Strengthening Governance of EU Funds under Cohesion Policy by OECD

Author:OECD
Language: eng
Format: epub
Tags: governance/finance/regions
Publisher: OECD Publishing
Published: 2020-01-17T00:00:00+00:00

Setting OP investment priorities that reflect national and regional development needs

Strategic priority setting can be complex and require a sophisticated approach to balance different factors. It is, however, fundamental in order to focus programme implementation and avoid wasting resources on secondary issues, thereby supporting more effective and efficient absorption of ESIF. MAs must take into consideration the higher-level priorities established in the PA, as well as national and often regional priorities for development and their capacity (including resources) to invest. Balancing these various factors can be tricky. In a case study of Scotland’s European Regional Development Fund (ERDF) and the European Social Fund (ESF) OPs (2014-2020), stakeholders stated that one of the challenges affecting policy efficiency and additionality was the discrepancy between the priorities set conceptually and strategically (e.g. a focus on research and development investment as part of the ‘smart growth’ agenda) and the availability of local match funding, as well as the match funding to be ensured by third sector organisations, to actually develop and deliver projects in specific areas (Dozhdeva, Mendez and Bachtler, 2018[9]). Investment priorities can also be influenced by different actors (e.g. government agencies, ministries etc.), whose objectives are supported by OP spending. This adds additional complexity to the MA’s work when considering which investments may most effectively respond to national and subnational needs and aims. Balancing technical requirements established by the EU (e.g. eligible costs, ring-fencing, mid-term review based on performance framework, etc.) and strategic considerations associated with investment needs and capacity – be they national, sectoral or regional – is an intricate task for the MAs when setting priorities. In addition, care needs to be taken that priority-setting is not driven by the inertia of out-of-date plans, prior assumptions, or narrow political considerations (OECD, 2013[1]).

The importance of a multi-stakeholder or “partnership” approach to investment planning processes cannot be emphasised enough. Strong top-down processes in priority setting can weaken OP implementation by limiting stakeholder input and the ability to take into consideration the needs and capacities of beneficiaries, be they regional or local authorities, the private sector, civil society or others. There is evidence indicating that strategies combining top-down with bottom-up approaches are among the most effective (Crescenzi and Giua, 2016[10]). This pilot illustrated that top-down approaches could originate at a national level or at the MA level vis-à-vis beneficiaries. This was illustrated by instances where priorities are established at a central level based on the impact they are expected to achieve regionally; and instances where the contribution to priority identification and setting by subnational-government beneficiaries is limited. Regardless of where a top-down approach originates, bringing OP stakeholders into the process of defining and validating priorities (and investment needs) can help ensure priority robustness, add to evidence bases, and increase the potential for project take up when calls are made. Setting priorities, and acting on them effectively, requires fruitful co-ordination and communication within the MA and between the MA and other ESIF stakeholders, including regional governments (where applicable), the national government and the European Commission, as well as Intermediate Bodies (IBs), regional and local authorities and beneficiaries.

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