Ex-post Evaluation of the Objective 1 1994-1999 Community Support Framew ork … · 2015. 3. 9. · Executive summary ISMERI EUROPA – Ex-post evaluation of the Objective 1 1994-99

Executive summary

ISMERI EUROPA – Ex-post evaluation of the Objective 1 1994-99 CSF - Italy 1

Ex-post Evaluation of the Objective 1 1994-1999 Community Support Framework

ITALY

Executive summary

November 2002

Executive summary


Ex post evaluation of C.S.F. obj.1 (1994-1999)

Summary of the key issues

Index

1. THE FINANCIAL DIMENSION AND INFLUENCE OF THE CSF .............................................................................................................. 4

2. BACKGROUND AND INFLUENCE OF EXTERNAL FACTORS ............................................................................................................... 5

3. MAIN TARGETS ACHIEVED ............................................................................................................................................................................ 6

4. APPROPRIATENESS OF STRATEGY ............................................................................................................................................................. 7

5. EFFECTIVENESS ................................................................................................................................................................................................ 8

6. COMMUNITY ADDED VALUE ........................................................................................................................................................................ 9

7. MANAGEMENT AND IMPLEMENTATION SYSTEM .............................................................................................................................. 10

8. OVERALL EFFICIENCY ................................................................................................................................................................................. 11

9. CONCLUSIONS.................................................................................................................................................................................................. 12

10. INFLUENCE OF THE 1994-99 ON 2000-2006 PROGRAMMING ............................................................................................................. 20

11. SHORT-TERM RECOMMENDATIONS (2000-2006)................................................................................................................................. 21

12. LONG-TERM RECOMMENDATIONS – POST 2006 ................................................................................................................................. 22

ANNEX - MAIN RESULTS................................................................................................................................................................................... 23

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Executive summary


1. THE FINANCIAL DIMENSION AND INFLUENCE OF THE CSF

Objective 1 1994-99 CSF was an important component of the regional development policy of Italy and was finalised to the reduction of thedisequilibria in income, productivity, unemployment and infrastructural endowment.

The Italian 1994-99 objective 1 CSF initially allocated 34,4 billions of Euro (1994 price), which were divided into 78% of public resources (46%of structural funds and 32% of national funds) and 22% of private resources. At 1999 prices the total cost of the initial CSF was equal to 35.389Meuro with 16.193 Meuro of structural funds (10.526 Meuro of ERDF, 2984 Meuro of ESF, 2428 Meuro of EAGGF and 254 Meuro of FIFG) The community transfer to Italian objective 1 regions significantly increased with respect to previous period (+65% the total amount and +38%the annual amount).

In the initial plan central administration managed the 55% of the public funds, and the regional administrations managed the remaining 45%. Therole of regional authorities increased with respect to the 1989-93 period.

For the first time community resources represented a relevant share of the public expenditure in the Italian objective 1 regions. Both the totalamount of resources and its investment quota increased their influence with respect to the previous period:- the total expenditure of the CSF on average was equal to about 1.3% of total annual internal demand in objective 1 regions, with a maximum

level of 5% in 2001;- the capital component of this expenditure was equal to about 5% of the annual investments In some sectors (telecommunication, environment, tourism, human resources) the expenditure of the CSF was superior than 50% of the totalexpenditure for regional development (CSF plus national policy).

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2. BACKGROUND AND INFLUENCE OF EXTERNAL FACTORS

Main factors Positive influence on the CSF Negative influence on the CSFMacroeconomic background - Deflationary effects on growth of the public deficit

reduction and increasing difficulties for weakregions

Institutional and administrativebackground

- Devolution and administrative reforms went inthe same direction of the CSF regionalisation

- Income policy and agreements between socialpartners reduced conflicts and facilitated nationaland local institutional agreements

- Low efficiency of public administration at national,regional and local levels; this affected CSF, but,more generally, it influences the market conditionsin the objective 1 regions (enterprise localisation,management cities and territory, justice, etc.)

- New rules for public work and block of thedecision mechanisms in public administration afterwidespread investigations for corruption (“manipulite”- clean hands) initially delayed public callfor tenders

Regional and developmentpolicy

- In 1992 the new national regional policy adoptedEuropean orientation and concentrationprinciple. This facilitated cofinancing andintegration between national and Europeaninterventions

- Territorial pacts and others similar initiativesenlarged the participation of new local actors indevelopment policy; it increased and facilitatedtheir involvement also in the CSF

- The operational definition of a new administrativeframework for the regional policy took time anddelayed some interventions

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3. MAIN TARGETS ACHIEVEDPRIORITY AXES MAIN TARGETS ACHIEVED

1COMMUNICATIONS

Transport – improvement in some strategic communication routes already in existence, but little enlargement of road and rail links. Weak support to railoptions+ compared with roads. Works of redefinition and extension in some ports and airports. Almost all the works carried out were part of largeractions, so that their impact is currently slight.Telecommunications Improvement in services and extension of the availability of fibre optic network..

2 INDUSTRY Great support to local production systems, especially to SMBs. The level of investment remains high for the Central-North despite the dramatic fall ininvestments by public businesses.Aid has covered falls in competitiveness due to the reduction in subsidies towards labour cost and decrease in domestic demand. The evolution ofproductivity is in line with that in the Central-North, even though they remain at different levels.Little integration with other policies on training or research.

3 TOURISM General support of the modernisation and re-definition of the tourist industry, especially to mid-category hotels. Support found rising demand and thesector has seen substantial development.There were no integrated actions at area level nor large-scale policies on diversifying the goods and services on offer.

4 AGRICULTUREAND RURALDEVELOPMENT

Great support of agricultural businesses and their investments in re-definition and modernisation of production. Good results in terms of an increase inproductivity, partly favoured by the steady rise in unemployment.Under par results for technological innovation, rural development and diversification in production activity, with the exception of agriturismo (farmholidays) which received significant impetus. There was also no sector policy that linked the whole food and agricultural system organically.

5 FISHING Significant support to the renewal of production equipment and hydroculture. Less impact on the environmental aspects linked to fishing.6 ECON.INFRASTRUCT.

Water: significant support of infrastructure maintenance; limited actions on expanding availability.. Results are definitely below expectations, andinvolvement of private parties too was nil.Energy Actions limited to the completion and consolidation of existing availability. Support of renewable resources was almost nil..Environment Implementation of many actions of adjustment and consolidation of existing infrastructures. Actions were below those needed (especiallywaste disposal) and showed no clear area policy. Of note was the initial activity of supplying infrastructures to parks and thus an initial step towards theirexploitation for economic development.Research, development and innovation Enormous involvement of universities and significant development of higher education in scientific subjects.Implementation of large research projects, but weak SMB involvement. These are ineffective limited results, especially actions of technology transfer.Security infrastructure the programme on security was added half-way through; it attained significant results not only in the construction of securityinfrastructures , but also as a message that there is a development policy including all elements of society and state.

7 HUMANRESOURCES

The ESF programmes reached an enormous number of beneficiaries and contributed to the creation of a support system for human resources includingschools, universities, professional training, and continuing education. In addition the development of specific actions for target populations (women andthe underprivileged) also enabled the first experimentation in these sectors to be carried out.No similar widespread efficacy corresponded to the great breadth of the action. The greatest successes were seen within schools and universities. On thecontrary, there were no links between support of human resources and the production sector, and it is no coincidence that continuing education was theaction most penalised by re-programmings.The non-existence of a system of employment services and the almost sole use made of training as a means of placing people in the job market limited theefficacy of actions.

8 TECH. ASSISTANCE Important role in supporting the public administration. Technical assistance worked almost exclusively in outsourcing, and the transfer of abilities andresources was limited. Importance of training for the PA as a means of disseminating basic concepts, but its low efficacy ion influencing the managerialability.

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4. APPROPRIATENESS OF STRATEGY

Main factors Strengths WeaknessesAppropriateness of

strategy- the CSF operated as a bridge between different phases of

national regional policy (closure of the “interventostraordinario” and launch of the “intervento per le areedepresse”)

- The CSF strategies addressed all the principal disparities ofthe Italian objective1 regions (i.e. roads, industrial fabric,tourism, etc.) and identified some relevant priorities (localenterprises, water infrastructures, rural development, humanresources); the initial difficulties in business cycleemphasized the role of aid schemes

- the absence of a general view of the developmentmodel necessary for the objective 1 regions did notallow clear choices and concentration

- the lack of regional and sectoral programming didnot support the identification of the CSF prioritiesand its operational integration with national policy

- poor integrations between different OPs andbetween different structural funds

- little attention to the territorial and institutionalaspects of the strategy

Reprogramming - comparing initial and final programming about 40% of totalresources was re-allocated;

- reprogramming was a fundamental instruments for sustainingexpenditure and full utilisation of funds;

- decisive institutional partnership in implementing automaticmechanism of reprogramming (anticipating new rules of the2000-06 period)

- reprogramming permitted some interesting, but financiallymarginal, experimentations (co-financing of Territorial pacts,OP for civil security, new employment policy)

- in general, financial targets guided reprogrammingand poor attention was devoted to strategy andeffectiveness in changing allocation of resourcesand financed projects;

- lost of the more ambitious interventions andweakening of the internal coherence of theprogrammes

Financialadvancement

- Commitment over 100% of programmed resources andexpenditure close to 100%; significant improvements withrespect to 1989-93 period

- Delays concentrated in ESF, which can not use thenational funded projects

- diffuse utilisation of national funded projectswithout clear priorities of efficiency andeffectiveness (consequence of the lack of anational programming)

Leverage effects onprivate funds

- not considering public or public participated companies,private resources reached about 20% of total cost

- insignificant private participation in infrastructurefinancing

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5. EFFECTIVENESS

Main factors Strengths WeaknessesCommunications - In the main OPs the defined objectives for telecommunications, the

rail and road networks were achieved (apart from the Messina-Palermo motorway)

- The CSF did not make exceptional efforts to solve specificproblems of the communications system and did notintegrated different intervention in systemic rational.

- At local level the intervention was broken up into manyoperations, they resulted important but rarely linked with adevelopment strategy

Production sector - Important support to industrial investments and employment- Increasing efficiency of aid schemes (specially 488/92) and large

involvement of enterprises (about 10.000 – more than 95% wereSMEs - in the national OP for industry only)

- High quota of dead-weight and limited effects on theoverall disparities in productivity and competitiveness

Tourism - Different direct and indirect actions increase and differentiatedtourist facilities, as well as improved attractiveness. The results arecomforting in relation to the trends in the sector over the last fewyears.

- A logic of integrated action could be better exploited with awider co-operation among the managing responsible of thedifferent interventions

Economicinfrastructures

- Many interventions in environmental sectors were successful, alsoif they were not included in a local or national strategies ofvalorisation of natural resources

- R&D policy obtained significant results in supporting higheducation and experimented new regulation for incentives

- At the end of the second CSF the water problem issubstantially unsolved

- Technology transfers was not completely successful and,specially at regional level, was translated into financing amultitude of research projects with no systematic design

Human resources - Involvement of a large number of unemployment and launch ofnew interventions for disadvantaged people and equal opportunities

- Important results obtained in the educational system (professionalschools and universities)

- poor analysis of training needs in each region and lack of astrategy for inclusion (involvement of production sector,implementation of services and action different fromtraining).

- Low integration with education and weak specialisation oftraining supply

Agriculture andrural development

- The objective of diversification of production and of productqualification has been successfully pursued. In each region specificsectors can be identified where significant results have beenachieved (viticulture, olives, greenhouses, animal husbandry)

- The objective of reducing internal disparity by promotingrural development has not been achieved; this does notimply however that the individual measures of ruralinfrastructuring and territory requalification wereunsuccessful or a failure.

- many businesses in the food industry were financed butwere not integrated with agricultural or trading businesses.

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6. COMMUNITY ADDED VALUE

Main factors Strengths WeaknessesEconomic and social

cohesion- important financial support during a period of public

expenditure reduction and low growth- difficulties in respecting the additionality principle

because of the extraordinary conditions of publicbudget and the large process of privatisation

Community priorities - CSF promoted new interventions in the field ofenvironment and equal opportunities

- Weak strategic definition of these newinterventions limited their general results,important achievements obtained in specificinterventions (i.e female entrepreneurship)

Community method - The improvements, both in methods of planning andmanagement, have been unprecedented even if theyare not yet sufficient to consider the task ofmodernizing public administration methods andprocedures as accomplished.

- The methods of monitoring and evaluation wereincluded with some difficulties into the proceduresof the public administrations responsible for thevarious programs.

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7. MANAGEMENT AND IMPLEMENTATION SYSTEM

Main factors Strengths WeaknessesManagement structure - Improved capability in managing structural funds,

specially in financial terms- Vertical hierarchy and watertight separation between

different departments (particularly in regions)hampered transfer of know-how and flexibleadaptation to the needs of the programming cycle

- Very poor attention to effectiveness in the managingdecisions

Partnership arrangements - Relevant improvements in vertical partnershipamong institutions and central role of CSF steeringCommittee in orienting main actors

- Positive effects of the strong co-ordinationpromoted by Treasury

- Horizontal partnership with local bodies andadministrations, and social partners was notpronounced

Project selection - Diffusion of public procedures, which now arelargely prevalent. Changes were significant inESF interventions, where initially publicprocedures were unusual

- many selection procedures are complex and timespending and produce delays in the implementation(specially in ESF interventions)

Financial system - Significant improvements in managing thestructural funds and promoting controls inconformity to the EC requirements

- Existence of “bottle necks” in national financialprocedures (i.e budgeting procedures in manyregions, insufficient officials for ESF controls,fidejussion for all kind of intervention, etc.)

Monitoring and evaluation - diffusion of culture and methods of monitoringand evaluation, but considerable results wereobtained only in financial monitoring

- late start-up of the evaluation process and its feebleeffectiveness in decision mechanisms

- absence of an organised set of physical indicators inalmost all the OPs

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8. OVERALL EFFICIENCY

CSF efficiency can be analysed at various levels, and the following paragraphs detail the main levels that emerged from the report.

Cost efficiency – This is the traditional computation for efficiency: the relationship between costs and policy output. The unit costs of the mainactions seem to be in line with national costs. Their extreme variability derives from the multitude of diverse operating contexts, and also fromphysical monitoring which was not completely reliable. Still referring to the information available, the sole action that generated significant newemployment was incentive to investments. Employment created has a lower unit cost for small and medium-sized businesses (SMBs), whereinvestments are relatively small and employment density is higher. This is not a new result and does not seem to influence any consequentstrategy decisions..

Efficiency of expenditure – This refers to the relationship between programmed expenditure and actual expenditure. This was relatively high,especially if compared with the very low level of performance in the 1989-93 period. There is still much room for improvement in the FSE and inimplementation capacity in the infrastructure sector.

Efficiency of programming and the means to achieve actions – This refers to the operational capacity demonstrated by initial programmingand the means used to achieve actions during the implementation phase. This has shown itself to be rather low; programming required extensiveon-going modification and the completion of very many measures depended on projects that had already been financed with national resources.Only some national aid systems, already tried and tested and with a good level of administrative organisation, were seen to have efficientprocedures.

Efficiency of decision-making mechanisms – This refers to the decision-making processes linked to programme management. If the mode ofimplementing the CSF is considered (partnership, Supervisory Committee, etc.), this generally gained efficiency in the 1994-99 period, whileimprovements in the administrative background against which the CSF had to function still appear very small. This is particularly true in the caseof the Regions and local bodies, where the growth in efficiency was still extremely slow and not up to standard.

Before the great improvements attained in the 1994-99 period, the efficiency problem in the management of structural funds is stillcorrelated to state administration. Cost efficiency generally appears to have been respected compared with other national policies, whileefficiency in implementation timescales compared with forecast remains problematical and requires further adaptation actions.

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9. CONCLUSIONS

The macroeconomic results of the Objective 1 CSF: a vital support to structural transformations in the 1990s

The Italian 1994-99 CSF achieved important results in supporting the production fabric during the 1990s. It had to sustain the Objective 1economy during a period of structural adjustments, which saw a policy reduction for Objective 1 regions compounded by a general reduction innational demand. These deep-reaching transformations closed a thirty-year period of policy for Southern Italy and were not seen in otherEuropean Objective 1 areas.

In these difficult circumstances Objective 1 regions did not record a positive performance, but widening of the gap compared with the rest of thecountry was contained, and in the last two years the gap was actually narrowed. In addition, during this period Objective 1 regions modified theirmacroeconomic trends and reduced their dependency on the rest of the country.

The CSF contributed to the change, but macroeconomic, political and institutional factors were its main causes, as follows:

– from the macroeconomic point of view, the dramatic reduction in public expenditure, the increasing prominence of an export-led model ofgrowth, the privatisation of large public companies and the increasing competitiveness arising from a single market with a single currencyaffected Objective 1 regions more than other countries, because the regions were less competitive and more dependent on public funding.

– from the political and institutional point of view, the increasing opposition to transferring finances to Objective 1 regions, the increasingefficiency required from public markets, the break-up of the traditional relationship between national and local government, and progressivedevolution forced Objective 1 players to seek a more autonomous way towards growth.

Within these transformations the CSF played a vital role: it kept expenditure on development at par, helped the private sector to make anynecessary adjustments, supported levels of investments and employment, involved many local institutions and became the most importantdevelopment policy for all Objective 1 regions.

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The slow progress in “wearing away” Objective 1 regions

In the year 2000, the decrease in the number of Objective 1 areas (with Abruzzo no longer being classified as such and Molise in the process ofbeing phased out) confirmed structural changes in Southern Italy and showed the presence of developing areas within its boundaries, even thoughthe areas are of limited size.

It is not however possible to attribute the decrease in Objective 1 areas to the CSF, as both regions had already passed the threshold of 75% in1994. What is important to underline though is how the CSF favoured the process of “wearing away” Objective 1 areas, and that over the last fewyears Sicily and Basilicata as well have reached a situation where they will shortly be able to leave Objective 1.

In Italy therefore Objective 1 is tending to contract, but still involves the main regions of Southern Italy (Campania, Puglia, Sicily), which alsoshow a reversal in pro capita income values compared to 1994. As a whole Southern Italy still records income values that would admit it toObjective 1. The persistence of high levels of unemployment in Southern Italy is a further sign of the serious imbalances having a widespreadeffect on the entire area.

There is therefore the problem of the polarisation of certain processes of development, a development that must be encouraged despite anyinherent imbalances that it may temporarily involve. There is a particular problem however in the “critical mass” of development processes; theirgeographical size and economic import are even yet too small when compared with the problems of cohesion between the regions of SouthernItaly and requires a wider distribution of resources and greater efficacy of development policies.

In the 1994-99 period the CSF was not successful in having an effect on these questions. Its support of the area’s macroeconomic resuscitationwas vital, avoiding a yet more serious deterioration in development indicators, but it did not appear to have given rise to new, widespreaddevelopment processes. The large structural improvements to which it contributed often turned out to be fragmented and with little connectionbetween them.

Structural results: great improvements, but with weak multiplying effects

In the field of structural modifications it is extremely difficult to evaluate short-term results. Some indications are significant however:- the many resources directed at the private sector have aided its adaptation to new market conditions. The industrial sectors of SMBs have

significantly increased productivity and many businesses have been aided by incentives. The same has occurred in the sectors of agriculture,fisheries and tourism.

- communication infrastructures concern the Palermo-Messina motorway and the Rome-Naples high-speed railway line.

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- General improvements have also been recorded in the sector of economic infrastructures, but with projects and areas of action generally beingimplemented in isolation. The water sector does not show the improvements forecast in the initial plan, where this action played a leadingrole.

- In the sector of human resources the number of beneficiaries was high and a wide range of actions was put into effect. Actions on theeducation system (higher technical education and universities) were seen to be successful and of good quality. Traditional training actions onthe other hand were little geared to area needs and were addressed almost exclusively to the unemployed.

- In agriculture the main improvements were in the re-definition of many local products and produce. The main results in the context of ruraldevelopment were limited to the development of agriturismo (farm holidays). Services to production also had great support, but still did notappear to be able to play a central role in supporting production.

From the overall picture of results emerge:- widespread significant results, but also the almost complete absence of multiplying effects or obvious concentration/synergies at area level..- a high proportion of “dead-weights” both in the infrastructure sector (where “border”, sponda, projects were financed) and in the incentives

sector (where dead-weight is traditionally high).

Despite significant results there is thus much room for improvement in action efficacy with respect to performance in the 1994-99 CSF.

Lack of development strategy

The problem of the strategy for the CSF 1994-99 was not that it was unsuitable in terms of the area’s economic opportunities or weaknesses. Thereal problem was that all the CSF programmes, even though each had its own rationale, did not compose an integrated consistent strategy fordevelopment (the stringent selection and quantification of final objectives, the identification and definition of objective variables and variables inthe means of achieving actions, specification of the causal mechanisms that would lead to the achievement of a certain economic goal, and theidentification of objectives that did not come into possible goals).

A strategy with too many overambitious objectives, which contains a very high number of actions and measures, and includes actions of normalon-going maintenance, is not a development strategy in the true sense of the words. And this is why we have made the provocative statement thatthe CSF 1994-1999 had no development strategy.

This lack of strategy has its causes and also its effects. The cause is the place held by community programming within national policies, while theeffects are the fragmenting of resources and a lack of integration between measures.

Executive summary


The role of the CSF and the lack of national programming

The main cause of the lack of a development strategy is in the role that community programming has come to take on in the context of nationalpolicies. Community programming has fulfilled a stand-in role where sector and area programming (national and regional) was non-existent orwanting in some way.

Although this situation represents very real community added value, it has meant that CSF resources have had to be spread over a very highnumber of activities and expenditures. In other words, the CSF has not been that part of national programming specifically devoted toexpenditure on development but has tended to be identified with programming as a whole. This has meant no selection of objectives and veryhigh fragmentation of resources.

The sector approach to programming and management

For the same reasons, the CSF has been considered since its conception phase as a combination of sector actions in the tradition of state action inItaly. The way actions were managed then aggravated the lack of integration between programme measures. The rule was that every measure hadits official head (a ministerial office, a councillor’s office, etc.) and that management was confined to watertight compartments. No one knewanything of what was happening outside their own area of responsibility. Certainly, there were co-ordinating bodies at various levels of theaction, but these were interested in the state of the action’s financial progress to the exclusion of all else, and not in aspects relating to economiccontent. What is more, the sizeable failure of physical monitoring impeded co-ordinating bodies from receiving reliable information at the time itwas needed on the economic results of the various measures.

A reconstruction of the rationale behind the 1994-99 CSF after the event: support of the private sector

Despite the limitations to strategy, a reconstruction of CSF logic can be put together after the event under one main objective: to promote amplesupport to the private sector, particularly the part relating to industry and services.

The widespread use of incentives to investment sustained the private sector at a time when other incentives were being reduced (reduction inlabour costs) and competition was mounting (the single currency, a reduction in public spending, globalisation of production). It also favouredthe process of a deep-reaching re-organisation of the credit system that had occurred during the 1990s in the south, reducing the pressure offurther delays in paying debts.

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The results of this choice appear contradictory. The production base of Southern Italy was not diminished but neither was there a significantsurge in productivity and competitiveness. Some dynamic SMB clusters emerged but the percentage of manufactured products was still close to10% of the GDP. The growth in employment deriving from investments was significant, but it was often concentrated by area and was notenough to have an affect on the general high levels of unemployment.

Support of the private sector may have played an important part in the recent phase of change during the 1990s, but does not appear to have beenenough by itself to create development. The capacity to conserve southern industry is still definitely lower than the needs of Southern Italy.

The increasing efficiency of the CSF: vital progress in a area of persistent problems

Increasing efficiency in the financial management of the CSF aided the achievement of the above results. The CSF 1994-99 represented a hugeleap in quality as regards absorption of funds compared with the previous period of community programming. The achievement of almost 100%of commitments and 95% of payments shows considerable improvement compared with the results for the 1989-93 period.

This was not a certainty at the beginning of the period. CSF efficiency had to deal with a change in national policy on Objective 1 regions, whichmatched some community guide-lines but required a re-definition of national implementation procedures as well. It also had to deal with the verylimited ability to adapt in the national administration, which caused serious delays and poor absorption in the 1989-93 CSF.

The CSF rose to the efficiency challenge by putting two main actions into place:– re-programming between different programmes and within each programme, which automatically penalised any programmes that did not

reach the defined targets for commitments and payments, and favoured the programmes with greater absorption capacity. Automatic re-programming was accompanied by enormous on-going regular re-programming within the individual programmes.

– the great use of nationally funded projects in the CSF, which enlarged the base of eligible projects and avoided the implementation of newprocedures for a large part of CSF expenditure.

Other actions were also important in achieving efficiency (well-organised procedures for the national aid scheme or the greater involvement ofpublic bodies – Telecom, FS, ANAS, ENEL, ENEA, CNR - with a large stock of feasible projects and no need of public procedures), but re-programming and the utilisation of nationally funded projects had a determining affect. The former was based on strong state partnershipsbetween the authorities responsible and was effective not only because it aided more efficient financial allocation, but it also defined financialobjectives and compelled the players involved to adhere to them. The latter action, the great utilisation of nationally funded projects, movedmanagement focus from implementation procedures to financing. In many cases the CSF became a simple financial source which was additionalto other ordinary national funds.

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These corrective actions assured the spending of the CSF, but conserved unaltered the management and administrative problems that were at theheart of implementation difficulties.

Processes of multi-level governance of the CSF

CSF management processes heightened and gave clearer definition to the role of the different levels of state institutions.

Before all else, vertical partnership emerged as greatly strengthened following stronger and more active co-ordination by the Treasury and, evenmore, by automatic re-programming, the definition of which required extensive on-going collaboration between central and regional government.Here, for the first time in Italy, a state institution agreed to an automatic reduction in its budget if it did not achieve spending objectives. Eventhough this had already occurred in actual fact, from the official point of view the acceptance of these rules, with no imposition, represented aconsiderable change in state attitudes. Overall, this collaboration was then positively reflected in the different relationships between regions,central government and the European Commission.

The opposite was the case with horizontal partnership, which was under- developed or not developed at all. Increased participation of localbodies, an increase powered by greater resources and national policies for local development, and the vital role played by the unions and othersocial bodies in the definition of national policies, were reflected little and to a limited extent in CSF management. These partnership limitationsmay have had a negative influence on the management of actions, especially in the implementation of many infrastructure actions, where localstate institutions have wide-ranging powers.

Overall, the experience gained confirms that a system of multi-level governance requires two elements operating simultaneously: firstly, strongcentral co-ordination and direction, which will specify common timescales and methods for an action; secondly, great independent involvementat area and society level, which will root actions in the community and aid implementation. The latter is obviously more complex and needs moretime due to the large number of players and the diverse interests involved.

Management problems still to be resolved

The history of the CSF 1994-99 management difficulties is conducive to several considerations.

The first is on the start-up of programmes, which should be as punctual as possible. Delays should not already have accumulated in this phasesince it will lead to an atmosphere of on-going emergency, which will then cause attention to be concentrated solely on the programme’sfinancial aspect.

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Secondly, state institutions lack a background in economic outcome. The officials responsible for measures simply do not take this aspect ofpolicies into consideration. They are still tied to a logic of procedural correctness and, because of constraints imposed by the Community, tocommitment and expenditure deadlines. The renewal of the monitoring system in all its three dimensions (financial, physical and economic) thuspresents itself as a priority to overcome this inadequacy.

Thirdly, the inability of state institutions, especially in the regions, to deal with change. It is true that the period within which the CSF 1994-99fell was a transition period between an old and new policy model. The transition involved not only the contents of development policies but alsothe players, and the CSF found itself in the position of having to form a bridge between the old and the new. It is also true however that centraland local government have difficulty in assimilating changes. Every time something new occurs - a national law, community regulation, regionallaw or election - state institutions come to a standstill and with them implementation of the community programme. The difficulty in dealing withchange leads to innovative projects being the first to encounter obstacles and to build up delays - and also the first to be sacrificed.

Lastly, and this is connected to the above, the part played by professional skills. Despite certain problems, it does not appear that managementdifficulties were linked to widespread individual incompetence. It would rather seem that the organisation of the management offices hinders theoptimisation of the existing human resources and growth in potential resources. For example, it emerged that in the management of differentmeasures no care was taken in horizontal management functions, and thus no body of knowledge and skills was disseminated or created on howcommunity actions worked. Any knowledge was concentrated in the person responsible for the fund or the measure and behind that figure therewas no one else. This meant that the frequent changes in those responsible constituted a factor that slowed down the programme, and that verticalmanagement led to a duplication of much effort and little flexibility in organisation.

All these problems taken together return to a question of administration that has a negative influence on the management of community actions.The limitations in administration were assailed by various reforms in the 1990s, but time is still needed for them to give firm results. In themeantime it is vital to be able to adapt the operating needs of structural funds to the operating constraints of state administration.

The necessity of overcoming the trade-off between efficacy and efficiency

The history of the CSF 1994-99 suggests that there is a trade-off between efficacy and efficiency. Considering the conditions for implementationimposed by community regulations and with the efficiency constraints in state administration, it is only possible to concentrate on financialprogress. On average around half of the programmes must have been implemented with projects that had already been financed or aid structuresthat were already in place, since of those planned only around 50% can have been implemented within the pre-determined times.

Executive summary


This state of affairs is permissible and has a strong functional motive, that of not losing the resources allocated, but it weakens any strategy,whether it be simple or ambitious, for the development of Objective 1 areas. If the implementation of actions that are new and consistent with adevelopment strategy is desired, more flexibility in deadlines and management methods will need to be given.

Efficacy and the quality of expenditure need to be transferred to the centre of CSF management action, without - obviously - reducing theattention given to efficiency.

Added value of CSF and community actions

Added community value has been of great importance in all its various aspects. Financially, the CSF has guaranteed a significant amount ofresources for availability policies when national public spending was experiencing difficulties. Methodwise, the CSF has filled certain nationaldeficiencies (programming, concentration) and has fostered policies that are more oriented towards efficiency and partnership both in state andsocial institutions. Strategically, it has supported an extension in range (target populations in the ESF, rural development, financial engineering,etc.) and the introduction of horizontal concepts within actions (equal opportunities, SMB, environment, etc.).

Although important in terms of innovation, the strategic aspect appears the least successful. Many programming decisions made by theCommission (financial engineering, support of business services, allocation of ESF resources by sub-axis, etc.) have undergone great changesand drastic reductions along the way, either because of operational or demand reasons. There is therefore the need to set community guidelinesmore carefully into Italy’s social, economic and administrative context.

Despite these limitations, then community contribution to the renewal and improvement of development policies remains essential. The veryexperimentation of local development policies that were carried out ion Italy in the 1990s was greatly indebted to the experience of programmingand partnership in the structural funds. More generally, community policies have promoted an activation of administrations and nationalinstitutions at national, regional and local level, which were without precedence in national policies and that, despite the limited efficiency in theadministrative structure, are now an inherited background for any other development initiatives.

Executive summary


10. INFLUENCE OF THE 1994-99 ON 2000-2006 PROGRAMMINGProgramming in the 2000-06 period achieved a real revolution compared with 1994-99. Specifically, it endeavoured to consolidate theimprovements attained in the management of structural funds in the 1994-99 period, while simultaneously proposing a revision of the wholeprocess of programming. The new programming determined clear strategy1, involved a very high number of administrations, specialists andsocial bodies in the defining of programmes, set up clearer co-ordination between central government and regions, and introduced systems ofnational award-winning/rebates+ to reinforce the management process. Many of the mistakes and limitations in the 1994-99 programming havethus been dealt with, although whether they have been completely resolved will still depend on the effective functioning of decision-makingmechanisms. While it will only be possible to evaluate outcomes over the next few years, some of the main innovations may be indicated here:- Above all, the balance between efficiency and effectiveness. Stringent selection criteria have been defined to ensure that projects already

financed with national resources are selected in a way that is consistent with the CSF, enforcing the identification of these projects withinspecific programming frameworks. In addition, the method of activating national policies now contains efficiency criteria that closelyresemble community criteria (Resolution CIPE 36/2002), the purpose being to bring their functioning into line with that of the CSF. It will beimportant to verify how these approaches combine with the more complex and innovative components of programmes, such as the TerritorialIntegrated Projects..

- Secondly, programming at national, area and sector level has been stimulated by the CSF. Even though community programming is stillthe only integrated programming for development, the Regions’ adoption of area or sector plans (e.g. water, waste disposal) has beenincentivised by CSF selection criteria, which impose such plans as a condition for project financing.

- Thirdly, Programming Complements seem to have further complicated programming rather than simplifying it. Any variationwhatsoever in complement continues to require a ruling, even if this is an informal ruling, from the European Commission, and moreimportantly, the complement has often restricted operating options a priori, making simplifications more complex during implementation.

- Fourthly, many of the difficulties in organisation and decision-making in the public administration have been dealt with throughnational award-winning/rebates2. This incentive has speeded up administrative reforms, which include - among other things – favouringthe adoption of programming plans by sector (e.g. water), the establishment of evaluation groups in national and regional administrations, andobjective-oriented administrative action. National award-winning/rebates+ cannot however have a direct effect on administrations’organisation and internal co-ordination, which will probably require further interventions.

- Lastly, great improvements have made in the evaluation process and physical monitoring; however, yet again OP managementauthorities appear to be concentrating almost exclusively on financial aspects. The acid test will be the mid-term review and the completionof the first works over the next few years, verifying the way in which the choices of method indicated above have had an effect on theeffectiveness of interventions.

1 To a great extent this strategy follows the theories of new economic geography and the experience of industrial districts in Italy, above all proposing that interventions beintegrated and concentrated by area or sector so as to generate multiplying effects.2 National award-winning/rebates involves/involve 6% of available resources and is linked to the activation of administrative reforms introduced in the 1990s.

Executive summary


11. SHORT-TERM RECOMMENDATIONS (2000-2006)

European Commission National/Regional GovernmentRe/Programming - to request greater clarity on the integration between CSF and

national actions and on the use of resources thus released- to define OP with a total cost greater than admissible

expenditure, but in which are already identified all actionsthat can be co-financed

- Activate methods of programming national development policies(at least: timescales, resources, means and objectives)

- identification of a national “project park” linked to the CSF, fromwhich to select actions to co-finance in line with a clearprogramming logic

Management - to operate with clear but general directions, avoiding theaccentuation of management constraints in nationaladministrations

- to assure one single interpretation of administrativequestions by different offices (various DGs, various unitswithin the DGs) strengthening co-ordination anddeveloping a “single office” approach

- to request the definition of TA action plans that will clearlyidentify short and medium term objectives also relating tothe necessary growth of the PA

- reinforce co-ordination functions between administrations andbetween offices in the same administration so as to favour theintegration of actions;

- promote methods of “horizontal” organisation, that will developstaff functions and oblige different offices to communicate witheach other

- enlarge the awarding of programmes starting from within theadministration, providing award systems for individual offices andpersonnel according to criteria of transparency linked to objectivesachieved

- define action plans for TA that will clarify functions inoutsourcing those supporting PA growth; the PA must however“raise its stakes” , otherwise external support is undefined andinefficacious

Efficiency - to link efficiency not only to spending objectives but also tothe quality of actions

- in the mid-term review consider not only actions’ financialprogress or the achievement of pre-determined objectives,but also the complexity and strategic worth of actionsimplemented by the individual OPs

- define actual, regular physical monitoring- improve horizontal partnership, guaranteeing services and methods

above all for the local administrations that implement actions

Efficacy - to carry out in-depth analysis of planned targets and verifytheir relevance to the overall strategy framework

- assure greater protection of the efficacy and quality of actions(specific sessions of the Monitoring Committee, greater spacegiven to evaluation, identification of quality projects – because ofefficiency and efficacy - in each OP, clear identification ofresponsibilities within the administration)

Executive summary


12. LONG-TERM RECOMMENDATIONS – POST 2006

European Commission National/Regional GovernmentStrategy andobjectives

- develop a strategy to redress the balance in infrastructureson the entire territory covered by the EU that will lay downthe bases for structural fund action

- define a new development strategy suitable for theconditions of competition from the single currency andexpansion of the EU

- verify the possible integration of community funds andnational funds

- maintain/bring attention on externalities to the production sector- emphasise policies to attract investments from outside (the

production system of Objective 1 regions is still too weak toguarantee the volume of investments needed for growth)

- optimise partnership results obtained in the 1994-99 programming(vertical) and 2000-06 (horizontal) through modes of collaborationand permanent co-ordination

Means - reinforce financing of actions for infrastructures and arearedefinition (here the need for additional resources is alsogreater)

- maintain the principle of multi-year programming evenwhen there is a reduction in resources

- define more carefully innovative means that are to bepromoted in programming.

- define a system of incentives as homogeneous and automatic aspossible for all businesses in Objective 1 regions, alongside aidand strong incentives for foreign investments and local systems ofSMBs

- improve opportunities for the private co-financing ofinfrastructures

- develop local and sector develop policies (on the basis ofexperience of current integrated projects)

Operating mode - favour the simplification of spending methods and strengthsupervision of policy objectives

- abolish the Complement to programming and report muchof the information contained therein (deadlines, procedures,etc.) in a simplified implementation plan with sole nationalresponsibility

- promote national programming of development policies in themain sectors and at area level

- activate models of management and re-organisation of the PAaimed at the management of development policies, which willovercome the old vertical hierarchy that is based on exclusiveresponsibility

Executive summary


ANNEX - MAIN RESULTS

Executive summary


Table 1 GDP per capita in objective 1 regions (EUR15=100, PPS)Regio 1990 1994 2001

Abruzzo 88,7 88,9 84,8Molise 79,7 80,9 78,9Campania 69,2 67,1 67,1Puglia 68,2 68,6 67,0Basilicata 66,3 69,2 75,0Calabria 60,3 62,1 65,8Sicilia 69,6 69,0 68,4Sardegna 76,7 79,8 79,1Mezzogiorno 70,1 70,0 69,7Centre-North 120,5 122,0 120,2Italy 102,3 103,1 102,0Euro15 100,0 100,0 100,0Source: Ismeri Europa elaborations of ISTAT, SVIMEZ e European Economy n.72-2001, data.

Graph 1: Gross fixed Investments in % of GDP.

GROSS FIXED INVESTMENTS % OF GDP

15,0017,0019,0021,0023,0025,0027,00

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

ANNI

%

Mezzogiorno Centre-North

Source: Ismeri Europa elaborations of Istat data for period 1995-1999 and Svimez data for period 1990-94.

Executive summary


Table 2 Summary of main gross impact of the 1994-99 Italian CSF by priority axisEffectiveValues

EstimatedValues

Total values Value in the Objective1 regions

% of results onexisting values

Main indicators U.of m.

1 2 3=1+2 4 5=3/4*100

Notes and year of theregional data

CommunicationsRail network km 538 79 616 5.446 11,3 1996Rail network (two tracks) km 187 187 1.311 14,2 1996New roads km 262 262 71.577 0,4 1996Re-defined roads km 539 539 71.577 0,8 1996Optic fibre implemented km 137.797 137.797 437.308 31,5 1993IndustryBeneficiary farms No. 86.973 22.509 109.482 994.249 11,0 1996TourismBeds No. 33.760 37.216 69.179 910.695 7,6 Hotel+other

sleeping accomod.1999Agricultural res. and Rural development Beneficiary businesses No. 76.984 52.327 129.311 1.474.398 8,8 2000Businesses involved No. 6.434 6.434 1.474.398 0,6 2000Beds No. 7.102 6.834 13.936 12.452 111,9 Agri-tourism 2000Agricultural surface area involved ha 377.782 28.615 406.397 3.596.829 11,3 UAS 2001Economic infrastructuresWater depuration plants No. 145 145 2.000 7,3 1993Human resources (*)Unemployed pupils No. 232.176 304026 536.202 1.636.258 5,5 1999Employed pupils No. 27.690 89.747 117.437 5.815.133 0,3 1999Secondary schools students involved No. 724.543 724.543 663.173 18,2 1999Note (*) impact of training in human resource axis has been calculated at annual level (total value divided by 6 years).Source: Ismeri Europa data processing and ISTAT

Executive summary


Table 3 Estimation of the employment impact of the 1994-99 CSF.Temporary jobs New jobsRegions

Estimation oftemporary jobs(person/years)

Estimation of annualtemporary jobs(person/years)

Annual temporaryjobs/Employment in

1999 (%)

Estimation of newjobs

(units)

Estimation of annualnew jobs(units)

Annual newjobs/Unemployment

in 1999 (%)

Abruzzo 4.355 726 0,2 1.439 240 0,5Molise 5.670 945 0,9 1.305 218 1,1Campania 17.646 2.941 0,2 9.629 1.605 0,3Puglia 15.977 2.663 0,2 8.108 1.351 0,5Basilicata 8.380 1.397 0,8 4.806 801 2,2Calabria 12.477 2.079 0,4 5.593 932 0,5Sicily 20.008 3.335 0,3 9.209 1.535 0,4Sardinia 12.076 2.013 0,4 5.364 894 0,7Multi-regional 105.979 17.663 - 92.345 15.391 -Overall total 202.568 33.761 0,6 137.798 22.966 1,4(*) total value divided by 6 yearsSource: Ismeri Europa data processing and ISTAT for employment and unemployment in 1999.

Documents

Ex-post Evaluation of the Objective 1 1994-1999 Community Support Framew ork … · 2015. 3. 9. · Executive summary ISMERI EUROPA – Ex-post evaluation of the Objective 1 1994-99