EC's Cohesion Funds (part V) A Tale of Sound and Fury?

There’s something to be said for ignoring a policy field for several years and then trying to catch up with it in one go – it makes you focus on the essentials and certainly saves a lot of time! So it’s been in the last few days as I have downloaded and skimmed a lot of material on the (rather incestuous) debate which has been taking place over the past 2-3 years about the EC Structural (or Cohesion) Funds whose programme for 2014-2020 will have to be decided this year.

As the Commission’s views eventually surfaced at the end of 2011, it seems, frankly, to be have been a case of "sound and fury…signifying…nothing”! When I read the leaflet which set out the Commission’s proposals of 6 October, they don’t seem to contain anything significantly new – more ex-ante evaluation; better monitoring; and a new category of "transitional regions”. And the much-discussed idea of more local flexibility seems to have died without trace. So perhaps the journalists I accused of neglect in an earlier post have been correct to leave the subject well alone. As we say, it "doesn't appear to amount to a row of beans!"
In 2010, a slide presentation caught the terms of the then current debate rather well. For those masochists who want to follow the details of the debate, an archived site allows you to access both the key papers and also the various components of the 2009 Barca report including its ten 10 commissioned studies and a summary of some hearings.

Despite a caustic comment recently about language, the papers from Strathclyde University’s European Policies Centre are the only clear updates you get on Structural Funds. The latest is appropriately subtitled "let the negotiations begin".
In November 2011 one of the leading members of the Centre produced a paper EC Cohesion Policy and Europe 2020 – between place-based and people-based prosperity which subjected the debate on the EC’s Cohesion Policy to the dreadful Discourse Analysis -

Ideas are increasingly recognized as playing an important causal role in policy development. Instead of seeing change as the product of strategic contestation among actors with clear and fixed interests, an ideational perspective emphasises the struggle for power among actors motivated by different ideas.

 The last half of the paper, however is actually interesting - it traces the history of cohesion policy and then explores the various policy positions about the nature and shape of the future programme (which now accounts for 40% of the EU budget). The paper suggests 2 central dimensions – focus and management – to construct a matrix. The focus can be geographical place or sector (eg transport, energy, IT, environment); the management central (EC led) or local (national) – which gives four options -
• Territorial contractualism (top-down); supported by two key players – the European Parliament and the European Commission’s Regional Policy Department (DG Regio)
• Territorial experimentalism (with more local flexibility); supported by the Committee of Regions
• Sectoral functionalism (top-down); supported by the other relevant Commission Directorates
• Sectoral coordination

Ideas in these arguments become tools which rationalise the interests of the various actors. As I thought about the process, I was suddenly reminded of one of the seminal texts in the literature of political science – Graham Allison’s The Essence of Decision (1971) - which applied three different explanatory models to the Cuban Crisis – the rational (what is in the interests of the government); the organisational process (organisations do what they are used to doing); and bureaucratic (court) politics ("various overlapping bargaining games among players arranged hierarchically in the national government”). This is a paper of his from 1968 which presents the basic proposition; and this a critique from 1992.

Cohesion Policy - part IV

The last few posts have been about the apparent lack of public knowledge (including mine - let alone discussion) about an issue which has been absorbing the energies of thousands of specialists throughout Europe in the last 2-3 years – namely the future shape and management of the huge amounts of money which Europe disburses to Regions and which take up the energies and time of so many officials in countries such as Bulgaria and Romania – with so much acrimony (confusion, corruption and penalties) and so few apparent results.

My concerns are not populist – since I have always accepted the existence of „market failure” and the case for government intervention and spending programmes.
My recent experience in the field in Bulgaria raises the following sorts of questions -
• What was actually achieved in the period since 2007 by the 50 billion a year spent on what most of us know as EC Structural Funds (although technically it comes from 6-7 differently-named programmes)?
• Where is the country by country analysis?
• Can one programme do justice to the needs of 27 countries – even granted its management is in the hands of each country?
• Particularly a programme of which amost half is in new member states (still in transit from centralised political cultures) and which yet makes no mention of the specifics of these countries?
• Has it not been a mistake to run the programme as a regional development one when the needs are more institutional and developmental?
• In what precise ways is the new proposed policy from 2014 different from that which has ruled for the 2007-2013 period?
• And what weaknesses of the previous policy explains the changes?
• What exactly is the "place-based approach” which is trumpeted in the new policy ??
• Where are debates which deal clearly and honestly with these questions?

I am encouraged by one semi-official report (of 250 pages) which appeared in 2009 – the Barca Report - which seems very well written, draws on a wide range of discussions and openly admits (a) the conceptual and political confusion; (b) the difficulties in measuring impact; and (c), in the very first page, the lack of public debate -

What is lacking is a political debate about whether that particular way of spending public funds adds value compared to sectoral or national approaches. And when and where it is effective. The same failure is visible in the academic debate, where very often a line separates the “cohesion policy experts” and the rest of academia.

I've a long way to go in reading this report - so please be patient. And, in the meantime, I stick with my main accusation - that there don't seem to be any journalists writing about this issue!

Today Romanian media have been celebrating the birthday of their most famous dramatist - Caragiale - who was born 160 years ago. The Romanians are very fond of him and his mocking of the political process.Mitica was a character who cropped up in his plays and whom the Transylvanians particularly associated with the slippery southerners. Wikipedia have a very detailed entry on his life and works.

The painting is a Levitan

Briefings on the new Cohesion Policy

A summary of the new Cohesion Fund which the EC is proposing to replace the present Structural Funds is available here.
The University of Strathclyde’s European Policies Research Centre can generally be counted on for clear summaries of the issues involved in EC regional policies and duly produced two years ago a paper “Challenges, Consultations and Concepts – preparing for the Cohesion Policy Debate”

Last August the Centre presented an updated 150 pages briefing on the issues to the European Parliament - Comparative study on the vision and options for Coherence Policy after 2013 – although its Executive Summary does not seem quite up to its normal standards of clarity. Judge for yourself -

The Commission proposes to reinforce the urban agenda, encourage functional geographies, support areas facing specific geographical or demographic problems and enhance the strategic alignment between transnational cooperation and macro-regional strategies.
Unsurprisingly, there is resistance to some of the more prescriptive elements. Yet, the territorial dimension could benefit from a greater strategic steer at EU level, potentially drawing on the recently agreed Territorial Agenda for 2020 to clarify and reinforce future territorial priorities for Cohesion Policy. A more strategically focused approach to the territorial dimension of cooperation must also be a priority, including a greater focus on priorities and projects of real transnational and cross border relevance, seeking greater coherence with mainstream, external cross-border cooperation and macro-regional strategies and the simplification of administrative requirements.

And what, exactly, does this mean???

The 2009 Barca Report was a bit long (250 pages plus 10 annexes) but did at least give a good summary of what we know about the impact of Structural Funds -

20. The state of the empirical evidence on the performance of cohesion policy is very unsatisfactory. The review of existing research, studies, and policy documents undertaken in the process of preparing the Report suggests, first, that econometric studies based on macro-data on growth and transfers, while providing specific suggestions, do not offer any conclusive general answer on the effectiveness of policy. This is due partly to the serious problems faced by any attempt to isolate at macro-level the effects of cohesion policy from those of several confounding factors, and partly to the fact that existing studies have largely analysed the effect on convergence, which is not a good proxy of the policy objectives. The review also shows both the
lack of any systematic attempt at EU and national/regional levels to assess whether specific interventions “work” through the use of advanced methods of impact evaluation, and a very poor use of the system of outcome indictors and targets formally built by the policy.


21. Despite these severe limitations, the available quantitative evidence and a large body of qualitative evidence lead to two conclusions on the current architecture of cohesion policy. First, cohesion policy represents the appropriate basis for implementing the place-based development approach needed by the Union. Second, cohesion policy must undergo a comprehensive reform for it to meet the challenges facing the Union.

22. The strengths of cohesion policy, which indicate that it represents the appropriate basis,
include, in particular:
• the development of several features of what has come to be called the “new paradigm of regional policy”, namely the establishment of a system of multi-level governance and contractual commitments that represents a valuable asset for Europe in any policy effort requiring a distribution of responsibilities.
• A good track record of achieving targets, both when cohesion policy has been implemented as a coherent part of a national development strategy and when local-scale projects have been designed with an active role of the Commission and the input of its expertise.
• A contribution to institution-building, social capital formation and a partnership approach in many, though not all, regions, producing a lasting effect.
• The creation of an EU-wide network for disseminating experience, for cooperation and, for sharing methodological tools in respect of evaluation and capacity building.

23. The most evident weaknesses which indicate the need for reform of cohesion policy are:
• A deficit in strategic planning and in developing the policy concept through the coherent adoption of a place-based, territorial perspective.
• A lack of focus on priorities and a failure to distinguish between the pursuit of efficiency and social inclusion objectives.
• A failure of the contractual arrangements to focus on results and to provide enough leverage for the Commission and Member States to design and promote institutional changes tailored to the features and needs of places.
• Methodological and operational problems that have prevented both the appropriate use of indicators and targets – for which no comparable information is available - and a satisfactory analysis of “what works” in terms of policy impact.
• A remarkable lack of political and policy debate on results in terms of the well-being of people, at both local and EU level, most of the attention being focused on financial absorption and irregularities.

The new Cohesion Policy as a case-study in Orwellian language?

Having made a casual reference a few days ago to a rather superficial paper on EC Structural Funds (with which I have a tangential link in my current Bulgarian project), I was understandably attracted by the title of one of the LSE lecture series - Redesigning the World's Largest Development Programme: EU cohesion policy - by the Special Adviser to the current EC Regional Commissioner (Austrian Johannes Hahn) – one Phil McCann, a Professor of Economic Geography. Particularly because it also offered a 91 slide presentation.
Before I started to listen to it, I checked on Googlescholar to see whether McCann had perhaps not written an article on the subject - which I could read in a fifth of the time necessary to stick with the lecture. Unfortunately McCann’s papers are highly academic and almost impossible to read – eg here.
The guy seems very chatty in person but the more he gets into his subject, the more naïve he (and his type) seems. The academic discipline of geography has always seemed, for me, one of the best of the social sciences with its strong multidisciplinary bias. So (and from the title) I had hoped to get an insight into the intellectual and political aspects of the european-wide discussions of the past 2 years about the future shape of this central piece of the “European venture” (now almost level pegging spending with the wasteful CAP).
What I got was a frightening Orwellian presentation of the latest fashionable EC phrases. I have still to read all the relevant documentation which has poured from the EC presses in the past 2 years (and to which I do brief justice in the sections below). All I know is that the key adviser to the Regional Commissioner seems to know nothing about policy analysis; seems completely taken in by words and phrases; and seems blissfully ignorant about the various reasons for implementation failure. I do concede that he was speaking to a student and graduate academic audience - and that this may be one reason why he focussed on words rather than realities.

Discussions on the future of EU Cohesion Policy - €347 billion between 2007 and 2013 – were launched amost 3 years ago.
Two key documents which appeared almost simultaneously in April 2009 have served as a basis for discussions on regional policy reform: first a reflection paper by Danuta Hübner, who had just demitted office as commissioner in charge of regional policy (from Nov 2004) and amost immediately became chair of the European Parliament’s Committee on Regional Development (!!)
The other document was a report she had commissed - and which was drafted by Fabrizio Barca, director-general at the Italian Ministry of Economy and Finance.
Both papers categorically rejected any attempt to renationalise Cohesion Policy - which was the thrust of the Open Europe Report I had mentioned earlier in the week.

Barca’s report, in particular, pays homage to the legitimacy of a policy, which he considers essential to pursuing European goals. The policy, says the report, must serve two objectives: development of territories based on local/regional possibilities; and improvements in social welfare (combating social exclusion). Like Hübner, Barca suggests placing territories at the centre of EU strategy. Both papers considered that EU intervention must be refocused on a few key objectives.
The report's recommendations for reform seem typical in their language of such documents. They are based on ten “pillars” and I would ask the reader – as a mind-game – to try reversing the phrases to check for how much meaning they contain -

1: Concentration on core priorities (how many of us would suggest focussing on inessentials??)
Dr Barca says the EU should concentrate around 65% of its funding on three or four core priorities, with the share varying between Member States and regions according to needs and strategies. Criteria for the allocation of funding would remain much as now (i.e. based on GDP per capita). One or two core priorities should address social inclusion to allow for the development of a "territorialised social agenda".
2: A new strategic framework
The strategic dialogue between the Commission and Member States (or Regions in some cases) should be enhanced and based on a European Strategic Development Framework, setting out clear-cut principles, indicators and targets for assessing performance.
3: A new contractual relationship, implementation and reporting
The Commission and Member States should develop a new type of contractual agreement (a National Strategic Development Contract), focused on performance and verifiable commitments.
4: Strengthened governance for core priorities
The Commission should establish a set of “conditionalities” for national institutions as a requirement for allocating funding to specific priorities and should assess progress in meeting targets.
5: Promoting additional, innovative and flexible spending (how many of us would suggest inflexible spending????)
The Commission should strengthen the principle of "additionality", which ensures that Member States do not substitute national with EU expenditure, by establishing a direct link with the Stability and Growth Pact. A contractual commitment is needed to ensure that measures are innovative and add value.
6: Promoting experimentation and mobilising local actors (ditto)
The Commission and Member States should encourage experimentation, and a better balance between creating an incentive for local involvement in policies and preventing the policy from being “hijacked” by interest groups.
7: Promoting the learning process: a move towards prospective impact evaluation
Better design and implementation of methods for estimating what outcomes would have been had intervention not taken place would improve understanding of what works where, and exert a disciplinary effect when actions are designed.
8: Strengthening the role of the Commission as a centre of competence (as distinct from a centre of incompetence?)
Develop more specialised expertise in the Commission with greater coordination between Directorate-Generals to match the enhanced role and discretion of the Commission in the policy. This would imply significant investment in human resources and organisational changes.
9: Addressing financial management and control (as distinct from ignoring them???)
Achieve greater efficiency in administering the Structural Funds by pursuing the ongoing simplification agenda and considering other means of reducing costs and the burden imposed on the Commission, the Member States and beneficiaries.
10: Reinforcing the high-level political system of checks and balances
A stronger system of checks and balances between the Commission, the European Parliament and the Council, through the creation of a formal Council for Cohesion Policy. Encourage an ongoing debate on the content, results and impact of the Cohesion Policy.

Such an approach argues for a Cohesion Policy which continues to address all EU regions, both Barca and Hübner say. Pawel Samecki, who succeeded Hübner as commissioner (but for one year only until replaced by an Austrian who is contesting accusations of plagiarism in his doctorate)), follows the same logic. Since both (or all three) defend the need to concentrate the greatest share of funds on less developed regions, where GDP per inhabitant would remain the reference indicator for prioritising funding, we are no longer talking about a ‘Sapir-style’ scenario. This was named after the Belgian economist André Sapir who, in 2003, drew up a highly controversial report for the Commission, which recommended a Cohesion Policy almost exclusively for regions in the new member states. For the Commission, a regional policy addressed to all is especially necessary since challenges, such as globalisation and climate change, affect the whole of the European Union – the EU15 as much as more recent members – at a time when national exchequers are stretched. There is no doubt, however, that some member states will call on the Sapir scenario in discussions on the new Cohesion Policy
During her mandate, Hübner frequently insisted on the need to strengthen the Commission’s strategic role in defining the policy to be implemented. The same idea is taken up in the Barca report. This envisages a seamless process starting with a real political debate and leading to adoption of a European framework and signature of “strategic development contracts” between the Commission, member states and, possibly, regions. In the Barca scenario, regional and local authorities would be more widely involved than today, which the Commission is also said to support. These contracts would formally commit signatories to a strategy, results and follow-up reports.
A genuine assessment for monitoring the performance of programmes and results would also need to be established – something Barca considers is lacking today. In her reflection paper, Hübner talks of setting up a “culture of monitoring and evaluation”. Commissioner Samecki also highlighted the need to concentrate further on results and performance. In this, they are slavishly following the fashion of today - and that part of McCann's presentation which dealt with this issue was positively embarrassing in its naivety and failure to relate to the wider and highly critical literature about performance management.

One of the problems about EC policy-making is that, despite (perhaps because of??) the emphasis on transparency and consultation, the processes are conducted by insiders - many of them paid by the EC itself (academics and not a few journalists). Outsiders like myself are discouraged by the language, complexity and sheer volume of paper. It would be interesting to spend some time reading the relevant stuff on Structural Funds (regional policy, social funds, coherence et al) and explore some basic questions about Value Added!!!

EC Structural Funds - Cui Bono?

I'm cocooned at the moment in a cosy flat in a wind-swept and snow-bound concrete block in down-town Bucharest.

The ever-watchful Open Europe operation has targeted two big elements of EC spending in reports just out – on Structural Funds and its Development (or “external” assistance). Its report on the latter subject has been drafted for the UK House of Commons Select Committee on International Development which has started an investigation of the EC’s Development Assistance budget. In combination with Member States’ own aid budgets the EU as a whole provides 60% of global Official Development Assistance (ODA) making it the largest donor. "Despite some improvements", the Committee says, "concerns have been expressed about the effectiveness of EC development assistance, the slow disbursal of aid, the geographical distribution of EC aid and poor coordination between Member States".
This blog (and papers on my website) have also made a more detailed critique in relation to its state-building programmes in transition countries. The committee points out  that

Total EC external assistance in 2010 was €11.1 billion. The UK share of this was approximately €1.66. A new Commission policy paper, “An Agenda for Change” was published in October 2011 for approval by the Council in May 2012. At the same time, negotiations are proceeding for the Multi-Annual Financial Framework, and the replenishment of the European Development Fund. Together these will set the parameters for EC development aid from 2014-2020. The Committee invites evidence on:
• The comparative advantage of the EU as a channel for UK development and humanitarian assistance and the UK’s ability to influence EU development policy;
• The proposals set out in the “Agenda for Change”;
• The proposals for future funding of EC development cooperation;
• Progress towards policy coherence for development in climate change, global food security, migration, intellectual property rights and security.

The Open Europe paper is a fairly political briefing on the issues of geographical distribution, administration (costs and waste), EC “value-added” and policy issues (eg questionable reliance on budgetary support) – but seems to have been written by epople with little familiarity with the field of development work.

Its other paper – on EC Structural Funds - is a rather better one which actually looks at what the research has actually tells us about the success over the years of this funding in dealing with its basic objective – namely reducing regional differentials within countries. The answer is "difficult to prove”. Of course, the 60 billion euros a year programme is now more about building up the missing technical and social infrastructures of new member States and the paper argues that this should be properly recognised by the richer member states being taken aut of the programme’s benefits. The paper reminds that

the previous UK Labour Government proposed limiting the funds to EU member states with income levels below 90% of the EU average and suggests that this could create a win-win situation. Such a move would instantly make the funds easier to manage and tailor around the needs of the poorest regions in the EU. The paper estimates that 22 or 23 out of 27 member states would also either pay less or get more out of the EU budget, as the funds are no longer transferred between richer member states.

Structural Funds are, however, an important political tool for those committed to "the European project” in developing and sustaining clienteles. This should never be forgotten!

I have never been a fan of the EC Structural Funds which I have seen expand from almost nothing in the 1970s to 350 billion euros in the 2007-2113 period (60 billion a year – eg 5 billion annual contribution for UK). As a senior politician with Strathclyde Region which was the first British local authority to forge strong relations with the European Commission in the 1980s (when we had no friends at Margaret Thatcher’s court), you might imagine that I was positive about the European funding which we then received. In fact, I was highly critical – mainly for the dishonesty of the claims made about its net benefits. The British Treasury simply deducted whatever we gained from our European funding from our UK funding.

The programme really expanded in the Delors era on the watch of Scottish politician Bruce Millan as Regional Commissioner (1989-1994). In those days, we believed in regional development. In my own case, it was my whole intellectual raison d’ etre! The subject was coming into its own academically – and it was indeed the subject I first focussed on in my own academic career (before I moved into public management). It spawned thousands of university departments and degrees many of which seem still – despite public spending cuts - frozen in institutional landscapes. And I have never seen an intellectual questioning of what it has brought us – although I did recently come across this short critical article on the related field of urban development.

This Open Letter by some prominent Hungarians has just been published about the situation in that country - and is a useful briefing on the issues - as is this EuroTribune one. When I worked in that country, I vividly remember one of my older Hungarian colleagues telling me that she hoped that, this time, the country might actually succeed in something - since the history of her country to that point seemed to have consisted of a series of failures.She must be crying herself to sleep these nights!

The cartoon is one of Honore Daumier's - "The Gargantuan". At times like these, we are in desperate need of the caustic insights of the likes of Daumier, Goya, Kollwitz et al - and those influenced by them such as the Bulgarian caricaturists of the early and mid- part of the last century.

Evidence, dear boy? Training - Part III

I have made a lot of assertions in my two recent posts on EC-funded training – based solely on my (limited) experience in 10 countries over the past 2 decades . Before posting the final part of my commentary on EC training programmes for public officials in ex-communist countries, I wanted to check what was available on the internet about the recent experience with, and evaluation of, the EC-funded programmes for developing the effectivness (capacity) of state bodies which Structural Funds have been encouraging in these countries for the past few years. The EC, after all, treasures transparency and it is currently spending hundreds of millions (under its Structural Funds) in projects to develop the capacity of state bodies and their human resource management. In Bulgaria alone, 180 million euros was set aside for the 6 year period for the Admin Capacity theme (significantly this theme doesn't interest the Romanians who have set aside only 1% of their Structural Fund allocation for it). But there are few documents online which give any sense of what is happening. Those few demonstrate the scale of the mountain we have to scale to ensure effective spend of EC Funds. In most cases, of course, the documents are written in a foreign language (English) – for bureaucratic or academic approval – three factors which tend to knock any sense from the text! Key bureaucratic phrases such as cohesion, transparency and inclusion litter the sentences in meaningless ways. There is no experience or critical analysis behind the words – just obedient regurgitation of the required phrases. This academic paper from a Bulgarian in 2007 tries to extract the lessons of pre-accession instruments for future accession states is written clearly but simply presents global figures, organisational carts and some gossip. A 2009 German (GTZ) consultancy report on one of the instruments is more typical of the obtuse reporting style
A document prepared for a small network trying to share their experiences of using EC money for the development of admin capacity gives a useful insight into their world and issues. Finally a more critical 2011 paper from a young Bulgarian academic

Everyone – on all sides(beneficiaries, donors, consultants, academics, evaluators) – plays the same game – everything has to be fitted to the Procustean bed of EC funding. The European Policy Research Centre at the University of Strathclyde, for example, has received hundreds of millions of euros from the EC to explain, evaluate and proselytise the EC’s regional policies since they were a gleam in Bruce Millan’s eye from 1988 when, as EC Commissioner for Regional Policy, he started (under the Delors regime) the incredible expansion of the programmes whose munificence created the real attraction of EC membership for ex-communist elites. Of course it is the last organisation which would dare to blow the whistle on the dubious nature of the ventures. Take, for example, this Greek academic paper it published recently.

One longs for a young boy to shout out that the Emperor has no clothes – and dare to tell it as it is.