Download EU Regional Policy: method and evaluation

Relations with Countries
outside the EU
EU Regional Policy: method
and evaluation.
Presentation for officials in South Africa
14 September 2011
Unit for Communication, Information and Relations with Third Countries
Directorate-General for Regional Policy
European Commission
1
What is Regional Policy?
• A) The way the EU helps poorer regions catch up
(<75% average GDP)
• B) Help for economically damaged regions to
restructure
• C) Part of Cohesion Policy which has €347
billion for 2007-2013, say €50 billion per year
(including Social Fund, Cohesion Fund…)
• D) Not just a budget but a tried and tested method
2
A Method based on what works (1)
• Made to measure strategies: not imposed upon but
adapted to the specific characteristics and needs of
the region in question.
• Multi level governance: a wide range of
organisations involved at all levels of programme
design and management. State and regional
governments, economic and social partners,
representatives of civil society.
• Local centres: a polycentric approach maximising
the potential of small and medium settlements in local
economic development.
3
A method based on what works (2)
• Stable financing and programming: long term
financial perspectives avoid the risk of rushing to
make hand-outs simply to ensure expenditure
• Local economic development: most private sector
jobs in Europe are in micro, small or medium sized
enterprises. Targeting them lays the basis for future
growth.
• Institutional support: strong formal institutions and
informal systems to supply, renew and encourage
retention of informed and expert personnel.
4
A Method based on what works (3)
• Cross border co-operation (cross frontier, trans
national, interregional): enhances the sense of
‘Europe’, fosters trust and can develop reconciliation.
• Ownership: communities are encouraged to feel that
they have a genuine stake in projects if they are not
imposed from the top down but derive from
participative, multi-level authorities and involve a
degree of co-financing.
5
Why have a Cohesion Policy? (1)
It is in the Treaty of Rome, and all later versions:
To promote economic social (and, as of
November, territorial) cohesion by reducing:
• disparities in the level of development between
the regions
• the backwardness of the least favoured regions
or islands, including rural areas
6
Why have a Cohesion Policy? (2)
Leaving disparities in place would compromise
a) the Single Market and
b) Economic and Monetary Union (EMU)
Both need an adjustment mechanism.
We have Lisbon Strategy for Growth and Jobs
But it needs the Cohesion Policy to
function properly
7
The challenges: wide disparities
GDP per head (EU=100)
•Overall
• Inner London 334.2%
(But it is not NUTS 2)
• Severozapaden 25%
8
The challenges:
social exclusion and poverty
• Poverty has a regional
dimension
• It is high in less developed
regions, such as those in
the southern and eastern
regions
• It is also a problem within
highly developed regions,
such as London, Brussels
and Vienna
9
Competitiveness: GDP growth rates
compared
Population 1995-2005
(millions) % per annum
2000-2005
% per annum
US
299.8
3.3
2.5
Brazil
186.8
2.4
2.7
Russia
142.0
3.9
6.1
India
1134.4
6.2
6.7
China
1312.9
9.0
9.4
EU
491.9
2.3
1.7
10
Geographical eligibility
for Structural Funds support 2007-13
Convergence objective
(Regions > 75% in EU-25)
Convergence objective
statistically affected regions
Regional Competitiveness
and Employment Objective
Phasing-in regions,
‘naturally’ above 75%
Regional Competitiveness
and Employment Objective
Index EU-25 = 100
11
18/02/2004
EN
How does it work? How does the
Commission choose projects?
(It doesn’t…)“Shared” responsibility between the
European Commission and Member State authorities
Commission determines the priorities, negotiates and
approves the strategies and operational programmes
proposed by the Member States, and allocates resources
Member States are responsible for designing
operational programmes, implementing them
(decentralising where possible) and monitoring
Economic and social partners as well as civil society
bodies (environment, equal opportunities, sport etc.)
participate in design programming and management.
12
Commission is involved in programme monitoring,
commits and pays out approved expenditure and verifies12
the control systems
18/02/2004
EN
Fully decentralised management of funds
For each of the 458 operational programme, the Member State appoints:
A managing authority (a national, regional or local public
authority or public/private body to oversee the operational
programme, and a monitoring committee to run it);
A certification body (a national, regional or local public
authority or body to certify the statement of expenditure and
the payment applications before their transmission to the
Commission);
An auditing body (a national, regional or local public
authority or body for each operational programme to
oversee the efficient running of the management and
monitoring system)
Automatic decommitment (N+2 or N+ 3) If you don’t use it,
you lose it (two or three years after project commitment)
13
13
What has Cohesion Policy achieved?
•
•
•
•
•
•
•
•
•
Much higher growth where active than elsewhere
Improved connectivity, road (2000) and rail (4000km)
Significant involvement of enterprise and civil society
Major improvements in local administration
Cross border co-operation a motor for reconciliation
in the Balkans, Northern Ireland and elsewhere
Major re-orientation towards innovation and research
for 2007-13 (growth, jobs, Lisbon)
Significant improvements to the environment
More than a million jobs
14
Revolutionary move to flexible credit, recycling funds
Some lessons from the last 20 years (1)
1) Needs an objective, non-political method for raising
and allocating resources, based on impeccable
statistics
2) Combining co-financing and partnership encourages
ownership. All programmes bring in between 15 and 50%
of cost from outside public or private sources: often more.
3) Vital to dissociate overall legal framework from individual
project decisions (best devolved to managing authorities)
15
Some lessons from the last 20 years (2)
4 Importance of Conditionality: respect for competition
and environmental rules, equality of opportunity,
partnership and democracy (also financial sanctions)
5 Crucial to have adequate formal and informal
institutional capacities to manage programmes
6 Cross border co-operation is vital to promote
understanding and exchange experience. Old enmities
must be set aside.
16
Some lessons from the last 20 years
7 Good to combine grants with some form of flexible
credit (recycles funds...)
8 Monitoring and evaluation essential, requiring
expertise and rigorous indicators
9 Transparency, communication, exchange of
experience
10 MOST OF ALL
Long term strategic vision of the objectives to be
attained: sectorally (eg transport) and/or
geographically
17
The design of ex post evaluation 2000-2006
Question of the evaluation:
• What has been achieved in terms of reducing disparities (e.g.
as GDP per capita)? and
• in specific policy fields?
Evaluation design:
• Thematic approach - methods and evaluation teams adapted
to themes
• Evaluation effort has been substantially stepped up in scale
and resources. Academic community involved.
→ Change in comparison to earlier work
18
Data Block
Modelling Block
•
•
•
Hermin
Quest
Transtools
Management
and
implementation
systems
•
•
•
Data indicators ‘06
Major projects
Geographic distrib.
Impact of Cohesion Policy
2000 - 2006
Thematic Block
•
•
•
Enterprise support
Environment and Climate Change
Transport
Community Initiatives
Interreg III & Urban
•
•
•
Structural change and globalization
Gender and Demography
Rural Development
Cohesion Fund
Transport & environment
19
Observations for growth and regional disparities
• Growth higher in Objective 1 regions in nearly all countries
• EU 25: regional disparities narrowed
• EU 15: narrowed in most EU15 countries (exception GR)
• EU 10: regional disparities widened (high growth capitals!)
• In Objective 1 in EU15, 2% growth in GDP pc, 1.4% in non-assisted
regions
20
Economic Cohesion
Not possible to judge success of policy by observation of statistics –
other factors at work!
• Approach adopted:
– Was scale of funding big enough to make a difference?
– Was it targeted at relevant factors?
– Do macroeconomic models indicate positive effect on growth?
– Was growth performance better in assisted regions?
– Is there concrete evidence of positive results?
• Answers to all questions positive:
– Funding significant especially in Obj 1 regions
• 2-3% of total fixed investment in Obj 1 regions
• +1% of GDP pa in GR and PT
– Targeted at drivers of growth identified by theory, e.g. Enterprise
investment & Infrastructure
21
Cumulative net effect of cohesion policy on GDP
(model: QUEST)
Percentage difference in GDP in end year as result of policy.
For approximate annual value divide by number of years.
All funds, Cohesion Fund included. Priority on Objective 1.
2000-09
2000-15
EU 25
0.7
2.4
EU 10
3.7
10.2
EU 15
0.5
1.9
22
23
Enterprise Support
WP 6a, b, c
• Member States report creation of over 1 million jobs by
enterprise support.
Test of new evaluation methods in E. Germany:
• Higher investment per worker €8,000 grant leads to €11,000 - €12,000 extra investment
Estimate by counterfactual methods and regression.
24
Policy Questions…
• Should ERDF finance aid to large enterprises?
• Need for more evidence on effectiveness of support
to enterprises
• What are the correct measures/indicators?
• Jobs safeguarded (now generally regarded as
inappropriate – policies of the 1990s)
• New jobs created (but are we always trying to create jobs
directly and immediately?)
• Increased productivity (with longer term job creation)
25
Transport
WP5a
• ERDF co-financed 13% of all new high speed rail lines &
24% of the extension of motorways
• ERDF co-financed 26% of 7,734 km of motorway
completed in EU15 and upgrading of 3,000 km of railway
lines
• TRANSTOOLS: failed attempt to model effect on GDP,
environment. New model needed?
• Questions on high-speed railways, support for ports,
roads in EU15. Insufficient attention for public transport,
cross-border projects.
26
Social and Territorial Cohesion
WP5b
• A third of ERDF in Objective 1 and 36% in Objective 2 was
aimed at social objectives plus territorial balance rather
than economic growth
• Mainly environmental infrastructure and ‘planning and
rehabilitation’
– increase in households in deprived regions
connected to supply of clean drinking water (+14
million inhabitants) or main drainage (+20 million
inhabitants)
– renovation and regeneration of villages, inner city
areas, old industrial sites, heritage sites
27
Social and Territorial Cohesion (2)
• Improvement in quality of life + territorial balance, but no
indicators to measure this
• Limited effect on growth but strengthened conditions for
sustainable development by reducing social + territorial
disparities
Policy conclusion
• Achievements of Cohesion policy go beyond economic
growth: multiple objectives
• Need to spell out clearer case for ERDF financing and link
to regional development
28
URBAN II programme
•
•
•
•
Relatively limited scale (70 programmes, average €10m)
Method more important than outputs (perceived results)
Environmental, leisure, image improved.
Inclusive partnership approach: relation with other
programmes
• BUT:3.2million m² of new green space, 10, 712m² new
water collectors, 264 security projects on fear of crime,
443 new childcare places, 964 cultural events,43,000
training places for business, 23 commercial centres and
stores renewed, 5984 business support interventions
29
Particular case of Objective 2
WP4
• In Objective 2 regions, small scale of funding – under EUR
40 per head a year
• Contrasts with large scale and long-lasting problems in
many regions targeted
• Objective 2 in many cases acted as a catalyst for
development of a long-term strategy for restructuring
• Effectiveness reflected in growth performance – rate
achieved at worst no lower than in regions with fewer
problems
30
Implications for future Objective 2
• Vision and commitment of regional policy makers
more important than specialisation pattern
• Objective 2 and regional strategies need to be
aligned
• More exchange of experience across MS is needed
• Evidence needed – how funding used plus effects
• Competitiveness only objective?
31
Management and implementation
WP11
• EU10 countries had only short time to implement
programmes plus limited experience.
• Fears of absorption difficulties not realised.
• Delivery system had significant effects on effectiveness of
policies + spill-overs into domestic policy areas
• But weaknesses:
– main focus on processes + financial control, not on
results of programmes and effectiveness
– evaluations not adequately supported by indicators
32
Implications for Future Policy
• Multiplicity of goals – social, environmental, economic
– Needs to be recognised in design, implementation and
evaluation
– Priority attached to different objectives should be made
clear when programmes determined
– Indicators needed so as progress can be monitored
• Concentration of funding in each region
– On limited number of policy areas and measures to
ensure critical mass – does not mean concentrating on
one objective
– Policy measures cannot be specified a priori - should
be in line with needs of region
– Whatever choice – needs to be justified in light of EU
strategies
33
A Summary
• Evaluation demonstrates contribution of ERDF to
reduction of disparities.
• EU25 as a whole wins with cohesion policy.
• We have more knowledge about what policy has delivered
in main policy fields (transport, environment, enterprise
support).
• We can demonstrate that policy delivers more than
growth: a better environment and social benefits.
• We know much better how to evaluate.
• We have many more questions to answer!
34
Athens Metro, Syntagma square
Major
contribution
to reducing
pollution
35
Holland: Phileas, gas, electric guided
bus, Eindhoven
36
Micro-chip for latest GSMs,
Denmark
Innovation
inspired
projects
37
18/02/2004
EN
Some Examples of projects
Clean water
in Romania
38
38
18/02/2004
EN
Some Examples of projects
Far away
foods
39
39
Some Examples of projects
40
41
18/02/2004
EN
Child
care;
Mullingar
42
42
18/02/2004
EN
Puzzle
43
43
Future of regional policy: political context
•
•
•
Lisbon Treaty
–
Territorial cohesion
–
Co-decision
Europe 2020
–
More thematic approach, more focused, more coherent
–
Structural reforms
Reform of economic governance
–
Budgetary/fiscal constraints and risks
44
EU 2020 – new framework for growth
3 thematic priorities: smart, sustainable, inclusive growth
5 EU headline targets – translated into national ones
•
Employment rate, R&D investment, climate change, renewable energy
and energy efficiency, education and social inclusion/poverty
7 flagship initiatives – EU & national action
•
Innovation Union, Youth on the Move, Agenda for New Skills and
Jobs, Platform against poverty, Industrial Policy, Resource efficient
Europe, Digital Agenda
Mobilising existing EU instruments:
•
Single market
•
External dimension
•
Stability and Growth Pact (SGP)
•
EU and national budgets & new financing instruments
45
Cross-Border Regional Links
Canada/US
West
The Economy
BC
Prairies Great Plains
AB
AB
SK
MB
Great
Lakes Heartland Quebec
ON
QC
East
Atlantica
NB
NS
PE
NL
Trade level
Trade growth
Trade breadth
Trade dependency
Culture and Values
Organizations
Intergovernmental
Single-purpose
General-purpose
Civil
Cities
Strong
Significant
Weak
46
What does this mean?
• Regional growth and prosperity increasingly
connected to regional cross-border dynamics
• Key questions at the regional-level:
– Are regional industries that are integrated across borders
more vulnerable or more resilient to global events?
– Because of the global crisis, will regional cross-border value
chains and arrangements be reshaped?
– How?
47
What does this mean
for Regional Governance?
• Implications for Canada?
• Current federal instruments and institutional
arrangements geared to uniformity and consistency
• However, “one size may not fit all”
• Coherence over consistency
48
Some lessons from the last 20 years (1)
1) Needs an objective, non-political method for raising
and allocating resources. Exclusive or inclusive
approach to beneficiaries? (EU now inclusive)
2) Combining co-financing and partnership encourages
ownership. All programmes bring in between 15 and 50%
or more of cost from outside public or private sources:
often more.
3) Vital to dissociate overall legal framework from individual
project decisions (best devolved to managing authorities)
49
Some lessons from the last 20 years (2)
4 Importance of Conditionality: respect for competition
and environmental rules, equality of opportunity,
partnership and democracy (also financial sanctions)
5 Crucial to have adequate formal and informal
institutional capacities to manage programmes
6 Cross border co-operation is vital to promote
understanding and exchange experience. Old enmities
must be set aside.
50
Concentration on the Lisbon Strategy
What is the Lisbon Strategy ?
Originally adopted March 2000, updated 2001 and 2005
Aims to make Europe the most competitive and dynamic
economy in the world…
The 2005 update created the ‘growth and jobs agenda’; two
quantitative targets:
– Employment rate of 70% by 2010
– R&D 3% of GDP by 2010
Since 2005, reinforced governance:
– Detailed annual reporting
– Peer pressure
51
Concentration on the Lisbon Strategy
Procedural aspects
COHESION POLICY
LISBON AGENDA
Community Strategic
Guidelines (1)
Integrated Guidelines
National Strategies
(NSRFs - 27)
National Reform
Programmes
National and regional
programmes (455)
Annual Progress Report
52
Financial Instruments for Cohesion Policy 2007-13 (1)
COHESION FUND (€70 billion)
• Eligibility at national level (Member States with a
Gross National Income per head of less than 90% of
the
EU-average)
• Trans-European Transport Networks (TENs) projects
and environmental projects
EUROPEAN REGIONAL DEVELOPMENT FUND (€196
billion)
• Eligibility at regional level
• Supports physical investment programmes
53
Financial Instruments for Cohesion Policy 2007-13 (2)
EUROPEAN SOCIAL FUND (€76 billion)
• Supports national programmes and human capital
investment programmes
INSTRUMENT FOR PRE-ACCESSION ASSISTANCE (€5
billion)
• Regional development projects and capacity
building in the fields of transport, environment and
economic development
54
Concepts
•
•
•
•
•
•
Redistribution
Restructuring
Investment not subsidies
Subsidiarity not top down (generally)
Wide partnership
Geographical balance/catching up/’reducing
disparities’
• Regions: sub national, self governing ‘NUTS’ 2
55
What is new (for 2007-2013)?
• Re-orientation: away from concentrating
on weak spots towards building up
potential all areas
• Innovation, research, ICT, knowledge
society (Lisbon strategy)
• Revolutionary: flexible credit/micro
credit- recycling the funds available.
56
18/02/2004
EN
Organised by objectives
Financial concentration on poorest
regions
• Convergence (like old Obj 1: greater
scope) 81.9%
• Competitiveness (old Obj 2&3, tie to
Lisbon) 15.7%
• Territorial co-operation (former
INTERREG programme and RFEC
networks to test ideas) 2.4%
57
57
18/02/2004
EN
Why should contributing regions keep
pouring money into the other regions?
(PIGS, Club Med, The Garlic Belt,
Mañana republics…)
• We are not pouring we are investing. For all
investments there are returns
• As poorer regions catch up they buy more
goods
• Many building and supply contracts come back
to contributing regions (35% PO, 42% HE)
• Solidarity is vital, especially now.
58
58