1. The OECD Territorial Review of Småland-Blekinge Chapter 3: Governance Carlos Icaza Lara Regional Development Policy Division Directorate for Public Governance and Territorial Development OECD Ronneby, 10 November 2011

2. Summary Chapter divided in 3 main sections: 1.Governance Structure of Småland-Blekinge. 2.Arguments to be considered when assessing the regionalisation reform. 3.Multi-level governance arrangements to contribute to promote a better governance framework for regional development policies. 10 November 2011 Ronneby Seminar2

3. GOVERNANCE STRUCTURE Part 1 10 November 2011 Ronneby Seminar3

4. Excessive fragmentation Large number of public actors involved in regional development… Regional development largely influenced by the national and municipal level. –Central Government agencies+ CABs. –Regional Development councils indirectly elected. 10 November 2011 Ronneby Seminar4

5. Increasing need of co-operation Why is it co-operation required?: –Mobility of people and businesses across administrative borders; –Many policies (transport infrastructure; innovation) require a broader geographic focus than the county; – Search for efficiency in public administration in a context of reduced fiscal resources. What are the potential benefits? –More efficient and better targeted policies/ initiatives: co-ordinating complementary measures that can generate synergies. Co-ordinating different county/ municipal interventions that can have a stronger effect if they are planned/ carried out together. Have a stronger voice… Avoid duplication or overlapping of efforts and resources 10 November 2011 Ronneby Seminar5

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7. Co-ordination Challenges No clear structure for facilitating co-ordination of regional development efforts: –Deficiencies in vertical co-ordination among many national, regional and local authorities. –Deficiencies in horizontal co-ordination at county level  Lack of regional leadership: no single institution capable of co- ordinating the different regional development actors and policies in each of the counties. 10 November 2011 Ronneby Seminar7

8. Co-ordination Challenges Different inter-county co-operation initiatives –Health; infrastructure; innovation; tourism… But, cross-county co-operation is still weak: –More the sum of individual county priorities than an analysis of regional complementarities and joint opportunities. –Normally not result in concrete plans (e.g. common infrastructure projects) using joint financial resources. –Difficult to reach political agreements. 10 November 2011 Ronneby Seminar8

9. ARGUMENTS FOR THE REGIONALISATION REFORM Part 2 10 November 2011 Ronneby Seminar9

10. Elements to be considered (i) Regional reform processes are context-dependent. But, some common elements can be identified: –Guidance from the centre is required to clarify the purpose and direction of the process. –But stable reforms also require a certain degree of political consensus among the stakeholders involved. –This requires setting clear goals and objectives of the reform 10 November 2011 Ronneby Seminar10

11. Elements to be considered (ii) –In-depth cost-benefit analysis must be conducted… Economies of scale/ efficiency; Transaction costs; Economies of scope; Stronger voice; Democracy and accountability –Regionalisation reforms may involve trade-offs among outcomes: e.g. economies of scale vs. closeness to the local government. –Importance of agreeing on the weights assigned to each of the criteria in cost-benefit analyses –The focus should be on assessing and communicating the benefits of the reform: why the reform is needed; which benefits it will bring? 10 November 2011 Ronneby Seminar11

12. Other options should be considered Option of strengthening co-operative arrangements: –It may bring some advantages: economies of scale. –And allows for flexible interaction: different borders for different objectives. But reaching agreements between administrative units is complex: –Special-purpose institutions (such as health-care regions) help. – This work for single purposes but not solve structural territorial failures. Assessing the pros and cons of co-operation arrangements vs. administrative mergers is crucial. 10 November 2011 Ronneby Seminar12

13. But, whatever the structure of public authorities, they will require the involvement and co-operation of different kinds of actors at different levels of government 10 November 2011 Ronneby Seminar13

14. MULTI-LEVEL GOVERNANCE Part 3 10 November 2011 Ronneby Seminar14

15. Strengthening MLG co-ordination (i) –Clarifying the roles of the different actors dealing with regional development. –Ensuring regional leadership Move towards directly elected bodies dealing with regional development, and strenghtening the role of regional directors. It would need adequate financial and human resources and enough institutional support to carry out its task efficiently. It will hep to give a regional focus to regional development instead of the sum of local perspectives. Municipalities would still play a central role: strong regional actors could exist in parallel and in co-operation with strong municipalities. –Promoting a better definition of the role and organisation of central government agencies. 10 November 2011 Ronneby Seminar15

16. Strengthening MLG co-ordination (ii) –Strengthening regional development programmes as a main framework for guiding regional development efforts: Develop more tangible strategies, including concrete targets and measurable outcomes. Linking investment priorities with the objectives of the regional programmes. Better integrate rural development strategies and general development programmes in a comprehensive regional strategy. –Strengthening inter-county and multi-level planning. To be effective, joint strategies should include concrete initiatives and funding and implementation modalities. The framework of regional “contracts” may help: agreement between national and sub-national, public/private units concerning their mutual obligations. It allows sharing the design and financing of concrete initiatives 10 November 2011 Ronneby Seminar16

17. Strengthening MLG co-ordination (iii) –Further involving the business community and universities: It requires public encouragement. And concrete regional development strategies viewed by private sector actors as concrete, relevant and capable of generating tangible effects. Institutional frameworks for public- private co-operation may help: public- private development agencies; industry advisory groups… Public-private co-operation for infrastructure development could go further. Enabling the legal framework for public- private co-operation 10 November 2011 Ronneby Seminar17

18. Inter- municipal co-operation –Increasing need for municipal co-operation: population ageing, specialisation of public services, need of recruiting specialised staff, interdependencies of labour market areas –Inter-municipal co-operation has been developing actively. –But faces some challenges: Legal constrains for buying or selling services: e.g. municipal inspection. Reaching consensus among administrative units and local political leaders on which activities to carry out jointly and how to do. Lack of incentives: it can be difficult to show measurable impacts in the short term. –How to overcome these obstacles: Incentive policy to encourage municipalities to co-operate. Regional institutions can also encourage municipal co-operation. Support for municipal co-operation should go beyond county borders: –Bordering municipalities ]with limited capacities and resources. –Border municipalities with large commuting flows 10 November 2011 Ronneby Seminar18

19. Relocating municipal competences? –In-depth assessment to decide if some competences could be recentralised to regional or national institutions: e.g. municipal inspection. This process could be asymmetric: bigger municipalities could have certain competences that smaller municipalities would not have. Any process of recentralisation of competences should be made based on a comprehensive dialogue in which representatives of the main parties involved agree on the rationality of moving up a devolved competence. 10 November 2011 Ronneby Seminar19

20. TACK! 10 November 2011 Ronneby Seminar20