A RADICAL SHIFT TOWARDS A MORE RESULTS-ORIENTED COHESION POLICY IS BOTH NEEDED AND POSSIBLE Ideas from the Report “An agenda for a Reformed Cohesion Policy” by Fabrizio Barca Open days 2009 Workshop “Future of EU Cohesion Policy post 2013” October 7, 2009

2  The Report shows that: A RADICAL REFORM OF COHESION POLICY: WHY RESISTING CHANGE IS WRONG  Two arguments are used to resist change towards a more results-oriented cohesion policy or to dilute this change: 1.change is technically un-feasible because indicators and targets have severe limits 2.change is politically un-feasible because Member States (and Regions) will never accept a more substantial conditionality system 1.the first argument is wrong if the appropriate methodological steps are made 2.the second argument is wrong too, since a feasible compromise can be offered to Member States (and Regions)

3 A FUNDAMENTAL METHODOLOGICAL CLARIFICATION  “Result” is a very ambiguous word. “Orienting policy to results” includes four different functions: i.Ensuring that policy-makers comply with procedures and financial and output targets  contracts are complete, automatic incentives and sanctions can be used ii.Promoting policy-makers’ focus on final objectives  contracts are not complete (causal link between intervention and results is unknown), but outcome indicators and targets can be used, although automatic incentives and sanctions are totally inappropriate iii.Learning about which interventions work  impact evaluation is needed (not indicators!) to estimate causality iv.Learning about what interventions actually are  evaluation of the implementation process is needed

4 TODAY’S PROBLEMS AND HOW TO MOVE FORWARD  In the current design of cohesion policy and in the debate on simplification these four VERY DIFFERENT functions are confused  Once they are properly distinguished: 1. The focus on final objectives can be strongly empowered by:  using the extraordinary know-how on indicators and targets accumulated all over the world and in other EU policy fields (  Open Method of Coordination)  eliminating policy-makers’ incentive to “cheat” on targets 2. A major investment can be made by the Commission and Member States on prospective counterfactual impact evaluation by:  cashing in on very relevant methodological advances made in the last twenty years  using it as a strong disciplinary device

5 MORE ON OUTCOME INDICATORS AND TARGETS  Following well-established protocols, indicators must satisfy a set of requisites, such as:  statistical validation  clarity of interpretation  responsiveness to policy interventions  distinction between objective and subjective types  Except for a few core-indicators (set at EU-wide level, as in the OMC)  indicators (and targets) are set by Managing Authorities  but they represent the main focus of both the National Strategic Framework and Operational Programmes  Progress (or lack of progress) towards targets is the main focus of Annual Reports (after year 3) to be debated in a newly created Council for Cohesion Policy and in the EU Parliament  Failure to more towards targets does not lead to any sanction, but failure to provide convincing explanations for progress leads to ad- hoc evaluation analysis and to recommendations by the Commission (failure to respond to recommendations can lead to sanctions)

6 MORE ON PROSPECTIVE COUNTERFACTUAL IMPACT EVALUATION  All methodologies of impact evaluation must be promoted, but a special effort must be made to promote counterfactual impact evaluation (CIE) designed while interventions are being designed (prospectively). Why?  a large body of practical experience is ready to be exploited  an answer to the question “what works?” can strongly improve policy  CIE can provide ex ante a strong disciplinary effect on the transparent identifications of:  objectives  mechanisms for selecting beneficiaries  Cohesion policy poses new challenges to CIE (heterogeneity of interventions due to context-dependency, and multi-component nature of interventions) that call for a humble approach and a gradual learning process.  The Commission should certainly not make CIE compulsory, but it should rather:  promote CIE and provide strong technical assistance  conduct CIE pilots  create an EU “clearing house” for making all studies accessible

7 MEMBER STATES AND REGIONS WILL ACCEPT AND EVEN SUPPORT THESE CHANGES IF…  Changes are appropriately explained so as to dismiss fears about a sanctioning or procedure-oriented use of these innovations  Changes are part of a more comprehensive reform – as advocated by the Report – whereby Commission’s discretionality  Member States and Regions themselves perceive that there is no alternative :  cohesion policy will not stay – if not reduced to a “de minimis” – unless a decisive move is made towards making its results measurable and known  is accompanied by a radical investment of DG Regio and DG Employment on human resources  is kept at bay by new political checks-and-balances  cohesion policy will not last – unless downsized to a “de-minimis” level – if no decisive move is made towards making its RESULTS measurable, known and debated