How to measure socio-economic development for cohesion policy

GDP and other criteria for GDP and other criteria for Cohesion Policy Cohesion Policy –– How to How to measure sociomeasure socio--economic economic

development for cohesion policydevelopment for cohesion policy

Jacek Szlachta, Warsaw School of EconomicsBrussels 20 December 2011

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Milestones of national accountsMilestones of national accountsAntic Greece – Ksenofont – goal of economic

activity is to achieve surplusMercantilism- sources of wealth are trade and exportA. Smith – every labour is source of new value

added K. Marks – productive and unproductive workW. Leontief – input/output tableR. Stone – outline of System of National Accounts

(SNA) proposed by UNEuropean System of National Accounts (ESA)

proposed by EUROSTAT in 1990s 2

Cohesion in Lisbon Treaty Cohesion in Lisbon Treaty --from December 1from December 1--st 2009 three st 2009 three dimensions dimensions –– economic, social economic, social

and territorialand territorial

Economic – gross domestic product (GDP) Social – unemployment level, employment

level Territorial – accessibility – travel time

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GDP why yes, why not. Key GDP why yes, why not. Key issuesissues

More or less objective measure of production (but not welfare!)

Some simplifications concerning different economic activities

Grey economy in national accounts Problems with comparisons between territories

different levels of prices (purchasing power parity standards)

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GDP and other indicators GDP and other indicators --key issues key issues

Territorial scale – countries and regions (NUTS 2 and NUTS 3 areas)

Relation to – population or territory Quality of description of cohesion processes

using GDP

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Belgium by World Bank (GDP Belgium by World Bank (GDP per square kilometers)per square kilometers)

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Poland, GDP per km2 Poland, GDP per km2 World Bank, Reshaping Economic Geography

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Central Europe, GDP per km2Central Europe, GDP per km2World Bank, Reshaping Economic Geography

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GDP per capita in Poland – NUTS 2 regions compared with EU27=100 in 1997-2009 (1)

Region 1997 2008 2009 Change

Mazowieckie 62,9 89,9 97,3 +34,4

Śląskie 49,9 61,6 65,2 +15,3

Wielkopolskie 46,3 59,5 64,6 +18,3

Dolnośląskie 46,0 61,3 66,3 +20,3

Zachodniopomorskie 44,3 51,7 53,4 +9,1

Pomorskie 43,5 54,1 59,2 +15,7

Lubuskie 40,5 48,9 51,9 +11,4

Opolskie 40,1 48,3 49,7 +9,6

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GDP per capita in Poland –NUTS 2 regions compared with EU27=100 in 1997-2009 (2)

Region 1997 2008 2009 ChangeKujawsko-pomorskie 39,0 49,2 51,5 +10,2Łódzkie 39,0 53,1 55,5 +14,1Małopolskie 39,0 49,2 52,2 +10,2Podlaskie 35,4 41,6 44,8 +9,4Warmińsko-mazurskie 35,2 42,3 44,9 +9,7

Lubelskie 33,6 39,6 40,9 +7,3Podkarpackie 33,4 39,3 41,6 +8,2Świętokrzyskie 33,3 45,6 47,2 +13,9Poland 44,2 57,0 60,8 +16,6

Beyond GDP (1)Beyond GDP (1) Different proposals of indicators in fifth cohesion

report: 1. Employment rate, unemployment rate, population

with a tertiary education, early school leavers, total expenditures on R&D, employment in high-tech sector, regional innovation index, productivity in industry and services, households with broadband connection, competitiveness index, infant mortality rate, population at risk of poverty, public investment per head, EU and UN human development index

2.Happiness index, happy life years (only for countries) 12

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Targets proposed by EU 2020 Targets proposed by EU 2020 1. Employment 75% of the 20-64 years old to be

employed 2. R&D 3% of GDP to be invested in R&D 3. Climate change/energy Greenhouse gas emission

20% lower than 1990, 20% of energy from renewables, 20% increase in energy efficiency

4. Education reducing school drop out rates below 10%, at least 40% of 30-34 years old completing third level education

5. Poverty/social exclusion at least 20 million fewer people in or at risk of poverty

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ConclusionsConclusions 1. GDP still important but we should improve

methodologies of calculations 2. We should work on different synthetic

indicators, especially: A. Showing welfare level B. Adressing also social and territorial

dimension of cohesion 3. We should accept limited number of sector

indicators (EU 2020 list is good example)

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Thank you for your attentionThank you for your [email protected]@aster.pl

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