Presentation on theme: "EU Regional Policy: method and evaluation."— Presentation transcript:
1 EU Regional Policy: method and evaluation. Relations with Countries outside the EUEU Regional Policy: method and evaluation.Presentation for officials in South Africa14 September 2011Unit for Communication, Information and Relations with Third CountriesDirectorate-General for Regional PolicyEuropean Commission
2 What is Regional Policy? A) The way the EU helps poorer regions catch up (<75% average GDP)B) Help for economically damaged regions to restructureC) Part of Cohesion Policy which has €347 billion for , say €50 billion per year (including Social Fund, Cohesion Fund…)D) Not just a budget but a tried and tested method
3 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.
4 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 expenditureLocal 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.
5 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.
6 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 regionsthe backwardness of the least favoured regions or islands, including rural areas
7 Why have a Cohesion Policy? (2) Leaving disparities in place would compromisethe Single Market andb) Economic and Monetary Union (EMU)Both need an adjustment mechanism.We have Lisbon Strategy for Growth and JobsBut it needs the Cohesion Policy tofunction properly
8 The challenges: wide disparities GDP per head (EU=100)Inner London 334.2%(But it is not NUTS 2)Severozapaden 25%Overall
9 The challenges: social exclusion and poverty 28/03/2017The challenges: social exclusion and povertyPoverty has a regional dimensionIt is high in less developed regions, such as those in the southern and eastern regionsIt is also a problem within highly developed regions, such as London, Brussels and Vienna99
10 Competitiveness: GDP growth rates compared Population(millions)% per annumUS2126.96.36.199Brazil188.8.131.52Russia142.03.96.1India1184.108.40.206China1312.99.09.4EU4220.127.116.11
11 Geographical eligibility for Structural Funds support 2007-13 Convergence objective(Regions > 75% in EU-25)Convergence objectivestatistically affected regionsRegional Competitivenessand Employment ObjectivePhasing-in regions,‘naturally’ above 75%Regional Competitivenessand Employment ObjectiveIndex EU-25 = 100
12 How does it work? How does the Commission choose projects? 18/02/2004ENHow does it work? How does the Commission choose projects?(It doesn’t…)“Shared” responsibility between the European Commission and Member State authoritiesCommission determines the priorities, negotiates and approves the strategies and operational programmes proposed by the Member States, and allocates resourcesMember States are responsible for designing operational programmes, implementing them (decentralising where possible) and monitoringEconomic and social partners as well as civil society bodies (environment, equal opportunities, sport etc.) participate in design programming and management.Commission is involved in programme monitoring, commits and pays out approved expenditure and verifies the control systems1212
13 Fully decentralised management of funds 18/02/2004ENFully decentralised management of fundsFor 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)1313
14 What has Cohesion Policy achieved? Much higher growth where active than elsewhereImproved connectivity, road (2000) and rail (4000km)Significant involvement of enterprise and civil societyMajor improvements in local administrationCross border co-operation a motor for reconciliation in the Balkans, Northern Ireland and elsewhereMajor re-orientation towards innovation and research for (growth, jobs, Lisbon)Significant improvements to the environmentMore than a million jobsRevolutionary move to flexible credit, recycling funds
15 Some lessons from the last 20 years (1) Needs an objective, non-political method for raising and allocating resources, based on impeccable statistics2) 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)
16 Some lessons from the last 20 years (2) Importance of Conditionality: respect for competition and environmental rules, equality of opportunity, partnership and democracy (also financial sanctions)Crucial to have adequate formal and informal institutional capacities to manage programmes6 Cross border co-operation is vital to promote understanding and exchange experience. Old enmities must be set aside.
17 Some lessons from the last 20 years Good to combine grants with some form of flexible credit (recycles funds...)Monitoring and evaluation essential, requiring expertise and rigorous indicatorsTransparency, communication, exchange of experienceMOST OF ALLLong term strategic vision of the objectives to be attained: sectorally (eg transport) and/or geographically
18 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)? andin specific policy fields?Evaluation design:Thematic approach - methods and evaluation teams adapted to themesEvaluation effort has been substantially stepped up in scale and resources. Academic community involved.→ Change in comparison to earlier work
19 Impact of Cohesion Policy 2000 - 2006 Modelling BlockData BlockManagementandimplementation systemsHerminQuestTranstoolsData indicators ‘06Major projectsGeographic distrib.Impact of Cohesion PolicyThematic BlockEnterprise supportEnvironment and Climate ChangeTransportStructural change and globalizationGender and DemographyRural DevelopmentCommunity InitiativesInterreg III & UrbanCohesion FundTransport & environment
20 Observations for growth and regional disparities Growth higher in Objective 1 regions in nearly all countriesEU 25: regional disparities narrowedEU 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
21 Economic CohesionNot 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 regions2-3% of total fixed investment in Obj 1 regions+1% of GDP pa in GR and PTTargeted at drivers of growth identified by theory, e.g. Enterprise investment & Infrastructure
22 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.EU 250.72.4EU 103.710.2EU 150.51.9
24 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 investmentEstimate by counterfactual methods and regression.
25 Policy Questions… Should ERDF finance aid to large enterprises? Need for more evidence on effectiveness of support to enterprisesWhat 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)
26 Transport WP5aERDF co-financed 13% of all new high speed rail lines & 24% of the extension of motorwaysERDF co-financed 26% of 7,734 km of motorway completed in EU15 and upgrading of 3,000 km of railway linesTRANSTOOLS: 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.
27 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 growthMainly 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
28 Social and Territorial Cohesion (2) Improvement in quality of life + territorial balance, but no indicators to measure thisLimited effect on growth but strengthened conditions for sustainable development by reducing social + territorial disparitiesPolicy conclusionAchievements of Cohesion policy go beyond economic growth: multiple objectivesNeed to spell out clearer case for ERDF financing and link to regional development
29 URBAN II programmeRelatively limited scale (70 programmes, average €10m)Method more important than outputs (perceived results)Environmental, leisure, image improved.Inclusive partnership approach: relation with other programmesBUT: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
30 Particular case of Objective 2 WP4 In Objective 2 regions, small scale of funding – under EUR 40 per head a yearContrasts with large scale and long-lasting problems in many regions targetedObjective 2 in many cases acted as a catalyst for development of a long-term strategy for restructuringEffectiveness reflected in growth performance – rate achieved at worst no lower than in regions with fewer problems
31 Implications for future Objective 2 Vision and commitment of regional policy makers more important than specialisation patternObjective 2 and regional strategies need to be alignedMore exchange of experience across MS is neededEvidence needed – how funding used plus effectsCompetitiveness only objective?
32 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 areasBut weaknesses:main focus on processes + financial control, not on results of programmes and effectivenessevaluations not adequately supported by indicators
33 Implications for Future Policy Multiplicity of goals – social, environmental, economicNeeds to be recognised in design, implementation and evaluationPriority attached to different objectives should be made clear when programmes determinedIndicators needed so as progress can be monitoredConcentration of funding in each regionOn limited number of policy areas and measures to ensure critical mass – does not mean concentrating on one objectivePolicy measures cannot be specified a priori - should be in line with needs of regionWhatever choice – needs to be justified in light of EU strategies
34 A SummaryEvaluation 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!
35 Athens Metro, Syntagma square Major contribution to reducing pollution
36 Holland: Phileas, gas, electric guided bus, Eindhoven
37 Micro-chip for latest GSMs, Denmark Innovation inspired projects
38 Some Examples of projects 18/02/2004EN18/02/2004ENSome Examples of projectsClean water in Romania38383838
39 Some Examples of projects 18/02/2004EN18/02/2004ENSome Examples of projectsFar away foods39393939
44 Future of regional policy: political context Lisbon TreatyTerritorial cohesionCo-decisionEurope 2020More thematic approach, more focused, more coherentStructural reformsReform of economic governanceBudgetary/fiscal constraints and risksEvaluations reports published in April 2010 give a clear indication of the achievements of the policy. Capturing the impact and results of cohesion policy is critical to its ongoing success. Letting the public know what is achieved with the investment from the policy is key to its transparency and accountability. It also offers the opportunity to learn from good practice elsewhere, and to continuously improve projects and programmes.The task of safeguarding and developing competitiveness as a constant necessity in successful economies - no region in Europe can assume prosperity forever. It is important for regions to diversify their economic activities in order to sustain their success – regional policy strategic programming support this.
45 EU 2020 – new framework for growth 3 thematic priorities: smart, sustainable, inclusive growth5 EU headline targets – translated into national onesEmployment rate, R&D investment, climate change, renewable energy and energy efficiency, education and social inclusion/poverty7 flagship initiatives – EU & national actionInnovation Union, Youth on the Move, Agenda for New Skills and Jobs, Platform against poverty, Industrial Policy, Resource efficient Europe, Digital AgendaMobilising existing EU instruments:Single marketExternal dimensionStability and Growth Pact (SGP)EU and national budgets & new financing instrumentsEvaluations reports published in April 2010 give a clear indication of the achievements of the policy. Capturing the impact and results of cohesion policy is critical to its ongoing success. Letting the public know what is achieved with the investment from the policy is key to its transparency and accountability. It also offers the opportunity to learn from good practice elsewhere, and to continuously improve projects and programmes.The task of safeguarding and developing competitiveness as a constant necessity in successful economies - no region in Europe can assume prosperity forever. It is important for regions to diversify their economic activities in order to sustain their success – regional policy strategic programming support this.
47 What does this mean?Regional growth and prosperity increasingly connected to regional cross-border dynamicsKey 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?
48 for Regional Governance? What does this meanfor Regional Governance?Implications for Canada?Current federal instruments and institutional arrangements geared to uniformity and consistencyHowever, “one size may not fit all”Coherence over consistency
49 Some lessons from the last 20 years (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)
50 Some lessons from the last 20 years (2) Importance of Conditionality: respect for competition and environmental rules, equality of opportunity, partnership and democracy (also financial sanctions)Crucial to have adequate formal and informal institutional capacities to manage programmes6 Cross border co-operation is vital to promote understanding and exchange experience. Old enmities must be set aside.
51 Concentration on the Lisbon Strategy What is the Lisbon Strategy ? Originally adopted March 2000, updated 2001 and 2005Aims to make Europe the most competitive and dynamic economy in the world…The 2005 update created the ‘growth and jobs agenda’; twoquantitative targets:Employment rate of 70% by 2010R&D 3% of GDP by 2010Since 2005, reinforced governance:Detailed annual reportingPeer pressure
52 Concentration on the Lisbon Strategy Procedural aspects COHESION POLICYLISBON AGENDACommunity Strategic Guidelines (1)Integrated GuidelinesNational Strategies (NSRFs - 27)National Reform ProgrammesNational and regional programmes (455)Annual Progress Report
53 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 projectsEUROPEAN REGIONAL DEVELOPMENT FUND (€196 billion)Eligibility at regional levelSupports physical investment programmes
54 Financial Instruments for Cohesion Policy 2007-13 (2) EUROPEAN SOCIAL FUND (€76 billion)Supports national programmes and human capital investment programmesINSTRUMENT FOR PRE-ACCESSION ASSISTANCE (€5 billion)Regional development projects and capacity building in the fields of transport, environment and economic development
55 Concepts Redistribution Restructuring Investment not subsidies Subsidiarity not top down (generally)Wide partnershipGeographical balance/catching up/’reducing disparities’Regions: sub national, self governing ‘NUTS’ 2
56 What is new (for )?Re-orientation: away from concentrating on weak spots towards building up potential all areasInnovation, research, ICT, knowledge society (Lisbon strategy)Revolutionary: flexible credit/micro credit- recycling the funds available.
57 Organised by objectives Financial concentration on poorest regions 18/02/2004ENOrganised by objectives Financial concentration on poorest regionsConvergence (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%5757
58 18/02/2004EN18/02/2004ENWhy 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 returnsAs poorer regions catch up they buy more goodsMany building and supply contracts come back to contributing regions (35% PO, 42% HE)Solidarity is vital, especially now.58585858