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Shifting to more decentralised and integrated policies?

Preliminary results

Lewis Dijkstra

Deputy Head of the Analysis UnitDG for Regional PolicyEuropean Commission

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Main hypothesisMember States (especially high performing ones) are shifting to more integrated and de-centralised policies

Tested in three policy domains: • Innovation• Transport• Labour market

Forthcoming study: Intralab by Ecorys

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Simple idea

Low (Sectoral) High (Integrated)L

ow

Hig

hIntegration

Reg

ion

al i

nvo

lvem

ent

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Difficult to define

• Sectoral (vertical)• Focus mainly on

goals within the policy domain

Example• Increasing the share

of people aged 30 to 34 with a tertiary education to 40%

• Integrated (horizontal)

• Focus explicitly includes goals from other policy domains

Example• Linking education

needs of the economy to education supply

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Centralised and decentralised• Centralised (no

regional involvement)

• National level designs and controls the policy implementation (regions may implement policy but with no discretion)

• De-centralised (high regional involvement)

• Regions or local level government can design and implement policy as they see fit (budget may be provided centrally)

Multilevel governance is a hybrid of two types, but provides room for discretion at the subnational level

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Logic behind the study• Integrated policies are more difficult to

evaluate• Even with very good framework conditions,

obstacles to development remain• Assessment of Member State policy practice

may allow to review whether their mix– Is linked to their level of performance– Is shifting over time

• This study may contribute evidence to the EU discussion about when to use what type of policy

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Link to spatial blindness

Low (Sectoral) High (Integrated)L

ow Spatially blind

Can be either blind or differentiated

Hig

h

Reg

ion

al i

nvo

lvem

ent

Integration

Spatially differentiated

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No policy type is intrinsically better• Being spatially blind can be beneficial or

even the only option, for example in the case of trade policy or Central Bank interest setting

• Regional involvement can help but can also distort a policy

• An integrated policy can find synergies, but it can also lead to confusion

• The goal is to identify the relative costs and benefits of each type of policy

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High-speed rail in France• Started out as a national and sectoral

policy in the 1950s• Became more integrated and involved

more regional and local authorities during the 1980s and 1990s

• Mostly produced clear synergies (for example in Lille) through this stronger involvement and better policy coordination

• In a few cases produced little synergy due to poor connections/frequency and insufficient critical mass (overshooting)

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Innovation

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Performance: Innovation Index

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Summary Innovation Index

• Based on 25 indicators covering:– Human resources (S&E, SSH)– Finance and support (R&D, VC)– Firm investments (R&D, IT, innovation)– Entrepreneurship– Throughputs (patents, trademarks…)– Innovators (product, process, market or

organisational innovation)– Economic effects (hi-tech and KISS, new

sales)

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What do the top performers do?• Concentrate on a few core priorities and

strategic issues• First priority is investing in R&D

cooperation between public/academic/non-profit research centres and enterprises (covers 18% of the innovation leaders spending in this field)

• Shift to more coordination and integration as well as decentralisation

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Changes in the policy mix

• Three broad types of policies:– Research (focus on universities and

research centres)– Innovation (focus on entreprises)– Triple helix policies

• Trends: – The first two are centrally driven and

sectoral but are shifting to more integrated– Triple helix is decentralised and integrated

and becoming more so

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National policy mix

Low

High

Sectoral Integrated

Level of integration

Regionale & Local involvement

PL

ES

SE

CZ

NL

FI

BE

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Case studies1. Finland: OSKE Centres of Expertise Programme2. Sweden: VINNVAXT regional innovation systems3. Spain: INGENIO 2010 (R&D&I and cooperation)4. Belgium: Flemish SME Innovation Cooperation (VIS)5. Poland: National Service system to SME’s (KSU) 6. Czech Republic: ROZVOJ investments in new

equipment and processes (Development)7. The Netherlands: WBSO R&D tax subsidy

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Case studies on the two dimensions

Low

High

Sectoral Integrated

Level of integration

Regionale & Local involvement

WBSO (NL)

Rozvoj (CZ)

KSU (PL)

Vinnväxt (SE)

OSKE (FI)

Ingenio (ES)

VIS (BE)

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Transport

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Performance: Four main groups• EU-15 North (highest)

SE, FI, DK, UK, IE, NL, DE, BE, LU, FR, AT

• EU-15 South (2nd highest)IT, ES, PT, EL

• EU-10 East (3rd highest)PL, HU, ZC, SK, EE, LV,LT, SI

• EU-2 (4th highest)RO, BG

• EU-10 otherMT, CY (some data gaps)

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Performance based on

• Quality of infrastructure• Investments in infrastructure• Modal split (passengers and freight)• Car ownership• Traffic fatalities

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What do top performers do?

• Rely mostly on central and sectoral policies, but are shifting towards more integrated and decentralised policies

• Traffic safety is an example of well performing sectoral and central policy

• Embedding changes to the rail, road and air network in the regional and urban fabric is done more and more with a strong regional/local involvement

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Policy trends• A number policies such as use optimisation,

transport operations and non-pricing policies are and remain sectoral and central

• Road and rail infrastructure provision is central and sectoral, but shifting

• Market regulation and pricing are more integrated as they (can) take on board other objectives, also at a regional level

• Transport and spatial planning and the development or regional airports are more integrated and decentralised

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Changes in the national policy mix

Low

High

Sectoral Integrated

Level of integration

Regionale & Local involvement

SW

PL

DK

SL

FR

ES

UK

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Seven case studies

1. Sweden: road traffic safety

2. Slovenia: road corridor development

3. France: high speed rail

4. Spain: road network development

5. UK: London congestion charge

6. Poland: Krakow regional airport development

7. Denmark: land use and transport integration in Copenhagen

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Case studies on the two dimensions

Low

High

Sectoral Integrated

Level of integration

Regionale & Local involvement

Road Safety (SE)

Motorway planning

(ES)

Road network development (SL)

High Speed Train Planning (FR)

Road pricing London (UK)

Urban planning Copenhagen (DK)

Regional airport Krakow (PL)

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Labour Market

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Performance

Equity

Efficiency

Scandinavian countries

Anglo-Saxon countries

Continental countries

Mediteranean countries

CEEC

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Performance is also related to:• Global Competitiveness index• Employment growth and rate• Unemployment rate• Integration of migrants• Flexible labour markets (OECD)• Education and training• Active labour market• Social security system

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What do top performers do?

• More decentralisation of policies• More active labour market policies• More responsive to regional/local needs

and differences in the level of development• Flexicurity relies more on an integrated

approach and a decentralised approach

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Changes in the policy mix

• A shift from passive to active labour market policies and both are becoming more integrated and decentralised

• Public employment services are becoming more decentralised

• Centralised and sectoral policies rely on accompanying measures which are more decentralised and integrated

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The national policy mix

Low

High

Sectoral Integrated

Level of integration

Regionale & Local involvement

PES Service

DK

IT

DE PLUK

HU

ES

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Seven policies to study1. Italy: regulatory framework2. Germany: More employment through self-

employment?3. Poland: Active Labour Market Policy in Upper Silesia4. Hungary: Integrated regional development policies

in Western Pannonia5. Spain: Decentralisation of Public Employment

Services and more effective ALMPs in Catalunia6. UK: Creating Advantage– a regional economic

strategy for the West Midlands7. Denmark: The ‘Golden Triangle’ of Flexicurity

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Case studies on the two dimensions

Low

High

Sectoral Integrated

Level of integration

Regionale & Local involvement

Vinnväxt (SE)

Self Employment

(DE)

Flexicurity (DK)

Creating advantage

West-Mistlands (UK)

LM restructuring Upper- Silezia (PL)LM policy

Cataluna (ES)

Integrated development

West-Pannonia (HU)

Regulatory framework (IT)

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Conclusions

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ConclusionsCentralised policies• Economies of scale

(faster and cheaper)• Externalities beyond

the region within the country

• Lower transaction costs

• Easier to set up• Predominant in the EU-

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De-centralised policies• Adaptation to local

preferences and needs• Externalities per region• More innovation• More accountability• More difficult to set up• More common in EU-15

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Sectoral and integrated policiesSectoral• Simple and fast• Can set uniform

framework conditions• Easy to evaluateBut• Does not consider

externalities• No policy coordination

Integrated policies• Incorporates externalities• Can remove further

obstacles to development

• Easier policy coordination

• Difficult to evaluateBut• Take more time• Requires strong

institutional capacity

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Overall

• Sectoral and central policies can deliver a swift improvement to framework conditions. This is useful when the regional impact and the synergies with other policies are not so important

• Integrated and de-centralised policies overcome specific obstacles to development by adapting to regional strengths and weaknesses, encourage more ownership and benefit from synergies with other policies. But they take more time to set up

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Thank you for your attention

Questions?