Cohesion policies: place based approach

Cohesion policy: a controversial issue

Cohesion policy is an highly controversial issue

Who pays for cohesion policy?Is cohesion policy really useful?Why should Europe be involved in

cohesion policy?

The place-based approach

The Barca report and the place-based approach

What is a place within the framework of a place-based policy

What is a place

Place can be defined as a contiguous area within whose boundaries a set of conditions conducive to development apply more than they do across boundaries: natural and cultural circumstances and the preferences of people are more homogeneous or complementary, the knowledge of people is more synergic and positive externalities and informal and formal institutions are more likely to arise.

The two objectives of cohesion policy

The two objectives of the cohesion policy: efficiency and equity

Potential trade-offs between these two objectives

Optimal policies to pursue efficiency may not be optimal policies to pursue equity and vice-versa

The two objectives of cohesion policy

These two objectives must then be pursued through different measures

Definition of a place-based policy

A place-based development policy can therefore be defined as– -a long term development strategy whose objective is

to reduce persistent inefficiency and inequality in specific places

Definition of a place-based policy

– through the production of bundles of integrated place tailored public goods and services designed and implemented by eliciting and aggregating local preferences and knowledge through participatory political institutions and by establishing linkages with other places

– promoted from outside the place by a system of multilevel governance where grants subjects to conditionalities on both objectives and institutions are transferred from higher to lower

levels of government.

Efficiency

The main objective of cohesion policy is efficiency

All regions have, to a greater or lesser extent, underutilized resources

Efficiency means full utilization of existing endogenous immobile resources but also expansion of these resources exploiting all the possibilities of attracting mobile resources over time within a framework of sustainable development.

Efficiency

The primary goal of cohesion policy is the enhancing of these underutilized economic resources

Cohesion policy is a development policy and not a redistributive policy

Convergence is not the primary goal of cohesion policies

Cohesion policies as exogenous policies

Cohesion policies must be exogenous policies

Two crucial reasons for that:– To avoid the risks of capture of local elites– To break path dependency

Cohesion polices must be place-based

Cohesion policies must be place-basedThis means that a) these policies must be

designed to suit specific territories and b) that local actors must have a leading role in their elaboration and implementation

Cohesion polices must be place-based

Policies must be designed to suit specific territories because people needs and institutions are different

People needs and preferences depend on the local context

Policies must take fully account of these territorial differences

Cohesion polices must be place-based

The effectiveness of institutions depend as well on the local context

Institutions for economic development must be tailored to suit territorial specificities

Policies aimed at creating and strengthening local institutions must therefore take into account the special features of each territory.

Cohesion polices must be place-based

Cohesion policies must be place-based because local actors have a better knowledge of their territory.

Local people is then in the best position to elaborate and implement policies at territorial level

Deliberative decision making processes

Local knowledge is not readily available. It is fragmented in a variety of individuals and bodies. It must be extracted, socialized and increased through deliberative decision making processes

An exogenous intervention may be necessary to convince local people to share information and knowledge.

Local and external knowledge

Local knowledge does not exhaust all knowledge is needed.

It is important to have access to information and knowledge, wherever it can be found

Access to outside knowledge is particularly important for fostering innovation and technical progress

Focus on public goods

The main goal of cohesion policies is to provide bundles of integrated public goods – Public goods increase productivity of firms,

specially of small firms– Public goods improve people standard of living– Public goods favour people participation in the

local decision making processes

Focus on public goods

Cohesion policy is a territorial policy and not a sectorial policy

This makes possible to implement integrated programmes

Integration makes possible the exploitation of synergies between complementary interventions

Model of governance

A proper design of the model of governance is a necessary condition for the success of cohesion policies

The proper model of governance for cohesion policies is multi-level governance

Multilevel governance

This is a system by which the responsibility for policy design and implementation is distributed between different levels of governments and special purposes local institutions

In multilevel governance there is not a division of responsibilities by sector of intervention but a division of tasks

Multilevel governance

Different institutions and local agencies cooperate to reach the same aims and implement the same policies but with different tasks

Multilevel governance

In multi-level governance, the top levels of government have responsibility for setting priorities and general objective and the contractual framework for the lower levels; selecting projects and allocating funds to places and providing linkages between them; promoting institutional building and learning and monitoring results and providing technical support and expertise

Multilevel governance

The lower levels have the responsibility of eliciting and aggregating the knowledge and preferences of citizens; designing projects and appraising them for financing and implementing projects and managing learning processes.

Conditionalities

Relations between different levels of government take a contractual form

Commitments, conditionality, monitoring and evaluation are necessary ingredients of this policy

Decision making at local level

The decision making processes at local level should exhibit the following ideal features:– To convince local people to share common information

and knowledge in order to achieve common goals;– to be highly inclusive promoting the participation of all

those interested in the results of the policy; – to clearly identify objectives and targets of each

measure– to favour a learning process adopting an experimental

approach through continuous debate and monitoring