ems o achie e policy consis ency. To ans o m na ional inno a ion in en in o
sus ainable local economic ac ion, i is c ucial o in es in he inal s ages o policy
implemen a ion.
KEYWORDS: Capaci y De ici , Fiscal Dependence T ap, Mul ile el Go e nance Sys ems, Sys emic Co-O dina ion Failu e
I. INTRODUCTION
The De olu ion Impe a i e and he Inno a ion
Pa adox.
This ising ole o egions and ci ies as sou ces o global
economic pe o mance has con ibu ed o he popula iza ion
o he Decen aliza ion Thesis, which s a es ha inno a ion is
essen ially a egionalized p ocess ha elies on he s eng h
o di e en egions (Gullma k & Clausen, 2023). As a esul ,
na ional go e nmen s a e no longe adhe ing o cen alised,
monoli hic policies. S ill, hey a e mo ing owa d complex
Mul ile el Go e nance (MLG) sys ems, which means ha
poli ical, adminis a i e, and iscal powe s o e science,
echnology, and inno a ion (STI) a e being ans e ed o
coun y and municipal go e nmen s. This eloca ion is based
on he p emise ha local o ganisa ions possess be e aci
knowledge o local ma ke condi ions, skill equi emen s, and
en ep eneu ial ecosys ems, allowing policies o be di ec ed
o maximum e ec i eness (He and Yang, 2025).
Ne e heless, his sys emic change has e ealed one
o he mos essen ial weaknesses: he policy implemen a ion
gap (Hudson, Hun e , and Peckham, 2019). This disconnec
highligh s he signi ican dispa i y be ween he ambi ious
objec i es o na ional inno a ion policies (such as building a
s ong knowledge economy o es ablishing echnology
B idging Policy and P ac ice: How Coun y Go e nmen s T ansla e Na ional Inno a ion Policy in o Local Ac ion
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Ru h G. Mu honi Kimani, RAJAR Volume 11 Issue 11 No embe 2025
cen es) and he agmen ed and une en na u e o coun y-
based implemen a ion (Abdullahi and O hman, 2020). The
complexi y o ansla ing la ge-scale and s anda dised cen al
s a egies in o local implemen a ion o ces coun y leade s o
become knowledge b oke s, ansla ing abs ac objec i es
in o p ac ical p og ams (Zhu and Fauche , 2025).
This scena io o ms he undamen al Inno a ion
Pa adox o de olu ion. On he one hand, he change o powe
can gua an ee local cus omisa ion, p o iding coun ies wi h
au onomy and he possibili y o use so-called local choice
(Ecke sley, 2017), he eby ensu ing policy e ec i eness. Fo
example, au onomy will enable a coun y o de elop i s own
low-ca bon incen i e policy ha ocuses on local indus ial
speci ics, maximising en e p ise change (He & Yang, 2025).
Con e sely, he same ans e can lea e coun ies ulne able
o an ex eme implemen a ion ailu e because o a lack o sub-
na ional esou ces and capaci y (Ka e, 2023).
One o he mos no able examples o his ension is
he in oduc ion o Technology and Inno a ion Suppo
Cen es (TISCs) in Kenya. Al hough he na ional policy has
sough o decen alise access o In ellec ual P ope y (IP)
in o ma ion, local implemen a ion has been signi ican ly
hinde ed by issues o poo in as uc u e and insu icien ly
ained pe sonnel a he coun y le el (Lugasi & Odhiambo,
2022). Equally, he la ge objec i e o de eloping local
con en and abili ies needed o indus ialise necessi a es
complica ed co-o dina ion o execu e, which is usually
beyond he inancial and echnical capaci y o inancially and
echnically hin coun y go e nmen s (Kingi i & Okemwa,
2021). Mo eo e , he dependence o local o ganisa ions on
cen ally unded bodies may esul in a si ua ion o low
le e age, making i challenging o balance and limi ing ac ual
local so e eign y (Elias, 2025).
The esou ce- esponsibili y misma ch is he c i ical
cons ain ha mo i a es his implemen a ion gap. The
guiding esea ch ques ion ha will d i e his a icle is as
ollows: Do Coun y go e nmen s ha e he equi ed
esou ces, specialized capaci y, and ope a ional au onomy o
ans e he na ional policy o inno a ion in o local ac ion
e icien ly, and wha a e he speci ic dimensions o he
implemen a ion gap?
The ollowing sec ions will i s de ine a concep ual
amewo k o implemen a ion esea ch. I will hen examine
h ee in e sec ing issues, including he capaci y de ici ,
esou ce cons ain s, and ailu es in au onomy and e ical
co-o dina ion, and inally conclude wi h models o
success ully b idging he policy-p ac ice gap.
II. CONCEPTUAL FRAMEWORK:
UNDERSTANDING THE IMPLEMENTATION GAP
To examine he p ocess o na ional inno a ion
policy ansla ion (o lack he eo ) in o local ac ion, i is
necessa y o base he discussion on p o en policy
implemen a ion heo y, he machine y o de olu ion, and he
poli ics o mul ile el go e nance.
2.1 Policy Implemen a ion Pa adigms: Top-Down, Bo om-
Up, and Syn hesis
The Top-Down app oach domina ed ea ly policy
analysis, as bes known om P essman and Wilda sky. The
main idea behind hei assump ion is ha success ul
implemen a ion depends on he cen al go e nmen ’s
capaci y o de ine goals clea ly, minimise he disc e ion o
lowe -le el o icials as much as possible, and ensu e a igh
chain o command (Weible, 2023). Top-down inno a ion
would imply uni o m p ocedu es in which, o example, g an
applica ions o he es ablishmen o egional inno a ion unds
would be implemen ed by coun y go e nmen s ac ing me ely
as execu o s o such commands. This model conside s he
implemen a ion gap as a compliance o con ol ailu e.
Ne e heless, he Top-Down model was ound o be
ine ec i e in explaining why policies end o ail when
challenged by bu eauc a ic complexi y and local poli ical
eali ies. This ga e ise o he Bo om-Up app oach, which
was ad oca ed by schola s such as Weible (2023), who
p esupposed ha s ee -le el bu eauc a s —local o icials
wo king in di ec con ac wi h ci izens and enjoying
signi ican p ac ical disc e ion —de e mine he ac ual success
o ailu e o a policy. Applying his o he STI con ex , coun y
s a need o ansla e a na ional policy ega ding low-ca bon
en e p ise incen i es (He & Yang, 2025) in o local
businesses, and equen ly, his can be done by adap ing he
egula ions o eal-wo ld limi a ions.
The Syn hesis App oach is he mos sui able
amewo k o his esea ch. This model assumes ha policy
implemen a ion is nei he pu ely command and con ol no
en i ely local adap a ion, bu a he a long- e m p ocess o
nego ia ion and ba gaining be ween cen al policymake s and
local implemen e s (Weible, 2023). This me hod will be
pa icula ly applicable in his case, as we can in e p e he
implemen a ion gap no as a me e adminis a i e ailu e, bu
a he as he p oduc o policy design de ec s (Top-Down) and
a lack o local capaci y o s a egic exploi a ion o Au onomy
(Bo om-Up).
2.2 De olu ion, Au onomy, and Powe Dynamics
To p ope ly measu e he s uc u al en i onmen o
coun y inno a ion policy, we need o di e en ia e be ween
he concep s o decen alisa ion and de olu ion. Acco ding o
Ka e (2023), decen alisa ion is associa ed wi h he decision
o dis ibu e du ies o he cen al go e nmen . In con as ,
de olu ion is he dis ibu ion o all poli ical, adminis a i e,
and iscal powe o a o mally es ablished sub-na ional
go e nmen . Local au onomy, he e o e, has a s uc u al basis
in de olu ion. Ecke sley (2017) desc ibes local au onomy as
he legal and poli ical igh s o sub-na ional uni s o make
au onomous decisions abou hei ope a ions, budge s, and
me hods o ope a ion. This independence is essen ial in he
sphe e o inno a ion as i p omo es local policy. To illus a e,
a coun y wi h a dis inc economic makeup can ocus on
ag icul u al echnology expe imen a ion a he han
manu ac u ing inno a ion due o i s au onomy.
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Howe e , his independence is o en comp omised
by Powe Dependency. The o mal legal au ho i y may be
p esen , bu he p ac ical capabili y o a coun y o use i s
powe is cons ained by i s eliance on he cen e, speci ically,
i s iscal eliance (Guimón, 2018). A limi ed le e age by local
ac o s in a pa on-clien ela ionship, as Elias (2025)
emphasizes in a di e en con ex , imposes a cons ain on
so e eign y, necessi a ing se e e ade-o s. When one o he
coun ies is hea ily dependen on cen al ans e s, wi h mo e
han 80 pe cen o i s budge , i s policy o inno a ion will
au oma ically ollow cen al di ec i es, ega dless o how
much he coun y is legally independen . This inancial
eliance is a se e e cons ain on he ange o local policy
de elopmen , e en hough, in heo y, de olu ion can be
e ec i e.
2.3 Inno a ion Policy and Mul ile el Go e nance (MLG)
The Mul ile el Go e nance (MLG) is a amewo k
wi hin which he policy o STI is unde aken in he de ol ed
sys ems. Guimon (2018) de ines i as a model o policy-
making ha is decen alised, nego ia ed a na ional, egional,
and local le els, as opposed o hie a chical policy-making.
The na ional go e nmen usually es ablishes he gene al
di ec ion, de e mines na ional p io i ies (e.g., mi iga ing
clima e change), and egula es he majo unding sou ces in
his MLG con ex . The coun y go e nmen , in u n, is
en us ed wi h he key in eg a i e o ganize ole (Zhao, 2021)
and is le o shoulde he esponsibili y o ans o ming hese
na ional goals in o local indus y de elopmen and skills
plans (Kingi i and Okemwa, 2021). The coun y should
become a knowledge b oke (Zhu & Fauche , 2025), which
means combining ex e nal expe ise wi h he needs o he
local popula ion o ou line speci ic ac ion cou ses.
The implemen a ion gap, hence, lies in he
inadequacy o he MLG s uc u e o esou ce he local ie .
This is well exempli ied by he challenges su ounding he
implemen a ion o Technology and Inno a ion Suppo
Cen es (TISCs) in Kenya: he na ional policy p o ides he
amewo k, bu he TISC si es on he coun y le el do no
achie e hei goals due o inhe en sho ages in he local
adminis a i e and echnical capaci y o es ablish and
main ain hem (Lugasi & Odhiambo, 2022). This
o ganisa ional ail y sugges s ha e ec i e MLG o d i e
inno a ion equi es mo e han me ely decen alising powe ;
i necessi a es capaci y co-c ea ion and a p ecise speci ica ion
o powe s o p e en policy dispe sion (Kollydas, 2024).
III. CHALLENGE 1: THE CAPACITY DEFICIT (THE
HUMAN CAPITAL GAP)
Capaci y De ici is he mos angible es ic ing
ac o ha a ec s he success ul implemen a ion o na ional
inno a ion policy a he sub-na ional le el. Capaci y he e can
be unde s ood no only as he numbe o pe sonnel, bu also
as he adminis a i e and echnical expe ise, as well as he
s a egic planning, managemen , and execu ion skills o local
go e nmen o ganisa ions (Gullma k & Clausen, 2023). The
absence o his capaci y ende s he disc e iona y au ho i y
ha de olu ion empowe s ei he do man o misguided,
se iously limi ing he coun y’s oppo uni ies o gene a e
ans o ma i e policy esul s (Zamb ano-Gu ié ez and
Puppim de Oli ei a, 2022).
3.1 Key De iciency 1: Lack o Specialised Skills
The i s c ucial gap is he lack o s a who possess
a speci ic echnical skills base o ope a e he mode n
inno a ion sys ems. The policy o inno a ion equi es skills
a beyond hose ypically ound in egula public
adminis a ion. I equi es he compe ency in In ellec ual
P ope y (IP) managemen , he capaci y o ack and assess
Resea ch and De elopmen (R&D) pe o mance, and he
capabili y o de elop compe i i e g an p oposals.
This was one o se e al challenges iden i ied by
Mugwagwa e al. (2015) when e alua ing heal h esea ch and
inno a ion policies in Mozambique, Senegal, and Tanzania.
Thei esul s indica e ha cen al policies we e p esen , bu
he abili y o implemen hem, in o he wo ds, he echnical
capaci y o adminis e esea ch g an s o e la ge and mul i-
yea p ojec s and en o ce e hical s anda ds, was equen ly
lacking a he local le el. Likewise, Lesnikowski e al. (2020)
demons a ed in hei s udy on clima e change adap a ion
policy ha local go e nmen s lacking specialised planning
capaci y end o de aul o passi e, eac i e implemen a ion
s yles, a he han he p oac i e, in eg a i e s a egies
equi ed o achie e sys emic inno a ion. This implies ha
na ional p og ams o de elop speci ic echnological sec o s,
such as high- ech manu ac u ing o bio echnology, equen ly
emain a he planning phase, wi h no coun y o icial
possessing he necessa y echnical expe ise o suppo he
domain expe o echnology ans e agen .
3.2 Key De iciency 2: O ganisa ional Thinness
The skills gap, as specialised, is u he augmen ed
by a mo e gene al s uc u al ulne abili y ha Guimón (2018)
desc ibes as o ganisa ional hinness in eme ging economies.
This no ion e e s o he sys emic absence o s ong and
e ec i e in e media y o ganisa ions ha play a i al ole in
an e ec i e inno a ion sys em. These in e media ies consis
o p o essionally ope a ed echnology business incuba o s,
uni e si y echnology ans e o ices, expe public
inno a ion agencies, and en u e capi al acili a ion agencies.
These o ganisa ions in he ma u e inno a ion ecosys em
abso b non-local knowledge and se e as in e media ies
be ween esea ch, go e nmen , and indus y. These s uc u es
a e non-exis en o weakly ins i u ionalised in capaci y-
de icien coun ies. As a esul , local go e nmen s equen ly
ha e o cope wi h complex asks such as men o ing s a -ups
o es ablishing he igh ma ke connec ions, which hey a e
s uc u ally ill-equipped o pe o m. Acco ding o Conlé
(2023), special-pu pose inno a ion pla o ms a e essen ial
means o ancho ing non-local knowledge and linking global
ends o local expe imen a ion; o ganisa ional hinness
hinde s ancho ing capabili y.
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3.3 The Une en Dis ibu ion o Capaci y: Me opoli an s.
Ru al Di ide
The capaci y de ici is no e enly dis ibu ed,
esul ing in a sha p and unbalanced implemen a ion
landscape. In hei pape de o ed o decen alised Indonesia,
Se iawan e al. (2022) con i med ha he capaci y o he local
go e nmen se es as a di ec and subs an ial p edic o o he
ou comes o public se ice deli e y. The capaci y in la ge
u ban coun ies (e.g., a na ional uni e si y o inancial cen e)
is ela i ely high. These coun ies can ec ui and e ain
specialised alen , equen ly ha e well-es ablished uni s
ocused on economic de elopmen o in es men p omo ion,
and possess he ins i u ional ma u i y o na iga e he complex
na ional compe i i e unding p ocesses. They manage o ap
in o hese unds o co- inance local incuba o s o seed-s age
in es men s.
On he o he hand, he e is a deep capaci y sho age
in he u al, pe iphe al coun ies. The sho age o good jobs,
low wage a es, and he dis ance o la ge esea ch cen es
con ibu e o b ain d ain. In such coun ies, e en a single
designa ed o ice who can c ea e an e ec i e na ional g an
p oposal mee ing high echnical s anda ds is equen ly
missing (Hilmawan e al., 2023). This gap is c ucial since i
c ea es a icious cycle o unde in es men : low capaci y does
no allow access o na ional compe i i e unds, and a lack o
unds does no allow o in es men in capaci y building.
Acco ding o Abdullahi and O hman (2020), ins i u ional
upg ading (as in he case o China’s coun ies- o-ci y
upg ading policy) can ha e a posi i e e ec on i m
inno a ion, and he e o e, ins i u ional powe (which is
dependen on human capaci y) is no nego iable in e ms o
achie ing desi ed de elopmen ou comes.
3.4 Remedies and O ganisa ional Choices
The solu ion o he capaci y de ici should be s a egic.
Acco ding o Schmid hube e al. (2021), local go e nmen s
ha e o conside making in en ional o ganisa ional decisions
abou hei adop ion pa hways due o a lack o esou ces. This
implies he u ilisa ion o co e esou ces by means such as:
a) Capaci y-Building Hubs: The na ional go e nmen s
mus in es in egional cen es o excellence ha
deli e s anda d se ices, including g an w i ing
suppo , IP legal clinics, and R&D moni o ing
expe ise, a ailable o mo e han wo coun ies wi h
low capaci y.
b) Embedded Technical Assis ance: Ins ead o b ie
aining sessions, cen al agencies should send
echnical expe s (o knowledge b oke s) o coun y
go e nmen s o be placed he e long- e m, whe e
hey can help ain local employees, as well as
ins i u ionalise bes p ac ices (Abdullahi and
O hman, 2020).
Finally, e ec i e implemen a ion is based on
ansi ioning owa d p oac i e, ans o ma i e inno a ion,
a he han eac i e adminis a i e s yles, which canno be
achie ed wi hou i s illing he specialised human capi al
gap.
IV. CHALLENGE 2: THE RESOURCE CONSTRAINTS
(THE FISCAL GAP)
The second signi ican o ganisa ional issue acing
coun y go e nmen s in hei implemen a ion o na ional
inno a ion policy is he Resou ce Cons ain , usually in he
o m o a c ippling Fiscal Gap. Unless sus ainably and
adequa ely inanced, e en he mos compe en and
independen local adminis a ion is unable o uel inno a ion,
which equi es in es men in long- e m capi al o esea ch
and de elopmen , as well as capi al in as uc u e.
4.1 Fiscal De olu ion: Decen alised s. Au onomous
Funding
To examine esou ce alloca ion, i is necessa y o
dis inguish be ween wo ca ego ies o unding in de ol ed
sys ems. The o me is Decen alised Funding, o cen al
go e nmen budge alloca ions, gene ally h ough s a u o y
g an s o condi ional ans e s, ope a ed locally. The coun y
main ains adminis a i e au ho i y o e he use o such unds
o de ol ed expendi u es, such as heal h o ag icul u e, bu
he o igin o hese unds is he cen al easu y. The second
and mo e i al one is Au onomous Funding, which exp esses
he au ho i y o he local go e nmen o collec , hold, and
dispose o i s own-sou ce e enue (OSR) (usually p ope y
axes, use ees, and local le ies) (Ka e, 2023). Au onomous
Funding is essen ial o a success ul inno a ion policy, as i
ensu es ce ain y and incen i es o in es s a egically.
Ne e heless, Guimón (2018) poin s ou ha in mos
eme ging economies, he iscal decen alisa ion p ocess ends
o de ol e esponsibili y and es ic he adequa e e enue-
aising capaci y o he sub-na ional le el, which inhe en ly
imbalances he si ua ion.
4.2 The Dependence T ap and Comp omised Au onomy
The wo s impac o an inadequa e iscal base is he
Dependence T ap. Coun ies wi h ew local ax- aising
au ho i ies a e s ongly dependen on ans e s om he
cen al go e nmen , which, as Ka e (2023) obse es in he
con ex o se ice p o ision in Kenya, signi ican ly in e e es
wi h hei independence. This eliance implies ha he
coun y’s spending p io i ies should be closely coo dina ed
wi h cen al di ec i es o ensu e a smoo h inancial low,
ega dless o whe he he cen al p io i ies align wi h local
inno a ion equi emen s o no . The heo e ical backg ound
is p o ided by Ecke sley (2017), who explains ha al hough
local go e nmen s may ha e o mal legal au ho i y o make
local choices in policy-making, such decisions a e ha dly
possible when hey lack he inancial capaci y o und
al e na i es o he cen al agenda. An example is a na ional
policy ha may emphasise a massi e in es men in uni e si y
esea ch. In con as , a u al coun y may see i s immedia e
inno a ion impe a i e as in es men s in a isanal skills
de elopmen o mic o-le el business p ocess inno a ion. The
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coun y lacks he iscal independence o ealloca e unds, so
na ional di ec i es ake p ecedence, u he con ibu ing o
he implemen a ion gap.
The ela ionship is appa en in he iscal analyses o
SADC (Sou he n A ican De elopmen Communi y) ci ies
(based on he policy- ele an con ex o he ou line o he
sec ion). The local go e nmen s in hese a eas a e equen ly
es ic ed by cen al laws ha limi hei abili y o aise high
a es o axa ion, such as co po a e axes o high p ope y
axes. Ins ead, hey ha e o depend on hese p edic able
sou ces o income, like his. This ins i u ional cons ain
dis o s he incen i es o local economic s akeholde s. The
coun y canno e ec i ely s imula e local i ms o engage in
p ojec s ha c ea e local con en and capabili ies (Kingi i and
Okemwa, 2021) because he local go e nmen lacks he
inancial powe o be aken as a c edible, independen pa ne
wi hou he capaci y o und inno a ion on a local basis.
4.3 Budge a y Ins abili y and he Impedimen o R&D
In addi ion o he numbe o esou ces, he iming
and egula i y o unding pose a d as ic challenge o long-
e m inno a ion planning. Inno a ion p ojec s, whe he
h ough in es men in in as uc u al R&D, ope a ing
business incuba o s, o inancing echnology pilo p ojec s,
equi e consis en , mul i-yea budge alloca ion. None heless,
whe e coun ies ely on cen al ans e s, hey become
suscep ible o budge luc ua ions due o poli ical ba gaining,
bu eauc a ic s alling, o na ional economic shocks. Abdullahi
and O hman (2020) s a e ha he policy implemen a ion gap
can be b idged by, among o he measu es, ensu ing a s able
alloca ion o esou ces. The lack o imely o s eady cen al
ans e s means coun y inno a ion p og ams a e equen ly
cu o s alled hal way h ough he yea .
One hea ending case o his is obse ed in he
in oduc ion o Technology and Inno a ion Suppo Cen es
(TISCs). Lugasi and Odhiambo (2022) epo ed ha he long-
e m iabili y o TISCs was unde mined by he cen al
go e nmen ’s ailu e o und ope a ional expenses, e en in
a eas whe e he ini ial in as uc u e was in place, ende ing
he cen es ine ec i e and incapable o achie ing hei
manda e. This ola ili y compels coun y manage s o ocus
on immedia e and sho - e m (such as s a sala ies) needs
a he han he long- e m in es men needed in R&D
in as uc u e and inno a ion pla o ms, which, on a e age,
equi e yea s o pay o .
4.4 The Con as o Fiscal Empowe men
The implemen a ion o he policy in iscally
empowe ed egions is success ul, and he challenges aced by
he dependen coun ies a e s iking. Fo example, He and
Yang (2025) examined a i udes owa ds u ban low-ca bon
incen i e policies. They concluded ha e ec i e en e p ise
ans o ma ion and upg ading we e highly co ela ed wi h he
abili y o local go e nmen s o design and inance incen i e
schemes ha co esponded o he local indus ial base. This
le el o capaci y has ypically been associa ed wi h inc eased
iscal au onomy, which enables local go e nmen s o be
in eg a i e o ganise s (Zhao, 2021) o inno a ion, as opposed
o being adminis a o s o cen ally p ede e mined
alloca ions. Finally, he Fiscal Gap o inadequa e ax powe
and eliance on uns able ans e u ns policy eedom in o
adminis a i e ine ec i eness, which ensu es ha na ional
inno a ion policies ail a he essen ial s age o local
implemen a ion.
V. CHALLENGE 3: AUTONOMY, CO-ORDINATION,
AND THE POLICY MIX
The hi d and mos challenging obs acle o na ional
inno a ion policy ansla ion is he inabili y o coo dina e,
which di ec ly esul s om he wo sides o he coin o local
au onomy. Al hough de olu ion in oduces he p inciple o
local choice (Ecke sley, 2017), he success o his choice
depends on he success o he e ical and ho izon al
alignmen (wi h he cen al go e nmen and wi h
neighbou ing coun ies).
5.1 Ve ical Co-o dina ion Failu e: S anda disa ion s.
Tailo ing
The ailu e o e ical co-o dina ion is inhe en in
he clash be ween na ional in e es s, which p e e
s anda diza ion as a means o adminis a i e e iciency, and
local equi emen s, which p e e cus omiza ion o achie e
policy e ec i eness. When he cen al go e nmen imposes
challenging, uni o m, one-size- i s-all equi emen s, hese
equi emen s smo he he e y locally esponsi e inno a ion
policies ha de olu ion is supposed o p omo e.
One o he mos impo an ins ances o such a policy
con lic is obse ed in he de olu ion o local skills policy
(Kollydas, 2024). The basic inpu s o any egional inno a ion
sys em a e skills and oca ional aining, bu hei oles a e
usually di ided. Cu iculum design, acc edi a ion, and
ce i ica ion s anda ds a e gene ally unde he con ol o he
na ional educa ion and aining bodies. A he same ime,
economic de elopmen agencies a he coun y le el a e
esponsible o a ac ing in es men s, encou aging
en ep eneu ship, and mee ing local indus ial needs. Such
agmen ed decision-making a di e en le els gene a es
disjoin ed local skills p og ams. Acco ding o Kollydas
(2024), o success ully inno a e local skills, he e should be
explici , comp ehensi e, and unambiguous powe s handed
o e o local au ho i ies. In he absence o his, he coun y
emains incapable o ailo ing cu icula o unding lows o
mee he pa icula demands o local indus ies, including a
localised emphasis on digi al ag icul u e o specialised
a isanal p oduc ion, hus unable o de elop he local con en
and capabili ies ha a e needed o achie e sus ainable
indus ialisa ion (Kingi i & Okemwa, 2021). This dispa i y in
policy is likely o exace ba e he o e all gap in
implemen a ion (Hudson e al., 2019).
5.2 Ho izon al Co-o dina ion Challenges
Besides e ical misalignmen , coun ies also ace
co-o dina ion di icul ies a he ho izon al le el, namely he
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c i icali y o coope a ion be ween pee ju isdic ions.
Special y esea ch pa ks, anspo a ion connec ions, o la ge
uni e si ies a e commonly i ualized as inno a ion asse s
se ing also neighbo ing coun ies. Coope a ion is necessa y
o sha e expenses, p e en duplica ion, and capi alise on
olume.
Howe e , unp oduc i e in e -ju isdic ional
compe i ion is equen ly p omo ed by he eali y o
de olu ion. Ra he han coope a e o c ea e a s anda d
egional echnology hub, he neighbou ing coun ies can
compe e o p o ide excessi e ax elie o a ac he same
ancho company o o eplica e small-scale echnological
inno a ion p og ams. This compe i ion consumes limi ed
esou ces and ails o allow he de elopmen o s ong and
egionally le elled inno a ion sys ems (Gullma k & Clausen,
2023). To illus a e, when wo neighbou ing coun ies
conside s a ing hei own modes Technology and
Inno a ion Suppo Cen es (TISCs) a he han consolida ing
esou ces in o a single la ge cen e, bo h acili ies ul ima ely
end up in bank up cy due o a lack o unds and echnical
pe sonnel (Lugasi & Odhiambo, 2022).
5.3 Local Au onomy in P ac ice: The Double-Edged Swo d
The main ea u e o de olu ion, au onomy, is a wo-
edged swo d in p ac ice (Ka e, 2023). Local leade s can use
hei disc e iona y powe o p o ide policy e ec i eness
when applied posi i ely. A p oac i e coun y execu i e, ac ing
as a knowledge b oke , could exe cise hei independence o
eb and a na ional low-ca bon policy (He & Yang, 2025) and
edi ec he p io i ies o gene al policies owa ds en e p ise-
speci ic ans o ma ion incen i es ailo ed o hei pa icula
manu ac u ing ounda ion.
None heless, poli ical cap u e can also be applied o
disc e iona y powe . Zhu and Fauche (2025) cau ion ha ,
despi e he local choice p omo ed by de olu ion, he
ans e ed powe is a imes suscep ible o a possible lack o
capaci y and excessi e exploi a ion o limi ed esou ces. This
is o en seen wi h local leade s spending geopoli ical aid
unds, which should be di ec ed o in ica e, long- e m
inno a ion (such as R&D g an s), on isible, sho - e m
p ojec s (such as a new adminis a i e block o populis
gi eaways) ha gene a e immedia e poli ical bene i s. This
emphasis on pa onage a he expense o sys emic
imp o emen en ails demanding inancial ade-o s and
ul ima ely unde mines he long- e m desi ed e ec s o
na ional inno a ion policies (He & Yang, 2025). The
in e ac ion be ween a co-o dina ion ailu e and he aga ies
o local disc e iona y powe will ensu e ha he gap in
implemen a ion emains, e en whe e unding and capaci y
a e a ailable ma ginally.
VI. CASE STUDIES: MODELS FOR BRIDGING THE
GAP
Al hough he issue o capaci y, esou ces, and co-
o dina ion p esen s a las ing implemen a ion gap, se e al
models ac oss he globe ha e shown ha coun y
go e nmen s, wo king wi h hei na ional pa ne s, can
o e come his di ide. These case s udies a e cen ed on he
inno a i e o ganisa ion s uc u es ha u ilise local
independence and bypass s uc u al sho comings.
6.1 Case S udy A: The In eg a i e Local O ganise Model
Some o hese decen alized sys ems, no ably in Eas
and Sou h Asia, a e now cha ac e ized by local go e nmen s
going beyond passi e adminis a ion and becoming he
In eg a i e Local O ganize (Zhao, 2021). This model
esponds explici ly o he issue o o ganisa ional hinness and
he absence o s ong media o y ins i u ions. The local
go e nmen is an ini ia i e de elope a he han wai ing un il
he incep ion o inno a ion pla o ms h ough he
in ol emen o p i a e capi al o cen al agencies.
In Sou h China, local go e nmen s end o be a he
o e on o c ea ing inno a ion hubs, including specialised
indus ial pa ks o science ci ies (Zhao, 2021). This s a egy
en ails ha he local go e nmen u ilises i s egula o y and
inancial ins umen s o acqui e land, p o ide essen ial
u ili ies, and, mos impo an ly, es ablish coo dina ing
agencies ha he p i a e sec o o uni e si ies would no
spon aneously es ablish. By playing his coo dina ing ole,
he local s a e akes he ini ia i e o add ess he co-o dina ion
loopholes (Challenge V). I a ac s p i a e in es men ,
he eby o e coming he ba ie s ha o en hinde de eloping
coun ies in es ablishing an e ec i e inno a ion sys em
(Lema, K aeme -Mbula, and Rakas, 2021). This ac i e
posi ion ep esen s a high le el o public sec o inno a ion
ha has a signi ican impac on de elopmen al ou comes
(Hilmawan e al., 2023).
6.2 Case S udy B: S a egic De olu ion and Policy Cla i y
To a oid he aps o Ve ical Co-o dina ion Failu e
and policy agmen a ion (Challenge V), e ec i e models a e
based on he p o ision o genuinely comp ehensi e and well-
delimi ed au ho i ies ega ding pa icula policy a eas. The
S a egic De olu ion in Skills Policy p oposals a e one such
example.
The abili y o inno a e locally e ec i ely, as
discussed by Gullma k and Clausen (2023), is insepa ably
linked o o ganisa ional decisions and policy o mula ion a
he local le el. S a egic de olu ion gi es local go e nmen
no only an explici manda e, budge , and au ho i y o add ess
local ma ke demands bu also p o ides na ional minis ies
wi h a clea and explici manda e and au ho i y o decide he
oca ional aining and skills de elopmen needs o local
ma ke s. To demons a e his, a local go e nmen is g an ed
comple e ju isdic ion o e he unds a i s oca ional
ins i u ions. I can he e o e quickly edi ec in es men on
gene ic ade skills o, say, speci ic ag o-p ocessing me hods
demanded by i s local indus ies. Such anspa ency
elimina es policy ambigui y ha hinde s implemen a ion and
enables local go e nmen s o ocus hei e o s on hei
p ima y business, he eby enhancing se ice deli e y and
local go e nance (Se iawan e al., 2022).
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6.3 Case S udy C: Communi y-D i en Planning
The las model ocuses on he exploi a ion o local
aci knowledge, which is o en o e looked in cen alised
policy o mula ion. Economis s ha e always been awa e o
he be e in o ma ion ha local p ac i ione s possess
compa ed o ha o dis an cen al planne s. This is di ec ly
implemen ed in o he policy p ocess h ough communi y-
d i en planning mechanisms, whe eby he inno a ion
ad anced is ele an and ans o ma i e (Zamb ano-
Gu ié ez and Puppim de Oli ei a, 2022).
In Kenya, In eg a ed De elopmen Plans (IDPs)
necessi a e b oad consul a ion among ci izens and
communi y o ganisa ions by coun y go e nmen s. Al hough
occasionally bu eauc a ic, when applied well, IDPs would
ensu e ha local p io i ies in inno a ion, such as in es ing in
small-scale d ip i iga ion echnology in d ough -p one
egions ins ead o la ge-scale and cen ally planned dams, a e
in o med by eal-li e expe iences and he ac ual needs o he
people. Likewise, al hough in ano he policy a ea, he idea o
in eg a ing gende equali y objec i es ia local budge ing, as
illus a ed in e o s sponso ed by he B ookings Ins i u ion
(Chak abo y & Ray, 2025), helps o show how decen alised
planning may be designed o p oduce pa icula , locally
speci ic esul s. This bo om-up model o in elligence
collec ion ensu es ha he ensuing inno a ion s a egy is no
me ely inc emen al bu indeed ans o ma ional, add essing
he long-s anding local de elopmen -wide weaknesses (Sube
e al., 2025). Communi y inpu helps coun ies ansi ion o
p oac i e and e ec i e implemen a ion s yles (Lesnikowski
e al., 2020), enabling hem o ha e he mos impac on local
policy.
VII. CONCLUSION AND RECOMMENDATIONS
7.1 Syn hesis o Findings
This pape begins by iden i ying he in e na ional
end o decen alisa ion and he esul ing Inno a ion
Pa adox, which is he p omise o local e ec i eness
punc u ed by he possibili y o ailu e in implemen a ion.
This s udy’s indings es ablish ha he signi ican policy
implemen a ion gap be ween na ional policy on inno a ion
and coun y-le el ac ion is caused by h ee in e locking
s uc u al de ici s. Fi s , he Capaci y De ici ende s local
go e nmen s incapable o pe o ming complex echnical
unc ions, such as IP managemen o R&D moni o ing, which
is exace ba ed by o ganisa ional hinness (Gullma k &
Clausen, 2023). Second, he Fiscal Gap also leads o a
c ippling Dependence T ap, cha ac e ised by limi ed ax-
aising powe s, which unde mines absolu e local con ol and
ins ead causes budge ola ili y and discou ages long- e m
in es men (Elias, 2025). Las ly, he co-o dina ion ailu e,
especially he e ical ine iciency o one-size- i s-all
equi emen s agains he necessi y o a local esponse o
needs in ce ain aspec s, such as skills policy (Kollydas,
2024), makes he de elopmen o consis en inno a ion
s a egies impossible.
7.2 Policy Recommenda ions
To o e come his gap, cen al policy make s and
de elopmen p ac i ione s should no longe limi hemsel es
o de olu ion o esponsibili y, bu s i e o empowe he sub-
na ional le el in an ac i e sense:
1. Ta ge ed Capaci y Building and P o essionalisa ion:
The in es men should be edi ec ed no om
gene al aining, bu om highly specialised
echnical skills. I en ails c ea ing egional cen es
ha o e echnical suppo and expe ise in g an
w i ing, In ellec ual P ope y (IP) p ocedu es, and
echnology ans e , so ha coun ies can mo e
beyond passi e implemen a ion pa e ns
(Lesnikowski e al., 2020) and secu e compe i i e
na ional unds.
2. Fiscal Empowe men and Ce ain y: To o e come
he Dependence T ap, cen al go e nmen s should
g an coun ies inc easing au onomy in ax- aising,
aligning i wi h hei inancial esou ces and policy
esponsibili ies. Mo eo e , cen al ans e s whe e
needed should be designed o be long- e m and
p edic able, acili a ing consis en unding o
inno a ion asse s o e ime (Lugasi and Odhiambo,
2022).
3. Clea Policy Alignmen h ough Fo malised MLG:
The unce ain y ha con ibu es o Ve ical and
Ho izon al Co-o dina ion Failu e should be
emo ed. Fo malised Mul ile el Go e nance
(MLG) amewo ks mus be adop ed o en o ce
e ical co-design and o e explici legisla ion o
collabo a e in e -coun y on join inno a ion
in as uc u e, as has p o en success ul wi h
S a egic De olu ion models (Se iawan e al., 2022).
7.3 Final Though
The case s udy e idence, including he In eg a i e
Local O ganise model (Zhao, 2021) and Communi y-D i en
Planning, sugges s ha local go e nmen s a e no me ely
adminis a i e ga ekeepe s bu also po en agen s o
inno a ion when equipped wi h he igh ools. The abili y o
in es in he independence and p edic abili y o coun y
go e nmen s is an in es men in he “las mile” o policy
implemen a ion, making na ional inno a ion aspi a ions a
eali y a he local le el o sus ainable economic change.
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