On Territorial Dimension of Development Policies (2011)

SEMINAR
ON TERRITORIAL DIMENSION
OF DEVELOPMENT POLICIES
Ostróda 18 –19 July 2011
Polish Presidency of the Council of the EU
Seminar on Territorial Dimension

of Development Policies
Seminar Papers and Proceedings
18-19 July 2011, Ostróda, Poland
Polska Prezydencja w Radzie Unii Europejskiej 2011

Polish Presidency of the Council of the European Union 2011
Présidence polonaise du Conseil de l’Union européenne 2011
2
3
This document is as part of a general reflection on the future

of development policies. It does not prejudge in any way the
final position of the Presidency on the issues discussed.
4
5
Table of contents
Objective and agenda of the seminar............................................................................................................................................... 7

Polish Presidency Territorial dimension of development policies.................................................................................................. 10
DIFFERENT APPROACHES TO DEVELOPMENT POLICIES THE INTERPLAY BETWEEN CONCENTRATION

AND DECONCENTRATION OF TERRITORIAL DEVELOPMENT ............................................................................................................... 13
Grzegorz Gorzelak Doctrines of regional policies - their virtues and limitations ........................................................................... 15
Jose Enrique Garcilazo, Joaquim Oliveira Martins Key Findings and Policy Implications in the OECD
Regional Outlook 2011................................................................................................................................................................... 21
Indermit Gill Improving regional development policies .................................................................................................................. 29
Sergey S. Artobolevskiy Regional policy in Russia. Spatial concentration-deconcentration of state regional policy.................... 35
Fabrizio Barca Alternative Approaches to Development Policy: Intersections and Divergences.................................................. 45
FROM THEORY TO APPLICATION HOW TO REINFORCE TERRITORIAL DIMENSION IN PUBLIC POLICIES..................................... 51

Philip McCann Brief Notes on the Major Practical Elements of Commencing the Design of an Integrated
and Territorial Place-Based Approach to Cohesion Policy............................................................................................................. 53
Roberto Camagni ‘Local knowledge, national vision’: challenges and prospect for the EU regional policy.................................. 57
Jacek Szlachta From theory to application: How to reinforce the territorial dimension in EU policies ......................................... 65
Martin Ferry Performance management instruments in multi-level, territorial policies: examples
from national regional policies........................................................................................................................................................ 71
TOWARDS TERRITORIAL APPROACH IN DEVELOPMENT POLICIES IDEAS AND PRACTICES .......................................................... 77

Iain Begg Towards territorial approach in development policies – ideas and practices................................................................. 79
Andrés Rodríguez-Pose Spatially-blind strategies as place-based development strategies ......................................................... 85
Jiří Blažek Balancing top-down and bottom-up approaches in the Czech Republic..................................................................... 91
Duarte Rodrigues Integrated approach: from common myths to right balances ............................................................................ 99
OTHER CONTRIBUTIONS ........................................................................................................................................................................... 105

Wolf Huber From Babylon to Brussels: Some theoretical reflections on Multi-sector, Multi-level Policies,
Language Diversity and the “Simplification” of EU Cohesion Policies ......................................................................................... 107
Wolf Huber Federal Coordination: Policy Making Beyond Command & Control.......................................................................... 113
Arjen van der Burg Place sensitivity: handling the space of flows in place-based policies.......................................................... 117
BIOGRAPHICAL NOTES .............................................................................................................................................................................. 121

6
7
Objective and agenda of the seminar

The Seminar is organised as an informal discussion forum on the role of territorial dimension in public policies in the
contemporary world. The seminar will provide a comparison of theoretical and practical approaches of the European Union,
the OECD, the World Bank, and of the individual countries. The participants will have an opportunity not only to discuss new
developments in the territorial aspects of public policies, provide examples of new policy approaches along with the
emerging territorial issues and challenges stemming from changing policy environment but also to attempt to work out
suggestions for effective territorial policy design.
The seminar will be attended by high level experts in the field of policy making, practitioners from EU Member States,
representatives of international organizations engaged in the design and execution of development policies, as well as by
eminent theoreticians.
The Polish Presidency looks forward to applying the guidance obtained from the open discussion at the seminar to enhance
the design, coordination and implementation of the EU development policies, with particular focus on Cohesion Policy. The
seminar should result in an increased awareness, among high level participants involved in the debate on the future
development policies (including Cohesion Policy), and on the possible options of the territorial orientation of these policies.
Moreover, we expect that the seminar will contribute to the formulation of conclusions which will be presented at the informal
meeting of ministers during the Polish Presidency (November 2011).
1st day - Monday, July 18th
9.30 Opening of the seminar

Jacek PROTAS, Marshal of the Warmińsko-Mazurskie Voivodeship, Poland
Waldemar SŁUGOCKI, Undersecretary of State, Ministry of Regional Development, Poland
Veronica GAFFEY, DG Regio, European Commission
10.00 - 13.00 y Session 1 (coffee break at mid-session)

Different approaches to development policies - the interplay between concentration and deconcentration of
territorial development
There are basically two intellectually coherent, but at the same competing, paradigms of development policy, espoused and
continually elaborated within the World Bank, the OECD, and the European Commission. Both agree that geography matters
for development, that agglomeration is a fundamental driver of regional development, and that policies promoting
development should aim at reforming institutions. But, the first of the two paradigms suggests that these policies should be
aimed at “persons rather than places”, and that institutional reforms should mostly be, as it is sometimes depicted, “spatially
blind”. The second view argues that development policies and institutional reforms should be aimed at “persons within
places” and be “spatially targeted” or place-based, taking into account the specificities of individual territories. The choice of
the optimal paradigm of development by the EU has practical implications on the way concentration, conditionalities and
results measurement systems are designed, and is therefore very important within the framework of the Europe 2020
Strategy.
Issues to be discussed
• As far as the economic dimension is concerned, what do we know about the positive and negative economic
externalities from agglomerations? How much do policy-makers know about the “optimal size” of agglomerations and about
their global long-term effect?
• When it comes to the interplay between the economic and the social dimension, what should be said about the
synergies and/or trade-offs between these two dimensions? Is there a predictable effect, in both short and long-term, of
economic concentration on social inequality or social-inclusion? In what sense should “convergence” be pursued?
• Should/can institutions capable of supporting a healthy, sustainable market-based system be built independently of
specific local conditions? Are general institutional reforms truly spatially-blind?
• Can spatially-targeted policies and institutional reforms escape the capture by local rent-seekers pushing against
innovation? Are public policies able to accelerate growth in structurally obsolete, underdeveloped regions or do they perform
only a compensatory function, postponing adjustments and alleviating social deprivation?
• Can we promote diffusion of growth from the most dynamic nodes of development and, if so, how to achieve the said
diffusion? What are the ways of counteracting the back-wash effects? In other words – is “concentrated growth and inclusive
development” achievable?
8
• To what extent the “place-based” policies take into account the emergence of the “space of flows” – i.e. how these
policies relate to interconnections and interrelations between places?
• What is the evidence about the effects of the two paradigms?
Moderator
Grzegorz GORZELAK, Euroreg, University of Warsaw, Poland
Panelists
Jan OLBRYCHT, European Parliament
Indermit GILL, Lead Economist, World Bank
Jose Enrique GARCILAZO, OECD
Michał BONI, Board of Strategic Advisors to the Prime Ministers of Poland
Sergey S. ARTOBOLEVSKIY, Russian Academy of Science, Russian Federation
Fabrizio BARCA, Special Adviser to the European Commission

From theory to application - how to reinforce territorial dimension in public policies
The introduction of territorial approach involves quite sizeable risks related to the high probability of imperfect selection of
directions of intervention. The transfer of resources to regions can end up sheltering them from markets, preventing labour
mobility and creating a dependency culture. The responsibility of the external policy actors for guiding and monitoring
interventions can be abdicated in the name of subsidiarity, entrenching existing local elites. Alternatively, this responsibility
can be abused, imposing on regions homogeneous interventions and a passive compliance culture. The appropriate
territorial level can be wrongly identified with administrative regions and a sectoral top-down approach can be reproduced by
regions towards their urban and rural areas. The governance of spatially-targeted policies should be designed in order to
tackle these risks. The transfer of resources must be made conditional on spatially-targeted institutional changes to be
designed on the basis of widely agreed conditionality principles. Policy outcomes in terms of inhabitants’ well-being must be
agreed, measured, widely communicated, and debated. Concentration of a critical mass of resources on a few thematic
priorities must be achieved without preventing integration at place level. In other words, the entire programming system
(including programming itself, concentration of resources, conditionality, and orientation on results) at the various levels
(European, national, regional and local) must be properly designed in order to assure the effectiveness of intervention.
However, the question is how to introduce workable system in these areas?
Issues to be discussed
• How should the practical aspects of programming and managing development processes within the framework of the
territorially-oriented approach be tackled? The possible answers to this question could focus on: the ways in which objectives
are determined; how thematic prioritisation and concentration is decided upon, and on the best way of formulating the scope
and form of support.
• How should the general conditionality principles look like? In designing conditionalities how can the appropriate
balance be achieved between ensuring institutional change and letting regional actors adapt it to their specific contexts?
• In setting thematic priorities what is the way to avoid sectorialisation? How should concentration be designed?
• What requirements can be designed at general level in order to truly promote integration at place level? How to
ensure a true involvement of municipal authorities in the design and implementation of programmes?
• In building a system of indicators for orienting policy to results what should be the role of the supra-national, national
and sub-national levels? Should comparability of indicators be required? But how to allow then for the specific objectives of
places?
• How can we best use a reformed and place-based Cohesion Policy to ensure that territorial, economic and social
cohesion play a central role in the delivery of the Europe2020 Strategy?
Moderator
Wolf HUBER, Federal Chancellery, Austria
Panelists
Philip McCANN, Special Adviser to the European Commission
Daniel BRAUN, Ministry of Regional Development, Czech Republic
Roberto CAMAGNI, Politecnico di Milano, Italy
Jacek SZLACHTA, Warsaw School of Economics, Poland
Peter WOSTNER, Government Office for Local Self-Government and Regional Policy, Slovenia
Martin FERRY, European Policies Research Centre, United Kingdom
9
2nd day - Tuesday, July 19th

Towards territorial approach in development policies – ideas and practices
New approaches to regional and territorial policies are being developed in different ways in different countries. There are
examples of new policy developments which attest to the growing importance of the territorial dimension of the development
policies in these countries and their regions in the context of the governance reform. Such developments merit careful
analysis of their successes and failures, as they involve a re-thinking of the relationships between central, regional and local
(municipal) government, and also the relationships between different sectoral ministries. This re-thinking has both an
institutional as well as a territorial and spatial dimension. In institutional terms, multi-level governance reforms provide
opportunities for designing new approaches to regional development policies. Such opportunities can be created via novel
horizontal cross-sectoral or cross-jurisdictional coordination arrangements or via novel vertical coordination arrangements.
Institutional reforms must be designed so as to maximize the engagement of all local stakeholders and to exploit the
capabilities of all local and regional actors. However, in order to be successful these institutional developments must be
tailored both to the specific contexts and to the desired objectives, and these will be explicitly territorial and spatial in nature.
In other words, the logic of the governance relationships should best reflect the territorial logic of the region and provide
structures and systems which enhance and exploit the economic geography and spatial economic features of the locality.
Issues to be discussed:
• What are the best practices applied by different national and local authorities in their conduct of the territorially
oriented development policy?
• How to ensure the strategic and operational coordination of policy design and delivery?
• What are the practical territorial implications for “place-based” policies and how can this approach be used to
enhance local capabilities and to ensure the fostering of long-term institutional capacity-building?
• How to achieve proper balance between the top-down approach on one hand (Europe 2020) and the bottom-up
approach on the other (territorial potentials)?
• How can development policies (including regional innovation policies) increase the economic and technological
performance of particular countries and country groupings in the competitive global economy so unevenly affected by the
recent financial crisis?
Moderator
Iain BEGG, London School of Economics, United Kingdom
Panelists:
Andrés RODRÍGUEZ-POSE, London School of Economics, United Kingdom
Jiří BLAŽEK, Charles University in Prague, Czech Republic
Marek KOZAK, Euroreg, University of Warsaw, Poland
George PETRAKOS, University of Thessaly, Greece
Duarte RODRIGUES, NSRF Observatory, Portugal
Joaquim OLIVEIRA MARTINS, OECD
12.15 - 13.15 y Coming to conclusions? - closing of the seminar
Grzegorz GORZELAK, Euroreg, University of Warsaw, Poland

Veronica GAFFEY, DG Regio, European Commission
Piotr ŻUBER, Ministry of Regional Development, Poland
10
Polish Presidency
Territorial dimension of development policies
The objective of this paper is to present the main concepts, current state and potential future directions of the debate on the
role of territorial dimension of development policies in achieving the broadly defined objectives of economic, social and
territorial development in the EU, its Members States and its regions within the context of globalization challenges. The
paper starts with presentation of different approaches to development policies focusing, among others, on the question of
interplay between concentration and deconcentration of territorial development. Subsequently, it attempts to introduce both
the theoretical foundations of the territorial dimension and the attempts at their practical application (by referring, inter alia to
the current system of the EU policies and its proposed modifications). It concludes with comments on the instruments (e.g.
horizontal cross-sectoral and cross-jurisdictional as well as vertical coordination arrangements) conducive to the effective
application of the territorial perspective into the development policies.
Introductory remarks
We are in the challenging time for the European Union. The future position of the EU on the global scene and the Union’s
ability to achieve its strategic objectives will be determined by the number of defining factors. The success of the EU will
depend on: the effectiveness of the post-crisis economic reconstruction, implementation of the Europe 2020 Strategy, the
institutional context created by the adoption of the Treaty of Lisbon and on the establishment of the new economic
governance system. It is imperative to invoke here, the forthcoming negotiations on the future EU budget and regulations
which will lay down the principles for the application of the EU policies.
Therefore, it is essential for all of us to assess the effectiveness of the whole spectrum of the EU policies in order to design
them in a way conducive to assuring both their optimal potential for the development of the EU regions and the well-being of
their inhabitants (understood wider than the GDP growth alone). Taking into account diversity, variety and social, economic,
cultural and environmental wealth of the European Union territories, special attention should be devoted to the methods of
exploiting both the potential of places (regions) and the potential of their mutual interactions.
We have a lot of sources of inspiration for shaping development policies: experience of Cohesion Policy, other territorially
oriented EU policies, examples from different Member States and from international organizations, such as the OECD, the
World Bank, the United Nations, the Forum of Global Associations of Regions. The world of academia also provides valuable
advice in this field, for example in the form of: the New Economic Geography (P. Krugman), the space of flows theory (M.
Castells), the theory of clusters (M. Porter) and the Agenda for a Reformed Cohesion Policy (F. Barca). It is worthwhile to
commend in this place the Hungarian Presidency accomplishments in advancing the notion1 of “territoriality” in the debate on
the future Cohesion Policy.
Within such a context the Polish Presidency organizes the Seminar on the territorial dimension of development policies
(Paradigms of regional policies - virtues, limitations, implications). The seminar will offer an opportunity for an informal and
open discussion on the role of territorial dimension in public policies in the contemporary world. Referring to the most
important new economic theories, the seminar’s participants will provide a comparison of theoretical and practical
suggestions brought forward within the OECD (e.g. Regions at a Glance 2011), the World Bank (e.g. World Development
Report 2009: Reshaping Economic Geography), the European Union, and the individual countries. The seminar will be
attended by high level experts in the field of policy-making, practitioners from EU Member States, representatives of
international organizations engaged in the design and execution of development policies, as well as by eminent
theoreticians.
From such a perspective, the Polish Presidency is looking forward to applying the guidance obtained from the discussion at
the seminar towards enhancing the design and coordination of the EU development policies, taking into account the
conditions of the said policies’ implementation. We expect that this seminar will contribute to drafting conclusions which will
be presented at the informal meeting of ministers during the Polish Presidency (November 2011). Therefore, the seminar
should result in an increased recognition, among high level participants involved in the debate on the future Cohesion Policy,
of the possible options for territorial orientation of policies in the context of their practical design.
Theoretical foundations
The paradigms of development policy have become the subject of heated debate both in the world of academia and in the
circles of policy-makers, and consequently have been exposed to several challenges, of intellectual and practical nature.
There are basically two intellectually coherent, but at the same competing paradigms of development policy, espoused and
continually elaborated within the World Bank, the OECD and the European Commission.
1Documents presented by the Hungarian Presidency at the meeting of Ministers responsible for Cohesion Policy, in Godollo on May 20, 2011, e.g..
Territorial Agenda 2020.
11
Both paradigms, by resting on an extensive body of knowledge, agree that geography matters for development, that
agglomeration is a fundamental driver of regional growth, and that policies promoting development should aim at reforming
institutions. But, the first of these paradigms suggests that these policies should be aimed at “persons rather than places”,
and that institutional reforms should be, as it is sometimes depicted, “spatially blind”. However, the second view argues that
development policies and institutional reforms should be aimed at “persons within places” and consequently be “spatially
targeted” or place-based.
The first paradigm emphasizes the rise of metropolises as the main nodes of the global networks in which not only decisions
are being taken, but also innovations and cultural streams are being produced. It also stresses the increased role of
geographical concentration, as well as of flows and interconnections (a change from “space of places” to “space of flows”).
This further stresses the role of these nodes of the global metropolitan network which are better connected and between
which the flows of decisions, money, innovations and creative people are the greatest – at the expense of the more
peripheral areas. According to this paradigm any attempt at smoothing out differences – by resorting to territorially-oriented
intervention - can prove counterproductive because it may slow down economic growth. Territorial disparities should be
tackled by “territorially blind” approach, in which both institutional changes and the provision of basic services, such as
education, health and public safety, are aimed at persons independently of where they live. Such a perspective entails that
the best way to bring economic growth and social inclusion to lagging areas is through economic integration based on the
construction of so-called “connecting infrastructure”, which would facilitate reduction in an economic and social distance
between places. In a nutshell: “concentrated growth, and inclusive development”.
According to the second paradigm there are, however, strong premises for focusing development policies on persons in
places, i.e. to tailor policies to specific territories. According to this view, both private and public agents have limited
knowledge about the efficient limits of agglomerations and about the global effects of connecting infrastructures. The design
of both adequate public goods and effective institutions needs to rely on the knowledge and preferences of people living in
places (and self-proclaimed “spatially-blind” policies often have a hidden territorial agenda). At the same time - as this view
holds - several places fail to exploit their development potential due to either limited capacity, unwillingness or limited scope
of action of local elites. Therefore, the development policies need to be tailored to places but they also require to be steered
from outside, this mix of endogenous and exogenous components being achieved through a multilevel governance.
According to this paradigm risks exist, as argued by the other paradigm, that the policy is captured by local rent-seekers and
that it is directed against mobility, but these and other risks can be tackled by introducing strong conditionalities, an effective
system of outcome indicators, and a room for open public debate. Polycentric development, inclusive growth and place-
based policies are the catchwords of this orientation.
The dilemma of territorial (place-based) vs. sectoral approaches has been of a key importance for policy-makers who design
public interventions. New regional/territorial policies in many countries have been developing in a way conducive to finding a
balance between governing by central institutions through the redistribution of activities/funds on the one hand and regional,
local knowledge of the best use of these resources on the other hand. The regional planning process has to tackle existing
different approaches to development, namely the sectoral and territorial ones.
The increased role of the territorial dimension of public policies takes on an additional significance in the view of the
forthcoming negotiations of the EU future financial perspective, which were initiated by the publication of the EC
Communication "A Budget for Europe 2020". The said Communication proposes the framework for the functioning of the EU
policies in the next programming period, including the mechanisms and the future directions of distribution of the EU funds.
In the said document the references to the territorial aspects of the EU measures were made in the fragments devoted to
Cohesion Policy, to Common Agriculture Policy and to the new fund - Connecting Europe Facility. Hence, the debate over
the choice of the optimal solution for the programming, implementation, monitoring and evaluation of public interventions will
be the focal point for all actors involved in the management of public funds. The forthcoming discussion on the future shape
of Cohesion Policy as well as of other EU policies will entail new propositions focused on alignment with Europe 2020
Strategy and on result-orientation.
Having in mind the objectives of the EU policies and its Member States we have to be aware of the fact that the
heterogeneity, variety and specificity of regions and localities will be instrumental in achieving the sustainable, accelerated
growth of the EU territories and that one-size-fits-all approach is not advisable for cohesion policy. Since the combination of
“top-down” and “bottom-up” approach might prove demanding for the forthcoming discussion on the shape of Cohesion
Policy and other EU policies after 2013, should take these possible new conditions into account in order to elevate the
importance of the territorial dimension of development policies. The new above-mentioned documents (Common Strategic
Framework and the contract) offer perfect opportunity to apply the integrated approach, which is conducive to the
coordination of different EU measures.
The regional/territorial policies in general and the EU Cohesion Policy in particular have to cope with these new challenges.
Have they been able to do so? To what extent particular doctrines have acknowledged the changing development paradigm,
and in which case the traditional doctrines have lost the most of their power? The seminar should address these questions
through a free and ample discussions triggered by the several important key presentations.
12
We are convinced that the three most important international organisations active in the field of regional/territorial research
and policies will construct the axes for discussion: the European Commission, the World Bank and the OECD. It is our
intension to decode their standpoints and doctrines of regional/territorial policies – this can be done by the representatives of
these organisations. However, the debate on the following issues may lead to a better understanding of these doctrines and
to identifying their similarities and differences between them.
The main issues for discussion
• Can we promote diffusion of growth from the most dynamic nodes of development and, if so, how to achieve the said
diffusion? What are the ways of counteracting the back-wash effects? In other words – is “concentrated growth and
inclusive development” achievable?
• To what extent the “place-based” policies take into account the emergence of the “space of flows” – i.e. how these
• How should the practical aspects of programming and managing development processes within the framework of the
territorially-oriented approach be tackled? The possible answers to this questions could focus on: the ways in which
objectives are determined; how thematic prioritisation and concentration is decided upon, and on the best way of
formulating the scope and form of support.
• How can we best use a reformed and place-based Cohesion Policy to ensure that territorial and social cohesion play a
central role in the delivery of the Europe2020 Strategy? How to achieve proper balance between the top-down approach
on one hand (Europe 2020) and the bottom-up approach on the other (territorial potentials)?
• What are the practical territorial implications for “place-based” policies and how can this approach be used to enhance
local capabilities and to ensure the fostering of long-term institutional capacity-building?
13
Different approaches to development policies

The interplay between concentration and deconcentration
of territorial development
14
15
Grzegorz Gorzelak
Doctrines of regional policies - their virtues and limitations
1. For modesty in regional policy
Since its origins in the times of the Great Depression, modern regional policy has been exposed to several challenges, of
both intellectual and practical nature. In spite of appealing theoretical developments, the practical results of regional policies
have not fulfilled their promises and have not met expectations. Let us mention just few processes and phenomena which
should have been eliminated (or at least reduced) had the regional policies been successful.
• The interregional differences2 have been growing in most countries, especially in the new EU Member states and other
countries that had undergone accelerated socio-economic restructuring. This manifested itself mostly in the
metropolitan – non-metropolitan dimension, in spite of all attempts to overcome this differentiation and assure that the
less developed regions will be growing faster than the more developed ones, to achieve at least beta-convergence, with
hopes for sigma-convergence in a longer run.
• Even massive spending in less developed regions has not accelerated their growth. As a result, funds directed for
regional growth have had mostly social meaning, and in several cases lead to emergence of dependency culture (rent-
seeking strategies) from both national and international donors3.
• Traditional orientations of regional policies – with a bias towards basic, heavy infrastructure – has in many cases
diminished structural competitiveness of lagging regions through delaying the development of human capital and
improvement of institutional infrastructure.
• Institution building in several lagging countries and regions has – probably – been the weakest spot in all efforts to
achieve more cohesive economy, society and territory of the European Union. This hypothesis is being currently
validated by the nature and development of the economic crisis of the Eurozone and several Member states which
(being triggered by the financial crisis) had institutional (and psychological) roots on all levels – the EU political
leadership, the political elites in the Member states and the societies of the EU countries.
As a result, we witness strong persistence of the “regional problem(s)” is several countries. The empirical evidence
demonstrates a strong durability of historical regional patterns, in spite of the hopes that these patterns would be changed by
massive external assistance rendered to the less well-of regions. Central Appalachia is still the internal periphery of the US in
spite of the fact that it had enjoyed the greatest share of the Appalachian Program. Mezzogiorno has not entered the path of
fast growth and has not demonstrated the abilities of the Third Italy which emerged all of a sudden without any help from the
Italian governments and the EU. The most recent example of the former GDR dramatically shows that massive inflow of
financial and technical help from the outside leads nowhere, and in many cases may be counterproductive by killing
individual motivation and attitudes of self-reliance and self-responsibility. Eastern Poland has remained the least developed
region in the country, in spite of several attempts to equalise the level of economic development4.
This list can be prolonged. Moreover, along with economic restructuring of the second half of the 20th century new category
of regions supplemented the notion of “problem areas” – the deindustrialised ones, left without their traditional economic
base which was moved to the newly developing countries that offered lower costs of production of commodities not too
technologically advanced. By this, the challenges for regional policies were multiplied, and the success rate has not
increased dramatically – though there have been more successful cases with post-industrial restructuring than with
introducing growth to the stagnating regions.
Why does it happen? Why the regional policies cannot achieve their ambitious goals? There are several reasons for this.
Firstly, two contradictive tendencies can be observed. In search for lower costs of production capital is moving from more
expensive (higher developed) places (countries, continents) to the cheaper (less developed) ones. However, once arriving to
such a cheaper country this capital seeks the most prosperous places that offer the best external conditions for economic
activity. Thus both theoretical approaches are correct: the one that states that interregional differences in the level of
development have a “natural” tendency to equalise (labelled as neoclassical approach) – and the contradictive one stating
that “by nature” the level o development has to be polarised (a bunch of theories from cumulative causation through growth
2 I purposely refrain from using the almost official in the EU term “disparities”, since before we are able to label some difference as a “disparity” we should
define a “parity”, i.e. the threshold of differentiation beyond which we may say that some differences are “excessive”. This is very difficult, if possible at all –
so terms involving even implicit value judgments should be used with utmost care.
3 This rent-seeking strategy and dependency on external assistance could have been seen in the 1990s in the poorer countries of the EU-15, and now has
spread to the new Member states. For example, discussions with the authorities of Alentejo, then the poorest of Portugal’s regions, revealed that in 1995
they had only one development strategy: to seek funds from Brussels and Lisbon. Endogenous development opportunities were beyond the sphere of
interest of this regional elite. Such attitudes, not yet abandoned in Western Europe, are now shared by some regional elites in Central and Eastern Europe.
4 In the years 1950-1955 a massive industrialisation effort was undertaken in Poland (as in other countries of the Soviet bloc). The ambitious investment
programme has not been fulfilled, but the level of success was even lower in the eastern part of the country. Even the omnipotent communist state has not
been able to overcome the resistance of obsolete socio-economic structures, poor infrastructure, and peripherality – all well-known dimensions of the
syndrome of underdevelopment.
16
poles to new economic geography). The first theoretical standpoint seems to be correct on the international scale – the
second on the intranational, interregional scale. As a result, we witness international convergence, and at the same time
interregional (intranational) divergence.
And the regional policy cannot do much about it. This is because the end of the last Millennium brought up a sharpening of
the equity-efficiency dilemma. In the industrial (“fordist”) model locating an industrial investment in a peripheral territory could
have had positive effects on the regional economy (although the “cathedrals on the desert” are a vivid example that this had
not always been the case). Such an investment usually was financed from public sources, since the state - according to
Keynesian principles – was an active economic actor. This is no longer the case in the older economy in which decisions on
investment are no longer taken by public authorities but by private agents (mostly by the TNCs), and the quality of territorial
business, social and natural environment is the most important factor in selecting the location for the new enterprise. Thus
nowadays the lagging, peripheral regions may be in an even worse and less promising position than it was the case some
thirty years ago, and the only opportunity for the state – supporting innovation and research – is not leading to supposed
results (as Rodriguez-Pose proves, we often end up with a new form of “cathedrals” – the technoparks in peripheral regions).
It should be also indicated here that the specific type of advanced regions is currently of special importance - the
metropolises. “Metropolises govern the world”, as Castells says. They concentrate management, finance, culture,
innovations. And metropolisation is the most strongly pronounced process in most of the catching-up economies. Moreover,
there is no relocation of metropolitan functions from the expensive “core” to the cheaper “periphery”, since only the
metropolitan cores can perform them5.
These processes also explain while there seems to be a positive correlation between the rate of GDP growth and
interregional differentiation. The catching-up countries – especially the CEE ones, but also Ireland in the 15-year period
1994-2009 – have been growing rapidly at the expense – and maybe even because of – their increasing regional divergence.
This corroborates the “old” Williamson’s hypothesis of the 1960s, which assumes that on the initial stages of development
regional differentiation increases along the process of growth, while on the more advanced ones it begins to decrease.
It would a thrilling exercise to establish causal relationships between growth and territorial differentiations. One may
hypothesise that in the early stages this differentiation is a condition for accelerated growth. It could be indicated that the
territorial “locomotives” – in the previous industrial paradigm these were the industrial concentrations, nowadays the
metropolises have taken over this role – provide the bulk of value added created in a given country, and what is even more
important now, they connect the national economies with the international (now we tend to call it “global”) scene. However,
along the development process also the peripheral regions advance and get equipped with infrastructure, thus becoming
attractive for investment and settlement, and in this way gain more exogenous potential for development, which tends to
equalise the interregional differences. So, in the first stage we might have growth because of divergence, in the later stage
convergence because of growth.
And, finally, the perspective on the regional issues has been changed by the financial crisis and its aftermath. On the one
hand, austerity measures have led to a decrease of the amount of funds that can be directed to public intervention for the
sake of spatial or regional processes. On the other hand, however, a better (the crux of the matter is to decide what it exactly
mans!) allocation of these funds may be regarded as a powerful tool of overcoming the limitations for growth brought up by
the crisis.
In conclusion: regional policy should assume a modest attitude towards its goals and objectives. It is very difficult to
overcome in a short, and even in medium run the natural processes of socio-economic development, underpinned by
geographical location and natural conditions, which have shaped the trajectories of countries, states and regions in a
perspective of Braudelian “longue durée”. This modesty should be even greater in the light of unclarities of the very doctrines
of this policy, conflicting or at least not precise enough.
2. Theoretical foundations
As already indicated, “classical” regional policy has aimed at equalisation of interregional differentiation. In Europe – the
continent of no doubt the strongest regional policy - the Treaty of Rome repeated this goal, adding that this should lead to
“harmonisation” of development of the Member states and should be achieved by assisting the least favoured regions.
This seemed reasonable in the old, traditional development paradigm and Keynesian economic doctrine. However, as the
economic realty begun to change, theoretical considerations started to question the traditional approaches.
The first indication came some 20 years ago in the form of New Economic Geography which suggested that agglomeration is
the main driver for regional development, and concentration for the sake of greater competitiveness should become the
major orientation of regional polices. To some extent ground for this orientation has been also prepared by M.Porter's
concept of clusters which – having some roots on Perroux’s idea of growth poles and Marshallian industrial districts - also
5 This is the reason for such a strong metropolisation processes in the post-socialist countries. The deindustrialisation process was a general one, but only
in big cities the lost industrial functions could have been replace by the metropolitan ones. As a result, the old divide on the axis urban-rural areas has been
replaced by the new one along the metropolitan-nonmetropolitan one.
17
indicated that concentration of several innovative activities increases overall efficiency of economic production through spill-
overs and synergic effects.
These new concepts were formulated in parallel to rapid acceleration of globalisation processes and the rise of metropolises
as the main nodes of the global networks in which not only decisions are being taken, but also innovations and cultural
streams are being produced. These processes have, in turn, increased the meaning of concentration and made the attempts
of making the development more equal even more difficult, if possible at all. Metropolises of the post-industrial era added the
quality dimension to the “quantitative” agglomerations that were the product of the industrial paradigm.
A third dimension has then been added to the two mentioned above – the increased role of flows and interconnections, so
well described by M.Castells in his famous remark about a change from “space of places to space of flows”. This in turn
increased the role of these nodes of the global metropolitan network which were better connected and between which the
flows of decisions, money, innovations and creative people was the greatest – at the expense of the more peripheral areas
which begun to demonstrate even less growth potential than it had been the case in the previous development pattern6.
The regional policies had to cope with these new challenges. However, there is gap between the scientific description of the
contemporary development in its territorial dimensions – and the traditional approaches of regional policies. This is due to the
fact that theory is “value free” – a cold description of the observed realty, obtained as a result of objective scientific approach,
and does not have to take into account ideological underpinnings and even more so sometimes conflicting interests of the
parties involved. But policy is “political”, and steps beyond the cool expert’s eye. Policy has not only to fulfill goals rooted in
ideological value judgments, but also has to secure a proper result of a popular vote. This makes the dialogue between
science and policy even more difficult, and often creates frustration among the researchers who observe that suboptimal
(according to their judgments) solutions are being implemented in practice7.
So to what extent particular doctrines of regional policies have acknowledged the changing development paradigm, and in
which case the traditional doctrines have lost the most of their power? In particular, what are the answers of these doctrines
to the following basic questions?
1. What is the interplay between concentration and deconcentration of territorial development? In what circumstances the
regional policies should support one or another tendency?
2. What are the social consequences of economic concentration? To what extent the slogan “polarised growth – inclusive
development” can be put into practice and with what instruments and measures?
3. How does the innovation policy translate itself into equalisation of territorial development? Can we dream about making
innovation creation more territorially equal if research and innovation potential are so strongly differentiated and
concentrated in space?
4. Are the peripheral, structurally obsolete and underdeveloped regions able to accelerate growth due to external support
directed to them by public polices - or can this support be only of social meaning?
5. How can we achieve stronger diffusion of growth from the most dynamic nodes of development - the metropolises, and
should we – and if yes how – try to diminish the back-wash effects manifested mostly in migration flows for less to better
developed places?
6. What are the practical instructions for “place-based” policies and how this approach can be incorporated into the “space
of flows” in which interconnections and interdependencies are of crucial character?
7. How can regional policies increase the economic and technological performance of particular countries and country
grouping in the competitive global economy, so unevenly affected by the recent financial crisis?
3. The doctrines
Two contemporary doctrines of regional policy seem to be of the greatest importance: the Cohesion policy implemented by
the European Union and the 3-D approach proposed (but for obvious reasons not put into practice) by the World Bank.
Cohesion policy seems to be at the crossroads. Not repeating the growing criticism of its practical implementations (an
account was given in our paper with John Bachtler, Policy Studies, 4/2007) three its main problems may be indicated:
1. Strong attachment to convergence as its utmost objective. It has been however found that even this supposedly clear
objective is not clear at all. Do we mean convergence between Member states (which is being achieved, but to a great
extent not due to this policy at all)? Or is it convergence of regions within the Member states (not being the case, as
already indicated)? Or maybe convergence between all regions of the EU (which may happen but only due to the inter-
country convergence)?
6 It is interesting to note that Peter Hall in his book published in 1966 on “world cities” described the cities independently, one by one. Two decades later
J.Friedman and later S.Sassen investigated “global cities” conceived as nodes of the metropolitan networks.
7 A consolation can be seen in the fact that there scientific arguments find their way to the minds of practioners, though with a considerable time lag.
18
Growing criticism of convergence-driven doctrine of Cohesion policy has led to its shift towards competitiveness. But
again – competitiveness of what? Of the entire national economies, as is being the case in the most advanced countries
of the EU? Or of their regions – but if so – of all regions, or just the strongest ones which already are highly competitive?
This is also unclear, and prone to individual interpretations of the Member states. Moreover, this maneuver is not
liberating the policy form the equity-efficiency dilemma, since in most cases “competitiveness” may be achieved only at
the expense of “convergence” between the regions in a given country.
Instead of using “convergence” as the main interpretation of Cohesion policy, cohesion should be understood in
functional terms, and not as an effort to reach convergence. Convergence is an approximation of static states, whereas
cohesion is dynamic by nature, being the opposite of entropy. Moreover, convergence is difficult to achieve, certainly
with the limited resources available at EU level. Cohesion should be liberated from its ‘equalisation’ underpinnings and
should be understood rather as harmony and collaboration (economy of flows), lack of destructive pressures and
irresolvable conflicts, the possibility for co-existence and cooperation between individual components. Following this line
of argument, an alternative understanding of the individual aspects of cohesion would involve a policy focus on three
elements: economic cohesion, denoting the possibility for effective cooperation between economic agents, lowering
transaction costs, and harmonising relationships between businesses and their institutional environment; social
cohesion, eliminating barriers to horizontal and vertical mobility through helping to overcome differences in levels of
education, career advancement and material status; and territorial cohesion8, removing constraints on spatial
development which restrict the achievement of social and economic cohesion, such as eliminating barriers to transport,
connecting the major nodes of European and national space, and developing research and business networks.
2. Weak response to the growing importance of the “space of flows” and traditional attachment to the “space of places”.
These are mutually interdependent perspectives, with a dominant role for the flows of goods, people, capital and,
especially recently, information (one should remember that economic decision is also information). In the current era,
countries and regions will only gain lasting competitive advantage if they can produce innovations on a steady basis,
operating in global networks of innovation creation and diffusion. Stimulating growth in theses new circumstances must
take different forms than it had been the case under the previous paradigm. Is Cohesion policy prepared to take these
changes under consideration? To what extent the new concept of “place-based policies” is open for enhancing
interconnectivity, facilitating “inter-place” flows and interactions? If we concentrate our interventions on “places” – don’t
we lose from sight the “corridors” of exchange and movement of ideas, information, innovation, people, goods and
services? The functional approach to Cohesion stresses the role of these “corridors” – are they not left aside when
“place-based” policies are in the focus of Cohesion policy?
3. Poor and mostly formal coordination during the implementation stage and then shallow and fragmented evaluation of
effects of policies. Evaluation became a separate “theory”, it was equipped with special vocabulary and procedures.
Everybody is performing evaluations – needed or not, but required. Ex-ante, mid-term, on-going, ex-post etc. However,
the ex-post evaluations are finalised after the coming programming period is fixed, so they may be useful for the next
one. But this means that we have over 10 year time lag, and in rapidly changing reality our conclusion form these
evaluations may often have only historical meaning.
What seems even more important, evaluations are fragmented and disintegrated. There are no joint evaluations of
interventions financed from different EU funds: EFS is evaluated (how seriously?) totally independently from the projects
financed by ERDF and the CF. The results of CAP – hypothetically often contradicting the goals of Cohesion policy –
are not related to the evaluation of this policy at all.
This situation stems from weak coordination. It is relatively better on the programming-strategic level, but once the
programmes are written and projects drafted implementation is being performed practically independently by particular
implementing authorities – often located in the same ministry, agency, or regional government.
Cohesion policy will remain the most important - on par with CASP – policy of the European Union. Its effectiveness and
efficiency will no doubt be improved if some of its weaknesses could be eliminated.
The 3-D doctrine of the World Bank is a relatively new intellectual – though not yet practical – proposition. It is based on
the concept of “Seeing Development in 3-D”: density, distance and division. The main message of this proposal is that
“economic growth will be unbalanced, but development still can be inclusive” which seems much more realistic than the
convergence-driven attitude of Cohesion policy of the EU.
It is being often indicated that the proposal of the WB is “spatially blind”. Nothing more incorrect! This is a proposal strongly
related to place, territory, and space. Yes, one dimension of intervention is spatially blind – development of institutions. But
this is correct, since the rule of law, transparency, lack of corruption, effectiveness of administration, openness of economy,
should be “spatially blind”, as related to the entire territory and not just limited to this or that region. Yes, introducing these
institutions should be related to the given socio-economic national and/or regional context, but the utmost goal of is to
8 The notion of territorial cohesion only recently added joined economic and social cohesion in the official EU language, and has not as yet been approved in
treaty form.
19
achieve institutions working in a similar, comparable way. All other proposals and indications of the WB doctrine are strongly
spatially related9.
Underdevelopment is often a result of a joint combination low local density, costly internal distances, and international
divisions. Overcoming these impediments may lead to growth and its spreading from places of concentration to other
territories.
There is not need of reporting on the content of the WP 2009 report, it is widely known. What can be indicated here is that
too strong generalisation seems to be the greatest weakness of this proposal. It puts into one sack very diverse countries
with vastly different socio-economic systems, and offers them different combinations of the same three elements, be it
“institutions-infrastructure-incentives” or “specialisation-agglomeration-migration” etc. Can these suggestions be so
overwhelmingly universal? Should, for example, whole of Europe still undergo concentration and urbanisation? Moreover,
the advises sometimes seem not to be rooted deeply enough in reality. Even if Russia should concentrate its population and
economic potential – how can this be done? What resourced should be spent on this, and what instruments used?
Nevertheless, the WB doctrine is influential and definitely should not be dismissed or labeled as “spatial” just in the grounds
of relatively shallow understanding.
Instead of conclusions
Just few sentences. The Cohesion policy – as a political undertaking with rich implementation experience – seems to be too
practical, and too little theoretical. On the contrary – the preposition of the WB is just a set of elegant and theoretical ideas,
and its practicalities are not too deep, and definitely have not been tested in practice. What should be advised is a an attempt
to look at the Cohesion policy from the perspective of the WB suggestions, and to supplement the 3-D doctrine by broad –
and often uneasy – practical experience of policy implementation that the Cohesion policy is rich with.
9 Realistic attitude and spatial orientation is best proved by the following quotation: „The challenge for governments is to allow—even encourage—
“unbalanced” economic growth, and yet ensure inclusive development. They can do this through economic integration—by bringing lagging and leading
places closer, in economic terms. This integration can best be done by unleashing the market forces of agglomeration, migration, and specialization, not by
fighting or opposing them.”
20
21
Jose Enrique Garcilazo, Joaquim Oliveira Martins

Key Findings and Policy Implications in the OECD Regional Outlook 2011
This small note provides a brief summary of key findings emerging in our forthcoming 2011 Regional Outlook (RO) to be
officially launched in the fall of 2011. This publication will be the first of a biennial series. The structure of the series will
consist of a section summarising the key regional trends and policy challenges during the period of examination, a section on
a special thematic focus, a section containing country notes and finally a section dedicated to a selected policy forum.
While this note cannot provide a comprehensive review of all the rich and extensive material contained in our forthcoming
RO, it will rather focus on the section and material examining regional growth disparities and opportunities, the links between
the regional and aggregate dimension, policy implications emerging from these “stylised facts” and finally a brief summary of
the main ideas presented in the policy forum “place-based or space-blind development models” which took place in Paris on
16th June 2011 amongst the authors contributing to this policy forum in the RO.
The structure of this note contains four sections. The first provides a description of the main growth trends examining forces
of convergence and divergence in OECD regions. The second examines the links between the regional aggregate growth
followed by the third section describing the policy response (and implications). The final section will summarise the main
arguments presented in the policy forum.
1. Forces of convergence and divergence suggest opportunities for growth are observed in all
types of OECD regions
Over the past fifteen years, regional growth in OECD countries has been quite heterogeneous. While predominantly urban
regions have generally exhibited higher levels of productivity and GDP per capita, they have not enjoyed any advantage in
terms of growth performance. Predominantly rural regions appear to be disproportionately represented among the fastest-
growing regions; however, they are also over-represented among the slowest-growing (Figure 1). This suggests that the
recipe for high sustainable growth rates is not unique and that strong growth can indeed be achieved in different ways. The
greater heterogeneity in rural regions’ performance might well point to greater variation in the challenges facing such regions,
but the data provide little support for the widely held belief that rural regions are necessarily in decline.
One of the key predictions of traditional growth models is that the income levels of poor countries will tend to converge towards the those of
richer countries, provided they exhibit certain similar characteristics (e.g., saving rates). This stems from their ability to import technical,
managerial and other innovations from the more advanced economies – in short, to catch up by imitating the leaders. If this logic
predominates, one would expect to see poorer countries growing faster, ceteris paribus, than richer ones. Against this, however, a major
strand of the economic geography literature concerns the benefits of agglomeration. This line of argument stresses cumulative effect of the
economies of scale, labour market pooling, forward and backward linkages, network effects, knowledge spill-overs and other internal and
external economies that firms may be able to exploit when economic activity is geographically concentrated. It is these effects that drive
urbanisation and account for the well established empirical observation that large urban areas tend to be characterised by higher
productivity and higher levels of per capita value added. On its own, the logic of agglomeration would lead one to expect divergence of
regional performance over time, with the leading regions pulling further ahead.
22
These two forces, though cross-cutting, are not contradictory. It is perfectly possible to envisage both convergence and
agglomeration dynamics at work in the same economy, but they will have the opposite impact on inter-regional disparities. In a
scenario dominated entirely by convergence dynamics, poorer regions would tend to grow faster, whereas in world shaped solely
by agglomeration, one would expect divergence to dominate, at least until the forces of attraction driving increased agglomeration
began to reach their limits and were overcome by the forces of repulsion (as when congestion and other diseconomies begin to
outweigh the advantages of agglomeration). The empirical evidence points to the presence of both forces, albeit with differing
impacts on different types of regions. Among rural and intermediate regions, forces of convergence appear to be dominant during
the period 1995-2007 (Figures 2 and 3). This reinforces the conclusion of OECD (2009) that concentration, while often beneficial for
performance, is neither necessary nor sufficient. Strong growth need not everywhere be associated with agglomeration processes.
Among predominantly urban regions, there are forces of both convergence and divergence. While urban regions have higher
levels of per capita GDP overall (78% display higher initial GDP per capita than the OECD average), the majority (56%) are
growing more slowly than the OECD average, indicating convergence from the top of the distribution. In other words, urban
regions beyond a certain level of GDP per capita tend to experience a deceleration of growth rates. Nonetheless, one may
also observe the divergence among a group of urban regions recording fast growth with higher-than-average levels of GDP
per capita (Figure 4). These findings are fairly consistent with past analysis examining the performance of functional metro-
regions; these tend to experience a deceleration of growth rates in GDP per capita growth. The analysis finds that only 45%
of the metro-regions are growing faster than their respective countries over the period 1995-2005 (OECD, 2009)
23
In sum, growth trends across OECD regions suggest that possibilities for growth exist in all types of regions: urban,
intermediate and rural. This mixed pattern of growth is largely driven by a wide range of interconnected factors influencing the
performance of each region, including, inter alia, amenities, geographic location, size, demographics, industry specialisation and
agglomeration effects (OECD, 2009). Nevertheless, recent OECD analysis of the main factors underlying regional growth finds several
endogenous elements to be critical drivers of regional performance over the medium and long term. These are human capital (both the
presence of highly skilled workers and the relative dearth of low-skilled ones), infrastructure, innovation activity, scale and
agglomeration effects, and to a lesser extent accessibility (see Box 1). These factors complement each other in important ways. The
performance of a region will thus depend to a great extent on how well it manages to exploit and mobilise its own assets and resources.
24
2. Mapping the heterogeneous picture into aggregate growth

Understanding regional performance and its link to aggregate growth is a critical area of research we have started to
undertake (see Garcilazo and Oliveira Martins, 2011 and OECD 2011b); especially the links between the heterogeneous
growth pattern we observe, where forces of convergence and divergence are present, with aggregate growth. For this task
we analyse the distribution of regional contributions to aggregate growth, where a region’s contribution to aggregate growth
depends on both its size (i.e. its initial share in national GDP) and its dynamism. From a national policy perspective it is not
simply regional growth rates that matter – where the growth occurs is also critical. Large, fast-growing regions will have the
largest impact on aggregate growth, while small regions with low rates will have the least impact. The impact of a large
region displaying very low growth rates could potentially be as large as the impact of a small region displaying very fast
growth rates. It will depend on each of these two elements. This analytical framework can help us better understand critical
policy questions – whether the performance of few large regions is what really matters for national economies; or rather the
performance of all regions.
Figure 5 graphs the shape of contributions to aggregate growth by large (TL2) and small (TL3) OECD regions. The
contributions to growth of OECD regions are highly skewed, and their distribution resembles a so-called “power law”
distribution. A few regions (the big “hubs”) account for a disproportionate share of aggregate growth, while the rest
collectively account for the bulk of growth but do not contribute much individually (e.g. fat-tail regions). At first sight it would
appear that big hubs are indeed the key drivers for aggregate growth, which they are, however when summing up of the
contributions of the fat tail regions their combined aggregate effects are even larger.
Amongst the big hub regions (Figure 5), as one would expect include dynamic capital regions such as Tokyo (Kanto),
London or Paris (Ile de France), Rome, Madrid, Stockholm, Warsaw and Dublin; large dynamic regions from the US and
regions home to large dynamic cites such Milan, Barcelona and Munich.
The magnitudes of the contribution by the big hub regions follow approximately a one-third two-thirds rule (Garcilazo and
Oliveira Martins, 2011). The large hubs contribute to one third of aggregate growth while the remaining aggregate growth
(two thirds) comes from the remaining regions
Comparing the natural logs of each TL3 regions’ rank sequence in Figure 5 to their contributions to aggregate growth
(expressed in natural logs) partition all regions into four groups of regions where each of the four group correspond to
regions with an equal proportional contribution to aggregate growth in their respective rank. Figure 6 compares the
contributions to aggregate growth of these four groups of TL3 regions and the number of regions within each of the four
groups as well as the population share contained in each of the four groups. The graph displays the magnitudes and
importance of two groups of regions; the big-hub regions (group 1) and the fat-tail regions consisting of non-capital urban
and intermediate regions (group 2). When comparing the population share to the respective contributions to aggregate
growth of the four groups, we observe increasing returns to population scale in group 1, constant returns to scale in group 2
and diminishing return in groups 3 and 4.
25
As one might expect, much of groups 3 and 4 consists of very thinly populated, predominantly rural regions; their small
growth contributions largely reflect their small size. However, a significant minority of these low-contributing groups are urban
regions whose small growth contribution is chiefly the product of exceptionally poor growth performance over the period:
altogether, some 5% of the population of the OECD area lives in predominantly urban areas that fall into groups 3 and 4.
These regions present a particular policy challenge. Altogether, the 50 worst-performing regions in terms of growth of GDP
per capita contribute virtually nothing to aggregate growth over the period and yet are home to 33 million people. Fifteen of
these regions are predominantly urban, with a combined population of over 16 million; a further 18, with a population of 10
million, are intermediate regions. This group of slow-growing regions includes such urban areas as Grande Porto (Portugal),
Hainaut (Belgium), Hyogo (Japan) and Berlin (Germany). For policy-makers, the performance of these and similar regions
must be seen as both a huge challenge and tremendous potential opportunity: enhancing the dynamism of such urban
centres could, on its own, have a palpable affect on the aggregate performance of the countries concerned and might also
generate positive spill-overs for neighbouring regions.
Power laws have scale free a property meaning this particular shape tends to replicate itself at smaller and larger scales or
within sub-samples of the distribution. Our analysis confirms this property empirically (Garcilazo and Oliveira Martins, 2011)
finding a similar shape in contributions to aggregate growth at the country-wide level, among regions from the same type and
within individual countries. These shapes carry important policy conclusions as we document in length on the forthcoming
RO. First the notion of an “average” region looses meaning. One the one hand policy-makers should indeed focus on the
performance of the hub regions given their disproportional contribution to national and aggregate economies; however an
exclusive focus on them neglects the very important contribution of the fat tail regions which include the many remaining
second-tier cities and rural areas. These account for around two-thirds of aggregate growth.
A policy neglecting this underlying heterogeneity and focusing on averages in a spatially-blind manner could miss its target.
The challenges -- and therefore policy responses -- facing the big-hub regions are very different than the challenges second
tier medium size cities and in rural areas face. Our analyses examining the drivers of growth in different types of regions find
that indeed regions face different constraints on growth (OECD 2011b), all based on endogenous factors, and thus require
different policy interventions. A policy response equipped to address these different challenges in different regions is likely
the yield better results -- in terms of aggregate growth -- than a “one-size-fits-all approach”.
In sum policy responses capable of addressing negative externalities in agglomeration economies are a critical tool for
national economies given their large contribution to aggregate growth. More work is needed to better understand under
which conditions and why, negative externalities emerge in cities and agglomerations hindering their performance. At the
same time a differentiated approach capable of unleashing the growth potential of the many fat tail regions -- contributing to
the bulk of national growth -- can also be a very valuable tool for national economies. Our evidence suggests that place
based policies defined in the new regional paradigm are best equipped for this task. These do not rely on national transfers
26
and subsidies and are therefore are not a zero-sum game or differently said and either-or question. Place based policies
have been undergoing a significant structural change over the past decades from compensatory instruments initially
designed as policy responses to forces of agglomeration to a more integrated portfolio of policies focusing on growth
potential and the competitiveness of regions. We review the paradigm shift in the next section.
3. Policy responses to agglomeration forces: countries have been experiencing a paradigm shift
At the OECD we have been conducting work at sub-national level for over 20 years improving our understanding geography
and space play in the process of economic development. Our work has conducted national territorial reviews in 18 OECD
countries, reviews of metropolitan areas in 20 cases, 13 rural reviews, 5 regional innovation reviews and 4 regional reviews,
where each review takes us approximately 18 months to complete.
In this body of work we have identified a clear paradigm shift in place-based polices over the last years which is currently still
underway in most OECD countries. During the 50’s and 60’s regional policy was mainly used as policy response to market
forces yielding pockets of economic concentration in specific geographies and regions mainly due to benefits associated with
economies of agglomerations. Uneven spatial development consequently increased inequality among territories and called
for policy responses.
Mechanisms giving rise to pockets of economic concentration has been extensively studied by the NEG literature. In
summary they emerge due to the presence of a pooled labour market, backward and forward linkages among firms, and
knowledge spillovers. Workers and firms are able to meet and match skills with jobs, thereby lowering costs and increasing
the efficiency of firms’ operations. Proximity between buyers and suppliers increases the efficiency of the value chain and
reduce the risks of defaults on contracts. Proximity also facilitates the flow of workers’ knowledge among organisations. We
have empirically measure that such agglomeration effects give rise to higher levels of GDP per capita and higher levels of
productivity (OECD, 2009a) in OECD metropolitan region in comparison to national standards.
As a response to these market forces, national governments during the 50’s and 60’s employed regional policies as an
instrument for compensating lagging places through massive subsidy interventions (infrastructure and setting up public
services) to the poorest regions, distorting markets and harming the development chances of the regions in the medium and
long term. Attempts were also made to keep declining industrial sectors alive as to protect local jobs, when such sectors
were being condemned in the long term. These government responses failed in their objectives of reducing inequality over
the medium and long term, generating new jobs in lagging areas or triggering a culture of economic dynamism in targeted
areas. Moreover these actions attained unintended consequences to their original goals and instead created a culture of
dependency of recipient regions many of them experiencing development traps.
In response to these poor results, regional polices evolved from a top-down subsidy based intervention aimed a
compensating and reducing inequality, to a broader family of polices defining new objectives, new units of intervention, new
strategies and new actors summarised in Table 1.
27
The new paradigm now departs from a zero-sum game approach and consists of designing a portfolio of integrated and
coordinated investments targeted toward the endogenous potential of regions. In the new regional approach, polices are
differentiated according to the different regional contexts but at the same time they are coordinated and synchronized into a
common national framework combining top-down with bottom-up approaches.
Most OECD countries are still undergoing the paradigm shift, but by and large national governments have recognised the
shortcomings of the old approach and the potential benefits of the new approach, which are based on three core building
blocks. The first is assessing and identifying the main strengths and challenges of regions. Second lies on ability to create
complementarities and synergies among various sectoral policies, and the final building block lies on multilevel governance.
T3 key reasons to get the growth potential going:
4. Policy Forum
The RO devotes a chapter to a policy forum “place-based or space-blind development models” inviting a number of authors
to provide written contributions expressing their thoughts and providing constructive evidence on both policy alternatives. In
total six written contributions will appear in the RO. During its 25th meeting, the Territorial Development Policy Committee
invited the authors contributing to the forum to present their views and debate with other participants and committee
members in Paris on 16th June 2011. Four participants agreed to partake in the policy form and below we summaries,
according to our own interpretation, the core elements of their interventions.
Paul Cheshire:
The first contributor Paul Cheshire highlighted the need to distinguish between policy design and policy delivery, where the
former should be general and national and not place based, but delivery should take place where it is most needed. He
argued the purpose of policy should help people rather than buildings or neighbourhoods and there is a need for research to
carry out analysis at the functional scale. In his view agglomeration economies will not go away any time soon and pointed to
a body of literature providing evidence of growing sectors benefiting increasingly from agglomerations. People act according
to their preferences and can decide to relocate to cities or not. In this sense there is sorting mechanism in a spatial labour
market resulting in price differences between cities and other places. In addition the sorting mechanism will attract a higher
proportion of high skilled workers to cities. Policy responses aimed at picking winners such as place based policies from the
old paradigm based on transfers and subsides are distortive and should be avoided. Even place based policies from the new
paradigm attempting to generate innovation and build on regional potential are discriminating and will unavoidably pick
winners. He pointed out that many place do not have development potential and we need to learn how to manage decline in
more humane and efficient way. In addition he argued that policies aimed at moving people around – such as changing
social segregation – rarely work, and instead policies should focus on investing in skills training and to some extent,
innovation and letting people move. Finally he suggested the importance of co-ordinating many policies – especially
transport planning and metro planning – at the functional metropolitan level.
Andres Rodríguez-Pose
Andres highlighted the importance of this debate, given the recent advances in our understanding of growth and
development pointing to a number of recent very influential studies. Amongst these he highlighted the 2009 World Bank’s
Word Development Report (WDR) promoting spatially blind policies. He praised the framework employed in the report
allowing a simple understanding of very complex problems and offering clear simple policy solutions. Nevertheless he
pointed four problematic areas in this report. The first lies in the assumption that all territories (e.g. 21st century Africa) follow
the same stages of development (e.g. 19th century Europe). The second area is in the assumption that agglomeration will in
due course spread to other territories. While he agreed with the benefits of agglomeration, -- which he argues are not yet
exhausted -- he is a bit more sceptical about their spread. The third area is on the assumption that migration has no
economic, political and social costs for migrants or others (e.g. sending or receiving regions). Finally he disagreed with the
definition of institutions focusing solely on formal ones such as the rule of law and property rights protection, and furthermore
argued that beyond a certain level of development formal intuitions do not matter much. In his view informal institutions are
probably more important since they can act as a filter affecting any type of policy intervention.
Finally he argued that it is a fallacy in believing spatially blind policies are spatially blind. Rather they are very place based
but only benefit core places which are already well off. Moreover he suggested they might discourage development in other
areas with growth potential. Finally he agreed with Paul Cheshire that place-based should not be about territories but rather
about people in them.
Mark Drabenstott:
The third contributor claimed that we are engaged in a false debate between place-based and people-centred policies since
it is a false dichotomy. In his view both are needed. People cannot develop apart from the places in which they live and work.
A people-only approach ignores the large public investments that support some places major, especially cities. Moreover a
people-only approach assumes that markets get it always right ignoring their mistakes in overinvesting and under-investing
vis-à-vis fundamentals such as recently experienced in the global financial crisis. In his view regions is where the cores
28
action lies in labour markets, environmental assets, human capital and innovation. Innovation and places are very closely
tied such as their connectivity to global networks. He also suggested the growing importance of soft infrastructure, which in
his view can be put in faster and cheaper, is less path-dependent and will eventually drive hard infrastructure investments.
Finally he reminded us that regional policy is partly art (e.g. governance) and partly science, and in his view art consistently
trumps over science. Finally Mark concluded that agglomerations are not enough and rather more emphasis should be place
on innovation.
Fabrizio Barca
The final contributor, Fabrizio, also suggested the two-sided dichotomy is a fallacy and rather we are confronted with five
different approaches each aiming at different objectives. The first approach is the perfect institution approach with only one
way to solve the problem. It is based on a platonic ideal focusing on institutions with very strong assumptions. The second
approach is the agglomeration approach placing emphasis on the rents generated by the agglomeration processes. Together
with institutions, public investment matter and agglomerations do not just emerge from private decision-making. The third
approach is the redistributive/compensatory view underlining the bad side of agglomerations based on market oriented
decisions and the need to compensate the inequalities generated by them. The fourth approach is self-
discovery/communitarian approach where the role of outsider is to help locals discover and figure out what they already
know. The final approach is the place-based approach, which is based on a tension between external intervention and
endogenous forces where conflicts unavoidable emerged and governance is needed to deal with these tensions. In his view
the spatially blind view presented in the World Bank’s WDR is a mix of institutional homogeneity, agglomeration approach
and a bit of redistributed approach. Fabrizio suggested that any policy design must focus on discussions, debate and
revelation of information in order to turn it into knowledge. Finally he argued it is not about enabling people to move rather
enabling them to decide freely whether or not they want to move.
Bibliography:
Garcilazo, E. and J. Oliveira Martins (2011), “The Contributions of Regions to Aggregate Growth”, OECD Regional
Development Policy Working Papers (forthcoming).
OECD (2009a), Regions Matter: Economic Recovery, Innovation and Sustainable Growth, OECD, Paris
OECD (2009a), How Regions Grow: Trends and Analysis, OECD, Paris.
OECD (2011b), Regional Outlook, OECD, Paris.
29
Indermit Gill
Improving regional development policies10
As the global crisis abates, regional development policy is again coming to the forefront of debates in the European Union
and in the OECD. But this time, these policies are being debated in different economic conditions than just three years ago.
OECD economies now face weak growth prospects, with weakened fiscal balances. In 2010, all but three of the OECD’s
countries had higher general government debt than they did in 2007. In 2011, almost every OECD country is expected to run
a fiscal deficit. Regional development efforts will have to contend with more pressing national growth imperatives, and there
will be more pressure to be more frugal with national fiscal resources.
A polarized policy debate
During the economic crisis, three major reports addressed the matter of regional development policies. They should be
reexamined, keeping these objectives and constraints in mind.
In 2008, the World Bank’s World Development Report 2009 “Reshaping Economic Geography” (henceforth WDR;
downloadable at www.worldbank.org/wdr2009 ) argued that economic growth will always be spatially unbalanced, and the
principal aim of regional development policies should be to integrate lagging regions with those doing better. It emphasized
spatially blind “institutions” such as general administration and social services in every case and connective “infrastructure”
such as highways, railways, airports, and telecommunication networks in many cases. Targeted “interventions” such as
special incentives for enterprises to locate in lagging regions, it argued, should be used sparingly, mainly where countries
had internal divisions that weakened the market forces of agglomeration, migration, and specialization. It proposed how
policymakers could calibrate the mix of policies to instruments to suit the circumstances of the country (see Table 1).
Table 1: A rule of thumb for calibrating regional development policies

Policy priorities for economic integration
Institutions Infrastructure Interventions
Complexity of Place type Spatially blind Spatially Spatially targeted
challenge connective
Low Nations with sparse lagging regions •
Medium Nations with densely populated lagging regions • •
High Nations with densely populated lagging regions and • • •
domestic divisions
Source: World Development Report 2009, www.worldbank.org/wdr2009.
In 2009, two reports were published that differed in their policy conclusions from those of the WDR. A report authored by
Fabrizio Barca for the European Commission made the case for “tackling persistent underutilization of potential and reducing
persistent social exclusion in specific places through external interventions…” Soon afterwards, an OECD report argued that
persistent disparities between regions imply unused growth potential, reckoning that since “per capita GDP in the top-ranked
region of a[n OECD] country is at least double that of the lowest-ranked region”, it is better on both efficiency and equity
grounds for policies to target the lagging regions for growth-enhancing policies.
As is often the case with matters that span both efficiency and equity concerns, the debate has become polarized. One way
to characterize the debate is that it is between “place-based” and “people-centered” approaches to regional development.
But it is difficult t distinguish between the two. This is how the Barca report (page 5) defines place-based regional
development:
• “a long-term development strategy whose objective is to reduce persistent inefficiency (underutilisation of the full
potential) and inequality (share of people below a given standard of well-being and/or extent of interpersonal disparities) in
specific places,
• through the production of bundles of integrated, place-tailored public goods and services14, designed and
implemented by eliciting and aggregating local preferences and knowledge through participatory political institutions, and by
establishing linkages with other places; and
• promoted from outside the place by a system of multilevel governance where grants subject to conditionalities on
both objectives and institutions are transferred from higher to lower levels of government.”
There is not much here that anyone can disagree with. Nobody would propose the opposite, viz., that inefficiency should not
be reduced over the long term, or spatial inequities in the share of people below some poverty line should not be reduced, or
public services should not be designed using local preferences and knowledge, or that politics should not be participatory, or
that linkages with other places should not be strengthened, or that there should not be multilevel governance with disciplining
of how intergovernmental transfers are used. This definition can hardly be the basis of a serious debate.
10The author is Chief Economist for Europe and Central Asia at the World Bank, and was the Director of the 2009 World Development Report ‘Reshaping
Economic Geography.’ He would like to thank Aleksandra Iwulska for excellent assistance in writing this note. The views expressed here are his own, and
do not necessarily represent those of the World Bank, its executive directors, or the countries they represent. He can be contacted at igill@worldbank.org.
30
The OECD also does not specify what a place-based strategy is, but argues that such an approach is needed to generate
“synchronized growth” in all places all at once. The Secretary-General of the OECD, in a recent speech that was probably
informed by the OECD (2009) report, said:
“Some argue that location doesn’t matter and that national policies are sufficient. We reject this view at the OECD
and support a place-based approach. Yes, location matters. Whether resources are natural, human or intangible
(such as culture), they are located in a geographic space. Once the approach to national growth becomes place-
specific, sectoral policies need to be adjusted to the specific local economic, social and environmental conditions. …
More fundamentally, this place-based approach requires advanced and effective vertical and horizontal governance
mechanisms. It implies a deep and coordinated engagement of regional and local governments in achieving national
short- and long-term development outcomes. It also entails nurturing specific institutional arrangements to sustain the
dialogue between the public and private sectors, academia and training institutions and community-based non-
governmental organisations. “
It is not clear why anyone would suggest (or has suggested) that location does not matter, or that resources are not “located
in a geographic space”. Why would other (“non-place-based”) approaches not need effective governance mechanisms or
coordination between national, regional and local authorities? Which approach would not benefit from arrangements that
promote dialogue between government, businesses and NGOs? Again, this characterization of place-based policies cannot
be the basis of a serious debate.
For these reasons, this note tries a different approach. It first outlines what economic growth looks like in most countries in
the world. It oversimplifies things a bit, because it turns out that these patterns are not the same in the poorest and richest
countries. But this simplification is done to illustrate a point: that it is costly to try to put in place “synchronized policies” to
make every place grow at once; far better to help lagging and leading regions become more integrated with each other, and
with international markets. The note then outlines a simple set of rules—gleaned from theory and experience—to facilitate
this integration in circumstances that vary from the straightforward to the complicated. Finally, it describes how the approach
to regional development has evolved over the last several decades. Again, it simplifies things, perhaps overly so, by using
the ‘Italian’, ‘Iberian’ and ‘Irish’ approaches to regional development policies as illustrations. This is done both to show how
regional development policies have become more effective over time by recognizing that the forces of agglomeration,
migration, and specialization can be used by policymakers to integrate nations and facilitate economic development, and
how differing national conditions require more or fewer instruments of integration.
Economic growth will be unbalanced
Prosperity does not come to every place at once, and to some places it does not come at all. This is difficult for caring people
to accept, because it is more natural to think that if a place is not prospering, the policy remedies must be incorrect or
inadequate. The belief is that a strong enough push to improve governance, a big enough investment in infrastructure, and
generous enough incentives to enterprises to move to lagging regions would make such places as prosperous as the others.
At unification, many leading politicians in Germany seemed to think so. Despite a vast flow of funds to Eastern Germany—
estimated at more than €1.3 trillion—privately produced GDP per capita is still only 65 percent of Western Germany’s. And a
lot of this catch-up is not because eastern GDP went up but because more than 1.7 million East Germans left for a better life
in the west. Cities became cleaner and public services better, but even a Herculean push did not make the distribution of
economic activity smooth.
Today, with a severe fiscal crunch facing policymakers in much of the OECD, they must make spending decisions based on
clear-headed assessments of how growth and development take place. And any realistic analysis shows that economic
activity is not evenly spread out—not in large middle-income countries such as Mexico, nor in midsized but more developed
countries such as South Korea and Poland, nor even in small advanced economies such as Belgium and Denmark.
This poses an apparent dilemma. Should policymakers abandon lagging regions, at least until a country accumulates so
much wealth that it can essentially waste some of it on incentives for economic activity in these places?
Integrate, integrate, integrate
The WDR proposes a better solution. It urges policymakers to recognize that economic growth will be spatially unbalanced,
and to try to spread out economic activity—too much, too far, or too soon—is to discourage it. It advises that they should
instead look at the interactions between leading places and those that are lagging. When seen this way, migration is not
seen as a failure of policies but as a measure of the desire of people to improve their lives and those of their children.
Agglomeration of businesses is not seen as a visual manifestation of spatial inequities, but instead as an opportunity to
design fiscal transfers to share the fruits of economic concentration in some places by spreading social services to places
not as lucky or plucky. Spatial specialization is the rule, and this means that some regions will grow faster than others, and
yet others will not experience growth at all. The best way to help a lagging region is to reduce its economic distance to
leading places; that is, through economic integration.
31
The notion of economic integration should be central to the debate on regional development, but the discussions are often
narrowly focused on places that are not doing well. Perhaps this is what underlies the use of the term “place-based
approach”.
The WDR tries to reframe this debate in a way that better conforms to the reality of development. The reality is that it is the
interaction between leading and lagging places is the key to economic development. Spatially targeted interventions are just
a small part of what governments can do to help places that are not doing well. Besides place-based interventions,
governments have more potent instruments for integration: they can build the institutions that unify all places, and put in
place infrastructure that connects some places to others. Policy discussions should include all the instruments of
integration—institutions that unify, infrastructure that connects, and interventions that target. Experience and analysis can
help to tailor the use of these policy instruments to address integration challenges that range from the relatively
straightforward to the most complicated (see Table 1).
Table 2. Calibrating regional development policies
Country type
Sparsely populated lagging Densely populated lagging Densely populated lagging regions
regions regions in united countries in divided countries
What policies should Labor and capital mobility Labor and capital mobility Labor and capital mobility
facilitate Market integration for goods and Market integration for goods and
services services
Selected economic activities in lagging
regions
Policy Priorities
Spatially blind Fluid land and labor markets, Fluid land and labor markets, Fluid land and labor markets, security,
“institutions” security, education and health, security, education and health, education and health, safe water and
safe water and sanitation safe water and sanitation sanitation
Spatially Interregional transport Interregional transport infrastructure
connective infrastructure Information and communication
“infrastructure” Information and communication services
services Local roads
Local roads
Spatially targeted Incentives to agriculture and agro-
“incentives” based industry
Irrigation systems
Workforce training
Source: WDR 2009, Chapter 8.
Even for those who have recognized the futility of providing economic incentives for staying and striving in lagging regions—
such as the discouraged regional development specialists who worked for decades in Italy’s Mezzogiorno—the temptation is
to think of highways, railroads, and airports as the main instrument of integration. The WDR emphasizes that the most potent
instrument for integration are spatially blind improvements in institutions; put more simply, the provision of essential services
such as education, health, and public security.
Rodriguez-Pose (2010) provides a sensible critique of an overemphasis on spatially blind policies for integrating lagging
areas with the broader economy, writing that the Barca and OECD “reports posit that even the best spatially blind
development strategy can be undermined by poor institutional environments.” In this context, the main points made in the
2009 WDR are worth repeating.
• Policymakers should consider all the instruments of integration when designing a regional development strategy—
universal institutions, connective infrastructure, and targeted interventions. But they must start by improving the basic
institutions—essential social services provided to all at levels of quality that the country can afford, and sensible regulation of
markets. In some cases, such as the Italian Mezzogiorno, doing this may be difficult. But there is really no choice. And the
experience of other countries shows that it can be done.
• The next instrument is infrastructure—well-placed roads and railways, and balanced regulation or provision of
transport services—to improve market access.
• The final instrument, to be used only in extraordinary circumstances but always in conjunction with institutions and
infrastructure, are special incentives to attract business to lagging regions.
Logic and experience both show that place-based incentives only succeed when they are accompanied by efforts to
strengthen institutions and improve infrastructure.
The Italian, Iberian and Irish Approaches
The experience in Europe is especially illustrative.
32
Table 3 shows three stages of regional development policies in Europe. They can be called—somewhat exaggeratedly but
with the benefit of helping readers remember the main points—the ‘Italian’, ‘Iberian’ and ‘Irish’ models. The nicknames are
chosen because they reflect policies in Italy between 1955 and 1990, in Spain and Portugal during the 1980s and 1990s, and
in Ireland during the 1980s, 1990s and early 2000s. The experience of these countries is the story of progress in
understanding what works best to help people in lagging regions.
Table 3: Three approaches to Regional Development in Europe
“Italian” Model “Iberian” Model “Irish” Model
Rationale Bring jobs to people Brings jobs to people and enable Prepare people to get jobs
them to access product markets wherever they are
Objective Bring economic activity from Facilitate access of producers in Integrate lagging and leading
leading to lagging regions lagging regions to markets in regions
leading regions
Instruments Emphasis on spatially targeted Emphasis on Interventions and Emphasis on Institutions and
Interventions connective Infrastructure connective Infrastructure
Although structural and cohesion funds seem to have contributed to growth of GDP per capita in these countries, assessing
their impact on regional differences is not straightforward.11 The shift in regional policies illustrates how countries have been
searching for successful approaches towards regional development. In Italy, after years of spatially targeted incentives to
develop enterprise in the lagging south, the approach gradually changed to include an emphasis on institutions (social
service provision) and better infrastructure. In Spain, initial regional development policies included a combination of special
incentives and improved infrastructure, with later shift to improvements in education and training. In Ireland, the policy mix
emphasized institutions—especially business friendly regulations and national efforts to deliver essential social services such
as education and healthcare—and connective infrastructure, not spatially targeted incentives for businesses.
Italian failure
Italy’s experience in trying to develop the Mezzogiorno—the lagging regions in the south—shows the futility of relying on
targeted incentives to integrate lagging regions into the national economy. These efforts correspond to the policy from 1955
to 1993 that provided companies with subsidies to tilt their investment profiles to the south. Due to weak institutions and
inefficiencies, the support for the South did not bring measurable economic benefits (See Table 4). Indeed, the fall in
unemployment between 1950 and 1970 was achieved mainly due to emigration from the South to northern Italy.
Table 4. Economic development of Italy’s Mezzogiorno
1951-60 1961-70 1971-80 1981-90 1990
The South’s share of the national total or level (percent)
Population 37.2 36.0 35.1 36.1 36.6
GDP per capita 54.5 56.6 58.6 58.2 56.7
Fixed investment 26.0 29.0 31.2 29.0 26.9
Unemployment rate (percent)
South 9.1 6.4 9.6 16.3 19.7
Center-North 6.8 4.5 5.2 7.6 6.5
Source: Faini, Giannini, and Galli 1993.
Italy changed its approach in the early 1990s. Targeted subsidies for enterprises were deemphasized and administrative
reforms were made a priority. Decades of misdirected money had exacerbated divisions between the north and the south
without reducing the gaps in per capita incomes.
Iberian experiments
The cohesion countries obviously learned from Italy’s failures. In Spain and Portugal, regional development efforts focused
on infrastructure, though they also provided incentives for companies to locate in lagging regions. Between 1994 and 1999
productive infrastructures accounted for half of the available public financing, while subsidies to private activities made up
nearly a quarter. Although EU funds contributed to convergence in wealth and employment of poorest regions, they did not
necessarily make the inequalities between the regions necessarily smaller. Gomis-Porqueras and Garcilazo (2003) found
that despite the flow of structural funds, wage inequalities in Spain and Portugal increased between 1989 and 1999.
Pérez et al. (2009) find that allocating resources to lagging regions do not result in commensurate advanceents. Between
1995 and 1999, the richest regions in Spain were actually able to capture some of the returns to investments in poorer areas.
Montolio and Solé-Ollé (2009) indicate that the efficiency of public investment actually has a lot to do with private sector
11From a quantitative perspective, different models attribute various growth contributions of structural and cohesion funds: 3.0-9.3 percent of additional GDP
between 1994-1999 for Ireland, 2.3-9.2 percent for Portugal, 1.2-4.2 percent for Spain and 2.2-5.4 percent for Greece. The models underlying these
estimates are HERMIN, QUEST and Beutel.
33
characteristics: between 1984 and 1994 in Spain, public investment in infrastructure was more effective in regions with
greater private activity.
Irish success
The experience of Ireland may be the most educational. Between 1977 and 2007, Ireland’s GDP per capita grew from less
than 75 percent of the EU average to about 125 percent. Some of this progress—especially after 2002—was almost certainly
the result of a housing bubble. But much of the progress was built on solid foundations, which included sound regional
development policies that made the most of EU support.
Compared with the other cohesion countries—Greece, Portugal, and Spain—spatial concentration in Ireland increased much
more (Figure 1). Its per capita income grew much faster too. In 1977 Greece, Ireland, and Spain had per capita incomes of
about $9,000; Portugal’s was $6,000. By 2002 Portugal had an income of $11,000, and Greece and Spain close to $15,000.
Ireland’s had risen to $27,500.
Figure 1: As Ireland converged internationally, domestic concentration increased.
Source: Dall’Erba (2003)

Ireland was also more successful in tackling regional unemployment differentials than Spain, Italy or Germany. And it is likely
that despite its current problems—which are due mainly to decisions regarding banks—Ireland will keep its place among the
twenty richest countries in the world.
What was behind Ireland’s success? Among other things, recognizing the national benefits of spatial concentration, and
coordinated efforts to promote domestic integration through a sensible blend of spatially-blind public service provision and
well-placed investments in infrastructure.
Since joining the EU in 1973, Ireland received approximately €17 billion in EU Structural and Cohesion Funds through the
end of 2003. In the first two rounds of EU funding, the entire country was classified as an Objective One area. Between 1993
and 2003 cohesion funds supported 120 infrastructure projects at the cost of about €2 billion. The choice of projects was
based on a national development plan, which focused on investments in economic infrastructure that stimulated national
economic growth.
Infrastructure improvements were more selective. These included investments in leading regions and in connecting leading
and lagging areas, such as the M50 (Dublin Ring Road), M1 (Dublin-Belfast), and improvements in the N4 (Dublin-Sligo), N7
(Dublin- Limerick), and N11 (Dublin-Rosslare). With its skilled labor force and good logistics, Ireland became a popular
destination for American firms and European workers.
The Irish invested aggressively in education and training and general public services in all of Ireland to create a good
business climate countrywide. Martin (2003) notes that nearly 45 percent of EU structural funds 1994-1999 were invested in
human resources—compared with less than 30 percent for Spain, Portugal and Greece. The $2 trillion that Germany spent
on integrating the East was also aimed at social transfers and infrastructure rather than investments in human capital.
Bachtler and Yuill (2001) provide an informative account of the shift in regional development approaches from a reliance on
incentives for enterprises to an emphasis on improved business environment and soft infrastructure. OECD documents write
about a shift to policies that are now aimed at encouraging economic activity in both lagging and leading regions, and to
“exploit their unused potential.” The paradigm has perhaps to evolve to recognize that it is not the best use of public money
to try to spread economic activity to all places at once.
34
Follow the Irish

Contrasting the Irish approach to regional development with the Spanish or Italian approaches is not straightforward. Ireland
is a small country where a single pole of concentration could suffice—indeed would be suitable. Italy is a bigger country, with
stubborn differences between the north and south that could indeed be termed “divisions”, in the terminology of the WDR.
East and West Germany had deep sociopolitical cleavages at unification. Spain faces similar political divisions.
But many economies in the OECD are small, and the principle underlying the Irish approach is a general one: development
policies should distinguish between the geography of economic production and the geography of social welfare. As countries
develop, the geography of economic production becomes bumpier, while that of social welfare becomes smoother. Together
with national policies, regional development policies should facilitate both these spatial transformations.
Despite the characteristics that make Ireland unique, the lessons from its experience with regional development policies are
quite broadly applicable. The experience of Italy, Spain, and Ireland calls for a shift from fighting the forces of agglomeration,
migration and specialization to facilitating them instead; away from a reliance on targeted subsidies for enterprises and
towards improved governance and better connectivity.
Today, almost all regions in the new member nations in Eastern Europe qualify for EU financial support. They should
consider using the funds for international convergence and not—until later stages—for spatially balanced economic growth
within their borders. Those aspiring to belong to the European Union—such as Albania, Turkey and countries of the former
Yugoslavia—would be well-advised to be even more single-minded in using the funds for international convergence and not
to spread economic activity out too soon.
And, as the older member states of Western Europe try to find new drivers of growth and greater efficiency in public
spending, they too would do well to shift from relying on place-based interventions to a mix of policies that strengthen social
services such as education, healthcare and general administration everywhere, combined with selective investments in
infrastructure to connect leading and lagging regions. In a few cases, place-based interventions such as special incentives to
firms to locate in lagging regions might be necessary. But these should be used least and last, and only along with efforts to
improve basic social services and connective infrastructure.
Selected References
Bachtler, John and Douglas Yuill, 2001. “Policies and Strategies for Regional Development: A Shift in Paradigm?” Regional
and Industrial Policy Research Paper 46, University of Strathclyde at Glasgow.
Bachtler, John and Grzegorz Gorzelak, 2007. Reforming EU Cohesion Policy, A appraisal of the performance of the
Structural Funds, Policy Studies Vol. 28 No.4.
Barca, Fabrizio, 2009. An Agenda for a Reformed Cohesion Policy: A Place Based Approach to Meeting European Union
Challenges and Expectations. Brussels.
Dall'Erba, Sandy. 2003. "The Efficiency-Equity Trade-off as an Explanation of the Mitigated Success of European Regional
Development Policies." University of Illinois Working Paper. Urbana, IL.
De la Fuente, Angel. 2003. The effect of Structural Fund spending on the Spanish regions: an assessment of the 1994-99
Objective 1 CSF. FEDEA Working Paper no. 2003-11.
European Commission, 2010. Investing in Europe’s Future. Fifth Report on Economic, Social and Territorial Cohesion.
Brussels.
Gurria, Angel. 2011. “Stability and Growth: What Role for EU Cohesion Policy?” Remarks by the OECD Secretary-General,
delivered at the EU Cohesion Forum, Brussels, 1st February.
Martin, Reiner. 2003. The Impact of the EU’s Structural and Cohesion Funds on Real Convergence in the EU, National Bank
of Poland Conference “Potential Output and Barriers to Growth”.
Ministry of Regional Development of the Czech Republic. 2002. “Regional Policy and the Utilization of the European
Regional Funds: The Italian Example.” Special Reparatory Programme CZ 02 IB SPP III.
Montolio, Daniel and Albert Solé-Ollé. 2009. Road investment and regional productivity growth: the effects of vehicle intensity
and congestion. Papers on Regional Science. Vol. 88 no. 1.
OECD, 2009. Regions Matter: Economic Recovery, Innovation and Sustainable Growth. Paris.
Pérez, Julián. Dones, Milagros and Carlos Llano. 2009. An Interregional impact analysis of the EU structural funds in Spain
(1995-1999). Papers in Regional Science. Vol. 88 no. 3.
Rodriguez-Pose, Andres, 2010. “Economic Geographers and the Limelight: Reactions to the 2009 World Development
Report, Economic Geography.
Sinn, Gerlinde and Hans-Werner Sinn. 2009. Muffled jumpstart. voxeu.org. November 9th.
World Bank, 2008. World Development Report 2009: Reshaping Economic Geography. Washington, DC .
www.worldbank.org/wdr2009.
35
Sergey S. Artobolevskiy
Regional policy in Russia. Spatial concentration-deconcentration of state regional
policy
History
Russia has always been more focused on expanding the known world and the creation on the periphery of "growth poles",
rather than on the development/maintenance in order it owns large territory. As the first "growth poles" may be considered a
fortresses and settlements. They were established on the periphery of the rapidly growing Empire. However, these "growth
pole" economic targets set for second place. They fixed on the political-territorial aims of the Empire. By the beginning of the
XX century, fairly stable Federal Empire, under which specific rights had Finland, Khiva, Ukraine … and Poland. The
collapse of the Empire did not start from the periphery, and from the Center.
In the so-called “socialist period”, Russia/USSR emphasis on the establishment of major centers, including in a new marginal
areas, which were to serve the "adjacent" territory, addressing both economic and political problems. The policy was
designed to maximize the territorial concentration of efforts on the development of major cities, and the creation of a limited
number of large-scale industrial centers and agricultural areas. Opportunities for public housing, or "access" to food is
directly dependent on the status of the city or on the stage of its development. In the "economy of deficit" a favorable position
were 2 capitals, centers of the USSR Republics, as well as cities in implementing major projects (before the end of
construction phase).
Purely regional policy of Western type in the USSR did not exist. The sum of sectoral projects, separated by the territory,
seen as a regional goals. Functions of the regional policy institution were de-jure served the State Planning
Commission. The state sought to geographically concentrate their investments, but its objectives have not been fully
implemented.
During the period of perestroika it was thought that the market will solve all the territorial problems of Russia. Ignored by the
western experience Keynesian and post-Keynesian periods, which is clearly evidenced potential of market in the area of
economic efficiency and the limitation of the possibilities for social equality. In the West, leveling the regional policy came into
disfavor and was supplemented by a policy focus on major centers development.
Interest in regional policy, which began in the former socialist countries of the 90ies.years of the last century, unfortunately
for it coincided with the disappointment of ideas J.M.Keyns, big government and the growing interest in market
processes. For regional policy it had two consequences:
1. New direction of regional policy, focused on the development of major centers and has the aim, through their development
and improve competitiveness in the global economy. These centers should give impetus to development of the surrounding
area.
2. Become more widespread economic evaluations of development and implementing effective traditional, socially-oriented
regional policy. Economization of regional policies and methods to assess its effectiveness took place.
Spatial inequality in socio-economic development can become serious societal problem, if it becomes too severe and (or)
leads to a strong inequality of citizens in terms of income, the comforts of life, opportunities to realize their potential. This kind
of inequality is perceived by the population, tend to be extremely serious. There is a so-called problem of territorial
injustice. Its sharpening generates mutual alienation and even hatred of individual parts of the country.
Methods
Leveling. The main way to reduce spatial socio-rconomic variationd - is stimulating the development of backward (depressed
and underdeveloped) areas, inflow of capital into them, building new businesses, job growth with good salaries,
etc. However, in the backward areas of lower productivity, return on capital is worse than in the advanced
areas. Consequently, the artificial "enticement" of capital in backward areas leads to a slowdown in economic
growth. Forcing the same economic growth or help the most successful regions will lead to the fact that the capital will rush
in the past, and as a result of territorial imbalances in the country will grow.
If the primacy of social objectives, regional policy is only valid through the economy and development-oriented, rather than
maintaining the status quo. It is not part of social policy (and global). Help to “Locomotives areas” as the main direction of
regional policy is possible only for rich and homogeneous countries, and only in certain periods of their development.
Space itself implies the existence of social inequality. Employment opportunities and income, quality of life in general is
largely dependent on the area of residence. Certain areas (and much of their population) in general are "switched off" from a
life of their countries. But this position contradicts the proclaimed ideology of equality - and yet as such, or only in
possibilities. In addition, despite all the statements of politicians, in their ideology is still dominated by the idea of the "welfare
state".
36
In developed countries regional disparities threaten the unity of the country actually increase the influence of other factors of
disintegration. In principle the large spatial differences are opposed to the unity and integration, it is recognized axiomatically,
as well as the need for state intervention. In Russia, these provisions are not recognized or almost, anyway, do not result in
concrete actions.
In the last 20-25 years are obvious attempts by the state to “economize” regional policy. One can mentioned focus on the
development of the largest centers in the country and improving the performance of traditional areas of regional policy
No wonder the regulation and the WTO, and EU aid in crisis areas of the state is allowed and not considered "dangerous" to
the fundamental principle of free competition (and the only "legal" channel support). In this case quantitatively defined criteria
for classifying areas in the category of crisis are very "soft" for the latter, as well as limiting the rate of the assistance
provided.
In the West, for a term regional policies are laws, institutions, power tools and a variety of scientific development and
consulting, in the Russian reality every official and expert, put it in his notion of content. The most popular is the approach
that extends the boundaries of the regional policy: any government activity, localized in space and / or regulating the
development of various administrative units. In the framework of regional policy and its got the traditional objectives -
development crisis areas, easing regional disparities ... The result was a very strange mixture that includes absolutely
incompatible elements.
In developed countries, the process of economization of regional policy in the presence of her social foundation and a clear
ideology, has not led to specific changes. As part of the same newly created Russian regional politics, this approach has
become dominant and almost no corresponding realities of the country. The main problem was and remains the reduction of
spatial disparities of socio-economic development.
"Growth pole". In Russia the most consistent attempt to create and legalization of "growth poles" was made in the middle of
the previous decade. Its results were largely linguistic, entered into use terms such as agglomeration, cluster, growth pole. It
is the latter and becomes a symbol of global regional policy.
Like any innovation, reform originated in a limited number of regions, and even more points and from there spread
throughout the country. Obviously, and the criteria selection: a large population and central location in the most developed
regions of the country, proximity to public administrations, the availability of infrastructure (including
telecommunications). Naturally only few that meet the requirements and have the greatest dividends of reforms. Naturally far
from all Moscow, Even St. Petersburg lagging far behind. As a result of increased inter-regional antagonisms: the criticism of
Moscow became a daily occurrence. .But the other side the question remains: whether a normal and efficient functioning of
the headquarters of banks and industrial groups outside of Moscow (or St. Petersburg) is possible.
The model itself is absolutely neutral and preaches only the general principle of polarized development, i.e. not uniform
"smearing" of the resources in the territory, and their concentrations are most favorable for the growth areas with the
subsequent transfer of development impulses to the less wealthy and smaller centers. Therefore we should not impose on
Perroux responsibility for ignoring the state of the territorial problems of Russia, and above all, the huge regional
disparities. The proposed model is adequate to Russian problems, if we recognize the need for a regional policy on several
levels. At the federal level is allocated 2 global capital cities, followed by the largest metropolitan area (whose influence
extends beyond the subject) "ordinary centers of Federation subject, administrative areas and urban centers, etc. Thus
Russia need a system of growth poles of various ranks. The specifics of Russia is, first of all, regional differences are
enormous. Even taking into account the purchasing power, the official statistics of defects and the like, the difference
between the federation and between the component parts of these subjects is still measured in orders.
The choice of territorial units. The main task of developing such a typology put the problem in Russia, which will adapt the
general principles of regional policy to the specifics of particular regions and cities. Under the "operating with" whole subjects
with a high probability concentration in their habitats favored In general, a unit of administrative-territorial division is not very
suitable for implementing regional policy in Russia. It is obvious that the limited resources required their territorial
concentration. Necessary or reform of the administrative-territorial division of the country or its “problematic zoning”.
Sizes range of problem depends on its sector specialization, the extent of assistance provided, etc. But a particular
significance of such category as geographic location. On the axes North - South and East - West the price of land differs by
orders.
Institutions
The ministry, officially the "parent" for regional policy has been created almost 20 years ago (with a 2-year interval, 2002-
2004).. But never it includes structural unit occupied by regional policy. In the foreground, always been that federalism,
ethnic problems, utilities, construction ... Frequent change of the Ministers (and his teams) does not suggest a coherent
policy. Comparison of organizational structures of Russian and Polish ministries of regional policy will have a lot of Polish
experts puzzling questions.
37
All this was not just a change of signage, and a major restructuring of both the Ministry and its significance in the executive
branch. Rights and opportunities of current Ministry certainly more than of its predecessors. The result of almost the same -
the Ministry is engaged in anything other than the actual state regulation of the processes of regional development,
i.e. national regional policy.
Creation of growth poles system prevents depopulation of the country. Since the early 90s of last century depopulation took
place in the majority of subjects of the Federation, both due to natural population decline and a negative migration
balance. There is an obvious decrease in the population along the axis of East-West and North-South. In parallel with the
population decline is a collapse of the system of settlements, naturally at the expense of smaller communities tend to have
more peripheral position. Economic reforms and gaps in management led to a reduction specializing in agriculture and
forestry, other resource industries have led to a crisis in their "home centers", that's why even the normally slow reacting
Ministry of Regional Development, quickly decided to close the user having no prospects of development,
human points. Already quite commonplace crisis hundred settlements connected with oil and gas. A set of crisis and
company towns mono-settlements increases in quantity and becoming more diverse in terms of industry.
Tools.
The idea of agglomeration and clustering was a natural extension of the proposed Ministry of Regional Development
Strategy Concept of socio-economic development of the Russian Federation based on the postulates of the theory of growth
poles. Founders of reform invited the state to focus on the development of few urban agglomerations (less than a dozen so
far) as the poles of growth. Their number can be increased slightly, but still it is only the largest cities separated by hundreds
or thousands of miles away. Their ability to maintain and develop the entire country is strongly exaggerated. The country
needs a more complex system of settlement, appropriate to its size and diversity (or, in the proposed approach, the system
of growth poles of different territorial levels).
Regions forced trapped in the processes of "agglomeration and clustering." At the same decision makers genuinely believe
in the possibilities to subjugate these processes. Moreover, they are determined to create new agglomerations, where they
already exist and where they can not be created. And of course they want to manage metropolitan (not decided - why and
how). And with the creation of new institutions of government, which does not need proof.
enters may, as a vacuum cleaner, "pulling" people living among them, and contributes to depopulation and the crisis of the
said territory. So did not work out the linear agglomeration between the two capitals, and the space between them ensured
the growth of the population of Moscow and St. Petersburg.
The formation of agglomerations and the speed and direction are dependent on many factors, often in opposite directions. It
is about the size of cities, the distance between them, the relief and other natural conditions, population, industry structure of
the economy, the role of government, etc. etc. Causing a quiet sadness for the establishment of such agglomerations as
Vologda - Cherepovets, Khabarovsk - Vladivostok.
It is easy to imagine that in Russian conditions, agglomeration will be used also for political purposes. Giving it official status
and creating it controls the governor can "get rid" of the opposition to him mayor, and the federal government - to weaken the
power of the governor.
Going depopulation of most regions and the country as a whole makes unrealistic plans for the development of most urban
agglomerations of the country (in the form in which it is proposed now). Benefits that can realistically offer regional authorities
in their "own" built-up areas can not attract people to stop and western "transfer" in the Russian migration, not to mention the
return migration. Therefore, emphasis is made on the internal restructuring of urban agglomerations, preparing them to
function in conditions of prolonged depopulation.
Love of the Russianl authorities to gigantism has a long history. In recent history, we escalate regions, merge ministries and
state companies are creating bigger. From the same series, and a sudden love for agglomerations. In the developed
countries - "small is beautiful", we - "big is beautiful".
Case Studies
Irkutsk agglomeration. Agglomeration as a real collective capital of Irkutsk region, increasing the information-management
communication with the centers of the highest order, would create the preconditions distribution services, information and
standards down to the settlement system, according to the model of diffusion of innovations. The development of
agglomeration will increase private investment and public funds to projects and programs in the metropolitan area. Provided
for the construction of transport will increase the availability of both the three cities included in the agglomeration, and a
number of areas vneaglomeratsionnogo space. The result will be a real territorial expansion of the metropolitan area. The
new scale of agglomeration will lead to the formation of the federal government, serving and the self-closing and settlement
system outside the Irkutsk region. Service a larger area will increase the flow of an agglomeration of various resources.
But at the same time, the policy of accelerated development of the metropolitan area and the scale of its involvement in the
space of the region's population could bring down the existing settlement, or at least, to deprive it of grass-roots
38
level, represented mainly by rural settlement centers. The State will be harder to fulfill their responsibilities for social and
cultural services of the region's population: less than a network of settlements, the harder it is to ensure alignment and
cohesion. Positive effects of the accelerated development of agglomeration due to state aid to be of limited spatial
distribution and rapidly diminish with distance from the metropolitan area. The weakest level is the lowest settlement system
- rural communities most affected by depopulation and marginalized populations. Monitoring the development and at the
same time phasing out the system of settlement throughout the area should be part of the proposed project to create a
metropolitan area.
Studies conducted by the author in Irkutsk and Krasnoyarsk showed that their capital, regarded as subcapital of the country,
this role does not work. The desire to push through its own model of development has the appearance of phantasmagoric
projects, creation of agglomerations of Vologda, Cherepovets (the distance between cities 140 km), and even the
Khabarovsk-Vladivostok (the distance over 700 km). In the above-mentioned territorial retreat, in the framework of regional
policy, it is necessary to maintain control over all territory of the country.
Kaliningrad region. Russia and the EU position is clear and not extraordinary attractive to potential investors from both
sides. The area could become a testing ground cooperation of Russia and the EU only with ongoing efforts of both sides, to
some extent, even artificially. But this is not possible without the efforts of the Centre, their constant pressure on government
institutions and individual EU countries in the Baltic region.
The unique position of Area (its exclave) can not treat this as a pilot region, cooperation with the EU.
Negotiations with foreign partners would be much easier to do if the federal government would do its part, the necessary
steps for the development of the Province. Need to clearly articulate strategy and policy of the Centre against it in all
spheres, to legislate a special status and privileges, to make the necessary institutional solutions to ensure the openness of
the region, etc.
Is not justified "guilty" bias of the federal authorities in negotiations with the EU, the authorities of Poland and Lithuania. Why
the latter should be given to the problems of the Kaliningrad region more attention than the Russian authorities to take
responsibility and pay for their decision. In the end, that the Russian government (and, above all, federal), recognizing in the
early 90's the independence of Lithuania, did not care about the interests of the Kaliningrad region, for 10 years failed to
attract enough investment in the region, did not provide operational people on foreign passports and sufficient income to
purchase airline tickets (or permanent low prices for them), failed to crime, etc.
Political Declaration of the "problem of the Kaliningrad region - an internal affair of Russia" includes the duties of the Centre's
social and economic sphere, which he still performs poorly. In these circumstances, an appeal to the neighbors, the EU is
not decorated with the Russian authorities, whisking occasionally to blackmail ("do not give money - will pollute the Baltic
Sea, skip the illegal immigrants and stolen cars, etc.").
Areas of development - it is a problem nationwide level, it can only be solved at the federal level. The area should be subject
to large-scale, long-term and well-oriented federal policies (preferably in the Common Country Regional Policy), fixed
legislatively and institutionally, financially secured and designed for a long period of time. Strengthening cross-border
cooperation with Lithuania and Poland - the most effective way to engage in the field of European integration processes. It is
through neighborhood areas will be easier to integrate into the European space.
Attempts to find a Russian "territorial counterparts Fields led the author to the Kurile Islands. The main similarity between
them - for years the federal government, for political reasons pumped their money with the efficiency of the first steam
engine. Both territories are clearly different from their "mainland" brothers and require customized solutions. But how to
combine them with useless for Russian standards of equality of subjects of the Russian Federation (and a municipal level).
Conclusion
Russia is on the way "catching up" development Different processes of regional development in Western countries were
"separated" in time, go to our country almost simultaneously (suburbanization and gentrification, industrialization and the
transition to a postindustrial society ...), sometimes on the same territories. The management of these processes, based only
on one model, it seems a little unrealistic.
At present, Russia just went to the line when the spatial socio-economic disparities and the many territorial issues of concern
to the population and can not be ignored by politicians. In regional policy priorities of Russia dominated the alignment
characteristic of the developed countries (but, unlike them, the current policy alignment was not directed at economic
development crisis areas, and solved their current problems), but not stimulation of the territories, which can most effectively
use resources and "move" the economy forward.
During the transition period in Russia began to form areas of growth where there is shown a cumulative effect of a
combination of favorable factors. The most rational strategy of spatial development in the coming years is the reliance on
naturally a positive trend. With this policy the state can accelerate the formation of growth poles, and then quickly expand
their influence on the surrounding area by supporting the natural diffusion of innovation.
39
Currently in Russia there are three types of areas of growth, formed under the influence of globalization, agglomeration, and
resource factors, the largest metropolitan areas, export-resource regions, border regions harbor the major trade routes.
Changing proportions between functions and alignment of development requires, on the one hand, estimates of necessary
investments (or tax rates reduction) in the growth pole in accordance with industry and territorial development strategies and,
on the other hand, the evaluation of political and socio-economic risks for the underdeveloped regions. It is always a political
decision taken by the federal government in view of the situation and its dynamics.
In terms of technology implementation, multiple spatial and temporal strategies:
• A gradual strengthening of support for the development of growth poles (in this case there is less risk, but more
slowly manifested a positive effect);
• A sharp change in the proportion and concentration of resources sufficient to stimulate all of the existing growth
poles, which allows a significant and rapid effect, but the risk of underfunding and negative consequences for less developed
regions;
• Select a limited number of growth poles as a model and getting a significant effect at lower volumes the concentration
of resources, but with limited territorial effect.
In view of the risks and yet low-quality administration of any programs that require a vertical (center-region) and horizontal
(inter-agency) coordination, the most acceptable is the first option.
Main objective of the poles of growth strategy is stimulating business investment with the support of the state. The task of the
state and region authorities - to create a favorable environment for investment promotion at point of priorities.
Attempts to focus on growth poles have been made, as expected, from the top. Was initiated by the Ministry of Regional
Development, and is the only initiative of its regional policy, known to the author this article. In an extreme form of this policy
is its proposed focus on the development of the state of 2 capitals. Such "capital" approach did not like the rest of the
country's population, and a list of centers of growth or as we say in Russia, "regions of locomotives" of growth, or rather their
administrative centers, has grown to a dozen.
Pursuing a policy of growth poles, the obvious need is a choice in their capacity as centers with diversified economies, or
with the prospects of its development. For the stability of a center, an important question is place of the provisions of the real
owners. The branch economy does not give the economy the stability of many habitats, especially in the long term.
Small territories of many growth poles can provoke effect of intermediate (grey) areas.
Both directions of Russia's regional policy (and social, and global) must use such tool as a growth pole, but in their system,
covering most populous country. Naturally, this will be the pole of a different order.
Despite all the differences between Poland and Russia, the Russian practice in the organization of regional policy can be
helpful:
Firstly, in terms of institutional organizing. For the post-socialist countries the most appropriate model is an "independent
institution of power," specialized directly and only in regional development and policy. Attempts to combine the solution of
regional problems with those in agriculture, construction or public sector, etc. leads to the dominance of the latter and
"forgetting" of regional problems.
Second, prior to the preparations for the EU accession of ex-socialist countries, most experts were inclined to the priority of
economic (global) goals of regional policy, subsequent changes in tastes associated with significant revenues from the EU
structural Fords. Thus, the regional policy of Poland, formed largely under the influence of external factors, without which she
could easily go to the Russian way.
Third. Both countries have a problem of the Kaliningrad region. Its development may be only in terms of cooperation
between the region and neighboring countries, especially Poland and Lithuania. Need to recognize the uniqueness of this
example and adopt policies that adequately uniqueness. Passion de facto of the Kaliningrad region in European integration
would significantly improve the situation in polish surrounding areas, reducing the degree of peripherality.
Fourth: It is obvious there are problem areas analogs in both countries, such as company towns, ex-areas of the coal
industry, etc.
Scientific base. For regional policy there is a lack of statistical and scientific basis. You must have sufficient detail in the
center of socio-economic statistics for the municipalities "first level" (administrative districts and cities). The country has no
scientific division employed an analysis of regional development trends, the problematic zoning, development of regional
policy instruments, critical evaluation of domestic and foreign experience.
Increasingly confusing the science and consulting. As a result, decreases the level of both a growing lack of
professionalism.
For solving spatial problems in Russia for regional policy must meet the following requirements:
40
• A combination of social and regional policy at the global primacy of the first;
• The creation of growth poles of different levels;
• Compliance with the principle of sufficiency of funds allocated by the state;
• Increase the professionalism of those engaged in regional policy;
• Taking into account the realities of geography in determining the territorial objects of regional policy.
Russia needs a sensible policy of territorial concentration of forces and means.
Литература.
Amstrong H., Taylor J. Regional economics and policy. – Oxford, Malden: Blackwell, 2000. – X, 437 p.
Artobolevskiy S. Regional policy in Europe. – London: Jessika Kingsley, 1996. – 1.. p.
Balchin P., Sycora L. Regional policy and planning in Europe. – London, New York: Routledge, 1998. – XI, 287 p.
Gorzelak G. The regional dimension of transformation in Central Europe. – London: Jessika Kingsley, 1996. – 152 p.
Growing regions, growing Europe (Fourth report on economic and social cohesion) – Luxembourg: Office of the official
publications of the European Communities. – xxi, 201 p.
Faina J.A., Rodrigues J.L. The regional policy of the European Union and the enlargement process to Central and Eastern
countries, - Exeter: University Discussion paper in economics 01/07. – 23 p.
Social exclusion in European cities. Ed. by Madanipour A., Cars G., Allen J. – London: Jessika Kingsley, 1998. – 301 p.
Vanhove N. Regional policy: A European approach. – Aldershot et al.: Ashgate, 1999. – XX, 639 p.
Working for the regions. – Luxembourg: EU, 2004. - 34 p.
Agreement on the delimitation of powers between the state authorities of the Russian Federation and state bodies of the
Kaliningrad region (signed January 12, 1996).
The concept of cross-border cooperation in the Russian Federation, approved by a governmental decree of February 9,
2001, N 196-p.
The concept of federal social and economic policy in the Kaliningrad region (prepared by the Russian Government)
(www.komersant.ru/documents/doc23.htm).
The Federal Target Program "Development of Special Economic Zone in Kaliningrad Oblast 1998 - 2005 years." (Approved
by RF Government Decree of September 29, 1997, N 1259).
Federal Target Program "Development of the Kaliningrad region for the period up to 2010" (approved by RF Government
Decree of December 7, 2001, N 866).
Federal Target Programme for the Development of the Kaliningrad region for the period 2009-2014. Approved by the RF
Government Decree of September 1997, N).
Federal law "On special economic zone in Kaliningrad region.» (N 13-FZ, signed by the President January 22, 1996).
Federal law "On special economic zone in Kaliningrad region ...» (N 16-FZ of January 10, 2006 came into force on April 1,
2006).
41
Appendix 1 Structure of the RF Ministry of Regional Development
Minister
Administrative Department
Deputy Minister
Department of Legal Support
Deputy Minister
Department of Strategic Planning
Deputy Minister
The Department of Housing
Deputy Minister
Department of Regional Development and Municipalities
Department of monitoring and evaluation of government
Department of Construction
Deputy Minister
Department of special programs and projects of territorial development
Inter-Regional Office for the North Caucasus federal district
Deputy Minister
The Department of Housing Policy
Department of Architecture, Building and Urban Policy
Deputy Minister
Department of Coordination for the Olympic Games
Deputy Minister
Department of International Relations
Department of International Relations and cross-border cooperation
Deputy Minister
Department of Finance and Accounting
Department of Investment Projects
Department of Regional Development of targeted programs
42
Appendix 2 - Ministry of Regional Development: Georgia

43
44
45
Fabrizio Barca12
Alternative Approaches to Development Policy: Intersections and Divergences
.Introduction
1. In both the developing and developed world it is widely believed that the success of development policies does not
depend on the adoption of any “world-wide model” but rather on the adherence to a few sound and ever-evolving principles
and on the capacity to monitor thoroughly, debate publicly and adjust continuously policy actions within a stable, credible and
long-term framework.
2. The debate promoted by the OECD is clearly about policy principles. For it to be useful and to provide guidance for
daily work on the ground, it should go beyond the reiteration of each side’s views and it should get rid of any preposterous
divergence between them, such as whether development policy must be aimed at persons or places, whether context
matters, and whether agglomeration is a primary source of growth. By highlighting the contribution and the (rather wide)
intersection of existing views, the debate should lead to identifying their true (significant) divergences and the assumptions
which motivate them. Which in turn is the basis for everyone to chose his/her preferred set of principles. This is the purpose
of this note.
3. I shall first suggest that for the debate to advance the place-based vs. space-blind duello should be unlocked by
identifying five different approaches to development. Having summarised their contribution, their assumptions and their
recommendation, I will put forward a group of propositions that captures the intersection of all but one of these approaches
while at the same time bringing to light the true divergences between them and some distinct features of the place-based
perspective. Finally, I will come back to the duello and stress the rationale for, and the consequences of, adopting the
placebased perspective. In so doing, I will draw upon both the articles presented in the debate promoted by the OECD13 and
from some enlightening contributions to the theory of development14. Unquoted reference is also made to the Report “An
Agenda for a Reform of Cohesion Policy” (chapter I) prepared in 2009 for the European Commission.
Five Approaches to Development Policy
4. Let’s start with the five approaches. Each of them provides a specific contribution to the public debate: moving from
first to last, these contributions add up. At the same time, very different policy guidelines are recommended by each view.
They can primarily be attributed to different assumptions about knowledge: which agents know what policy actions to take
where and how? Four different answers are offered to this question (when addressed): a) the State, b) long-established large
firms, c) local agents (knowledge embeddedness ), d) none of them (knowledge does not pre-exist and it is produced by the
interaction of all these agents). Divergences also emerge in the objective of development policy (growth, social inclusion, a
mix of them, convergence) and in the assumptions about local elites.
5. First, the Perfect Institutions Approach. Its contribution to public debate comes from the argument that good
institutions are a primary driver of growth. It moves from this standpoint to give a specific definition of what “good institutions”
are: they are thought to be perfect general institutions (in the fields of education, health, law and order, justice, labour
markets, water and waste, energy, land, etc.) whose features we have learnt through the history of development. This view
assumes that:
• the institutions suitable to economic development are unique and their effectiveness is not context-dependent
(personal circumstances are taken into account, independently of context, by built-in mechanisms);
• the State (i.e. democratically-elected national elites) or an international or supra-national institution (i.e. elites
appointed by national democratically-elected elites) knows what these perfect institutions are;
• no context-based interdependencies exist among these institutions. Economic efficiency (generally interpreted as the
maximisation of national growth) is considered to be the primary or unique objective of development policy, while equity or
other social goals tend to be treated as constraints (excessive social tensions disrupting economic growth) or as by-products
of growth (an historically determined correlation – Williamson or Kuznets curves - being envisaged between social and
economic results). No attention is paid to space, to the spatial allocation of resources or to agglomeration.
6. Second, the Agglomeration-driven Approach. This view’s contribution to the public debate is the argument that the
world is inherently spiky and that agglomeration is a primary driver of growth, as well as the recognition that development
requires, together with appropriate institutions, public or publicly-governed investments (in education, health, security, justice,
water and waste, energy, land, as well as in transport and communication) suited to the agglomeration. Moving from this
perspective, the approach argues that, since the State as well as any international or supra-national institution, have a very
12 General Director at the Italian Ministry of Economy and Finance. Advisor to the European Commission
13 See Cheshire, P. (2011), Garcilazo, E., Oliveira Martins, J. and Tompson, W. (2011), Gill, I. (2011), Kim, J. (2011), McCann, P. and Rodriguez-Pose, A.
(2011).
14 See in particular Acemoglu, D. (2009); Acemoglu, D. and Johnson, S.H. (2006); Aghion, P. and Durlauf, S.N. (2005); Atkinson, A.B. and Brandolini, A.
(2008); Bourguignon, F., Ferreira, F.H.G. and Walton, M. (2007); Caglar, K. (2005); Dorf, M.C. and Sabel, C.F. (1998); Hart, O. and Moore, J. (1990);
Krugman, P. (1995); North, D.C. (1990); Rodrik, D. (2005, 2010); Sen, A. (1999, 2009).
46
limited knowledge of the efficient spatial allocation and specific features of these investments, they should be market-driven,
i.e. public investment decision-making should be driven by “private development interests”. By doing so, public investments
would promote agglomeration processes that in turn would benefit all persons living in lagging regions because these
investments would provide them with the opportunity to achieve a better quality of life through migration.
7. This view can be rationalised by assuming that:
• a unique optimal set of agglomerations exists and market forces can “discover” it through a process of trial and error
and steer public investments towards it 15;
• market forces are capable to do so because the decisions of long-established large firms – market leaders - result
from a balancing of interests and from ongoing negotiations among a multitude of stakeholders (managers, shareholders,
workers, clients, residents, etc.), which in turn ensures knowledge extraction, avoids decisions being driven by any particular
interest and untangles decision-making complexity over time.
Notice that if either of these two assumptions were to prove false – as suggested by the new economic geography (multiple
equilibria) and the most advanced, non-contractarian theory of the firm, as well as by the lessons of the current economic
crisis16 – the agglomeration approach would look like a green light for the State to be captured by particular private interests.
8. Third, the Redistributive Approach. This view’s contribution, compared to the previous ones, is the argument that
agglomeration brings about not only economic efficiency but also social exclusion within the agglomeration boundaries and
that it tends to produce, in spite of migration, very large or increasing development gaps between regions, these two
tendencies having the power to erode the fabric of society and then hamper development. The view then moves on to focus
on the income features of development – intra-regional income inequalities and regional gaps in GDP per capita – and to call
for those effects to be compensated by redistributing funds (through public works, incentives to firms, subsidies to people)
both to the deprived areas within the agglomeration and to lagging regions.
9. This policy conclusion is consistent with two very different visions and assumptions:
• A tough market-oriented vision. Those who believe, as in the second approach, in a unique optimal map of
agglomeration but also believe that very relevant problems of social exclusion are bound to arise within the agglomerations
(under-employment or the invisible economy, organised crime, lack of security, failure of the education system, etc.), or
between regions, are concerned that these challenges do not grow so unwieldy as to threaten the agglomerations
themselves. They see financial redistribution, or other kinds of “spatiallytargeted incentives”, as being needed “at some
point”. The same is true for lagging regions, in order for them not to threaten national (or even international) stability.
• A soft compassionate vision. A similar financial redistribution, although on a grander scale, is advocated by those
who believe, on the contrary, that the world is potentially flat, i.e. that all places have the potential to achieve the same GDP
per-capita and that this is a reasonable long-term goal. From their point of view the social objective (and the connected
preoccupation not to let the fabric of society being eroded) coincides with the economic objective of promoting growth.
Financial redistribution is seen as a way to promote convergence of GDP per-capita across regions and achieve both
objectives at once.
10. Whatever vision is supporting this approach, it presents two distinct features. First, there is no particular concern for
the rent-seeking activities that redistribution tends to enhance. Second, there is no focus on the issue of knowledge: which
agents in the region (or community), if any, or other actors, are competent and capable of making use of those transfers. In
the market-oriented version, these two features are justified by the fact that redistribution is clearly conceived as a tool to
achieve “social peace”, which is expected to be guaranteed by regional elites (or, within an agglomeration, by community
elites) whose loyalty is bought by allowing them permanent rents. No real concern exists about how the resources are
actually used. In the compassionate version, the assumption is that local elites are both benevolent and competent. The
redistributive view, in both its versions, is pre-eminent today in the support for large transfers of funds to lagging regions
under the European Union cohesion policy. The compassionate version manifests itself in the choice of “convergence” as a
policy objective for lagging regions. The market-oriented version is reflected by the resistance within the European
Commission to the idea of putting forward more binding rules against rent-seeking.
11. Fourth, the Communitarian Approach. The Communitarian (or local) approach’s contribution to the debate on
development policy comes from its argument that local agents’ awareness of their own knowledge and preferences is a primary
driver of development – both of its economic and social dimensions, and both in the deprived areas of agglomerations and in
lagging regions. The approach moves on from this awareness to argue that policy actions should be the result of a local
deliberative process, where the role of external agents (the State or an international or supra-national organization) is limited to
promoting the conditions for this process to take place. This view makes no assumptions on whether the world tends to be flat or
spiky, although it is concerned about the negative effect of agglomeration. It assumes that:
15 It is often assumed that this map is made of mega-cities, and that the same or a greater level of efficiency cannot be achieved by networks of
intermediate-size cities.
16 “Our faith in long-established large firms ... may now have suffered the death blow”, as Acemoglou (2009) wrote with reference to the “self-monitoring
capabilities” of those organisations.

47
• context influences both the needs to be addressed and the effectiveness of institutions and investments;
• most knowledge on institutional design and investments pre-exists and is embedded in a multitude of local agents,
while a strict adherence to local values is a necessary prerequisite for development to take place.
Therefore, the knowledge contribution to development by external agents is about how to trigger a “self-discovery process” to
extract and aggregate local knowledge, not about what to do and how. At the same time, risk of rent-seeking by existing
elites is strongly perceived and this leads either to rejecting financial transfers (except for capacity-building) or to advocating
a pervasive process of monitoring and evaluation when financial transfers are significant.
12. Fifth, the Place-based Approach. The contribution of this approach, together with the explicit emphasis on the role
of contexts, comes from the argument that innovation (new knowledge) is a primary driver of development – essential for the
other drivers – and that tailor-made institutions and integrated public investments must be designed through the interaction of
agents both endogenous and exogenous to places. Both reducing the underutilisation of resources and promoting social
inclusion are the objectives of this approach; social inclusion is defined as the share of people above a socially acceptable –
and therefore ever-changing – standard in the multiple dimensions of their well-being, the process through which this result is
achieved being participatory and fair. The assumptions of the place-based approach are:
• institutions are not unique and context influences both the needs to be addressed and the effectiveness of institutions
and investments in meeting those needs;
• strong interdependence exists among institutions and investments, which calls for them to be designed in an
integrated way;
• most of the knowledge needed to tailor institutions and investments to context does not preexist - whether held by the
State, the large corporations or local agents - but must be produced through a deliberative process involving all those actors,
both exogenous and endogenous to specific places;
• local values are important but development also requires openness to values from outside (Adam Smith’s and
Amartya Sen’s “view from nowhere”);
• under-development traps result from local elites being incapable (capacity being pathdependent), unwilling (their aim
being to maximise their own share of a given output) or insufficient (centripetal flows of capital and labour occurring due to
agglomeration effects) to deliver the appropriate institutions and investments, which calls for an exogenous intervention to
promote endogenous change.
13. As a result of these assumptions, the place-based approach advocates policy actions that
• not only take spatial context into account intentionally and explicitly,
• nor just design an integrated multi-sector bundle of institutions and investments that addresses different dimensions
of well-being at the same time,
• but do so by applying a combination of endogenous and exogenous forces - the exogenous action being needed to
bring information and values from “outside” and change the balance of bargaining power within places - where the conflict
between endogenous and exogenous forces is accounted for and governed through appropriate multi-level governance
tools.
14. In the specific case of the European Union, the place-based approach today calls for a radical reform of cohesion
policy, overcoming the deficiencies produced, compared to Jacques Delors’ vision, by the hegemony of the redistributive
approach in both of its versions.
Identifying Intersections and Divergences to Fashion a Way Forward
15. Once the five approaches that lie behind the current debate have been decoded, it is possible to take some steps
forward. This can first be done by identifying the intersection of all views except for the redistributive one. This intersection,
which turns out to be remarkably wide, is summarised in what follows under seven propositions (quotation marks are used
when the proposition comes from one of the papers promoted by the OECD). These propositions get rid of some false
differences that prevent the current debate from being useful to policy-making. Each proposition is also used to identify the
relevant features of the real disagreement among the four non-redistributive approaches. This exercise will make clear how
the place-based approach stands out compared to the others.
I) “Prosperity does not come to every place at once, and to some places it does not come at all”. Very few (except
those predicting a flat world) would disagree. But development is not about a zero-sum alternative between prosperity and
doom. Some policy makers – namely the proponents of the place-based approach – would argue that most places can
contribute to growth – as data produced for this Forum show - through a higher utilisation of their potential output. Moreover,
since no public or private organisation has adequate ex-ante knowledge about which places have a higher potential for
growth, whether a given agglomeration is approaching its efficient limits, or how costly it will be to bring a lagging region
closer to its potential, development policy should let alternative policy options aimed at different places compete
transparently among themselves. This is why an overall place-based strategy is needed, as opposed to a blind reliance on
either the choices of a few large corporations or on the judgements of some top-bureaucrats or top-experts.
48
II) A high disparity of productivity and per-capita income between places is likely to be persistent, i.e. convergence of
per-capita income of places is not an appropriate objective for development policy. This proposition follows from the first one
and is widely agreed upon, once again with the exception of those predicting a flat world. But, a high disparity could signal
the failure of some places to tap into their growth potential and should therefore call for policy scrutiny. Furthermore, when a
high per-capita income disparity persists between places of the same nation (or Federation, or Union) with different cultural,
historical or ethnical identities, it might well erode the fabric of society of that nation (or Federation or Union), as it is correctly
perceived by both the redistributive and the place-based approach. Finally, reducing poverty or, more generally, improving
social inclusion (as previously defined) within and between places is as reasonable and relevant an objective of development
policy - in the framework of both Rawls’s and Sen’s theory of justice - as promoting growth.
III) Agglomeration economies are a primary driver of growth. “It is extremely unlikely that policies deliberately designed to
reduce the benefits of agglomeration economies in one city will help others”. Widespread agreement on this position exists,
since none of the approaches – except, in some versions, the compassionate version of the redistributive approach - is
“antiurban”. But the agreement leaves plenty of room to argue that agglomerations can arise not only in mega-cities but in
networks of intermediate cities. It also leaves room to argue that agglomerations (especially those of mega-cities) encounter
negative as well as positive externalities and produce social exclusion within their boundaries, and that neither of these two
phenomena can be ex-ante predicted. Moreover, it is the case that the State’s direct investments in primary cities – a very
space-oriented intervention often disguised as “placeblind” – play a fundamental role in the development of agglomerations
(they “often dwarf the amount of subsidies provided to politically less important regions”): therefore, their return in terms of
the public interest (both in its economic and social dimensions) should be assessed in comparison with all the other explicitly
space-oriented interventions in non-primary cities and regions.
IV) People’s well-being, not the well-being of any given place, should be the target of development policy. Even the
proponents of the redistributive approach would agree with this proposition: any attempt to read the current debate as if
some approaches were concerned with persons and others were concerned with places is preposterous. The issue at stake
is different. Some approaches – namely the place-based and communitarian ones – argue that the wellbeing of each person,
given all its individual characteristics, also depends on the context in which he/she lives. They also argue that addressing a
person’s well-being and designing the appropriate institutions to do so require taking context into account. Finally, they point
to the fact that since no deterministic correlation exists between equity and growth (no Williamson or Kutznets curves have
actually been proved to exist), addressing people’s well-being requires taking care of both growth and social inclusion, with
reference to a given place.
V) Attempts to reduce social exclusion within cities by “moving people about or providing local jobs or renovating buildings” are
unlikely to lead to any result. Independently of any assumption on how far deprived “neighbourhoods, independently of people’s
characteristics, reduce their prospect or systematically worsen their lives”, this proposition squares with a very high mobility of labour
and residence and low commuting costs within cities and with the marked response of land and housing prices to all features of
location. But the proponents of the communitarian and place-based approach would argue that the proposition also underlines how
ineffective any intervention is when it is top-down and not based on the knowledge and preferences of the people living in the
deprived neighbourhoods. They would also argue that a strong case exists for place-tailored interventions aimed at providing public
services (education, health, child and elderly care, etc.) in those neighbourhoods of a quality similar or higher than in other
neighbourhoods and shaped to their specific needs (preventing the market-driven tendency of the public sector to do exactly the
opposite, i.e. to respond more promptly to the “voice” of rich neighbourhoods). Indeed, they would argue that even a topdown
initiative for urban renewal of stressed neighbourhoods could actually have a positive impact on the original residents if they were
given the opportunity to benefit from the capital gains arising from rising land and house prices due to the renewal itself (which would
then act as a source of “original accumulation of capital”). Finally, they would argue that any fascination with the advantages that
would accrue to people from sharing their neighbourhood with people of the same social status or condition should be rejected as
unproved, based on questionable categorizations of people’s identity, as well as a source of “communitarian confinement”.
VI) In lagging regions (particularly in persistently lagging regions such as the Italian Mezzogiorno) it is “futile to provide economic
incentives for staying and striving in those regions” or “highways, railroads, airports”, while the primary instrument should be the
“improvement of basic institutions and of essential services”. All approaches – once again, except for the redistributive one –
converge on this proposition. The disagreement concerns how to deliver these institutions and how to improve essential services.
According to the perfect institution approach, a unique model exists that should be implemented with no reference to place.
According to the agglomeration–driven approach, it would be up to “private development interests” to lead the way. According to the
place-based approach, basic institutions and essential services need to be tailored to place, and tailoring requires multilevel
governance involving both exogenous institutions (State, international organisation or supranational institutions such as the
European Commission) and endogenous agents (belonging to the place). The latter is the approach adopted for a limited share (5
per cent) of total public spending in the Italian Mezzogiorno after the failure of the redistributive approach of the previous three
decades. The Bank of Italy Research Centre, after investigating the results of this policy and observing that it has fallen short of
expectations, concluded that for results to be achieved the whole of public spending in the Mezzogiorno should take into account its
specific territorial features: “homogeneous public policies tend to produce”, Bank of Italy Governor Mario Draghi wrote, “different
49
effects according to the quality of administrations and territorial contexts”17. In other words, “place-based-ness” should not constitute
an attribute of some residual policy – called “regional” – that is juxtaposed to traditional sector-based policies, but should be a
feature of all development policies financed by the public budget.
VII) “Migration is a measure of the desire of people to improve their lives and those of their children”, and policies aimed at
holding people back in places by compensating for the higher capital cost of doing business there or by other subsidies are
inappropriate. Except for those supporting the redistribution approach, all would agree with this proposition, once note is taken of
the opportunities that migration offers both to migrants and their families (although the need to prevent major and disruptive
moves of masses of people to crowded and badly managed mega-cities might call for temporary measures aimed at preventing
people from moving, while better and more sustainable policies are being designed). But it is equally inappropriate and even
more odious to induce people with no choice to migrate through “market-driven” public policies that encourage the swelling of
mega-cities without ex-ante addressing the issue of migrants’ social inclusion. These inducements actually count on and exploit
the fact that these migrants do not have a choice. Rather, development policy should give people in all places - through
education, democratic participation in decision-making, decent housing, provision of water, care of children and the elderly - the
opportunity to assess whether they want to stay or move. This is what the place-based approach advocates.
Conclusion
16. By identifying a wide range of common elements within the different policy approaches to development, the issues on
which the place-based approach stands apart come to light. The specificity of this approach does not lay in the idea that
“place (context) matters”, a feature common to all approaches but one. Nor it does lay in a presumed anti-agglomeration and
anti-mobility drive, since it shares with the agglomeration–driven approach a belief in the primary role of agglomeration for
economic growth and it considers mobility a freedom to be guaranteed to people: including the freedom to move, the
freedom not to move and the freedom (the capability) to decide whether to move or not to move – a feature largely ignored
by the agglomeration-driven approach. The specificity of the place-based approach relates rather to the hypotheses
concerning knowledge and local elites. First, the place-based approach argues that no actor knows in advance “what should
be done”. It posits that sensible and reasonable decisions can emerge as the innovative result of a process of interaction and
even conflict between endogenous and exogenous forces, i.e. between the knowledge embedded in a place and external
knowledge. In conjunction with this assumption, it also stresses the role played in producing under-development by the
failure on the part of local elites, even when democratically elected, and their innate tendency to seek rents from public
interventions. For these two reasons the place-based approach, while sharing with the communitarian approach the
emphasis on the knowledge, preferences and values of local agents, assigns a much greater role to exogenous institutions –
their knowledge, preferences and values – and therefore advocates multi-level governance.
17. But what about the so called space-blind or a-spatial perspective put forward by the 2009 World Bank Development
Report? It turns out that this perspective is a combination of the perfect institution, the agglomeration–driven and the
redistributive (in the market-driven version) approaches. Nationwide homogeneous institutional reforms according to an
established blueprint constitute a pillar of the 2009 WB-DR strategy; but a similarly central role is also played by public
investment in agglomerations (driven by “private development interests”); while it is also argued that these actions might
have to be followed by incentives and subsidies both to lagging regions (to attract business) and to distressed areas within
agglomerations (to limit social disruption). Each arm of this strategy relies on different assumptions. With reference to space
and the role of context, the 2009 WB-DR strategy assumes context-independence for institutions and context-dependence
for investments and incentives: it is then space-blind only in the first of its three pillars, while for the agglomeration pillar only
the reliance on the choices of large private concerns is “blind”. With reference to the issue of knowledge – who knows what
actions to take where and how? – it assumes that the public sector is very knowledgeable in the design of institutions, but
very ignorant in designing public investments, the issue of knowledge not being relevant in the redistributive arm.
18. In the duello between the place-based approach and the 2009 WB-DR strategy the real issue at stake is then not the
attention de-facto paid to space. It is rather the assumptions about knowledge and local elites. Knowledge is treated as
innovation by the place-based approach, while a mix of different views is held by the 2009 WB-DR strategy. As for internal elites,
their failures, role and change are central in the first approach, while being largely ignored in the other. Transfers of resources to
lagging regions are seen by the place-based approach as a way to promote institutional and, when needed, elite change within a
region, these being the conditions for regions to increase both the utilization of potential output and social inclusion. Unlike all
other approaches – except for the communitarian one - the option of local elites to capture any form of public spending for their
own particular interests, extracting a rent from their position without introducing any innovation, is considered as a physiological
feature – not a pathology - of any development policy, to be addressed by policy governance.
19. Policy governance is entrusted then by the place-based approach with three tasks: committing local elites to tailor-made
institutional changes coherent with general principles set exogenously by the agency running the policy; creating room for an
intense and even inflamed endogenous public debate, where individuals and groups inside and outside established elites have a
chance to voice their ideas and dissent and promote innovation; establishing and using a monitoring and evaluation system,
17 M. Draghi, Il Mezzogiorno e la politica economica dell’Italia, Banca d’Italia – Eurosystem, November 2009
(my translation).
50
based on widely agreed-upon outcome indicators, through which this public debate can be supported and steered. These are
the mechanisms through which endogenous and exogenous forces operationally interact, where development policies win or
fail, and to which most attention and work should be dedicated once the policy principles have been agreed upon.
20. The place-based approach is the “new paradigm” of regional policy, as opposed to the “old paradigm” – the
redistributive approach in its compassionate version. It is the new paradigm that the OECD has been promoting for some
years by re-launching and developing some ideas originating in the 1950s. It is the approach to which several countries
including the US are increasingly looking as a driver for growth. It is the approach that could rescue the European Union’s
cohesion policy from ineffectiveness and decline should the reform announced by the European Commission’s 5th Cohesion
Report indeed be carried out.
References
Acemoglu, D. (2009), “The Crisis of 2008: Structural Lessons for and from Economics”, in CEPR Policy Insight, No. 28.
Acemoglu, D. and Johnson, S.H. (2006), “De Facto Political Power and Institutional Persistence”, American Economic
Review, 96(2), 325-330.
Aghion, P. (2006), “A Primer on Innovation and Growth”, in Bruegel Policy Brief, No. 06.Aghion, P. and Durlauf, S.N. (eds.)
(2005) Handbook of Economic Growth, North Holland, ElsevierAcademic Press.
Atkinson, A.B. and Brandolini, A. (2008), “Income Inequality in the European Union”, in BEPA Montly Brief, No. 17, July.
Bourguignon, F., Ferreira, F.H.G. and Walton, M. (2007), “Equity, Efficiency and Inequality Traps: A Research Agenda”, in
Springer, Journal of Economic Inequality, 5(2), 235-256.
Caglar, K. (2005), “Globalization and Social Inclusion in Istanbul”, in International Journal of Urban and Regional Research,
29(1), 124-134.
Cheshire, P. (2011), “Places in Places but People Everywhere: the Place for Policy?, in OECD, Regional Outlook.
Dorf, M.C. and Sabel, C.F. (1998), “A Constitution of Democratic Experimentalism”, in Columbia Law Review, 98(2).
Garcilazo, E., Oliveira Martins, J., Tompson, W. (2011), “Policies May Need to be Place-based to be People-centred”, in
OECD, Regional Outlook.
Gill, I. (2011), “Improving Regional Development policies”, in OECD, Regional Outlook.
Hart, O. and Moore, J. (1990), “Property rights and the Nature of the Firm”, in Journal of Political
Economy, 98(6), 1119-1158.
Kim, J (2011), “Non-market effects on Agglomerations and their Policy Responses” in OECD, Regional Outlook.
Krugman, P. (1995), Development, Geography and Economic Theory, Cambridge, MIT Press.
McCann, P., Rodriguez-Pose, A. (2011), “Why and When Development Policy Should be Placebased”, in OECD, Regional
Outlook.
North, D.C. (1990), Institutions, Institutional Change and Economic Performance, Cambridge, Cambridge University Press.
Rodrik, D. (2005), “Growth Strategies” in Aghion,P. and Durlauf, S.N. (eds).
Rodrik, D. (2008), “Second-Best Institutions, in American Economic Review, Papers and Proceedings, May.
Sen, A. (1999), Development as Freedom, Oxford, Oxford University Press.
Sen, A. (2009), The Idea of Justice, Cambridge, Mass., Belknap Press of Harvard University Press.
51
From theory to application

How to reinforce territorial dimension in public policies
52
53
Philip McCann
Brief Notes on the Major Practical Elements of Commencing the Design
of an Integrated and Territorial Place-Based Approach to Cohesion Policy
1. Identifying the Place-Based Characteristics of a Region
In order to help policy-makers and managing authorities to identify the dominant characteristics of their own administrative
regions we employ a three-dimensional box diagram, within which any individual administrative region participating in
Cohesion Policy programmes or projects can be positioned or situated. The sides of the box reflect the three different
dimensions of Europe2020. Each side of the box provides a typology which most concisely captures the major features
associated with each of the individual Europe2020 challenges.
For the smart growth typology, the most concise framework is provided by the OECD (2011a) regional innovation typology in
which regions are grouped into three types, namely knowledge regions, industrial production zones, and non-Science &
Technology -driven regions. These three categories reflect the major observed differences in terms of the relationships
between knowledge, innovation and regional characteristics. All regions can be broadly categorised into one of these
groupings in terms of the role played by knowledge in fostering their local innovation processes.
For the sustainable growth typology the classification scheme which most concisely captures the different combinations of
environmental and energy challenges faced by different types of regions is based on a consideration of the relationship
between the built environment and the natural environment. At its most fundamental level, this gives us four types of regions,
namely regions which in nature are primarily rural regions, rural near urban regions, urban regions, and urban-coastal
regions.18
For the inclusive growth typology, the classification scheme which most concisely captures the very different social inclusion
issues faced by regions is that which is also adopted by the ESPON (2010) DEMIFER project. This has two broad types of
regions, namely regions facing population decline and population outflows and regions facing population growth and
population inflows. Migration is a highly selective phenomenon and mobility is highly correlated with skills and income. In
today’s society which is becoming both increasingly mobile and also is ageing, differences in migration patterns are
engendering major differences in population change in different places, and these have significant impacts on both
innovation and environmental issues.
In the Europe2020 box diagram below, each individual axis represents one of the three Europe2020 agenda dimensions.
The combination of the smart growth, sustainable growth and inclusive growth typologies allows for twenty-four possible
tripartite types of place characteristics, each of which is reflected by a different cell in the three-dimensional box of regions.
Using this simple diagrammatic device it is quite straightforward for policy-makers to identify the major combined features of
their region and therefore to identify the major combinations of development challenges they face.
18 This sustainable growth classification scheme of primarily urban, primarily rural near urban, primarily rural and primarily urban and coastal, closely
resembles the OECD (2009a, 2009c, 2011b) regional typology based on the dominant built-environment-natural environment features which uses three
types of regions, namely predominantly urban regions, predominantly intermediate regions, and predominantly rural regions, with one additional category of
an urban and coastal region, because of the specific combination of ecological and environmental challenges faced by these regions allied with the
particular trade and commercial possibilities of these regions to respond to these challenges.
54
Smart Growth
Typology
Knowledg
e Region
Industrial
Production Zone
Non S&T‐driven
Region Inclusive Growth
Typology
Urban‐Coastal Region Population
Urban Region Growth and
Inflows
Rural near Urban Region Population
Decline and
Rural Region Outflows
Sustainable
Growth Typology
Europe 2020 Dimensions: Integrated Regional Typologies

1.2 Hypothetical Examples of Different Place-Specific Characteristics
Region A
Major features: Knowledge region; population growth and in-migration: urban + coastal
Major challenges: transport and land-use congestion, social and territorial segregation; environmental damage including
marine ecosystem
Major opportunities and place-based policy priorities: multi-sectoral knowledge-enhancing projects; integrated infrastructure,
housing and public transport provision
Region B
Major features: Industrial production zone; population decline and out-migration: urban + coastal
Major challenges: declining transport and land-use usage, dereliction, non-operative real estate markets, skills outflows,
declining credit availability, widespread reductions in social and territorial cohesion; environmental damage including marine
ecosystem
Major opportunities and place-based policy priorities: smart specialisation policies targeted both at high and medium
technology sectors and based on specialized technological diversification strategies in major embedded occupational and
technological classes; local labour skills-enhancing programmes in related technologies; integrated land use reclamation and
conversion programmes.
Region C
Major features: Non S&T-driven region; population decline and out-migration: primarily urban area
Major challenges: declining transport and land-use usage, dereliction, non-operative real estate markets, skills outflows,
declining credit availability, widespread reductions in social and territorial cohesion; environmental damage including marine
ecosystem
55
Major opportunities and place-based policy priorities: smart specialisation policies based focused on medium technology
sectors; local labour skills-enhancing programmes in related technologies; integrated land use reclamation and conversion
programmes.
Region D
Major features: Non S&T-driven region; population growth and in-migration: rural area
Major challenges: pressure on local resources and land use; social and territorial segregation; economic and geographic
isolation
Major opportunities and place-based policy priorities: smart innovation growth policies based on communications
infrastructure; preservation and upgrading of heritage and cultural assets; skills enhancement policies focused on tourism
and natural environmental arenas; renewable energy policies; social and territorial cohesion focused on integrated land use
development and public transport planning.
What is important for policy-makers is to identify the combined place-specific features of each region, as a first essential step
in the design of integrated place-based development policies. For large administrative regions which contain very different
types of places, managing authorities must first decompose their administrative regions analytically into the major different
types of places, using the tripartite classification scheme depicted in the box diagram. This ought not to be too difficult in that
managing authorities and policy-makers should easily be able to identify the dominant place-based characteristics of their
own region as a whole or the different parts of their own region.
2. Urban and Regional Approaches to Territorial Cohesion and Policy Design
Differences in territorial scale also influence the policy priorities and the policy design logic, which can be summarised as
follows. An urban approach to development policy in essence represents a highly-diversified and multi-sector approach
applied at a particular location. In contrast, A regional approach to development policy is represents a more narrowly-defined
and less diversified multi-sector approach applied across a multi-locational, but relatively compact, spatial structure.
2.1. Dominant Features of an Urban Approach
Synthesis of Major Characteristics: Spatial concentration of activity and people; multi-thematic approach; multi-sector
integration
Place-based context: The territorial structure underpinning the development policy design-logic is a mono-spatial context.
Networks and agglomeration: The dominant logic of the system relates to spillovers and interdependencies within a place. In
terms of network effects, the major features are the concentration of activity within the individual node and
interdependencies operating within the node. The policy aims at the fostering of positive local agglomeration
effects.
Social Cohesion: Social Cohesion in this urban context is understood in terms of intra-urban inter-neighbourhood effects,
between different income groups, between different ethnic groups, and between different social groups, within
the same place. Social exclusion is observed in terms of spatial segregation. Territorial Cohesion and Social
Cohesion cannot be separated at the urban level.
Territorial Cohesion: In an environment characterised by multiple local interdependencies and spillovers territorial cohesion is
essentially the same as social cohesion.
Concept of Mobility: Mobility issues are primarily related to occupational mobility rather than geographical mobility, in order to
avoid segregation and social exclusion due to unemployment or ongoing working poverty.
Institutional Capabilities: A holistic approach to service-delivery needs to be fostered within intra-urban institutions, so as to
allow for a highly diversified multi-sectoral policies to be implemented within and between intra-metropolitan
jurisdictions.
Transport Priorities: The promotion of sustainable public transportation facilities for urban commuting, including buses, light
rail, trams, is the priority for ensure sustainable intra-urban mobility.
Governance Priorities: The multi-level governance priority centres on the fostering of cross-sectoral coordination within
jurisdictions which is vertically integrated and highly cross-thematic in nature.
Conditionalities: Conditionalities focus on issues relating to information provision, outcome indicators, and evaluation
processes necessary for ensuring the multi-level institutional reforms required for delivering cross-sectoral
vertically-integrated policies.
Outcome Indicators: Many interventions and outcome indicators are appropriate at an urban or regional scale, but some are
specific to an urban scale
56
2.2. Dominant Features of a Regional Approach

Synthesis of Major Characteristics: Spatial diversity of activity and people; thematic concentration of approach; narrower
cross-sector objectives
Place-based context: The territorial structure underpinning the development policy design-logic is a multi-spatial context.
Networks and agglomeration: The dominant logic of the system relates to interactions and interdependencies between
places in a system. In terms of network effects, the major features are activities distributed across nodes and
the resulting interdependencies operating between the nodes. The policy aims at the fostering of positive
transmission effects and the enhancement of connectivity between places.
Social Cohesion: The social cohesion priority aims at maximising the local development potential of all income groups in
non-core or lagging regions and building on the untapped potential of all places in the national economy.
Territorial Cohesion: The major emphasis for territorial cohesion is on the fostering of horizontal governance coordination
between jurisdictions. In this territorial context, territorial cohesion and social cohesion are distinct and
separate. Although they overlap in many aspects, the actual relationship between them depends on the
nature of the programme.
Concept of Mobility: The mobility priorities in this territorial construct are primarily related to fostering the geographical
mobility of people, goods and services between places.
Institutional Capabilities: A holistic approach to cross-institutional service-delivery needs to be fostered within adjacent intra-
regional jurisdictions, so as to allow for narrowly focused multi-sector policies to be delivered across and
between intra-regional jurisdictions.
Concept of Transport: The transport priorities focus mainly on removing network bottlenecks so as to enhance the efficient
mobility of people, goods and services between places, via high speed trains or key road infrastructure.
Governance: The multi-level governance priority centres on the fostering of horizontal and coordination between sub-regional
areas within administrative regions in order to provide for cross-thematic policies which are more narrowly
defined than in the urban context but applied over larger territorial regimes.
Conditionalities: Conditionalities focus on issues relating to information provision, outcome indicators, and evaluation
processes necessary for ensuring the multi-level institutional reforms required for delivering multi-sector
policies in a coordinated manner in a cross-jurisdictional territorial context.
Outcome Indicators: Many interventions and outcome indicators are appropriate at an urban or regional scale, but some are
specific to a regional scale
This regional-type of approach which emphasises interactions and interdependencies between places can also be applied
over much larger cross-border territorial contexts.
3. An Urban Emphasis?
A possible increased urban emphasis in a reformed Cohesion Policy must allow for the very different urban population scales
and also very different urban spatial structures of different countries and regions. Member States should be eligible for
specific urban funding streams if the policies responding to urban issues relate to urban areas which exhibit one of the
following criteria:
(i) An individual urban area has (or a group of networked urban areas have) a population of at least 100,000 people. This is
the absolute threshold scale criterion.
(ii) Networked groups of urban areas, each of which exhibit a combined population of at least 100,000 people, and together
accounting for at least 30% of a region’s population. This is the cumulative relative threshold scale criterion.
(iii) In terms of its rank-size level the individual urban area ranks (or a group of networked urban areas combined together
rank) amongst the nation’s top ten percent of urban centres, as calculated with respect to all urban centres with populations
of at least 20,000 people. This is the rank-order threshold criterion.
Having an increased urban emphasis in Cohesion Policy in which urban priority funding criteria are based simultaneously on
absolute, cumulative, or rank-order thresholds, allows each member state to prioritise urban funding in a manner which is
tailored to their own particular territorial context, and which is also consistent across countries.
In terms of consistency, the consistent and comparable data required for such a flexible approach to be employed have
already been constructed by DGRegio in conjunction with Eurostat and the OECD. Moreover, more detailed Functional
Urban population calculations are shortly forthcoming from DGRegio-OECD which control for different commuting patterns
and land use coverage, and provide very detailed and consistent estimates for individual EU urban areas.
57
Roberto Camagni
‘Local knowledge, national vision’: challenges and prospect for the EU regional
policy
1. Introduction
This paper addresses some basic issues concerning the rationale for regional policies and their rules: why shall we
implement regional policies? Which roles for the regions, the states, the Union? Which new policy rules and styles are
requested nowadays in the EU context?
The paper builds on the European Union’s recent experience: in fact, at present the EU is reforming its regional policy (RP),
in terms of goals and rules, in view of the next policy period 2014-20. A large debate is being launched on the rationale,
economic justification, conditionality, process design and delivery style of regional policy itself, supplying wide material for
institutional and political decisions. The new Territorial Agenda, developed by the Hungarian Presidency and approved by
spatial development Ministers in may 2011, and the recent engagements of the incoming Polish Presidency suggest the
likely possibility of a real strengthening and partial reorientation of the EU regional policy.
The specific objective of the paper is to underline the logical, conceptual and empirical necessity of adding a territorial
dimension to any general development strategy, something that nowadays is by no means a universally accepted
proposition. In fact, in the most recent EU Report, namely Europe 2020 (European Commission, 2010), the general context
in which Europe will act in the next decade is presented in a consistent logical framework, but a territorial perspective is
totally absent. The main challenges – globalization, pressure on resources, ageing – and the main weaknesses – growth
rates, productivity growth rates, employment rates, strains on our welfare systems – are carefully inspected and a general
strategy for “avoiding decline” and offering “a sense of direction to our societies” is indicated. The Report proposes what
could be seen as an integrated development strategy: a strategy based on three pillars – namely smart, sustainable and
inclusive growth. These pillars may look relatively autonomous, touching the challenges of the knowledge society, the
environment and of an equitable society, but in fact are integrated with each other and “mutually reinforcing” (p. 3).
Sustainable growth is pursued not just per se but as a possible driver for “resource efficiency” and consequently
“competitiveness”; inclusive growth is requested for the sake of social equity but also as a means for the “acquisition of
skills”, social cohesion and social capital.
But this consistent general development strategy, so well and synthetically presented, in my opinion and in the opinion of
many policy commentators, lacks a more explicit territorial dimension: a way through which to engage all the potential and
dispersed actors that may contribute to it with their decision processes, in a bottom-up way.
The new goal on which it is possible to build a renewed regional development strategy is the territorial cohesion one,
launched by the Commission in 2004 (European Commission, 2004) and authoritatively assumed as a major EU goal in the
Amsterdam and Lisbon Treaties (2007 and 2009)19. The new scientific tool may be found in the territorial capital one,
proposed by the OECD (OECD, 2001) and re-launched by the European Commission (EC, 2005). A new “place based”
development strategy could be designed on these bases.
2. The main challenges
The main challenges for a renewed European regional policy have to be found in the following:
• The persistence and even increase of regional disequilibria inside countries during international integration and
market liberalization processes. This fact was always apparent in European countries in the early phases of their integration
in the Union, and in particular in the weaker and more dualistic ones: an increasing interregional imbalance hit Italy in the
1958-1970 period, soon after the creation of the European Community; the same process hit Spain and Portugal in the
1980’s and early 1990’s, after their joining the Union; and a severe and almost similar process happened to almost all
Eastern European new Member countries after the European enlargement in 2004. This process is due to present itself
again in periods of trade and market liberalization and in periods of economic crisis when relatively stronger economic
structures are able to respond more easily to a tighter competitive climate. This process may be considered as a form of
“market failure”, when increasing returns to scale favour large, already existing firms and prevent newcomer, small firms in
lagging areas to take full advantage of the new market opening and integration process.
• Serious unexpected side effects of regional policies in supported regions. These effects refer to the creation of a
dependency culture with respect to external support, favour a new class of rent-seekers, and may generate a misallocation
of public resources (“government failure”) (Barca, 2009). Neo-liberist attitudes tend to oppose regional policies mainly on this
ground, and on the lack of full evidence of the effectiveness of regional policy; the recent World Bank Report (2009)
advocates “space blind” policies, in complete opposition to the most common European view.
19 “The Union .... shall promote economic, social and territorial cohesion…” (art. 3). In matters of territorial cohesion, the Union has a “shared competence”
with Member States (art. 4).

58
• The new need to speed up efficiency/effectiveness in the allocation of public resources, and for new forms of
justification for government spending and related controls, as a consequence of the present crisis condition.
• The failure of a previous European strategy launched in 2000, called the “Lisbon Agenda” – which allegedly aimed at
making EU the most competitive and innovative economy in ten years. For sure this failure calls for a renewed and more
thorough development strategy. The general frame and policy fields are well defined in the EU 2020 Report; but this strategy
should link more directly to a bottom-up vision, entrusting and empowering regional and local governments in the definition,
design and implementation of specific, tailor-made, local policies.
3. The economic rationale for a territorial approach to development strategy.
In front of the difficulties that any regionalized strategy towards development encounters nowadays, a mainly theoretical
reflection on the economic rationale for a territorial approach to development looks necessary. This rationale may be found in
the following elements:
A. Social and economic cohesion (or “equity” as it was called years ago) represents one of the main political goals of
any society, and was authoritatively assumed as one of the funding principles of the European Union in its Treaties since
many decades. Recently it was acknowledged as being in potential contrast with another goal, the efficiency one (addressing
the maximum aggregate growth rate of the national economy), but the balance between the two was never explored in
depth, the positioning on the equity-efficiency trade-off being felt as the task of the political sphere. But further theoretical
reflections put in question the very existence of this efficiency/equity trade-off, emphasising both the aggregate development
effects of sound spatial development policies and, on the other hand, the economic and social costs of an unbalanced
development process (OECD, 2001, ch. 1 and 6). Many of these reflections could be worth reconsidering nowadays.
B. Spatial policies traditionally found their justification in the evidence of multiple cases of “market failure” in the
allocation of resources: spatial and land resources, physical and financial capital resources, in a general framework of static
optimisation. Nowadays, after the huge transformations of economies – from agriculture to industry, to tertiary activities, to
information, knowledge and control activities – the general framework is one of dynamic optimisation, of devising the
conditions for fast transformation of local economies and quick transfer of resources from declining to “sunrise” functions
(Camagni, 2001).
C. General institutional conditions are crucial in this respect of course – let us think about factor flexibility (in the labour
markets), market transparency and risk control (in financial markets), market openness (antitrust practices), fiscal
homogeneity (across countries) - but also spatial characteristics and local institutions play a major role in this process,
speeding up or hindering the transformation process (Armstrong and Taylor, 2000).
D. The globalisation issue has taken to the fore the growing importance of proximity space, no more in the sense of a
shelter to the benefit of local markets and communities, but in the sense of the growing importance of local conditions for
economic success – the so-called “localisation” issue. Territories not only supply the infrastructure and service preconditions
for successful location decisions and the skills and competencies needed for present economic growth, but represent a
crucial stock of non-mobile social and “relational” capital. In policy terms, these assets should not be wasted as a
consequence of the “hyper-mobility” of some, globalised activities (OECD, 1999).
E. If one considers some new, qualitative aspects of the present international economic picture, space or better
“territory” enters inherently into the scene. The increasing importance of knowledge factors, of immaterial elements linked to
culture, taste and creativity in present economic processes and the ways of their accumulation are deeply embedded into
slow, localized learning processes, fed with information, interaction, long term investments in research and education. Like
all learning processes, they are inherently localised and cumulative, as they embed in human capital, interpersonal networks,
specialised and highly skilled local labour markets and local innovative milieux; therefore they are highly selective in spatial
terms (Camagni, 1991; Camagni, Maillat, 2006).20
F. The cumulative nature of development processes; the limited capability of spontaneous adjustment processes to
rebalance differentiated regional starting conditions; the absence in an inter-regional context of some powerful
macroeconomic adjustment mechanisms that work at the level of countries (devaluation of currencies, flexibility of prices and
wages) and are able to guarantee each country a role in the international division of labour 21; all these elements confirm that
the trend towards increasing disparities inside each country is the most likely outcome in a wide customs and monetary
union like the EU, even in a context of strong aggregate growth22. This outcome is particularly strong in the early phases of
20 We see here a complex dialectics between the hyper-mobility of some production factors and the territorial “anchorage” of some others, which act as
crucial location factors for the more advanced production processes. The likely result is the cumulative strengthening of the centripetal forces of growth
(scale and scope economies, all sorts of increasing returns) and the centrifugal forces of territorial exclusion and decline.
21 These mechanisms and policy tools are not present at the regional level and, whenever a region presents lower rates of productivity growth with respect
to other regions, its fate is out-migration and even, at the extreme, “desertification” (Camagni, 2002).
22 In a context of monetary union also countries behave like regions, as they renounce to a potential adjustment tool as the exchange rate movements. This
implies further difficulties for countries experiencing a lack of economic competitiveness and an insufficient increase of internal productivity with respect to
the other member countries.
59
the integration and internationalization process.The social and public cost of increasing interregional disparities may be huge
and unbearable in the present context of tight public resources (Camagni, 2002; Capello, 2007).
G. But a further aspect, regarding the economic costs of non-intervention in a context of increasing disparities and
globalization, provides even clearer support to spatial development policies. A strategy of non intervention in fact presents
the following drawbacks (OECD, 2001, ch. 1; Camagni, 2001):
- the risk of a super-concentration of population and jobs in advanced regions and cities, with high risks of inflationary
pressures (what happened largely in many EU countries after joining the Union: Italy in the early 1960’s, Spain and Ireland in
the 1990’s; the New Member Countries in the mid 2000’s);
- the high opportunity cost of adding new activities in already successful areas: in a context of full employment, new
workers for new activities are found at the expenses of existing activities, while in weak areas they are drawn from the
unemployment reservoir, and their opportunity cost is close to zero;
- the channelling of a wide share of national savings towards the building and construction industry and real estate
speculation in advanced regions and cities, as a consequence of the migration processes, subtracting it from more
productive uses;
- a lower exploitation of the creativity potential of all regional communities, constrained by the presence of some basic
locational disadvantages (accessibility, services, infrastructure).
4. A viable policy paradigm for development through regionalization and the engagement of
territories.
Adding a territorial dimension to any national development strategy means looking for a way through which to engage all the
potential and dispersed actors that may contribute to it with their decision processes, in a bottom-up way. This approach
might be the most efficient, operational and viable one in the present conditions of international integration and competition.
In fact:
a. if - as it is widely accepted nowadays by the most advanced literature on the subject - long-term development is
largely a supply-side phenomenon, based on general rules and institutional frames and above all nourished by the internal
entrepreneurial capabilities of regions and places and by the local capability of efficiently exploiting existing resources,
realizing collective learning processes and providing attractiveness factors for external firms, then the bottom-up and
territorial dimension of any development strategy should be necessarily emphasized (Camagni, 2001 and 2002; Martin,
2004; Kitson et al., 2004);
b. if the pathways towards innovation and modernization are differentiated among regions according to local
specificities, then a single overall strategy is likely to be unfit to provide the right stimuli and incentives in the different
contexts. Therefore the outcome of a single, generalized strategy is unlikely to provide the most successful outcome;
c. as the Community Strategic Guidelines for Cohesion Policy have rightly and trail-blazing pointed out (EC, 2005), the
preconditions for development widely lie in a hugely differentiated and scattered endowment of “territorial capital”, made up
of natural and artificial specificities, varied settlement structures, cognitive and relational assets at different degrees of
complexity and development. All these elements – especially those that are not yet fully or creatively exploited - represent
the assets and potentials on which any development strategy should rely (and the territorial dimension is back again);
d. in devising a workable allocation of regional policy and R&D public support among the different local economic
activities, a wise strategy could be synthesized in the “smart specialization” strategy suggested by Foray (2009), namely a
consistent matching between investments in knowledge and human capital and the present “vocations” and competences of
territories. In order to avoid risks of centralistic decision making and of being locked-in with respect to local historical
specializations, I prefer to speak about a strategy of “smart diversification and upgrading” of existing successful activities and
functions, namely a creative and appropriate diversification of existing specializations and an upgrading of their quality. This
strategy avoids concentration of advanced, knowledge-related functions only in core regions and cities but at the same time
the undifferentiated dispersion of advanced functions in any lagging area; non-core areas and second-third rank cities should
implement network strategies in order to attract applied research and advanced functions complementary to existing know-
how and activities;
e. a single, centralized, top-down development strategy, overlooking regional specificities, explicitly renounces to
support and exploit the strategic capabilities of intermediate institutional bodies, both public and private, that are present in a
dispersed way in all territories – repeating in a different context the limits of centralized planning habits stigmatized by
Friedrich von Hayeck. These decentralized bodies are the best fit for interpreting the potential assets present in each territory
and for generating, through a bottom-up process, the agreement on necessarily differentiated and “place-based”
development strategies (provided that the right incentives, rules and control systems are delivered from the centre).
The present EU Cohesion Policy, conceived as a development policy addressed towards all EU regions and based on a
bottom-up, place-based approach to project planning, design and implementation, is the best-fitting available lever for
supporting the achievement of a smart, sustainable and inclusive growth strategy. Of course, some caveats have to be made
explicit and taken full care of, as indicated in previous Sect. 2.
The new policy paradigm for a regionalized development strategy may be indicated synthetically as follows:
60
• “Local knowledge, national vision”: the authority promoting regional policies sets priorities, rules and general
objectives, leaving policy implementation to lower level governments (OECD, 2001). Local knowledge and related learning
processes are inherently dispersed in a host of local actors whose decisions and entrepreneurial capabilities have to be
mobilized and supported;
• Regional policies targeted to all regions, not just to lagging ones (with differentiated support), as all regions have to
improve competitiveness and sustainability through a wise use of territorial capital;
• “Place-based approach”: each region making the most of its assets and developing new ones (relevant also for
attracting new activities) (Barca, 2009);
• Supporting intangibles: knowledge dissemination, entrepreneurship, education, human and social capital;
• Decentralization and fiscal federalism: in order to boost local government responsibility on public spending and linking
it to local tax resources;
• Stakeholders partnership, empowerment, citizens participation: as a means for rightly assessing priorities, enhance
private responsibility, mobilize private project design capabilities, improve project selection, control local élites.
5. The new general goal: “territorial cohesion”.
It is this author’s opinion that Territorial Cohesion (TC) represents an excellent intuition and a potentially powerful conceptual
innovation of the Commission of the EU for policy purposes. The concept was launched by the Third Cohesion Report of the
DG Regio in 2004 (E.C., 2004) and authoritatively confirmed as a main aim of the Union by the draft Constitution approved
by the Council of Ministers in June 2004 and by the New Treaty approved in 2007.
Unfortunately, the concept still remains somehow unclear – Andreas Faludi spoke about “an unidentified political objective”
(Faludi, 2005) – and, at least up to now, very far from an intentional and courageous utilisation within the EU policies. It is at
least surprising that, four years after the first proposal of the concept and its acceptance in the EU Treaty , in the official
document devoted to it – the Green Paper of Territorial Cohesion of the Commission (European Commission, 2008) – a light
and very general definition is once again put forward and a subsequent refinement is postponed to the result of a public
debate. Territorial cohesion is equated to “the harmonious development of all (…) places”, which belong to, and make up, the
“territorial diversity” of the European territory. The term “territorial” helps introducing “places” (which substitute for “regions”)
as updated policy targets and highlighting “diversity” as an asset to be fully and wisely exploited for the wellbeing of citizens
and the competitiveness of firms 23.
Perhaps a more operational definition of TC was given by the Scoping Document and Summary of Political Messages
(European Commission, 2005): “it translates the goal of sustainable and balanced development assigned to the Union into
territorial terms”. “In practical terms territorial cohesion implies: focusing regional and national territorial development policies
on better exploiting regional potentials and territorial capital – Europe’s territorial and cultural diversity; better positioning of
regions in Europe…… facilitating their connectivity and territorial integration; and promoting the coherence of EU policies
with a territorial impact…” (p. I; emphasis in the text).
Relevant innovations are present in this passage. First, traditional ‘spatial development’ policies are called ‘territorial’, using a
neologism in the English language that suggests the exploitation of territorial specificities going beyond pure location and
distance in space. Second, the concept of territorial capital is used for the first time, implicitly underlining the fact that territory
is a resource, potentially generating productivity increases (“higher returns for specific kinds of investment”) and utility flows
to local communities.
Most recently in the Sixth Progress Report on economic and social cohesion (European Commission, 2009), TC is defined
as the “harmonious and sustainable development of all territories by building on their characteristics and resources”. This
definition rightly states that, if the concept of territorial cohesion is to add to the content of economic and social cohesion, it
must necessarily link with the sustainability issue.
Some years ago, my proposal in this same sense was that territorial cohesion may be seen as the territorial dimension of
sustainability (beyond the technological, the diplomatic and the cultural/behavioural one (Camagni, 2005), residing in an
ordered, resource-efficient and environmentally-friendly spatial distribution of human activities. Its three main components
may be defined as follows:
Territorial efficiency: resource-efficiency with respect to energy, land and natural resources; competitiveness of the economic
fabric and attractiveness of the local territory; internal and external accessibility;
23 Turning territorial diversity intro strength (the title of the Green Paper) sounds as one of the possible, and wise, guidelines for the conception and
implementation of new development strategies by regions, but surely not as the central meaning of a concept that figures among the main aims of the
Union. Some fifteen years ago I used a similar sentence (namely “turning specificities into assets”) to synthesize the idea that regions should build their
competitive advantage from below, investing in their particular competences, resource endowment and even weaknesses (like inaccessibility, if this meant
conservation of an untouched environment), renovating their productive “vocations” and cultural identities (Camagni, 1995, p. 339). But this is something
that nowadays is almost fully recognized and accepted. Indeed, we expect more from the concept of TC than a condition of territorial harmony in which each
local community is content with its diversity, or a condition of interregional equity and absence of territorial imbalance (widely covered by the traditional goals
of social and economic cohesion).
61
Territorial quality: the quality of the living and working environment; comparable living standards across territories; similar
access to services of general interest and to knowledge;
Territorial identity: presence of ‘social capital’; capability of developing shared visions of the future; local know-how and
specificities, productive ‘vocations’ and competitive advantage of each territory.
Territorial efficiency, quality and identity represent objectives and values in themselves; no modern society can do without
them, as they are the basis of local collective wellbeing. While the first two objectives are rather familiar, the third, namely
territorial identity, may be seen as rather surprising, but is in my opinion crucial and will become increasingly central for
European policies. Territorial identities represent the ultimate glue of local societies, are linked with the spatial division of
labour and determine its evolution, and facilitate processes of collective learning and hence the efficiency of the local
production fabric. The different components and sub-components of TC may be identified as in Fig. 1. 24
6. The concept of “territorial capital”.
If the general goal to be achieved by national governments (and supra-national ones like the EU) at the inter-regional scale
may be identified in territorial cohesion, the new operational concept that can help the specific policies implemented by
regional and local governments may be indicated in the already mentioned concept of territorial capital.
Territorial capital (TC) may be seen as the set of localised assets – natural, human, artificial, organizational, relational and
cognitive – that constitute the competitive potential of a given territory (Camagni, 2009b). It was launched explicitly in the
early 2000’s by the OECD (OECD, 2001) and re-launched by the EU Commission in its Guidelines to Structural Funds (EC,
2005) 25: agglomeration economies, equilibrated and polycentric urban structures, accessibility, skilled labour force, R&D and
high level education facilities, business networks and social capital, natural resources and cultural heritage, territorial
diversity and territorial identities are indicated as the assets and preconditions for regional growth that need to be properly
identified, wisely protected and strengthened, smartly utilised, continuously re-interpreted and re-oriented.
Fig. 1 – The components of the Territorial Cohesion principle
Source: Camagni, 2005
24 One very strong advantage of this definition is that it allows progress to be made in developing an operational model of Territorial Impact Assessment
(TIA) suitable for evaluation purposes of the territorial effects of policies, programmes and large integrated projects at different spatial levels. The three main
components of TC identified above – efficiency, quality and identity – and their sub-components become the criteria of a Multi-criteria assessment model,
called TEQUILA – Territorial Efficiency Quality Identity Layered Assessment model. This model was developed for, and utilised by the ESPON Programme
of the UE for assessing the territorial impact of the Union’s Trans-European Network programme (Camagni, 2009a).
25 “Each Region has a specific ‘territorial capital’ that is distinct and generates a higher return for specific kinds of investments than for others. Territorial
development policies should first and foremost help areas to develop their territorial capital” (European Commission, 2005).
62
Even if the TC term was recently proposed, the general concept was implicitly present in more traditional, supply-oriented
spatial development strategies since the 1960’s, with a differentiated emphasis on different kinds of capital (Fig. 2). What
changed in time was the shift from mainly material to immaterial assets, from “development” factors to “innovation” factors,
from a “substantive rationality” to a “procedural rationality” à la Simon. More recent approaches are the most interesting:
knowledge production and diffusion, territorial identity and receptivity, milieu effects and synergies, collective learning
processes are the main assets and ways towards a modern and competitive growth strategy.
Fig. 2 – Evolution of policy approaches to Territorial Capital
Three main typologies of territorial capital may be found:

- productive, human and cognitive capital, which is crucial for achieving the goal of smart growth,
- settlement, infrastructure, natural and environmental capital, crucial for sustainable growth,
- cultural, social and relational capital, crucial for an inclusive growth26.
The main cognitive advantage of adding a territorial dimension to any national strategy resides in the acknowledgement that
every region is endowed with some sort and combination of territorial capital. From this very fact derive at the same time:
- the diversification of the development paths (and innovation paths) of the single regions;
- the asset represented by regional “diversities;
- the possibility for any region to contribute to the general national (and EU) strategy if it is able to:
- creatively exploit its own territorial capital,
- enrich it in the right ways setting appropriate priorities to local and regional policies,
- “tap” and mobilize previously “untapped” assets of territorial capital.27
7. Concluding remarks: policy goals, tools and styles for a renewed (European) regional policy
The present debate underway inside the European Union for the design and implementation of a renewed regional policy
may be extremely useful for any strategy of regionalization and regional policies in other parts of the world. The main
outcomes of this debate on the new goals, tools and policy styles, and the main messages coming out of the reflections
presented in this paper, may be synthesized as follows.
• “Local knowledge, national vision”: the authority promoting regional policies sets priorities, rules and general
objectives, leaving policy implementation to lower level governments;
• Priorities: innovation and enhanced use of new IC technologies, resource efficiency, internationalization, youth,
participation and social inclusion;
• Orientation towards the soft preconditions of growth: knowledge, education, regional receptivity and reaction
capability, internal synergies;
26Smart growth, sustainable growth and inclusive growth are the large goals of the EU 2020 Report (EC, 2010).
27In the paper mentioned before (Camagni, 2009b) a more thorough typology of territorial capital is built through a 3x3 matrix with two dimensions: rivalry
(encompassing private goods, public goods and an intermediate class of impure public goods) and materiality (encompassing tangible, intangible and mixed
goods).
63
• “Place-based approach”: each region making the most of its assets and developing new ones;
• Strategy: making the best, most efficient and creative use of existing territorial capital assets in each region,
mobilizing the most promising and still untapped ones, strengthening or completing the weaker ones;
• “Smart” investment and specialization strategy, matching investments in R&D and human capital with local know-how
and “vocations”: a strategy of “smart diversification and upgrading” avoids concentration of advanced, knowledge-related
functions only in core regions and cities but at the same time the undifferentiated dispersion of advanced functions in any
lagging area;
• Integrated policy concept, design and implementation: tapping all potential synergies among the goals of
competitiveness, sustainability, green technology development, inclusive growth;
• Necessary change in policy styles, emphasizing the relationality, cooperation and synergy dimensions of policy
actions:
- developing shared territorial visioning and project partnership;
- promoting stakeholder partnership, empowerment and citizens participation, as a means of rightly assessing
priorities, enhancing private responsibility, mobilizing private project design capabilities, improving project selection;
- changing policy delivery and controls, in order to avoid the risks of local lobbying and to drive local élites towards
virtuous, responsible and innovative behavior;
- implementing flexible inter-institutional relationships, vertical and horizontal, based on (conditional) contract,
negotiation and cooperation;
- realizing a more transparent use of public resources.
References
Armstrong. H., Taylor J. (2000), Regional economics and policy, Blackwell, Oxford
Barca, F. (2009). “An agenda for a reformed cohesion policy”, Report to Commissioner for Regional Policy, Brussels, April
Camagni R. (1991), “Technological change, uncertainty and innovation networks: towards a dynamic theory of economic
space”, in Camagni R. (ed.), Innovation networks: spatial perspectives, Belhaven-Pinter, London
Camagni R. (1995), "The concept of innovative milieu and its relevance for public policies in European lagging regions",
Papers in Regional Science, n. 4, 317-340
Camagni R. (2001), “Policies for spatial development”, in OECD Territorial Outlook, Ch. 6, Paris, 147-169
Camagni R. (2002), “On the concept of territorial competitiveness: sound or misleading?”, Urban Studies, n. 13, 2395-2412
Camagni, R. (2005), “The rationale for territorial cohesion: issues and possible policy strategies”, in P. Boscaino, Present
and Future of the European Spatial Development Perspective, Ministero delle Infrastrutture e dei Transporti, Alinea, Firenze,
pp. 121-138
Camagni R. (2009a), “Territorial Impact Assessment for European regions: a methodological proposal and an application to
EU transport policy”, Evaluation and program planning, 32, 342-350
Camagni R. (2009b), “Territorial capital and regional development”, in Capello R., Nijkamp P. (eds.), Handbook of regional
growth and development theories, Edward Elgar, Cheltenham
Camagni R., Maillat D. (eds.)(2006), Milieux Innovateurs: théorie et politiques, Paris, Economica
Capello R. (2007), Regional Economics, Routledge, New York
European Commission (2004), A New Partnership for Cohesion, Third Report on Social, Economic and Territorial Cohesion,
Brussels, February
European Commission (2005), Territorial State and Perspectives of the European Union, Scoping Document and Summary
of Political Messages, Brussels, May
European Commission (2008), Turning territorial diversity intro strength – Green Paper on territorial cohesion,
Communication from the Commission, Brussels, October
European Commission (2009), Sixth Progress Report on economic and social cohesion, Report to the Parliament and the
Council, Brussels
European Commission (2010),Europe 2020, Report to the EU Parliament, Brussels, March
Faludi A. (2005), “Territorial cohesion: an unidentified political objective. Introduction to the special issue”, Town Planning
Review, vol. 76, n. 1, 1-13
Foray D. (2009), “Understanding smart specialization”, in Pontikakis D., Kyriakou D., van Bavel R. (eds.), The question of
R&D specialization, JRC, Brussels, Directorate General for Research, European Commission, 19-28
Kitson M., Martin R., Tyler P. (2004), “Regional competitiveness: an elusive yet key concept?”, Regional Studies, vol. 38, n.
9, 991-999
Martin R. (2004), “Competitiveness, Productivity and Economic Growth across the European Regions”, Regional Studies,
Special Issue on Regional Competitiveness, vol. 38, 1045-1067
OECD (1999),“Innovation and growth in the knowledge-based economy: proposed outline”, Directorate for Science,
Technology and Industry, STP/TIP, Paris, april
OECD (2001), OECD Territorial Outlook, Paris
World Bank (2009), World Development Report, Washington
64
65
Jacek Szlachta
From theory to application: How to reinforce the territorial dimension in EU
policies
1. Approach of European Community to territorial dimension of cohesion policy
It was thanks to the so-called ”Delors Package” of far-reaching institutional reforms that a fundamental change in the scale
and scope of European Community intervention in the process of regional development came about. It was also in the
course of this that the sphere of possible Community impact on ongoing socioeconomic processes came to be known as
cohesion policy. The elements to the changes introduced at that time included long-term programming of the EC policy and
budget. The different actions the Community undertook fitted in with the then logic of multiannual programming. The adoption
of the Delors Package was also a premise raising the rank of the studies and strategic approaches drawn up with medium-
or longer-term horizons.
One of the effects of this re-evaluation was manifested in the early 1990s through the EU’s engagement in various analyses
and actions to determine prospects when it came to the Community’s territorial development. These events took place
despite the fact that spatial policy remained an exclusive competence of the Member States at that point. In the first half of
the 1990s, the key multiannual documents in this area were the two successive studies from the European Commission
entitled Europe 2000. Outlook for the Development of the Community’s Territory (adopted in 1991), and Europe 2000+.
Cooperation for European territorial development” (which was accepted in 1994).
In the EC’s budget- and policy-programming period 1994-1999 there was a steady stream of programme-related work on the
part of the EU-15 and the Commission which led ultimately to the 1999 enactment at Potsdam of the European Spatial
Development Perspective.28 This was the first document drawn up at EU level to set out strategic directions to the spatial
organisation of Europe. In it, the goals of the Community’s territorial development policy are taken to be: (1) economic and
social cohesion, (2) the conservation and management of natural and cultural resources, and (3) a more balanced
competitiveness across Europe. While the ESDP was of an indicative character only (giving rise to nothing more than soft
obligations on the basis of which Member States and the Commission might or might not engage in given kinds of activity), it
nevertheless played an important role as a basis for various actions that were in fact taken where spatial policy was
concerned.
The years 2000-2006 brought a decision that a higher rank than hitherto needed to be conferred upon activity of the above
kind. To that end, a long-term programme of research entitled the European Spatial Planning Observation Network – ESPON
was embarked upon, the focus being a comprehensive studies of the Community’s spatial structures. The work in question
took in the 27 EU Member States plus Norway and Switzerland. Thanks to the involvement of many international research
teams, a number of reports were issued, detailing various different aspects to the EU’s territorial development. The overall
effect was a marked widening and deepening of our knowledge on the features of Europe’s territorial structures.
A further manifestation of the increasing importance being attached to territorial matters was the way in which these subjects
were taken up at successive Conferences of Ministers responsible for regional policy, beginning with the 2003 Luxembourg
Summit. Ultimately, the Conference of Ministers for Regional and Spatial Policy convening in Leipzig on May 24th and 25th
2007 was in a position to adopt the Territorial Agenda of the European Union.
In line with the recognised need to complete the documentation of Europe’s territorial structures, it was decided that ESPON
should be prolonged to take in the 2007-2013 period as well. This reflected a requirement to study in full the territorial
aspects to various challenges now facing the European Union. It was in fact against the background of the 4th (2007)
Cohesion Report that questions arose regarding the territorial aspects to the EU’s most important challenges for the coming
decades – these being identified as climate change, rising energy prices, ongoing demographic processes and the
globalisation of the economy.
2. Current state of the art
Important theoretical and practical implications for the discussion about the future of cohesion policy resulted in early 1990s
from the New Economic Geography doctrine, which significantly drew attention to the importance of location and space for
economic development of regions and countries. Works by P. Krugman,29 M. Fujita, A. Venables30 and other authors
restored the significance of space in the geographic sense in macroeconomic deliberations and considerably enhanced the
arguments in favour of running development policies at the regional level.
28 European Spatial Development Perspective. Towards Balanced and Sustainable Development of the Territory of the European Union (ESDP), Potsdam,
May 1999, Ministry of the Economy, Warsaw, May 2000. This is the name of the final document arising out of 5 years of work on the part of the Ministers
responsible for spatial and region al policy in the Member States, as well as DG Regio at the European Commission. Final document gained acceptance in
1999, under the German Presidency of the EU.
29 Krugman P., Development, Geography, and Economic Theory. The MIT, Cambridge 1995.
30 Fujita M., Krugman P., Venables A. J., The Spatial Economy. Cities, Regions, and International Trade. The MIT Press, Cambridge, Massachusetts,
London, 2001.
66
Another important contribution came from M. Castells,31 who pointed to the network-based nature of economic growth and
the primary importance of the flows of capital, information, innovation and goods between the most robust centres of growth,
i.e. metropolitan cities, whereas the spreading of state-of-the-art information and communication technologies creates a
network society and a flow space within the resulting network structure.
Interesting inspirations for the modification of regional development policies come from diagnostic and analytical reports
prepared by international financial and economic institutions such as the World Bank or the Organisation for Economic Co-
operation and Development (OECD). The World Bank32 published a report addressing economic growth at the regional level,
while analysing convergence, accessibility, concentration, migration and shrinking trade barriers as key issues for economic
growth. Other interesting recent documents in this sphere, which should contribute to the theoretical foundation for the future
cohesion policy, include two OECD reports: Policy Report and Background Report, both adopted in March 2009 at the
meeting of ministers responsible for regional policy in Member States.33
As a consequence of the steadily rising status of territorial issues in the European Union and its Member States, this third
dimension of cohesion, i.e. territorial, was laid down in Article 3 of the Treaty of Lisbon alongside the economic and social
dimension.
In 2008, the Green Paper on Territorial Cohesion defined four dimensions of territorial cohesion, namely: (1) concentration,
or overcoming differences in density, (2) connecting territories, or overcoming distance, (3) co-operation, or overcoming
division and (4) tackling problems of regions with specific geographical features.34
The Fifth Report on Cohesion of November 2010 did not propose a way to address the issue of territorial cohesion in the
operational sense.35 From this perspective, the theme of territorial impact assessment presents considerable interest. This
analytical direction, which has really caught on in Europe and beyond, attempts to employ learnings from environmental
impact assessments. A sample table contains key questions concerning territorial impact assessments in the economic,
social and environmental dimension (or, more precisely, the impact on spatial management status). In order to assess
territorial impact, the following questions were formulated:
• Will it have a specific impact on certain sectors?
• Is there a single Member State, region or sector which is disproportionately affected with severe consequences (the so-
called outlier impact)?
• Does it affect equal access to services and goods?
• Does it affect access to services in general, regardless of the freedom in their location?
• Does it affect specific local territorial units more than other units?
• Does the option have the effect of bringing new areas of land (‘greenfields’) into use for the first time?
• Does it affect land designated as sensitive for ecological reasons? Does it lead to a change in land use?
The Communication from the Commission accompanying the Fifth Report on Cohesion identifies the following elements
associated with the introduction of the third dimension, i.e. territorial cohesion:36
• committing Member States to developed an urban agenda,
• achieving greater flexibility by developing programmes for functional areas,
• addressing the problems faced by areas with specific geographical or demographic features,
• developing a new generation of pan-European macro-regional strategies.
Those four elements may be discordant with the existing model of European cohesion policy, generating proposals to direct
Community interventions into territorial settings other than administrative ones. Some of them give rise to doubts as to their
substance, which is evidenced by at least a few of the thirteen international macro-regional strategies.
Connectivity is quite rightly viewed nowadays as one of the most modern to stimulate regional growth, diffusion of
developmental processes and stimulation of cohesion in all of its dimensions. However, the most recent learnings from
research in this sphere were not materially reflected in the Fifth Report on Cohesion because the European cohesion policy
is now at the stage of conceptualising the findings of economy of places, and only to a minor extent the learnings from the
economy of flows.
31 Castells M. Społeczeństwo sieci, PWN, Warszawa 2008 and Castells M., Siła tożsamości, PWN Warszawa 2008. [English edition: Castells M., The Rise
of the Network Society, Wiley-Blackwell 2000, and Castells M., The Power of Indentity, Blackwell Publishers 1997.]
32 Reshaping Economic Geography. World development report, World Bank, Washington D.C., 2008.
33 TDPC Meeting at Ministerial Level (30-31 March 2009), Policy Report, GOV/TDPC (2008)10, OECD, Paris 2008 TDPC Meeting at Ministerial Level, (30-
31 March 2009), Background Report, GOV/TDPC (2008)9, OECD, Paris 2008.

34 Green Paper on Territorial Cohesion. Turning territorial diversity into strength. Communication from the Commission to the Council, the European
Parliament, the Committee of the Regions and the European Economic and Social Committee, Commission of the European Communities, Brussels
14.7.2008. Also: Territories with specific geographical features (by P. Monfort), European Union Regional Policy, Brussels Working Papers no. 02/2009.
35 Investing in Europe’s future. Fifth report on economic, social and territorial cohesion, European Commission, Brussels, November 2010.
36 Conclusions: The Future of Cohesion Policy, Communication from the Commission to the European Parliament, the Council, the European Economic and
Social Committee, the Committee of the Regions and the European Investment Bank, COM(2010)642 final, Brussels 9.11.2010.
67
Overall, the Fifth Report on Cohesion contains at least three attempts at tackling the territorial dimension of cohesion.
However, they seem uncoordinated, incoherent and fragmentary.
During the meeting of ministers responsible for cohesion policy, which took place on 20 May 2011 in Godollo (Hungary), EU
member states agreed on the Territorial Agenda of the European Union (TAUE) until 2020, where conceptualisation of
territorial cohesion was proposed.37 The TAUE identifies major challenges and potentials for territorial development, i.e.: (1)
increased exposure to globalisation and structural changes caused by the global economic crisis, (2) new challenges for
European integration and growing interdependence of regions, (3) territorially diverse demographic and social challenges,
and spatial segregation of vulnerable groups, (4) climate change and environmental risks which have geographically diverse
impacts, (5) growing energy challenges threatening regional competitiveness, (6) loss of biodiversity, growing vulnerability of
natural, landscape and cultural heritage.
The following territorial priorities in social and economic development of the European Union were identified:
1. promoting polycentric and balanced territorial development;
2. encouraging integrated growth in cities, rural and specific regions;
3. territorial integration in cross-border and trans-national functional regions;
4. ensuring global competitiveness of the regions based on strong local economies;
5. improving territorial connectivity for individuals, communities and enterprises;
6. managing and connecting ecological, landscape and cultural values of regions.
The following are proposed as mechanisms to implement territorial cohesion: (1) strengthening territorial cohesion at EU
level, (2) contributing to territorial cohesion at cross-border, transnational and inter-regional level, and (3) strengthening
Member States’ contribution to territorial cohesion.
3. Conclusions and recommendations
Recent years have witnessed a fundamental change in the global economic doctrine as the spatial aspect has been added
alongside social, economic and environmental factors, reflecting recognition of the importance of locations (places) for the
social and economic development of regions and countries within the Community. The European Union makes an effort to
accommodate to these tendencies by financing, within the European cohesion policy, priorities and actions that enhance and
improve the utilisation of endogenous developmental potential embedded in various locations. However, the most recent
research increasingly accentuates the importance of the flow economy. Hence, it is crucial to ensure broad financing of
social and economic networks.
The European Union needs an array of measures to conceptualise territorial cohesion within the European cohesion policy.
This entails, of course, modifications in other Community policies and a change in its spatial policies as a tool to drive greater
territorial cohesion. The following may be identified as constituents to such measures:
A. Defining directions, scope and territorial nature of policies adopted at the EU level
After all Member States ratified the Treaty of Lisbon, territorial cohesion found its anchoring in the treaties, which means
there is a need to circumscribe the scope of macro-spatial measures to be adopted at the Community level. Factors to
consider in these efforts include the subsidiarity principle, competences of Member States in the sphere of spatial policy and
the fundamental differentiation of spatial policy models across EU member states. The anchoring of territorial cohesion in the
treaties entails the need to debate whether or not spatial policy should remain the sole competence of Member States in
future. Also, once the spatial dimension of various sectoral policies in the Community is defined, this will help to make a more
effective use of the EU’s territorial potential.
Spatial order at all levels other than local is an important notion that will need to be defined in the context of the European
cohesion policy. The key question is whether general framework solutions in local planning within Member States will be
sufficient or whether we should strive to define the framework for spatial order development at the EU, member state and
regional level.
Another area that will need to be defined are the territorial aspects of various Community policies, notably the Common
Agricultural Policy and technical infrastructure policy (transport, environment and energy).
B. Undertaking work on the new ESDP
Development of a new European Spatial Development Perspective should play an important role within the efforts to
conceptualise territorial cohesion. Work on the previous ESDP for the then fifteen Member States was conducted in 1994–
1999, leading to adoption of a programming document by Member States in Potsdam in 1999, with 2010 as its time horizon.
At present, our knowledge about spatial processes across Europe and worldwide is much broader and we also recognise the
increasing importance of shaping territorial aspects of social and economic development. Such efforts should be undertaken
37Territorial Agenda of the EU 2020. Towards an inclusive, smart and sustainable Europe of diverse regions, Cohesion Policy Ministers Informal
Conference, Godollo, 19 May 2011.
68
by interested Member States, with active involvement from the European Commission as a catalyst, facilitating a smooth flow
of work on this strategic Community document. Without a new ESDP, the public discourse is based only on scientific reports
prepared under the ESPON programme. In the near future, discussions should focus on the methodology and timetable of
ESDP development. Apart from extending the territorial scope onto all 27 Member States, analyses underlying this document
should certainly also incorporate candidate countries (Croatia, Iceland, Macedonia and Turkey) as well as Norway and
Switzerland, and other countries of the Western Balkans. Selected spatial analyses should also give some attention to
Ukraine and Belarus. This document, extending until 2025 or beyond, should have an indicative character and should
contain a set of guidelines for various partners, notably the EU Member States. The role of the new ESDP should be to
translate the Europe 2020 strategy into the territorial dimension of socio-economic development within the European Union.
The new ESDP should also define a set of measures to be undertaken within the European cohesion policy and other
Community policies in order to improve the territorial cohesion in the European Union.
C. Reversing the disintegration of structural Community policies
Integration of Community policies for various areas is a precondition for achieving a higher degree of territorial cohesion.
Following the OECD, the European Commission’s Green Paper identifies three types of areas: urban, intermediate and rural
areas. Structural policy should cover all types of territories as well as mutual relations between them. However, starting from
2007 the European Agricultural Fund for Rural Development (EAFRD) was shifted under the Common Agricultural Policy
(CAP). This means that the European cohesion policy can no longer finance structural initiatives in rural areas through
dedicated interventions from the Fund. During the 2007–2013 programming period relatively few EAFRD resources are
allocated to rural development whereas considerable funds are earmarked for support to farmers. Rural areas play a special
role in territorial cohesion of the Community and its Member States because of their share in the territory and population of
Member States, environmental functions and various infrastructural deficits in those areas. Attempts undertaken within the
European Union to develop an autonomous urban policy play a somewhat lesser role.
While this classification can be meaningfully applied for analytical purposes, yet the adoption of types of areas as cohesion
policy targets may lead to separation of Community policies regarding three types of areas: urban, intermediate and rural. As
a result, Member States may end up pursuing a variety of fragmentary policies States, focusing on specific types of areas.
The European Commission’s programming proposals for 2014–2020 outline the boundary conditions for effective integration
of cohesion policy and rural development policy through the Common Strategic Framework and Development and
Investment Partnership Contracts, covering all structural funds. This, however, requires effective operationalisation at the
member state level.
D. Defining territorial standards of public services
As territorial cohesion has received anchoring in the treaties, a need will arise sooner or later to define minimum access
standards for public services, guaranteed for all Community citizens regardless of their domicile. Under ESPON it was
assumed that reasonable travel time for high-level services should not exceed 45 minutes, and it was also agreed that towns
of 100,000 inhabitants should ensure a complete range of such services. Therefore, it is essential to supplement and
improve the quality of transport infrastructure (roads, railways, bridges etc.) and, whenever peripheral areas suffer from
territorial isolation, to install those services in settlement units that are slightly smaller than standard ones. Rural areas call
for particular attention: efforts should be made to avoid turning some of their residents into second-rate citizens, while also
avoiding a dramatic increase in costs of various services as a result of the dispersed settlement structure. Unfavourable
demographic projections for the European Union represent another problem. As many countries and regions within the
Community face the problem of shrinking population, they will struggle to guarantee a reasonable level of services in areas
which are being depopulated.
This kind of change would be significant for citizens of ‘weaker’ Member States since, in their case, territorial parameters of
public services will match the Community standards. This will help, for instance, to enforce further modernisation of transport
infrastructure, to reinforce the local centre networks as places where essential public services are provided, and to
rationalise the highly dispersed rural settlement network.
E. Positive developments in cross-border relations within the European Union
As follows from the provisions contained in various strategic documents of the EU, one of the strategic directions for
interventions would be to enhance the territorial dimension of collaboration: cross-border, transnational and inter-regional.
There are three types of borders within the European Union: between regions, between Member States and between the EU
and its neighbours. A comprehensive approach means that problems of those three types of borders should be addressed,
even if the financing within the European cohesion policy is limited to the second segment only. Collaboration along the
external borders of the Community should be linked to the European cohesion policy.
All analyses of European cohesion policy consider cross-border to the type of intervention that brings the highest added
value. Traditionally, borders between European countries traditionally divided regions located in various countries rather than
connected them, with areas in their vicinity often suffering from the ‘periphery syndrome’. The technical infrastructure in
69
cross-border areas was often substandard. European integration entails practical elimination of internal boundaries between
the EU countries and an opportunity to leverage the socio-economic potential of those areas. As a result, possibilities offered
by the Economic and Monetary Union can be fully leveraged. An obvious precondition for this approach is, of course, to
supplement and improve the existing cross-border infrastructure, both in the land and maritime dimension, and to support a
broad range of regional collaboration initiatives on a consistent basis.
An increasingly important role for the socio-economic development of the Community is played by collaboration in pan-
European regions such as the Baltic countries or Central Europe. Therefore, it is important to develop long-term documents
addressing macro-spatial policies for such areas.
The key method to drive development for regions and cities of Europe is to make use of best practices from other regions
and cities/towns of the European Union through effective dissemination and adaptation of such practices. This approach is
reflected in efforts made within the European cohesion policy to finance various collaboration networks in a variety of
territorial settings. An elevated importance of this direction in cohesion policy will be demonstrated if the streams of structural
funds allocated to cross-border collaboration are significantly increased. This cross-border collaboration refers, of course, to
the internal borders between the EU Member States.
F. Limiting the negative role of EU external borders
The external borders of the Community, both on land and at the sea, represent a particular problem for the EU cohesion
policy. Along most external borders on land one can observe immense discrepancies in levels of socio-economic
development which are often exacerbated over time. Zones around external borders (on land and at the sea) are affected by
concentration of adverse phenomena such as illegal immigration, trafficking, corruption at border crossing points etc.
Standards concerning protection of natural environment and water management vary across Member States and
neighbouring countries, which affects the condition of the environment within the Community as a result of cross-border
pollution. The proximity to land boundaries and, in some places, also to the sea, has an adverse effect on development
prospects. Insufficient capacities of key border crossing points, combined with absence of local BCPs, effectively curbs the
socio-economic relations with regions located in neighbouring countries.
Efforts to achieve territorial cohesion mean that measures focusing on the surroundings of the European Union should be
undertaken on a larger scale. Hence, in the case of external borders one should expect an increase in funding under
instruments of territorial partnerships with EU neighbours, such as the European Neighbourhood and Partnership Instrument
(ENPI).
G. Integrating EU policies to achieve a greater degree of territorial cohesion
The Common Agricultural Policy plays a key role in the Community budget. Rural areas are generally characterised by a low
degree of territorial cohesion. This results mainly from the dispersion of the rural settlement network and low quality of
transport infrastructure. This fact needs to be taken into consideration when setting the priorities of the second pillar of the
CAP, which focuses on rural development. Consequently, a substantial proportion of CAP funds should be earmarked for
measures that would fundamentally improve the degree of territorial cohesion in rural areas. Needless to say, this will
necessitate a re-definition of demarcation lines between the European cohesion policy and the Common Agricultural Policy.
Most probably, definition of territorial accessibility standards for public services will play an important part once territorial
cohesion has found its anchoring in treaties after the ratification of the Treaty of Lisbon. Meeting (ensuring) those standards
in peripheral rural areas will represent a particular challenge.
There is an increasing understanding within the European Union for the need to introduce a common urban policy at the
Community level. An important part of problems related to the territorial cohesion concerns large cities. Uncontrolled
suburbanisation is often mentioned in this context as a pathology of territorial cohesion. External zones of large cities are
affected by spatial chaos occurring due to erratic economic growth, concentration of spatial conflicts, devastation of the
environment or shortages in efficient transport connections. The benefits which occur in the individual scale often become
barriers to growth in the scale of large cities and regions. Most probably, it will be important to agree on mandatory urban
standards and commonly applicable norms in local spatial planning. However, keeping this field within the competence of
Member States has been a good practice and this should not be changed.
The Community-level transport policy also plays an important role for the territorial cohesion. Against this background pan-
European transport corridors are identified (TEN: trans-European networks), which enable territorial integration of the
European Union through road and rail transport. Identification of transport corridors within TEN significantly influences the
selection of investment priorities within the European cohesion policy. The distribution of TEN gives preference to some parts
of the Community while discriminating against others. Therefore, an important role is played by analyses concerning issues
such as the length of TEN corridors versus populations and territories of countries, the juxtapositions of NUTS 2 and 3
regions which remain outside the pan-European network, and the shares of population living at a particular distance and time
isochrones from the entry and exit of the nearest pan-European corridor. Such analyses should provide a momentum for
identifying additional pan-European transport corridors to expand the existing network.
70
Bibliography
Conclusions: the future of Cohesion Policy, Communication from the Commission to the European Parliament, the Council,
the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank,
COM(2010)642 final, Brussels 9.11.2010.
Europe 2000. Outlook for the Development of the Community’s Territory, European Commission, Brussels 1991.
Europe 2000+. Cooperation for European territorial development, European Commission, Brussels 1994.
European Spatial Development Perspective. Towards Balanced and Sustainable Development of the Territory of the
European Union (ESDP), Potsdam, May 1999
Informal Meeting of Ministers Responsible for Cohesion Policy. Presidency Conclusions, Ministry of National Development,
Godollo, 20 May 2011
Investing in Europe’s future. Fifth report on economic, social and territorial cohesion, European Commission, Brussels,
November 2010.
Opinion of the Committee of the Regions on the Fifth Cohesion Report, 31 March - 1 April 2011, Brussels COTER-V011
Results of fifth cohesion report consultations, http//ec.europa.eu/regional policy/consultation/5cr/answers en.cfm
Territorial Agenda of the EU 2020.Towards an inclusive, smart and sustainable Europe of diverse regions, Informal Meeting
of Cohesion Policy Ministers, Godollo 19 May 2011.
71
Martin Ferry
Performance management instruments in multi-level, territorial policies: examples
from national regional policies
INTRODUCTION
This paper explores the use of performance management instruments in regional development policies implemented in a
multi-level context, an issue discussed by many commentators but not yet systematically reviewed. It brings together
evidence from recent EPRC research on performance management tools in policy systems based on shared management.
The research was commissioned by DG Regio.38 The aim was to develop ideas and recommendations to inform debate on
Cohesion policy reform. Ten national case studies were covered: Brazil, Canada, France, Germany, Japan, Poland, Spain,
Switzerland, England and United States. Three IFIs were also included: the European Investment Bank (EIB), the European
Bank for Reconstruction and Development (EBRD) and the World Bank (WB). We developed a conceptual and analytical
framework for the study, based on an extensive literature review. It differentiated between four key headings deemed most
relevant from the perspective of the research task. The first is performance management levers, including: the use of funding
mechanisms, contracts or agreements, and; the use of programmes, targets and guidelines which may implicitly motivate
performance but are not primarily designed for sanctioning or rewarding purposes. The second is conditionalities. These are
conditions tied to the use of funding, obligating the beneficiary to meet specified criteria, or ensuring that funding is used in a
particular way. These can be applied ex ante or ex post and can relate to a range of factors: macroeconomic or structural
conditions, governance frameworks etc). The third heading is incentives or sanctions. These are designed to strengthen
performance levers and conditionalities by penalising or rewarding certain levels of performance. They can be financial (e.g.
bonuses or penalties based on performance), operational (including granting greater or lesser autonomy from inspection) or
reputational (e.g. the public reporting of performance, publication of league tables etc.). This paper will highlight key issues
emerging from the research under these performance management headings, illustrated with representative examples drawn
from the case studies. The concluding section draws out some of the key messages arising from the research.
WHY PERFORMANCE MANAGEMENT?
In recent years, increasing weight has been attached to managing the performance of regional policy instruments that are
implemented across administrative boundaries. This is in the context of the so-called ‘paradigm shift’, involving a move away
from external interventions implemented by central governments to a ‘place-based’ approach that responds to regional or
local specificities through multi-level governance.39 The use of performance management instruments is of course justified
on the grounds of policy efficiency. Ensuring a close correlation between initial objectives and results is challenging because
of asymmetries in information, capacity and funding between the ‘donor’ and ‘recipient (or between the ‘principal’ and
‘agent’). The principle-agent dynamic and sharing of risk between levels creates uncertainty, making it difficult to guarantee
that the funding provided will achieve the desired effects,40 i.e. ensuring that the beneficiaries of funding follow the strategic
objectives outlined by their principals. Several factors can intervene at national and sub-national levels to alter or subverting
original policy goals during the implementation process. Efficient implementation depends on levels of administrative
capacity at national and sub-national levels: despite a commitment to compliance, initial priorities may be altered for
pragmatic reasons. Unanticipated events can change the institutional or socio-economic environment in which regional policy
programmes are implemented, creating new priorities. Some studies highlight the threat of ‘pork barrel’ or distributive politics
to compliance with original policy. Of course, fraud is the most extreme example of this type of ‘policy drift’.
In theory, performance management instruments address this threat. Conditionality can be seen as a key element of the
relationship between those funding and those implementing policy.41 However, there is no real consensus in the literature.
Studies demonstrate wide differences among economists and policymakers on the relationship between conditionalities and
programme performance. Some see conditionality as a key element of the relationship between funders and recipients;42
others regard it as ineffective (arguing that changes in performance are rarely related to conditionality)43 or even having
38 EPRC (2011) EU Cohesion Policy in a Global Context: Comparative Study on EU Cohesion and Third Country and International Economic Development
Policies, report submitted to DG Regio.
39 See, for instance Bachtler, J. and Yuill, D. (2007) ‘Regional Policy in Western Europe: Taking Stock of the Shift in Paradigm’, Beiträge zur
Ballungsraumforschung, Heft 10, RUFIS, Bochum.

40 Grossman, S., Hart, O., (1983). An analysis of the principal-agent problem. Econometrica 51, 7–46, Martens, B., 2002. Introduction. In: Martens, B.,
Mummert, U., Murrell, P., Seabright, P. (Eds.), The Institutional Economics of Foreign Aid, Cambridge University Press, Cambridge, pp. 1–43. Milner, H.,
2004. Why Multilateralism? Foreign Aid and Domestic Principal-Agent Problems. Columbia University, NY.
41 Hopkins R et al (1997) The World Bank and conditionality, Journal of International Development, 9(4), 507-516.
42 Hopkins R et al (1997) The World Bank and conditionality, Journal of International Development, 9(4), 507-516.
43 Killick T (1997) Principals, agents and the failings of conditionality, Journal of International Development, 9(4), 483-495.
72
negative consequences (for legitimacy and fairness)44; and some focus on the implementation problems associated with the
use of conditions (such as conflict of objectives, multiplicity of goals, lack of ownership).45
PERFORMANCE MANAGEMENT LEVERS
Performance management levers concerns those instruments that can implicitly motivate performance but are not primarily
designed for sanctioning or rewarding purposes.
Resource allocation mechanisms
Systems for the multi-level governance of development policy require mechanisms to allocate funding between tiers. Funding
can be allocated according to various measures, such as past performance, organisational capacity and the achievement of
targets. In IFIs this applies to how decisions are made to decide levels of lending to recipient countries. This is clearly seen in
World Bank’s use of Country Assistance Strategies (CAS). These provide an overall strategic context for individual Bank
lending operations in a country over a specified period of time. Indicative country allocations are set out in the CAS; and are
based on, inter alia, financing requirements, the sustainability of the country’s debt, and absorptive capacity. In contrast,
funding in national regional policy systems is allocated according to algorithms or criteria weighted towards specific priorities.
These mainly have a pro-equity bias and focus on socio-economic indicators such as GDP, unemployment rates etc. This
approach ensures that funding is automatically allocated to the neediest regions but does not take into account other issues,
such as management and administrative capacity, experience of implementing regional development programmes, strength
and commitment of regional civil society etc. This use of a discretional approach to resource allocation at the macro-level
gives IFIs a greater degree of leverage when it comes to performance management. As noted of the World Bank’s aid
programmes: “The Bank does not just lend money and produce ideas: it packages the ideas and the money together”.46 In
contrast, the allocation of regional policy funding is usually not discretionary; it was decided according to a range of criteria
(GDP per head, employment rates, education levels, population density etc.). Past performance levels are not taken into
account: funding to regions will be renewed regardless of past compliance with regional policy goals. Thus, regional policy
systems do not have the benefit of being able to choose those agents most likely to comply with original principles and
priorities: the agents are the regions.
Co-financing
Co-financing can be an important instrument of performance management, ensuring that funding and priorities are consistent
in shared management systems while strengthening the commitment or ownership of different partners to efficient
performance. In Switzerland, efficient allocation of funds is mainly ensured via the principle of ‘cantonal participation’,
requiring co-financing contributions of 50 percent to implementation programmes. Within this, funding can be used flexibly by
the cantons based on global grants delegations. They also have to assume 50 percent of any incurred loss, encouraging
them to take precautions to avoid such losses. This approach gives national authorities the opportunity to ensure that
national priorities are appropriately reflected in the projects in receipt of support while boosting the participation and
commitment of sub-national participants. On the other hand, this approach clearly relies on the availability of sufficient funds
at lower levels. Moreover, this can raise issues of ownership: a perception that limited funds are being drawn from existing
interventions to support actions favoured by higher levels.
Grants or loans
Approaches to performance management can also be influenced by the extent to which grants or loans are used as funding
instruments. Although regional policy funding is primarily in the form of grants, instruments of a revolving nature such as
loans and venture capital funds are gaining importance. At the micro level, funding packages can combine grants and loans
to beneficiaries. One mode may be more appropriate for certain interventions. For instance, loans may be more suitable to
measures related to the redevelopment of industrial sites or investment in innovation. In some regional policy systems,
interest-free or low-interest loans are granted for interventions in the field of high added value–oriented infrastructure (e.g.
development of industrial estates, research institutes, rather than basic infrastructure). These are seen as an appropriate
instrument, since the provider of the loan can closely manage the process of repayment.
On the one hand, grants allow greater political scope and leverage for donors to obtain recipients’ commitment to
conditionalities or reforms because they do not burden them with the need for repayment. However, grants are more prone
to be squandered because the enforcement environment is weaker (unless donors credibly threaten to withhold funds in
cases of mismanagement). Loans, on the other hand, have to be repaid and thus provide a stronger incentive for careful use
of resources by recipients. An important incentive for timely and effective implementation of loan funding is its revolving
44 Raman K R (2009) Asian Development Bank, policy conditionalities and the social democratic governance: Kerala Model under pressure? Review of
International Political Economy 16(2) 284–308.
45 Agostino M (2007) World Bank conditional loans and private investment in recipient countries, World Development, 36(10), 1692-1708. Koeberle S G
(2003) Should policy-based lending still involve conditionality, The World Bank Research Observer, 18(2), 249-273. Kapur D and Webb R (2000)
Governance-related Conditionalities of the International Financial Institutions, G-24 Discussion Paper Series, no. 6, UNCTAD, United Nations.
46 Gilbert, C, Powell, A., and Vines, D. (1999) ‘Positioning the World Bank’ Economic Journal 10., F-598-633.
73
nature. With revolving funds, financing can continue beyond the period of programming with local or regional authorities
using the same funding to pursue similar objectives.47
An important incentive for timely and effective implementation of loan funding is its revolving nature. With revolving funds,
financing can continue beyond the period of programming with local or regional authorities using the same funding to pursue
similar objectives. It should also be noted that the use of loans generally requires much more analytical capacity from the
donor since, risk assessments and capacity of reimbursement assessments have to be carried out.
Contracts and agreements
Where significant resources are being shared, contractual mechanisms provide a binding basis for ensuring efficient
performance. These can formally delegate responsibility for achieving certain levels of outputs or outcomes. Various types of
contractual arrangements are apparent across different regimes. Such instruments usually include provisions to negotiate
the integration of sectoral and regional development funding. Contractual arrangements offer several benefits. They can
strengthen linkages between regional and local policies to national priorities. By increasing policy-making responsibility, they
may also contribute to the development of local capacities. Contracting also performs a legitimising function: giving
governments the opportunity to submit their policies to the agreement and compliance of other authorities can spread
responsibility and accountability.
More challenging aspects of contracting include high transaction costs in terms of negotiation and administration. Moreover,
questions of enforceability are paramount. Attempts to enforce contractual commitments often were thwarted due to
pragmatic considerations of the political or administrative cost. For instance, in France the state-region contracts (CPER) are
protocols of political intent with a non-binding character rather than contracts in the strict legal sense. These contracts do not
imply any direct consequences or sanctions regarding the implementation of actions contained in them. A strengthening of
their legal position has been resisted because of potential adverse effects in the form of appeals and making partners more
reluctant to commit funding.
Programmes, targets & guidelines
A related instrument for performance management is the use of programmes with associated targets and guidelines. This
often involves lower level authorities drawing up regional or local plans in line with national objectives or guidelines. Recent
years have seen increasing use of programming in national regional policies , where it seen as be seen as a key, medium- to
long terms framework for managing performance in multi-level systems. However, programmes can be costly to design and
administer and ensuring that they serve as active management instruments raises several challenges.
The first concerns the coordinating of inputs into programme design. To what extent should programmes stress national or
high level perspectives rather than ‘upstream’ analytical work? How can you ensure that programmes move beyond a ‘paper
exercise’ to become active performance management instruments? There is criticism that national governments were playing
a too dominant role in determining the content of regional programmes. This can undermine regional-level commitment and
ownership and also produce a set of generic programmes that do not reflect territorial specifics. There is also criticism that
regional programmes have been too abstract and general and so open to a range of interpretations from different actors (this
has been a criticism of Cohesion policy). Most successful cases have found a reasonable balance between top-down and
bottom-up inputs. In the case of the Appalachian Regional Commission in the United States, five-year strategic plans
incorporate input from private citizens, local governments, regional and local development districts, state governments, with
some input from federal agencies. There is a combination of bottom-up and top-down dynamics: explicit and detailed
guidelines are provided at Congress level and the associated ARC Code. Bottom-up input in setting policy directions comes
through the priorities put forward by each of the state governments. Major projects for ARC approval are included in these
statements. Although there is a five-year framework, there is flexibility for year-to-year changes. In England, the
programming framework for the RDAs was similar (although the agencies are soon to be abolished). Agencies were required
to develop a strategic vision for each of their regions, and central government issued statutory and non-statutory guidance to
the Agencies on the formulation of the Regional Economic Strategies (RESs). Although the overarching framework produced
some common components, the methodological approach taken to drafting the programmes and the content of the strategies
reflected regional differences.
The key messages are that requirements concerning the content of programmes should take a focused approach so that
programmes are not overburdened by a high number of objectives. Programmes should focus on a limited number of
particular policy actions, based on close analysis of specific territorial or socio-economic conditions and specific theories and
arguments of how qualitative change can be supported. This emphasises the need for partnership and the negotiation of
indicators and targets, combining ‘top down’ and ‘bottom up’ inputs on which relevant and realistic conditions can be built.
Programmes should also be clearer and more results-based. They should have more explicit links between the results
framework and directly accountable (rather than higher level) outcomes. Of course, it is important to reiterate that this would
demand a significant expansion in analytical capacity both at national and sub-national levels.
47 See comments of Graham Meadows in House of Lords (2008), The Future of EU Regional Policy, 19th Report of Session 2008-09 (Norwich: HMSO).
74
CONDITIONALITIES
Conditionalities are structured and attached to these performance management levers in different ways. Studies
demonstrate wide differences among economists and policymakers on the relationship between conditionalities and
programme performance. Some see conditionality as a key element of the relationship between funders and recipients;
others regard it as ineffective (arguing that changes in performance are rarely related to conditionality) or even having
negative consequences (for legitimacy and fairness); and some focus on the implementation problems associated with the
use of conditions (such as conflict of objectives, multiplicity of goals, lack of ownership). A broad categorisation of
conditionalities can be introduced to analyse how these issues are addressed.
Macro-fiscal conditionality.
This type of conditionality aims to promote macroeconomic stability and lay the basis for sustainable growth. Under this
approach, the disbursal of development funding is linked to macroeconomic indicators, such as: inflation rates, levels of
government domestic and external government debt, and a country’s ability to finance its deficit. This has traditionally been
used by IFIs (such as the World Bank), but, as a result of assessments that questioned their effectiveness, there has been a
recent shift in focus on medium-term structural conditions. Of course, this is not evident in national regional policy systems.
Structural or performance related conditionalities
Second, structural conditionality attempt to capture the relationship between interventions and the broader socio-economic
environment. This could include, for instance, the impact of regional policy on labour market characteristics. However, the
complexity of contemporary economic development policy means that national regional policy systems do not try to capture
or measure the contribution of interventions to these broader categories. Rather, they require the recipients of funds to reach
certain goals related directly to their own programmes. Although difficulties in establishing causality between actions and
achievement of certain goals must still be considered, these conditions allow recipients of funding more scope to
demonstrate progress and impact. A key issue here is the nature of the conditions selected and the process of how
associated indicators and targets are set. In this context, Switzerland provides an interesting case. Projects under the New
Regional Policy are set a series of conditions. They are required to be: aligned with the priorities of the economic
development strategy; and focused on innovation and entrepreneurship in export-oriented added-value systems. Projects
should also contribute to the strengthening of functional regional centres. Moreover, specific conditionalities are outlined for
different intervention types. In order to receive a grant, one of the following conditions needs to be fulfilled: promotion of
regional entrepreneurship; strengthening of regional innovation capacity; exploitation of regional potentials and development/
improvement of added-value systems; or support of cooperation between public and private bodies, between regions, or with
large agglomerations. Cantons are responsible for indicator definition for their programmes but this has to be adapted to the
requirements of the NRP. This concerns the definition of cause-and-effect models for bundles of measures; the definition of
objectives regarding outputs, outcomes and impacts; the definition of quantified and qualified target indicators; and the
clarification of indicator measurement. Data are gathered at the cantonal level and are periodically sent to the central
government agency (SECO) to ensure the comparability of NRP implementation in different regions.
It is clear that for performance-related conditionalities to work, capacity for data gathering and monitoring at national level but
particularly at regional and local levels must be strong. This can be seen in the emergence of regional or local statistical
observatories in several countries (such as Poland). In France, there a trend towards a greater use of conditionalities in a
context of tight budgets (notably at the level of local authorities, where there is an increasing interest in the returns of support
provided). In the French context, the mid-term evaluation of the state-region project contracts (CPER), provides an
opportunity to check progress and propose modifications but there are conditionalities attached. Monitoring data has to be
up-to-date for both the regional State services and local authorities in order for proposed changes (such as funding shifts) to
be agreed. Although this has a delaying effect, an increasing number of regions now update their records more regularly.
This move has also required the establishment of a coordinating body in the regions which will oversee performance until the
end of 2013.
Ex-ante conditionalities
Ex-ante conditionalities are based on adherence to prior agreements on obligations, objectives or targets between parties.
This can involve setting specific project selection criteria. For instance, for regional programmes in Switzerland the cantons
are set indicative selection criteria based on overarching structural objectives. Ex-ante conditions can also concern agreeing
or requiring the inclusion of key or major projects or earmarking funds for particular priorities (e.g. in Poland). Ex-ante
eligibility conditions can also be set (e.g. France and Spain). They can also be process related. For instance, regions may
have to demonstrate administrative capacity, transparency, commitment to participation and accountability in the delivery of
the intervention. Ex-ante conditions can also be regulatory (e.g. relating to compliance with business regulation or
environmental standards, as in Germany). On the one hand, setting ex-ante conditionalities ensures a degree of
predictability: beneficiaries of funding are not required to hit ‘moving targets’. Moreover, these conditions are not renegotiated
periodically during the life-time of a programme. This cuts the administrative burden. On the other hand, setting realistic ex-
75
ante conditions is challenging in a complex field such as regional policy. Moreover, the rigidity of ex-ante conditionalities may
not be appropriate in such a fluid policy environment.
INCENTIVES AND SANCTIONS
The third heading is incentives or sanctions. These are designed to strengthen performance levers and conditionalities by
penalising or rewarding certain levels of performance. Again, in order to assess these, the research introduced a basic
categorisation.
Financial incentives and sanctions
Financial incentives refer to the availability of funds based on performance. For instance, performance-related awards can be
offered to promote better programme or project implementation. On the other hand, delays, suspensions or cuts in funding
can be used to sanction beneficiaries when conditions are not met.
Of course, a prominent example of a financial incentive is the performance reserve, where funding bonuses are rewarded to
the best performing programmes or interventions. This has been used in some cases (Italy, Poland, England) and the
picture emerging from our research was mixed. The use of a performance reserve in English regional policy was short-lived.
It concerned a very small proportion of the regional development agencies’ total budget; it was carved from the agencies’
own budget allocation, making it seem less of a true performance reward and more like a reallocation of funds. Elsewhere,
there were concerns that a performance reserve related to financial progress may lead to a focus on quick rather than
strategic spending and a focus on competition rather than cooperation among regions. Poland has used a performance
reserve in Cohesion policy programmes, and there are plans to create a similar ‘effectiveness reserve’ to improve the
performance of the new territorial contracts. Among other things, it will set aside, in advance, an amount of funding in the
regional policy budget of the state, to be released following the achievement of specific targets in the contracts. The reserve
will be allocated every three years in the course of a given generation of territorial contracts. The basis for allocating the
reserve will be the evaluation of findings contained in the annual strategic report’s assessment of regional development and
spatial trends. It is interesting to note that up to five percent of the reserve allocated to the regions can be used as a financial
bonus or incentive for staff working in the implementing body. This type of financial incentive has also been used in
International Financing Institutions such as EBRD.
It is important to note that no regional policy case provided a concrete, practical example of sanctions being enforced. This
illustrates the methodological and political challenges associated with attaching sanctions to conditionalities and the potential
for negative behavioural responses. The approach to sanctions in Switzerland is based more on negotiation. Obviously,
there will be ‘clawbacks’ of funding if extreme failures are discovered but there is concern that the use of sanctions would
encourage defensiveness and threaten transparency. Thus multi-annual programme agreements between the federal level
and cantons contain specific information on the financial consequences of non-compliance but they emphasise potential
mediation procedures that are seen as the optimal solution to any problems.
Operational or administrative sanctions
Very little use is made of operational or administrative incentives or sanctions in national regional policy systems. One
example, arguably was France, where unjustified discrepancies between forecasts and commitments or a lack of maturity of
the projects in the state-region contracts can lead to a review of State commitments, subject to an inter-ministerial meeting.
Reputational incentives and sanctions
Where regional funding is formula-driven and reflects the economic situation of regions, there are few financial incentives or
sanctions in operation. In these cases, reputational mechanisms may be used. This can involve the public or internal
reporting of performance data or so called ‘league tables’. The reputational impact even of internally published benchmarking
data can have an impact. In England, the performances of RDAs were ‘benchmarked’ against each other as reports
summarising RDA performance were submitted to parliament and made public twice a year. Though these performance-
related incentives for the RDAs were purely implicit, according to our research, they constituted a strong reputational
incentive for agencies to meet conditions attached to regional policy funding.
There is a basic tension or paradox surrounding the use of incentives and sanctions, a tension that runs through debate on
the new regional policy paradigm. This concerns the balance between central direction and local choice. In moving to more
devolved decision-making, national governments recognise the logic for incentivising performance, including the use of
sanctions and rewards. However, several national Ministries and departments noted that the devolution of priority-setting
competences and budgets reduced their ability to use sanctions and rewards to incentivise the delivery of national priorities.
This highlights the implicit tension in setting national priorities that can be implemented at local discretion.
CONCLUSIONS
If we consider the three types of performance management instruments identified, regional policy systems currently continue
to favour primary performance levers such as contracts, programmes and resource allocation mechanisms etc). There are
several reasons for this. First, these are ‘softer’ instruments that can implicitly motivate performance but are not primarily
76
designed for sanctioning or rewarding purposes. This fits well with the consensual, partnership-based principles of the
contemporary regional policy paradigm. Second, in most regional policy systems there is still a strong equity-based
orientation to regional policy and the use of sanctions, particularly against actors in less developed territories, could run
contrary to overall policy priorities and encounter political resistance. Second, in several cases, the enforcement environment
is not strong enough to support a robust use of conditionalities, incentives and sanctions. This is clearly the case in
federalised or regionalised systems where constitutional status is dispersed across tiers but also in unitary systems where
the political status and financial scale of regional policy may not be enough to make sanctions a credible threat. Third,
contemporary regional policy is a complex field and the capacity to definitively prove causality and thus support the use of
conditionalities is not always present.
Nevertheless, a second conclusion is that arguments for the increased use of conditionalities, incentives and sanctions are
gaining momentum. Processes of devolution and decentralisation of regional policy implementation and budgets are creating
‘principal-agent’ dilemmas that demand strong performance management systems. Efforts to integrate a complex range of
policy interventions through the territorial lens (as under the increasingly popular ‘place based’ regional policy model)
similarly demand instruments to ensure efficiency and coherence. Finally, the fact that regional policy budgets are
increasingly constrained as a result of the global financial crisis emphasises value for money and efficiency, putting
increased emphasis on performance management.
As a result, conditionalities are being used to varying degrees. There is clear support for ex-ante conditionalities. This
includes the negotiation of commitments to capacity-building at sub-national levels, specific regulations, projects or priorities
in contracts or programmes. There is also support among our cases for structural or performance-related conditionalities.
However, these are always programme or intervention-specific. In other words, the conditions and targets set must be
directly attributable to the programme or intervention concerned rather than broader regional characteristics. Again, a
common feature of this approach is the emphasis on consensus and joint agreement across national and sub-national levels
on what is practically achievable and measurable.
Much of the emphasis in these conditionalities is on capacity building (as in the case of France where the local level must
demonstrate robust monitoring and analysis in order to make changes to the contracts). The development of capacity for
data gathering and analysis has accompanied a stronger focus on conditionalities. This is particularly apparent at regional
and local levels where a much stronger evidence base for managing policy performance is emerging. Sub-national levels are
developing capacity to identify needs and priorities, negotiate conditions, targets and incentives with higher levels and
monitor and report on progress.
Due to the political and practical constraints noted above, the use of explicit incentives and sanctions is treated very
cautiously. The general trend is to favour reputational rather than financial or administrative incentives over sanctions. Some
financial incentives are used. The ‘performance reserve’ is a prominent example, although failure to benefit from the
associated funding can itself be seen as a sort of sanction. The threat of financial sanctions, such as the ‘clawing back’ of
funding in extreme cases is apparent but seldom if ever enforced. Rather, provisions are made for mediation and the
resolution of any issues. This reluctance to impose sanctions is understandable. Nevertheless, it has implications for the
credible use of conditionalities.
Overall, performance management is an increasingly prominent issue in regional policy. There is a broad trend towards the
use of stronger management instruments, including conditionalities, to help ensure the efficient implementation of complex
interventions that stretch across sectors and administrative boundaries. However, regional policy systems are developing
these instruments with caution – there is a need to ensure sufficient flexibility, capacity and participation, particularly at sub-
national levels, to ensure that these instruments are not counter-productive. This highlights the importance of fostering trust
among regional actors and within multi-level systems of governance. The basis for this trust is the construction of a robust
evidence base, rigorous analysis and transparent, inclusive policy debate at different levels.
77
Towards territorial approach in development policies

Ideas and practices
78
79
Iain Begg
Towards territorial approach in development policies – ideas and practices
Territorial cohesion is the new kid on the block, having only formally been added to the objectives of Cohesion policy in the
Lisbon Treaty. As such, it has less experience to draw upon than either economic or social cohesion, certainly in relation to
the Structural and Cohesion Funds, and also has to complement and (potentially) compete with these more established
approaches to development.
Successive cross-border initiatives (INTERREG in its various manifestations and the territorial objective of the 2007-13
programming period) have constituted one facet of ‘territorial’, namely an approach to development that takes account of
spillovers and inter-actions between neighbouring regions, usually encompassing different Member States. Another that
found favour when the concept was in originally canvassed (see the survey by Faludi, 2009) is spatial planning. This
perspective on ‘territorial’ was one that resonated in France, where aménagement du territoire was a long-standing
approach, as well as the Netherlands, but me with resistance elsewhere as a result of which it polarised opinion. While
progress has since been made on pinning-down what is meant by the term, there are still conflicting views on what territorial
comprises.
As explained in the Commission Green Paper (2008: 3), territorial cohesion is largely about harmonious spatial development:
the concept ‘builds bridges between economic effectiveness, social cohesion and ecological balance, putting sustainable
development at the heart of policy design’. It is to some extent about spatial planning on a continental scale, paying attention
to problems like congestion, remoteness, connections between regions and the advantages and drawbacks of urbanisation.
But it also concerns the governance arrangements that are needed to enhance co-operation between regions. Drawing
parallels with the equally slippery notion of the European social model, Faludi (2007: 570) argues that territorial cohesion ‘is
thus an umbrella concept’ and he notes that it has multiple goals that are not easily reconciled. These include equity and
solidarity, sustainable development, competitiveness and good governance – not an easy cocktail to mix.
Several core questions arise in implementing a territorial approach, in particular:
• First, what is the logic of policy intervention that characterises a territorial approach?
• A second issue is how the orientations and goals of the Europe 2020 strategy should link to the approach and whether
there are incompatibilities that crate difficulties for implementation
• Are there, third, distinctive policy instruments that should be favoured?
• Fourth, what models of governance have the potential to deliver development that follows a territorial model as oppose
to alternatives?
• What obligations and expectations should fall on different actors in a multi-level governance system, and how do they
differ from other approaches to development?
The following sections elaborate these questions to provide a basis for the roundtable discussion.
The logic of territorial intervention
Cohesion policy follows different forms of intervention logic within the EU at present. As a forthcoming study for DG Regio48
shows, several distinctive approaches to development can be identified among the regions or Member States. The logic of
policy interventions reflects a variety of factors, prominent among which are:
• The strategic goals behind the programmes and the broad thrust of the policy approach
• The broad mechanisms deployed to achieve these goals
• The nature of the governance arrangements designed to oversee and implement policy, including the balance between
the territorial level and other actors.
• Political accommodations that both reflect the balance of power in setting priorities and shaping interventions, but also
the strength of commitments to outcomes
In a territorial logic, the emphasis will tend to be on interventions that are placed-based. However, any territorial development
strategy will be affected by actions taken at a variety of levels, so that the approach also has to take into account other
policies that impinge on development. This entails the establishment of means of integrating policies that emanate from
different levels of government as well as reconciliation of policies that (whether only potentially or actually) pull in different
directions. Two forms of coordination are needed: horizontal which concerns how interactions between bodies at the same
spatial level are mediated; and vertical which relates to relationships between the territorial level on which the development
is focused and higher or lower geographical areas.
The optimal balance between bottom-up initiative and top-down steering is bound to be tricky in a territorial approach.
Several considerations have to be taken into account. A strong presumption is that local actors will know best what is needed
and will be able to develop projects that overcome development bottlenecks that would be less visible to outsiders. Local
48 Study on the impact of the Single Market on Cohesion: Implications for Cohesion Policy, Growth and Competitiveness (CCIN 2010CE16BAT006)
80
actors will also be better placed to mobilise support from citizens, albeit with the possible drawback that what is locally
popular may not be what is strategically optimal. The extreme form of this is ‘capture’ by local interests motivated by rent-
seeking in what amounts to clientilism. A related risk is that the strategic investments that might be most transformative in the
long-run would be neglected at the expense of bottom-up projects with more immediate pay-off, especially if they are
associated with electoral politics. Moreover, local actors will tend to be less concerned about spillover effects on other
territories.
Europe 2020 as a backdrop
To the extent that Europe 2020 has emerged as the core ‘narrative’ for EU socio-economic governance, it sets over-arching
development goals. The headline targets, in particular, imply national or even EU-wide action, but do not necessarily have
much resonance for the territorial or regional level. Similarly, the seven flagship initiatives (FI) pay only limited heed to
cohesion, and the predominant direction of flow seems to be from Cohesion policy to 2020, rather than from 2020 to
cohesion outcomes. This raises tricky issues for the territorial approach and how to assure its coherence with other policy
processes.
In making the case for the Europe 2020 strategy, the Commission (2010) spells out a range of ‘inclusion’ challenges. These
can be split into four main classes:
• Making full use of labour potential, an orientation that is directly linked to the ‘grand challenges’ of adapting to the
ageing of the population and intensifying global competition.
• Combating poverty and its consequences
• Advancing social inclusion, notably by paying greater attention to opportunities and obligations over the life-cycle
• Ensuring territorial cohesion in the sense of preventing or reducing the extent of regional disparities
The first and second are close to the World Bank concept of inclusive growth, while the third and, to a greater degree, the
fourth represent more distinctive EU priorities.
An important strand of any inclusive strategy is activation – most obviously of the economically inactive of working-age,
although it could just as readily be applied to other factors of production. It is self-evident that an economy which cannot
make optimal use of its resources will tend to under-perform, but a further concern is that it will be more at risk of
macroeconomic imbalances and volatility.Meaning and role of functional regions.
Where policy objectives are broadly consistent, few complications should arise. The earmarking under the Lisbon strategy
has shown a considerable amount of common-ground between cohesion aims and EU wide goals. However, there are likely
to be significant areas of policy-making in which a territorial preference either adds little to the EU-wide effort or, in more
extreme cases, contradicts it. A number of solutions can be envisaged:
• Explicit ear-marking of cohesion spending, as under the Lisbon strategy, is a first. However, it is important to note that
the breadth of Europe 2020 could mean several categories of ear-marking, embracing employment, competitiveness,
environmental sustainability and research/innovation. The question then is whether the room for territorial manoeuvre
would be so constrained as to be derisory – in which case the territoriality of the approach would be illusory.
• Second, incorporating all or some of the headline targets and the range of measures under the FIs into the territorial
strategy. This could be a more promising route provided that there is sufficient flexibility to adapt to regional
circumstances. For example, many territories and/or regions eligible for Cohesion policy funding would be expected to
be quite distant from key targets (such as the employment rate or R&D spending as a percentage of GDP), so that
credible intermediate targets would need to be established. Nevertheless, a modified 2020 programme could be
envisaged as a means of orientating the territorial approach.
• Third, and more contentiously, there could be resort to conditionality.
Priorities and instruments
A focus for policy that is territorial in the two senses of making best use of local assets and ensuring that cross-border
spillovers are optimised implies certain priorities that have normative content and, in turn, will influence how instruments are
chosen and configured. Agglomeration, for instance as advocated in the 2009 World Development Report, might be seen as
a desirable orientation for economic development, but may be more difficult to reconcile with the cohesion orientation central
to the EU’s objectives. This is partly because cohesion, as understood in Europe, means something more than economic
development, embracing stability of communities and, to some extent, a jobs-to-people philosophy rather than a relentless
stress on efficiency and growth objectives.
It is, therefore, a moot point whether a spatial strategy that promotes agglomeration is compatible (or could be rendered
compatible) with the inclusive growth agenda of Europe 2020. There may be a linguistic discordance insofar as the World
81
Bank understanding of the term ‘inclusive’ focuses predominantly on access to employment and how to maximise the labour
input into economic activity.49
For the World Bank, mobilising the potential labour force not only increases the sustainable growth rate by making for a more
balanced pattern of growth, but also facilitates poverty reduction (Commission on Growth and Development, 2008). While the
employment rate is also central to the EU approach, the achievement of social and territorial cohesion is stressed. It is the
pathway to inclusion/inclusive that has to examined and, in particular, whether the focus should be on spreading or
concentrating jobs.
The EU is a natural laboratory for regional development insofar as there is an abundance of approaches and experience of
what does and (too often neglected) does not work. Different local development methodologies can be identified and can, in
turn, flesh out the forms of intervention logic that offer the most promise. Telegraphically, they include:
• Clustering or other means of capitalising on niche markets
• Connecting the territory
• Transformation of specialisation
• Social capital building and institutional reform
• Human capital enhancement
• Inward investment
• Fostering the attractiveness of the territory
Governance framework
Multi-level governance originates from ideas about the balance between governments operating at different geographical
levels, but a broader conception takes into account other stakeholders who contribute to processes of economic
development. It is an open question whether MLG also implies some form of hierarchy, although past practice does suggest
at least elements of top-down control. The territorial approach implies a richer form of governance than more top-down
development policies, since it seeks to mobilise the local level alongside other levels, but the corollary is likely to be more
complexity. There are evident challenges in making the resulting, more dense, institutional fabric function effectively. In part it
is a question of efficiency of decision-making in a context in which there may be more voices and more perspectives to take
into account, prompting the question of how to avoid a cacophony.
A development strategy encompasses a series of public functions and an issue for any approach will be how these functions
are fulfilled and assigned between different policy-makers within a multi-level governance framework Different line ministries
at national level have to cohere with local actors, a challenge that will entail common understanding of concepts, as well as
priorities and operational issues. Apart from the design, funding and implementation of programmes, other functions that
have to be accommodated include modalities of consultation and revision of policy programmes, means of monitoring and
evaluation, and channels for the exercise of accountability and communication.
Delivery calls for thought about which agencies are held responsible for different aspects of development. It would be
expected that democratically elected and accountable bodies should have an influential role in decisions that affect well-
being and the distributions of costs and benefits. But efficiency criteria might justify resort to executive agencies of different
sorts for other functions. Some insights might be developed from the notion of Functional, Overlapping, Competing
Jurisdictions (FOCJ) developed by Frey (2009) in which the institutional mix reflects the diverse strengths and weaknesses
of different institutional forms, but also highlights the role of territory in government (and, by implication, governance). Frey
argues that more effective governance can be achieved by allowing different organizational forms to be established, and for
those best-suited to the tasks at hand to compete for governance space, but with the impetus coming from the bottom
upwards.
Adapting or changing programmes is a tricky issue when a territory is reliant on external funding. Having some flexibility in
programmes is manifestly desirable, especially when circumstances change or there are grounds for fresh thinking. But
alterations have to be justified and may be subject to approval from the funding body. How to build in appropriate
consultation procedures, constraints and means of resolving possible conflicts consequently has to be part of the
governance equation. In part, this is about what might be called the risk-trust balance.
Who does what in a territorial approach?
One of the expected advantages is in engaging and mobilising local interests. To this extent, the territorial dimension can be
seen as a substantial deepening of the partnership principle. Well-applied, it should enable local actors to make a much
more strategic contribution to the direction of development, rather than being mainly the source of individual project
49 For an overview of this approach, see a briefing paper by Ianchovichina and Lundstrom (2009).
82
proposals. A more strategic role for local actors implies some redefinition of the role of the Member State and Community
level actors. But it also calls for some broadening of the input of local actors and, where the necessary skills or experience
are insufficient, for the provision of appropriate advice and support.
Responsibility for decision-making in the different spheres of development policy needs to be clearly articulated. If there are
more centres of power in a territorial approach and more interest to accommodate, the risks of confusion or of conflict are
likely to be greater. It follows that an adequate demarcation of these roles and assignments should be put in place.
Networking across regional boundaries has been shown to be a valuable means of over-coming barriers to enhanced
research capability. For a minority of relatively well-connected regions eligible for Cohesion policy support, collaboration
between their researchers based in universities and research institutes and colleagues in research intensive regions has had
beneficial outcomes (Varga et al., 2010). Within the Innovation Union FI, there is a push for more effective integration of
innovation into development policy. This suggests that an important role should be assigned to non-governmental actors in
advancing the R+D+I agenda, and can be portrayed as consistent with space of flows concepts.
Some questions for the roundtable
Drawing on the foregoing discussion and the general orientations provided by the seminar organisers, a number of key
questions can be put forward. These are presented in this section as elaborations and extensions of the ‘issues to be
discussed’ set out in the seminar programme for session 3. The original questions are in bold print. They are as follows:
What are the best practices applied by different national and local authorities in their conduct of the territorially
oriented development policy?
o Are there adequate means of sharing the information and is ‘policy transfer’ sufficiently encouraged?
o Where capacity is lacking, how can it be enhanced and which facets of governance tend to need the most
support in this regard?
o Should the EU contribution to territorial approaches to Coheion policy do more to encourage experimentation
and to derive lessons about what does and does not work well?
o Is the risk/trust balance in policy initiatives appropriate, especially from the perspective of policy innovation
rather than financial control?
How to ensure the strategic and operational coordination of policy design and delivery?
o Where does the balance of decision-making power lie?
o What needs to be coordinated and how?
o In particular, how can the legitimate interests of those outside the territory be accommodated when local priorities
are uppermost in decision-making?
What are the practical territorial implications for “place-based” policies and how can this approach be used to
enhance local capabilities and to ensure the fostering of long-term institutional capacity-building?
o Who does what and how are interventions legitimated?
o To what degree should an effective territorial approach involve agencies that are not directly subject to
democratic controls?
o What governance mechanisms can help to minimise rent-seeking or clientilst behaviour when local actors are
more heaviliy involved?
o Are there forms of conditionality that are more likely to promote good policy inputs and better outcomes?
How to achieve proper balance between the top-down approach on one hand (Europe 2020) and the bottom-up
approach on the other (territorial potentials)?
o Do the top-down imperatives of Europe 2020 over-ride, constrain, or weaken the place-based elements of a
territorial cohesion strategy?
o In practice, are Europe 2020 objectives often at odds with a territorial approach (for example by favouring
agglomeration and hoping for trickle-down to less competitive regions) or are they more often mutually
reinforcing?
o Where the two are at risk of being in conflict, how should incompatible objectives be resolved?
How can development policies (including regional innovation policies) increase the economic and
technological performance of particular countries and country groupings in the competitive global economy so
unevenly affected by the recent financial crisis?
83
o What is territorial capital and what facets of it should be promoted in a territorial approach?
o Cross-border connections have traditionally been viewed as an issue about how to internalise spillovers,
especially those resulting from closer integration in Europe. Particularly for research and innovation, should a
territorial approach involve more emphasis on flows of knowledge?
o How can EU research policy (predicated on excellence) and Cohesion policy (with social and territorial targets)
be integrated?
o What should the ‘division of labour’ be in R+D+I, in terms of human capital, research infrastructures and basic
knowledge generation/scientific advancement?
References
Commission on Growth and Development (2008) Growth Report: Strategies for Sustained Growth and Inclusive
Development, Washington: The World Bank
Corley-Coulibaly, M. and Ernst, E., ‘Promoting employment recovery while meeting fiscal goals’, International Institute for
Labour Studies, Geneva, 2010.
European Commission (2008) ‘Green paper on territorial cohesion: turning territorial diversity into strength’ COM(2008) 616
final, Brussels 6.10.2008
European Commission (2010) Europe 2020: a strategy for smart, sustainable and inclusive growth, COM(2010) 2020,
Brussels, 3.3.2010
Faludi, A. (2007) ‘Territorial cohesion policy and the European model of society’ European Planning Studies 15, 567-83
Faludi, A. (2009) ‘Territorial Cohesion under the Looking Glass Synthesis paper about the history of the concept and policy
background to territorial cohesion
Frey, B. (2009) ‘A new concept of European Federalism’ LSE ‘Europe in Question’ Discussion Paper no. 03/2009
Ianchovichina, E. and Lundstrom, S. with Garrido, L. (2009) ‘What is inclusive growth?’
http://siteresources.worldbank.org/INTDEBTDEPT/Resources/468980-1218567884549/WhatIsInclusiveGrowth20081230.pdf
84
85
Andrés Rodríguez-Pose
Spatially-blind strategies as place-based development strategies
1. Introduction
One of the important paradoxes we have witnessed over the last two and a half decades in the world of economic
development has been the contrasting evolution between theory and policy implementation. On the one hand, economic
development and growth theories, after decades of relative torpor, have made a significant leap forward. Starting with the
endogenous growth theory, which endogenised technology and labour (Romer 1986; Lucas 1988; Rebelo 1991), followed by
the new economic geography, which has highlighted the role of agglomeration, externalities and transportation costs
(Krugman, 1991), and ending with new developments in institutional economics which have brought governance and
institutional factors to the fore (Rodrik et al., 2006; Acemoglu and Johnson, 2006a and 2006b), recent progress in
development theory has substantially changed our perception of the factors which contribute to development – and the way
they contribute to change – and brought about important policy implications. On the other hand, those responsible for
development policies, albeit aware of the changes in economic theory, have been slow to react. Despite some progressive
adaptations, development strategies and policies across the world have remained firmly anchored in top-down, centrally
planned, often supply-driven, technocratic policies, whose impact on economic development has been, more often than not,
questionable (Rodriguez-Pose, 2011). In the face of rapid and profound theoretical change, it can be said that development
policy has a strangely remained still.
Fortunately, it all seems to be changing in the last two years. Since 2009 there has been a reaction led by international
organisations trying to incorporate this theoretical progress into policy practice. Pushed by the frequent failure of traditional
development policies, international organization and governments are increasingly waking up to this anachronistic situation
and promoting a debate about where development intervention should go. This policy reaction has been marked by the
almost simultaneous publication of five major reports on economic development since 2009. These reports are, however, far
from unanimous in their perception of changes in development theory and, especially on the policy implications of recent
theoretical progress. Two different camps have emerged (Barca et al, 2012). On one side, the 2009 World Bank World
Development Report is the main proponent of what are becoming known as spatiallyblind policies. Spatially-blind policies
posit development intervention regardless of the local specific conditions. This implies “policies that are designed without
explicit consideration to space” (World Bank 2009: 24). The lack of spatial consideration and the focus on efficiency in order
to improve the conditions of individuals wherever they live and work has often led to equating spatially-blind policies to
people-based policies: policies aimed at improving the opportunities and conditions of individuals, regardless of where they
live (World Bank, 2009).
On the opposite side a broader, but not necessarily more influential, camp has emerged: the place-based policies camp. At
least four major reports by international organisations are included in this camp: the EU sponsored independent Barca report
(Barca, 2009), two OECD reports (OECD 2009a and 2009b), and the local development report by the Corporación Andina de
Fomento (2010). In addition to these one off reports, a number of periodic studies fundamentally by the European
Commission (2010) and the OECD (2009c, 2011) can also be placed firmly on this side of the development fence. In
essence, place-based approaches postulate that context makes an important difference for development and that market-
and institutional-failures limit the economic potential of different territories in different ways.
The debate between spatially-blind and place-based policies has contributed to awaken and dynamise the policy discussion
on development intervention. It has raised questions about where and how to intervene and has provided a new impetus for
development policies. But, for all its benefits, I will argue in this policy paper that it is an artificial debate. Spatially-blind vs
place-based development policies is a false dichotomy, which, despite its usefulness in attracting attention to the topic, is
bound to die out. The reason for this is, as I will argue, that there is no real difference between spatially-blind and place-
based policies, became spatially-blind intervention is, indeed, as placed-based as placed-based intervention. What are being
proposed as spatially-blind policies are more likely to be effective in certain types of territories (large urban areas) than in
others (intermediate and peripheral regions). Hence, in order to maximise the potential aggregate development returns,
spatially-blind policies will need to be complemented by other type of place-based policies specifically tailored to the needs of
what are very diverse institutional environments.
2. The assumptions of spatially-blind policies
The World Bank World Development Report 2009 has created an enormous stir by proposing the idea of spatially-blind
approaches to economic development. This idea is appealing and extremely well presented in the 2009 Report.
Development intervention is packaged as development in 3-D (density, distance, division) (World Bank, 2009). Development
in 3-D provides a series of policy intervention guidelines for development problems which can be applied to any territory,
regardless of its initial socioeconomic conditions and independent of whether the territory is located in the core or in the
periphery, both within countries and at the world level. Overall, development in 3-D allows for a relatively simple
understanding of what are complex problems and for the adoption of viable and relatively easy to implement policies, while,
at the same time, permitting a multitude of possible policy solutions. In this respect, the World Bank (2009) World
Development Report makes a substantial contribution to the debate on what sort of policies are needed in order to generate
86
economic development and contributes to make the so-called spatially-blind policies extremely appealing. Not only are
development diagnoses and policy interventions relatively straight forward, they can also be applied to virtually any territory,
regardless of initial conditions.
However, in order to reach the conclusions that spatially-blind policies are the way forward, the World Bank (2009) World
Development Report makes a number of assumptions which, little by little, strip development intervention from its
territoriality, to the extent of ultimately making space and place irrelevant. By assuming that a) there is a Rostovian
development trajectory that all territories must follow; that b) agglomeration is always beneficial for growth; that c) migration
is costless; and, last but not least; that d) institutions can be treated as exogenous factors, the Report may be generating an
artificial disconnect between policies and territories, which artificially leads to a lack of territorial path dependency of
development intervention. But as the disconnect between development policies and territories is assumed, rather than
proven, the spatial-blindness of intervention may simply be a mere illusion. As a consequence, the effectiveness of spatially-
blind intervention may be undermined for the simple reason that the assumptions underlying the types of intervention
considered in a development in 3-D framework may work in certain places and not in others.
Let me take these assumptions in turn. The first assumption is the Rostovian (Rostow, 1959) idea that all territories sooner or
later follow the same stages of development. While it is possibly true that certain basic conditions are needed for any territory
to take off, the idea that 21st century Africa will follow more or less the same development stages as 19th-century Europe is,
to say the least, questionable (Peck and Sheppard, 2010). Some similarities may indeed exist, but the differences are
equally as powerful, if not more. Europe built its industrial revolution on what can be considered, by today’s African
standards, moderate levels of population growth, long-term migration trends and in a context where urban systems were
reasonably developed. In addition, Europe had both a migration safety valve in colonies and former colonies, as well as,
through its domination of the world, easy access to raw materials and, in some cases, either captive or semi-captive markets.
Most African countries cannot afford these luxuries nowadays. Population growth and migration are taking place in Africa at
a pace never seen before in history. The consequence is rapid and disorderly urbanisation, with the emergence of large and
persistent pockets of poverty in urban areas. Legal migration to developed countries encounters enormous legal barriers and
rather than controlling markets, these countries are, more frequently than not, at their mercy. Hence, the presence of similar
stages of development in different contexts and in different time periods may be nothing more than pure coincidence.
Different territories may follow different development paths depending on a combination of time-space factors which are
impossible to ignore.
A second assumption is linked to the idea that agglomeration is beneficial for economic growth and that the growth
generated by greater agglomeration will eventually spread out, first to neighbouring, and later to far away areas. The
evidence in favour of the former fact is increasingly strong. Agglomerations of economic actors generate all type of
externalities, from Jacobs-type diversity externalities to MAR (Marshall-Arrows- Romer) externalities, including urbanisation
externalities (Glaeser et al.,1992; Duranton and Puga, 2001), and related-variety type of externalities (Frenken et al, 2007).
Innovation and human capital come together and the space-boundedness of geographical spillovers implies that they tend to
reinforce one another in large urban agglomerations (Rodríguez-Pose and Crescenzi, 2008a). Backward and forward
linkages among firms and other economic actors are also facilitated by geographical proximity (Krugman, 1991) and, above
all, agglomeration encourages face-to-face interaction, which is at the base of knowledge exchange, innovation and greater
economic activity (Storper and Venables, 2004).
The Hirschmanian assumption that growth will eventually trickle down from development poles to surrounding areas
(Hirschman, 1958) is, however, more questionable. Most evidence points in the opposite direction, highlighting that
backwash effects prevail over spread effects (Myrdal, 1957; McCann, 2008). The benefits of geographical proximity and the
interaction in large city-regions (Scott, 2001; Storper and Venables, 2004) tend to limit the diffusion of development. There is
increasingly strong evidence about the spatial-boundedness of the transmission of the knowledge necessary for greater
growth (Jaffe et al., 1993; Howells, 2002). Numerous authors have found very little proof of a costless and easy diffusion of
innovation from dynamic centres to neighbouring areas. Indeed, the opposite seems to be the norm. There is multiple
evidence of the presence of rather steep distance-decay effects in the diffusion of innovation, both in Europe (Moreno et al.,
2005; Rodríguez-Pose and Crescenzi, 2008b) and in the US (Anselin et al. 1997; Varga 2000; Sonn and Storper 2008). But
this process is not confined to the developed world. In a country like China it gets to extremes, as knowledge spillovers from
the most dynamic areas – Beijing, Shanghai and Guandong – are negative and significant. This implies that these areas
keep on sucking knowledge and innovation from neighbouring provinces, with no sign of any spread effect (Crescenzi et al.,
2012). Hence, assuming that spread effects would eventually overtake backwash effects is, at least, doubtful. Existing
evidence, by and large, points in the direction that dynamic economic poles absorb resources from surrounding areas, with
movements in an opposite direction more difficult to identify.
When spread effects take place it is often likely to happen through so called global pipelines (Bathelt et al., 2004), that is
connecting dynamic poles at large geographical distances. Hence, rather than spreading out evenly towards neighbouring
areas, growth and development is likely to make leaps connecting dynamic poles around the world, creating a sort of world
city network (Taylor and Walker, 2001) or ‘archipelago’ economy (Veltz, 1996).
The third assumption which deserves greater attention is that migration is costless. The spatially-blind development
approach is built on the idea that individuals can move freely from one place to another at no or very little cost. But, first,
87
significant political barriers to migration remain and new barriers have erected in recent times (Peck and Sheppard, 2010).
Second, migration is far from costless. It generally entails significant economic, social, and political costs, both for the
individuals involved, who often have to leave close-knit family ties and wander into the unknown, as well as for the regions of
origin and destination (Portes, 2008). The former lose what often are their more qualified and dynamic individuals, while the
latter often incur serious adaptation costs.
Finally, the World Bank World Development report (2009) tends to follow a substantial part of the economics literature in
adopting a minimalist approach to institutions and equating them to just formal institutions – and fundamentally the rule of
law and the protection of private assets, political and governance institutions, or the protection of human rights (North 1990;
Rodrik 1999; Djankov et al 2003; Rodrik, Subramanian, and Trebbi 2004; Acemoglu et al. 2004; Tabellini 2005; Acemoglu
and Johnson, 2006b). However, an excessive reliance on formal institutions also has its downsides. It can result in high
transactions costs, which rise as a consequence of an increasingly dense and tangled web of formal rules and structures. It
may also lead to situations of lack of commitment and coordination complex developmental processes, to expanded
bureaucracies and regulations and, in certain areas, to the very outcome they try to avoid: elite capture (Farole et al., 2011).
Moreover, by equating institutions to just formal institutions, which are accessible everywhere at little or no cost, spatially-
blind approaches are making institutions exogenous. It is clear that the presence of adequate formal institutions makes a
world of difference for economic development and that their absence has a detrimental effect on growth. But institutions are
much more than formal institutions. Basic informal institutions, such as culture, history, religion, identity and the like, as well
as trust (Fukuyama 1995; Portes 1998; Portes and Landolt, 2000; Hardin, 2002; Uslaner 2002) and social capital (Coleman,
1988; Putnam, 1993) – to highlight but a few – play a non negligible role on the potential of any territory to develop economic
activity.
The combination of formal and informal institutions in space results in different institutional set ups and ways in which
institutions operate and function in every territory, creating an institutional environment which is unique to every city, locality,
region, or country. In particular, it is the informal institutions which tend to shape this unique environment. In many parts of
the world, and in particular in countries which are members of the European Union, which have to fulfil the so-called ácquis
communautaire,50 the basic formal institutions on which development can be built are already in place. The main problem lies
with the functioning of community or its informal institutions. Hence, if, for example, south-eastern Bulgaria or the Romanian
regional Moldova lag behind, it may not just a question of effective endowments, but also, to a large extent, of inadequate
informal institutions.
Institutions are thus endogenous and not exogenous and an inadequate institutional environment, which may have been
embedded in territories for centuries (Putnam, 1993; Duranton et al, 2009) will end up filtering the effectiveness of any
spatially-blind policies.
3. Spatially-blind policies as place-based policies
Putting those four assumptions together means that the spatially-blind approach has de facto tried to eliminate all place
specific characteristics from intervention and stripped context from the development equation. Considering agglomeration
and institutions as exogenous factors, together with assuming that migration is costless and that all territories follow the
same stages of development may, indeed, mean that the same sort of development policy guidelines will work everywhere.
Unfortunately, this is most likely not to be the case. A spatially-blind approach thus work best in those areas where these four
assumptions are most likely to work: territories which are already well developed and therefore do not have to burn
development stages in diverse time-space contexts; territories which do not have to depend on others for the generation of
innovation and economic activity; territories where the benefits of migration clearly outstrip its potential costs; and, finally,
territories with a more or less adequate institutional environment. These territories exist and are normally called by various
names, but could be equated to dynamic metropoli. In this territories, the spatially-blind formula of spatially-blind institutions
solution for one-dimensional problems, connective infrastructure for two-dimensional problems, plus spatially-targeted
intervention for three-dimensional problems (World Bank 2009, 23-24) may possibly work extremely well.
However, not all territories follow the same stages to development, not all of them are large metropoli, migration is often very
costly for all those involved and institutions – and, especially, informal institutions – vary significantly, as frequently stressed
in the Barca (2009), the OECD (2009a, 2009b) and the Corporación Andina de Fomento (2010) reports, across territories.
Hence, implementing a spatially-blind solution, will only partially address the development problems the world faces and
would lead to too rigid development solutions in what are widely different contexts (Rodríguez-Pose, 2011) . It will leave
aside large swathes of territories mainly made of intermediate and peripheral regions. It will also leave a considerable
amount of the people living in each country out of the equation, undermining the plight of spatially-blind policies to be people-
based.
It can therefore be said that spatially-blind approaches to development are just another form of place-based policies. But a
type of place-based policies which benefits fundamentally one type of places: core, often already dynamic spaces, where
economic activity agglomerates, which act as a magnet for people and jobs, and which tend to have better institutional
environments than surrounding areas.
50 Candidate countries to join the EU have to adopt and enforce the cumulative body of EU legislation, including its objectives, basic rules and policies.
88
This sort of approach would have work if spread effects became prevalent. However, as argued earlier, this is rarely the
case. Hence, leaving aside a whole raft of territories makes spatially-blind approaches a partial territorial form of
development intervention, which favours the development of the economic potential of certain areas, but not of others.
Hence, spatially-blind approaches, far from maximising the potential returns of development intervention, may undermine
long-term aggregate growth by leaving significant growth potential untapped, while, at the same time, promoting greater
territorial exclusion and inequality.
Fully fledged place-based approaches thus have the great advantage that they will tap on development potential wherever it
exist, taking into account the idiosyncrasy of every space. This implies mobilising socioeconomic development wherever it
can be found, regardless of whether we are talking about core or peripheral areas, urban and rural areas, diversified or more
specialised territories. By tapping development potential wherever it exists, it is more likely that place-based approaches will
eventually increase overall aggregate development and lead to greater level of satisfaction by the population.
The discussion should thus not be about whether we should follow spatially-blind or place-based policies in order to
maximize the returns of development intervention, but about how to integrate the many interesting and valid proposals of
spatially-blind approaches in a place-based intervention framework.
Spatially-blind policies are thus not necessarily more people-based policies than placebased policies. They are a type of
place-based policies which will ultimately be more beneficial for a significant share of large city dwellers, but not necessarily
for the rest of the population. We therefore need people-based development policies which, without rejecting their needs for
cross-fertilisation and integration with what is known as a spatially-blind approach, put individuals at the centre.
Reference list
Acemoglu, D. and Johnson, S,H. (2006a) “De facto political power and institutional persistence,” American Economic
Association Papers and ProceedingsReview 96(2): 325-330.
Acemoglu, D. and Johnson, S,H. (2006b) "Unbundling institutions," Journal of Political Economy, 113(5): 949-995.
Acemoglu, D, Johnson, S.H. and Robinson, J A. (2004) "Institutions as the fundamenta
cause of long-run growth," NBER Working Paper No. W10481, Available at SSRN: http://ssrn.com/abstract=541706
Anselin, L., Varga, A., Acs, Z. (1997) Local Geographic Spillovers between University Research and High Technology
Innovations. Journal of Urban Economics 42: 422- 448.
Barca, F. (2009) An Agenda for A Reformed Cohesion Policy: A Place-Based Approach to Meeting European Union
Challenges and Expectations, Independent Report Prepared at the Request of the European Commissioner for
Regional Policy, Danuta Hübner, European Commission, Brussels
Bathelt H., Malmberg A. & Maskell P. (2004) Clusters and knowledge: local buzz, global pipelines and the process of
knowledge creation Progress in Human Geography, 28(1): 31-56.
Corporación Andina de Fomento. 2010. Desarrollo Local: Hacia un Nuevo Protagonismo de las Ciudades y Regiones.
Caracas: Corporación Andina de Fomento.
Coleman, J.S. (1988) "Social Capital in the Creation of Human Capital," American Journal of Sociology, Supplement 94:
S95-S120.
Djankov S., Glaeser E., La Porta R., Lopez-de-Silanes F., Shleifer A. (2003) “The new comparative economics” Journal of
Comparative Economics 31 (4): 595-619.
Duranton, G. and Puga, D. (2001) Nursery cities: Urban diversity, process innovation, and the life cycle of products.
American Economic Review, 91: 1454–1477.
Duranton, G., Rodríguez-Pose, A. and Sandall, R. (2009), Family Types and the Persistence of Regional Disparities in
Europe. Economic Geography, 85: 23–47
European Commission. 2010. Investing in Europe: Fifth Cohesion Report on Economic, Social and Territorial Cohesion.
Brussels: European Commission.
Farole, T., Rodríguez-Pose, A. and Storper, M. (2011) Human geography and the institutions that underlie economic growth.
Progress in Human Geography, 35 (1). pp. 58-80.
Frenken, K., Van Oort, F. and Verburg, T. (2007) Related variety, unrelated variety and regional economic growth. Regional
Studies 41(5):685–697
Fukuyama, F. (1995) Trust: the social virtues and the creation of prosperity, New York: Free Press.
Hardin, R. (2002) Trust and Trustworthiness. New York, NY: Russell Sage Foundation.
Hirschmann A. O. (1958), The Strategy of Economic Development, New Haven: Yale University Press.
Howells, J. (2002) Tacit knowledge, innovation and economic geography Urban Studies 39(5-6), 871-884.
Jaffe, A., Trajtenberg M. and Henderson R. (1993) Geographic localization of knowledge spillovers as evidenced by patent
citations. Quarterly Journal of Economics 108(3): 577-598
Krugman, P. (1991) Increasing returns and economic geography. Journal of Political Economy, 99: 484-499.
Lucas R. (1988) On the mechanics of Economic Development, Journal of Monetary Economics, 22(1): 3-42.
89
McCann, P. (2008) Globalization and economic geography: the world is curved, not flat. Cambridge Journal of Regions,
Economy and Society, 1:351-370.
Moreno, R., Paci, R., Usai, S. (2005) Spatial spillovers and innovation activity in European regions. Environment and
Planning A, 37: 1793–1812.
Myrdal G. (1957), Economic theory and underdeveloped regions, London: Hutchinson.
North, D.C. (1990) Institutions, institutional change and economic performance, New York: Cambridge University Press.
OECD (2009a) How Regions Grow, Paris: Organisation for Economic Growth and Development.
OECD (2009b) Regions Matter: Economic Recovery, Innovation and Sustainable Growth, Paris: Organisation for Economic
Growth and Development.
OECD (2009c) Regions at a Glance, Paris: Organisation for Economic Cooperation and Development.
OECD (2011) Regions at a Glance, Paris: Organisation for Economic Cooperation and Development.
Peck, J. and Sheppard, E. (2010), Worlds Apart? Engaging with the World Development Report 2009: Reshaping Economic
Geography. Economic Geography, 86: 331–340.
Portes, A. (1978) Migration and Underdevelopment. Politics and Society 8(1):1–48
Portes, A. (1998) Social capital: Its origins and applications in modern sociology, Annual Review Sociology, 1998: 24, 1-24.
Portes, A. and Landolt, P. (2000) Social capital: promise and pitfalls of its role in development, Journal of Latin American
Studies 32: 529–47.
Putnam, R.D. (1993) Making democracy work: civic traditions in modern Italy, Princeton NJ: Princeton University Press.
Rebelo, S. T. (1991) Long-Run Policy Analysis and Long-Run Growth, Journal of
Political Economy, 99(3): 500–521.
Rodríguez-Pose, A. (2010), Economic Geographers and the Limelight: Institutions and Policy in the World Development
Report 2009. Economic Geography, 86: 361–370.
Rodríguez-Pose, A. (2011) Economists as geographers and geographers as something else: distance and policy in spatial
research. Journal of Economic Geography 11:347-356.
Rodríguez-Pose, A. and Crescenzi (2008a) Mountains in a flat world: why proximity still matters for the location of economic
activity. Cambridge Journal of Regions, Economy and Society 1:371-388.
Rodríguez-Pose, A. and Crescenzi, R. (2008b) R&D, spillovers, innovation systems and the genesis of regional growth in
Europe. Regional Studies 4: 51-67.
Rodrik, D. (1999) Where did all the growth go? external shocks, social conflict and growth collapses, Journal of Economic
Growth 4 (4): 385-412.
Rodrik, D., Subramanian, A., and Trebbi, F. (2004) Institutions rule: the primacy of institutions over geography and
integration in economic development, Journal of Economic Growth, 9(2):131-165.
Romer, P.M. (1986) Increasing Returns and Long-Run Growth, Journal of Political Economy, 94(5) 1002-1037.
Rostow, W.W. (1959) The Stages of Economic Growth, Economic History Review 12(1): 1–17.
Scott, A.J. (ed.) Global city-regions: trends, theory, policy. Oxford: Oxford University Press.
Sonn, J. W. and Storper, M. (2008) The increasing importance of geographical proximity in technological innovation: an
analysis of U.S. patent citations, 1975-1997. Environment and Planning A, 40 1020-1039.
Storper, M. and Venables A.J. (2004) Buzz: face-to-face contact and the urban economy, Journal of Economic Geography,
4: 351-370.
Tabellini, G. (2005) "Culture and Institutions: economic development in the regions of Europe," Working Papers 292, IGIER
(Innocenzo Gasparini Institute for Economic Research), Bocconi University, June 2005.
Taylor, P. J. and Walker, D. R. F. (2001) World cities: a first multivariate analysis of their service complexes Urban Studies,
38: 23-47
Uslaner, E.M. (2002) The moral foundations of trust, New York: Cambridge University Press.
Varga, A. (2000) Local academic knowledge spillovers and the concentration of economic activity, Journal of Regional
Science 40: 289–309.
Veltz, P. (1996), Mondialisation, villes et territoires : l’économie d’Archipel, PUF.
World Bank. 2009. World Development Report 2009: Reshaping Economic Geography.
Washington, DC: World Bank.
90
91
Jiří Blažek
Balancing top-down and bottom-up approaches in the Czech Republic
Contemporary Europe is facing important challenges, so is the European Cohesion policy. Though European cohesion policy
is appreciated for significant achievements in boosting socioeconomic development in lagging regions as well as for its
contribution to stimulating growth in European most developed regions and for sharing best practices across European
territory and represents also a clear sign of European solidarity, it falls short on the number of important aspects such as:
• low efficiency and effectiveness
• insufficient focus of the policy
• large bureaucratic burden
• high share of irregularities.
Therefore, a need for a change is obvious. Appreciated should be the fact that serious discussion about the future focus and
design of EU cohesion policy has started already long ago, providing a wide space for discussion both among relevant actors
within particular countries as well as for discussion on European level. Consequently, large body on this topic already exists.
One of the proposals that gained significant support across Europe is proposal for much stronger thematic concentration of
European Cohesion policy. Therefore, this paper tries to offer some insights into how the issue of thematic concentration has
been so far approached in the Czech Republic during the preparation for the next programming period and what kind of
problems emerged when the thematic concentration has been attempted.
However, before moving on to the issue of thematic concentration I would like to elaborate on a relatively recent experience
(gained approx. over the last 10 years) with a pro-active bottom-up support of regional development strongly focused on
boosting of innovations in one of the Czech regions. The experience of this region has several implications for the issue of
thematic concentration as well.
I. Bottom-up approach to regional development support in South Moravia Region
Before focusing on this particular case study I would like to stress that in the Czech Republic there is only limited tradition
with using strategic/programming documents. This applies both to national and regional level of public administration. There
are many reasons for this, but according to my personal opinion, two reasons are of particular relevance. First, the Czech
public is generally sceptical about the relevance or added value of various studies, strategies and policies as they are rarely
implemented in practice. Secondly, I believe that important reason for down-playing the value of strategic documents is the
fact that any proper strategy in fact limits the space for discretion of decision-makers which they not exactly welcome.
In this context, it is not surprising, that the Czech national innovation policy can be considered to be just emerging and
developing under the contradictory process of institutional change-over related to the political, societal and political shake-up
after the collapse of Communism. This is even truer in the case of Czech regions which were (re)established only recently (in
2001) and which were at the beginning of their existence overwhelmed with basic tasks concerning infrastructure, education
and other spheres of public administration. Consequently, in the absence of a sophisticated national institutional support
framework for research, development and innovation, the self-governing regions (or, more precisely, at least some of them)
began to search for their own way to enhance their development and innovation potential.
Nevertheless, frequently, the regional innovation strategies are by Czech regions elaborated not due to strategic intent of the
regional decision-makers to enhance the economic and technological performance of the region, but rather to make use of
funding available and in the best case to gain access to advanced know-how. Therefore, in the Czech Republic, there is
general scepticism about the added value of a range of strategies and policies which is also related to a general frustration of
the Czechs with the politics, which is consistently proved by the opinion pools concerning the level of trust of various bodies
of Czech public administration (According to opinion pool agency STEM, in June 2011, only 16% of Czechs trusted the
Government and 23% trusted to the Parliament).
In this context, as a kind of surprise or even a miracle developed the situation in the South Moravia region.
In spite of the fact that South Moravian Region with the regional capital Brno (the second largest city and the second most
important academic centre in Czechia) ranks among the more developed regions of Czechia, it faces significant challenges
concerning its socioeconomic development. The region specializes, on the one hand, in traditional sectors such as
mechanical & electrical engineering and viticulture, but recently it has successfully developed various new activities including
biotechnology industries and the IT sector. The attractiveness of the regional capital has recently risen due to a significant
number of foreign investments (ABB, Celestica, Honeywell, IBM, Lufthansa, Siemens, Tyco Electronics, etc.).
Origins of regional innovation strategy (RIS) in the South Moravian Region date back to 2001, when the first generation of
RIS was prepared within the EU project InterpRISe on the basis of initiative of a narrow group of local professionals who
command the state-of-the-art know-how based especially on their work experience in abroad. The primary rationale for
elaboration of RIS was to switch from a non-sustainable exogenous development strategy aimed at creating jobs by
attracting foreign direct investments (FDIs) to a more endogenous approach. This policy reorientation received strong
92
political support from the newly constituted regional government. The main factors behind unusual political support were: the
high unemployment rate; the delocalization of the first large FDI plant in Czechia leaving more than 2000 unemployed
people; and the start of Lisbon Strategy debates.
The main output of the first generation of RIS was the establishment of the South Moravian Innovation Centre (JIC), which
became responsible for implementing this strategy. The second generation of RIS was prepared by JIC in 2005 as a
response to joining the EU and as a means for utilizing the opportunity to channel EU Structural Funds into innovation
support measures. Both generations of RIS were focused primarily on supporting start-ups. Therefore, one of the main
strategic objectives of the third generation of RIS, was extending the scope of support measures. This third generation of RIS
was adopted in 2009 and its preparation is presented below.
The role of leadership in negotiations concerning RIS3 in South Moravia
At the beginning of the drafting process for the new RIS, partnership consisting of representatives of the Regional
Government, the City of Brno, universities and intermediaries agreed on these goals:
• to expand interventions from start-up support to cluster development, technology transfer, talent formation &
attraction and to the internationalization of R&D&I actors;
• to prepare the region for the 2007-13 EU programming period to efficiently stream funds into the region since all
Operational Programmes relevant for R&D&I are implemented from the national level;
• to boost already existent partnerships by establishing permanent structures, such as the Steering Committee (political
group), the Coordinating Committee (expert group), and four thematic working groups.
After initial discussions within the above-mentioned structures, key industrial branches (mechanical engineering, ICT,
electronics, life-sciences) were identified by a desk research. Subsequently, extensive field research among companies and
research teams in the region was carried out focused on company strategy, its position in the market, R&D activities
including collaboration patterns and challenges concerning human resources. Importantly, a demand analysis was done to
test newly proposed support instruments. The survey was performed jointly by external consultants and by a representative
of an intermediary body (JIC) in order to start building a partnership.
The formal design of RIS3
RIS3 is traditionally structured (analysis, strategy, action plan and rules of implementation). The strategic section consists of
four priority axes based on the survey results (technology transfer, services for companies, human resources and
internationalization), which are further divided into strategic goals with proposed activities. The Action Plan consists of 27
projects each having its own time-schedule, financial sponsor and owner. These include the South Moravian Region, the City
of Brno, implementing agencies (intermediaries) such as South Moravian Innovation Centre (JIC), the South Moravian
Centre for International Mobility, universities or their departments (e.g. technology transfer offices) etc. In terms of “political
ownership”, the RIS is an official strategic document approved by both the South Moravian Region and by the City of Brno.
The presence of an Action Plan with thoroughly formulated projects (including responsibilities) has been one of the key
factors in the strategy’s approval and in its swift implementation.
Relevance of key theoretical concepts and progress in implementation
A deliberate effort has been made in RIS3 to reflect the state-of-the-art theoretical concepts for enhancing innovation
performance (esp. related variety, knowledge bases, distributed knowledge networks). In terms of concept related variety,
which stresses the role of learning among firms of related but not identical industrial branches, several projects can be
highlighted, such as innovation management training within a group of related companies, organizing brokerages of firms
which operate along sectoral overlaps or the targeted attraction of foreign investors. However, ample room for policy
improvement remains, since the effects of interventions motivated by the concept of related variety depend significantly on
proper analysis of the relatedness among particular companies. Such detailed analysis has not yet been performed.
As for analyzing RIS interventions in terms of differentiated knowledge bases a strong sectoral focus of public support via
RIS is apparent. Particular attention has been given to the life-sciences, which in South Moravia represent both tradition
(Brno is the place where Gregor Mendel formulated basic laws of genetics in the 19th century) and significant current
potential. Consequently, the biotech sector has received dedicated support, e.g. the establishment of a biotech incubator
which also provides consulting services, the organization of matchmaking events, etc. Recently, several activities have been
carried out in other key sectors, such as motivating ICT students to establish their own companies or setting up a research
competence centre in the traditional machine tools industry in order to un-lock the potential which has accumulated in this
region.
Likewise, several activities have been carried out to integrate regional knowledge institutions into globally-distributed
knowledge networks, such as a regional programme to attract foreign researchers or to support return of scientists and
technicians of Czech origin who work abroad, organizing brokerages to motivate companies and research teams to join
international projects and organizing international conferences. A positive example of these activities is a joint project, which
is already underway, to establish a clinical research centre with the American Mayo Clinic.
93
Concerning progress in the implementation of RIS in the South Moravian Region, it is difficult to talk about actual impacts,
but several outcomes and results are evident. So far, out of the 27 projects envisaged within the RIS3 Action Plan, 15
projects have been realised or are in the realisation phase, another nine projects are in the preparation phase and the
remaining three projects have not started yet. Specifically, in 2008, the Technology Incubator was opened and, in 2009, the
biotechnological incubator INBIT was opened. Altogether, at present, these two incubators house firms that employ more
than 200 highly qualified people; however, additional firms, employing another 150 individuals, have already successfully
moved out of the incubator. In terms of knowledge transfer, the first five spin off firms have been established by Masaryk
University in Brno. In terms of other outcomes, 98 companies have been supported in cooperation with universities with
innovation vouchers and 35 start-ups are being supported within the incubation programme. Concerning talent formation &
attraction, 14 foreign researchers were attracted and approximately 50 talented PhD students per year are being supported.
However small these figures may seem, the regional actors are learning quickly and the key results so far remain intangible
in nature: the formation of a network and a solid, institutionalized platform that is able to prepare joint projects to submit to
the newly established Technology Agency of the Czech Republic, as well as to FP7 and, particularly significant, the flagship
CEITEC project which has been recently approved by the EC focused on exploring the synergy between the life-sciences
and nanomaterials.
Importantly, the experience of South Moravian region shows that the ERDF funding is the most effective in case of large–
scale projects aiming at expanding R&D&I infrastructure where there is - inter alia - as a rule no uncertainty with the eligibility
of particular types of expenditures. Consequently, a typical model of synergy between the Czech and ERDF money is the
following. While ERDF invests into the development of R&D&I infrastructure, Czech money (obviously, in addition to a
necessary co-financing) are being used for covering the running costs, financing of the consultancy teams, financing of a set
of complementary projects such as micro-loan fund, seed fund, patent fund, innovation vouchers etc. In case of these
smaller projects the Czech money seems to be more flexible, readily available and less administratively demanding. In
addition, a synergy with other funding sources is being achieved in South Moravia region including ESF, EU 7th FP, national
and regional and city programmes/budgets, private money and even sponsorship (e.g. South Moravian Centre for
International Mobility has been established thanks to support of sponsors (mostly firms operating in technology sectors) the
SOPHIA foundation for talent support.
Therefore, this case study illustrates that the lack of a pro-active approach at the national level creates a lot of room for the
activities of regional actors, which then have to search for their own mode of coping with development and innovation
challenges instead of applying a recipe that is more or less similar to that designed at the national level. However, using this
space for bottom up approaches by regional actors is by no means automatic but conditioned by both structural and soft
factors such as leadership.
Interestingly, the case of South Moravia region proves that the state-of-the-art theoretical concepts can be of significant use
in at least two spheres related to innovation support. First, these concepts can help to design more sophisticated innovation
strategies provided that these concepts are applied sensitively reflecting thorough understanding of the needs and
challenges of regional actors of both knowledge generation and knowledge exploitation subsystems. Secondly, these
concepts can help to legitimize allocation of public money into less traditional but needed sphere among the regional and city
politicians provided that these expenditures are swiftly met by at least some tangible results.
Finally, we attempt to answer perhaps the most fundamental question, which moreover, is highly relevant from a policy
perspective, i.e. which are the key factors behind the profound differences in design and especially in the progress in
implementation of RIS in particular regions. The presented case study suggests that significant results can be achieved (at
least within a medium-term time-span) only in cases in which the key actors are extraordinarily committed to achieving a
desirable change or, more precisely, to setting the entire system into motion in a desirable direction, and where such efforts
are not hindered by fundamental structural or institutional problems. In this context, one can speak even about a favourable
“constellation” of key regional leaders that has been formed in South Moravia Region. In addition, such a favourable
“constellation” should be supported by a professional intermediary organization(s) that would guarantee that the projects
supported by public money are not be “blind”, but set within a well-thought-out strategy that corresponds to the particular
development context of the region in question, a context that can be revealed through properly designed and detailed
research preceding the strategy’s formulation. Therefore, soft factors such as individual enthusiasm and willingness to
devote the time to acquiring knowledge and to building a network of relevant actors seem to be decisive factors for success.
This is related to the more general observation that, in contrast to a common perception among many decision-makers, in
some cases (for example, in the case of technology transfer or incubation services), the major problem is not the lack of
financial means, but the lack of know-how and the lack of a stable commitment of key actors.
Needless to stress again, that approach of South Moravian Region to innovation support is really a unique phenomenon in
the Czech Republic (recently recognized even by NY Times) and contrasts sharply with the passivity or incapability of a
majority of other Czech regions in this sphere. This situation has some implications for a design of the EU cohesion policy in
the Czech Republic and quite likely also in other countries where capabilities of actors in particular regions differ
fundamentally.
94
Finally, perhaps the only significant imperfection of the pro-active approach as applied in the South Moravia Regions is the
fact that adaptation of western experience clearly dominates over own innovative approaches to stimulation of
socioeconomic development of this region.
The achievements of South Moravia Region have recently been acknowledged by New York Times writing: “An information
technology hot spot for more than a decade, with a focus on investment and innovation, the area is working strategically to
bring in businesses and ideas that fit its research-led vision” (New York Times, May 22, 2011).
II. Process of selection of thematic priorities in the Czech Republic
The Czech Republic is among the countries that support the idea of thematic concentration as one of pre-conditions for a
more targeted, more visible and more efficient and effective EU cohesion policy. However, some pros and cons concerning
the thematic concentration have been obvious since the very beginning. These are briefly summarized in the following
Table 1.
Table 1: Pros and cons of thematic concentration of the EU cohesion policy.
Pros Cons
Better strategic focus of the policy Contrasts with widely accepted notion that “one size doe
not fit all”
Higher expected efficiency and effectiveness (also due to Contrasts with place based development model
accumulation of knowledge in key spheres)
Easier setting of monitoring indicators and easier Contrast with the fact that regional development depends
quantification of targets in limited number of key spheres on a multitude of factors and actors
Better visibility of the policy to the European citizens Contrasts with the principle of partnership
To start with, the attempts of thematic concentration have been complicated by the fact that so far there is no template how
the thematic concentration should be implemented in practice. Though there is a general agreement that better strategic
focus of cohesion policy is needed and the Czech Republic shares this vision, in policy practice, the process of thematic
concentration hints upon a surprising number of different obstacles. Obviously, many problems are induced by the simple
fact that there is no firm agreement upon what exactly thematic concentration is neither on European level nor in the Czech
Republic.
Consequently, the attempts for a thematic concentration started under conditions of unclear European legislative framework
which left unanswered at least the following important questions related to thematic concentration:
1) Would there be a single list of thematic priorities defined at the European level or each country would be allowed to
select its own priorities?
2) How broadly would the thematic priorities be defined? (on the one hand a priority might be for example support to
clusters, on the other hand, a “priority” might be an all encompassing support to regional development)
3) Should the MSs allocate 100% of cohesion policy support to these thematic priorities or let’s say just 75%?
Within this context (i.e. several unknown factors, the problem of “moving target” as the discussion of the EU level is and will
be evolving), the Czech Republic opted for a combination of a top-down and of a bottom-up approach to selection of key
priorities.
Bottom up approach consisted of several rounds of interactions with key actors such as line ministries, regions, cities,
municipalities, social and economic partners etc. when these actors were invited to identify and to propose their own
priorities. Within this process, the line ministries were explicitly invited also to elaborate on likely regional dimension of
proposed thematic priorities. The materials supplied by the sectoral ministries in response to this request proved that the
issue of regional impacts and of regional dimension of sectoral policies is in its infancy in the Czech Republic.
Top-down approach consisted mainly in elaboration of a new strategy of economic development prepared by a team of
governmental advisors and, of course, in following and participating in discussions about the future shape of the EU
cohesion policy at the EU level.
Meanwhile, a set of criteria for selection of key priorities has been suggested by the Ministry for Regional Development in
consultation with experts.
Several different criteria have been suggested. Therefore, these criteria have been divided into three groups. The first group
of criteria has been called strategic or basic criterion and this is relevance/need of a given priority for the Czech Republic.
This strategic criterion should be assessed on the basis of the following indicators:
1) Coherence of a given priority with the Czech and European strategic documents.
2) An existence of a strategic document elaborating this priority for the period 2014-2020.
3) Position of the Czech Republic in a given sphere within the EU and within the OECD.
95
The second group consists of supplementary criteria, which should assess the suitability of a support to the given sphere
considering possible synergic effects, administrative demands for management of cohesion support in a given sphere etc.
These supplementary criteria are efficiency and effectiveness of existing support in a given sphere, measurability, simplicity,
absorption capacity and existence of synergic effects.
The third group consists of criteria which should not primarily serve to selection of thematic priorities, but which should be
instead respected when strategic priority is translated into a detailed specification of support in a given sphere. In other
words, these criteria should eliminate undesirable types of projects from the future support. Therefore, firstly, basic and
superfluous projects (which in addition often require support from public budgets after their completion) should be strictly
distinguished. Secondly, the spirit of the Competition Act should be followed, for example preference should be given to
support of measures which enhance business environment instead of provision of a direct support to individual enterprises.
Since the very beginning it was clear that any set of criteria would be far from objective exercise as there is neither rigorous
clue for their selection nor for assigning the weight to different criteria. Nevertheless, important inputs are expected from mid-
tem evaluation of current programming period which is just proceeding.
The process of selection of thematic priorities consisted so far from several rounds of interactions between the Ministry for
Regional Development and various relevant authorities and other actors, including several “round tables”, where the priorities
for the next programming period were discussed.
The progress and experience gained so far can be summarized in the following points:
• the number of suggested priorities is excessive
• there is no fundamental difference between priorities suggested by national and regional authorities
• one of the key problems is the fact that there is no clue how broad the thematic priorities could/should be (e.g.
support to regional rail transport or just “improvement of all transport connections”).
• there is a significant pressure to spread the EU support from cohesion policy to new spheres or to spheres which
were rather marginal in current programming period (health care, housing, energy networks, free-time activities, fighting with
poverty and social marginalisation etc).
In addition, for selection of a given thematic priority, a huge amount of information is needed as it is not only the strategic
focus of the priority that counts but also many other aspects such as detailed explanation of the strategy how the strategic
goal will be achieved, rigour of quantification of strategic target, definition of the type of support (grants, loans) and definition
of target group, what exact type of activities and under which conditions will be supported etc. as the “devil is often in detail”.
Nevertheless, so far, the following national development priorities have been proposed:
• Enhancement of competitiveness on the economy
• Development of backbone infrastructure
• Enhancement of quality and of efficiency of public administration
• Support to social inclusion, to fight with poverty and to system of health care
• Integrated regional development
However, it should be stressed that these “national priorities” are in fact all encompassing, as it proved to be politically
impossible to approach a real selection of key priorities under the condition when the relevant EU legislation is unknown.
Conclusions
The case study of South Moravia suggests that significant results can be achieved (at least within a medium-term time-
span) only in cases in which the key actors are extraordinarily committed to achieving a desirable change and where
such efforts are not hindered by fundamental structural or institutional problems. In addition, such a favourable
“constellation” of key regional leaders should be supported by a professional intermediary organization(s) such as
JIC that would guarantee that the projects supported by public money are not be “blind”, but set within a well-thought-
out strategy that corresponds to the particular development context of the region.
To be sure, the approach of South-Moravia region is not new but rather consists of a sensitive application of foreign
know-how. Nevertheless, the approach of South-Moravia region inspires not only other Czech regions but even the
national level. Some regions are even thinking that they will directly employ JIC instead of starting building their own
capacities and know-how from scratch.
The case study also shows that surprising results can be achieved on the basis of initiative of really few people,
nevertheless, it should be stressed that it was the availability of the EU funding that sparked this initiative about 10
years ago.
From the case study follows some implications for a design of the EU cohesion policy in the Czech Republic (and quite likely
also in other countries where capabilities of regional actors differ fundamentally).
96
Thematic concentration - one of the key reform proposals for the future Cohesion Policy - though desirable, induces
also a number of significant problems (starting from missing agreement what exactly thematic priority means). Thematic
concentration also requires rethinking of the relation between national (thematic) and regional approaches (including
the number and focus of OPs) with important political implications as the example of South Moravia shows that some
regions are clearly capable of setting their own bottom-up innovation strategy. However, if the state decentralizes a
significant part of the innovation support to regional authorities to allow their own fine-tuned innovation strategies, the
businesses and research institutions in regions with less active regional development actors might face significant problems.
In addition, thematic concentration, though highly desirable, induces also a number of significant problems such as:
• there is no agreement what exactly thematic priority means
• there is no rigorous mechanism how the key priorities should be selected given a multidimensional character of
regional development
• thematic concentration would imply a significant pressure on national budgets to increase the support to spheres
which will not qualify for being thematic priorities within the EU Cohesion policy (in the Czech Republic, this might concern,
for example, the reconstruction and upgrading of secondary roads or revitalisation of housing estates).
• thematic concentration might challenge the principle of partnership as exclusion of some traditional spheres of
interventions from the cohesion policy excludes also important regional development actors
• Consequently, this case study suggests that differentiated capabilities of regions have to be carefully considered
when a new support framework of EU CP is being designed in order to provide room for building a sound support framework
at the national level but in the same time opened sufficient space for local initiatives (see Annex).
Acknowledgements: The author is grateful to many colleagues, esp. to Petr Chládek for their insights, which are used in
this paper.
97
Annex:
Proposal of a possible link between national (thematic) and regional priorities in the next programming period
Background:
Each region would on the basis of its socioeconomic situation decide upon allocation of its share of CP funding among
particular thematic/national priorities according to following model (see Table 2).
Table 2: Possible link between national (thematic) and regional priorities in the next programming period
Thematic priority Financial allocation Region A Region B Region C Etc.….. Total allocation on
(TP)/Thematic thematic priority
operational
programme (TOP)
TP1 (TOP1) „220“ bln CZK 10 30 50 310
TP2 (TOP2 „200“ bln CZK 40 15 255
TP3 (TOP3) „100“ bln CZK 5 5 5 115
TP4 (TOP4) „80“ bln CZK 10 90
…. „55“ „60“ „55“
Total ROP or Grant ROP or Grant ROP or Grant
Schemes for Schemes for Schemes for
Region A Region B Region C
Note: Figures are purely illustrative
Advantages of this model:

• Provision of a space for specific needs of particular regions,
• direct link of regional priorities to national (thematic) priorities.
Disadvantages:
• Complicated process of negotiation between sectoral ministries and regions about proper links between national and
regional interventions
• danger of “gaps” in support in the regions that would not allocate EU funding to some of the thematic priorities
• fragmentation of the support as regions could design their own models of support
• the lack of specific integrated regional priority.
98
99
Duarte Rodrigues
Integrated approach: from common myths to right balances
Integration is a key issue of any policy that deals with development, like the EU Cohesion Policy does. However, integration
approach is not yet the natural way in public policies and requires a combination of several factors, such as, a clear strategy,
close cooperation among sectors, strong governance mechanisms that promote vertical and horizontal cooperation among
actors and a culture of monitoring and evaluation.
The paper starts by framing the role of the integrated approach in regional development policy, notably using as an
illustration of the current debate on the European Cohesion Policy. In the second section, common myths about policy
integration are pointed out. Finally, in the third section, critical challenges for a successful territorial integrated approach are
presented.
I. The role of integrated approach in regional development policy
Integration is a cornerstone of the development policies and, therefore, integrated approach arises as a compulsory subject
on regional policy field, as well as within the framework of Cohesion Policy.
As OECD work argues, the drivers of growth are rather different among regions, but are always highly interdependent in
each region (OECD; 2009a). Against this background, only an integrated approach can allow for the reconciliation of several
policy objectives and tailor-making this policy-mix to the needs and specificities on the ground, as well as higher level cross-
sectoral objectives. This approach takes into account the individual policy aims of each other, allowing the identification and
circumvention of the possible externalities effects and turning them into synergies (HU PRES; 2011a).
The relevance of this approach has walked hand-in-hand with the present paradigm of regional policy, where the focus is on
tapping the growth potential of territories based on (dynamic) sources of territories’ competitive advantages (the well known
principle that there is “no one size fits all”). This approach is anchored on place-based strategies and strong multi-level
governance mechanisms for designing, implementing and monitoring the policy. Regional policy, in that sense, is being
increasingly demanded by its capacity to fuel growth, rather than simply reducing disparities. The so called new regional
policy paradigm by OECD (OECD; 2009a) is also present in Barca Report (BARCA; 2009), in the 5th Cohesion Report (EC;
2010) and, most recently, in the conclusions of the Informal Meeting of Ministers responsible for Cohesion Policy (HU PRES;
2011c), where “Ministers shared the view that since Cohesion Policy is about addressing bottlenecks for growth and
stimulating endogenous potential in order to raise the competitiveness of different regions, the aims of Cohesion Policy and
those of the Europe 2020 Strategy are generally in line. It was highlighted that Cohesion Policy, through its multi-level
governance system and cross-sectoral approach, is a key instrument for the implementation of the Europe 2020 Strategy on
the ground.”
If an integrated-approach is important in periods of growth and large manoeuvre of investment it is even more relevant in
times of tight fiscal environment, such as the case of today’s well known austerity plans. Despite the implementation of
budget cuts be intrinsically complex and difficult, they tend to be better accepted when balanced by positive objectives such
as long-term development. Managing fiscal consolidation requires well informed investment strategies, in order to better
prioritise expenditures in a context of urgency and customising investment in what unlocks each region’s greatest potential,
to restore growth and build resilient regions (OECD; 2010a).
As a strong illustration of the relevance of integrated approach in regional development policy, the following references from
critical documents on the debate on European Cohesion Policy clearly point to the role that approach should entail:
• Barca Report (BARCA; 2009) stresses the quality of place-based strategy and the robustness of multi-level governance
system as critical pre-conditions to Cohesion Policy effectiveness.
• Commissioner Hübner (HUBNER; 2009) refers to the need for integrated solutions to the new challenges in the
framework of a reinforced role for territory and institutions.
• Commissioner Samecki (SAMECKI; 2009) argues that Cohesion Policy through place-based approaches provides the
framework for integrated solutions tailored to people's knowledge and preferences avoiding a “one-size-fits-all” approach.
• In the Panorama Magazine (REGIO; 2010) Director General for Regional Policy – Dirk Ahner – points out the question of
how to provide the appropriate framework for integrated solutions tailored to people's knowledge and preferences, yet
avoiding a “one-size-fits-all” approach, as one of the issues to be addressed within the debate on the future of European
cohesion policy. In the same publication, Barca claims that integration requires a place-based approach, because it is not
feasible to integrate different sectoral interventions anywhere else them at the ground level.
• The 5th Cohesion Report (EC; 2010) highlights the relevance of all regions and Member States tailoring their strategy in
an integrated manner, taking into account their specific strengths and weaknesses, and presents some important new
policy instruments in the field of strategic programming that can contribute to a better integrated approach, such as: the
Common Strategic Framework (covering the EU funds with major territorial impacts) and the Development and
100
Investment Partnership Contract (based on strategic dialogue between EC and Member States focussing on the
development strategy presented in their National Reform Programmes and centred on results and governance
mechanisms).
• The contribution from Portuguese Government to the public consultation on Cohesion Policy (PT; 2011) posits that the
EU huge territorial diversity implies that Cohesion Policy implementation is anchored on integrated territorial
development strategies (necessarily differentiated from each other) to capitalize the assets and circumventing the
specific constraints to each territory. Consequently, each Member State and region should have sufficient flexibility to
determine the most appropriate policy mix to address the development challenges they face.
• Commissioner Hahn (HAHN; 2011) states, in a recent speech, that only an integrated and place-based approach takes
the unavoidable externalities of sectoral policies into account, thereby enhancing the overall effectiveness of public
policy.
• The Territorial Agenda of the European Union 2020 - Towards an Inclusive, Smart and Sustainable Europe of Diverse
(HU PRES; 2011b), recently adopted by the Spatial Planning Ministers in Gödöllö, during the Hungarian Presidency,
“calls for a more strategic approach to enhance territorial cohesion. Designing and implementing integrated local,
regional development is an important issue. The territorial dimension could be better reflected and the different starting
positions, national, regional and local specificities should be recognized in the implementation and monitoring process of
the Europe 2020 Strategy.”
• Presidency conclusions from the Informal Meeting of Ministers responsible for Cohesion Policy in Hungary (HU PRES;
2011c), claim that “enhanced effectiveness of Cohesion Policy can best be achieved if its improved tools and
mechanisms are aligned with and build upon the characteristics and added values of the Policy, that is, the ability to
reflect on territorial differences through an integrated and bottom-up approach”, in line with the conclusions of previous
Presidencies since the beginning of this debate in 2007 during the Portuguese Presidency.
• The European Parliament, in its recent resolution on the contribution of the Cohesion policy to the achievement of Lisbon
and the EU2020 objectives, underlines the integrated approach as one of the three principles of Cohesion policy,
together with multi-level governance and real partnership, and argues that these principles are key complementary
elements for the success of the EU 2020 strategy (EP; 2011).
Although there is no standard definition of integrated approach, based on the review of the most important policy documents
on this theme, it is possible to raise the critical ingredients for a successful integrated approach, notably:
• a close coordination of several (sectoral) public policies to promote synergies among them;
• a development strategy shared by all the relevant stakeholders, with clear objectives and targets;
• a robust governance mechanism that puts in place an effectiveness system of horizontal and vertical cooperation among
actors;
• an effective monitoring system that allows to assess the results and outcomes and fine-tune the solutions during the
implementation period;
• a relevant territorial scope, because the only field to integrate different sectoral interventions is on the ground.
II. The common myths about integrated approach
Although most of the public policy literature argues that, within complex objectives like development, an integrated approach
is a more effective way than a purely sectoral approach, the need to mobilise and articulate different actors and institutions
(with their distinct knowledge, visions, interests and ways of work) makes integrated approach more challenging to
implement in the short term. Moreover, still persist some common misunderstandings that jeopardize the implementation of
integrated approach most of the times. In this section, the most relevant myths about an integrated approach will be
presented. Any initiative to implement such an approach should be aware of them.
The integration among policies is the “natural way”. NO, clearly there are conflicts among sectoral policies goals and
these conflicts should be anticipated and solved on the ground. For instance, (re)designing the system of any social facilities
(e.g. health or education) on a sectoral and spatial blind perspective, tends to ignore the interrelations among social facilities,
even on a cost-benefit analysis, and to neglect the relevance of this kind of infra-structure on the urban system and on the
competitiveness potential of territories.
The role of strategie planning within a territorial framework is crucial to articulate the several interventions on the ground and
to build a global vision of the regions and nations beyond the sum of sectoral plans. As recently argued by Figueiredo, under
an analysis of the convergence between structural funds programming and spatial planning tools in Portugal, the existence
of binding sectoral plans is not per se a guarantee of integrated and coherent guidelines at national and regional levels
(FIGUEIREDO; 2011).
101
The integration among policies is a matter of programming phase. NO, it is impossible to anticipate all the relevant
relations among different interventions. In the implementation phase of any particular territorial development strategy emerge
freąuently some unexpected externalities among different interventions or unpredictable conflicts among different actors
objectives.
The various economic, social, environmental, institutional, political, organizational and inter-personal processes involved in
an integrated approach are characterized by high levels of uncertainty. Conseąuently, for as much careful as the designing
of policies may be, it is not possible to predict and avoid ex-ante all the possible sources of discrepancy between objectives
and policy implementation. The attempt to anticipate all possible scenarios often leads to an excessive complexity and
rigidity in the programming. This is where strategie monitoring emerges as a timely tool to deal with unexpected difficulties in
the implementation phase and allow for a permanent fine-tuning of the policy tools and their governance solutions
(Observatório do QREN; 2009).
The relevance of keeping an integrated approach in the implementation stage is also evident in the support of EU Cohesion
Policy Ministers for an enhanced cooperation of the different Funds, including the harmonisation of their rules, the optional
use of multi-fund programmes, flexible geographical scope of programmes, a unified local development methodology and the
alleviation of cross-financing rules (HU PRES; 201 lc), much in linę with the conclusions of previous Presidencies.
An effective integrated approach will only be achieved through persistent methods supported by a strong governance model,
which look for closing the loop between policy design, the effective and accountable delivery of policy, and monitoring and
evaluation of outeomes. The diagram below represents some examples of how the integration should be pursued in all
stages of the policy cycle.
in (RODRIGUES; 2009)
The integration of policies is only possible with fixed and rigid geographies. NO, it is possible and desirable to have a
more flexible approach to regional “borders”. The most appropriate regional boundary is quite dependent on the intervention
focus. As argued by Herrschel and Tallberg (HERRSCHEL and TALLBERG; 2011), the “new version of regionalisation
focuses much more on the strategic, instrumental side of regions as flexible, dynamic spaces circumscribed by shared policy
agendas ‘from within’ – and that means collaborations between localities and their actors and policy makers is an often ad-
hoc, bottom-up process. Such as new understanding is inherently variable, time-limited and, in its bordering often less clear
(fuzziness)”.
The design and implementation of a regional development strategy implies mobilising several policies with different territorial
scope. Such as the case for the smart specialisation strategies, where the key issue is the matching among, at least: human
capital policies, more people-centred and, by this way, with a larger territorial scope; qualifications of productive sector,
where territorial scope varies with firm size and their location horizons; and specific support infra-structures, which tend to be
more limited in territorial coverage. In a nutshell, the place-based approach definitely does not imply adopting the same
territorial scale for all interventions.
In a multi-level governance system the degree of integration in one layer is independent from the others. NO, the
lack of integration in higher levels of governance tends to be transposed, or even amplified, in lower levels. The long lasting
heritage of sectoral approach in government structures remains a strong obstacle in the implementation of integrated
approaches.
102
The success of the integrated approach truły relies in the effectiveness of horizontal coordination mechanisms (e.g. inter-
ministerial committees, fully fledged ministries or strategie planning and Programming). The relevance of horizontal
coordination mechanisms is amplified by their influence on the effectiveness of vertical coordination mechanisms51. Based
on this principle, the Portuguese Government welcomes the EC proposal to reinforce the strategie programming notably
through the definition of an European Common Strategie Framework for all European policies with relevant territorial
impacts, promoting this way a morę integrated approach from the higher-level of Cohesion Policy governance - the European
level (PT; 2011).
In a context where regional development challenges are broader, encompassing issues that cross-sectoral and
administrative boundaries, the role of higher-levels of government, either Central Government or EC in the EU Cohesion
Policy field, become morę relevant in providing guidelines and overseeing co-ordination mechanisms within which regional
policy can be formulated and implemented, acting morę as “co-ordinators and partners”(OECD; 2010b).
Lastly, integration does not imply to do everything at the same time, or in order words, that integration should not mean that
each policy instrument and each policy stakeholder thinks and deals with all complex ingredients of development policy.
Integration approach should assure that each policy instrument and each policy stakeholder develops its own interventions
within a well known and shared strategy and is aware of the interactions between its own interventions and other pieces of
the same strategy.
III. Right balances to achieve a successful integrated approach
Integrated approach is still a recent area with a large potential to develop. It reąuires innovative approaches in order to break
out policy silos’ of sectoral approach. To minimize the risk during the implementation of such innovative integrated approach,
there are some crucial balances to take in account.
i. The right balance between ambition and realism
Development policies anchored on integrated approach should be intrinsically ambitious, which implies to avoid the simple
reproduction of past experimented solutions or models of intervention, as well as the echo of collective interests with a strong
bias towards short term results (VITORINO et al; 2010). However, simultaneously, it is crucial to ensure that the design of
the policy tools, its allocated resources and its governance model are realistic, i.e. are coherent with assumed ambition. To
do so, key issues should be well balanced, such as: the territorial scope of implementing innovative approaches and the
overlapping of several innovative approaches in a specific territory in the same timeframe; the relevance and opportunity of
pilot phases, based on its potential for fine-tuning the instruments; the institutional capacity of local stakeholders and the
importance of capacity building actions; the genuine commitment of sectoral stakeholders on the policy.
The success of innovative policy tools stems definitely from the ability of learning-by-doing and overcoming the unavoidable
constraints and, even, conflicts that comes up during the implementation stage, which reąuires persistence from the
stakeholders for keeping focused on results. The political will appears as a determinant factor to keep the focus, the
legitimacy and the credibility of these innovative integrated approaches, as well as to support the continuous mobilisation of
the stakeholders (CHORINCAS ET AL; 2011).
In conclusion, while ambition is an intrinsically feature of any integrated policy, the policy design should be based on the
additive principle, i.e. defining a policy should start from past experiences and use the ability of present stakeholders,
furthermore introducing incremental innovation on top of them.
ii. The integrated approach needs to be supported in a strong governance model, while avoiding institutional fatigue
and proximity traps
Mobilising the relevant stakeholders knowledge, mostly the local knowledge on territorial specificities, is critical to develop
and implement a common and shared strategy, supported in important principles of regional development, such as
subsidiarity, partnership and ownership. The inputs and commitments from critical stakeholders need to be converted into a
strong governance model, with a elear mandate and well identified goals.
Nevertheless, there are two common risks to be avoided (or, at least, limited) in the conception of governance model.
On the one hand, the idea that the best way to measure the partnership potential is through the number of partners. This
wrong belief leads to governance models with an excessive number of actors, most of them just poorly committed to the
overall strategy, i.e. it tends to generate the institutional fatigue phenomenon – too many players in partnership and/or
players involved in too many different partnerships as the main reason for the lack of commitment.
On the other hand, the more supported the partnership is on local knowledge, the riskier it is that strategy and actions are
captured on the sake of some local actors. This capture jeopardizes a robust integrated approach focused on the long term
For a development analysis of coordination mechanisms in regional policy, either horizontal or vertical, see OECD publication “Regional Development in
51
OECD countries (OECD;2010b).

103
development strategy and its goals, i.e. tends to generate the proximity trap phenomenon – the role of some local actors are
overrepresented to the detriment of the long term and integrated approach of the strategy.
A well defined system of monitoring and evaluation can be a strong contribution to keep the focus on the final outputs, by
making a clear and permanent link between each individual actor and the overall strategy, and each individual project and
the final goal. The system of performance indicators is an important tool to ensure the effectiveness of the governance
model. This system can promote learning and orient stakeholders towards results, beyond its central role of generating and
disseminating information, reducing or eliminating the information gaps (OECD; 2009a).
In conclusion, the governance model should not follow the rule of “one size fits all”. However, in order to have a genuine
partnership, there are some rules to keep in mind throughout the process of governance definition, such as: ensuring the
involvement of key stakeholders since the very beginning; a clear definition for the role of each partner; keeping it as simple
as possible and, for sure, more partners is not necessarily the best; although specific projects are relevant, the strategy and
its final goals should be at the centre; developing a robust monitoring and evaluation system that allows the fine-tuning
process and avoids the capture of policy by some local elites.
iii. The difficult choice of relevant territory between functional areas and administrative regions
The modern regional policy has changed its territorial scope from administrative regions to functional areas, in which relevant
interactions among stakeholders (private or public) occur.
As posited by Herrschel (HERRSCHEL and TALLBERG; 2011) , “new regions take shape and operate by combining both
engagement in varying, informal arrangements, which define a region through the territories represented by the participant
actors, while simultaneously also working through existing structures with their associated clearly defined portfolios of power,
responsibility and, crucially for effective policy making, finances.”
However, administrative regions remain as the central units in policy, either by some inertia, or by some stronger arguments,
such as the fact of being the place of democratic legitimacy.
The administrative borders do not correspond to functional areas very often, the phenomenon also known by administrative
gap, one of the gaps which affect relations across levels of governments presented by OECD (OECD; 2009).
When adopting the territorial scale and scope for an integrated policy, a complex balance between pros and cons from
adopting functional areas vs. administrative boundaries should take place (Rodrigues; 2010). Once the option were on
functional areas, the issue for policy makers becomes to find governance mechanisms, that enable policy coherence in
spatially and economically homogenous, but politically fragmented, areas, i.e. that ensure real commitment from local
political leaders. If the option be on administrative regions, the issue for policy is how to enhance co-ordination among
regional or local authorities in order to deal with unavoidable externalities among administrative regions.
Final remarks
Integration is a necessary condition to the success of any development policy, like Cohesion Policy, and should be pursued
(systematically) throughout all policy cycle. Although there is a strong consensus that integrated approach is a more effective
way within development policy, it remains not being the natural way, mainly due to sectoral-driven government structures.
There are several examples of risks from the lack of integration (or even articulation) among policies, such as: the
improvement of human capital disconnected from the interventions in the productive sector (and vice-versa), which tends to
speed-up the internal migration towards more developed regions and/or mitigate the final outcomes of human capital
improvements; the urban renewal (physical) interventions disconnected from actions related with social inclusion in
respective communities, which leads to a nice place that “belongs” to nobody; the improvement of scientific capacities of the
people disconnected from innovation strategies (e.g. R&D priority fields) which speeds up the brain drain.
The implementation of an integrated approach requires a virtuous combination of clear long term goals, an adequate
governance mechanism and robust monitoring and evaluation system. Throughout the process of designing and
implementing such a policy approach, the policy makers will face some trade-offs where they should find the right balance on
a casuistic basis.
References
BARCA, F. (2009) An agenda for a reformed cohesion policy: A place-based approach to meeting European Union
challenges and expectations.
CHORINCAS, J., FEIO, P., MAMEDE, R. and RODRIGUES, D. (2011) Políticas Públicas Inovadoras: o caso das estratégias
de eficiência colectiva in Casos de Desenvolvimento Regional, APDR.
Comissão Técnica de Coordenação (CTC) do QREN (2010) Relatório anual do QREN 2009,
(http://www.observatorio.pt/item1.php?lang=0&id_channel=15&id_page=43).
EC (2010) Investing in Europe’s future: Fifth report on economic, social and territorial cohesion.
104
EP (2011) European Parliament resolution of 20 May 2010 on the contribution of the Cohesion policy to the achievement of
Lisbon and the EU2020 objectives (2009/2235(INI)), (2011/C 161 E/18)
FIGUEIREDO,A. (2011) Programação de fundos estruturais e instrumentos de gestão e ordenamento do território – pistas
para uma convergência destes instrumentos, Documento de apoio à coordenação e Monitorização estratégica do QREN e
PO.
HAHN, J. (2011) Improving the impact of Cohesion Policy through an integrated place-based approach, Keynote address at
the Regional Studies Association International Conference, Newcastle, 19 April 2011.
HERRSCHEL, T and TALLBERG, P. (2011) Regions, “Fuzziness of Opportunity? in “The role of the regions”, Kristianstads,
Sweden 2011
HU PRES (2011a), Hungarian Presidency note for the key issue debate on result-orientation of cohesion policy post 2013,
Brussels, 5 May 2011.
HU PRES (2011b), Territorial Agenda of the European Union 2020: Towards an Inclusive, Smart and Sustainable Europe of
Diverse Regions, Adopted in Informal Ministerial Meeting of Spatial Planning EU Ministers – Hungarian Presidency, Gödöllö,
19. May.2001.
HU PRES (2011c), Towards a more effective Cohesion Policy - Presidency conclusions, Informal Meeting of Ministers
responsible for Cohesion Policy – Hungarian Presidency, Gödöllö, 20.May.2001.
HUBNER, D. (2009) Reflection paper on future Cohesion Policy, Informal Meeting of Ministers for Regional Policy,
Mariánské Lázne – 22-24 April 2009.
Observatório do QREN (2009) General conception of the NSRF strategic monitoring process
(http://www.observatorio.pt/item1.php?lang=0&id_channel=14&id_page=545)
OECD (2009a) Regions Matter: economic recovery, innovation and sustainable growth.
OECD (2009b) Governing Regional Development Policy: The use of performance indicators.
OECD (2009c) “Bridging the Gaps Between Levels of Government: Policy Brief”
OECD (2010a) Making the most of public investment in a tight fiscal environment: multilevel Governance lessons from the
crisis, Territorial Development Policy Committee, 1-2. December.2010.
OECD (2010b) Regional Development Policies in OECD Countries.
PT (2011) O futuro da política de coesão da UE: contributo do governo português para a consulta pública.
REGIO (2010) Regional policy, an integrated approach: a 360° view, Panorama Magazine n.º34, Summer 2010.
RODRIGUES, D. (2009) Integration as the cornerstone of the development policy, communication in the conference
“Shaping the future of the ESF - ESF and EUROPE 2020”, promoted by DG Employment (CE), Brussels, 23 June.
RODRIGUES, D. (2010) Strengthening of the institutional framework: key challenges, communication in the “Workshop:
Improving productivity in lagging regions conference - panel on Institutions and Policy discussions”, promoted by OCDE,
Paris, 28 June.
SAMECKI, P. (2009) Orientation paper on future cohesion policy.
VITORINO, N. et al (2010) Abordagens Integradas de Base Territorial, study developed for the Observatório do QREN.
105
Other contributions
106
107
Wolf Huber
From Babylon to Brussels:
Some theoretical reflections on Multi-sector, Multi-level Policies, Language
Diversity and the “Simplification” of EU Cohesion Policies52
What does language have to do with simplification?
The Bible tells us the story of the early (in today’s EU speak: cohesion) project of the Tower of Babylon and its failure due to the
deficiencies of language communication. In modern thinking, we no longer tend to explain planning failures as a sign of divine
disapproval. What still applies though is the fact that complex actions requiring planning and coordination cannot be implemented
successfully if you have “language confusion”, i.e., if the actors involved fail to develop a form of communication that is adequate to
the complexity of the tasks.
In my opinion, this is the case for the policies of the European Union to promote economic and social cohesion (cohesion and
structural policy). In the past we have often heard critiques stating that the rules created to coordinate these policies lack the
relevance required for practice and have created excessive bureaucracy. I believe that the failed coordination is the outcome of
“language confusion”. Due to a lack of understanding of the special challenges posed by linguistic communication for accomplishing
extremely complex tasks, there are no adequate provisions to successfully overcome these challenges.
The “language confusion” refers to more than the mere translation of texts from (for example) German into French, Greek or
Lithuanian. The diversity of languages is an additional burden on the policies at the international level, but not the core problem in
my opinion. Misunderstandings and meaningless results are caused already at an earlier stage: When designing communication
(i.e. when formulating and interpreting the goals, measures and procedural rules, but also in the settings for verbal communication in
the negotiating bodies and at seminars) not enough consideration is given to the fact that language is never unambiguous and that
certain concepts and associations are unknown to many people even within a language or that different people may understand
these concepts very differently. To put it concisely: “Language confusion" does not emerge so much from the diversity of languages,
but rather from fact that diversity in communication through language is ignored or not treated adequately.
I would like to explain this issue in more detail in this contribution.
Language and the system contexts of policy-making
The starting point for our analysis is the recognition of modern linguistics that language is not simply an unambiguous
representation of an objective reality, but that the success of communication through language depends on the context (a
“text” always exists in a “con-text”). This means that
1. A message sent from A to B will only be understood if B knows the background experience of A as well as the concepts
and phrases used. In practice this is very often not the case: Experiences may diverge enormously; different milieus,
occupations and institutions have varying specialist languages and jargons (language games) that are sometimes
incomprehensible to outsiders. This means that rationality is not unambiguous either: What may seem rational for A
could be irrelevant or meaningless for B.
2. Written language messages can be transferred easily by a physical medium through space and time to other contexts.
This might result in a text being understood completely differently in different contexts from what was intended by the
author (shift in context).
Contrary to common assumptions of a homogenous state as policy-maker, i.e., a body that carries out policies based on a
uniform rationality, a closer look at policy-making reveals that it actually consists of a variety of social systems with very
different experience contexts, “language games” and rationalities. This applies even in the simplest case of sectoral policy at
a single level of government. Based on my professional experience, I would like to propose a prototypical differentiation of
the following system contexts and sub-rationalities that seems to be significant for language communication in the area of
policy-making:
- Functional rationality of expert systems: Behind the very concept of “policy” lies the – by no means self-evident - specific
logic of “experts”, i.e. the notion of a professional technical rationality, which is based on generally applicable scientific
regularities or, at the least, handcrafted “good practice” solutions. Most sectoral policies have a self-understanding and
rhetoric dominated by a specific profession and its “language games” and media preferred for representation and
communication: e.g. transportation policy by engineers, spatial planning by spatial planners and geographers,
economics and fiscal policy by economists, educational policy by educational scientists, etc. All policies in this technical
sense are characterised by a functional logic: Through the appropriate measures and strategies (series of measures
designed to be implemented over a longer time period) specific sectoral policy goals are to be achieved. Flexibility in the
52 German version published in: Österreichische Raumordnungskonferenz (ed.), Raumordnung im Umbruch – Herausforderungen, Konflikte,
Veränderungen. Festschrift für Eduard KUNZE. Wien 2003
108
execution of the measures is desired, but only as far as it is necessary for the achievement of the superordinate
strategic goals and thus technically justified.
- Individual case rationality of the client systems: Policies have to be applied in practice, i.e., policy goals cannot be
achieved without the “citizens” or “clients” (who may be natural or legal entities) as the addressees of specific actions
under law taken by public bodies, recipients of financial assistance or beneficiaries of government services. Beyond the
professional concepts and strategies that may be generalised, the rationality of practical application requires the flexible
treatment of individual cases and their special features. According to this rationality, the concrete objectives of actions
result from the specific needs. These may very well contradict the general goals of a policy strategy.
- “Conditional” rationality of formal regulatory systems: Large organisations need rules for their functioning. Rules are
effective only if their compliance can be monitored and if they are subject to sanction if they are not observed.
Legislation is such a rule. Rules follow a conditional logic (“if a specific circumstance occurs, then certain actions have
to follow”). Routine helps to avoid irregularities and to safeguard compliance with the rules. Special cases and changes
in the rules disturb the routine and increase the risk of irregularities. Flexibility therefore contradicts the administrative
rationality oriented at the smooth functioning of the organisation. In the context of regulatory systems objectives are
treated as formal requirements. From the perspective of the formal regulatory logic checks to assess whether these
objectives are “reasonable“ (from the perspective of other rationalities) are not done and are in fact not even possible.
- “Situational” rationality of political communication systems: Policy activities and formal rules always need a certain
degree of legitimacy, i.e., acceptance by the general public – or, more specifically: by the respective relevant parts of
the general public (mass media, lobbies, interest groups representatives, parties, etc.) - as they are hardly ever fully
enforceable by the pure power of the state. The legitimacy of our democratic society is formally endorsed by elections.
In practice, however, acceptance must be achieved constantly by responding as flexibly as possible to current
sentiments. I would like to call this “situational rationality”. This requires communication between the representatives of
the state (politicians) and the relevant (parts of the) public. Symbols and rituals have always played a great role in
helping to overcome the divide between excessive expectations placed in political problem solutions and the rather
modest factual scope of action. Today, mass media and opinion polls with their own functional requirements (novelty,
low complexity, rapid change, powerful imagery, etc.) are increasingly dominating the rationality of political
communication. Whenever these language games speak of “objectives“ or “strategies”, it is usually less the technically
reasonable long-term cause-impact-relations in the sense of final expert logic that is being referred to, but rather the
short-term symbolic responses to expectations induced by the media in the meaning of a situational rationality.
In performing its tasks the state would be confronted with the diverse rationalities and the related contradictions and
inconsistencies even in the ideal case in which the actors guided their actions exclusively by the interests of the common
good. However, in practice (as in other areas of society as well) the behaviour of public entities is determined significantly by
personal motivations and institutional interests, i.e., by the rationality of “self-interest”. This is seldom revealed in the
language used as such, but is disguised under the cover of language games from the area of professional rationality or legal
regulatory logics.
Even for sectoral policies at one level of government it is not easy to harmonise these different rationalities of the sub-
systems and balance the interests so that they yield an acceptable (I have deliberately avoided the word “optimal”) result for
all involved parties and interests. In the case of small, compact administrative units with long-serving, professionally trained
public servants that are in personal contact with their political superiors, this balancing task is part of daily work. The field of
tension between the different rationalities (“cognitive dissonance”) often leads to dissatisfaction among the persons
concerned, which – in my observations – is usually coped with by a certain degree of cynicism. Despite these experiences
with dissonance, however, the belief t one single valid rationality is amazingly strong.
Multiplication of the system context in multi-sectoral, multi-level policies
In the area of cross-sectoral policies (e.g. regional policy) and specifically in the case of cross-sectoral multi-level policies
(e.g. EU cohesion policy), the complexity is further increased by additional sub-systems and their inherent rationalities and
language games.
- Regional and national development policy must apply across sectors. Thus, the rationalities, experience contexts and
specialised languages of several professions (economists, ecologists, technicians, social scientists, etc.) are confronted
with each other. The spatial and planning-oriented rationality of geographers and spatial planners remains likewise
limited to its own professional perspective - even if it cuts across the rationalities of other sectoral policies - and
(contrary to the widely-held belief of spatial planners) does not guarantee automatically a “holistic” understanding of
development processes.
- Regional policy in Austria (which traditionally is the joint responsibility of the federal level and the Länder) and EU
cohesion policy are multi-level policies. Therefore, in these cases the political communication and institutional regulatory
systems must be harmonised to account for several system contexts. Although the regulatory systems follow the same
regulatory logic at all levels, there is a difference in the terminology used. This means that the rules of one level are not
109
automatically understood or believed to be useful by other levels, and even less easily harmonised with each other. The
situation is similar for political communication systems. In our communication with and within the EU Commission it is
additionally a problem that the persons who are involved there come from different countries with different
administrative and political cultures and thus contexts of experience. This opens the way for numerous possibilities of
misunderstandings and false contextual associations. Apart from the problem of lacking harmonisation of regulations or
political communication styles, differences in the way how to treat power differentials between the levels and thus in the
understanding of concepts such as subsidiarity, partnership or hierarchy can be a hindrance to communication.
- The highest degree of complexity is achieved by the system in the area of INTERREG programmes, where - not only at
the Commission level but also at the national and regional levels - a common denominator has to be found for several
administrative and political systems with some very different language games and contexts rooted in history.
The widespread lack of understanding for the diversity of the involved contexts makes it hard to deal as adequately with their
diversity as would be necessary for successfully communicating through language. In the case of policies at the EU level, the
required balancing of the various rationalities seems to be made more difficult by two aspects:
- Actors are, of course, driven by their own interests, but addressing this issue seems to be taboo, in some other
countries and cultures more than for example in Austria. Therefore, money and power issues are usually not discussed
but must be hidden behind a paravent of apparently technical content-related arguments drawn from the store of
professional rationalities (“the most important questions are always those not mentioned”). This creates a high degree of
uncertainty in the communication at the EU level as to how, for example, a “text” expressed by a French, Finnish or
British person must be “read” correctly, i.e., up to what extent a statement on a technical concept or a noble general
policy goal is actually meant that way or is merely used to mask a “hidden agenda” of self-interest.
- Large organisations such as the EU Commission have specialised departments for the individual sub-rationalities –
conceptual work relating to technical rationalities, political public relations work, administration and financial control.
Contacts among these departments rarely happen; direct contacts with the European citizens, i.e., with the ultimate
clients of policies usually never take place at all. This helps to avoid “cognitive dissonance” in the acting persons and
makes them more susceptible to the illusion that everyone is speaking of the same thing and that their “policy-making"
rests on one single rationality free of contradictions.
Confusion as a consequence of the failure to take contextual differences into account
The cohesion and structural policy of the EU has up to now more or less ignored the obvious differences in national policies
and administrative structures and even more so the much less obvious differences in the internal logics of the expert, policy,
regulatory and client systems. Language is considered merely a problem for the interpreting services. I would like to illustrate
(albeit slightly exaggerated to make it more easily understood) the confusion caused by this ignorance of the contextual
dependence of language in practice in a complex policy field such as EU structural policy:
- New general objectives of the EU are usually adopted at the level of the European Council by the heads of states and
governments, sectoral goals by the Council of Ministers for the specific sectors and sometimes – as in the case of the
European Spatial Development Perspective (ESDP) – also by an informal meeting of ministers without any binding
obligations. The formulation of these goals sometimes refers to “strategies”, some of them might be drafted by
professional experts, but even so public declarations on political objectives are rather symbolic evocations reflecting
current sentiments of, or pressure exerted by, the relevant parts of the European public. This was the case in 1988
when EU structural policy was created (as a counterweight to the internal market) as well as in the recent “strategies“ of
Lisbon or Gothenburg. Moreover, political declarations of EU policy objectives are usually compromises in which the
contradictions in the national interests are bridged by consciously using ambiguous wording. The question of which
goals formulated can be reached (if at all) by which public institutions applying which measures within which time-frame
is usually not considered in this context.
- The Commission now decides to put such political goals of the EU – partly disguised in expert language – into practice
and to anchor these in its (legal and financial) intervention instruments, e.g., structural funds. This is causing a
contextual shift: Political declarations or professional concepts are being turned into formal rules, which in line with the
corresponding internal logic of a bureaucratic regulatory system must also be complied with and monitored. Vice versa,
a contextual shift also occurs if a political body such as the European Parliament attempts to prove its (political!)
significance by troubling the Commission with formal controls (some being inappropriate from a professional point of
view).
- The regulatory system of the Structural Fund was unmistakably designed according to the model in place in a certain
national administrative context: the French “planification”. The application of this model in other administrative contexts
or in a multi-level system could therefore result in frictional losses if the systems involved are not sufficiently
harmonised.
- By failing to recognise contextual differences, the Commission services have repeatedly attempted in the past to fit their
understanding of political intentions (and also their own professional ambitions) into a set of administrative rules as
110
detailed as possible. These attempts not only have caused severe delays at the beginning of the programming period,
but the results of these efforts have often turned out to be unusable, because they were incompatible with the different
political and administrative contexts in the Member States. They had consequently – again with a loss of time – to be
adapted to the national frameworks.
- If necessary, the formal rules are observed, but only formally: An example is the principle of having to draft programmes
by working “in partnership“. This principle would indeed make sense, both as a political signal and from a professional
point of view to better anchor a developmental strategy. In the timeframe granted by the regulatory logic, however, there
were only a few weeks left for a discussion of programme drafts with the programme partners. This is, of course, much
too short for a sound discussion of the content (in the meaning of a professional rationality). “Partnership“ has thus been
transformed into a formal requirement in the meaning of the regulatory logic, which (at least from a professional policy
perspective) has lost a lot of its meaning, or has mutated into a mechanism for securing the political acceptance on the
basis of the smallest common denominator: the selfish interest in obtaining funds.
- Another problem arises if – in the interest of a pretended “coherence” between policies – attempts are made to overload
the implementation of measures with the goals of several different (often contradictory) policy areas. If the (inevitable)
contradictions among goals and priorities are ignored and regulations are formulated too rigidly without taking account
of the requirements of practical implementation, often absurd results are the outcome and a good intention can easily
turn into its exact opposite. For example, if state aid to SME is made contingent at the same time on costly or time-
consuming conditions (e.g. additional analyses to prove the compatibility with environmental goals), is restricted in the
amounts (by state aid rules) and subject to strict controls (to avoid misappropriation of public funds), then the added
value of the small assistance granted may be negative, making it more advantageous for the target group to refrain from
the assistance offered. A strong formal linkage of the Structural Fund to the European Spatial Development Perspective
(ESDP) - which was rejected by all member states at the time of its approval, but has been proposed by Commission
services several times since - would probably lead to such absurd results in practice, too.
- A good example for the contradictory nature of the various rationalities is provided by the issue of evaluation. This
concept comes from the world of professional rationality. It was largely unknown in the political and administrative
system of Austria’s regional policy before accession to the EU. In the Anglo-Saxon world, however, it seems to belong
to political culture to call for “value for money” (which does not automatically mean the same thing as evaluation). The
unreflected transposition of the expert and political requirements to the context of formal regulatory systems has yielded
quite absurd results: when (in circular logic) the ex-ante evaluation of a programme is required to be part of the very
same programme; when a programme has to be evaluated at the prescribed interim date, even if there are no
implementation results available (because the programme started late); when evaluation methods that were developed
for a certain type of programme (infrastructure-oriented Objective 1 programmes) are required as standard for other
types of programmes (e.g. innovation-oriented Community Initiatives programmes); when the evaluation is required to
be based on quantitative indicators even if there are no meaningful indicators available and the available indicators are
invalid or not meaningful. Furthermore, the question arises of whether an evaluation exclusively from the perspective of
professional rationality can adequately assess the success or failure of a programme that is also heavily influenced by
political and administrative rationality and hidden objectives.
The list of examples mentioned above could be lengthened at will and should make the following clear: If the differences in
the contexts, language games and rationalities are not taken into account, the results will be unsatisfactory from the
perspective of the sub-systems – not only in individual cases, but systematically. They will be absurd from a professional
point of view, politically hard to explain to the public, susceptible to irregularities and impracticable in individual cases.
Attempts to stop these undesired results have not been completely impossible up to now, but have led to additional costs
and time delays. In my opinion, this is the main reason for the low degree of effectiveness and efficiency of EU structural
policy.
What next? – Proposals for “light governance” for EU cohesion policies
The complexity of multi-sectoral multi-level policies and thus the multitude of rationalities and linguistic contexts involved
cannot be reduced substantially. I believe, however, that the problems resulting from this situation can be mitigated by
dealing with this multitude in an adequate manner. In my opinion, approaches referred to as “loose coupling” or “light
governance” are more appropriate than the traditional approaches based on rigid, hierarchical, top-down co-ordination
(command and control) or introduction of new conditionalities. For the purpose of designing EU cohesion policies, the
following aspects appear to be of particular importance:
1. As a basic prerequisite, one would have to awaken or deepen the appreciation of the fact that there is not just one
“correct” point of view but many; that - as a fundamental working hypothesis, until the opposite is proven - one should
expect that an interlocutor or reader does not understand what one wishes to convey, or at least not in exactly the way
intended by oneself; that information “is not what A says, but what B understands”.
2. Building on this appreciation of different contexts one should seek to design communication adequate to specific
contexts, to avoid the confusion of contexts or, at least, to write “texts” in a manner that does not provoke misleading
111
interpretations when read in different contexts. As far as Structural Funds are concerned, this might have the following
implications:
- Because of their multi-level character, the Structural Funds require formal rules regulating the collaboration
between Commission, member state, and region. Legally binding rules, however, should be issued only for matters
that can actually be regulated and monitored. In order to leave enough room for technical details, practice-oriented
action in individual cases and political flexibility, formal rules should be formulated as minimum requirements or
exclusion criteria (on which a consensus can be achieved and which can be monitored): what is the maximum
amount of money available for a programme; under what conditions and in which cases should co-financing from
Structural Funds be ruled out (eligibility criteria in content, time and place; anything that is not expressly ruled out
would then be formally allowed, even if it is not necessarily “optimal” from the perspective of other rationalities);
what reports and information have to be submitted as a minimum requirement in what kind of format (to be kept as
simple as possible) by what (realistic) timetable to whom, etc.; and finally: who is responsible (and liable!) for
compliance with which of these rules. These formal responsibilities fulfil their purpose only if they correspond with
the capacities (legal competence, qualification and number of staff, material resources) that are needed for
exercising them in place (which with the Structural Funds is currently not always the case, e.g. where the
administration of cross-border programmes by national and regional authorities is concerned). This body of rules
should be laid down in the regulations or in specific co-financing agreements without garnishing them with any
additional analyses and concepts that belong to another context. These formal rules should be kept as simple as
possible and remain unchanged throughout the entire programming period to ensure that anyone who has to apply
them is able to understand them, which minimises the risk of irregularities as a result of misunderstandings.
- The (professional) wisdom of a strategy cannot be unambiguously regulated. Here opinions may vary. Professional
assessments are therefore out of place in formal regulatory documents. Even if some programme strategists
believe that by means of programme documents or “management by objectives” or conditionalities one can force
the agencies involved in implementation to conform to the given strategy and guarantee that goals will be attained,
this remains an illusion. Nonetheless, communication about the conceptual considerations underlying a funding
programme makes sense and is necessary to help the participants gain a more profound understanding. For this
purpose, however, instruments should be chosen that are more appropriate to this context (e.g. working papers,
workshop discussions). The monitoring committees that were set up for the Structural Fund programmes and
currently have to deal with the boring duty of resolving issues of formality could be assigned a new, more suitable
task of serving as discussion rounds reflecting on matters of content and strategy. They would have to be designed
as a common learning system and organised to work through modern communication techniques. Evaluation
would have its place within this learning system as an ongoing professional interaction between the programme
partners and external experts. It should not be mixed with formal monitoring tasks (and threats of sanctions). The
EU-wide exchange of experiences would have to be organised by the Commission in a suitable manner.
- For political communication, neither formal sets of rules nor expert discussions are the proper vehicle. What is
needed here are simple messages of highly concrete, easy-to-grasp content as appropriate for the respective
target group. As practical experience is showing us even now, voluminous, difficult-to-read programmes, reports
and evaluation studies are quite irrelevant in the political arena. Instead, politicians use their own media (press
conferences, presentations of successful projects in brochures, advertisements in regional media, etc.). These
channels of political communication might be developed even further.
- If, finally, regional funding programmes are not only meant to distribute funds to clients but actually to achieve a
strategic purpose, i.e. change actors’ behaviour, well-targeted communication with the addressees (potential
interested parties, project owners) is required. Here again, the learning processes have to be designed for best
effect. The project owners have to understand why the public sector hands out subsidies linked to certain
conditions. The administrators of such subsidies, on the other hand, can effectively intervene in regional
development processes only if they have a better understanding of the special problems that project owners are
confronted with and of their options.
- Finally, it would help to avoid misleading shifts of contexts if conflicts about power and funds (i.e. self-interests of all
involved parties) would be negotiated in the appropriate bodies more frankly and would be less prone to
concealment and taboos.
3. It is important to differentiate clearly between different contexts and to engineer communication instruments to suit
specific contexts. In addition, however, vertical as well as horizontal links are needed between the various professional,
political and administrative sub-systems involved (“interfaces”) staffed by people who are able to think and communicate
in several contexts, to “translate” information between these contexts, to facilitate an exchange of views and
experiences between the representatives of different contexts and thus enable cross-context learning processes. In
practice, special “intermediary” institutions are increasingly being created for this purpose. To fulfil their tasks, these
intermediaries should be as neutral as possible vis-à-vis the various rationalities and interests involved (which does not
mean that they are free from self-interests).
112
The fact that Austria – despite having a highly complex institutional structure – has not encountered any major problems in
implementing the EU Structural Funds, is possibly attributable to the fact that – at least some of - the “light governance”
components referred to above have already been established in the regional policy area.
- As I see it, professional, political and administrative rationalities of policy-making are less closely intertwined in Austria
than in other countries.
- Even in Austria, though, appreciation of the different aspects of these rationalities is not common practice yet, but it is
possible to discuss them relatively openly time and again. This applies in part even to negotiations involving self-
interests.
- Austrian regional policy, which, because of its institutional fragmentation and a lack of formal legislation laying down co-
ordination obligations, always had a particular need for interfaces, is already able to look back on many years of
experiences with intermediary institutions (e.g. the Austrian Conference on Spatial Planning, Österreichische
Raumordnungskonferenz or so-called “regional managements”). Since Austria’s accession to the EU, these interface
functions have acquired additional importance.
Austria does not have the ideal solution for Europe, but it does have experience with complex multi-sector multi-level
policies. Perhaps this experience may help in developing a more appropriate system for EU cohesion policies through the
joint efforts of the Member States and the Commission.
113
Federal Reserve Bank & OECD Conference

„New approaches to Rural Policy – lessons from around the world”
Warrenton (Virginia - USA) 25.-26.3.2004
Wolf Huber
Federal Coordination: Policy Making Beyond Command & Control
Territorial policies in a federal system: multi-level multi-sector governance
The traditional understanding of public policy-making usually has in mind a strictly hierarchical structure: one single decision
maker (or decision making body) on top and subordinate agents, who implement the policy. Decisions are taken in the name
of a homogenous public interest. The implementation of the policy is coordinated by the binding central decision (command)
and supervised on the basis of full information (control).
Territorial policies in federal systems, however, do not correspond with this model:
• Federal systems may vary considerably in the size and number of regions as well as in the distribution of constitutional
powers and budgetary resources between federal (national) and regional (State, Länder, Canton etc.) levels. All of
them, however, are characterized by their multi-level character of government and legislation, i.e. the existence of
autonomous fields of policy making given to the regional level. It might thus be the case that different elements – legal
framework, finance, planning, technical implementation – of one specific policy are split among different levels of
government. In such fields of regional autonomy central government has no formal power neither to influence
(“command”) regional government decisions and actions directly nor to hold them responsible for the outcomes of their
actions (“control”).
• Policies with a territorial focus, such as rural policy, urban policy, regional policy etc. are characterized by their multi-
sector approach. They may comprise elements of economic, agricultural, environmental, transport, labour-market,
education, social, housing or cultural policies. The responsibility for these sectoral policies is usually split among
different ministries or departments, each having a certain degree of institutional independence. In Austria, e.g., each
minister is directly responsible to parliament; the Federal Chancellor (Prime Minister) has no formal right to give
directives to other ministers. In a federal system, furthermore, these sectoral policies will most probably be distributed
between federal and regional government levels.
Multi-level multi-sector policies therefore have to be coordinated without being able to rely on command and control.
Challenges for multi-level & multi-sector governance
Each of the institutions and levels of government involved in multi-level multi-sector policies has its own institutional self-
interests (concerning resources and power) as well as specific policy agendas. These policies therefore are characterized by
manifold interest conflicts and competing agendas within the public sphere, not only between policies but even within one
specific policy.
The situation is further aggravated by the (however for many people not so obvious) fact that different public sectors are
dominated by different professional languages, logics, views and values. What seems crucial to economists often seems
irrelevant to spatial planners (and vice-versa), what might appear to be a solution of a problem to agricultural experts or
transport planners might create a new problem from the perspective of an environmental authority (and vice-versa).
Sometimes financial tools – e.g. conditional grants as “golden rein” – are used to retain or introduce a certain element of
command & control, i.e. dependence of formally autonomous partners. But such financial tools are not always available. And
if they are available they do not always render the desired results, because “command” is confused by conflicting objectives
and “control” jeopardized by the impossibility to get sufficient information on highly complex and dynamic phenomena.
This raises the fundamental question of multi-level and multi-sector governance: Is it possible – and if so: how - to coordinate
a multitude of autonomous agents with different (often competing) interests, agendas and views without formal power or
actual possibility to force others into acting according to one’s own agenda and without full information, i.e. beyond the
traditional coordination model of command and control?
This question, by the way, should not be new to people familiar with territorial development policies: Development has
always been heavily dependent on open-minded attitudes and innovative behaviour of private agents, which, too, cannot
simply be brought about by command & control, but have to be stimulated and encouraged by softer forms of intervention.
Arrangements to facilitate multi-level multi-sector coordination
According to my experience the answer to the above mentioned question is: yes, but not to the extent promised by traditional
planning theories and not in the traditional way.
114
There are institutional arrangements for coordination, which are suited to facilitate multi-level multi-sector policy making and
to render desired outcomes of complex territorial policies at least more likely:
1. A new mission for coordinators: coordination as service
Coordinators usually are confronted with great scepticism among those they want to coordinate, who are afraid to have
their autonomy reduced. Any attempt of coordinators to adopt an inappropriate attitude of dominance will increase
resistance and make successful coordination less likely.
Acceptance for the concerns of the coordinator, however, will rise among those to be coordinated, if they benefit from
coordination, e.g. if they are provided with better information on relevant procedures or possible innovative problem
solutions relevant to their policies, if they are supported in their attempts to raise public awareness for their agenda or if
the coordinator succeeds in mediating conflicts. Instead of command coordinators therefore rather have to listen. In
multi-sector policies coordinators have to be familiar with the different professional languages, values and views
involved and be able to “translate” messages from one logic to another. Coordinators should act as honest brokers and
remain impartial in conflicts (concerning both institutional interest or policy objectives) between institutions involved.
The services of coordinators have to be “marketed”, i.e. the potential benefits of cooperation have to be actively
communicated to the addressees. This requires knowledge of the demand side, i.e. a good coordinator has to know
how the world looks like from the perspective of those he wants to coordinate.
The existence of an external challenge (a “common enemy”) or a clear win-win-situation make the benefits of
coordinated action more obvious. Financial incentives (which do not have to be very high) can compensate for
additional transaction costs and thus reduce barriers to cooperation.
2. Impartial institutions specialized in coordination
Different autonomous agents of similar political or economic power with strong own interests and policy objectives will
often find it difficult to accept one of them as coordinator. For good reasons, by the way, because persons with a strong
commitment for their own agenda usually have difficulties to adopt an impartial (or rather: all-partial) role of an honest
broker and neutral coordinator. This problem can be overcome by creating special institutions for coordination. My own
job of coordinating regional policy in Austria, for example, has proved to be much easier being located in the Federal
Chancellery (Prime Ministers office, formally in charge of government coordination) than it used to be when we were
located in a sectoral ministry for some years back in the 1980ies.
For the purposes of multi-level multi-sector policy coordination the creation of separate intermediary institutions (e.g.
regional development associations, territorial employment pacts) has proved to be successful in Austria and many other
countries. To compensate for the lack of formal coordination tools in the Austrian federal system the Austrian
Conference on Spatial Planning (ÖROK) was established as early as 1971 to serve as a common platform of all federal
ministries, regional governments, representatives of local government associations and social partners, to deal with
multi-level multi-sector issues of spatial and regional development policies. After the accession to the European Union
this well-accepted coordination platform has been used successfully also for the coordination of EU structural policies in
Austria. In spite of a very fragmented institutional framework for regional policies this coordination platform has enabled
us to implement the extremely complicated EU structural policies rather successfully.
3. Communication in informal networks
Efficient and effective coordination of dynamic processes in complex policies requires quick transfer of high quantities of
information. Traditional formal exchange of information along hierarchical communication chains – typical for
bureaucratic systems – has proved to be highly inadequate for this requirement: Formal processes of information
transfer are much too slow. Especially the limited capacity of overloaded top positions of hierarchies to process
information creates a serious bottle-neck. In order to cope with the challenge of information it proved to be more
appropriate to use informal, non-hierarchical networks among competent people working on different levels of
administrative and political hierarchies.
Informal communication has one important prerequisite: trust. Trust, in its turn, requires a certain degree of stability in
personal relations and framework conditions and, above all, the positive experience, shared by all network partners, that
cooperation “pays”, i.e. renders a positive value-added for all participants. According to my experience it is a task of
crucial strategic importance for multi-level multi-sector policies to establish such cooperation networks and create an
atmosphere of mutual trust. The above mentioned intermediary institutions in Austria (ÖROK, Regional Managements),
which are using informal communication networks in most of their everyday work, are good examples for the
effectiveness and efficiency of this type of communication.
4. Patience and flexibility
Time is crucial for successful coordination in many ways:
115
Processes like information generation, processing and transfer, learning or negotiations to solve conflicts require time,
usually much more than expected. This time requirement seriously limits the quantity of coordination work that can be
managed with a given working capacity. The traditional expectation that everything should be coordinated with
everything therefore remains an illusion. A successful coordinator has to take decisions on priorities.
Innovations, which imply changes in people’s attitudes and behaviour, require even more time. So patience is a
necessary precondition for a good coordinator who wants to avoid frustration.
If innovation occurs, however, it does so often without warning, e.g. when the right people meet at the right time at the
right place. A good coordinator should be able to recognize such “windows of opportunity” as early as possible and have
sufficient flexibility to react without delay.
A different understanding of policy making
It should have become obvious that the type of policy coordination described above implies a completely different
understanding of policy making: A “policy” is not any longer a static set of public activities defined ex-ante, implemented
mechanically in a linear and hierarchic structure and controlled ex-post, but should rather be seen as an emergent dynamic
phenomenon of creating and gradually modifying a joint understanding of the “what”, “why” and “how” of certain public
activities in an on-going communication process. Based mainly on trial and error, this process, again and again and at the
same time, reflects past results, monitors on-going activities and develops new perspectives for future activities.
Central government coordination aims at organizing this policy process to keep it fluent and innovative and to increase the
adaptability of the whole process of economic and social development.
116
117
Arjen van der Burg

Place sensitivity: handling the space of flows in place-based policies
Ministry of Infrastructure and The Environment, The Netherlands (a titre personnel)
arjen.vanderburg@minvrom.nl
1. Introduction
From the Agenda for the seminar I’ve chosen one question to reflect upon:
- To what extent the “place-based” policies take into account the emergence of the “space of flows” – i.e. how these
My experience with spatial planning in The Netherlands is at both the local and the national level (and the connections
between those two). I see spatial planning as a special form of “place-based policies”. Spatial planning in The Netherlands
has evolved from municipal-level urbanism and housing development since the end of the 19th century. Regional spatial
planning started in the 1920’s, national planning can be exactly pinpointed at 1941 but gained ground after 1960. The state
took the lead in rebuilding the nation from extensive war damage and then in developing an industrialized country, in the
mean time housing a rapidly increasing number of inhabitants. After 1960 the country developed into an increasingly rich,
export and consumer oriented post-industrial society. After 2000, population growth slowed down and market choices
became more important than government choices. With the recent financial crisis, economic recovery is now the main
theme. Spatial planning has been the companion to these national development efforts, especially in the field of urban
development, urban-rural relations and urban renewal.
2. Where the “space of flows” meets the “space of places”
I see the “space of flows” as the functional relationships that people and firms (and their organizations) have with one
another, over small and large distances. The “space of places” is the physical space, with its “natural”, geomorphological
basis and with the imprint that human activities leave on it. The flows between people and firms require physical means - for
transport of people, goods and information - and so they also leave traces in physical space.
How to take the space of flows into account when dealing with the space of places? In the Netherlands a fruitful approach
has been developed that I use to handle this question. The approach has been incorporated into national, and often also into
regional and local land use planning.
3. Layers approach
Although we share only one “space”, or one “earth”, we have developed a finer approach for planning purposes. It is called
the layers approach53. Its essence is that for some forms of land use governments are more capable and responsible to act
than for other forms of land use. The distinction lies in the time frame of land use changes, the cost of interventions and the
extent to which the private sector can fruitfully operate. (Figure by prof. Dirk Sijmons.)
53Developed by landscape planner prof. Dirk Sijmons of TU Delft. For a more extensive explanation and application to EU-level planning issues, see Arjen
van der Burg and Marjan Hidding, 2006, “Nationale ruimtelijke ordening als scharnier tuissen Europa en de regio’s”, in Leonie Janssen-Jansen en Bas
Waterhout (eds.), Grenzeloze ruimte, Den Haag: Sdu uitgevers, pp. 189-201.
118
The surface layer (layer 1) is formed by very slow processes based on the formation of the earth. Because of the large part
of the country that lies under sea level, in the Netherlands the water system is seen as the central factor for safety, fresh
water supply and water quality for nature. The surface layer should have a kind of “self-evident” priority in planning. The
water system, formed by rivers and sea, is cross-border by nature. In general, only governments can take care of the long
time frames and high costs involved in maintaining or remodelling the surface layer. On smaller scales private firms can take
care of e.g. extraction sites or water reservoirs.
Layer 2 represents the networks for human traffic and their nodes: roads, canals, railroads, cables, pipelines, air corridors. It
is called the network layer. The is the space of human flows par excellence. Here, also governments are best suited to take
care of the networks, although in the course of time responsibility shifts between government and the private sector (e.g.
railways started as private companies, then were nationalized, and now are partly privatized again). The time frames are
shorter, but still considerable, the costs and risks are less than in the surface layer.
Layer 3 represents what is traditionally associated with “spatial planning”: the distribution of human land uses like housing,
industry and recreation, over space. It is called the (human) occupation layer. It is the heartland of the space of places. The
time frame is rather short, costs and risks are such that private firms and individuals can take on most of the responsibilities.
Developments in the occupation layer should primarily be a response to market demand.
Over the last twenty years the realization has dawned in the planning discipline that with the end of strong central
government control over housing and economic activity, and with the liberalization of the EU internal market and the
globalization of other markets, shaping regions according to a pre-determined policy model can only be effective in a limited
number of cases at a small geographical scale. Spatial development in the occupation layer is determined primarily by the
choices of inhabitants and entrepreneurs.
As far as governments want to bear responsibility, local and regional governments are best suited to take care of the third
layer. Not only the scale of costs and risks is suited to their capacities, it is also the need to make local fine tuning possible
that gives these levels of governments a strong position. This includes fine tuning of the three layers. The “Functional Urban
Region” or “Daily Urban System” define the geographical size of the territory in which the bulk of human activities take place
that need to be interrelated for a smooth functioning of society. Most housing, office, retail or leisure projects have a limited
market scope, seldom exceeding regional boundaries. Most traffic is also regional54.
4. Handling the space of flows
On the basis of this layers approach, the way of dealing with the space of flows in place-based policies can be seen as
follows:
- In the development of a territory the surface layer must first be taken care of. It is a conditio sine qua non for the
accommodation of human flows, and for safety and sustainability. High standards must be met to offer a stable business
and living environment. Its qualities should be guaranteed, and both restrictions on and new opportunities for development
should be produced. Where the water system also functions as a means of transport, the surface layer has direct
importance for the space of flows.
In the Netherlands, the importance of the surface layer manifests itself amongst other things in the existence of “water
management boards” that have independent constitutions and that have their own tax base and regulations. Their main
purpose is to guarantee that there is no flooding and provide a fresh water supply. In recent times, the expected effects of
climate change have led to the need to revamp large parts of the country in the form of a multi-year “Delta programme”
under the guidance of central government. Part of this program is the adaptation of the main rivers and seaports that have
an important European function to both higher and lower future water levels.
- The transport networks that support the functional flows of people, goods and information deserve a strong place in the
planning approach because through their inertia they are fundamental determinants of other developments in the
occupation layer55. The networks must be seen as links between nodes. Thus, in the design of networks, it is necessary to
have a sound idea about the nodes and their different functional profiles and sizes.
In the Netherlands, policies for network development make a distinction between the international and national, regional or
local significance of networks. Each level of government is supposed to be able to organize and finance its own networks
(with some general state support) and to fine tune them to other spatial developments on their own geographical scale.
The key to matching networks with the other layers is to start network development from a broad spatial perspective, in
which the future demand for different land uses in a (smaller or larger) region is combined with analysis of existing
qualities in the surface layer, the occupation layer and the networks. This way of working makes network planning “place
sensitive”. From that start, alternatives are sought, broadly speaking either on the land use side or on the network side.
New or modified infrastructure can be the outcome, but usually a combination of land use choices, network management
54 A corollary to this view is that regional governments should be strong compared to local and national governments and that regional governments should
have ample room for regional taxation. Both these conditions have been unsatisfactory fulfilled in The Netherlands.
55 Large parts of the Western European road network are heirs to their Roman ancestors.
119
solutions, and infrastructure provision (starting from optimization of existing infrastructures). Multimodality is a general
design principle for networks56.
The state produces when necessary spatial strategies for (parts of) such networks (e.g. for large wind power installations)
and delivers building permits to operators on the basis of national “local” land use plans.
Seaport Alliance: Flow managers meet space managers
In 2008, a new Spatial Strategy for Randstad Holland was finalized, in the context of which a series of “alliances” were
launched comprising a number of important but different stakeholders and decisionmakers in both the public and private
sector. It was an attempt to join forces and to co-operate in a number of areas, for which usual PPS contracts would come
too early.
One of the themes was (pre-competitive) co-operation between the two large Dutch seaports, Amsterdam and Rotterdam,
with the aim to formulate economic, spatial and infrastructure strategies for the long term (2020-2040). The Seaport Alliance
is the only one that is still functioning. It now comprises two seaports located in the Randstad region (Amsterdam and
Rotterdam), two other seaports located elsewhere in the the Netherlands (Groningen Seaports and Zeeland Seaports) and
the two ministries of Infrastructure & The Environment and of Economic Affairs, Agriculture & Innovation. The Alliance is
currently doing scenario research regarding future cargo flows (volumes, composition, spatial structure), possibilities for
enhanced market focus and seaport co-operation, and future requirements of both seaport and hinterland facilities (industrial
sites, infrastructure).
- The flows are seen as functional relations between people and firms; they must precede physical solutions in planning57.
For example, the urbanization pattern or the location of seaports should be determined on the basis of (the future
development of) those functional relationships. The occupation layer can be seen a set of nodes that in themselves are a
combination of transport nodes and other land uses that serve as origins and destinations for transport.
In the Netherlands, most functional relationships are on the level of daily urban systems, of which around 25 can be
discerned. Municipalities and provinces are supposed to take care of the occupation layer. The state only takes on special
responsibilities in this field for the most internationalized regions of Amsterdam, Rotterdam and Eindhoven, e.g. through
strategy development and project realization in the area around Schiphol Airport, and in general through giving priority to
these three regions in national network development58.
In national planning economic development nowadays comes first. The so called “triple helix” of collaborating research
and educational establishments, private firms and local government has proven to be successful in the Eindhoven region,
after the multinational corporation of Philips had to cut back activities drastically in the 1990’s. This approach has been
scaled up to the national level for 10 top economic sectors. Spatial-physical measures will have to follow upon triple helix
proposals, not the other way round.
5. Layers over Europe
Of course this is not an exact model of the distribution of responsibilities and capabilities between the public and the private
sectors, and between layers of government. There are different national and local traditions, and in the end political choice is
decisive. But this conceptual approach can help place EU policies on the right track.
In the surface layer Europe is the widely diversified westernmost part of a huge continent, but many structures are shared by
more than one country. The seas are the most prominent shared spaces, but also the great rivers and the major mountain
ranges are a common ground. This makes the case for EU policies for larger areas, as is done through the maritime strategy
or the water directive. In the network layer, Europe is covered by densely woven networks of energy, overland transport of
people and goods, and nature reserves. A strong raft of EU policies reflects this common networked space in which the
space of flows is reflected. Rivers and seas also form networked transport structures. So we can count at least four networks
on the EU level: transport, electricity, water, nature. (Internet could be added.) With these networks come major nodes that
connect the branches. In many cases, cities are the nodes that combine nodes of different networks.
For a European perspective on spatial development we must first study the nodes in networks that have relevance at the
European and world scales, as is done in the forthcoming TEN-T proposal59. The patterns and profiles of the European
nodes deserve a European perspective in order to prevent wasteful competition for scarce infrastructures and the scarce
56 The application of this principle is still in its infancy. The described way of doing is part of the so called “MIRT” proces: each year the state produces a
multi-year program for infrastructure and spatial development, divided into eight region’s. The program is a negotiation piece between state, provinces and
metropolitan regions.
57 This is an explicit rupture with the tradition of morphological planning. See more on this theme in: Arjen van der Burg, 2011, “Europa moet zijn knopen
natellen”, in Stedenbouw + Ruimtelijke ordening, no. 2, p. 18-23. An English translation is available on request.
58 In the past, the state took a greater responsibility for urban and rural development through project contracts and general subsidies.
59 Compare Wil Zonneveld, 2010, ‘Ruimtelijke ordening in de Eurodelta’, in Stedenbouw en Ruimtelijke Ordening, no. 6, p. 14-19. He provides a sound
analysis of the four most important European networks within which the Netherlands must choose its position. Also: Zachary P. Neal, 2010, ‘From central
places to network bases: A transition in the U.S. urban hierarchy, 1900-2000’ in City & Community, vol 1, p. 1-27
120
capacity to deal with environmental burdens. The nodes acquire their significance from world trade (= flows of goods and
information) and the location behavior of multinational enterprises. Multinational enterprises are the biggest drivers in the
world economy and must therefore be cherished60. They represent a high earning capacity and stimulate the other parts of
the national economies. They prefer large urban regions61.
Large urban regions are in general more productive than smaller ones, simply because they can offer more agglomeration
advantages62.
Here we must look at the spatial planning of the nodes themselves at the scale of the daily urban system. This is work in the
third (occupation) layer. The regions must provide a good working and living environment and therefore be well planned
spatially.
Is the design and planning of the daily urban system a European issue or should we leave that to the member states?
I would say the latter because integrated (spatial) planning is only possible at smaller scales. The subsidiarity principle also
leads to a preference for regional levels of government .
National governments and the EU should support the regions in fine tuning land use demands with network and the surface
layers; presenting models for urban and regional development would hinder that. Support could mean that proposals for
European sectoral policies give systematic account of their effects on the agglomeration advantages and disadvantages of
the European world cities. Specifically, EU policies for the four “flow” networks must show “place sensitivity”: the ability at the
level of regulations, objectives, budgets and programs to make local fine tuning adaptations possible.
60 For example Philip McCann, Zoltan J. Acs, 2011, ’Globalization: Countries, Cities and Multinationals’, in Regional Studies, 45: no. 1 p. 17-32 and A.
Thierstein and S. Luthi, ’Rhein+Ruhr – Der polyzentrische Metropolraum im internationalen Standortwettbewerb’ in Vorbereitender Bericht Jahrestagung
Deutsche Akademie fur Stadtebau und Landesplanung, 2010
61 This is a problem in The Netherlands. There a no regions with more than 2 mln. inhabitants. Comparative studies suggest that a region of at least 3 mln.
inhabitants would be an asset. Think of Stockholm or Vancouver. The Amsterdam region is the best we can offer, with a strong position in some fields of
European or even world importance (logistics, finance, internet). In the past, the idea was that Dutch urban agglomerations should not exceed 1 mln.
inhabitants in order to prevent unliveable and morally dangerous cities like London to come into existence. In modern terms: agglomeration disadvantages
would become too difficult to deal with. On that basis the growth of great Dutch cities was restricted at their borders by creating green recreation separation
zones (“buffer zones”) and by creating protected landscapes, of which the Green Heart is the most famous one. After the 1970’s faith in cities was restored
but strong autonomous expansion was not facilitated. “Compact cities” remained the favorite concept. Recent change of policy offer some opportunities for a
different direction of development.
62 See CPB and Atlas voor gemeenten, 2010, Stad en land. That large cities can be a cause of concern – agglomeration disadvantages such as for example
criss-cross car traffic, noise pollution, high house prices etc. - is recognized and can be successfully countered by spatial, environmental and transport
policies at the local, regional and national levels.
121
Biographical notes
Sergei Artobolevskiy, Head of Department for Economic and Social Geography at the
Institute of Geography at Russian Academy of Sciences. Graduated from the Faculty of
Geography at Moscow State University, where he defended a thesis on the changes in the
territorial structure of the economy of the UK. In 1982 he obtained a PhD degree (thesis on
Regional Development in UK). In 1992 he obtained Doctor of Science degree (thesis on
Regional Policy in Europe). Since graduating from university he has been working at the
Institute of Geography of the RAS. His main research interests cover the field of Russian
regional policy. Actively collaborates with experts from universities in the UK, the Netherlands, Germany,
Belgium, Hungary, Poland and other countries - he has lectured at more than 20 universities in Europe.
Repeatedly invited to work as an expert by the World Bank, TACIS, BISTRO, ECOS-Overture of the European
Union, the Russian federal and regional executive and legislative branches.
Fabrizio Barca, General Director at the Italian Ministry of Economy and Finance and Special
Advisor to EU Commissioner responsible for Regional Policy. He has previously worked at
the Bank of Italy as Division Chief at the Research Department, Chief of the Department of
Development Policies at the Italian Treasury and President of the OECD Territorial Policies
Committee. He graduated from Rome University and undertook an M.Phil. degree and
research activity at the Universities of Cambridge (1978-80), MIT (1989-90), and Stanford
(1994). He had appointments at the Universities of Bocconi, Siena, Modena, Rome and
Parma, where he taught economic development, corporate finance and Italian economic
history. His works include papers and books on the theory of the firm, evidence on SMEs, corporate governance,
the history of Italian capitalism and regional policy.
Iain Begg is a Professorial Research Fellow at the European Institute, London School of
Economics and Political Science. His main research field is political economy of European
integration and EU economic governance. He has directed and participated in a series of
research projects on different facets of EU policy and his current projects include studies on
the governance of EU economic and social policy, the EU's Lisbon strategy, the social
impact of globalization and reform of the EU budget. Other recent research projects include
work on policy co-ordination under EMU and cohesion policy. He has published extensively
in academic journals and served, from 1998 to 2003, as co-editor of the Journal of
Common Market Studies, the leading academic journal focusing on the study of European integration. He has
undertaken a number of advisory roles, including being a member of a groupe de prospective on the future of
cohesion policy and being called as an expert witness on EU issues by the House of Commons Treasury
Committee, the House of Lords European Communities Committee and the European Parliament. He is a
frequent contributor to international conferences on EU economic policy issues and is regularly solicited for
interviews by journalists.
Jiří Blažek, Associate Professor at the Department of Social Geography and Regional
Geography, Charles University in Prague. Main research interests are formation of
regional innovation systems in new member states, the geography of knowledge
sources, analysis of regional impacts of sectoral policies and evaluation of the impacts of
the EU cohesion policy. Author of about 50 scientific papers on regional development
and policy and of about a dozen of evaluation studies concerning the EU cohesion
policy.
122
Michał Boni, Minister, Member of the Council of Ministers. Graduate of Polish Language
Department at University of Warsaw with specialization in cultural sciences. In 1986 defended
his PhD thesis on sociology of culture. Specialist in human resources management. Since
1980 activist of Solidarity trade union movement, where he worked within its underground
structures and press. Member of Solidarity national authorities since 1989, in 1990 chairman
of the “Mazowsze” Region Board. In 1991 minister of labour and social policy in Jan Krzysztof
Bielecki’s government. Parliament Deputy (from the Liberal-Democratic Congress list) of the
first term of office in the years 1991-1993. Deputy minister of labour and social policy
responsible for labour market policy in 1992-1993. Since 1995 director of the Social Policy Reform Programme at
Stefan Batory Foundation. From 1994 to 1996 councilor of the Centrum Commune of the municipal city of
Warsaw. In 1996-1997 director and member of the Public Affairs Institute Team. Former consultant of the Third
National Investment Fund and the Polish-American Enterprise Fund in the field of employee affairs. In 1997-2001
head of political cabinet for the Ministry of Labour and Social Policy. Collaborator of Polish and international
foundations like CASE Socio-Economic Analyses Centre, International Relations Centre, Polish-American
Freedom Foundation, Institute for Human Sciences in Vienna. Representative of Polish employers in the
Foundation for Improvement of Life Quality in Dublin. Adviser to the Polish Confederation of Private Employers –
“Lewiatan”. Member of the Scientific Committee for Supporting Community for the Assessment of the National
Development Plans and Operational Programmes. Key expert cooperating in the elaboration of the National
Development Plan for the years 2007-2013.
Daniel Braun, the Deputy Minister at the Ministry of Regional Development of the Czech
Republic. Graduated from University of Economics in Prague (International Relations) and
from Central European University in Hungary. Previously, he has served as Assistant to
Organizer at the Ministry of Foreign Affairs of the Czech Republic and as a Project
Coordinator in Prague Congress Centre. From 2002 employed as an Analyst in the Ministry
of Defence & Armed Forces. In the years 2005-2007 the Senior Consultant in Deloitte BPO
G&I. He has been working at the Ministry of Regional Development of the Czech Republic
since 2007. He was in charge of coordination of preparation of operational programmes and
led the negotiations on the National Strategic Reference Framework 2007-2013. In July 2010 he was appointed
Deputy Minister. At present he leads the team which is preparing national development priorities for the period of
2014+.
Roberto Camagni, Professor of Urban Economics and of Assessment of Urban
Transformations at Politecnico di Milano. Graduated from Università L. Bocconi in Milan
(Master Degree in Economics) and from the University of Pennsylvania. Head of the
Department for Urban Affairs at the Presidency of the Council of Ministers, Rome, under the
Prodi Government. In the years 2003-2005 the President of the European Regional Science
Association. He is the author of more than 150 international scientific publications and more
than 100 national publications. In 2010 was awarded the Prize of the ERSA - European
Regional Science Association / European Investment Bank. In 2008 he was awarded the
Prize of the Fondazione Confalonieri, Milan, for his studies in urban sustainable development.
Martin Ferry is a Senior Research Fellow at the European Policies Research Centre
(EPRC) at the University of Strathclyde. He specializes in regional economic development
and policy in Europe and the governance of national regional policies and EU cohesion
policy with emphasis on the UK and Central and Eastern Europe, particularly Poland. Mr.
Ferry has been involved in several major evaluation studies of EU territorial and spatial
development policies, including cross-border cooperation programmes and the evaluation
of Structural Funds programmes in different parts of the UK. He recently authored the
research report The Implications of Demographic Ageing for Regional Policy prepared by
EPRC for a consortium of sponsors.
123
Veronica Gaffey is acting Director in the Policy Development Directorate of the Directorate
General for Regional Policy of the European Commission. This Directorate has responsibility
to design the future Cohesion Policy, to define the territorial and urban dimensions of the
policy and to carry out economic analysis and evaluation. Since 2007, she has been head of
the Evaluation Unit of the DG. During 2006, she was head of the Innovative Actions Unit of
DG REGIO. She joined the Evaluation Unit in 2000 from the ESF Evaluation Unit based in the
Ministry for Enterprise and Employment in Dublin, Ireland. There she managed the unit from
its inception in 1992. Before that she worked in the Ministry for Labour from 1986. Her
academic background is the study of English literature. In the Evaluation Unit in DG REGIO,
her priorities have been to significantly improve the evidence available on the performance of Cohesion Policy.
Together with her colleagues she launched an ambitious ex post evaluation of the 2000-2006 period which has
delivered new insights into the performance of the policy which are feeding into the policy debate. The second
priority is to improve the reporting by Member States on the achievement of their objectives, to support the
building of evaluation capacity in the Member States, and to encourage Managing Authorities to carry out more
evaluations exploring the effects and impacts of the policy.
Jose Enrique Garcilazo has been working at the OECD in Paris in the Directorate for Public
Governance and Territorial Development since September 2005. Graduated from Drake
University (B.S./B.A., Actuarial Science, Economics, Finance), University of Texas at Austin
(M.S, Economics), School of Public Affairs the University of Texas at Austin (PhD, Public
Policy). His research commenced in topics related to monetary economics, computational
economics and econometrics. During his doctorate studies, his research focused primarily on
the problem of European unemployment where he explored the relationship between
inequality and unemployment by developing a regional model of unemployment during the
period of European integration. Enrique has presented his work at various international conferences in France,
Costa Rica, Mexico and the US. He has co-published two articles with dissertation supervisor James Galbraith:
Unemployment Inequality and the Policy of Europe, 1984-2000 (BNL Quarterly Review, March 2004), and Pay
Inequality in Europe 1995-2000: Convergence Between Countries and Stability Inside (European Journal of
Comparative Economics, forthcoming). In 2007 Enrique published his first book Regional Labor Markets
Unemployment and Inequality in Europe (VMD Verlag Dr. Müller) based on his dissertation work.
Indermit Singh Gill is the Chief Economist for Europe and Central Asia at the World
Bank. He was the Director of the 2009 World Development Report 'Reshaping Economic
Geography' and the principal author of several major reports, including 'An East Asian
Renaissance'. He has a BA and MA in Economics from Delhi University, and a Ph.D. in
Economics from the University of Chicago.
Grzegorz Gorzelak is a Professor of Economics, specializing in regional and local

development and policies. Director of the Centre for European Regional and Local Studies (EUROREG) at the
University of Warsaw and the professor at the Koźmiński Business School (WSPiZ) in Warsaw. He is the
president of the Polish Section of the Regional Studies Association. He has conducted the research on
multivariate statistical comparisons, regional and local development of Poland and Central Europe and post-
socialist transition. Advisor to the Polish government during the local government reform in 1990, manager of
PHARE program for local government (1991), consultant to several local and regional authorities on development
strategies, in Poland and in Ukraine. Member of several advisory councils of the Polish government and of two
committees of the Polish Academy of Sciences. He coordinated several national and international research
programs on regional development, regional policy and post-socialist transition. Published (as author and editor)
over 30 books (several of them in English) and over 200 articles. Editor in Chief of scientific journal “Studia
Regionalne i Lokalne”.
124
Wolf Huber, Director of the Division for Coordination of Regional Policy and Spatial
Planning at the Federal Chancellery, Austria. He is responsible for the coordination of all
regional Structural Funds programmes in Austria as well as for cross-border and
transnational spatial development issues. With degrees in economics and spatial
planning, and experience of consultancy in urban and regional development, he has
been a civil servant since 1982 and head of division at the Federal Chancellery since
1995.
Marek Kozak is the Associate Professor at the Centre for European Regional and Local
Studies at the University of Warsaw. He has graduated from University of Warsaw (MA in
sociology), Polish Academy of Sciences (PhD in social sciences and postdoctoral degree in
political science). He has completed post-graduate studies in Law and Economics of the
European Communities (University of Warsaw) and the post-graduate studies in European
Integration (the National School of Public Administration and French École nationale
d'administration). He specializes in regional policy, evaluation, regional and local
development, institutional system’s development and management, tourism in development.
For nearly 10 years he held the function of the President and the General Director of the Polish Agency for
Regional Development. Member of the State Council for Spatial Economy (Deputy President of the Executive
Board) and of the Committee for Space Economy and Regional Planning of the Polish Academy of Sciences. He
is the author of over 100 publications, mostly on regional development.
Philip McCann, Special Adviser to Johannes Hahn, EU Commissioner for Regional Policy,
appointed an Endowed Chair in Economic Geography in the Faculty of Spatial Economics at the
University of Groningen, the Netherlands, He studied at and gained his PhD (1993) from the
University of Cambridge and then worked at the University of Pennsylvania in the US (1993-1995),
the University of Reading (1995-2005) and the University of Waikato in New Zealand. At Reading
he was a professor of Urban and Regional Economics, in Waikato a professor of Economics. He
is one of the world’s most highly cited and widely recognized economic geographers and spatial
economists of his generation. In 2010 awarded the ERSA 50th Anniversary Award for outstanding
research at the European Regional Science Association Congress, Jonkoping, Sweden.
Jan Olbrycht, Doctor of Sociology. Lecturer, expert, politician and social activist. Vice-
Chairman of the Association of Polish Cities responsible for contacts with European local and
regional government organizations. Vice-Chairman of the Council of European Municipalities
and Regions. Chairman of the Polish delegation to the Congress of Local and Regional
Authorities of the Council of Europe. Between 1998 and 2002 Marshal of Silesian
Voivodeship. Founding member of the Marshals’ Convent. Member of the Management
Board of the Assembly of European Regions, of the National Council for Regional Policy and
of the World Council of the United Cities and Local Governments. Since 2004 Member of the
European Parliament on behalf of Civic Platform (EPP). Member of the EPP Political Bureau. Deputy-Head of the
EPP Polish delegation. Vice-Chairman of the Committee on Regional Development in the years 2004-2009.
Currently Member of the Committee on Regional Development, the Budgetary Control Committee and the
Committee on Budgets. Vice-Chairman of the Delegation for relations with Japan and member of the Delegation
for relations with the Maghreb countries and the Arab Maghreb Union. Founding member and the President of the
EP Intergroup URBAN. Member of the Editorial Board of the Parliament Magazine and the Regional Review.
Joaquim Oliveira Martins is currently the Head of the Regional Development Division at the
OECD, focusing on regional performance and policies. Prior to that, he was the Head of the
Structural Economic Statistics Division, dealing with Trade & Globalisation indicators,
Productivity measurement and Business statistics. He was the Senior Economist at the
Economics Department heading projects on the Economics of Education, Ageing and
Growth, and Health Systems. He was also Head of Desk for emerging markets, where he
was in charge of the first Economic Surveys of Brazil, Chile and several transition countries.
Other OECD projects include monographs on Competition, Regulation and Performance and
Policy Response to the Threat of Global Warming. He is lecturer at University of Paris-Dauphine and Sciences
Po, Paris. He holds a PhD in Economics from University of Paris-I, Panthéon-Sorbonne.
125
George Petrakos (Ph.D.) is a Professor of Spatial Economic Analysis at the University of

Thessaly, Department of Planning and Regional Development. He is also the Director of the
South and East European Development Center (SEED) and the Vice President of the European
Regional Science Association (ERSA). His research interests include urban and regional
economics, development, transition economics, Balkan studies and international economic
relations. He has published several books and a large number of articles in international journals
like Environment and Planning A and B, European Planning Studies, Regional Studies, Papers in
Regional Science, Urban Studies, International Urban and Regional Research, European Urban
and Regional Studies, etc. Recent publications include the volumes: "The Impact of European Integration on Regional
Structural Change and Cohesion” Routledge, 2008 (with Krieger-Boden C. and Morgenroth E.), “Integration, Growth
and Cohesion in an Enlarged European Union”, Springer, 2004 (with Bradley J. and Traistaru J.) and “Integration and
Transition in Europe: The Economic Geography of Interaction”, Routledge, 2000 (with Maier G. and Gorzelak G). Since
January 2010 he serves as Secretary General for Investment and Development in the Ministry of Development,
Competitiveness and Shipping in Greece.
Jacek Protas, Marshal of Warmia-Mazury Voivodeship. Graduated from the Academy of Physical
Education and completed postgraduate studies in Management in Public Administration at the
University of Warmia and Mauzury. In the 1990s he served as the City Council member and in the
tenure 1996-1998 performed the function of its chairman. He received the mandate of a councilor
of the district twice: in 1998 and 2002). In 2006 he was appointed by the Parliament of Warmia
and Mazury to the position of the Marshal. In March 2010, during the twentieth anniversary of the
Congress of Local Government in Poznan, he was elected the President of the Association of the
Voivodeships of the Republic of Poland. Representatives of the provinces re-nominated him for
this function in February 2011. Between February 2009 and February 2011 he held the
presidency in the Euroregion Baltic - a forum for international cooperation within Baltic regions. Member of the
Committee of the Regions, EU Commission CIVEX (Commission for Citizenship, Governance, Constitutional Affairs
and External) and the Commission NAT (Natural Resources Commission).
Duarte Rodrigues, Deputy Coordinator of the NSRF Observatory (since 2008) with strong
involvement in monitoring of public policies co-funded by EU funds and in the debate about the
future of EU Cohesion Policy. He is also the Portuguese delegate to the Territorial Development
Policy Committee of the OECD (since 2008) and the chairman of its Working Party on Territorial
Indicators (since 2010). In the years 2005-2008 he acted as an Adviser of the Portuguese
Secretary of State for Regional Development and in the period 1999-2005 was the Head of the
Territorial Statistics Unit in Portuguese Statistics Office. Simultaneously, he developed teaching
activities in the area of urban and regional economics in undergraduate and master courses.
Duarte Rodrigues has a degree in Economics (1996) and MSc/Master degree in Economics (1999), both by Business
and Economics Institute-Technical University of Lisbon (ISEG/UTL), Portugal.
Andrés Rodríguez Pose is a Professor of Economic Geography at the London School of
Economics, where he was Head of the Department of Geography and Environment. He is the
current holder of a European Research Council Advanced Grant and IMDEA Social Sciences
Professorial Research Fellowship and of a Leverhulme Trust Major Research Fellowship. He has
also served as Secretary of the European Regional Science Association (2001-2006). He has a
long track record of research in regional growth and disparities, fiscal and political
decentralization, regional innovation, and development policies and strategies and has acted as
consultant on these fields to several Directorates of the European Commission, the European
Investment Bank, the World Bank, the Cities Alliance, the OECD, the International Labour Organization, and the
Confederación Andina de Fomento, among others. He directed a major World Bank/Cities Alliance report entitled
Understanding your local economy and has also been visiting professor at a number of universities, including the
College of Europe (Belgium), Cambridge (UK), and Hanover (Germany). He is the only social scientist to have been
awarded the Royal Society-Wolfson Research Merit Award. Other past academic awards include a Philip Leverhulme
Prize and a Royal Geographical Society Gill Memorial Award, both for his contribution to our understanding of regional
disparities and development. Among his books, we could highlight The dynamics of Regional Growth in Europe
(Oxford, Oxford University Press, 1998), The European Union: Economy, Society, and Polity (Oxford, Oxford University
Press, 2002), and Local and Regional Development (London, Routledge, 2006). He has also published more than 70
papers in peer-reviewed journals, is the joint managing editor of Environment and Planning C, and editor of Economic
Geography and sits on the editorial board of 16 scholarly journals.
126
Waldemar Sługocki was appointed Undersecretary of State in the Ministry of Regional

Development on 2nd March 2010. Graduated from the Faculty of Social Studies at Adam
Mickiewicz University in Poznań, where he also received PhD in political economy. His career
started in 1997 at Voivodeship Office in Zielona Góra. He took active part in Phare INRED
"Eco-development in Spree-Nysa-Beaver Euroregion" pilot program. Since January 1999 he’s
been employed as a Deputy Director of Regional Policy Department in the Municipal Office of
Lubuskie Voivodship. From February 2007 until November 2008, Mr. Sługocki was a Deputy
Mayor of Żagań, where he managed projects co-financed with European Funds. He was also
a representative of Żagań in Łużyce Union of Municipalities. In November 2008 he took charge of Department of
Regional Development and Spatial Planning. Between February 2009 and February 2010 managed the
Department of Lubuskie Regional Operational Programme. Mr. Sługocki also lectured at the International
Relations Institute of Zielonogórski University and headed postgraduate studies on management of irreclaimable
European Funds support with elements of European law. He is the author of over a hundred of articles regarding
regional policy, absorption of European funds, local government, European integration and agricultural policy.
Jacek Szlachta, since 1994 a Professor of Warsaw School of Economics. He was a visiting
scholar at Massachusetts Institute of Technology (by Fulbright-Hayes), Cambridge and
Strathclyde University in Glasgow (by British Academy). Since 1995 foreign member of
Academy of Spatial Economy of Germany. Since 1999 deputy chairman of the Committee for
Spatial Economy and Regional Planning in Polish Academy of Sciences. Leading expert of
European Commission and the World Bank projects. Leader of two local teams in VI
Framework Programmes. Since 2002 Chairman of State Regional Policy Council. The author
and the editor of more than fifteen books and 250 published papers. Key areas of interest:
regional development policies, regional patterns of transformation, structural funds.
Peter Wostner has over nine years of experience in the field of cohesion policy and regional
development. As a head of programming department he has been a project leader for the
preparation of the Slovene Single Programming Document 2004-2006 for the use of
structural funds and also has been involved in the preparation of the National Development
plan 2001-2006. In 2005 was nominated Deputy Director of the Government Office for Local
Self-Government and Regional Policy, responsible for the whole cohesion policy field, i.e. in
the function of managing authorities for Structural Funds, Cohesion Fund as well as
INTERREG programme. He has been responsible for the preparation and negotiation of all
four programming documents for 2007-2013, the National Strategic Reference Framework as well as three of the
Operational Programmes. He was also a member of the core negotiation team for the 2007-2013 EU budget
negotiations as well as Slovene representative at the Council Working Group, which prepared the cohesion policy
regulations. He is also the author of a number of articles as well as editor of a book on “How to access EU funds”.
Currently he is preparing a PhD on the rationale and effectiveness of Cohesion Policy at the Ljubljana Faculty of
Economics.
Piotr Żuber, Director of the Department of Structural Policy Coordination in the Ministry of
Regional Development, Poland. Mr. Żuber graduated from the University of Warsaw, Faculty
of Geography and Regional Studies and obtained a PhD degree at the Warsaw School of
Economics. He holds overall responsibility for structural policy coordination in Poland
(elaboration of strategies, monitoring and evaluation, policy recommendations) as well as
coordination of Poland’s position on the structural and cohesion policy of the European
Union, therein on the future of the EU Cohesion Policy+2013. Since 1999 involved in
preparation of a number of draft programming documents in the area of the cohesion policy.
In charge of evaluation of implementation of the Community Support Framework 2004-2006 and the NSRF 2007-
2013. His department is also accountable for developing the spatial development concept for Poland. Author of
articles and papers concerning: regional policy in Poland, regions and SMEs, as well as Cohesion Policy .
127
Notes
128
Notes
129
Notes
MINISTRY
OF REGIONAL
DEVELOPMENT
Ministry of Regional Development

Wspólna 2/4, 00-926 Warsaw
tel. + 48 22 461 30 00
fax +48 22 461 33 10
www.mrr.gov.pl
MINISTRY EUROPEAN UNION

OF REGIONAL EUROPEAN REGIONAL
DEVELOPMENT DEVELOPMENT FUND
for Poland’s

On Territorial Dimension of Development Policies (2011)

Transféré par

Informations du document

Description originale:

Copyright

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

On Territorial Dimension of Development Policies (2011)

Transféré par

Droits d'auteur :

SEMINAR

Seminar on Territorial Dimension

Polska Prezydencja w Radzie Unii Europejskiej 2011

This document is as part of a general reflection on the future

Objective and agenda of the seminar............................................................................................................................................... 7

DIFFERENT APPROACHES TO DEVELOPMENT POLICIES THE INTERPLAY BETWEEN CONCENTRATION

FROM THEORY TO APPLICATION HOW TO REINFORCE TERRITORIAL DIMENSION IN PUBLIC POLICIES..................................... 51

TOWARDS TERRITORIAL APPROACH IN DEVELOPMENT POLICIES IDEAS AND PRACTICES .......................................................... 77

OTHER CONTRIBUTIONS ........................................................................................................................................................................... 105

BIOGRAPHICAL NOTES .............................................................................................................................................................................. 121

Objective and agenda of the seminar

1st day - Monday, July 18th

9.30 Opening of the seminar

10.00 - 13.00 y Session 1 (coffee break at mid-session)

14.30 - 17.30 y Session 2 (coffee break at mid-session)

2nd day - Tuesday, July 19th

9.15 - 12.15 y Session 3 (coffee break at mid-session)

12.15 - 13.15 y Coming to conclusions? - closing of the seminar

Grzegorz GORZELAK, Euroreg, University of Warsaw, Poland

Different approaches to development policies

Jose Enrique Garcilazo, Joaquim Oliveira Martins

2. Mapping the heterogeneous picture into aggregate growth

Table 1: A rule of thumb for calibrating regional development policies

Source: Dall’Erba (2003)

Follow the Irish

Appendix 1 Structure of the RF Ministry of Regional Development

Appendix 2 - Ministry of Regional Development: Georgia

capabilities” of those organisations.

From theory to application

Europe 2020 Dimensions: Integrated Regional Typologies

2.2. Dominant Features of a Regional Approach

with Member States (art. 4).

Source: Camagni, 2005

Three main typologies of territorial capital may be found:

31 March 2009), Background Report, GOV/TDPC (2008)9, OECD, Paris 2008.

Ballungsraumforschung, Heft 10, RUFIS, Bochum.

Towards territorial approach in development policies

Advantages of this model:

OECD countries (OECD;2010b).

Federal Reserve Bank & OECD Conference

Arjen van der Burg

Grzegorz Gorzelak is a Professor of Economics, specializing in regional and local

George Petrakos (Ph.D.) is a Professor of Spatial Economic Analysis at the University of

Waldemar Sługocki was appointed Undersecretary of State in the Ministry of Regional

Ministry of Regional Development

MINISTRY EUROPEAN UNION

Vous aimerez peut-être aussi