Local Economic Assessment: Learning from International Practice

Local Economic and Employment Development

Programme (LEED)

Dr Jonathan Potter

Senior Economist, OECD

Structure

• The OECD

• Strategy issues

• Good practice

• Case study: regional strategies in Latvia

• Pitfalls

• Messages for North East England

OECD

Forum for governments to work together . . .

on the economic, social and

environmental challenges of interdependence and globalisation.

30 member countries – countries pursuing democracy and market economies.

Process of enlargement and enhanced engagement.

OECD

OECD Member countries

Non-Members working with OECD

LEED Programme

Messages

• Integrated strategies

• Partnerships

• Entrepreneurship as a job generator

• Culture of evaluation

Activities

• Peer reviews

• Guidance

• Conferences and seminars

• Training events

1. Defining the problem: rationale, objectives and base lining↓ Baseline and reference case comparison with objectives to define

the problem

2. Defining alternative options/actions↓ Identification of options available to achieve the objectives

3) Identifying and measuring inputs (costs)↓ What will the options cost?

4) Identifying and measuring outputs and outcomes↓ Examination of the likely impacts of the options

5) Results presentation and interpretation↓ Effectiveness of options in achieving objectives, risk, comparison

with alternatives

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Strategy issues

Source: ODPM, 2003.

Strategy issues

Source: ODPM, 2003.

Strategy fundamentals

Aim of strategy• Where are we?• Where do we want to get to? • How do we want to get there?

Best strategies are• Clear and explicit on objectives and priorities• Clear on needs and opportunities• Practical and implementable• Creative and flexible

Good practice

• Defining objectives

• Identifying options

• Assessing expected impacts

• Using evidence

• Implementation plan

Good practice

Defining objectives• Consider indicators to assemble and areas for

benchmarking• Consider scale of intervention and ensure that

objectives complement at different scales• Take a long-term perspective• Identify beneficiaries

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Good practice

Identifying options• Make sure options fit objectives• Make process transparent• Fit to needs of specific groups• Include stakeholders in defining and selecting

options• Consider management questions• Set out the full costs and benefits to society• Use evidence to assess options

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Good practice

Assessing expected impacts• Have a clear sense of purpose• Set targets to achieve• Use the logic model• Have a clear sense of relevant indicators on

intermediate and final effects• Be prepared to offer a range of estimates

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Good practice

Implementation plan• Have strong commitment and leadership• Define review milestones and progress measures• Report progress, encouraging good behaving and

impose sanctions for inappropriate behaviour• Conduct regular checks

• Recycle learning and establish communities of

practice

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Case study: regional strategies in Latvia

• Mobilising the region • Understanding the region• Defining a strategy and

action plan• Financing the strategy• Evaluating and improving

• Assessment • Guidelines• Learning models

Latvian planning system

• Set up 1991 – challenge not to reject planning but set up a democratic approach

• Three spatial levels: national, regional, local• Three time scales: long term (25 years), medium

term (7 years), short-term (2 years)• Process of administrative reform underway

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Mobilising the region

Strengths• Presence of

competent staff• Transparency of

documents• Widespread

knowledge of the system

Weaknesses• Only target group was

private entrepreneurs• Considered as a

bureaucratic process subject to change

• Surprising similarities between national, regional and local plans

• Formal, not real consultation

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Understanding the region

Strengths

• Political will for evidence-based policies

• NSO collecting wide range of data

• Research projects on NSO data

• Evidence of both quantitative and qualitative techniques

Weaknesses

• Lack of shared evidence bases

• Limited skills and resources at local level

• Little city-region or rural analysis

• Little sub-regional data• No attempt to fix NSO data

gaps locally• Little attempt at causal

analysis• Limited use of scenarios

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Defining strategy and action plan

Strengths

• Desire to develop long term vision

• A lot of work being undertaken

Weaknesses

• Regional level creates strategies but has no autonomy or resources

• Some localities developing too many plans, some developing none

• Existing plans are really spatial plans not strategy

• Competitive niches are not clear

• Disconnect with finance and implementation tools

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Financing

Strengths

• Clear plan to absorb EU financing

Weaknesses

• Little understanding of potential private sources

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Evaluating and improving

Strengths

• Good regional data• EU emphasises role of

monitoring and evaluation• Strengthened strategic

capacity in central government

Weaknesses

• Top-down steering system• Hostility to evaluation• Limited skills and

resources• Stakeholders not used as

information source• Focus on monitoring not

evaluation• Lack of intermediate

results information• Lack of self assessments

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Pitfalls

Defining objectives• Data – too aggregated, no time trajectory• Ignoring the relationship with the surrounding

area• Excluding particular stakeholder groups• Ignoring sustainability• Ignoring local specificities• Relying on markets to distribute benefits• Assuming monitoring and evaluation can be set

up later

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Pitfalls

Identifying options• Ignoring the ‘do nothing’ option• Concentrating on infrastructure at the expense

of social and innovation• Being afraid of different approaches• Ignoring stakeholders• Forgetting to look at risks• Neglecting the ‘Plan B’

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Pitfalls

Assessing expected impacts• Being over-sophisticated• Omitting important expected effects• Ignoring factors likely to influence the problem• Ignoring key groups of beneficiaries• Ignoring the possibility that things may turn out

differently

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Pitfalls

Using evidence• Assume that assessment results will

automatically be used• Rely on a single written report

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Pitfalls

Implementation plan• Trying to turn everyone into a strategist• Stifling innovation and flexibility• Undervaluing experience against theory• Making processes overcomplicated• Frequently changing performance metrics• Raising expectations of short-term impact• Allowing a gap to grow between strategic

messages and staff, customer and stakeholder understanding

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Messages for North East England

• Move from evidence to policy choices by considering: – options – alternatives – expected impacts

• Use logic models• Focus on beneficiaries• Consider scenarios• Focus on where policy can make a difference • Look for distinctiveness to other regions• Fill data gaps locally

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