Public sector Innovation in rural policy

1. Relevance of this event

2. Usefulness of TERA

3. A couple of open questions

Territorial disparities in OECD Countries (gdp per capita 94-2000)

.20

0

.17

8

.15

9

.15

3

.14

5

.14

0

.13

6

.12

9

.12

6

.12

4

.11

6

.10

6

.10

1

.09

7

.08

9

.08

5

.08

2

.07

0

.06

7

.06

5

.05

7

.05

4

.04

6

.04

1

.03

4

.000

.050

.100

.150

.200

.250M

EX

US

A

HU

N

ITA

DE

U

PR

T

CA

N

AU

T

SV

K

ES

P

GR

C

UK

D

PO

L

BE

L

IRL

NL

D

KO

R

FIN

FR

A

JP

N

DN

K

AU

S

NO

R

CZ

E

SW

E

social, economic, political concerns

Economic Growth and Regional Disparities

Growth

3.5%3.0%2.5%2.0%1.5%1.0%.5%

Reg

ion

al D

isp

ari

ty4%

3%

2%

1%

0%

-1%

-2%

-3%

US

UK

Spain

Slovak Rep.

Portugal

Norway

Netherlands

Mexico

Japan

Italy

Hungary

Greece

Germany

France

Finland Denmark

Czech Rep.

Canada

Belgium

Austria

Australia

Economic performance of rural areas

Low population density lack of critical mass for services and infrastructure

(++ higher education)

fewer employment opportunities

out-migration (+ageing)

lower business creation

Rural per capita GDP = 64% of national averages, and declining

Although…

the fastest growing region in 1 out of 3 OECD Countries is rural

“rural” not synonymous with “decline”

(> H&I, > PHIMISTER)

1950

Center for the Study of Rural America, FRBKC

New rules of the game: changing profile of rural economies…

1990

Center for the Study of Rural America, FRBKC

0% 5% 10% 15% 20% 25% 30% 35%

United States

United KingdomTurkey

Sw itzerland

Sw edenSpain

Norw ay

New ZealandNetherlands

Luxembourg

KoreaJapan

Italy

IrelandIceland

Greece

GermanyFinland

Denmark

Czech RepublicCanada

Belgium

AustriaAustralia

1983 2003

52%34%

Agriculture as an employer…

Rural empl. 10 %

…changing profile of rural economies

Nat. GVA 2 %

… and globalisation, EU enlargement, CAP reform…

…new migration trends

...increasing mobility: where does rural start?

Leisure

Living

Shopping

Key:

24

68

1012

14

Move house13.5 miles

Restaurant8 miles

Average commute 8.1 miles

Theatre12.6 miles

CarRepairs

5.3 miles

Furniture / carpet 8.9

miles

Computer Equipment 8.5 miles

SmallElectrical5.3 miles

Clothes8.8 miles

MajorElectrical7.3 miles

DIY /Garden items

5.2 miles

Cinema6.8 miles

Groceries3.5 milesHOME

Lookfor new car 13.5 miles

School*3.1 miles

Source: Future Foundation/Newspaper Society

Average number of miles travelled (urban and rural people)

Changes in the share of subnational governments in total public revenues and spending (Percentage points, 1985-2000)

1. Or earliest year available: 1986 for Ireland, 1987 for the United Kingdom, 1990 for Japan, Luxembourg and Netherlands, 1991 for Germany, 1993 for Sweden, 1995 for Greece, Portugal and Spain. 2. Or latest year available: 1997 for Canada and the United States, 1996 for Ireland and 1998 for Portugal. 3. Excluding transfers received from other levels of government. 4. Excluding transfers paid to other levels of government. Source : OECD National Accounts data. Statistics Norway.

Nor

Gbr

Swe Esp

Prt

Nld

Lux

Jpn

Ita

Irl

Grc

Fra

Fin

Dnk USA

Deu

Can Bel Aut

- 25

- 20

- 15

- 10

- 5

0

5

10

- 8 - 6 - 4 - 2 0 2 4 6 8

Revenues

3

Spending 4

...devolution, calling for new planning capacity

Revenue

Spending

So there is diversity, complexity, rapid change…

…and the governments ?

… simplistic, national view > SATERIALE, BIANCHI

1971 1996

Centre-West

South-Southeast

Centre

Northwest

Northeast

Individual and territorial disparities

> unaltered during strong growth period (1992 - 2000)

32 %

70 %

Mexico

China

Patterns of Change of Provinces between 1990 and 2000

Several provinces are in a low income and slow growth trap (in red)

Producer Support in % of Gross Farm Receipts (Source:OECD)

EU

USA

OECD

The limits of agricultural policy: 1,3 % of OECD GDP

0

10

20

30

40

50

60

1986 1988 1990 1992 1994 1996 1998 2000 2002 2004

%P

SE

inefficient, ineffective, inequitable> Kilkenny, also Psaltopoulos&Balamou

TERRITORIALDEVELOPMENT

HUMANRESOURCES

Training

IT -INFRASTRUCTURES

V.CAPITALS

R&D -TECHNOLOGY

e-GOVERNMENT

Universities-Technopoles

e-companies

education

H.R. loops

infrast. demand

R

R

R

infrastructure loop

technology loop

R

"Cambridge" Loop

Public Investment

Private Investment

R

TERRITORIALDEVELOPMENT

HUMANRESOURCES

V. CAPITALS

R&D -TECHNOLOGYINFRASTRUCTURES

e-GOVERNMENT

Moving away from simplistic approaches: in search for coherence

NEG, NEEG, SAMs... > Prof. Round, Marattin...

In the OECD: LEADER, PITs, LSPs, Growth Agreements, Regionen Aktiv, Canadian community futures, Mexico’s PDRs and microregions…

…and in developing Countries: India, Central and South America, China…

At national…and local levels: Tuscany, Basque Country, Scotland, Quebec, Extremadura …

Towards a new rural policy paradigm: a lot of innovation…

…some common principles…

The new rural paradigm

1. “place-tailored”, integrated vs. sectoral approach

2. emphasis on opportunities vs. disadvantage

3. investments vs. subsidies

4. knowledge and amenities vs. hard infrastructure

5. multiple actors

a matter of governance/cooperation > Kilkenny, Giannattasio

Arezzo Grosseto

EU Central Gov

Region Province Local EU Central Gov

Region Province Local actors

Docup 2000-2006 X x X x

RDP 2000-2006 X x x X x X

LEADER Plus X x x x X

Provincial Plan X x

Territorial Pact x X x x x X x X

Territorial Pact for Agriculture

X x x x X x X

Programming Contract X x

Agenda 21 X x

Mountain Plan x x X x x x x X x x

PRUSST X x

Industrial Districts X x

Rural District X x

PASL X x X x

PISL X x x X x x

Multipleactors…

Grosseto

Automatic Announcement Negotiation Automatic Announcement Negotiation

Docup 2000-2006 X X

RDP 2000-2006 X X

LEADER Plus X X

Provincial Local X

Territorial Pact X X

Territorial Pact for Agriculture X X

Programming Contract X

Agenda21 X

Development Plan for the mountain X X

PRUSST X X

Industrial Districts X

Rural District X

PASL X X

PISL X X

Sophisticated mechanisms…

Challenge # 1: COMPLEXITY

knowledge, research gaps > GALASSI overcrowded instit. settings: who coordinates what? transaction costs and additionality efficiency and effectiveness ?

need to address:

intellectual, institutional, administrative gaps

Challenge #2: Political economy of reform...What place for rural policy ? > BIANCHI, THOMPSON?

Policies

TerritoryRegional General

Rural

Non-rural

'niche' policy

'grand plan'

comprehensive regional policy

‘niche’policy’

comprehensive regional policy

Summing up

The need for a new policy approach to RD is there

The research challenge is also there

This discussion and TERA are relevant and timely

Thank you and good luck to TERA !