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Conference on Facilitating an area-based development approach in rural cross-border areas of the Western Balkans Belgrade, 5 May 2011. Local development and territorial disparities in transformation countries Keynote address. Prof. Bruno Dallago School on Local Development - PowerPoint PPT Presentation
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Local development and Local development and territorial disparities in territorial disparities in
transformation countriestransformation countriesKeynote address
Prof. Bruno DallagoSchool on Local Development
University of Trento
Conference on
Facilitating an area-based development approach in rural cross-border areas of the Western Balkans
Belgrade, 5 May 2011
2
Local development
• Necessary for managing disparities and capturing opportunities, rebuilding the social fabric, integrate institutional transformation
• Formal institutional decentralisation
• Uneasy central/local relation
• Sectoral vs. holistic approach
Transformation and disparities
Transformation has generated disparities and inequalities due to:
• End of socialist allocation and distribution policies
• Different endowments of territories, social groups and individuals
• Agglomeration effects of domestic and international resources
New member countries as path breakers for accession countries?
4
Opposite trends in transformation countries
• Decreasing inequality among countries convergence and integration
• Increasing inequality within countries economic, social and territorial inequality and segmentation
• Need to consider population dynamics
• Territorial disparities as one of the reasons for income wealth, and opportunity inequalities
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Czech Rep. (14) Hungary (20) Poland Slovakia
1990 2000 2006
Concentration of production in capital cities
Source: OECD
1. Growth of post-transformation regional disparities and stability of general territorial patterns. Flow of opportunities, human and financial resources towards capital cities and impoverishment of periphery areas
2. Polarization and territorial segmentation due to faster development of regions with big urban centers and stagnation – or even decline – of less developed regions of eastern (external) and central (internal) peripheries.
3. Rapid restructuring vs. delayed restructuring of sectors/branches. Immediate impact on regional trajectories.
Regional patterns of transformation
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Regional patterns of transformation
4. Metropolisation replacing traditional urban-rural divide.
5. East-West divide due to new opportunities of transborder co-operation and return of the „modernisation from the West” pattern.
6. Decentralisation, local democracy. The competencies of the regional tier still uncertain in some countries.
7. Social disparities, divided polities
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The territorial patterns of transformation
Reaction to transformation
positive negative
Posi-tion in
the socia-
list eco-
nomy
good
LEADERS
Positive continuity
Motropolitan areas and capitals
Diversified economy, skilled labour, good infrastructure and rich institutions, international activities
LOSERS
Negative continuity
Traditional industrial regions
Specialised industry, neglected land,
biased/low qualifications
bad
WINNERS
Positive Discontinuity
Regions with endogenous potential
Diversified economy, external demand
LAGGARDS
Negative continuity
Rural, peripheral
Nonaccessible, obsolete structure, low qualifications
Degree of tax sharing vs. own financing of subnational governments, early-mid 2000s
Own taxes
as % oftotal SNG
Reve-nue
Own nontax
revenueas % of
total SNG
revenue
Total ownrevenue
as %of total
SNGrevenue
(ex grants)
Totalsubnationaltax revenuein percent
oftotal
subnationalrevenues
Distribution of total
subnational tax revenues
Degree of Autonomy
Tax sharing
Own-finan-cing
To set tax
base
To set tax rate
Albania 0.0 1.6 1.6 35.7 100.0 0.0 None NoneBulgaria -- 11.9 -- 72.9 90.0 10.0 None NoneCroatia 55.8 85.0 15.0 Very
limited Very limited
Macedonia, FYROM
86.4 -- -- None Local govt financingis currently underdiscussion
Romania -- 12.6 73.7 75.0 25.0 Somed Someg
SCG 71.5 8.0 92.0 None None
Transfers (grants) from central to subnational governments
Size Type of grant
Percentof GDP
Percent oftotal revenue
General Specific
Albania (1998) 5.4 96 100 0
Bulgaria (2000) 3.3 43 80 20
Croatia (2000) 0.2 5 Small Most
Romania (1999) 0.7 17 Yes Yes
Sources: Government Finance Statistics (IMF), IMF country economists; Wetzel and Dunn (2001)
The case for cross-border cooperation
• Cross-border cooperation (CBC) as a way to:boost local developmentsoften (territorial, industrial, social, political)
segmentation, disparities, and tensionsattract resources and create opportunities
• Institutional framework to facilitate cross-border cooperation
• Policies for CBC
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Evaluating and strengthening the effects of CBC
• Evidence: limited economic impulses, important social and political influence
• Need for:– comparison of evidence against context, policies,
and experiences in the field;– proper time frame;– comparison against counterfactual
• How can we improve and strengthen CBC implementation, outcomes, and spillovers?
• Is CBC in former Yugoslavia different? Is there a positive path-dependence?
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