LOCAL DEVELOPMENT Policies and projects of European Union, IBD, Prof. Guglielmo Wolleb, academic year 2014/2015.

LOCAL DEVELOPMENT

Policies and projects of European Union, IBD, Prof. Guglielmo Wolleb, academic year 2014/2015

The cycle of local economic development project

Sources

Slides of these lectures have been drawn, with cuts and changes, from the following Manual, available on the web:

Making Local Economic Development Strategies: A Trainer’s Manual is a knowledge product of the World Bank and Cities of Change Initiative, and was produced in conjunction with the Bertelsmann Foundation.

http://www.worldbank.org/

http://www.citiesofchange.net/

http://www.bertelsmann-stiftung.de/de/index.jsp

Sources The Manual was written and produced by the Local

Economic Development team based in the Urban Development Unit of the World Bank. The methodology was developed by Gwen Swinburn, Senior Urban Specialist, with assistance from Fergus Murphy, Consultant. Contributions and advice were gratefully received from Nikolas Beckmann, Bertelsmann Foundation, Bonnie Walter, Consultant, and André Herzog, Consultant. Information used in this guide was obtained with permission from the publication ‘Local Economic Development: Good Practice from the European Union and Beyond’, 2000, an unpublished paper prepared by Gwen Swinburn for the Urban Development Unit of the World Bank.

A process with different stages

Creating a local coalition Analysing local economy and society Elaborating a local development

strategy Implementing the development

strategy Monitoring and evaluating the

strategy

Stage 1: creating a local coalition

To take note of the institutional context (powers’ system)

To take note of the top level system of rules- laid down by the Centre-within which the coalition must act

To identify possible promoters of the coalition

To build the driving nucleus of the coalition


To identify and involve all local stakeholders in development programmes

Why involve them: Because they are bearers of knowledge To build a wide political consensus on

the local development strategy


Potential stakeholders: Local public institutions Higher than local public institutions Intermediate institutions Private firms Non profit organizations Universities and research centres Single persons with specific skills


To favour the emergence of a leaderships with characteristics of: Legitimacy (institutional and on the

ground) Credibility (political power) (skills) (super

partes) (engagement)


To start a process of consultation and discussion in a way shared and agreed

To give visibility to the whole process To ensure inclusiveness and openness

to the process To give concrete outcomes to the

process


To ensure temporal stability to the process

To formalize the process: steering group

Give effective power to the coalition To maintain relationships with other

tiers of government

Stage 2: Local economy assessment To gather the necessary information to

undertake an economic and social territorial analysis

Information are needed to identify the endogenous resources of the territory, its capabilities, its weaknesses and external opportunities

Information, properly processed, are the basis for elaborating scientifically founded development strategies and programmes

Stage 2: Local economy assessment

This work of gathering and analysing information is also instrumental for local actors to deep the knowledge of the territory

This work also represents an opportunity to strengthen the coalition and create consensus on the programme


Information can be drawn from a variety of sources: Statistical sources Questionnaires to specific stakeholders Interviews Focus groups


Needed information cover different dimensions: Demography Economy Infrastructure Institutions Civil society Policies


Demography Dimension and size of population Age structure Immigration Natural increase Net migration


Economy National, regional and local GDP Past growth performance Labour productivity Investment Value added and employment by sector Weight and localization in external

markets Number and size of firms


Economy (follows) Linkages among firms (clusters?) Corporate governance Average earnings Research and development Human capital Weight of informal economy


Economy Employment rate by age and gender Unemployment rate by age and gender Long run unemployment


Society Income inequalities Share of poor people Share of immigrants Segments of people at disadvantage

Health Education Housing

Security


Institutions Role and power of different institutions Institutional thickness Cooperation among institutions Relationships between public institutions,

firms and civil society Efficiency in public administration Laws, regulations, enforcement, taxation,

licenses, business enabling environment


Infrastructure Transportation links Telecommunications Public utilities Internet Environment Future planned infrastructure

investments


Civil society Norms and agreed values Identity values Historical traditions of collective action Social capital Trust Security


Policies Survey of ongoing economic policies

impacting on the territory Evaluation of past policies Consistency and integration of local

policies with national and European policies

Lessons learned


Swot analysis: useful conceptual tool to systematize and elaborate information gathered on a territory, sector o topic.

It is not a good substitute for more scientifically rigorous analysis

It is undertaken building a four entries matrix: strengths, weaknesses, opportunities, threats


Strengths and weaknesses refer to the endogenous resources of the local economy and society

Their identification is instrumental for elaborating programmes aimed at the enhancing of the territorial potentialities and at overcoming the elements of weakness


Threats and opportunities refer to external events, which are not under the control of local actors, but which can have an impact on the territory

Their consideration is instrumental for elaborating programmes which exploit the external opportunities and reduce the risks of external events

Stage 3: elaborating a strategy

Various steps in the process: To develop a strategic vision of the

future of the territory To select the final goals of the

programme consistent with the strategic vision

To select intermediate objectives to achieving the final goals

To elaborate and select programmes and projects to achieving the objectives

Stage 3: elaborating a strategy To verify consistency and

complementarity between local strategy and higher level of government strategies: European, national and regional

To take into-account learned lessons of past policies: correct errors and enhance successes and best practice.


Strategic vision

Final goals

Specific objectives

Programmes

Projects


Agreed strategic vision of the future of the territory

The vision represents the desired future by the community. It reflects the community’s preferences

It contains elements of realism but also of imagination


It is important to involve all relevant stakeholders in the making of strategic vision: To reduce conflicts in the implementation

stage To mobilise local actors and widen the

human basis of development To increase knowledge and socialise skills


Creating a vision (an example) “By 2010, this city will have a dynamic

business-oriented government and be characterized by an attractive business enabling environment that provides the basis for a wide range of entrepreneurial and employment opportunities. This city will be home to a diverse and growing range of business that provide a broad range of employment opportunities in the service, agricultural and manufacturing sectors”


Final goals of the programme/project Final goals are more descriptive and

concrete than a vision statement but still quite general

They should be based on the local economy assessment undertaken to date


Typical goals of a regional programme To improve living standard and reduce

social exclusion To foster economic growth and

increase the rate of employment To increase competitiveness of the

economic system


Typical goals of sub-regional or local programmes Integrated enhancement of historical, cultural, artistic

and human resources of the territory to promote tourism development

Reviving the local manufacturing system in order to compete with more advanced local systems

Leveraging on religious tourism and exploiting its power as the driving force to enhance the local immobile resources


Specific objectives Intermediate objectives must be

Consistent with the final goals More specific than final goals Suitable for a quantitative assessment Realistically achievable Financially sustainable With precise deadlines


Typical specific objectives To give incentives to biological agriculture To launch marketing campaign to promote

tourism To favour the start up of new firms and to

promote new skills Implementation of measures of recovery of

farm properties to support agri-tourism To promote the use of renewable energies


The programs are made by a set of projects that contribute to achieving the same specific objectives


The following criteria should be followed in selecting the projects: Projects should be clearly linked to the achievement

of specific objectives Bundles of integrated and complementary projects

should be chosen to enhance the final impact To avoid fragmentation choosing too many and too

small projects To ensure technical and procedural feasibility To ensure financial sustainability even beyond the

end of public financing


It is also important To evaluate the temporal dimension of

the various projects and the diverse degree of risk

To compare effectiveness and efficiency of alternative projects


Transparency of the whole process of strategy elaboration should be ensured

All local actors must be enabled to know the strategy

Comments and criticisms should be solicited and carefully evaluated.

Stage 4: implementing a strategy

The different steps To prepare an Implementation Plan To prepare an Action Plan for each

project Build institutional frameworks Ensure relevant inputs are available Carry out project tasks


Prepare an Implementation Plan An Implementation Plan lays out

budgetary, human resource, institutional and procedural implications in implementing the LED strategy

It is based on the Single Action Plans related to the single projects

It ensures the coherence and complementarities of single projects and the overall feasibility of the programme


The Implementation Plan must contain for each project information about: Distribution of tasks and responsibilities Targets Financial resources Human resources Legal and procedural requirements The time table of each project The monitoring and evaluation systems


Prepare the Action Plan of each project

The Action Plan describes in more detail all tasks which must be carried out for the implementation of the project


The Action Plan must include: The specific objectives and their consistency with the

final goals The list of all resources required for the

implementation of the project The list of all tasks to be accomplished The expected output and the indicator The expected result and the indicator The expected impact and the indicator The distribution of competences in the management

of the project The procedures to be followed

Stage 4: implementing a strategy For each project it is useful to fill synthetic cards with the

following information Name of the programme and of the project with a

brief description Tasks to be accomplished Human and financial resources Time schedule and pluri-annual financial plan with

indication of the sources Expected output, results and impact Performance indicators and monitoring and

evaluation systems


To build the institutional framework To establish the competencies of different bodies To establish the forms of cooperation among different

bodies To establish the rules of the decision making process To formalize the relationships among different

institutional levels To formalize the arrangement and the role of

partnership and stakeholders

Stage 4: implementing a strategy To ensure the availability of necessary inputs

for the implementation of the project for its entire duration

Inputs can be: Financial (financial resources to pay for the cost of the

project) Human (people ready to work in the project with the

necessary skills) Political (political forces and lobbies available to support

and give priority to the project)


To implement the projects…..

Stage 5: revising the strategy

Local development programmes and projects have the character of processes: it is physiological that they be monitored, revised and modified continuously during implementation

This requires that the strategic design of projects includes monitoring and evaluation systems and specifies the operating mode

Stage 5: revising the strategy Monitoring and valuation perform different tasks:

They ensure transparency in the use of public resources

They allow adaptation to changes in external environment

They provide a continuous flows of information to help make changes and correction of errors in a short time

They promote the strengthening of the strategy through a learning process “trial and error”: you learn from successes and failures

Stage 5: revising the strategy They favour a process of empowerment

of the local actors and of institutional building

They make possible the benchmarking of interventions

They increase external actors’ trust They justify the call for further financing

Stage 5: revising the strategy Monitoring

It consists in the systematic and continuous collection of information on all aspects of the programme and its use in the implementation of the projects

It aims to analyse the current situation, identify problems and find solutions, to monitor compliance with the provisions in the project, to measure progress in achieving these objectives and make corrections


Monitoring It is carried out on a continuous basis in

order to allow intervention in a short time

It does not challenge the strategic design but it focuses on its correct and efficient implementation

It is undertaken by the same actors which implement the strategy (or by actors which work side by side with the implementers of the project)

Stage 5: revising the strategy Evaluation

It consists in the periodical verification of the validity of a strategy and of its programmes and projects in relation to the objectives set

Evaluation can challenge the overall design strategy, verifies the validity of the final goals, makes judgements, focuses on the effectiveness of programmes and projects

It can be realized either by external evaluators or by the same subjects who implement the programmes.


External evaluation has the following positive features: It is more transparent (because it is

made by non-interested people) It is more objective (the appraiser is

different from who those evaluated) It is technically more valid (because it is

undertaken by specialized bodies)


Internal evaluation has the following positive features: It favours the empowerment of local

actors engaged in the implementation of the strategy (self reflective processes)

It is more easily translated in changes in strategy, programmes and projects

Stage 5: revising the strategy Evaluation focuses on changes produced by the policy. It

is based on four parameters Output produced compared to the expected output Efficacy in achieving the objectives (extent to which

the objectives have been achieved) Efficiency in achieving the objectives (what has been

done, has it been done at minimum cost?) Overall impact of programmes and projects (how and

what the implementation of the programme has changed the initial situation of the territory)

Stage 5: revising the strategy A system of indicators suitable for valuation

must be embodied from the beginning in the design of the strategy

An indicator is a unit of measurement The value of an indicator before the launching

of the programme is the baseline value The value of the indicator which the

programme aims at achieving is the target. Indicators refer to objectives, general or

specific


Indicators must be Easily and clearly understandable Good proxies for the objectives to which

they relate Based on statistics easily and regularly

available


Examples of indicators: Percentage increase of agriculture

employment Percentage increase of textiles exports Reduction of CO2 emissions


Examples of targets 5% increase in agricultural employment

to be implemented in three years 8% increase in textiles exports to be

implemented in 5 years Reducing by 30% CO2 emissions by 2020


Three main types of indicators Output indicators Result indicators Impact indicators


Example 1: policies aimed at providing incentives to business investments Output indicator: number of firms

benefiting incentives Result indicator: volume of investment

by supported firms Impact indicator: new jobs created


Example 2: building a road junction between an industrial area and a motorway Output indicator: km of road built Result indicator: reduction in travel time Impact indicator: reducing transport cost

for firms located in the area


Evaluation must be able to separate changes in circumstances that are attributable to the action of the programme from changes that are attributable to other causes

This is possible only with counterfactual analysis (that are extremely difficult to be carried out)

Stage 5: revising the strategy The design of systems for monitoring and

evaluation is done early in the drafting of the strategy. It is part of the overall strategy

The design of these systems-who does what-is discussed and decided together with stakeholders in the first construction phase of the strategy

The data needed for monitoring and evaluation are identified in the analysis phase of the local system


The system of indicators and targets will be formulated during the development of programs and projects

The evaluation results are presented and discussed in public

The evaluation results are used for the preparation of future strategies

LOCAL DEVELOPMENT Policies and projects of European Union, IBD, Prof. Guglielmo Wolleb, academic year 2014/2015.

Documents

coalition slide

local stakeholders

local development policies

process slide

local economy assessment

development programmes

urban development unit

tiers of government