Transcript Document

Expert seminar
“Cohesion Policy Reform Development and Consequences for the Czech Republic”
Prague, March 29, 2010
AN AGENDA FOR A REFORMED COHESION POLICY
by Fabrizio Barca
PROLOGUE 1: DEADLOCK
Prologue
 Today, there is a wide consensus that the European Union should:
 be more “people-oriented” and strengthen its “social agenda”
 “modernize” its budget and make it more “focused on results”
 But the direction of change is far from clear. The EU is in a
deadlock:
 the budget review has failed to produce a substantive high level
debate
 a provisional and informal Commission document on the budget
shows a strong orientation towards an alternative, sectorial
approach to economic and social development
 there are conflicting views on the rationale, results and need of
cohesion policy, while a comprehensive cultural attack against any
“space-aware policy” has been launched
 the consultation paper “EU 2020”, does not provide any
assessment of the past overall strategy and fails both to design a
strategy to move towards a “people’s Europe” and to innovate
policy delivery.
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PROLOGUE 2: A REFORM OF COHESION POLICY IS PART OF THE SOLUTION
 The Report “An Agenda for a Reformed Cohesion Policy” puts forward
a proposal that can help getting out of the deadlock:
 rejuvenating the concept of cohesion policy with a stress on a
modern concept of development
Prologue
 implementing a few, simple changes in the delivery system
 The Czech Republic has taken into account the Report when it
approved its “Framework Position” in October 2009
 Today’s Seminar offers an opportunity to
 explore convergences
 clarify misunderstandings
 discuss controversial issues
 … with one point in mind:
“More of the same cohesion policy” is bad for Europe
and for each Member State… and is also unfeasible
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1. Rejuvinating the principles of cohesion policy
THE POLICY CONCEPT IN FOUR STEPS
1. From the concept of “value added” in the Czech Framework
Position to a policy for harmonious development.
2. Why does the Union need a development policy?
3. What is the model of development policy suitable for the EU?
I.e. why should development policy be place-based?
4. What are the objectives of cohesion policy?
From the Report back to the Czech Framework Position.
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1. Rejuvinating the principles of cohesion policy
1. FROM “VALUE ADDED” TO A POLICY FOR HARMONIOUS DEVELOPMENT
 Czech Republic’s Framework Position clearly identifies the “elements of the
value added” that are expected from EU cohesion policy (especially for the less
developed Regions and Member States). They can be summarised as follows:
 promoting priorities
 promoting an integrated/territorial approach
 promoting institutional changes, namely
 quality of project selection
 implementation of basic reforms
 measuring results
 learning methodologies
 This view calls for the development interpretation of cohesion policy strongly
backed and articulated by the Report:
 cohesion policy should not be a “financial redistribution fund” (an Equalization
Fund), transferring resources with no conditions attached. It should be a longterm strategy where an external agent – the EU – triggers institutional
changes and public actions that would not otherwise take place.
 As the EU Treaty makes clear: the mission of the cohesion policy is “harmonious
development”.
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1. Rejuvinating the principles of cohesion policy
2. WHY DOES THE UNION NEED A DEVELOPMENT POLICY?
An EU development policy is needed because the internal market, although
indispensable, cannot by itself deliver results: all the citizens of a Union must be
enabled with the means to take the opportunities and to defy the threats created
by a unified market:
 when the EU opens the internal borders and lets its citizens to move freely and de
facto promote inflows of migrants from outside  the EU must then provide the
ways for the migrants to enjoy the same basic social rights (at least the same public
services) enjoyed by the citizens of the places where they migrate and for the latter
not to see a worsening of their social rights;
 when the EU adopts a strategy for mitigating climate change  the EU must
then provide the places mostly affected by this strategy with the means to innovate
their economy;
 when the EU (rightly) prevents less developed Regions from tackling their troubles
by means of State-aids or by a regional differentiation of tax rates (which would
unleash beggar-they-neighbor conflicts)  the EU must then provide the means for
these Regions not to fall backwards.
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1. Rejuvinating the principles of cohesion policy
3. WHAT IS THE MODEL OF DEVELOPMENT POLICY SUITABLE FOR THE EU?
I.E. WHY SHOULD DEVELOPMENT POLICY BE PLACE-BASED?
A place-based or territorial model – as cohesion policy should be – is the
appropriate model for the EU, because it combines two features:
 EU’s responsibility for setting tasks and guidelines, ensuring their adoption and
providing technical support for change  the requirement for triggering changes
 MSs’, Regions’ and local agents’ responsibility for implementing policy
according to contexts  the requirement for tailor-made interventions (eliciting and
aggregating people’s knowledge and preferences)
The alternative sectoral model, whereby the EU (i.e. the Commission) decides resource
allocation to projects and Regions,
 is ineffective, since it cannot allow to design tailor-made solutions and wrongly
assumes a “fully knowledgeable Federal State”
 is absolutely unfeasible, since the Commission lacks the democratic legitimacy to
play an allocative and managing role (even if it could)
(The sectoral model is feasible only when, as in the case of high level research,
excellence and the criteria for selecting projects are defined by clear and fully recognised
international standards)
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1. Rejuvinating the principles of cohesion policy
4. WHAT ARE THE OBJECTIVES OF COHESION POLICY?
FROM THE REPORT BACK TO THE CZECH FRAMEWORK POSITION
Two distinct objectives are called for, as in any development policy:
 reducing the underutilization of resources (growth objective)
 reducing social exclusion (equity objective)
The objective of reducing social exclusion, or deprivation, i.e. the share of citizens
falling under a socially acceptable standard in some fundamental aspects of life
(health, education, security, access to work, housing, etc.), takes a particular
relevance today in Europe as a concrete way
 to address the problems not only of marginalised groups or “poors” (as in the
EU2020 document) but of ordinary workers, peasants and middle-class persons,
 to work towards the EU Treaty promise of “European citizenship” stressed by
President Barroso’s Agenda.
Housing, healthcare, education, as well as access to the labour market play
already a very important role both in 2006-2013 Czech cohesion policy strategy
and in the Czech Framework Position. The same occurs in most Member States.
It is about time that the choice of this objective is made more transparent. Only
if social inclusion is formally given the same stand of growth in the strategy:
 targets and results will become verifiable
 citizens will perceive this policy and politicians will be rewarded …
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1. Rejuvinating the principles of cohesion policy
… European citizens – Czech citizens – have a good
reason to expect such focus on social inclusion!
Source: Second European Quality of life Survey, 2009.
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2. Lessons from cohesion policy performance
FROM CONCEPT TO DELIVERY:
THE STATUS QUO IS BAD. DEEP CHANGES ARE NEEDED
 Czech Repubblic Framework Position does not propose a status quo. On
the contrary:
1. It calls for several, deep changes:
 NSRF and OP: concentration on strategic parts, not on procedural details
(although it is concerned about calling NSRF and OP “contracts”)
 simplification of audit
 coordination of DG’s in Brussels
 better indicators
 streamlined strategic Reports
 better learning via exchange of experiences
2. It also calls for concentration, although it argues that the priorities should
not be chosen at EU-wide level.
3. It finally asks for no changes in the eligibility criteria.
 From the Report’s perspective:
 changes at point 1 are all fully shared, although for them to be effective they
must be part of a simple but comprehensive reform,
 point 2 – the most controversial one – requires more thinking,
 point 3 is fully shared
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2. Lessons from cohesion policy performance
CHANGES NEED TO BE SHAPED BY A CLEAR ANALYSIS OF PAST
AND PRESENT PROBLEMS
Today’s cohesion policy has 5 main weaknesses:
 No critical mass exists on priorities, and cohesion policy results are neither
strongly perceived by citizens, nor at the centre of policy debate.
 Economic (efficiency) and social (equity) objectives are confused (the social
one being often hidden).
 Cohesion policy enjoys high accountability in terms of financial and physical
output, but not in terms of outcome:
 the system of outcome indicators and targets is of very poor quality;
 there is no systematic impact evaluation of interventions.
 NSRF and OP signed by the Commission and Member States/Regions fail to
provide the former with the power to trigger value added.
 The present strong pressure on timely spending has a negative feed back on
regular and effective spending.
These are the conclusions of two years exams of all we know on cohesion
policy. And these lessons shape the reform proposal.
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3. The reform
OUTLINE OF THE REFORM
1.
Concentration
on 3-4 core
priorities
2.
Flexible and
effective
contracts
3.
A new metric
4. Strengthening the competence
of the Commission
5. Improving public scrutiny through
experimentalism and
new political checks and balances
And also: a revised negotiation system
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1. CONCENTRATION OF RESOURCES ON 3-4 CORE PRIORITIES (I)
3. The reform
 2/3 of funding must be concentrated on 3-4 “core priorities”, narrowly defined and
concerning “issues” relevant vis a vis the expectations of European citizens.
 The Report puts forward six examples of narrowly defined priorities, that are in line with the
three very broad priorities of the “EU 2020” paper:
 2 options with a predominantly “economic” objective: Innovation and/or Adaptation to
climate change
 2 options with a predominantly “social inclusion” objective: Migration and/or Children
 and 2 options aimed at both objectives: Skills and Ageing.
 How should the “core priorities” be chosen?
 the Report suggests that the same 3-4 priorities should be selected for the whole
EU through a EU-wide political debate;
 but an alternative exists if differentiation among MS demands it: drawing a broad
list and letting each MS to choose 3-4 priorities among them.
For example, by looking at the specific “main structural needs” identified by the Czech
Framework Position, the following core priorities would seem to emerge:
 mobility
 city sustainability
 innovation
A fourth priority concerning social inclusion is less clearly identified: clarity is called for
on which sections of the population are particularly lacking “in the availability of services”.
What is exactly the political issue?
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3. The reform
1. CONCENTRATION OF RESOURCES ON 3-4 CORE PRIORITIES (II)
What about the allocation of resources among Member States
and Regions?
 No change should be introduced in the criteria for distribution of
funds (except for the introduction of a 75% + X transitional status),
since no consensus can be envisioned on any mix of indicators
alternative to GDP per capita.
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2. FLEXIBLE AND EFFECTIVE “CONTRACTS” (I)
3. The reform
 The present programming documents – National Strategic Document and Operational
Programmes – already represent, by any means, “contracts” between the EU and MS and
Regions. But they must be simplified and streamlined by committing each Member State
and Region to:
 objectives and targets, expressed in terms of outcome indicators
 institutional requisites, expressed in terms of “broad but binding principles”
 An example of “broad but binding principles” in the case of the Innovation priority.
Lessons from the past suggest principles along the following lines:
 launching of any intervention must follow a preliminary search aimed at identifying
comparative advantages in terms of unused knowledge base and innovation potential,
 identification of “candidate areas” must not follow administrative boundaries and must be
guided by the above search,
 local actors must be given a stake, as a way to encourage them to reveal informations, but …
 … competition with other areas and mobility of researchers must be maintained and
promoted
 incentives must be designed to reduce the risks of adverse selection and moral hazard:
 setting conditions about functions of the innovation process which are sufficiently
standardised,
 unbundling the innovation process in phases and granting funds sequentially,
 designing incomplete contracts with mechanisms to complete them (third party, bona fide
clauses, etc.)
 using public procurement
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 the option of replacing projects must be kept open
2. FLEXIBLE AND EFFECTIVE “CONTRACTS” (II)
3. The reform
 Two further changes are required:
 simplification of the financial additionality requirement, linked to the Stability
and Growth Pact
 application of the de-commitment rule at the level of whole countries
 Faced with a contract proposal, the Commission will:
 adopt the whole Contract
 adopt some parts of the Contract “subject to condition”
 reject some parts of the Contract
When the contract is “subject to conditions” an Implementation Report will later be
prepared by the MS to assess that the condition is met
 Strategic Reports on Results by MS shall focus on progress towards targets and
motivate failures to make progress. Together with Commission’s Opinions and
Summary Report they will be submitted for discussion to the European Parliament and
the Council
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3. The reform
3. A NEW METRIC
A new policy metric must be developed in two distinct directions.
1. Promoting policy-makers’ focus on final policy outcomes by:
 establishing a small set of EU-wide comparable “core indicators” (following Open
Method of Coordination practice)
 making MS and Regions to commit to the adoption of a system of indicators and
targets which satisfy the following requisites:
 statistical validation and timely updating
 clarity of interpretation
 responsiveness to policy interventions
 promoting community-based indicators at project level
 establishing that progress towards targets will be reported and explained
2. Promoting the use of “prospective counterfactual impact evaluation” – where
impact is estimated by comparing outcomes for beneficiaries of the intervention with
outcomes for a similar population of non-beneficiaries - designed while interventions are
being designed. This fundamental move, while allowing to learn what works, can have
strong disciplinary effects in:
 identifying objectives
 transparently selecting beneficiaries
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3. The reform
4. STRENGTHENING THE COMMISSION: ORGANISATION AND COMPETENCE
 None of the other changes can fly unless the organization and
competence of the Commission are strengthened:
 the internal structure needs to be rebalanced towards strategic functions,
by:
→ establishing core-priority task forces
→ upgrading the evaluation department
→ strengthening the links of the geographic units with the horizontal
structures
 a significant investment in human resources must be made, by
recruiting for those strategic functions the best junior and senior expertise
that is today available in Europe
 coordination between DG Regio and DG Employment and between them
and the Sectoral Directorates must be strongly improved under the
guidance of the Secretary general
 Refocusing of the Commission Role in turn requires a reduction of the
control and audit burden for the Commission, either through the proposals
being currently debated or through an appropriate implementation of the new
Treaty with a transfer of responsibilities to Member States
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3. The reform
5. IMPROVING PUBLIC SCRUTINY: EXPERIMENTALISM AND
A NEW EU-WIDE POLITICAL CHECKS AND BALANCES
 “Partnership” is too often just a slogan. Experimentalism at place level should be
promoted, i.e. stronger incentives must be created for actors at place level to experiment
with solutions while exercising mutual monitoring and being exposed to external knowledge.
This result can be achieved by:
 the learning process set in place by impact evaluation,
 committing Member States and Regions to truly place-based (territorial) strategies,
 putting at Commission’s disposal a small share (0,1%) of all funds for Innovative
territorial actions
 Improved information on results and greater Commission discretion make stronger public
scrutiny by the two other European Institutions both necessary and feasible:
 a new formal Council for Cohesion Policy must be created which would:
→ assess Contracts and Reports on Results
→ assess special decisions by the Commission (approval of contracts subject to
conditions, decision to run an Implementation Assessment and its effects, financial
sanctions for unmotivated failure to achieve financial additionality, financial sanctions
for unmotivated failure to achieve targets)
→ issue recommendations
 the European Parliament would:
→ fully use its budgetary power as a way to demand ex-ante a clear voice in designing
the new strategy and reforming the delivery
→ contribute opinions on Contracts and Reports
→ receive and debate the Commission’s Summary Report (as part of the “Evaluation
Report” of art. 318 of the Treaty)
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3. The reform
FEASIBILITY AND TIMING
 The argument that this reform is technically unfeasible is totally unfounded:
 the methodologies it uses are fully available,
 the rules it requires are definitely simpler than the present rules,
 the human resources it call for (in Brussels and elsewhere) can be recruited
at once,
 several features (impact evaluation, reporting, indicators, etc.) can and should
be tested in the present programming period
 The reform certainly requires a strong political will and the design of a highlevel compromise. This is what the present deadlock of the European Union
calls for.
 Time is running out but is still enough:
 2010: a high level political compromise on the future of cohesion policy
 Autumn 2010–Spring 2012: strategic dialogue between Member State and
European institutions facilitated by a Policy Group and leading to a draft of a
European Strategic Development Framework
 Spring 2012-Spring 2013: final negotiation on resources, governance and goals
 Spring 2013: simultaneous agreement on resources (Financial framework),
governance (Regulation) and goals (European Strategic Development
Framework)
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