Improving Governance Framework for Regional Development Policies: Småland-Blekinge Review

1. The OECD Territorial Review of Småland-BlekingeChapter 3: GovernanceCarlos Icaza LaraRegional Development Policy DivisionDirectorate for Public Governance and Territorial DevelopmentOECD Ronneby, 10 November 2011

2. Summary • Chapter divided in 3 main sections: • Governance Structure of Småland-Blekinge. • Arguments to be considered when assessing the regionalisation reform. • Multi-level governance arrangements to contribute to promote a better governance framework for regional development policies. Ronneby Seminar

3. Part 1 Governance structure Ronneby Seminar

4. Excessive fragmentation • Large number of public actors involved in regional development… • Regional development largely influenced by the national and municipal level. • Central Government agencies+ CABs. • Regional Development councils indirectly elected. Ronneby Seminar

5. Increasing need of co-operation • Why is it co-operation required?: • Mobility of people and businesses across administrative borders; • Many policies (transport infrastructure; innovation) require a broader geographic focus than the county; • Search for efficiency in public administration in a context of reduced fiscal resources. • What are the potential benefits? • More efficient and better targeted policies/ initiatives: • co-ordinating complementary measures that can generate synergies. • Co-ordinating different county/ municipal interventions that can have a stronger effect if they are planned/ carried out together. • Have a stronger voice… • Avoid duplication or overlapping of efforts and resources Ronneby Seminar

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7. Co-ordination Challenges • No clear structure for facilitating co-ordination of regional development efforts: • Deficiencies in vertical co-ordination among many national, regional and local authorities. • Deficiencies in horizontal co-ordination at county level • Lack of regional leadership: no single institution capable of co-ordinating the different regional development actors and policies in each of the counties. Ronneby Seminar

8. Co-ordination Challenges • Different inter-county co-operation initiatives • Health; infrastructure; innovation; tourism… • But, cross-county co-operation is still weak: • More the sum of individual county priorities than an analysis of regional complementarities and joint opportunities. • Normally not result in concrete plans (e.g. common infrastructure projects) using joint financial resources. • Difficult to reach political agreements. Ronneby Seminar

9. Part 2 Arguments for the regionalisation reform Ronneby Seminar

10. Elements to be considered (i) • Regional reform processes are context-dependent. • But, some common elements can be identified: • Guidance from the centre is required to clarify the purpose and direction of the process. • But stable reforms also require a certain degree of political consensus among the stakeholders involved. • This requires setting clear goals and objectives of the reform Ronneby Seminar

11. Elements to be considered (ii) • In-depth cost-benefit analysis must be conducted… • Economies of scale/ efficiency; • Transaction costs; • Economies of scope; • Stronger voice; • Democracy and accountability • Regionalisation reforms may involve trade-offs among outcomes: e.g. economies of scale vs. closeness to the local government. • Importance of agreeing on the weights assigned to each of the criteria in cost-benefit analyses • The focus should be on assessing and communicating the benefits of the reform: why the reform is needed; which benefits it will bring? Ronneby Seminar

12. Other options should be considered • Option of strengthening co-operative arrangements: • It may bring some advantages: economies of scale. • And allows for flexible interaction: different borders for different objectives. • But reaching agreements between administrative units is complex: • Special-purpose institutions (such as health-care regions) help. • This work for single purposes but not solve structural territorial failures. • Assessing the pros and cons of co-operation arrangements vs. administrative mergers is crucial. Ronneby Seminar

13. But, whatever the structure of public authorities, they will require the involvement and co-operation of different kinds of actors at different levels of government Ronneby Seminar

14. Part 3 Multi-level governance Ronneby Seminar

15. Strengthening MLG co-ordination (i) • Clarifying the roles of the different actors dealing with regional development. • Ensuring regional leadership • Move towards directly elected bodies dealing with regional development, and strenghtening the role of regional directors. • It would need adequate financial and human resources and enough institutional support to carry out its task efficiently. • It will hep to give a regional focus to regional development instead of the sum of local perspectives. • Municipalities would still play a central role: strong regional actors could exist in parallel and in co-operation with strong municipalities. • Promoting a better definition of the role and organisation of central government agencies. Ronneby Seminar

16. Strengthening MLG co-ordination (ii) • Strengthening regional development programmes as a main framework for guiding regional development efforts: • Develop more tangible strategies, including concrete targets and measurable outcomes. • Linking investment priorities with the objectives of the regional programmes. • Better integrate rural development strategies and general development programmes in a comprehensive regional strategy. • Strengthening inter-county and multi-level planning. • To be effective, joint strategies should include concrete initiatives and funding and implementation modalities. • The framework of regional “contracts” may help: agreement between national and sub-national, public/private units concerning their mutual obligations. It allows sharing the design and financing of concrete initiatives Ronneby Seminar

17. Strengthening MLG co-ordination (iii) • Further involving the business community and universities: • It requires public encouragement. • And concrete regional development strategies viewed by private sector actors as concrete, relevant and capable of generating tangible effects. • Institutional frameworks for public- private co-operation may help: public-private development agencies; industry advisory groups… • Public-private co-operation for infrastructure development could go further. • Enabling the legal framework for public- private co-operation Ronneby Seminar

18. Inter- municipal co-operation • Increasing need for municipal co-operation: • population ageing, specialisation of public services, need of recruiting specialised staff, interdependencies of labour market areas • Inter-municipal co-operation has been developing actively. • But faces some challenges: • Legal constrains for buying or selling services: e.g. municipal inspection. • Reaching consensus among administrative units and local political leaders on which activities to carry out jointly and how to do. • Lack of incentives: it can be difficult to show measurable impacts in the short term. • How to overcome these obstacles: • Incentive policy to encourage municipalities to co-operate. • Regional institutions can also encourage municipal co-operation. • Support for municipal co-operation should go beyond county borders: • Bordering municipalities ]with limited capacities and resources . • Border municipalities with large commuting flows Ronneby Seminar

19. Relocating municipal competences? • In-depth assessment to decide if some competences could be recentralised to regional or national institutions: e.g. municipal inspection. • This process could be asymmetric: bigger municipalities could have certain competences that smaller municipalities would not have. • Any process of recentralisation of competences should be made based on a comprehensive dialogue in which representatives of the main parties involved agree on the rationality of moving up a devolved competence. Ronneby Seminar

20. TACK! Ronneby Seminar