Workshop n°1: A More Focused Policy Concept: Territorial/Place-based Approach and Policy Value-added

1. Workshop n°1: A more focused policy concept:territorial/place based approach and policy value-added 22/06/2009CSM 1 00/SDR 1

2. THE POLICY CONCEPT: THE “NEW PARADIGM OF REGIONAL POLICY” OR PLACE-BASED POLICY • Two objectives • reducing persistent underutilization of potential (efficiency objective) • reducing persistent social exclusion (equity objective) • Unit of intervention • places or functional regions, set through the policy process • Three rationales (= 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 W1. Policy concept and policy value-added • Instruments • supply of bundles of integrated public goods and services • triggering institutional change • Method • external intervention through conditional grants • eliciting and aggregating local information and preferences

3. WHY SHOULD THE EU DO IT? THREE COMPLEMENTARY RATIONALES Union sustainability: • 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 • it is NOT a “cost to pay” to preserve market and currency unification, BUT a complementary means to achieve the EU's aim of growth and peace W1. Policy concept and policy value-added • place-based strategy objectives are the modern way to interpret the EU Treaty tasks of promoting “harmonious development” and “reducing disparities” • a place-based strategy is the only policy model compatible with the EU’s limited democratic legitimacy: the alternative to cohesion policy of “sectorial non pre-allocated funds” is un-feasible Taking care of over-the-border interdependencies Credibly keeping its distance from places, more than what Member States and Regions can do

4. CONSEQUENCES OF THE POLICY CONCEPT MISCONCEPTIONS AND CLARIFICATIONS Cohesion policy should not be: • 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 W1. Policy concept and policy value-added A policy aimed at “convergence” (of per capita income) • not a proxy for greater efficiency • not a proxy for greater social inclusion A policy constraining “natural” agglomerations • the fallacy of self-proclaimed “spatially-blind policies”

5. CONSEQUENCES OF THE POLICY CONCEPT:SOME FEATURES OF THE REFORM • From Pillar 1: a conservative territorial allocation of resources: • the allocation to “places” (and their definition) is not a task for the EU but for Member States or NUTS2 Regions; • NUTS2 Regions are particularly well placed to play this role; • there is no compelling reason to change the “75 per cent of EU GDP” threshold separating lagging from non-lagging Regions, but • a category of “transition Regions” should be introduced. • From Pillar 5: policy additionality W1. Policy concept and policy value-added • “contracts” between EU and MS (Regions) should commit to policy added value: • in terms of the 3 rationales of EU interventions • in terms of place-based policy innovations • From Pillar 6: experimentalism • The capacity of cohesion policy to truly “elicit and aggregate knowledge and preferences” at place level should be strongly enhanced through: • “contracts” with the EU committing MS (Regions) to this task • Commission running Innovative territorial actions (0,1 per cent of total resources) • developing the Region for Economic change initiative