Transcript (CHSM) and Regionalisation: an exciting new development

The COHESION System of
HERMIN Models: CSHM
Sixth European Conference on
Evaluation of Cohesion Policy
WARSAW, 30 NOVEMBER-1 DECEMBER 2009
NEW METHODS FOR COHESION POLICY
EVALUATION: PROMOTING ACCOUNTABILITY AND
LEARNING
John Bradley (EMDS), Zuzana Gakova (DG REGIO), Philippe Monfort
(DG REGIO), Gerhard Untiedt (GEFRA), Janusz Zaleski (WARR)
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HERMIN: Some Background
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Grew out of the HERMES model used to analyse
the Single Market initiative
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Applied first to Ireland, and then to Greece,
Portugal and Spain
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Extended to NMS/2004 over 1998-2004
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Extended to NMS/2007 after 2004
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Extended to entire EU-27 in 2008
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Models also developed for Turkey, and under
construction for Croatia and Macedonia
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HERMIN: Some Background
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HERMIN and then CSHM have been used for a
long time by DG REGIO
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Evaluations and simulation of policy scenarios
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Close collaboration with the CSHM team
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HERMIN: Theoretical Issues
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Detailed focus on supply side, with 5 production
sectors:
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manufacturing,
market services
building & construction,
agriculture and
non-market services
Output and factor demands modelled explicitly
Standard treatment of demand side
(consumption, trade)
Uses simple autoregressive expectations, not
forward-looking expectations (see Irish case
study)
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HERMIN: Incorporating
cohesion policy mechanisms
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Explicit modelling of Cohesion Policy impacts of
broad investment categories:
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infrastructure (PI)
human resources (HR)
R&D
Distinction made between output effects and
productivity effects of CP instruments
International literature used to calibrate impacts
Full accounting for CP instruments in government
revenue and expenditure
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CSHM/HERMIN: Country and
Regional Coverage
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Original “cohesion” states: Greece, Ireland,
Portugal, Spain
Two “macro” regions: East Germany and Italian
Mezzogiorno
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The ten new states joining in 2004
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The two new states joining in 2007
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CSHM/HERMIN:
Supporting databases
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Data sources based on EUROSTAT data, mainly
through the AMECO database provided by DGECFIN
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Augmented by national data sources, where
necessary
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OMS (EL/IE/PT/ES): 1980-2008
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NMS 2004 & 2007: 1995-2008
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East Germany and Italian Mezzogiorno are
specially constructed regional databases
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CSHM/HERMIN
Calibration and Testing
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Behavioural equations calibrated using timeseries data, but imposed parameters sometimes
needed
Cohesion policy parameters derived from
international literature, since little evidence
available from EU cohesion states
Models tested on standard policy shocks using
projections to 2020 (remember: cohesion policy
has long-term impacts!)
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CSHM/HERMIN in action:
Ex-post evaluation of
Cohesion Policy 2000-2006
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Step 1: Use country model to derive a plausible
projection out to 2020 time horizon, checking
short-term projections against published ST
forecasts
Step 2: Extract cohesion policy shocks and carry
out a “without-CP” simulation
Step 3: Derive CP impacts by comparing Step 1
with Step 2
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2004-2006 Cohesion Expenditure
Impacts: Poland
b) Employment Effect
a) GDP Effect
Poland (PL)
Poland (PL)
1.20
2.50
1.00
in % over baseline
in % over baseline
2.00
1.50
1.00
0.50
0.80
0.60
0.40
0.20
0.00
0.00
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Poland (PL)
c) Net Trade
Balance Effect
0.40
0.20
in % over baseline
0.00
-0.20
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
-0.40
-0.60
-0.80
-1.00
-1.20
-1.40
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-1.60
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Comparing rates of return on
Cohesion Policy (CP) expenditures
The “cumulative” CP multiplier
Cumulative % increase in level of GDP
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Cumulative CP injection as % of GDP
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Time profile of Cumulative Multipliers
Example of Poland: CP 2004-2006
Poland
3.00
2.50
2.00
1.50
1.00
0.50
0.00
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
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Cohesion Expenditure Comparative
Impacts
Cumulative Multipliers by 2020
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
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IE
ES
CZ
MT
SK
EL
EE
PT
PL
HU
LT
SI
CY
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LV
Cohesion Policy 2004-2006
Sectoral impacts: Poland
Poland (PL)
a) GDPFC effect
1.40
1.20
0.80
0.60
0.40
0.20
0.00
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
b) OT effect
Poland (PL)
1.40
1.20
1.00
in % over baseline
in % over baseline
1.00
0.80
0.60
0.40
0.20
0.00
2000
-0.20
2002
2004
2006
2008
2010
2012
2014
2016
2018
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2020
Cohesion Policy 2004-2006
Sectoral impacts: Poland
c) OM effect
Poland (PL)
1.20
0.80
0.60
0.40
0.20
0.00
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
d) OB effect
Poland (PL)
6.00
5.00
in % over baseline
in % over baseline
1.00
4.00
3.00
2.00
1.00
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0.00
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
Conclusions 1
Cohesion Policy Impacts
Demand impacts of Cohesion Policy are confined to
the implementation period 2000-2008
Supply-side impacts of Cohesion Policy build up
gradually, and endure after programmes end
The rate of return on cohesion expenditure can
vary due to structural differences (e.g., Greece
versus Ireland; Lithuania versus Poland)
Difficult to evaluate efficiency and effectiveness of
Cohesion Policy national planning and
implementation
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Conclusions 2
Cohesion Policy Impacts
Cohesion Expenditure increases demand for
imports by beneficiary states during
implementation
Import demand remains higher after CP
implementation compared to the no-CP scenario,
but impacts on net trade balance become positive
The orientation of net donor states to trade with
beneficiary states affects the transmission of
spillover impacts from recipient states to net donor
states
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CSHM/HERMIN:
Ongoing Research Activities
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Adding in the net “donor” states and evaluating
spillovers to net donors (see European Parliament
publication, 2009)
Adding in the “candidate” states (Turkey (2008),
Croatia, Macedonia)
Adding in the “applicant” and potential “applicant”
states (Bosnia, Serbia, Montenegro, Kosovo,
Albania (2009))
Refining the CSHM models and cohesion policy
mechanisms
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THANK YOU FOR
YOUR ATTENTION
Questions ?
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