Transcript Διαφάνεια 1

TERA Final Conference “Territory and Rural
Development in Six European Countries”
Pre-Congress Symposium – XIIth EAAE Congress,
Gent, 26-29 August, 2008
From positive to normative analysis:
prescriptions for policy
Jukka Kola
Department of Economics and Management, University of Helsinki
Objectives
• make further interpretation and explanation of the abundant
results of the project (previously presented by Dr Psaltopoulos)
• construct a link to territorial factors
• provide policy implications and recommendations...
• ... that would lead to a more targeted and effective policy
framework for the remote rural areas in Europe
• sources: the six country reports of remote rural regions in Czech
Republic, Finland, Greece, Italy, Latvia and Scotland (compiled in
the TERA-Deliverable No. 14), based on common and additional study-area
specific quantitative (3 modelling approaches) and qualitative analyses
Territorial Factors (1)
• assessment of the role and significance of territorial factors
(TFs) in the past, present and future policies in the six
study regions
•  evaluate the effectiveness of current development policy
frameworks, and make recommendations for future
policies, w.r.t. TFs
• Each research team defined those TFs that should be
considered when structural development policies are
planned and implemented in their study region
• TFs can be either positive or negative characters depending
on the study area, due to different socio-economic
conditions in these areas
Territorial Factors (2)
•Size of the area, long distances and remoteness
•Infrastructure and transportation
•Importance and conditions of agriculture
•Narrow industrial structure
•Importance of exports-oriented industries
•Scarcity of skilled labour, or unemployment
•Negative demographic development
•Low regional GDP
•High dependence on the public sector and subsidies
•Economic activity and work participation rates
•Location near the border of a foreign country
•Rural-urban interactions: e.g. degree of urbanization and
commuting
•Quality of life, social infrastructure and local governance
•Importance and opportunities of tourism
Territorial Factors (3)
 Differences among the study areas,
for example in "remoteness"
 Finnish and Czech study areas are ‘highly
remote’
 Scottish and Latvian areas are ‘moderately
remote’
 Greek and Italian areas are of ‘low
remoteness’
Territorial Factors (4)

Three most important TFs are:
1. quality of life, social infrastructure and self governance
2. infrastructure and transport
3. scarcity of labour and low economic activity rates

Main issue: Ability to recruit new businesses and labour

Soft and hard infrastructure needed to alleviate the
problems of smallness, remoteness and long distances

New economic activity enhances labour supply, improves
employment,
and
corrects
negative
demographic
developments and migration losses

TFs inadequately taken into account when planning,
deciding and implementing national and EU policies

Important rural TFs should be considered in policy design
to
improve
equality,
economic
performance
and
opportunities of remote rural areas compared to the urban
centres
Policy Implications
The most important issues in need of
targeted policies:
1. labour supply and migration
2. transportation and infrastructure
3. foreign trade
4. agricultural policy
5. tourism
 TFs should be taken into account
Labour supply
 Increase in labour supply clearly benefits all
study regions  big positive effects on economic
growth (all models) and productivity (N-NEG)
 Short run: Updating vocational and professional
skills through adult education
 Long run: Increasing the pool of skilled labour
force (5-6 years for MSc graduate), and in-migration
 In addition to the progress in education, local
development efforts are also needed to improve
the overall attractiveness of rural regions
The direction of immigration is a key issue
Transport and Infrastructure
 Improvement of transportation networks
and physical infrastructure is essential for
the sustained long-run development of the
rural areas
 Increase in the productivity
transport sector important
of
the
Foreign trade
 Foreign trade creates potential also for
rural SMEs through specialization in the
products and services of the core know-how
of a company
 Government support, if any available
and/or needed, should be directed to those
firms that have the greatest potential in
foreign trade
Agricultural Policy
 The CAP is mainly decided at the EU level and less
at a national level  smaller chances for regional
policy design and instruments
 The goal of more market-oriented, selective and
specialized agricultural production is a big challenge
for remote, relatively small regions in the short run
 Small, gradual changes in the CAP preferred to
drastic changes in order to avoid

quick negative spill-over and social effects in
remote rural regions

threats to the secure food chain in the long
run
Tourism
• offers major possibilities when farming is downscaling in many remote rural areas
– first, along with the agricultural operations on farms
– then, specific tourism firms, and groups of firms
• government support can be used to quickly improve
co-operation and joint marketing of rural tourism
firms
• increased international and national market
orientation beneficial also for tourism sector
• opposite impacts possible, too, as the extremely
competitive “nature” of the tourism sector could induce an
increase of rural economic leakages and, consequently,
diffuse economic development benefits mainly towards
larger and more integrated (urban) economies
Case: Basso Ferrarese, Italy
(1)
• structural problems of competitiveness  local
administration actions needed
– investments in innovative sectors and the attraction of skilled
labour force
– reduction of trade costs  the huge length of the supply chain
(Italy in general) and small market (Basso F.)  selective
intervention, involving communication, network services and
traditional ways of communication
– the financial sector must act as a catalyst, not a brake
– Small market size a huge problem  Policies favouring
immigration produce higher economic results than e.g.
infrastructure building
• Tourism is a key issue  improve capacity and facilities
– rural tourism can prevent the depopulation by employing local
labour force, and can preserve the fragile environmental
ecosystem of the Po Delta
– “intelligent agriculture”; investments in “vie del sapore”
Case: Basso Ferrarese, Italy
(2)
• Agriculture still plays a big role
• Reduction of farm subsidies enhances the
modernisation of the local economy and
allocative efficiency, but the costs in terms of
GDP and employment in the rural area are
considerable  losses > gains
• The best policy scenario: encourage incremental
changes (e.g. partial decoupling), because they
have smaller effects on efficiency, and are also
combined with much smaller losses in the rural
sector
Case: Archanes, Greece
• Best Policies: locally designed by the area’s social capital
(local development agency through wide consultation with
local development actors and stakeholders), taking into
account local development strategy and the area’s
comparative advantage
• Leader and the local Integrated Rural Development
Programme are today's good examples of a bottom-up
approach in their design
• "Quality of Life”: an important territorial factor affecting
regional development
• Increases in (skilled) labour supply is the most important
territorial factor on the economic performance of the study
area  generates GDP growth and gains in investment
• the improvement of human capital and the skills of the
labour supply are appropriate policy priorities
Case: Latgale, Latvia
• Latvia’s regional development program (RDP), supported by
the national and EU funds, has had a positive impact on the
country’s development
• However, the assessment studies indicate that the program
implementation has increased rather than reduced the
polarisation between the richer central part of the country
and the poorer eastern region Latgale
• as a whole, the sustainability of rural development in Latvia
has remained low
• policy implementation and planning are strongly centralized
 the regional governments do not have a role or influence
big enough in the support programs planning processes  a
bottom-up approach and local social capital needed
Overall Conclusions (1)
• Unanimous understanding of the main
results, strengthened by the three
different modelling approaches, among
the TERA teams
• Overall conclusion: Focusing on these
aforementioned activities and policy areas,
and granting financing for the
development and investments, would
strengthen the economic base and make
the quality of life better in remote rural
areas
Overall Conclusions (2)
• Territorial factors are essential in the design of structural and
rural development policies
• Narrow sectoral policies should be avoided in favour of more
territorial approaches in the policy design
• Continuing importance of the coordination and integration of
policies, already at design phases, at the local level
– need for increased labour supply should be underpinned by mutually
consistent and complementary housing, infrastructure, and skills
enhancement and training initiatives
• Policies should be harmonized to the local needs in a bottomup approach
• Link between social capital and harmonization: Strong social
capital makes policy implementation effective, especially if
harmonized with the regional/local formal or informal
development strategy
• Main issue: Ability to recruit new businesses and (skilled)
labour to the remote rural regions
Thank you!
Muchas Gracias!
Merci beaucoup!
Grazie molto bene!
Vielen Dank!
Kiitos! Tack så mycket!