Slide 1:AN AGENDA FOR A REFORMED COHESION POLICY Independent Report prepared at the request of Danuta Hübner, Commissioner for Regional Policy by Fabrizio Barca Notre Europe Paris, 14/09/2009


Slide 2:2 PROLOGUE 1: WHAT A UNION OF STATES NEEDS 1. Prologue No Union of States aimed at peace and prosperity can fail to accompany unified markets with a development policy capable to: give all places the opportunity to make use of their potential (efficiency) and all people the opportunity to be socially included independently of where they are born (social inclusion/equity) The EU Treaty commits the Union to pursue “harmonious development” both: indirectly, by taking the task into account in designing any policy directly, through dedicate Funds or “cohesion policy”


Slide 3:3 Cohesion policy was given significant funds and was strengthened when market unification was envisaged and started It has lost consensus over the lost ten years through: increasing misconceptions on its task: “redistribution”, “convergence”, “a price to pay to keep markets unified” unresolved tensions between subsidiarity and conditionality surprising lack of focus, political debate and information on “results” (in terms of people’s well-being) an increasingly self-referential language and debate within the high walls of the Cohesion Policy House PROLOGUE 2: A CONSTANT EROSION OF CONSENSUS ON COHESION POLICY 1. Prologue


Slide 4:4 Objectives of the Report: to “open the doors and windows of the cohesion policy house” to offer directions for a much-needed and yet-to-be-started budget review to assess whether present cohesion policy should be discarded, retained as it is, adjusted or comprehensively reformed PROLOGUE 3: THE REPORT 40 academics through 3 Hearings, 1 Workshop, 10 Working Papers 40 policy-makers of Member States and Regions through 5 Seminars 40 Commission officials through 15 months of work a review of more than 200 articles and documents 1. Prologue launching a wide survey of different views: Opening the Cohesion Policy House required: examining conceptual, political and operational aspects taking a comparative and historical perspective


Slide 5:5 Cohesion policy, if interpreted as a “place-based policy”, is the modern and only way for the EU to perform its development task Cohesion policy needs a fundamental change of direction Relaunching requires: PROLOGUE 4: CONCLUSIONS The adoption of a strong political concept, A reform of the priorities and governance based on: concentrating resources orienting grants to results mobilizing and learning strengthening the Commission reinforcing political checks and balances A new political compromise A change in the negotiation calendar 1. Prologue


Slide 6:6 THE POLICY CONCEPT: A PLACE-BASED POLICY Definition: a long-term development strategy aiming at reducing persistent under utilisation of resources and persistent social exclusion through the integrated production of bundles of public goods and services determined in accordance to local preferences and knowledge , promoted by a system of multilevel governance and grants subjects to conditionalities Rationale = market and government failures appropriate institutions fail to be chosen by the local elite institutions have a strong inertia high uncertainty on efficient agglomeration patterns calls for verifiable public action 1. Prologue


Slide 7:7 Sustainability: WHY SHOULD THE EU DO IT? a place-based strategy is the only policy model compatible with the EU’s limited democratic legitimacy Taking care of over-the-border interdependencies no Union (with unified markets) can do without a development policy: the EU is blamed if expectations of equal access to opportunities created by market unification and of equal chance to cope with its risks are not met common market rules erode national identities and bonds and call for a “feeling of community” to be built at a supra-national level Credibly keeping its distance from places a place-based strategy is the modern way to interpret the EU Treaty tasks of promoting “harmonious development” and “reducing disparities” 1. Prologue


Slide 8:8 CONSEQUENCES OF THE POLICY CONCEPT MISCONCEPTIONS AND CLARIFICATIONS Cohesion policy should not be: A policy aimed at “convergence” (of per capita income) A policy for “financial redistribution” the fallacy of the renationalization critique: the financial redistribution task would call for an Equalisation Fund the need for intervening in all regions: the EU Treaty, EU citizens’ expectations and the nature of market failures call for action in all Regions the fallacy of self-proclaimed “spatially-blind policies” A policy restricting people’s mobility not a proxy for greater efficiency not a proxy for greater social inclusion A policy constraining “natural” agglomerations 1. Prologue


Slide 9:9 THE STATE OF THE EMPIRICAL EVIDENCE ON THE IMPACT OF COHESION POLICY IS VERY UNSATISFACTORY There is great accountability in terms of output (greater than in most national and EU policies) on how the resources are spent, but not in terms of outcome: 2. Lessons from cohesion policy performance econometric studies do not offer any conclusive general answers on policy impact there is no systematic impact evaluation of interventions the system of outcome indicators and targets is of poor quality


Slide 10:10 Cohesion policy provides the appropriate basis for an EU place-based strategy HOWEVER, THE AVAILABLE EVIDENCE LEADS TO TWO CONCLUSIONS 2. Lessons from cohesion policy performance A comprehensive reform is needed, for the following reasons the policy concept is very weak a lack of focus on priorities and a failure to distinguish between economic and social objectives a failure of contracts to focus on results and to create adequate incentives to use resources effectively methodological problems in the use of indicators and the evaluation of impacts a remarkable lack of political debate on results


Slide 11:11 A STRONG CHANGE OF DIRECTION: THE MAIN PROPOSALS 3. The reform Concentrating resources on a few “European public goods” and a territorialised social agenda A new contractual relationship between the Commission and Member States (Regions) Mobilizing actors and learning at place level Strengthening the Commission New political checks and balances, and A new negotiation calendar


Slide 12:12 1. CONCENTRATING RESOURCES AND… 3. The reform Concentration of up to 2/3 of funding on 3-4 “core priorities” Selection of “core priorities” through a high-level strategic debate based on three criteria: EU-wide relevance needs/expectations of EU citizens advantage of EU over Member States Member States’ interests place-based nature verifiability


Slide 13:13 … A TERRITORIALISED SOCIAL AGENDA 3. The reform 1-2 core priorities must have a predominantly “social inclusion” objective: the social and the territorial agendas must come together in a territorialized social agenda, an agenda aimed at persons and aware that policy effectiveness depends on contexts, a unique opportunity for the EU to respond to the increasing constraints on Member States’ social policies while respecting the diversity of national social contracts 1-2 core priorities must have a predominantly “economic” objective: innovation and/or climate change


Slide 14:14 2. A NEW CONTRACTUAL RELATIONSHIP A National Strategic Development Contract (Contract) commits each Member State (and its Regions) to: 3. The reform objectives and targets allocating resources to core priorities and Managing Authorities criteria for the selection of “places” administrative capacity Operational Programmes follow the same structure and are presented simultaneously The Commission can: adopt the whole Contract adopt some parts of the Contract “subject to condition” reject some parts of the Contract Implementation Report by MS and Implementation Assessment by the Commission strengthen orientation to results and differentiation among Member States Annual Member States’ Report on Results (after 3rd year) and Commission’s opinions and Summary Report open public debate


Slide 15:15 3. MOBILIZING ACTORS AND LEARNING AT PLACE LEVEL Promoting experimentalism and mobilizing local actor The positive effect at local level of focusing on objectives A small share of funding left at the Commission’s disposal for Innovative territorial actions Directly mobilizing local actors: more room for manoeuvre of the Commission And the role of the actors in the learning process… Promoting the learning process: a move towards prospective impact evaluation Promoting all methodologies which investigate “what works”, “for whom” and “why” Making a special effort to promote counterfactual impact evaluation: the strong disciplinary effect of its “prospective” use a “clearing house” of studies and results at the Commission using random selection when applicable 3. The reform


Slide 16:16 4. STRENGTHENING THE COMMISSION Refocusing and strengthening the role of the Commission as a centre of competence A more ambitious and demanding role for the Commission and more discretion call for its Directorates in charge of cohesion policy…. … to make a significant investment in human resources: … and to achieve inter-Directorates coordination which is now lacking, starting with DG Regio and DG Employment 3. The reform establishing core-priority task forces staff induction training evaluation department upgrading creating administrative support teams creating a research department


Slide 17:17 5. NEW POLITICAL CHECKS AND BALANCES Improved information on results and greater Commission discretion make a more active role of the two other European Institutions feasible and necessary A new formal Council for Cohesion Policy would: The European Parliament would: 3. The reform assess Contracts and Reports on Results assess special decisions by the Commission: contribute opinions on Contracts and Reports receive and debate the Commission’s Summary Report (as part of the “Evaluation Report” of the amended art. 275 of the Treaty) issue recommendations approval of contracts subject to conditions decision to run an Implementation Assessment and its effects financial sanctions for unmotivated failure to achieve financial additionality financial sanctions for unmotivated failure to achieve targets


Slide 18:18 3. The reform By Summer 2010: a high level political compromise on the future of cohesion policy Autumn 2010–Spring 2012: strategic dialogue between Member State and European institutions facilitated by a Policy Group By Spring 2012: a draft of a European Strategic Development Framework, setting out policy innovations, core priorities, the general requisites of the institutions needed to pursue these priorities, indicators and targets for assessing performance, coherent with a new draft Regulation Spring 2012-Spring 2013: final negotiation on resources, governance and goals Spring 2013: simultaneous agreement on resources (Financial framework), governance (Regulation) and goals (European Strategic Development Framework) A NEW NEGOTIATION CALENDAR AND A SIMULTANEOUS AGREEMENT ON RESOURCES, GOVERNANCE AND GOALS