Basilicata in Europe. Opportunities and Threats from the EU Cohesion Policy and Ideas for policy-learning

CapacityLab – Matera

4th May 2012

Dr Riccardo Crescenzi

London School of Economics

UK

(r.crescenzi@lse.ac.uk)

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Outline The EU Cohesion Policy … n … Why care? - Changing scenario at the Local

and EU level; n … How to care? –

¨ A framework for policy learning in time (Experience of Basilicata) and space (Experience of other EU regions);

¨ Some insights into what we can learn from the EU regions

n … Ideas for discussion

EU Cohesion Policy: Why Care?

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EU Cohesion Policy - Why care? (Internal Perspective)

n  Important component of past and current developmental dynamics of Basilicata (Beneficiary of some support since mid-1980s but stronger involvment after 1989);

n  Important role in qualitative and quantitative terms: around 750 meuro FESR and 330 meuro FSE in 2007-2013.

n  Actual payments 17.4% for FESR and 18.8% for FSE as of February 2011 (generally better than other ‘Convergence Regions);

n  Strong role of the Regional level as beneficiary of funds (Comuni attract a smaller share of resources than in other Convergence regions);

n  Favourable accumulation of skills and competences whithin a stable institutional environment;

n  Changing status (Phasing Out) ... Not less important

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n  In the new programming period in line with Barca Report: ¨ EU Regional Policy as a fully place-based

development policy ¨ Explicit account of spatial impacts of non-spatial

policies ¨ Move away from the convergence criteria to focus on

adjustment and transformation criteria ¨ Explicitly considers spatial population changes,

agglomeration and network effects, local regional capabilities and regional untapped potential

EU Cohesion Policy - Why care? (EU Perspective – Barca Report)

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n  Cohesion Policy is mentioned as a key delivery mechanism for Europe 2020.

n  Regional and local authorities are requested to contribute to this strategy. n  EU Cohesion Policy programmes are expected to:

¨  Select their investment priorities taking into account the starting position of a region or city in relation to the national 2020 targets;

¨  Identify the manner it can best respond to regional/local development needs while at the same time contributing to 2020 targets.

n  Europe 2020 strategy is based on three Pillars: ¨  Smart Growth ¨  Sustainable Growth ¨  Inclusive growth

EU Cohesion Policy - Why care? (EU Perspective – EU2020)

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Evolution of expenditure (II)

... HOW to care

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Place-Based EU Cohesion Policy

n  Impact, outcomes and credibility of Cohesion Policy rests on policy-learning processes and the fostering of institutional innovation

n  Place-based space-specific policies which integrate sector policies into a comprehensive targeted platform are the ideal way to provide public goods tailored to the context

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Policy Cycle Stage Activities Aims

Design Relevance

(Targets vs. Needs)

DIAGNOSIS OF LOCAL NEEDS

FOCUS/BALANCE OF STRATEGY

COORDINATION:

USE OF RESOURCES

EFFICIENCY AND TIMING

Effectivness

(Targets vs. Achievements)

Implementation AND in-itinere evaluation and

monitoring

Ex-post Evaluation

ANALYSIS OF  Time and Space Effects

 Macro / Meso / Micro perspectives

 All Steps above to identify factors conditioning/hampering success

Impact

(Achievments vs. Objectives

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Design

DIAGNOSIS OF LOCAL NEEDS

FOCUS/BALANCE OF STRATEGY:

 Design of balanced strategies;

 Spatial Concentration;

 Concentration on specific Projects/Beneficiaries;

COORDINATION:  Top-down vs. Bottom-Up;

 Spatial coordination vs. Territorial competion (inter-regional);

 Timing

 Between different policy areas (Agricultural Policies; EUROMED; Research and Technology (FP);

Relevance

(Targets vs. Needs)

Policy Cycle Stage Activities Aims

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Design

DIAGNOSIS OF LOCAL NEEDS

FOCUS/BALANCE OF STRATEGY:

 Design of balanced strategies;

 Spatial Concentration;

 Concentration on specific Projects/Beneficiaries;

COORDINATION:  Top-down vs. Bottom-Up;

 Spatial coordination vs. Territorial competion (inter-regional);

 Timing

 Between different policy areas (Agricultural Policies; EUROMED; Research and Technology (FP);

Relevance

(Targets vs. Needs)

Policy Cycle Stage Activities Aims

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Diagnosis of local needs: from SWOT to ‘Integrated Perspective’ n The analysis of EU growth trajectories

suggests that individual developmental drivers should be analysed in a systemic perspective;

n Strong interactions within and between regions;

n EU Experience highlights importanc of integrated perspectives

Socio - Economic Conditions

Innovative Activities (Innovative and absorptive capacity)

International Local - Global Linkages (Pipelines/Networks)

Local and regional policies and investment

Geography (Density and Accessibility)

Incentives / infrastructure

Synergy Compensation

Hindrance

Accessibility to innovation - prone space

Knowledge

spillovers /

Knowledge

seeking

Example: Integrated framework and its five keystones

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Design

DIAGNOSIS OF LOCAL NEEDS

FOCUS/BALANCE OF STRATEGY:

 Design of balanced strategies;

 Spatial Concentration;

 Concentration on specific Projects/Beneficiaries;

COORDINATION:  Top-down vs. Bottom-Up;

 Spatial coordination vs. Territorial competion (inter-regional);

 Timing

 Between different policy areas (Agricultural Policies; EUROMED; Research and Technology (FP);

Relevance

(Targets vs. Needs)

Policy Cycle Stage Activities Aims

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Thematic Focus/Balance of Strategies Existing studies on the genesis of growth in the EU

Regions show that: n  The distribution of funds across development axes

targeted at achieving short-term results and delivering assistance rather that long-term growth;

n  Around 50% of total expenditure devoted to infrastructure investments with limited returns;

n  Limited emphasis on human capital and innovation (support narrowly focused on Science and Technology in this area);

n  The only development axis with short and medium-term positive returns is investment in human capital Excessive focus on one single axis responding to political or national interests;

n  Need for “more locally tailored combination of investment priorities across axes” + making local institutions more

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Spatial Allocation of funds coherent

with policy targets ?

SPATIAL CONCENTRATION

CORRELATION WITH

DISADVANTAGE

 Smaller number of beneficiaries may allow a larger amount of resources to flow in selected regions.  Spatial concentration

maximises the externalities “flowing” within the assisted areas.

 It is possible to identify a specific set of “structural” conditions that are persistently associated with poor economic performance and which are very slow to adjust themselves endogenously (E.g. Social Filter);

Spatial Focus/Balance of Strategies

ANSWER AT THE EU-LEVEL RATHER MIXED ... Limited targeting but improving

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Design

DIAGNOSIS OF LOCAL NEEDS

FOCUS/BALANCE OF STRATEGY:

 Design of balanced strategies;

 Spatial Concentration;

 Concentration on specific Projects/Beneficiaries;

COORDINATION:  Top-down vs. Bottom-Up;

 Spatial coordination vs. Territorial competion (inter-regional);

 Timing

 Between different policy areas (Agricultural Policies; EUROMED; Research and Technology (FP);

Relevance

(Targets vs. Needs)

Policy Cycle Stage Activities Aims

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n  Significant changes in the COMPOSITION of EU spending;

n  Important opportunities for Basilicata after Phasing-out

n  Increasing emphasis on the capability of all EU policies to contribute to ‘territorial and social cohesion’ ¨ Regional Policy alone is not enough to achieve

cohesion (EC 2010; EESC 2007); ¨ Call for a Common Strategic Framework (DG Regio) ¨ Risk of counter-treatment effects (Esposti 2007); ¨ High cost of ‘non-coordination’ (Robert et al 2001; Barca

2009); ¨ Loss of territorial focus of spatially-targeted policies

(Greenbaum and Bondonio 2004).

COORDINATION (I)

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Example of coordination - Regional and agricultural policies of the EU The CAP is a sectoral policy with relevant spatial implications The analysis of the EU expenditure for Regional, Rural and Agricultural policies (and its evolution over time) shows:

n  Potential inconsistencies\conflicts in the regional allocation of the funds ¨  Limited coordination between regional expenditure under different policy headings

n  Capability of Agri Policies to work pro-cohesion ¨ Some ‘reward’ for structural disadvantage from Rural Development Policies; ¨  But this ‘Virtuous Component’ of Rural Development may tend to loose focus over time when their funding is increased ¨ Lack of synergies with Regional Policies in disadvantaged areas;

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n Example on CAP – given magnitude of funding;

n But Innovation Policy (e.g. FP7) also relevant;

n Coordination is also relevant as far as national policies are concerned

COORDINATION (II)

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Design

DIAGNOSIS OF LOCAL NEEDS

FOCUS/BALANCE OF STRATEGY:

 Design of balanced strategies;

 Spatial Concentration;

 Concentration on specific Projects/Beneficiaries;

COORDINATION:  Top-down vs. Bottom-Up;

 Spatial coordination vs. Territorial competion (inter-regional);

 Timing

 Between different policy areas (Agricultural Policies; EUROMED; Research and Technology (FP);

Relevance

(Targets vs. Needs)

Policy Cycle Stage Activities Aims

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… Ideas for discussion

n How to translate the EU Experience into policy innovation for the Basilicata Region? ¨ Diagnostic approach based on integrated

framework; ¨ Balanced strategy with strong focus on needs ¨ Coordination and synergies between policy

areas;