Transcript Presentation Field Approach Drina

Conference on
Facilitating an area-based development approach
in rural cross-border areas of the Western Balkans
Belgrade, 5 May 2011
Local development and
territorial disparities in
transformation countries
Keynote address
Prof. Bruno Dallago
School on Local Development
University of Trento
Local development
• Necessary for managing disparities and
capturing opportunities, rebuilding the
social fabric, integrate institutional
transformation
• Formal institutional decentralisation
• Uneasy central/local relation
• Sectoral vs. holistic approach
2
Transformation and disparities
Transformation has generated disparities
and inequalities due to:
• End of socialist allocation and distribution
policies
• Different endowments of territories, social
groups and individuals
• Agglomeration effects of domestic and
international resources
New member countries as path breakers for
accession countries?
Opposite trends in transformation
countries
• Decreasing inequality among countries 
convergence and integration
• Increasing inequality within countries 
economic, social and territorial inequality
and segmentation
• Need to consider population dynamics
• Territorial disparities as one of the
reasons for income wealth, and
opportunity inequalities
4
Regional inequality in transformation
countries (Theil indices)
Regional inequalities within countries
(Theil indices)
Divergence from “old” Europe:
Dispersion of regional GDP at Nuts level 2 (%)
40
35
30
25
1996
20
2000
2004
2007
15
10
5
0
European Union
(27 countries)
Bulgaria
Czech Republic
Hungary
Poland
Romania
Slovakia
Croatia
7
Source: OECD
Czech Rep. (14)
1990
Hungary (20)
2000
Poland
Services
Industry
Tot. GVA
Population
Services
Industry
Tot. GVA
Population
Services
Industry
Tot. GVA
Population
Services
Industry
Tot. GVA
Population
Concentration of production in capital cities
50
45
40
35
30
25
20
15
10
5
0
Slovakia
2006
8
Regional patterns of transformation
1. Growth of post-transformation regional disparities and
stability of general territorial patterns. Flow of
opportunities, human and financial resources towards
capital cities and impoverishment of periphery areas
2. Polarization and territorial segmentation due to
faster development of regions with big urban centers
and stagnation – or even decline – of less developed
regions of eastern (external) and central (internal)
peripheries.
3. Rapid restructuring vs. delayed restructuring of
sectors/branches. Immediate impact on regional
trajectories.
9
Regional patterns of transformation
4. Metropolisation replacing traditional urban-rural
divide.
5. East-West divide due to new opportunities of
transborder co-operation and return of the
„modernisation from the West” pattern.
6. Decentralisation, local democracy. The
competencies of the regional tier still uncertain in
some countries.
7. Social disparities, divided polities
10
The territorial patterns of transformation
Reaction to transformation
positive
negative
LOSERS
Negative continuity
Traditional industrial
regions
Specialised industry,
neglected land,
biased/low qualifications
sociaLAGGARDS
list
WINNERS
Negative continuity
ecoPositive Discontinuity
Rural, peripheral
nomy bad Regions with endogenous potential
Nonaccessible, obsolete
Diversified economy, external
structure, low
demand
qualifications 11
LEADERS
Positive continuity
Posi- good Motropolitan areas and capitals
Diversified economy, skilled labour,
tion in
good infrastructure and rich
the
institutions, international activities
Degree of tax sharing vs. own financing of
subnational governments, early-mid 2000s
Own
taxes
as % of
total
SNG
Revenue
Albania
Own
nontax
revenue
as % of
total
SNG
revenue
Total own
Total
Distribution of total Degree of Autonomy
revenue subnational
subnational tax
as %
tax revenue
revenues
of total
in percent
Tax
OwnTo set To set tax rate
SNG
of
sharing
finantax
revenue
total
cing
base
(ex
subnational
grants)
revenues
0.0
1.6
1.6
35.7
100.0
0.0 None
None
--
11.9
--
72.9
90.0
10.0 None
None
Croatia
55.8
85.0
Macedonia,
FYROM
86.4
--
73.7
75.0
15.0 Very
Very limited
limited
-- None Local govt
financing
is currently
under
discussion
25.0 Somed Someg
71.5
8.0
Bulgaria
Romania
SCG
--
12.6
92.0 None
None
Transfers (grants) from central to
subnational governments
Size
Percent
of GDP
Albania (1998)
Bulgaria (2000)
Croatia (2000)
Romania (1999)
Type of grant
Percent of
total revenue
General
5.4
96
100
0
3.3
43
80
20
0.2
5
Small
Most
0.7
17
Yes
Yes
Sources: Government Finance Statistics (IMF), IMF country economists; Wetzel and Dunn (2001)
Specific
The case for cross-border
cooperation
• Cross-border cooperation (CBC) as a way
to:
boost local development
soften (territorial, industrial, social, political)
segmentation, disparities, and tensions
attract resources and create opportunities
• Institutional framework to facilitate crossborder cooperation
• Policies for CBC
Evaluating and strengthening the
effects of CBC
• Evidence: limited economic impulses, important
social and political influence
• Need for:
– comparison of evidence against context, policies,
and experiences in the field;
– proper time frame;
– comparison against counterfactual
• How can we improve and strengthen CBC
implementation, outcomes, and spillovers?
• Is CBC in former Yugoslavia different? Is there
a positive path-dependence?
15