Transcript EU Funds - Asian Political and International Studies Association

Regional Aid and Regional Integration:
East Asia’s Lessons from EU Structural Funds
Jisun Yi
Ewha Womans University, Seoul, Korea
Institute for Development and Human Security, Seoul, Korea
Research Agenda
Topic: Different Use of Regional Aid in European and Asian Integration Process
idea
institution
interest
Aid
Regional
Integration
Hypothesis: EU’s Structural Funds (of Regional Policy) represents a unprecedented
‘coordination mechanisms’ that are geared towards economic development and
regional integration within community.
International trends
Significant expansion in aid for regional integration and cohesion within
European and East Asian community
Beyond ‘Aid and Development’ nexus discussions
Expanded role of aid e.g. poverty reduction, economic growth
New approach: Regional cooperation, integration -> economic growth and
poverty reduction
Framework and Methodology
“Close coordinating mechanisms” of SF to be examined
[Targeting] Coordination between aid and integration (specific development for
regional cooperation and physical connectivity)
[Development Strategy] between aid and trade, FDI (investment for more private
investment) cf) tied aid (part of package)
[Aid Governance (allocation)] multi-level governance: negotiations and feedback
loop among supranational, national and sub-national institutions
Methodology and Aim
Qualitative methodology, comparative study of cases of EU’s SF and Asian
counterparts
To draw lessons from an advanced form of regional aid (EU’s Structural Funds)
for other emerging regional aid and ODA from institutional, development and
domestic politics perspectives
Evolution of the Fund
at times of EU enlargement
Part 1
EU
enlargement
Dev’t of
CP/SF
More
cohesive,
equitable EU
Introduction to EU’s Structural Funds
Regional policy
Treaty (Rome~Lisbon)
“to promote economic and social cohesion by reducing disparities
between the regions”
Toward a higher level of integration: monetary (single market,
monetary union) and political integration
One third of the EU budget 2007-2013
€347 billion over 7 years
“Redistribution” and “investment for investment”
Beneficiary: the least developed, worst-performing regions and
nations (1/4: below 75% of EU average; 13 states: below 90%)
Cohesion Policy: Disparity Harms Integration
15 traditional EU member VS. 10 New members (per capita
income); $7,000 ~ $78000
Differences in development in the EU-27
<50
50 - 75
75 - 90
90 - 100
100 - 125
 125
GDP per head as a % of the community average
EU 27 Member States GDP per capita in
PPS in 2006
EU 27= 100
300
250
200
150
100
50
0
LU IE NL AT DE SE BE UK FI DE FR ES IT EL CY SI CZ MT PT EE HU SK LT LV PL RO BU
(Source: Eurostat structural indicators)
Structural Funds Allocation (2007-2013)
Unit: EUR million, current prices
Top 12
Poland
Spain
Italy
Czech Republic
Germany
Hungary
Portugal
Greece
Romania
France
Slovakia
UK
Convergence
CF
22176
3543
8819
8642
3060
3697
6552
PO*
44377
21054
21211
17064
11864
14248
17133
9420
12661
3191
2899
2738
RCE
PI**
1583 4955
430 972
4215
2031
280 448
6458 635
7013
174
965
3522
5353
419
9409
490
10257
449
6014
ETC
Total
731
559
846
389
851
386
99
210
455
872
227
722
67284
35217
28812
26692
26340
25307
21511
20420
19668
14319
11588
10613
(Source: Europa official website)
Recent Challenges to SF
EU enlargement in 2004, 2007
Income disparity within community, increased
e.g. EU GDP p.c. on average
8 CEEC: Formerly planned economies
Strong presence of state in market and national
boundaries (regulation, corruption, centralization)
Considerable gaps in infra and capital endowments
Serves as catalyst to evolve mechanisms for economic,
financial, political integration within the EU
1. Targeting
“Aid that directly addresses regional cooperation and
integration”
Priority
‘Development at lagging regions’ < ‘Regional integration
and cooperation (intra-regional connectivity)’
Major Theme: Connectivity and Haman Capitals
‘transport’ – trade, FDI, labor movement-related infra.
2. Development Strategy
Western Development Experience & Integration Rationale
Free trade: income convergence among R & P
(cf. Dependency Theory)
Theory of MNEs and FDI
SF affects allocation of FDI (Breuss et al 2010)
(at the expense of FDI to Northwestern Europe, more FDI to new
destinations)
Comparison with ‘aid for trade’ (overseas development assistance)
- functions, similar
- Volume, under the ‘Subsidiary’ principle
3. Multi-level Governance
Analogy: Donor-Recipient Relationship / Agent-Principal Model
EC
•Top
decision
making
EC
MS
•Policy making &
•implementation
Coordination
System among
multi-level
governance
MS
Local
Local
•Implementation
-
<Hierarchical, centralized Structure>
Public bodies
Businesses
including SMEs
Associations
Voluntary group
<Decentralized Structure>
Aid Allocation Politics
R
R
Two-level bargaining process (Bodenstein & Kemmerling
2008)
R
R
MS
R
MS
R
EC
R
MS
R
MS
R
R
R
R
Official allocation criteria + “alpha”
R
‘Convergence (Goal 1)’
EU’s average GDP p.c. 75%
‘Competitiveness (Goal 2)’
EU’s average unemployment rates (no other specific
conditions)
• More room for politics to come in
• More aid to countries that have strong electoral
competitions (competitions among member states)
• Reflective of local, regional actors (electorates)
Effectiveness and limitation of SF
Empirical evidence
SF – Regional Economic growth (literature list)
SF – Efficient Governance – Regional Economic growth
SF – Disparity reduction – Regional Integration
Implications and limitation of SF
Inconclusive results of SF effectiveness
Case by case (spatial divergence)
Evolution of SF with reforms (before multi-year plans)
overtime: “positive” progress
ASEAN Plus Three
& Regional Aid
Part 2
Cooperation Among East Asia and ASEAN
Different Nature & Process of Asian Integration
•
Double track (ASEAN and Northeast) 60’s~80’s -> 1997 financial crisis ->
financial, monetary integration among ASEAN Plus Three (FTAs: intra-region
trade boosters)
•
FDI, financial integration indicators on the rise (ADB 2006)
•
Lower levels of integration (huge limits to labor mobility)
Regional Aid: East Asian advanced economies to ASEAN states
Major donors: Japan (traditional), China (lack of data), Korea (emerging),
ADB (integration-focused)
•
•
Emergence of integration-concerned aid
•
Addressing economic cooperation and South-South cooperation in aid policy as taking
global, regional responsibility (public goods)
•
Newly joined ASEAN countries: Cambodia, Laos, Myanmar, Vietnam
Major West and East Donors to ASEAN nations
Percent
Japan
Korea
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
44.6
44.4
51.9
46.6
45.9
51.1
50.6
47.0
49.9
55.2
53.4
47.8
44.3
48.4
46.7
47.2
42.9
42.3
39.1
45.6
0.0
0.1
0.1
0.1
0.1
0.2
0.6
0.7
0.6
0.4
0.4
1.0
1.3
1.0
1.2
1.0
1.0
1.7
1.8
1.7
China N. America
-
6.5
6.1
4.9
5.1
3.8
3.3
2.5
4.7
3.0
4.9
4.2
4.5
7.4
6.5
5.5
5.7
7.0
7.9
9.7
7.3
EU-DAC
48.9
49.4
43.1
48.2
50.2
45.4
46.2
47.6
46.5
39.4
41.9
46.7
47.0
44.2
46.6
46.2
49.1
48.2
49.5
45.4
(Source: OECD database)
Asian Counterparts
Major themes of Regional Aid
Trade-related infrastructure (e.g. transport, storage, energy,
etc.)
Technical Assistance (Soft Power): development
experience to developing ASEAN regions
Japan ODA to ASEAN
• Before the Cold War, lack of
philosophy; export promotion
• After; METI < MFA (Addressing
regional, global responsibility)
• Grants ratio, volume increased
• Priority: ‘Political stability’ in ASEAN
• Human security approach
ADB aid for RCP
• Integration in Asia and the Pacific
• RCP in 1994
• Major Pillar and theme in RCP
• Cross-border infra. & related
Software
e.g. Transport and ICT (33.4%), multi-s.
(13.5%)
(Source: “Regional Cooperation and Integration
Strategy (2006)”)
EU and EA Integration:
Implications and conclusion
Part 3
Comparison: Different Use of Regional Aid
of European and East Asian community
EU Structural Funds
East Asian ODA
ADB aid for RCP
Integration
Targeting
Importance
Lack of philosophy
Development
Strategy
Intergovernmental grants
Japan, China, Korea (Loans)
Aid
Governance
Multi-level governance
Conflict and cooperation in
politics
“Interplay of multi-level
governance -> better feedback ->
reform agenda, ‘refocusing,
smart’ aid”
*Donor-recipient relationship
“One way” from donor to
beneficiary (cf. ownership, the Paris
Declaration)
*Domestic politics in donor
countries in aid allocation
State interest vs. others
(transparency of aid)
Limitation of discourse: integration level in discrepancy, source of regional aid (cofinancing), etc.
Further Evolution of Regional Aid
in EA?
Aid for regional development and integration
Possible determinants of evolution
Emergence of multi-level governance, effective
mechanisms in a future, more integrated Asia
Obstacle: Sovereignty of state and intervention of
supranational institution (development aid policy
competence competitions)
Application of a new strategic approach of the EU