Local Economic Assessment: Learning from International Practice Local Economic and Employment Development Programme (LEED) Dr Jonathan Potter Senior Economist, OECD

Structure The OECD Strategy issues Good practice Case study: regional strategies in Latvia Pitfalls Messages for North East England

OECD Forum for governments to work together... on the economic, social and environmental challenges of interdependence and globalisation. 30 member countries – countries pursuing democracy and market economies. Process of enlargement and enhanced engagement.

OECD OECD Member countries Non-Members working with OECD

LEED Programme Messages Integrated strategies Partnerships Entrepreneurship as a job generator Culture of evaluation Activities Peer reviews Guidance Conferences and seminars Training events

1. Defining the problem: rationale, objectives and base lining ↓ Baseline and reference case comparison with objectives to define the problem 2. Defining alternative options/actions ↓ Identification of options available to achieve the objectives 3) Identifying and measuring inputs (costs) ↓ What will the options cost? 4) Identifying and measuring outputs and outcomes ↓ Examination of the likely impacts of the options 5) Results presentation and interpretation ↓ Effectiveness of options in achieving objectives, risk, comparison with alternatives 6 Strategy issues Source: ODPM, 2003.

Strategy issues RationaleObjectivesAppraisalMonitoringEvaluationFeedback Source: ODPM, 2003.

Strategy fundamentals Aim of strategy Where are we? Where do we want to get to? How do we want to get there? Best strategies are Clear and explicit on objectives and priorities Clear on needs and opportunities Practical and implementable Creative and flexible

Good practice Defining objectives Identifying options Assessing expected impacts Using evidence Implementation plan

Good practice Defining objectives Consider indicators to assemble and areas for benchmarking Consider scale of intervention and ensure that objectives complement at different scales Take a long-term perspective Identify beneficiaries 10

Good practice Identifying options Make sure options fit objectives Make process transparent Fit to needs of specific groups Include stakeholders in defining and selecting options Consider management questions Set out the full costs and benefits to society Use evidence to assess options 11

Good practice Assessing expected impacts Have a clear sense of purpose Set targets to achieve Use the logic model Have a clear sense of relevant indicators on intermediate and final effects Be prepared to offer a range of estimates 12

Good practice Implementation plan Have strong commitment and leadership Define review milestones and progress measures Report progress, encouraging good behaving and impose sanctions for inappropriate behaviour Conduct regular checks Recycle learning and establish communities of practice 13

Case study: regional strategies in Latvia Mobilising the region Understanding the region Defining a strategy and action plan Financing the strategy Evaluating and improving Assessment Guidelines Learning models

Latvian planning system Set up 1991 – challenge not to reject planning but set up a democratic approach Three spatial levels: national, regional, local Three time scales: long term (25 years), medium term (7 years), short-term (2 years) Process of administrative reform underway 15

Mobilising the region Strengths Presence of competent staff Transparency of documents Widespread knowledge of the system Weaknesses Only target group was private entrepreneurs Considered as a bureaucratic process subject to change Surprising similarities between national, regional and local plans Formal, not real consultation 16

Understanding the region Strengths Political will for evidence- based policies NSO collecting wide range of data Research projects on NSO data Evidence of both quantitative and qualitative techniques Weaknesses Lack of shared evidence bases Limited skills and resources at local level Little city-region or rural analysis Little sub-regional data No attempt to fix NSO data gaps locally Little attempt at causal analysis Limited use of scenarios 17

Defining strategy and action plan Strengths Desire to develop long term vision A lot of work being undertaken Weaknesses Regional level creates strategies but has no autonomy or resources Some localities developing too many plans, some developing none Existing plans are really spatial plans not strategy Competitive niches are not clear Disconnect with finance and implementation tools 18

Financing Strengths Clear plan to absorb EU financing Weaknesses Little understanding of potential private sources 19

Evaluating and improving Strengths Good regional data EU emphasises role of monitoring and evaluation Strengthened strategic capacity in central government Weaknesses Top-down steering system Hostility to evaluation Limited skills and resources Stakeholders not used as information source Focus on monitoring not evaluation Lack of intermediate results information Lack of self assessments 20

Pitfalls Defining objectives Data – too aggregated, no time trajectory Ignoring the relationship with the surrounding area Excluding particular stakeholder groups Ignoring sustainability Ignoring local specificities Relying on markets to distribute benefits Assuming monitoring and evaluation can be set up later 21

Pitfalls Identifying options Ignoring the ‘do nothing’ option Concentrating on infrastructure at the expense of social and innovation Being afraid of different approaches Ignoring stakeholders Forgetting to look at risks Neglecting the ‘Plan B’ 22

Pitfalls Assessing expected impacts Being over-sophisticated Omitting important expected effects Ignoring factors likely to influence the problem Ignoring key groups of beneficiaries Ignoring the possibility that things may turn out differently 23

Pitfalls Using evidence Assume that assessment results will automatically be used Rely on a single written report 24

Pitfalls Implementation plan Trying to turn everyone into a strategist Stifling innovation and flexibility Undervaluing experience against theory Making processes overcomplicated Frequently changing performance metrics Raising expectations of short-term impact Allowing a gap to grow between strategic messages and staff, customer and stakeholder understanding 25

Messages for North East England Move from evidence to policy choices by considering: –options –alternatives –expected impacts Use logic models Focus on beneficiaries Consider scenarios Focus on where policy can make a difference Look for distinctiveness to other regions Fill data gaps locally 26