Economic Growth and Cohesion Policy Implementation in Italy and Spain: Institutions, Strategic Choices, Administrative Change [1st ed.] 9783030369972, 9783030369989

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INTERNATIONAL SERIES ON PUBLIC POLICY

Economic Growth and Cohesion Policy Implementation in Italy and Spain Institutions, Strategic Choices, Administrative Change

Mattia Casula

International Series on Public Policy Series Editors B. Guy Peters Department of Political Science University of Pittsburgh Pittsburgh, PA, USA Philippe Zittoun Research Professor of Political Science LET-ENTPE, University of Lyon Lyon, France

The International Series on Public Policy - the official series of International Public Policy Association, which organizes the International Conference on Public Policy  - identifies major contributions to the field of public policy, dealing with analytical and substantive policy and governance issues across a variety of academic disciplines. A comparative and interdisciplinary venture, it examines questions of policy process and analysis, policymaking and implementation, policy instruments, policy change & reforms, politics and policy, encompassing a range of approaches, theoretical, methodological, and/or empirical. Relevant across the various fields of political science, sociology, anthropology, geography, history, and economics, this cutting edge series welcomes contributions from academics from across disciplines and career stages, and constitutes a unique resource for public policy scholars and those teaching public policy worldwide. All books in the series are subject to Palgrave’s rigorous peer review process: https://www.palgrave.com/gb/demystifying-peer-review/792492 More information about this series at http://www.palgrave.com/gp/series/15096

Mattia Casula

Economic Growth and Cohesion Policy Implementation in Italy and Spain Institutions, Strategic Choices, Administrative Change

Mattia Casula Ca’ Foscari University Venice, Italy

ISSN 2524-7301     ISSN 2524-731X (electronic) International Series on Public Policy ISBN 978-3-030-36997-2    ISBN 978-3-030-36998-9 (eBook) https://doi.org/10.1007/978-3-030-36998-9 © The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2020 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Contents

1 Conceptualizing Cohesion Policy as a Case of Development Policy: A Framework for the Empirical Analysis  1 1.1 Interpreting Convergence in Europe: A Public Policy Approach  1 1.2 Theoretical Background  6 1.2.1 Discussing Hirschman’s Theories on Socio-economic Development  7 1.3 A Working Hypothesis as a Starting Point 10 1.4 Cohesion Policy Implementation in Italy and Spain as Case Study 15 1.4.1 Why Cohesion Policy Implementation 17 1.4.2 Why Italy and Spain 21 1.5 Exploring the Theory 24 1.5.1 Proposing a Hirschmanian Approach to the Study of EU Structural Funds 25 1.5.2 Explaining the Change 27 1.5.3 Approach to the Analysis 37 References 39 2 Understanding the Rules of the Game: How Cohesion Policy Works 49 2.1 Introduction 49 2.2 Toward the 1988 Reform: The Antecedents of EU Regional Policy 50 v

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2.3 The Evolution of the Basic Principles 56 2.3.1 Geographical Concentration 56 2.3.2 Programming 60 2.3.3 Partnership 63 2.3.4 Additionality 68 2.4 The Transnational Arena: Building the Policy 69 2.4.1 The Debate on Cohesion Policy Reforms 69 2.4.2 The Dynamics of Negotiations on the Reform of Structural Funds 73 2.5 The Domestic Arena: From Policy to Implementation 83 2.5.1 Management 84 2.5.2 Monitoring 88 2.5.3 Evaluation 91 2.5.4 An Overview 95 2.6 Which Challenges for the Domestic Actors 96 2.6.1 The Institutional Challenge 97 2.6.2 The Strategic Challenge 98 2.6.3 The Administrative Challenge100 2.7 How to Study Domestic Answers?103 References106 3 The Italian Case: Between Decentralization and the Legacies of the Past111 3.1 Introduction111 3.2 The Legacies of the Past114 3.3 The Years of the “Extraordinary Intervention”114 3.3.1 A Consolidated Misfit120 3.4 Explaining National Strategies122 3.4.1 Meeting the Institutional Challenge: A System (Still) Searching for an Identity122 3.4.2 Meeting the Strategic Challenge: A Fragmented and Unplanned Endogenous Development139 3.4.3 Meeting the Administrative Challenge: An (Unusual) Case of Retrenchment?148 3.5 Evidence from Regional Experiences159 3.5.1 The Case of Campania: Another (Regional) Parabola?159 3.5.2 The Case of Calabria: An Immobile Region?175

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3.6 Implementing the 2014–2020 Programming Period: New Challenges and Old Answers?184 References190 4 The Spanish Case: The Benefits of a National Coordination197 4.1 Introduction197 4.2 The Legacies of the Past198 4.2.1 A (Consolidated) Centralized Approach to Regional Development198 4.2.2 A Limited Degree of Misfit205 4.3 Explaining National Strategies207 4.3.1 Meeting the Institutional Challenge: A (Quasi) Centralized System in a Regionalist State207 4.3.2 Meeting the Strategic Challenge: Perpetuating a Thematic and a Territorial Selectivity217 4.3.3 Meeting the Administrative Challenge: Stimulating a Learning Process from Above223 4.4 Evidence from Regional Experiences227 4.4.1 The Case of Andalusia: Reinforcing the National Garrison at the Regional Level227 4.4.2 The Case of Galicia: Central Planning and Learning Paths232 4.5 Implementing the 2014–2020 Programming Period: A Learning Response with a Top-Down Approach238 References241 5 Conclusions: Two Cases in a Comparative Perspective245 5.1 Results245 5.2 Lessons for Studies on Europeanization and Economic Development250 5.3 Policy Recommendations252 References253 References255 Index277

Abbreviations

ACP CCAA CEC CEU CF CI CLLD CoR CSF CSG DG Regio DP DPS EAGGF EC EEC EIB EMU EP ERDF ESC ESF EU GDP GNP IB IBRD

Administrative Capacity-Building Plan Autonomous Community of Spain Commission of the European Communities Council of the European Union Cohesion Fund Community Initiative Community-Led Local Development Committee of the Regions Common Strategic Framework Community Strategic Guidelines Directorate-General for Regional Policies and Cohesion (DG XVI) Development Plan Department for Development and Cohesion Policies European Agricultural Guidance and Guarantee Fund European Community European Economic Community European Investment Bank Economic and Monetary Union European Parliament European Regional Development Fund Economic and Social Committee European Social Fund European Union Gross Domestic Product Gross National Product Intermediary body International Bank for Reconstruction and Development ix

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ABBREVIATIONS

IDO IDP IGRUE

Integrated Development Operation Integrated Development Programme General Inspectorate for Financial Relations with the European Union IMP Integrated Mediterranean Programme ITI Integrated Territorial Investment MA Management Authority MC Monitoring Committee MFF Multi-Annual Financial Framework MS Member State NSFR National Strategic Reference Framework NUTS Nomenclature of Units for Territorial Statistics NUVAL Italian Evaluation Unit OP Operational Programme PA Partnership Agreement PAU Payment Authority PC Programme Complement POP Plurifund Operational Programme PPS Purchasing Power Standards RCE Regional Competitiveness and Employment RDA Regional Development Agency SEA Single European Act SPD Single Programming Document TIP Territorial Integrated Programme UK United Kingdom

List of Figures

Fig. 1.1 Explaining the administrative change: analytical framework for EU Cohesion Policy implementation by type of response, administrative dimension, and type of impact on growth. Source: Leonardi (2005) Fig. 1.2 Gross domestic product (GDP) at current market prices by Andalusia, Galicia, Calabria, and Campania (2000–2018). Source: Eurostat (Extracted on 30 July 2019) Fig. 3.1 Time profile of payments from the ERDF to Italy for the 2007–2013 period (% of total funding available). (Source: WP1: Synthesis report—Ex post evaluation of Cohesion Policy Programmes 2007–2013, focusing on the European Regional Development Fund (ERDF) and the Cohesion Fund (CF)— Task 3 Country Report Italy—September 2016 (Applica, IsmeriEuropa 2016, p. 15))

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List of Tables

Table 2.1 Distribution of funding between categories of region, 1989–202059 Table 2.2 Cohesion Policy funding by broad policy area in EU-15, 1989–201399 Table 4.1 The Evolution of the Organizational Plan of the Dirección General de Fondos Comunitarios216

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This book is about EU Cohesion Policy and the economic convergence of European underdeveloped regions: it investigates the political and institutional factors that determine the success or failure of implementing EU structural funds at national and sub-national levels, as well as their possible impact on economic growth.1 The approval of Council Regulation No 4253/1988 opened the way to a new era in European Union (EU) regional policy-making, since it completely inverted the existing procedural logic, by introducing three main challenges for domestic actors: (1) an institutional one, since the introduction of the new partnership principle required both a redefinition of multilevel governance (MLG) in beneficiary states and the elaboration of new institutional solutions for the management of European funds; (2) a strategic one, since the introduction of the concentration principle aimed for the use of structural funds in the most problematic socio-­economic situations, targeting budgetary resources in favor of underdeveloped areas; it also aimed for a strategic use of funds over the programming periods, requiring domestic actors to elaborate on a coherent long-term development strategy in concert with European and sub-national actors; (3) an administrative one, since a realignment of both administrative procedures and administrative culture historically embedded at national and sub-national levels in terms of management, monitoring, and evaluation was required. 1  This book results from a multi-year empirical research in the field of Cohesion Policy. This publication had been anticipated by some essays published, in English and in Italian, during these years (see Casula 2017, 2018, 2019, 2020).

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After the 1988 reform of structural funds, five multi-annual programs have been launched by the EU. During these decades, for each of the three challenges I mentioned, several changes have been made to this policy in terms of priorities, beneficiary states, and the rules of the game. At the same time, domestic actors have faced these challenges in different ways. Consequently, the impact of EU Cohesion Policy on different European countries has varied. In fact, from 1988, not every country has been able to utilize EU funds efficiently, failing to bring about the additional effects that a community-wide policy should have realized, that is, GDP and employment growth, infrastructural reinforcement, attracting foreign investment, and so on. Among the states that have had the possibility to take advantage of structural funds from the first programming period, both Italy and Spain exhibited a substantial number of underdeveloped regions. Nevertheless, the impact of EU regional policy in Spanish and Italian regions has not been the same in terms of economic growth and cohesion over the last three decades (with a greater performance in Spain). The aim of this book is to explain, through the use of a policy analysis perspective, the reasons for the different outcomes in the use of structural funds, taking into account the implementation of EU Cohesion Policy in these two regionalized states as case study. Political scientists showed lasting interest for the study of Cohesion Policy for a full three decades (Piattoni and Polverari 2016). They mainly investigated the emergence of MLG in the context of structural funds, by questioning the implications of the mobilization of domestic actors on sub-­national governance. Extensive theoretical work and empirical studies reinforced the argument that EU regional policy not only is dominated by national governments but also includes regional and supra-national actors (Hooghe 1996; Marks 1996; Piattoni 2015). In this context, issues of discussion were above all: the dynamics of negotiations concerning the regulation of structural funds (e.g., Brunazzo and Piattoni 2004; Marks 1996), the Europeanization of national institutions (e.g., Bull and Baudner 2004; Graziano 2012), the sub-national mobilization in the EU (e.g., Hooghe 1996; Kölling 2015), the mobilization of sub-national actors in territorial politics (e.g., Da ̨browski 2014; John 2000), and the role of administrative capacity for policy implementation (e.g., Milio 2007; Terraciano and Graziano 2016). Yet, the study of Cohesion Policy as a case of development policy and the role of domestic institutions in economic growth and cohesion since the 1990s have sparked little attention. While the Cohesion Policy approach “to promote the forces of convergence against those pushing toward divergence […] has been consistently

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reconfirmed from 1989 to the present in all of the treaties that have deepened the EU from a policy and political point of view” (Leonardi and Holguin 2016, p.  432), and during the last decades the European Commission itself stresses the importance of functioning domestic institutions for economic development, political scientists’ interest in these issues persisted only during the first decade of implementation (Leonardi 1993; Nanetti 1996; Paraskevopoulos 2001). On the wave of the American tradition of development studies (Evans and Stalling 2016), this book suggests that public policy analysis can be fruitful for understanding economic growth and cohesion, if it were to reconstruct domestic public interventions for development and the institutional characteristics of the subjects responsible for pursuing development goals. In fact, despite domestic authorities having been forced to implement Cohesion Policy in accordance with the well-established European institutional framework, regulations allowed the Member States (MSs) elbow room in the implementation phase. As a consequence, the study of this policy helps to understand whether persistent problems of underdevelopment can be explained by looking at different domestic management approaches to implementing the policy, since the way in which structural funds are managed by domestic actors may significantly differ. To do so, this book derived its theoretical foundations from the traditional debate on the role of state actors in promoting economic development and on the institutional characteristics that the public authorities involved in the process of economic development should display. Even if the level at which responsibilities in formulating and implementing development policies are assigned continues to divide commentators, most have highlighted the institutional characteristics of the subjects responsible for pursuing development goals as early as the 1950s, arguing that public institutions sensitive to pressures inhibit development, while institutions that are autonomous from this type of pressure tend to facilitate it. More in detail, this book suggests that this emphasis on institutional characteristics of subjects responsible for development and their degree of autonomy is in line with the lessons of one of the classic economic development authors, Albert Hirschman (1958, 1963, 1967), whose teachings may continue to be useful for understanding circumstances of underdevelopment. Hirschman argues for an entity that is autonomous from demands of particular consensus and that is able to take general responsibility for all aspects related to the implementation of complex development programs, such as the institutional solutions for planning development, economic policy choices, and the administrative change regarding actors involved.

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More precisely, the starting assumption of this book is that the transition from a position of underdevelopment is determined by institutional, strategic, and administrative factors that characterize the circumstances within which national decision makers operate, rather than by a simple optimization process of allocating funds and/or the characteristics of human capital involved in the implementation phase. By using a working hypothesis methodology (Kaplan 1964; Shields 1998; Shields and Rangarjan 2013), I assume in this book that the potential success or failure of a development policy in terms of economic performance is related to a plurality of supporting interconnected factors which state actors are expected to promote, by involving (1) the institutional solutions for planning development, (2) the economic policy choices for improving growth, and (3) the administrative change of the actors involved in the implementation phase. It is claimed that a development policy should possess each of these three characteristics in order to maximize its potential for a positive impact on economic growth and should closely match those characteristics as they are defined by Albert Hirschman in his works. In other words, it is assumed that economic growth (i.e., the dependent variable) materializes when the policy maker decides to find a solution to a persistent scenario of underdevelopment by formulating and implementing a specific development policy that, in terms of the adopted institutional solutions, strategic choices, and administrative change of the actors involved in its implementation, is aligned with Hirschmanian principles (i.e., the independent variable). In short, as compared with previous analysis on the implementation of EU structural funds done by political scientists, this book analyzes EU Cohesion Policy as a case of development policy and it proposes an original contribution aimed at (1) building an analytical and theoretical framework for comparing its implementation from the 1988 reform in different countries and understanding its results in terms of economic growth and cohesion; (2) and applying this framework to the study of Cohesion Policy implementation in Italy and Spain from the first to fourth programming periods (the first, 1989–1993; the second, 1994–1999; the third, 2000–2006; the fourth, 2007–2013). The latter programming period formally ended in March 2017. It does so by adopting the frame proposed by Hirschman, by analyzing the domestic institutions involved in the management of structural funds, and by taking advantage of a qualitative research based on documentary analysis, secondary literature, and more than 100 interviews conducted in Bruxelles, Rome, Madrid, and in the Italian and Spanish regions from the end of 2015 to the months prior to

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the publication of this book. Adopting a Hirschmanian approach to the study of EU Cohesion Policy, this book argues that the different performances in Italy and Spain have to be attributed to the presence in the latter of a sort of “national decision-maker for development” that—being autonomous from external pressures—had the capacities for top-down management of funds by attributing clear competencies among levels of government, giving priority to specific development projects, and stimulating an administrative learning process. The book is divided into five chapters. Chapter 1 “Conceptualizing Cohesion Policy as a Case of Development Policy: A Framework for the Empirical Analysis” introduces the limits and potentialities of the use of public policy analysis in the study of regional economic development, and it suggests the use of an abductive approach and the adoption of a working hypothesis methodology in designing a similar qualitative research. In fact, by providing a way to enhance alignment in deductive studies, working hypotheses become useful tools for empirical investigation in public administration and policy sciences when the type of inquiry is paired with exploratory research (Babbie 2007; Stebbin 2001). Chapter 1 also introduces the theoretical framework used during the empirical analysis on the basis of the triple challenge that the new regulations introduced and the Hirschmanian approach adopted in the analysis. In general terms, it makes simultaneous use of the literature on Europeanization and historical institutionalism in explaining the way in which change occurred in the three dimensions under investigation. Chapter 2 “Understanding the Rules of the Game: How Cohesion Policy Works” describes the evolution, from 1989 to the present, of the “rules of the game” within which Italian and Spanish actors could appropriate European policy to their domestic contexts: it explains the single types of institutional, strategic, and administrative challenges introduced in each programming period by the EU regulations and the possible margins for maneuver within which national and sub-national actors operated. Chapter 3 “The Italian Case: Between Decentralization and the Legacies of the Past” and Chap. 4 “The Spanish Case: The Benefits of a National Coordination” present the main results of the empirical analysis. Chapter 5 “Conclusions: Two Cases in a Comparative Perspective” summarizes the main results of the research and provides both lessons for Europeanization and development studies, as well as policy recommendations for both the implementation of the ongoing 2014–2020 programming cycle and the future of Cohesion Policy.

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References Babbie, E. (2007). The Practice of Social Research (11th ed.). Belmont, CA: Thompson, Wadsworth. Brunazzo, M., & Piattoni, S. (2004). Negotiating Structural Funds Regulations: Italian Actors in EU Regional Policy-Making. Modern Italy, 9, 154–172. Bull, M., & Baudner, J. (2004). Europeanization and Italian Policy for the Mezzogiorno. Journal of European Public Policy, 11(6), 1058–1076. Casula, M. (2017). Riflessioni sulla governance dei fondi strutturali in Italia. In M. Marini (a cura di), Le politiche di coesione territoriale. Un confronto tra Italia e Stati Uniti d’America (pp. 297–330). Soveria-Mannelli: Rubbettino. [ISBN: 88-498-5108-1]. Casula, M. (2018). Economic Growth and Cohesion Policy Implementation in Italy and Spain: Institutions, Strategic Choices, Administrative Change. PhD diss., LUISS Guido Carli. Casula, M. (2019). Centralizing Cohesion Policy in Times of Austerity: Evidence from the Policy Cycle. Policy Studies 1–18. First View [ISSN: 0144-2872]. https://doi.org/10.1080/01442872.2019.1606903. Casula. M (2020). Under which Conditions is Cohesion Policy Effective: Proposing an Hirschmanian Approach to EU Structural Funds. Regional & Federal Studies. First View. https://doi.org/10.1080/13597566.2020.1713110. Da ̨browski, M. (2014). EU Cohesion Policy, Horizontal Partnership and the Patterns of Sub-National Govern Ance: Insights from Central and Eastern Europe. European Urban and Regional Studies, 21(3), 364–383. Evans, P., & Stalling, B. (2016). Development Studies: Enduring Debates and Possible Trajectories. Studies in Comparative International Development, 51, 1–31. Graziano, P. R. (2012). Europeanization and Domestic Policy Change: The Case of Italy. London: Routledge. Hirschman, A.  O. (1958). The Strategy of Economic Development. London: Yale University Press. Hirschman, A.  O. (1963). Journey Towards Progress: Studies of Economic Policy-­ Making in Latin America. Santa Barbara: Praeger Publisher. Hirschman, A.  O. (1967). Development Projects Observed. Washington, DC: Brookings Institution Press. Hooghe, L. (1996). Cohesion Policy and European Integration: Building Multi-­ Level Governance. Oxford: Oxford University Press. John, P. (2000). The Europeanisation of Sub-national Governance. Urban Studies, 37(5-6), 877–894. Kaplan, A. (1964). The Conduct of Inquiry: Methodology for Behavioral Science. San Francisco, CA: Chandler.

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Kölling, M. (2015). Subnational Governments in the Negotiation of the Multiannual Financial Framework 2014–2020: The Case of Spain. Regional & Federal Studies, 25(1), 71–89. Leonardi, R. (1993). The Regions and the European Community: The Regional Response to the Single Market in the Underdeveloped Areas. London: Routledge. Leonardi, R., & Holguin, C. (2016). The ‘Real’ Principles of Cohesion Policy. In S. Piattoni & L. Polverari (Eds.), The Handbook of Cohesion Policy in the EU (pp. 429–442). Cheltenham: Edward Elgar. Marks, G. (1996). An Actor-Centred Approach to Multi-Level Governance. Regional and Federal Studies, 6(2), 20–40. Milio, S. (2007). Can administrative Capacity Explain Differences in Regional Performances? Evidence from Structural Funds Implementation in Southern Italy. Regional Studies, 41(4), 429–442. Nanetti, R. (1996). EU Cohesion and Territorial Restructuring in the Member States. In L.  Hooghe (Ed.), Cohesion Policy and European Integration (pp. 59–87). Oxford: Oxford University Press. Paraskevopoulos, C. J. (2001). Interpreting Convergence in the European Union. Patterns of Collective Action, Social Learning and Europeanization. London: Palgrave Macmillan. Piattoni, S. (2015). The European Union: Legitimating Values, Democratic Principles, and Institutional Architectures. In S. Piattoni (Ed.), The European Union: Democratic Principles and Institutional Architectures in Times of Crisis (pp. 3–25). Oxford, UK: Oxford University Press. ISBN: 978-0-19-871627-3. Piattoni, S., & Polverari, L. (2016). Handbook on Cohesion Policy in the EU. Cheltenham: Edward Elgar. Shields, P. M. (1998). Pragmatism as a Philosophy of Science: A Tool for Public Administration. Research in Public Administration, 4, 195–225. Shields, P.  M., & Rangarjan, N. (2013). A Playbook for Research Methods: Integrating Conceptual Frameworks and Project Management. Stillwater, OK: New Forum Press. Stebbin, R. A. (2001). Exploratory Research in the Social Sciences. London: SAGE Publications. Terracciano, B., & Graziano, P. R. (2016). EU Cohesion Policy Implementation and Administrative Capacities: Insights from Italian Regions. Regional & Federal Studies, 26(3), 293–320.

CHAPTER 1

Conceptualizing Cohesion Policy as a Case of Development Policy: A Framework for the Empirical Analysis

1.1   Interpreting Convergence in Europe: A Public Policy Approach The issue of the European regional disparities was a discussion topic already among the debates of the founding fathers of the European Economic Community (EEC). In fact, considering the inequalities present in its six Member States (MSs), that is, Belgium, France, West Germany, Italy, Luxemburg, and Netherlands, they strongly supported the strengthening of the social and economic cohesion as a necessary condition for the establishment of the common market. For these reasons, the Treaty of Rome (1957) set itself the goal to reduce the “disparities between the levels of development of the various regions and the backwardness of the least favoured regions or islands, including rural areas” (Art. 158), in order “to promote […] a harmonious development of economic activities, a continuous and balanced expansion, an increase in stability, an accelerated raising of the standard of living and closer relations between the States belonging to it” (Art. 2). As several scholars pointed out (Armstrong and Taylor 2000; Boldrin and Canova 2001; Leonardi 1995; Molle et al. 1980; Dziembała 2016; Crescenzi and Giua 2020; Williams and Varghese 2018), convergence in Europe should be realized by reducing socio-economic disparities among all regions. This goal should not be achieved by reducing the level of the most developed areas, that is, by downward convergence. On the © The Author(s) 2020 M. Casula, Economic Growth and Cohesion Policy Implementation in Italy and Spain, International Series on Public Policy, https://doi.org/10.1007/978-3-030-36998-9_1

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contrary, by upward convergence the goal should be to increase economic performance and social well-being of the less developed areas faster than the most developed ones. Moreover, convergence’s measurement had historically represented a crucial issue of discussion and debate, since its estimation requires the use of indicators with a longitudinal and a territorial dimension (Arbolino et al. 2018; Ferrara et al. 2017). For a long time, gross domestic product (GDP) per capita was used from the official reports of the European Community (EC) (CEC 1994, 1996; Sapir et  al. 2004) and academic studies (Boldrin and Canova 2001; Mohl and Hagen 2010; Paci 1997; Sala-i-Martin 1996) in order to assess economic cohesion. In fact, as compared other indicators, such as the gross national product (GNP) and income inequalities, it has historically been available at the Nomenclature of Units for Territorial Statistics (NUTS) Level II. Nevertheless, the use of GDP per head limits a comparability of the local economies across time, since its calculation is to a large extent conditioned by variations in the rate of exchange of the national currencies. For this reason, in 1986, the Single European Act (SEA) officially provided to also use Purchasing Power Standards (PPS) in order to estimate economic convergence. In fact, as compared to GDP per head, it is able to guarantee a more objective evaluation of the development of a specific NUTS II area, since it “adjusts for differences between countries in purchasing power due to differences in price levels” (CEC 2014, p. 1). In the last 50 years, several scholars have tried to understand whether economic convergence is taking place in Europe, as well as its intensity around the single regions (Parr 2015; Crescenzi et  al. 2017). Using advanced econometrics, these studies arrived at different results. In fact, while some of them indicated that convergence is taking place (Armstrong and Taylor 2000; Cappelen et  al. 2003; Leonardi 1995, 2005), other showed a stationary situation (Rodriguez-Pose 1998), or an absence of this process (Boldrin and Canova 2003; Neven and Gouymte 1995). These different results are to a large extent conditioned by the complexity in measuring convergence, which is in turn connected with both technical and political-historic issues. Technical issues are first of all conditioned by the presence of different definitions of the concept of convergence that in several cases corresponds to different convergence concepts themselves. Second, there is no measure able to capture all the dominant aspects of the same process of convergence, since many types of variables contribute to its determination and each of

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them could have a different weight. Finally, the impact of both specific public interventions and more structured development policies on growth do not necessary emerge immediately. On the contrary, it may take time, therefore limiting the possibility to clearly compare the result achieved, across time and space. Political-historic issues are above all connected with two events that more or less directly conditioned convergence measurement, that is, the different enlargements had from the Treaty of Rome to the present and the ongoing economic crisis. Either altered possible comparisons across the decades. In the former case, it was to a large extent conditioned by the inclusion in the calculation of new regions with a GDP much lower than the old ones, such as the Eastern areas. On the contrary, since 2008 the tragic impact of the global economic crisis in regional GDP growth decline is arresting the long-run convergence process (Berkowitz et  al. 2015; Pontarollo 2015). The latter reflection is inevitably connected with the instruments historically used to estimate convergence, that is, beta and sigma convergence. Both were introduced, in 1991, by Barro and Sala-i-Martin. While “the first [type of convergence] relates to poor economies growing faster than rich ones,” the second one “involves a decline over time in the cross-­ sectional dispersion of per capita income or product” (ibidem, 112). Considering these two indicators, several studies conducted before the start of the actual economic crisis pointed out that only beta convergence is taking place among EU regions, at both EU-15 and EU-27 (Cuadrado-­ Roura 2001; Leonardi 2005; López-Bazo 2003), as well as “the speed of convergence is not constant in time, with low values being generally found during the eighties and higher values being detected for periods before and after that decade” (DG Regio 2008, p.  5). Moreover, taking into account the poorer six macro regions in Europe, that is, Greece, Spain, Ireland, Portugal, the six eastern German Länder, and the Mezzogiorno in Italy, the Sapir Report (Sapir et al. 2004, p. 59) arrived at the conclusions that beta convergence was taking place only between MSs but not necessarily within the single countries. More recently, the Commission of the European Communities (CEC) quantified the impact of economic crisis in regional economic growth, comparing the level of convergence in Europe before 2008 and in the period 2008–2011. Its “analysis of changes in GDP per head between 2000 and 2011 confirm[ed] that, in the long run, convergence is mostly a result of the least developed regions catching up rather than growth

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declining in the more developed ones” (CEC 2014, p. 6, emphasis added). For example, the number of NUTS II regions with a GDP per head below 50% of the EU average shifted from 37 in 2000 to 20 in 2011. Moreover, 16 regions increased, in the same period, their GDP per head to between 50% and 75% of the EU average. In addition, considering both the coefficient of variation of regional GDP per head and the real growth rates of GDP per head, it pointed out that the crisis is arresting the convergence tendency in Europe. Nevertheless, it also provided a positive expectation for the future, supporting the idea that there are grounds for believing that the long-run convergence process in the EU will continue after the crisis comes to an end. Since the process is driven in part by less developed regions adopting technology and methods of working developed and tested in other regions, it means that they tend to catch up in terms of productivity. This process […] is likely to see growth in less developed regions return to a higher rate than in the more developed parts of the EU in the years to come, just as over the period 2003–2008. […] GDP per head grew faster in real terms in the less developed Member States over the period 2000–2013 and is forecast to continue to do so in 2014 and 2015 […]. The rate of growth in the moderately developed Member States, however, fell below that in the highly developed Member States in 2010 and continued to be lower in 2011–2013 but is forecast to be slightly higher by 2015. (ibidem, pp. 6–7)

Assuming that convergence is taking place in the two previous mentioned ways, that is, as a result of the growth of the less developed regions and happening above all between MSs and not necessary within them, it is more and more interesting to understand not only the “if,” the “how,” and the “where” of this phenomena, but also the “why,” that is, which factors can determine and/or can facilitate the achievement of different economic performance across the old and the new MSs and their respective regions. In fact, since the first years of the EEC, upward convergence should be achieved through specific domestic and/or European policy interventions. Therefore, the convergence issue has long been at the center of the international academic debate, involving scholars from different disciplines and different lines of thought. At the same time all studies have pointed out that the task of objectively interpreting convergence is arduous since

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several economic, social, political, and institutional variables could intervene, inevitably limiting the possibility of monitoring all the causal mechanisms. For this reason, limiting the field of action, several scholars analyzed the way in which single variables (or a set of them) can have a more or less direct influence on economic performance and convergence in specific geographical areas. This book fits into this debate proposing a novel interpretation of policy analysis. In fact, it is believed that its characteristic interdisciplinarity allows for the joint use of variables with a different nature, that is, political, institutional, and administrative, and, consequently, to be able to frame the same problem from different points of view. Moreover, one of its main advantages concerns the plurality of methods shared by scholars across the world and that every single researcher can decide to use, adapting them at his specific research question(s), as well as at the collective problem(s) he/ she is trying to analyze. As previously discussed, this is particularly valid for a complex collective problem such as convergence, since it simultaneously involves problems of various types. In fact, even if the public policy analysis approach can vary depending on the methods used (more or less inductive) and the finalities of the analysis (more or less prescriptive), its fundamental analytical unit is always the same. More in detail, it concerns the way in which the most relevant actors that participate in the policy process behave, according to the logics of action and producing a given policy outcome. In this way, we can better understand the possible successful distortions or perverse effects for the implementation of a public policy. In other words, it becomes necessary to study the way in which the various actors involved in the policy process, that is, politicians, bureaucrats, public and private organizations, and so on, interacted in order to solve common issues, on the one hand, and, on the other hand, whether both the institutional solutions adopted and the main characteristics of the determinant actors can contribute to solve the problem. In other words, proposing a policy analysis approach to the study of convergence and economic development does not mean that interpretations given by other scholars from other disciplines are wrong or minor. On the contrary, it is believed that this approach allows for the combination of a plurality of variables with a different nature, see in as multiple factors that are likely to determine convergence in Europe.

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1.2   Theoretical Background The centrality of state actors in promoting economic development was largely taken for granted since the 1950s. Assuming that “the state must plan and act on a large scale if it was to achieve economic success” (Grabowski 1994, p. 3), several scholars analyzed the benefits of public interventions in economy. Myrdal (1968, p. 896), for example, explained that the differences between South Asian countries and Western countries at the beginning of their industrialization has to be attributed to the presence in the former of “soft states” that were unable to efficiently implement their economic plans and required few obligations and a lower level of social discipline from their citizens. Several decades later, the economic ascent of certain East Asian countries was explained by the presence of a developmental state (Johnson 1982), characterized by strong state interventions, as well as an extensive regulation and planning. From the 1980s, the long tradition of the state-centered model of development was supplanted by a new neoliberal market-driven one. Reasons for this changing perspective were found in the predatory nature of the state in many less-developed countries (Lal 1984), with leaders easily permeable by external pressures from interest groups and intents on extracting the largest surplus possible to pursue their private interests. Simultaneously with the neoliberal narrative, development also started to be conceived as a bottom-up process, and the role of state institutions in controlling development was undermined by the endogenous forces of local actors in stimulating the regional economy: their capacity to create cooperative relations were considered a condition for counterbalancing the negative effects of market mechanisms and the dysfunctional top-­down redistributive policies driven by clientelist interests. Moreover, several scholars (e.g., Leonardi 1995) emphasize that in order to avoid frustrating the positive effects of endogenous forces, it is necessary for sub-national institutions to be autonomous from external pressures. Therefore, even if the level at which responsibilities in formulating and implementing development policies are assigned continues to divide commentators, most have highlighted the institutional characteristics of the subjects responsible for pursuing development goals as early as the 1950s. It is therefore appropriate to maintain that public institutions sensitive to pressures inhibit development, while institutions that are autonomous from this type of pressure tend to facilitate it. This book suggests that this emphasis on institutional characteristics of subjects responsible for

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development and their degree of autonomy is in line with the lessons of one of the classic economic development authors, Albert Hirschman (1958, 1963, 1967), whose teachings may continue to be useful for understanding circumstances of underdevelopment. An in-depth discussion of Hirschman’s theories on socio-economic development and why they provide insights for this analysis is presented as follows. 1.2.1  Discussing Hirschman’s Theories on Socio-economic Development Albert Otto Hirschman was born in Berlin in 1915. His cultural and academic development during the 1930s was conditioned by the Nazi climate of terror of these years. In fact, even though he started his academic studies in Berlin during 1932–1933, he was obliged to abandon his original country due to his participation in anti-Nazi movements. For this reason, he continued his education for two years at the École des hautes études commerciales (HEC) before spending one year at the London School of Economics (LSE). He finished his academic career in 1936, when he obtained his Ph.D. from the University of Trieste, where he had studied the French Monetary reforms of 1925–1926. His successive professional experience highly conditioned his work on socio-economic development. After the publication, in 1945, of his first book National Power and the Structure of Foreign Trade, he started working at the Federal Reserve and participated in the Italian and French reconstruction process within the Marshall Plan. Then, in 1952, he was a financial advisor for the National Planning Bureau, and in the following years, he worked as an independent consultant in the field of economic development. His research questions on these issues were answered in three books published in the 1950s and 1960s: The Strategy of Economic Development (1958), Journey Towards Progress: Studies of Economic Policy-­Making in Latin America (1963), and Development Projects Observed (1967). Referring to them, in the preface of the latter book, Hirschman wrote: I came to see [my work] as having the latent, hidden by over-ridding…intent to celebrate, to “sing” the epic adventure of development…its challenge, drama and grandeur…to endow and surround of development story with a sense of wonder and mystery that would reveal it to have much in common with the highest quests undertaken by mankind. (Hirschman 1967, pp. 8–9)

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This trilogy represents the core of his thought on development. What this idea really signifies for Hirschman is clearly defined in the first pages of the trilogy. According to him, “development depends not so much on finding optimal combinations of given resources and factors of production, as on calling forth, and enlisting for development purposes, resources and abilities that are hidden, scattered, or poorly utilized” (Hirschman 1958, p. 5, emphasis added). Therefore, a sort of central “decision maker responsible for development” should be able from above to “combine these factors,” both stimulating “pressures and induction mechanisms able to extract and to mobilize the largest quantities of these resources” (ibidem, p. 7) and “systematically putting into action several pacing dives” (ibidem, p. 8). This development process of putting in motion will have feedback effects. More precisely: in the exercise of the entrepreneurial and administrative capacity the feedback effect is so immediate that it is difficult to recognize it as such: they are resources that accrue directly with use and through use, in much the same way that the ability to play a piano or to speak a foreign language improves with the exercise of it. So, it is precisely these resources, that are perhaps the most scarce at the beginning of the development process, that can develop most rapidly, because of the strength and the effect of the direct action of feedback, and since their expansion is limited only by the ability to learn. (ibidem, emphasis added)

In the same book, his most well-known theory on unbalanced growth emerged. Compared to the theorists of balanced growth, such as Rosenstein-Rodan (1994) or Nurkse (1953), Hirschman pointed out that in deciding how to allocate resources, the decision-maker for development should be able to maintain disequilibria and it should be able to give investment priorities in specific territorial and/or sectorial areas of intervention. In this way, the latter first of all have an immediate impact in these contexts. Second, these investment priorities can also stimulate development in the adjacent areas. For this reason, both infrastructural and transport sector investments are considered by Hirschman to be preferable. Moreover, already in this first book, he underlined the main reasons behind the failures of the countries “to take advantage of their development potential” (Hirschman 1958, p. 25). According to him, they “fail […] for reasons largely related to the image of change [since] they find it difficult to take the decisions needed for development in the required

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number and at the required speed” (ivi). This emphasis, that is not limited to the economic sphere, will be recalled in his two subsequent works. In fact, Hirschman pointed out that both the specific administrative and cultural legacies of the past and the inadequate conceptions of the actors involved could result in paralysis in development. Therefore, the attitudinal and psychological predispositions of the actors involved are fundamental factors in the promotion of development, that even have the potential to impede it. Building on this, Hirschman finally reveals elements that could facilitate the obtainment of positive results in the development of a project. First of all, he underlined institutional characteristics that the decision-maker for development should have. From an institutional point of view, he emphasized the importance of political isolation for this role, that it should be realized in two ways: (1) creating specific institutional arrangements in order to prevent an incorrect “capture” of technical actors by political ones and (2) ensuring the disinterest of political actors to enter bureaucratic fields. Moreover, decision makers in development should have general responsibility in economic choices in order to apply the principles of unbalanced growth and, consequently, in order to realize any possible adjustments that are deemed necessary. Therefore, Hirschman’s theories on socio-economic development provide several insights for each of the three challenges under investigation in this book. First of all, the German scholar recommends the elaboration of a set of institutional solutions in order to guarantee a sufficient political isolation of the fundamental actors involved in the main economic public choices, as well as in the predisposition of specific development projects. In addition, they should guarantee the presence of autonomous bodies that have specific competencies and substantial resources to direct, from above, the development. Consequently, the presence of this sort of decision-maker for development first of all makes it possible to predispose selective and focused strategic choices that, even if they are initially circumscribed to a specific area, they are able to guarantee a large-scale diffusion of development in the long run. In addition, it aids in the consolidation and diffusion of an administrative culture among all the actors that, more or less directly, are involved in the different phases of the predisposition of the development plans and/or projects. Moreover, this increase in administrative practices is not in turn made possible by the presence of incorrect image of change by the same actors.

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Finally, Hirschman pointed out that these institutional characteristics of the decision-maker for development and the cultural and attitudinal predispositions of actors, as well as the power to allocate resources, are not the only elements a scholar should take into account in order to understand the results of a development project. In fact, several exogenous and/ or endogenous political, economic, and social events could have an improvised influence on both policy maker and policy-making. In Hirschmanian terms, these different set of external conditions can represent a more or less positive chance for the correct implementation of a specific development intervention.

1.3   A Working Hypothesis as a Starting Point I am aware that a public policy approach to the study of convergence and economic development can have several merits as well as several limitations (see, for more detail: Fisher and Miller 2007; Howlett et al. 2009; Moran et al. 2006). On the one hand, it makes it possible to limit the field of action to a specific aspect of the investigated problem, allowing for an in-depth analysis of the interaction of how economic, institutional, and political variables can contribute to solving one or more collective problems. On the other hand, the risk is to have only partial knowledge of the elements concerned. In other words, the contribution that public policy analysis can have in understanding convergence in Europe can be limited to an in-depth analysis of single aspects that ex ante a researcher considers might have an important role for its determination. Moreover, considering its nature, it requires that attention be focused on one or a limited sample of cases. On the basis of this consideration, I have decided to use a working hypothesis methodology as a starting point for my research. Providing a way to enhance alignment in deductive, exploratory studies (Shields et al. 2019a, b), working hypotheses are, in fact, useful tool for empirical investigation, and their use in designing a qualitative study has been adopted by several scholars in the field of public administration (among them: Gerald and Kaifeng 2007; Raadschelders 2011), and public policy analysis (among them: Graziano 2011; McGann et al. 2006; Nanetti and Holguin 2016; Smyrl and Genieys 2008).

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The use of the concept of working hypothesis in social science studies has a long tradition (Mead 1899). According to a dated definition,1 a working hypothesis can be defined as a hypothesis suggested or supported in some measure by features of observed facts, from which consequences may be deduced which can be tested by experiment and special observations, and which it is proposed to subject to an extended course of such investigation, with the hope that, even should the hypothesis thus be overthrown, such research may lead to a tenable theory.

In other words, it allows “a suggested explanation of a group of facts or phenomena provisionally accepted as a basis for further investigation and testing” (Kent 2006). From an epistemic point of view, its scientific foundations can be traced back to the pragmatism approach of Charles Sanders Peirce, John Dewey, and Abraham Kaplan. Peirce did not explicitly refer to this concept. Nevertheless, his theories on hypothesis justification contain several foundations for the idea of the working hypothesis. More in detail, he wrote: Accepting the conclusion that an explanation is needed when facts contrary to what we should expect emerge, it follows that the explanation must be such a proposition as would lead to the prediction of the observed facts, either as necessary consequences or at least as very probable under the circumstances. A hypothesis then, has to be adopted, which is likely in itself, and renders the facts likely. This step of adopting a hypothesis as being suggested by the facts, is what I call abduction. I reckon it as a form of inference, however problematical the hypothesis may be held. […] Ultimately, the circumstance that a hypothesis, although it may lead us to expect some facts to be as they are, may in the future lead us to erroneous expectations about other facts, – this circumstance, which anybody must have admitted as soon as it was brought home to him, was brought home to scientific men so forcibly, first in astronomy, and then in other sciences, that it became axiomatical that a hypothesis adopted by abduction could only be adopted on probation, and must be tested. (Peirce 1901, pp. 94–95, emphasis added)

Therefore, abduction is a different form of inference than induction or deduction. It is a hypothesis that allows for the positing of a provisional 1  See in Century Dictionary Supplement (1909 ed. by Benjamin E. Smith), New York, The Century Company.

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rule that afterwards could be confirmed or denied. In other words, adopting an abductive approach, the researcher proposes a set of interpretative hypothesis that allow him/her to temporarily give meaning to the events: an explanatory hypothesis is justifiable as a starting point for research when the promise that the hypothesis is true is largest, and is not to be understood as a provisional conclusion of its plausibility. According to this idea, the theoretical validity of a hypothesis can be found in its possibility to give provisions about the investigated problem(s) and, hence, to be potentially fruitful at the research method level. Several important elements for the definition and the design of a working hypothesis are also present in the works of two Peirce scholars, that is, Dewey and Kaplan. The former primarily explicitly used the concept of working hypothesis. More specifically, in Logic: The Theory of Inquiry, Dewey wrote: It is notorious that a hypothesis does not have to be true in order to be highly serviceable in the conduct of inquiry. Examination of the historical progress of any science will show that the same thing holds good of “facts”: of what has been taken in the past as evidential. They were serviceable, not because they were true or false, but because, when they were taken to be provisional working means of advancing investigation, they led to discovery of other facts which proved more relevant and more weighty. Just as it would be hard to find an instance of a scientific hypothesis that turned out to be valid in precisely the same form in which it was first put forward, so it would be hard in any important scientific understanding to fund an initial proposition about the state of facts that has remained unchanged throughout the course of inquiry in respect to its content and its significance. Nevertheless, propositions about hypotheses and about conjunctions of existence have served an indispensable purpose because of their operational characters as means. (Dewey 1938, p. 142, emphasis added)

Therefore, Dewey treated theory as a tool of empirical inquiry. By using a map metaphor (ibidem, p. 136), he argued that theories help a traveller to navigate the terrain and to reach a destination, and they should be therefore judged by their usefulness to achieve a purpose. Dewey’s approach also expands the definition of theory in order to include abstractions beyond causation and explanation: theory is an helpful tool that organizes inquiry connecting data and problem (Shields et al. 2019a, b). Similarly, Abraham Kaplan shared the idea that “without a theory, however provisional or loosely formulated, there is only a miscellany of

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observations, having no significance either in themselves or over against the plenum of fact from which they have been arbitrarily or accidentally selected” (Kaplan 1964, p. 268). For this reason, “the aim of methodology is to help us understand, in the broadest sense not the products of scientific inquiry but the process itself” (ibidem, p. 23), with methods that contain philosophical principles that distinguish it from other “human enterprises and interests” (Kaplan 1964, p. 23). More in detail, in debating the functions of the model of inquiry and trying to give a first major formulation of the way a research based on the use of a working hypothesis should be carried out, in The Conduct of Inquiry, he wrote: Many discussions of the role of models attribute to them functions that would be performed by any theory, whatever its style. Thus models are said to provide “meaningful contexts within which specific findings can be located as significant details”. That they do so is both true and important, but it is not distinctive of models. Every theory serves, in part as a research directive: theory guides the collection of data and their subsequent analysis, by showing us beforehand where the data are to be fitted, and what we are to make of them when we get them. The word “data”, it cannot too often be emphasized, is an incomplete term, like “later than”: there are only data for some hypothesis or other. (ivi, emphasis of the author)

In this context, the use of a working hypothesis would be useful toward the beginning of a research project (e.g., explanatory research), since it serve to guide and organize the investigation, providing us something to go on with. The working hypothesis is not a guess at the riddle, a hunch as to what the answer might be. It is an idea, not about the outcome of inquiry but about the next steps that may be worthy of taking. The working hypothesis formulates a belief pertaining to the course of inquiry but not necessarily pertaining to its ultimate destination. (ibidem, p. 88, emphasis of the author)

Therefore, from a methodological point of view, the use of a working hypothesis helps the researcher in designing a qualitative research project, since it allows him/her to create a conceptual framework in order to “explore,” rather than “test,” the validity of his/her assumption (Shields 1998; Shields and Rangarjan 2013), as well as to “work on the assumption that further progress can be made in this direction, without claiming that its truth has been established, or denying that success may finally elude” (Oppenheim and Putnam 1958, p. 8). In other words, using a working

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hypothesis, at the end of the empirical study, a researcher is able to show the justification of the tentative acceptance of his/her belief, showing that “the hypothesis is credible, partly on methodological grounds (e.g., the simplicity of the hypothesis) […], and partly because there is really a large mass of direct and indirect evidence in its favour” (ibidem, p. 28, emphasis added). In fact, the single instances of empirical evidence have little scientific relevance if they are taken individually. On the contrary, this “mass of information” enables the researcher to validate and solidify not only the elaborate theoretical framework but also the general statements of expectations. In order to provide a more flexible way to bring some structure to a problematic situation, Shields and Rangarajan (2013, p.  148) also suggested to use pillar questions—that is, “questions imbedded in working hypotheses absent an anticipated answer”—that can limit the scope of inquiry to “pillar” issues, by reducing uncertainty that enable to help align the literature review, analytical framework, data collection and analysis. In addition, a researcher could also use a set of sub-hypotheses that are part of the general hypothesis. Being more specific and easily linked to the data collection mechanisms, their aim is both to facilitate the inquiry and to support the general hypothesis. Based on this working hypothesis methodology and the theoretical background previously introduced, it is assumed in this book that the different levels of convergence and economic development have to be attributed to the nature of the public interventions and of the public policies realized in order to reduce the economic gaps of a single region as compared to other European territories. In other terms, to issues strictly related with the successes and failures of the formulated public policies, that, in my view, are to a large extent conditioned by the different ways in which public policies have been designed and implemented from the national and sub-national actors involved in the different stages of their management. In fact, it is believed that the possible success or failure of a development policy in terms of socio-economic performance is related to a plurality of interconnected factors that state actors have to promote and that involve: (1) the institutional solutions elaborated in order to plan development; (2) the economic policy choices, as well as the normative solutions, adopted in order to improve growth; (3) the administrative change of the actors involved in the different phases of the policy implementation, that is, from the management of structural funds to their monitoring and evaluation. The formalization of the following working hypotheses is therefore proposed:

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PURPOSE: This book explores the role of state actors in successful economic development policy. Wh1: Successful economic development policy depends on state actors engaging in interconnected activities which promote growth. Wh1a: State actors, successful at economic development, promote institutional solutions for planning development. Wh1b: State actors, successful at economic development, promote policy choices that improve growth. Wh1c: State actors, successful at economic development, promote administrative changes during the implementation phase. WH2: Successful economic development programs adhere to the single implementation system related to Hirschmanian principles. Wh2a: State actors, successful at economic development, have political independence. Wh2b: State actors, successful at economic development, facilitate strategic economic choices alongside the unbalanced growth principles. Wh2c: State actors, successful at economic development, induce feedback effects that involved administrative procedures.

After presenting my working hypotheses and the related sub-­hypotheses, the next paragraph will present the way in which this book will “explore” them, by using Cohesion Policy implementation in Italy and in Spain as a case study.

1.4   Cohesion Policy Implementation in Italy and Spain as Case Study My working hypothesis and my relative sub-hypotheses will be explored through an in-depth analysis of a specific case of development policy, that is, Cohesion Policy, in two big Southern European Countries, that is, Italy and Spain, and, on the basis of the multi-level nature of this policy, through the analysis of two levels of management of the same policy, that is, the national and the regional. In fact, until the start of the first programming cycle, in 1989, it seemed clear that the process of convergence and integration should be realized not only with the commitment of the national

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actors but also with the full involvement of regional actors in European policy-making, as well as the implementation of structural actions according to European rules. More in detail, the regional reinforcement of the institutional capacity and the consequent changes in administrative practices have been considered since the 1990s a “conditio sine qua non” for the regional empowerment, in terms of capacity for both negotiation (Ansell et al. 1997; Bailey and de Propris 2002; Hooghe 1996) and expenditure (Terracciano and Graziano 2016; Milio 2007). On the one hand, an in-depth analysis at the national level allows for an overview of the institutional solutions adopted, as well as of the policy instruments that the single MS—on the basis of the community’s rules— has decided to use in order to implement European policy within its domestic context. Moreover, in Hirschmanian terms, it allows us to understand the way in which the national center has come up against the overall management of the policy, and, therefore, against the other actors involved in the implementation of the policy, above all the sub-national ones. On the other hand, the choice to explore the thesis also analyzing the regional level must be understood on the basis of the technical characteristics of the policy (see below more in detail). In fact, the implementation of the general national strategy has to be implemented through single Operational Programme (OP). Most of them have a specific regional scope, in terms of both the type of actors involved in the management of the OP and the results the interventions should hopefully have. For these reasons, an additional in-depth analysis at the regional level and at the level of the new regional structures created makes it possible to explain the real influence politics had in bureaucracy, as well as the effects that single political and institutional factors could have in the management of the policy. Moreover, it aids in assessing the real effects of specific public interventions on economic development. It also helps to understand the ability of sub-national actors to respect administrative standards and procedures in each programming period on the basis of their previous administrative legacies, as well as the real availability and quality of the local actors, and above all, the rulers and the entrepreneurs that are involved in the different phases of the management of the OP and of its single development project. The following pages will provide a more in-depth analysis of the dual choice made, that is, (1) to study the implementation of European regional policy from 1988 and (2) to compare it in Italy and Spain.

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1.4.1  Why Cohesion Policy Implementation Even if a consolidated European policy for the rebalancing of the regional disparities was already present since the Treaty of Rome, it was the birth of Cohesion Policy traced back to the Council Regulation No 4253/88 of 19 December 1988 that opened the way to a new season of EU regional policy, since it completely inverted the logics adopted from the 1950s (Heinelt and Petzold 2018). In fact, “under the heading of structural policy” (Bailey and De Propris (2002, p. 305), it modified the nature of the funds historically used, that is, the European Social Fund (ESF), the European Agricultural Guidance and Guarantee Fund (EAGGF), and the European Regional Development Fund (ERDF) (see below), in order to coordinate their activities and to adapt each of them to the principles of programming, concentration, additionality, and partnership. As compared to the past, the EC started to develop a communal and an integrated multiyear programming that identified specific strategic objectives and, for each of them, the regional areas of intervention. Moreover, it institutionalized interactive processes among three types of actors (European, national, and sub-national) that reciprocally undertake to realize the Community’s objectives (Bache et al. 2016). In fact, until the end of 1980s “no explicit policy to stimulate socio-­ economic development was in place at the European level. The hope was that the transfer payments would have some effect, but no verification mechanism was put into place to check whether this impact was ever achieved” (Leonardi 2005, p. 65). In other words, for several decades the EEC was not able to create an institutional machinery really capable of fulfilling that goal. Until the end of 1980s the EU project was characterized by a sectorial and a vertical approach that limited the pursuit of its goals (Leonardi and Nanetti 2001): European regional policy worked for sectors, rather than for strategic objectives, and it provided attributions of responsibilities only for national actors. These elements limited both the set-up of projects to solve common problems and the involvement of sub-­ national actors in the policy-making that would have clearly illuminated the disparities both within the single MSs and among them. Moreover, the choice of how to allocate the European funds remained for a long time a national exclusive matter. The sectorial and the vertical approach of the regional policy did not change until the signing, on 17 February 1986, of the SEA. In fact, the latter accelerated a process of revision of the three funds and of the general

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regional policy toward a territorial and horizontal policy, in the name of integration and multi-sectoriality, becoming a community-wide policy to all effects. It is also important to know that this process was realized within a heated debate on the possible impact that both Spain and Portugal’s entry in the CEE, and their target of joining the European Single Market by 1992, could have on the less developed regions. As previously mentioned, the final result was the elimination of the sectorial nature of the previous interventions and the creation of a common framework for MS which they would have had to follow as much as possible in the implementation of the new policy. All the elements introduced thus far help in understanding the choice made to select Cohesion Policy as a case study for my research. In more detail, it is threefold and it is connected with (1) the goals of the policy, (2) the structure of the policy, and (3) the nature of the policy. First, beginning with the signing of the SEA, an intense debate about the real goals of this policy took place among academics (CEC 1987, p. 6). On the one hand, several scholars considered Cohesion Policy as a territorial rebalancing policy to help the economic growth of the less developed European regions (Leonardi 1993; Nanetti 1996; Molle 2011). On the other hand, other scholars (Allen 2000; Pollack 1995) pointed out the social objectives of the Community aids, since their aim should be to mitigate the negative social impact that the creation of the Single Market would have on the regional economies. Fully sharing the thought of the first group of scholars, it is important to emphasize that the aim of Cohesion Policy to restructure the less developed European economies has been explicitly affirmed by Community institutions on several occasions in the last 30  years. For example, SEA recognized “that the prospect of the Single Market widening the gap between the poorest and the richest regions of Europe needed to be counterbalanced by policies aimed at the political objective of social and economic cohesion” (Oktayer 2007, p. 66). Three years later, the Delors Report (1989)—that was “prepared in response to the mandate of the European Council to study and propose concrete stages leading towards economic and monetary union” (p.  1) —recognized that “Community policies in the regional and structural field would be necessary in order […] to spread welfare gains throughout the Community” (p. 18). […] If sufficient consideration were not given to regional imbalances, the economic union would be faced with grave economic and political risks. For

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this reason particular attention would have to be paid to an effective Community policy aimed at narrowing regional and structural disparities and promoting a balanced development throughout the Community. […] Economic and monetary integration may have beneficial effects on the less developed regions of the Community. […] Historical experience suggests however, that in the absence of countervailing policies, the overall impact peripheral regions could be negative. […] The economic and monetary union would have to encourage and guide structural adjustment which would help poorer regions to catch up with the wealthier ones. […] The success of these policies will hinge not only on the size of the available financial resources, but to a decisive extent also on their efficient use and on the private and social return on the investment program. (ibidem, emphasis added, pp. 18–19)

Moreover, the historical “structural adjustment” rationale of EU Cohesion Policy has been confirmed, in 2010, by Mario Monti. In fact, in his Report to the President of the EC “A New Strategy for the Single Market at the Service of Europe’ s Economy and Society”, he pointed out that a Cohesion Policy approach “to promote the forces of convergence against those pushing toward divergence […] has been consistently reconfirmed from 1989 to the present in all of the treaties that have deepened the EU from a policy and political point of view” (Leonardi and Holguin 2016, p. 432), underlining that market integration could be a win-win process only when complemented by action at EU level to correct structural imbalances at subnational level. Such action would give a push to peripheral regions that otherwise would not be able to participate in full to the single market and would prevent lagging regional economies from seeing their gap from the most performing increase. (Monti 2010, p. 84, emphasis added)

Assuming that EU Cohesion Policy can be considered as a development policy for all practical purposes and that, since the end of 1980s, its goals have always been the achievement of the convergence of the underdeveloped European regions, it is necessary to underline why I have decided to select this policy on the basis of its structure. In fact, on the basis of both the complexity of the investigated issue, and the need to compare public interventions in two different national economies, Cohesion Policy is the most important development policy in Europe that allows a rigorous cross-national comparison. Indeed, with respect to other

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development policies that are totally formulated by national authorities and that present different rules and different institutional implementation mechanisms, it presents precise “rules of the games” prescribed by the regulations. In other words, national and sub-national authorities are forced to implement this policy according to a well-established European institutional framework. Nevertheless, at the same time, regulations allow the single MSs several margins of maneuver in the implementation phase. Therefore, the study of EU Cohesion Policy is a crucial case study for at least two reasons. On the one hand, it enables comparison of the way in which two different administrations (both national and sub-national) had been able to correctly respect regulations, implementing cohesion accordingly. On the other hand, on the basis of the present margins of maneuver, it helps to understand if and how the ways in which domestic actors modeled the policy may have had an impact in terms of growth. In other words, on the basis of my working hypotheses, the study of EU Cohesion Policy enables us to understand whether persistent problems of underdevelopment can be explained by looking at the different management approaches in the implementation phase of the policy, on the basis of a state impulse. In fact, the way in which structural funds are managed may significantly differentiate both at the national and regional levels with respect to the three dimensions considered in this study. These considerations are strictly related with the third choice to select this policy as a case study for my research, and they are linked with the nature of the policy. In fact, the institutionalization of the new European regional policy introduced a triple challenge for MSs. Each of them is strictly related to my working hypotheses. First, Cohesion Policy introduced an institutional challenge. In particular, it was twofold, concerning (1) the creations and/or the reorganization of the structures, more or less central, present, and historically responsible for the management of the regional policy and/or of the Community’s affairs; (2) the elaboration of a set of institutional solutions in order to assign different responsibilities among the individual domestic actors (both national and sub-national) in the different phases of implementation of the national strategy. Second, it introduced a strategic financial challenge. In fact, the introduction of the concentration principle aims for the use of the structural funds in the socio-economically most problematic situations, targeting the budgetary resources in favor of the underdeveloped areas. Contextually, the programming principle aims for a strategic use of funds over the programming periods, and it requires the national

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policy maker to elaborate a long-term coherent development strategy in concert with the European and sub-national actors. Third, it introduced an administrative challenge. In fact, Community regulations in terms of policy implementation, monitoring, and evaluation implied from the first programming period a realignment both of the administrative procedures and of the administrative culture historically embedded at the national and sub-national level. Therefore, their introduction met the cultural and ideological orientations of the actors involved in these phases of the policy. To sum up, I assume that the different way in which domestic actors have been able to face three previously mentioned challenges significantly contributes to explain the achievement of convergence in European regions. In other words, with equal external challenges and on the basis of the margins of maneuver of the EU regulation, the answers of the MSs may have been different in terms of institutional solutions adopted, policy choices elaborated, and cultural and administrative changes on the part of domestic actors. 1.4.2  Why Italy and Spain On the basis of the complexity of the subject being examined in this study, as well as the way in which I decided to investigate it, that is, analyzing the implementation of four programming cycles looking at both the national and regional levels, I have decided to focus my attention on two case studies that not only received a great deal of funding from 1989 until the present day, since they had several underdeveloped regions concurrent with the start of the first programming period, but that also presented several common contextual factors, that is, be part of the same geographical areas, and have a similar territorial extension, institutional architecture, and administrative culture. In fact, it was felt that the way in which domestic actors could have responded to the three mentioned challenges could have been conditioned by the factors indicated. For example, the choice to elaborate an institutional solution for the implementation of the policy could vary depending on the number of levels of government present, rather than in a country in which the practices of vertical partnership between the central government and the institutional sub-national actors were already consolidated. The same reasoning can inevitably be applied also to the administrative culture and the resulting response to the third challenge. For these reasons, Italy and Spain are not only two Southern European countries with a great territorial extension and a regionalist institutional

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architecture. Rather, during the 1980s, the same legal-rational administrative culture prevailed both at national (Gualmini 2008) and sub-national (De Siervo 1985; Torres and Pina 2004) level. Moreover, sub-national governments were never centralized in the management of regional policy. In fact, while in Italy regional policy has been long centralized (La Spina 2003) under the supervision of a centralistic body, that is, the so-called Cassa per il Mezzogiorno (“Fund for the South”), Spanish regional policy suffered a “virtual disappearance” (Mancha-Navarro and Garrido-Yserte 2010, p.  53) after the approval, in 1978, of the new democratic Constitution. Yet regardless of this similar starting point, Italian and Spanish domestic actors faced the three challenges in different ways, since they differed in terms of institutional solutions and economic policy choices adopted on the one hand, and in terms of administrative capacity, on the other. Moreover, despite this similar starting point, the impact of EU Cohesion Policy in Spanish and Italian regions has not been the same in terms of economic growth. The latter can be presumed by analyzing both the general GDP growth in Italy, in Spain, and in their respective underdeveloped regions and the real macroeconomic effects of the single EU interventions in the Objective 1/Convergence area. First of all, the results of EU Cohesion Policy can be clearly seen in the capacity of European regions to come out of a situation of underdevelopment. For example, in 1989, of the so-called Objective 1 regions, that is, the more underdeveloped European regions with a GDP per head lower than 75%, there were 8  in Italy (the Mezzogiorno area) and 13  in Spain. However, in the actual programming cycle (2014–2020), the number of less-developed regions has been radically changed: while Spain has only one region (Extremadura) in this category, five of the eight Southern Italian regions continue to be collocated among the most underdeveloped areas in Europe. In addition, four of these areas are among the largest regions in the Mezzogiorno, that is, Campania, Sicily, Calabria, and Puglia. The superior Spanish performance is not only conditioned by the “statistical effect” due to the accession of funds to new member states in 2004, but also by the economic development that the Spanish Communidades faced in the last three decades (Kölling 2015, p. 75). For example, according to Eurostat data, five years after the official launch of the first programming period, in 1994, the index change of GDP per head in Spain Objective 1 regions with respect 1988 was equal to +4%. On the contrary, in the Italian Mezzogiorno, it was −1%. Moreover, while the annual GDP

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growth in Spain Objective 1 regions was 3.6% in the period 1995–2000 and 2.4% between 2000 and 2006, in Italian Objective 1 area, it was far inferior, that is, 1.9% in the first time interval and only 0.9% in the second one (Applica, IsmeriEuropa, Wiiw 2010). The Mezzogiorno was also the European area with the lower growth rate, being inferior with respect to all the other EU-15 Objective 1 regions. In addition, GDP growth in PPS in the period 2001–2013 was equal to 54.1 in the Spanish Convergence Area and only to 13.0 in the equivalent Italian area (Svimez 2015). Finally, Italy and Spain and their respective underdevelopment regions faced a different GDP growth during the years of the global recession. In Italy, for example, “after growth of only 1% a year in the two years 2009–2011, GDP declined significantly over the next three years and increased only a little in 2015 when it was 8% lower than in 2007 before the global recession hit” (Applica 2016a, p. 11). Moreover, the poor GDP growth in these years involved in a somewhat analogous manner both the Objective 1-Convergence regions and the other area of the Peninsula (Leonardi 2014, pp. 763–767). Even if equally negative, the Spanish economy has grown more than the Italian one. In fact, “GDP declined by 1.3% a year between 2007 and 2009, by 0.5% a year in the two years 2009–2011 and by over 2% a year between 2011 and 2013 […]. Growth resumed only in 2014 and it was 2015 before the rate increased back to what it was in the years leading up to the crisis” (Applica 2016b, p. 11). Nevertheless, as in the case of the Spanish growth years during which the European interventions were key to convergence, Cohesion Policy had a positive effect on Spanish economy since it “limited damage during the crisis”.2 In fact, the superior economic performance of Spanish regions is also demonstrated through an analysis of the real estimated macroeconomic impact of the EU’s interventions: since the launch of the first programming period, several studies tried to estimate the additional GDP of the single CSF as compared with a base scenario without the European aids. After an in-depth documental analysis, it is possible to conclude that all the studies conducted to date showed a lesser macroeconomic impact on the Mezzogiorno as compared not only the underdeveloped Spanish regions, but also the other European Objective 1 regions. For example, 2  Cfr. http://ec.europa.eu/regional_policy/en/newsroom/news/2016/04/04-04-2016european-cohesion-policy-a-key-factor-for-spain-s-development-and-integration-in-europe; accessed 06 July 2016.

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according to the evaluation of the CSF Italy Objective 1 “the original CSF (planned data) had less macroeconomic impact on the Mezzogiorno (0.9% of GDP in 1993) than other Objective 1 regions (1.6% of GDP on Community average in 1993)” (IsmeriEuropa 1995, p. 13). Moreover, as reported by Tondl (1998, p. 122), through an input-output analysis, it has been estimated that while the additional GDP growth associated with CSF I was equal to 0.2 in Spain and 0.1 in the Italian Mezzogiorno, for the CSF II, it was 0.7 in the former and 0.4 in the latter. Similarly, the tenth Annual Report of the Structural Funds (CEC 1998) estimated that the macroeconomic impact of the CSF II for Objective 1 in terms of additional GDP was 5.1% in Spain and 2.0% in Italy. Following, using an Hermin model, Applica (2010a, b) showed that the cumulative effect of the structural funds in GDP growth in the period 2000–2009 was 16.7% in underdeveloped Spanish regions and 10.4% in the Italian Mezzogiorno. Finally, in the year of the global economic crisis and in a general clime of continuous recession, it is calculated that the investment supported by the 2007–2013 ERDF and Cohesion Fund (CF) OPs is estimated to have increased GDP in 2015 by around 0.3% in Italy and 0.7% in Spain and in 2023 by around 0.5% in the former and 0.8% in the latter (Applica 2016a, b).

1.5   Exploring the Theory In the previous pages of this chapter, I explained that the aim of this book is to contribute to the debate over which factors can determine and/or facilitate the achievement of a process of convergence across the European regions. In detail, I formulated a working hypothesis and explained my decision “to explore” my theory by selecting Cohesion Policy implementation as a case study, ultimately arguing that the 1988 reform introduced three different challenges that required a drastic change for the domestic actors. At the same time, I argued that in implementing the policy, they had several margins of maneuver that allowed them to model the policy according to their domestic preferences, as well as their traditions. In building my theoretical framework, I started from Hirschman’s theories, arguing that the more domestic choices and practices adhere to his precepts, the easier it becomes to understand the overcoming of economic stalemates.

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Therefore, each of the parts of this section will be dedicated to explaining the way in which the theory will be explored in the next chapters. After presenting how it is concretely possible to apply the Hirschmanian principles to the study of EU structural funds, the analysis will continue discussing two different approaches long rooted in the study of political science, that is, Europeanization and Historical Neo-Institutionalism, that are important starting points for my analysis, since they allow for a better understanding of change and the direction it can take. Finally, I will present the way in which I have decided to explore my book through the empirical analysis done. 1.5.1  Proposing a Hirschmanian Approach to the Study of EU Structural Funds This section will present the way in which Hirschman’s socio-economic theory can be applied to the study of structural funds. More specifically, each of the three challenges the new European regional policy introduced for the beneficiary states since 1989 will be connected with the general theories he elaborated. As previously discussed, the institutional challenges required that the MSs should both clearly attribute all competencies among national and sub-national actors and decide at which level of the multi-level governance to attribute more financial and decision competencies and prerogatives. In other words, this challenge refers to the institutional characteristics of the national decision maker, that is, the institutional subject that has greater decision-making power in the domestic implementation of the policy. In Hirschmanian terms, its building should have been realized in four different and interconnected ways. First of all, the institutional solutions available to minimize potentially unacceptable political and/or biased interference in the management of Community funds could include the involvement of an independent authority and/or development agencies that should be devoid of any electoral mandate or a political nomination, rather than the elaboration of a strongly centralized national implementation mechanism. The aim of the latter approach should be to minimize the influence of local clientelism as much as possible. Moreover, while respecting the multi-level nature of the Community policy, it ought primarily to be accompanied by a clear identification of the level of government to which greater powers of decision-making are attributed. Consequently, a

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clear definition of responsibilities between the various domestic administrations involved in the management of the policy should be present. Third, on the basis of the latter clarification, the “building” of the ­decision-maker for development would have to be realized over the years by allocating it adequate technical and financial resources so that it could take on an incisive role of strategic direction in the more general development planning of the underdeveloped areas of the country. In other words, a clear attribution of competencies and adequate resources to the ­decision-maker for development would have allowed it to assume a general responsibility for the economic policy choices in terms of Community intervention. Finally, this should also be achieved by building a solid and sufficiently competent bureaucratic apparatus capable of inhibiting any negative process of politicization. The presence of a clear decision-maker for development would have allowed for a better response to the strategic challenge, since the latter required for each programming period the elaboration of a specific development plan in order to solve a possible situation of underdevelopment both within the regions and within the country generally. In fact, even if EU roles require that all regions must be trusted in each programming period in proportion to their population, additional priorities of action could have been decided. Rather than being randomly chosen, the latter are assumed to be selective (both territorially and thematically). In Hirschmanian terms, excellence poles or specific development projects, especially if infrastructural and multiregional, could first maximize benefits of a specific area and subsequently in other areas as well. In other words, big and focused projects, rather than small and randomly selected ones, may be the engine for new future investments, helping to ensure the additional effect structural funds should have. Third, in order to fit to the EU’s roles, the administrative challenge required a cultural change in all phases of the policy process of the domestic actors with respect the administrative legacies historically present. In Hirschmanian terms, a similar administrative change should be first of all realized through endogenous changes by all the actors of the system. At the same time, it should be also facilitated by exogenous pressures coming from above, that means from a centralist decision-maker for development. In other words, from the start of the first programming cycle, it has been requested of all the actors involved in the different phases of the implementation of the policy, that is, in the management, monitoring, and ­evaluation of the EU interventions, that they share in a common belief

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that a drastic and a real change is necessary. On the contrary, the persistence of mindset of backwardness among actors can paralyze development. The latter could inhibit the learning by doing process that over the course of subsequent programming periods should characterize policy implementation. The latter may be, for example, visible in an improvement in the capacity to manage, rather than to monitor and/or to evaluate the funds from programming cycle to programming cycle. To sum up, a central decision-maker for development characterized by specific institutional connotations could take a general responsibility toward strategic policy choices. Its presence could also condition the way in which all the other domestic actors involved would answer to the three challenges. In addition, a general change in the culture of the actors is necessary and should be realized through a radical change in the general approach to the implementation of the structural funds, rather than perpetuating erroneous ideologies which effect the choices associated with the development interventions. Finally, in Hirschmanian terms, it is also necessary to consider that the impact of luck for the decision-maker for development could prevent it from reaching the goals set. It could be, for example, connected to specific political, economic, and social conjunctures. 1.5.2  Explaining the Change As previously discussed, this research made simultaneous use of the literature on Europeanization and Historical Institutionalism in explaining the way in which change occurs. Each of the two approaches will be described in detail in the following pages. Moreover, the most recent literature on Europeanization and Cohesion Policy will be used as a basis to explain why it is possible to consider them simultaneously. The Europeanization turn only emerged in the mid-1990s, since for several decades scholars of European studies were only interested in analyzing the characteristics of EU’s institutional assets. On the other hand, the process of construction and diffusion of politics of the new supra-­ national entity was less investigated. Two reasons can explain this delay (Graziano 2012, pp. 6–7). While the first one is endogenous to EU studies, the second one is exogenous. In fact, on the one hand, the sterile and dated contraposition between “neo-functionalists” and “intergovernmentalists” needed to be overcome, putting in the research agenda new questions that were not only connected with the construction, the establishment,

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and the modification of the European institutions, but that also concerned the impact of community politics on domestic practices and procedures. On the other hand, the ratification of the Maastricht Treaty in 1992 opened the way for a new season in the relationships between center and periphery, since several domestic policies began to be regulated by EU institutions. Additionally, the concept of Europeanization was characterized by a substantial conceptual vagueness (Sartori 1970) for several decades. Political science literature would agree that an exhaustive definition was only given in 2003 by Claudio Radaelli, who defined Europeanization as the set of processes of (a) construction, (b) diffusion, and (c) institutionalization of formal and informal rules, procedures, policy paradigms, styles, ‘ways of doing things’, and shared beliefs and norms which are first defined and consolidated in the making of EU public policy and politics and then incorporated in the logic of domestic discourse, identities, political structures, and public policies. (Radaelli 2003, p. 30)

It is possible to identify the presence of two reasons capable of explaining the original of this definition on the basis of the 1990s’ debate on Europeanization. First, in previous definitions only one aspect of the Europeanization process emerged. In fact, on the one hand, several scholars (Lawton 1999; Risse et al. 2001) defined it only describing the ascendant phase of the process, that is, the construction at the European level of specific structures in order to take decisions on single public policies. On the other hand, some scholars (Ladrech 1994; Paraskevopoulos 2001) interpret Europeanization as a process of adaptation of the political and institutional components of the single domestic structures in order to cope with the rapidly changing European environment. In other words, they focused their attention only on the descending phase of the process. Second, for the first time, Europeanization has been defined not only in terms of what it is, but also indicating what it is not, “drawing the line” between Europeanization and other four concepts that were particularly in vogue in those years in European studies, that is, convergence, harmonization, integration, and policy formation (Radaelli 2003, pp. 33–34). From a theoretical perspective, Featherstone and Radaelli explained that Europeanization should not be considered as a theory in its own right, since “not only is not a new theory, it depends upon the application (and often the adaptation) of existing theories” (Featherstone and Radaelli

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2003, p.  340). In other words, Europeanization “is the phenomenon which a range of theoretical approaches have sought to explain” (Bulmer 2007, p. 47), since it “points the way to a new set of processes and a pluralist research agenda” (Featherstone and Radaelli 2003, p. 340). Therefore, rather than a theory, it has to be considered as a conceptual framework or an analytical approach that the single researcher could use in order to better understand the domestic changes that happen within the single MSs after a new European challenge, as well as the different ways in which Europeanization effectively intervenes to ensure that change of the internal structures is actually realized. For this reason, the literature became primarily focused on two different elements, that is, (1) how the intensity and the direction of the change is determined and (2) how it is possible to explain and interpret these different results. Considering the first element, that is, how the intensity and the direction of the change is determined, several scholars (Börzel 1999; Börzel and Risse 2000; Caporaso and Jupille 2001; Cowles et  al. 2001; Héritier 2001; Héritier et al. 2001; Radaelli 2000, 2003) have all elaborated different concepts able to explain the real results of the Europeanization process. All of them agree that the directions of change can be threefold. There is a total absence of change when domestic actors are completely opposed to introducing the new European practices. Second, a process of adaptation begins the moment in which a simple accommodation of policy requirements occurs without a real modification of the historically adopted procedures. Finally, a “third order” of change (Hall 1993) happens when all the domestic actors not only internalize European rules and procedures, but also totally change their previous logics of action, implying a drastic transformation rather than a mere institutionalization of European rules and procedures. In addition to these three mechanisms, Radaelli (2000, 2003) proposed a fourth paradoxical case, that of the so-called retrenchment. It implies that the Europeanization process could lead to a situation even more divergent than it was before the introduction of a specific EU intervention. Considering the second element, that is, how it is possible to explain and interpret these different results, a largely shared idea by European scholars is that “the degree of adaptational pressure generated by Europeanization depends on the ‘fit’ or ‘misfit’ between European institutions and the domestic structures. The lower the compatibility (fit) between European institutions […] and national institutions […], the higher the adaptational pressures” (Risse et al. 2001, p. 7). According to this line of argument—known as the “goodness of fit” hypothesis—a

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situation in which a strong misfit (or incompatibility) is present can facilitate a transformation of the domestic institutional practices, rules, and settings, since their more rapid change is made possible by the absence of other previous consolidated ones. On the basis of these theoretical contributions—that respectively have analyzed what Europeanization is, and how and why change can happen—several scholars have tried to apply them in the study of different types of domestic public policies that are more or less influenced by the new (external) European pressures. These studies provide in-depth qualitative analysis of the Europeanization of a single public policy in a specific national (Bulmer and Burch 2001; Jordan 2003) or sub-national (Murphy 2007; John 2000) context, or a comparison of the development of the same policy in different European States (Börzel 1999; Grabbe 2001), or a comparison of the development of different policies within the same domestic context (Graziano 2012; Ladrech 1994). Moreover, Europeanization studies involved various types of public policies, that is, agricultural policy (Garzon 2006; Roederer-Rynning 2002), electricity policy (Bauby and Varone 2007; Prontera 2010), immigration policy (Boswell 2008; Faist and Ette 2007), social policy (Graziano 2011; Mosher and Trubek 2003), and so on. The interest of European scholars in the impact of Europeanization in domestic practices also involved Cohesion Policy since the 1990s (Benz and Eberlein 1999; Conzelmann 1998; Hooghe 1996). Using the same theoretical references adopted by the pioneering studies on Europeanization, scholars researching EU structural funds tried to interpret two different dimensions of the change, that is, the administrative and the institutional one. In fact, since the end of the 1980s, it became clear that there could not be an effective regional policy without a profound change in the work of national and local public institutional methods, or through a review of the multi-level governance structure present, in the case in which the latter was not suitable to properly accommodate the new principles of EU policy itself. Therefore, since the early 1990s, Cohesion Policy implementation represented an important opportunity for domestic actors to change their traditional behavior, since in order to respect the rules and constraints imposed by these regulations, change would have been and would have to be a clear incentive for a more efficient management of the development programs. Moreover, the latter would have been required for the maintenance of regional policy itself, since its lack should have resulted in either

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the non-presence of the same policy or a considerable loss of resources. Obviously, since the previous solutions would entail major problems in both political and financial terms, it appears inevitable and essential that the same change, in a more or less marked way, would inevitably happen. Therefore, it is interesting to understand how and to what extent it actually occurred, that is, if only apparently or effectively occurring within the actors involved. Considering the first dimension of change, that is, the administrative one, and regarding my research, the work that best systematized this concept in the study of Cohesion Policy implementation is Robert Leonardi’s well-known book Cohesion Policy in the European Union: the Building of Europe (2005), and in particular its chapter “Cohesion Policy as Learning: The Planning Process and Administrative Responses.” The reason for this is twofold. On the one hand, because the American scholar elaborated an analytical framework in order to assess the administrative responses of the national and regional administrations to Cohesion Policy. On the other hand, because he links the different types of domestic responses not only at the individual level or at the level of organizational structure, but also to management outputs and their ability to stimulate growth and development. In elaborating the framework, Leonardi started from Börzel and Radaelli’s previously mentioned analyses, arguing that in the field of Cohesion Policy, retrenchment is not a possible response, since “the choice of participating in the policy is voluntary, but once that choice has been made the policy applies to all participants, irrespective of their national institutional structures or administrative traditions” (Leonardi 2005, p. 80). In addition he underlined that the availability of new funds is not a necessary condition in guaranteeing a total acceptance of the European rules and procedures by all the actors involved in the implementation of the policy. On the basis of these two assumptions and starting from the previous categories of pace-setting, fence-sitting, and foot-­ dragging and of transformation, absorption, and inertia that were respectively elaborated by Börzel and Radaelli, Leonardi operationalizes three responses that have been generated at the national and sub-national level, terming them negation, adaptation, and learning (see Fig. 1.1). Each of them will be described starting from his words. First of all, Leonardi argued that in adopting a “negation” or “denial of change” strategy,

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Fig. 1.1  Explaining the administrative change: analytical framework for EU Cohesion Policy implementation by type of response, administrative dimension, and type of impact on growth. Source: Leonardi (2005)

the national/regional political and administrative elites have, in essence, rejected the incorporation of the new rules and procedures into the way they manage the implementation of the cohesion policy and undertake to use (or not use) the available funds. Rejection on the part of the administration or political elites may not necessarily constitute an “irrational” response to the new regulations. In fact, the response may be completely rational from an internal administrative and political perspective. […] Thus […], the “costs” to the internal equilibrium within the political institutions and administrative structures are immediate and therefore considered to be greater than the external benefits to be accrued by civil society and the economy in the medium to long term. In this manner, the immediate administrative/political costs outweigh the medium to long-term socio-economic benefits produced by adhering to the rules and principles of the new policy. […] [This] lack of response will most likely lead to a minimal use of available resources and that the net impact on socio-economic change or growth will be low or non-existent. (ibidem, pp. 81–82, emphasis added)

As compared to the “negation” response, the emphasis of the adaptation approach:

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is to accept the formal adoption of the changes but to limit the impact of their implementation in day-to-day administrative behaviour. As with the previous response, the maintenance of the administrative status quo for as long as possible is considered to be a higher good than the full implementation of the policy. Therefore, the extent of internal changes are reduced to a minimum, and what change is introduced has to be carried out in an incremental and gradual fashion. The outcome of this approach is that the bureaucracy adopts a non-maximizing approach and, therefore, is only capable of engaging in a partial expenditure of the funds due to the lack of adequate planning, management or reporting procedures. The consequence is that only a limited impact is produced on the local social and economic structure. (ibidem, p. 82, emphasis added)

Finally, the third administrative response, that is, learning: reflects a full compliance with the new rules and regulations in an attempt to maximize the impact of cohesion programs. In most cases such a learning response requires a significant restructuring of the available information base and the internalization of the new norms and procedures at the individual level and a substantial modification of existing procedures and behaviour within the organizational structures. The status quo and internal equilibriums are sacrificed to the task of fully implementing the policy in the hope of generating substantial socio-economic impacts on the current economic structure. Immediate administrative/political costs are accepted in the hope of reaping medium to long-term socio-economic results that maximize the development potential of the socio-economic context. (ivi, emphasis added)

Several lessons can be learned from Leonardi’s words. First, the possibility to have access to structural funds does not necessarily imply a change at the individual and structural level, since it happens with a different intensity and only in few cases it also implicates a learning process. In several cases it can also be an intentional choice, since there might be a clear will by the domestic actors not to change or to change to a lesser extent than would be desirable. Reasons can be different, and they can be connected with political, historical, or cultural issues, both at individual level and at the systemic level. In fact, Leonardi assumes that all the three types of responses occur first at the level of individual actors and, if shared by all the actors involved, only later do they become part of the overall structure of the management level. For example, both a radical change in professional behavior and a socialization with the new EU rules and procedures

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represent a precondition for learning. Finally, Leonardi’s framework is not only limited to considering change as such. On the contrary, he assumes changes of different intensities have correspondingly different impacts on growth, that is, none in the case of negation, minimal in the case of adaptation, and maximum in the case of learning. As well as administrative change, several studies on Cohesion Policy were also interested in analyzing the change of the domestic institutions as a result of the EU “adaptational pressures,” going hand in hand with the debate on the validity of the “goodness of fit” hypothesis. As emerged from several empirical analyses in different sectors of policy (Guidi and Casula 2019; Heidenreich and Zeitlin 2008; Zeitlin 2009; Zeitlin and Pochet 2005), the presence of a level of misfit has not been considered as a necessary or a sufficient condition for ensuring an adaptation to the EU standards, assuming that this interpretation is particularly valid in borderline cases, that is, in the presence of a high level of misfit or of a high level of fit. In fact, while in the first case it might be extremely difficult to undertake change and adaptation to new structures, in the second one, the challenge to change would not be perceived as such by domestic actors, and therefore, the incentive for change would be lower. Contextually, change has begun to be considered as an intentional choice by domestic actors, since they are more and more predisposed to the “usage” of the European policies on the basis of their preferences.3 In other words, domestic change must be understood not only on the basis of the starting point of the domestic institutions, but also looking at the political and cultural choices of the main actors involved. In further detail, as Woll and Jacquot argued, three types of usages are present: the cognitive, strategic, and legitimating. According to the authors: cognitive usage refers to the understanding and interpretation of a political subject and is most common in when issues are being defined or need to be discussed, so that ideas serve as persuasion mechanism. Strategic usages refer to the pursuit of clearly defined goals by trying to influence policy decision or one’s room for manoeuvre, helping to aggregate interests and to build coalition of heterogeneous actors – be it by increasing one’s access to the policy process or the number of political tools available. It is the most common of 3  According to the pioneering article of Woll and Jacquot (2003), the term usage covers “practices and political interactions which adjust and redefine themselves by seizing the European Union as a set of opportunities, be they institutional, ideological, political or organizational” (2003, p. 4).

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all types and occurs typically in the middle of the political process, once all stakes are clearly defined. Legitimating usage occur when political decisions need to be communicated and justified. Actors rely on the image of ‘Europe’ to communicate implicit content or employ related discursive figures such as ‘the European interest’, ‘European constraints’, ‘the application of the Maastricht criteria’ to legitimate political choices. (Woll and Jacquot 2010, p. 116, emphasis added)

Moreover, on the basis of their different nature each of the three types of usage would also have mobilized in different phases of the policy process. More in detail: Cognitive usages are generally mobilized during the framing phase of a reform (which entails problem definition and the elaboration of policy alternatives), strategic usages are more concerned with the policy and decision-making phase, while legitimizing usages are linked with the general public and can take place up and downstream of the policy process (during the framing of the diagnosis and the solutions or during the justification of the reform). (ivi, emphasis added)

On the basis of this latter interpretation and considering the high stakes of the community’s resources, it is reasonable to think that Cohesion Policy implementation mobilizes both strategic and legitimizing usages within MSs. On the basis of this assumption, a new interpretation of change in the field of Cohesion Policy that evaluates it on the basis of the domestic use the main actors involved has recently been developed. This interpretation has been more recently systematized by Baudner and Bull. Starting from the same assumption put forward by Wool and Jacquot and adopting an Institutionalist approach in explaining the domestic change as a result of the EU “adaptive pressure,” the two scholars argued that: domestic actors’ strategies […] cannot […] be chosen randomly but are to a large extent based on the existing institutional context or heterogeneity (Deeg 2005). This is particularly the case in a complex policy field such as regional policy with numerous well-entrenched practices and regulations which contrast with the frameworks for policy formulation and implementation embodied in structural funds and their comprehensive requirements in terms of governance and administrative organization. (Baudner and Bull 2013, p. 203, emphasis added)

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Therefore, the more recent contributions in the field of Europeanization and Cohesion Policy share the idea that domestic actors strategically model (or “use”) European policy, and in doing so the strategies adopted are to a large extent conditioned by the main institutional characteristics of the pre-existing domestic context within which they implement the policy. In other words, in accordance with the idea that institutions “are shaped by history,” that they “have inertia and “robustness,” “and that they “embody historical trajectories and turning points” (Putnam et al. 1993, p. 8), it is believed that the strategies of national and sub-national actors, involved in the implementation of European policy, have been to a large part conditioned by the legacies of the past. In fact, as Historical Institutionalists have argued (Krasner 1984; Evans et al. 1985; Steimno et al. 1992; Pierson 2000), real opportunities for change are only possible within the path previously taken, since “history matters because it is “path dependent” […]. Individual[s] may “choose” their institutions, but they do not choose them under circumstances of their own making, and their choices in turn influence the rules within which their successors choose” (Putnam et al. 1993, p. 8). In other words, adopting a similar approach in interpreting the change caused by pressures induced by the new EU rules and regulations, it is reasonable to think that the policy strategies of the actors in implementing Cohesion Policy has been conditioned during the various programming cycles by the original imprinting and that change has been possible only within the limits of the path hitherto undertaken. To sum up, the traditional theories of Historical Neo-Institutionalism and path dependency, as well as the recent literature on Europeanization and EU Cohesion Policy are both important starting points for my analysis, since they allow for a better understanding of change and the direction it can take. Even if it is particularly valid for institutional the administrative change, since they help in understanding the reasons connected with institutional solutions adopted, as well as the way in which the administrative responses take place, it is reasonable to think that the Europeanization push has also covered the second dimension of analysis considered, that is, the one relating to strategic choice, since domestic actors should have aligned themselves with the EU’s strategies. Therefore, again in this case, a cultural change should have been necessary with respect to the strategic choices historically prevalent in order to ensure a distribution of resources consistent with the development logic that should have been pursued.

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1.5.3  Approach to the Analysis In the previous paragraphs I presented the main theoretical and conceptual references within which the analysis started. Based on these, it is necessary to explain in a more detailed manner the approach that I chose to adopt for the empirical research. Based on the choice of using a “working hypothesis,” I first of all tried to find a way to elaborate a “mass of information” that when read together helps in understanding the general thesis. Therefore, according to the working hypothesis methodology, in order to explore my working hypothesis and to gather as much information as possible, I will answer to three different “pillar questions” that have been the object of a specific empirical analysis. Circumscribing the analysis to a different degree of generality, each of them will explore the general thesis adopting the Hirschmanian approach previously presented. They are the following: 1. How did national authorities address the main challenges of the four investigated programming cycles? 2. How did sub-national authorities address the main challenges of the four investigated programming cycles? 3. Which political and institutional factors determine the success and failure of EU Cohesion Policy in terms of administrative performance? First, I will investigate how national authorities addressed the main challenges of the first four programming period, analyzing the institutional solutions adopted, the general choices of political economy taken, and the way in which domestic actors faced the administrative challenges taking into account both the policy solutions elaborated in the single MS and the administrative change of the actors by analyzing their capacity to manage, monitor, and evaluate the funds. The aim of this first empirical analysis is to give an overview of the main positive and/or negative effects that the domestic choices could have for the implementation of Cohesion Policy in Italy and in Spain and their respective underdeveloped regions, from the first programming cycle to the 2007–2013 cycle. The choice to limit the analysis to the first four programming cycles is connected to the fact that the last one was formally closed in March 2017, so it was in line with the empirical research conducted. On the contrary, it is not yet possible to give an actual assessment of 2014–2020 programming period,

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except for the general approach that national and regional actors have decided to adopt. Especially in terms of learning from any difficulties encountered in the previous programming cycle. Considering the general aim of the previous empirical analysis, the subsequent analysis will further circumscribe the range of action reprising the same investigation at sub-national level in four selected regions. In this way it has been possible to investigate the possible implications that the general national choice had in the management of funds at regional level, on the one hand, and the real way in which change happened in the single administrations, on the other hand. In order to answer to this second question, I decided to focus my attention in the first three programming periods. Instead, the 2007–2013 period has been investigated in the most detail, analyzing the general trend of the four ERDF 2007–2013 OPs in terms of programming, project selections, management, monitoring, and evaluation. For each of the five phases of the single regional OP, I assessed their respective performance on the basis of several selected indicators in order to understand which institutional and political factors can determine the success or failure of EU Cohesion Policy in terms of administrative performance. To that end, several factors were taken into account, that is, the political changes, the internal characteristics of the regional structures, the availability and the capacity of the regional and local actors involved, and so on (see par. 2.7 for more detail). Calabria, Campania, Andalusia, and Galicia are the four selected regions. They were classified as underdeveloped regions since the end of the 1980s. While the first two continued to maintain this status, both Andalusia and Galicia were able to come out of a situation of underdevelopment during the 2014–2020 programming period. Moreover, in line with their respective national GDP growth, they faced a different economic performance starting from the first years of the 1990s. For example, according to Eurostat data, in 1988, the GDP per head in PPS (EU15 = 100) was equal to 56 in Andalusia, 59 in Calabria, 61 in Galicia, and 68 in Campania. With respect the previous estimate, in 1994, their GDP was, respectively, equal to +1, +3, +2, and −1. In the following years each of them faced a different economic performance. Even if the new MSs are also included in the calculation, in Calabria the GDP per head in PPS (EU27 = 100) continued to grow until the 2000, and then fall significantly before and during the economic crisis. Indeed, it was equal to 70.7 in 2000, 65.3 in 2006, 64.5 in 2007, 66.4 in 2009, 63.6 in 2011, 59.5 in 2013, and 58.5 in 2014. Campania was involved by a similar trend,

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180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Andalusia

Galicia

Campania

Calabria

Fig. 1.2  Gross domestic product (GDP) at current market prices by Andalusia, Galicia, Calabria, and Campania (2000–2018). Source: Eurostat (Extracted on 30 July 2019)

since its GDP per head in PPS (EU27 = 100) gone from being equal to 77.8 in 2000 to 70.2 in 2006, 69.9 in 2007, 70.0 in 2009, 65.1 in 2011, 62.8 in 2013, and 60.7 in 2014. Among the two Spanish regions, Galicia showed the best economic performance, continuing its positive trend in the 1990s. Moreover, compared to a per head GDP in PPS (EU27 = 100) equal to 74.3 in 2000, its economy continued to grow in the last decade, arriving to a value equal to 88.9 in 2009, and succeeding in attenuating to a minimum the negative effects of the economic crisis. In fact, it was equal to 82.7  in 2011 and to 80.0  in 2014. Similarly Andalusian economy increased from 71.2 to 79.6 before the start of the economic crisis, then switched from 71.2 in 2011 to 67.3 in 2014. As Fig. 1.2 shows, the trend of the four regional economies is also confirmed by analyzing their GDP at current market prices from 2000 to 2015.

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Shields, P. M. (1998). Pragmatism as a Philosophy of Science: A Tool for Public Administration. Research in Public Administration, 4, 195–225. Shields, P.  M., & Rangarajan, N. (2013). A Playbook for Research Methods: Integrating Conceptual Frameworks and Project Management. Stillwater, OK: New Forum Press. Shields, P. M., Rangarajan, N., & Casula, M. (2019a). It is a Working Hypothesis: Searching for Truth in a Post-Truth World (Part I). Sotsiologicheskie Issledovaniya/Sociological Studies, 10, 39–47. Shields, P. M., Rangarajan, N., & Casula, M. (2019b). It is a Working Hypothesis: Searching for Truth in a Post-Truth World (Part II). Sotsiologicheskie Issledovaniya/Sociological Studies, 11, 40–51. Smyrl, M., & Genieys, W. (2008). Elites, Ideas, and the Evolution of Public Policy. London: Palgrave Macmillan. Steimno, S., Thelen, F., & Longdtreth, F. (Eds.). (1992). Structuring Politics. Historical Institutionalism in Comparative Analysis. Cambridge: Cambridge University Press. Svimez. (2015). Rapporto Svimez 2015 sull’economia del Mezzogiorno. Bologna: Il Mulino. Terracciano, B., & Graziano, P. R. (2016). EU Cohesion Policy Implementation and Administrative Capacities: Insights from Italian Regions. Regional & Federal Studies, 26(3), 293–320. Tondl, G. (1998). EU Regional Policy in the Southern Periphery: Lessons for the Future. South European Society and Politics, 3(1), 93–129. Torres, L., & Pina, V. (2004). Reshaping Public Administration: The Spanish Experience Compared to the UK. Public Administration, 82(2), 445–464. Williams, B., & Varghese, J. (2018). Examining the Impact of EU Cohesion Policies Aiming to Reduce Regional and Social Disparities with Examples of Policy Impacts in Ireland. Europa XXI, 35, 89–109. http://doi.org/10.7163/ Eu21.2018.35.6. Woll, C., & Jacquot, S. (2003). Usage of European Integration – Europeanisation from a Sociological Perspective. European Integration Online Papers (EIoP), 7(12). Woll, C., & Jacquot, S. (2010). Using Europe. Strategic Action in Multi-Level Politics. Comparative European Politics, 8(1), 110–126. Zeitlin, J. (2009). The Open Method of Coordination and Reform of National Social and Employment Policies: Influences, Mechanisms, Effects. In M.  Heidenreich & J.  Zeitlin (Eds.), Changing European Employment and Welfare Regimes: The Influence of the Open Method of Coordination on National Reforms. London: Routledge. Zeitlin, J., & Pochet, P. (Eds.). (2005). The Open Method of Coordination in Action: The European Employment and Social Inclusion Strategies. Brussels: Peter Lang.

CHAPTER 2

Understanding the Rules of the Game: How Cohesion Policy Works

2.1   Introduction In the previous chapter, I presented Cohesion Policy as a case of development policy, describing its birth and its main characteristics in the first years of its being. Contextually, I discussed that the study of this policy allows for comparison of its implementation in different Member States (MSs), since the EU regulations provide for specific “rules of the game” that national and sub-national domestic actors have to respect in implementing it: the margins of maneuver that they have in order to model it according to their policy legacies and their interests are conditioned by several European rules. In addition, I argued that, over the course of subsequent programming periods, these rules are often changed and that the implementation of the policy has alternated moments of extreme decentralization, in which regulations assigned several responsibilities to sub-­ national actors, to others in which the same responsibilities were assigned to national actors. Contextually, the relationship between European institutions and national actors is also often changed, since the former has exercised a more or less direct influence in domestic choices from the 1988 to the present. The aim of this chapter is to describe the evolution, from 1989 to the present, of the “rules of the game” within which Italian and Spanish actors could model the policy according to their domestic contexts. In order to accomplish this, three elements will be analyzed in-depth. After presenting © The Author(s) 2020 M. Casula, Economic Growth and Cohesion Policy Implementation in Italy and Spain, International Series on Public Policy, https://doi.org/10.1007/978-3-030-36998-9_2

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the antecedents of EU regional policy before the 1988 reform (Sect. 2.2), Sect. 2.3 will discuss how the four basic principles of EU structural funds (i.e., geographical concentration, programming, partnership, and additionality) have changed throughout the five programming periods. After presenting the transnational dimension of the policy (Sect. 2.4), through an analysis of the debate on Cohesion Policy reforms and the relative dynamics of negotiations of these reforms, Sect. 2.5 will analyze how the rules of the European and domestic actors changed in the five programming period for the management, monitoring, and evaluation of structural funds. Section 2.5 will present the single institutional, strategic, and administrative challenges introduced by the EU regulations in each programming period. This information will also provide a set of standards for the way in which the empirical analysis in the Italian and Spanish case was conducted. The latter will be further systematized in the final section, which will explain how they were used in order to answer each of the three questions I elaborated to collect a “mass of information” to explore my theory. In general, in line with other studies on EU policies, the analysis will benefit the traditional dichotomy centralization (in the hands of the European institutions) vs. decentralization (in the hands of the domestic actors), which can be useful to understand when the domestic actors had a greater autonomy in modeling the policy according to their preferences, and when they had the possibility to more or less directly influence the same policy during the multi-decade history of the policy.

2.2   Toward the 1988 Reform: The Antecedents of EU Regional Policy As introduced in Chap. 1, the 1988 reform represented the last phase of a process of revision of the European regional policy, which is still ongoing. Two other phases can be identified in the policy’s history, which establish its basic principles and make it easier to understand the logics of actions of the Cohesion Policy. Therefore, it is necessary to introduce the main characteristics of European regional policy from the 1950s to the 1980s in order to understand its origins and primary characterizing features. The first phase in the history of European regional policy coincides with the birth of the policy, and, temporally, with the years following the signing of the Treaty of Rome. During this period, three policy instruments were established, that is, the European Investment Bank (EIB), the

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ESF, and the EAGGF. While the first two were created in 1957, by the same treaty, the third was set up some years later by the Council Regulation No 25 of 20 April of 1962 “in order to enable the common organization of agricultural markets to attain its objectives” (Art. 1). On the contrary, while the ESF was created “in order to improve employment opportunities for workers and to contribute to the raising of their standard of living” (Art. 3, comma i), “the task of the European Investment Bank shall be to contribute […] to the balanced and smooth development of the Common Market in the interest of the Community” (Art. 130). In other words, the EIB was the unique financial instrument created in these years in order to facilitate the financing of: (a) projects for developing less developed regions, (b) projects for modernizing or converting enterprises or for creating new activities which are called for by the progressive establishment of the Common Market where such projects by their size or nature cannot be entirely financed by the various means available in each of the Member States; and (c) projects of common interest to several Member States which by their size or nature cannot be entirely financed by the various means available in each of the Member States. (Art. 130)

Although the two funds and the financial instruments were formally operational, in the first decade of the EEC, regional policy was essentially unknown. According to Manzella and Mendez (2009, pp. 5–6), the reasons were threefold. First, MSs were reluctant to develop a new regional policy due to both the previous low use of similar domestic practices and the excessive political relevance of this European issue. Second, an economic orthodoxy prevailed within MSs. In fact, the latter continued to be convinced that convergence should be achieved by promoting interregional trade. Third, there was the great expectation that the fledgling World Bank could facilitate the rebalancing of disparities in Europe. In fact, it was created in 1944 and the 1950s represented the years of its maximum activity. Therefore, “it wasn’t until the early 1970s […] that a convergence of economic and political developments enabled the regional policy issue to rise to the top of the EC’s agenda” (Baun and Marek 2014, p. 13). Several economic, institutional, and political reasons help in understanding why (ibidem, pp. 13–14). First, the increasing importance of the EEC in the issue of the regional policy emerged with the creation, in 1968, of the DG Regio XVI. Second, in order to pursue the goal of EMU, after the 1962

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Hague Summit, it is found to be essential to solve the issue of the regional disparities in Europe. This problem was also emphasized after Great Britain, Ireland, and Denmark’s entries into the EEC in 1973. On closer inspection, already two years before the first enlargement, the Council approved a Commission’s plan to increase funds for the poorer regions, limiting therefore the amount of aid allocated for the more developed ones. As a consequence, this cut generated a new and unusual increased interest among MSs, with inevitable consequences within community-­ wide debate. Moreover, to these factors endogenous to the EU, several additional exogenous factors were added. These were connected with the oil crises of the 1990s, whose negative impacts were inevitably felt in regional economic growth. MSs’ interest in the issue of the European convergence clearly emerged, in 1972, during the Summit of Paris. In fact, at the end of the meeting, they clearly invited “the Commission to prepare without delay a report analysing the regional problems which arise in the enlarged Community and to put forward appropriate proposals” (CEC 1973, p.  1). The Commission’s answer immediately arrived with the publication, in May 1973, of the Report on the Regional Problems in the Enlarged Community, commonly known as Thompson Report (from the name of George Thompson, i.e., the new British Commissioner for Regional Policy). It “recognized the need for a Community regional policy to be implemented in conjunction with states’ own policies” (Bache 1998, p. 38). For these reasons, it also provided a set of guidelines for the reinforcement of a Community Regional Policy, based on the concepts of additionality of the resources, cooperation between MSs and EEC, and coordination of the various national policies within a common framework. More specifically, Community regional policy cannot be a substitute for the national regional policies which Member States have been conducting for many years. It must complement them with the aim of reducing the main disparities across the Community. For this reason the effectiveness of the Community’s policy will also depend on the close cooperation of Member States: the activities of Member States in the regional field, whether economic, social or cultural in fact from an indispensable basis for the mobilization of financial resources for regional development. […] Since overconcentration of economic activity in some regions, a major social and economic problem which tends to become more and more acute, the Community as well as giving aid to the poorer regions, should seek agreement between the Member States on common policies to reduce concentration in the congested regions. […] If

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Community regional policy is to be successful, it requires not only new incentives and disincentives but coordination of the various common policies and financial instruments which exist at Community level with a view to their improved utilization for regional objectives. […] In order to facilitate this coordination, a Community Regional Development Committee should be set up […]. In carrying out these tasks, the closest cooperation with the social partners in the Community should at all times be maintained and developed in ways to be determined shortly. (CEC 1973, pp.  12–13, emphasis added)

Moreover, on the basis of these guidelines, and taking note that during the Paris Summit “the Heads of State or of Government agreed that a high priority should be given to the aim of correcting, in the Community, the structural and regional imbalances which might affect the realization of Economic and Monetary Union” (ibidem, p.  1, emphasis added), the Thompson Report recognized that this aim should be realized through the creation of a new policy instrument: The principal vehicle for mobilizing Community resources as a complement to actions presently carried out in the Member States should be the Regional Development Fund. The assistance of the Fund should be devoted entirely to the medium and long term development of the less developed and declining regions within the Member States, with the aim of bringing about self-­sustaining growth. (ibidem, p. 13, emphasis added)

As a consequence, in 1975, the ERDF was officially established, following lengthy negotiations which lasted two years. Its aim was “to strengthen economic and social cohesion in the European Union by correcting imbalances between its regions.” Despite its great ambition, in the first years after its creation, the results achieved by this new fund were very modest. According to Brunazzo (2016, p. 19), the reason was threefold, and it was to a large extent conditioned by the excessive role the national government continued to have. In fact: it was considered a compensatory measure for net contributors to the Community budget; its budget of 1.3 billion EUA (European Units of Account) (around 5 per cent of the Community budget) was too small to play a significant role; the Council of Ministers was in charge of defining the budget on the basis of national quotas annually negotiated between the MSs, without targeting regions that were lagging behind in terms of development. (ivi)

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All the events discussed above have described the history of the first phase of European regional policy. It coincided with the creation of the instruments through which the objectives of the policy should have been pursued. Moreover, in these years there has been the attempt to introduce in the management of the EU funds new principles that continue to be present, such as the principle of additionality (Šlander and Wostner 2018). Nevertheless, the analysis showed that for at least 20 years the implementation of these funds produced only modest results. On the contrary, a new phase of consolidation of the policy started at the end of the 1970s. It can be defined as the second phase in the history of Cohesion Policy, and it was a springboard for the 1988 reform. In fact, even if it did not substantially reform the structure of the policy, this phase gave a major boost to consolidation of the policy within both the MSs and the European Institutions. It was realized through two different reforms, made in 1979 and 1984, respectively. The 1979 reform first of all introduced the so-called non-quota section, providing the EEC with the possibility of using 5% of the ERDF quota in order to finance specific interventions in underdeveloped areas beyond national priorities. On closer inspection, the introduction of this provision did not reinforce the role of the Commission. In fact, this new amount of resources “was to be distributed subject to unanimous agreement in the Council, rather than by qualified majority voting as proposed by the Commission” (Bache 1998, p. 55). Contextually, the Commission hoped for the reinforcement of the concepts of additionality and integration between the funds and the EIB as a necessary condition in order to improve local and regional development. This aim was to be realized through the use of Integrated Development Programs (IDP).1 By contrast, the 1984 reform introduced five changes “primarily aimed at increasing the Community orientation of the policy” (Manzella and Mendez 2009, p. 12). First, it provided an increase in the money allotted for the financing of the ERDF, which at the middle of 1980s came to be around the 10% of the annual budget. Second, a new system of indicative minimum and maximum ranges was created in order to stimulate all MSs to present a minimum number of development initiates. Third, there was an extension of the field of application of the eligible expenditure in order to also include intangible investments. Fourth, the discretion of the 1  Two cases of Integrated Development Programs were experimented in Europe during the 1970s in two big European cities, that is, Belstaff and Naples.

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Commission in project selections increased. Finally, the previous programming approach of the Commission was reinforced, providing an increase of 20% of the total funding for these practices. In more detail, during the second half of the 1980s, the principle of integration should be primarily realized with the use of two new instruments, that is, the Community Programmes (financed in the same way as the previous mentioned “non-quota” section) and the National Programmes of Community Interest (domestically elaborated in order to solve specific regional problems). Moreover, it was later reinforced through the creation of two new experimental forms, that is, the Integrated Development Operations (IDOs) and the Integrated Mediterranean Programs (IMPs). The former were introduced by Article 34 of the 1787/1984 ERDF Regulation, and they allowed the Commission the possibility to elaborate, in concert with the national and the sub-national governments, development projects financed by all the three funds. During the years 1987, 1988, and 1989, 13 IDOs were financed. On the other hand, the IMPs—introduced by the EC 2088/1985 Regulation— represented the most mature example of integrated planning that had heretofore been realized. In fact, as Leonardi and Nanetti argued (2001, pp.  339–340), they were the most important not only from a quantitative point of view, that is, in terms of both financed projects (29 in 3 countries) and total funds invested (just under 7 billion), but also in terms of the policy innovations they introduced. In fact, within the more general aim to consolidate the diffusion of the inter-sectorial approach in the co-management of the three structural funds, they introduced two important innovations related to both the monitoring of the policy and the partnership between the actors. With respect to the former, it formally recognized at the regional level the figure of the Monitoring Committee (MC). Formally composed by representatives of the region, the national government, and the Commission, MCs had the responsibility for the general management of the IMP, along with the requirement to conduct the ex-ante and the ex-­ post evaluation of the financed projects. In addition, it reinforced the partnership practices, both vertically (between domestic actors and the Commission and between national, regional, and sub-regional actors) and horizontally (between regional actors with a different institutional nature). For example, a formal agreement between the Commission, the national, and the regional governments was necessary for each strategic decision of the IMP. Moreover, opting for a new pyramidal structure of the program

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(i.e. divided into sub-programs, measures, and projects), it required the involvement of institutional, socio-economic, and third sector actors in the formulation, implementation, monitoring, and evaluation of each single intervention. To sum up, all the measures introduced during the second phase reinforced two important principles that characterized the following 1988 reform, that is, partnership and the integration of funds. The evolution of four basic principles of EU structural funds from the first programming period to the present will be in-depth described in the following paragraph.

2.3   The Evolution of the Basic Principles This paragraph will present the way in which the main characteristics of the four basic principles of the EU structural funds changed from the first programming period to the present. The aim is not only to present and to discuss how they evolved in the period considered, but also to understand the main difficulties that MSs have found in their implementation. In other words, it will provide information about the general context within which the funds were implemented by the Italian and Spanish actors. 2.3.1  Geographical Concentration The geographic concentration of resources is “the key principle underlying the effectiveness of cohesion policies” (CEC 1996b, p. 116). According to Art. 12 of Regulation n. 2052/1988, the use of the structural funds should be directed toward major objectives and the socio-economic most problematic situations, targeting the budgetary resources in favor of the underdeveloped regions. In more detail, through concentrating resources, the Union has been able to mobilize funding to have a significant impact on the worst-affected areas and social groups. More generally, concentration of support on physical and human capital has ensured that, in all Member States, each ECU from the Community is specifically targeted on investment for the future. (CEC 2001a, p. 116)

In order to apply this principle, structural funds have to be concentrated in specific objectives that have been subject to change over the course of the five programming periods. The 1988 reform provided six objectives, of which three were regional and three were community-wide.

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Postponing the analysis of their eligibility and amount for the next pages, what is presently important is to underline the different nature of the two types of objectives in connection with the analysis of the concept of concentration. In fact, while the first three objectives interested only single European regions that presented one of the abovementioned critical situations, the community-wide objectives allocated funds at the national level for each of the EU MSs. The first three objectives, for which 85% of the funding was used, included lagging regions—including rural areas (Objective 1), industrial areas affected by decline (Objective 2), and rural areas (Objective 5b). The remaining 15% was assigned to the three community-wide objectives in order to reduce the long-term unemployment (Objective 3), help individuals under the age of 25 enter the labor market (Objective 4), and promote the adjustment of the fisheries and of the agricultural structures (Objective 5a). In addition, the Commission decided to allocate the 15% of the ERDF resources to the so-called Community Initiatives (CIs). These were a development of the 1984 experience of both the Integrated Mediterranean Programs (IMPs) and the non-quota section, since they were directly managed by the Commission and they focused on specific lines of action that were assumed to have an added value for EU interventions. For example, the aim of the RECHARD CI was to help the social and economic conversion of coal-mining areas that saw large losses of jobs. Successively, the other 11 CIs were elaborated. For example, they covered measures aimed to support the cooperation between areas on different sides of national borders (INTERREG), to improve the use of advanced telecommunications (TELEMATIQUE), to promote the economic and environmental development (EVIREG), and so on. Programming period after programming period, the seven objectives have been subject to alterations. Even if the Regulation n. 2081/1993 did not alter the nature of the previous three, it introduced another objective, that is, the so-called Objective 6, in order to take into account Austria, Sweden, and Finland’s entry into the EU. The latter were three areas with low population density. In order to promote the integration of the people at the risk of exclusion from the labor market, the new Objective 3 merged the previous Objectives 3 and 4. As a consequence, a new Objective 4 was created in order to facilitate the workers’ participation in the industrial developments and in the evolution of production systems. Moreover, the category “In transition” was created in order to support the exit of the previously underdeveloped regions from Objective 1. For the period

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1994–1999, it only included one region: the Italian Abruzzi. During the negotiation phase, the CIs were an issue of discussion, since MSs called for both a rationalization of the procedures and a greater involvement in their management. After a long consultative process lasting about two years (CEC 1993, 1994), the adoption of 13 CIs that covered 7 specific priorities, that is, cross-border, transnational, and interregional cooperation, employment, fisheries, outermost regions, regeneration of industrial areas, rural and urban development, and around the 9% of the resources was opted for. In 1995, the PEACE Initiative for Northern Ireland was launched by the Commission. In order to reduce the complexity that characterized the first two programming periods, Regulation n. 1260/1999 provided only three Objectives, aimed at promoting the development of the underdeveloped regions (Objective 1), facilitating the economic and social reconversion of the problematic areas (Objective 2), and supporting the adjustment and the modernization of education, training, and occupation policies (Objective 3). With respect to the 1994–1999 programming period, while Objective 1 merged the previous Objectives 3 and 4, Objective 5b flowed into Objective 2. Moreover, the category of transition regions was extended to support the regions under the “phasing-out,” that is, recipients of funding under Objective 1 in the previous period but whose GDP per capita had increased beyond the threshold of 75%. Beside them, for the 2000–2006 programming period, there has been a rationalization of the CIs, that above all covered their numeric quantity. In fact, only four CIs were created with the aim of solving specific problems that characterized European regions: LEADER+ promoted rural development; INTERREG III stimulated cross-border, transnational, and interregional cooperation; EQUAL fought inequalities and discrimination in the job market; URBAN II supported urban and cities’ regeneration. The Objectives of the regional policy were further modified during the last two programming periods. In fact, during the 2007–2013 programming cycle, aid was directed toward three Objectives. First, the “Convergence Objective” replaced the previous Objective 1. Its aim was to accelerate the convergence among the MSs and the less developed European regions. Second, the “Regional Competitiveness and Employment Objective” (RCE), that absorbed the previous Objectives 2 and 3, was created in order to strengthen these issues in the regions out the Convergence Objective. In detail, it tried to solve the problem of “micro-zoning” (CEC 2014, p. 185), that is, the tendency to solve a circumscribed problem, limiting the aid to its area without investing also

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in the surrounding territories. Third, the European Territorial Cooperation Objective included the three previous CIs in order to reinforce cooperation between local and regional actors and the creation of transnational and trans-regional projects. Moreover, in addition to the “phasing-out” regions, a new category was created, that covered the so-called pashing-in regions, that is, those that had a GDP per capita greater than the 75% of the EU-15 average. Finally, in the actual programming period, while not changing the nature of the 2007–2003 Objectives, the previous categories respectively changed their name in: “Less Development Regions,” “In transition,” “More Development Regions.” In addition, three CIs should be used in order to achieve the objective of the ETC, that is, URBACT, which encourages sustainable urban development; ESPON, which hopes for the creation of a European applied research network; and INTERACT, that provides support for cooperation programs. To sum up, during the five programming periods, Cohesion Policy has tried to respect the concentration principle, creating specific Objectives in order to stimulate convergence of the European regions. In fact, as discussed in the previous chapter, the growth of the latter has always been a priority for the EC. This is, for example, confirmed by the analysis of the distribution of the aid as demonstrated in Table 2.1, which shows that it has been concentrated above all in the less developed regions: “if the Cohesion Fund is included, the share going to these regions has changed very little since 1989, from 76% in 1989–1994 to 73% in 2014–2020, though with a high of just over 80% in 2007–2013” (CEC 2014, p. 187). Table 2.1  Distribution of funding between categories of region, 1989–2020 %

1989–1993 1994–1999 2000–2004 2004–2006 2007–2013 2014–2020

Less developed Transition More developed Cohesion Fund Less developed and Cohesion Fund Total EU

73.2 0.0 23.6 3.1 76.4

61.6 0.2 27.4 10.8 72.4

63.6 2.6 24.3 9.4 73.1

63.2 2.0 19.1 15.7 78.9

59.0 7.5 12.9 20.7 79.7

53.5 10.8 16.6 19.2 72.8

100 EU-12

100 EU-15

100 EU-15

100 EU-15

100 EU-27

100 EU-27

Source: CEC (2014, p. 187)

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2.3.2   Programming According to Art. 9 of Regulation n. 1260/1999, programming “means the organizing, decision-making and financing process carried out in a number of stages to implement on a multiannual basis the joint action of the Community and the Member States to attain the [priority] Objectives” identified in each programming period. In other words, this principle includes all the actions made by the domestic actors in order to implement a specific development program, from the moment of its submission to the Commission and its subsequent approval, to the approval, implementation, monitoring, and evaluation of the single projects. The underlying philosophy of the programming principle was not altered during the five programming cycles. Nevertheless, it is possible to identify several changes that covered both the duration of each programming cycle and the procedures for the submission to the Commission of the OPs for their successive approval. The first programming period lasted five years. The 1989–1993 procedures for the approval of the domestic development programs were very long and complex, covering three different phases. First, by six months after the demarcation of the eligible areas, national authorities should have prepared a preliminary document in which they underlined the domestic necessities and the possible financial, thematic, and territorial intervention strategies. The latter opened the way for the successive CSF writing and negotiation between the Commission and the MS, that should have concluded after a period of six months. After the CSF approval, national and sub-national authorities should have prepared their OPs that Commission should have evaluated for final approval. Due to the complexities encountered during the first negotiations, since the second programming period—which lasted six years, from 1994 to 1999—the Commission allowed the MSs to present a Single Programming Document (SPD), within which they should explain their development plans and a first draft of their OPs, that should be subsequently approved. The use of the SPD should not have included the programs that were covered by the Objective 1 areas. On the contrary, for these areas, the preparation of the CSF and of the single OPs also continued during the 1994–1999 programming cycle. It is clear that the choice to use the SPD, even if it should have expedited the approval procedures, would have required that all the national authorities should have enough administrative capacity in order to be able to immediately elaborate a long

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strategic and programmatic document. The lack of this administrative capacity can probably explain the reduced use of the SPDs, since it was used only in Belgium, United Kingdom (UK), and the Netherlands. The use of the CSF and of the OPs also continued during the third programming cycle—which lasted seven years, from 2000 to 2006—for the Objective 1 OPs with above €1 billion. On the contrary, the smaller ones and the OPs for the Objective 2 and 3 areas would use the SPD procedure introduced in 1993. Moreover, in order to oversimplify the programming stage, the Commission required that the information of the sub-priorities of interventions would no longer be due to be included in the single programs. Rather, a new Program Complement (PC) document was created with the aim of explicating the context of the priority axes of the OPs, by describing in depth the measures provided and quantifying their indicators and objectives (CEC 2001b, p. 4). The programming of interventions underwent a substantial change after the negotiations for the 2007–2013 programming period. As will be better explained in the description of the management phase (par. 2.5.1.), during the four programming cycles, several measures were introduced in order to simplify the rules for the management of the structural funds and to make them more strategic in nature. In order to realize this aim, it was opted for a greater decentralization in the management of the funds. The latter also implied a drastic change in the orientation of the Commission as concerned the programming phase. In fact, the previous system based on the use of the CSF, the SPD, and the PC was eliminated and replaced by a new multi-level system. This new system also changed the role of the Commission in the programming phase, since its task is not longer to verify in detail the congruence of the contents of the single OPs. On the contrary, it should be to verify the congruence of the community’s new orientations with the documents that domestic actors should bring to the attention of the Commission for their approval. In fact, the new procedure started with the definition of a set of Community Strategic Guidelines (CSGs) elaborated by the Commission, within which both the main objectives and the principles for the use of the structural funds were present. In elaborating the CSG, the Commission, in October 2006, also consulted the MSs before the formal approval by the Council. The latter opened the way to a second phase, during after five months of which the domestic actor should prepare, in line with the CSG and in concert with the Commission, a National Strategic Reference Framework (NSRF) for the “Convergence”

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and the “Regional Competitiveness and Employment” Objectives. The following approval by the Commission of the single NSRF should not be done for all the document, but only for single aspects. Finally, the single OPs should be designated according to the national strategic orientations declared within the NSRF. In this case, the task of the Commission should be to verify the congruence of the OPs with the respective NSRF, and it could have asked more questions to the domestic actors before their final approval. The programming of the interventions underwent a new change during the ongoing programming period (2014–2020), for both the process of approval of the national and sub-national documents and the nature of the support that the Commission gave to the domestic actors for their elaboration. The previous CSG was first replaced by a Common Strategic Framework (CSF) that was adopted by the Commission (but without a formal approval from the Council) and that contained several guidelines for the MS for the preparation of the domestic documents. Instead of the NSRF, the MSs should prepare—in cooperation with the sub-national actors and in dialogue with the Commission—a Partnership Agreement (PA), which should include several performance indicators in accordance with the new regulations and in line with the Europe 2020 objectives (McCann and Ortega-Argilés 2015; Medeiros 2017; see also the implementation phase). If their first proposal was not totally aligned with the CSF, PAs should be approved within four months of their formal submission, and during this period the Commission could ask additional information or requests to the MSs. Lastly, the procedure for the approval of the single OPs was very similar to the one of the PA. In fact, they would have to be finally approved within six months of their presentation, and by three months the Commission should have sent them a first review of the documents, on the basis of their congruence with both the respective national PA and the European CSF. To sum up, the programming principle contributed to introduce a new idea of the way in which regional development should have been made within the single MSs, since structural actions should have been designed on a multiyear basis and no longer on an annual one. Its basic philosophy was that in order to pursue a coherent development strategy, the interventions should have been programmed within an adequate period. The latter has always proved to be longer, since it was first fixed as five years for the 1989–1993 programming period, as six for the 1994–1999 one, and finally as seven for the following three. Moreover, the Commission

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has always played a guiding and controlling role for the national actors in the different stages of the elaboration of the domestic development strategy. This began at the first moments of its preparation, in order to encourage the national actors in the real application of the partnership principle, as well as to accompany them toward a clear definition of the specific development objectives, the priority axes of intervention, the financial plan, and the basic information for the definition of the OPs. 2.3.3  Partnership Since the 1988 Reform, the partnership principle has been considered as an essential instrument in order to “make regional policy more effective by involving formally the local and regional (sub-central) actors most familiar with the problems and priorities of targeted regions” (Bache and Jones 2000, p. 1). Art. 4 of Regulation 2052/1988 defined it as a “close consultation between the Commission, the Member State concerned and the competent authorities designated by the latter at the national, regional, local or other level, with each party acting as a partner in pursuit of a common goal (emphasis added).” In other words, since its first designation, this principle required that all the different levels of governance collaborate in all the phases of the policy implementation, covering “the preparation, financing, monitoring and assessment of operations.” Several studies pointed out that during the first programming period, the partnership principle was interpreted as an instrument in order to empower the role of the regions within the European arena, since local and urban actors participated less in the community’s affairs (Hooghe 1996; Marks 1993; Nanetti 1994). Nevertheless, the same studies showed a different involvement of the regional actors not only between the single Member States, but also in the single phases of the policy process. For example, Marks (1996) showed that the regional actors were involved only in the phases of formulation, implementation, and monitoring of the OPs. According to Bache and Jones (2000 p. 17), the different degree of regional empowerment depended “on the internal resources of the region itself [and] on the territorial structure of the state, specifically, the relation between the centre and different peripheries.” For this reason it is possible, for example, to justify the greater application of this principle in Germany (Börzel 1999; Sauer 2019), that is, a federal state with a greater tradition in the relations of cooperation between state and regions.

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Since 1993, this “vertical” dimension of the partnership principle has been placed side by side with another dimension, that is, a horizontal one, that called for the involvement of the socio-economic actors and the private sector in the three previously mentioned phases (Bauer 2002). Obviously, the ambition to try to reduce the democratic deficit by opening the participation to the economic and social groups in the designation, implementation, monitoring, and evaluation of the policy had to be balanced with the possible degree of misfit in partnership arrangement within several European States. For this reason, in the 1993 reform of the structural funds, the European Commission (CEC 1993, p.  19) clearly specified that the participation of the socio-economic partners “designated by the member state” should be realized within its framework. Consequently, the “partnership” principle has required to be also analyzed by looking at the evolution of the role of the European actors, above all those at the sub-national level. Regarding this, Fargion et  al. (2006, p. 759) pointed out that the new involvement of the public and private actors contributed aligning concept of “regions-as-actor” with that of “regions-as-arena.” In fact, while the first programming period required at the regions to “give a single voice, at a national and supranational level, to the interests of its territory” (ivi), the establishment of this new horizontal dimension also structured “a set of recurrent patterns of relations among actors, private and public, within each region” (ivi, emphasis added). During the second programming period, the application of the partnership principle underwent substantial progress within all the MSs. It clearly emerged within the final synthesis report of The Thematic Evaluation Report of the Partnership Principle, prepared, in February 1999, by the Tavistock Institute Evaluation Development and Review Unit with the assistance of experts of each MSs and of ESOTEC Research and Consulting Ltd (Kelleher et  al. 1999). It showed that “partnership itself has developed from being a statutory relationship between the Commission and the Member State, to a wider formal mechanism for program monitoring involving social and other sectorial or regional partners in the form of the Monitoring Committee” (ibidem, p.  156). Nevertheless, the same two criticalities that were found during the 1989–1993 programming period continued to be present. On the one hand, “the degree of decentralization and the type of de-concentration occurring in the different Member States inevitably shape[d] the relations between key actors within partnerships and determine[d] the competencies and composition of partnerships”

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(ibidem, p. 11). On the other hand, differences have been found in the participation of the partners in the single stages of the policy cycle, with a “more important role […] at the planning and project selection stage, a variable role […] for various operational tasks, and a less developed role for the full formal partnership in terms of monitoring and evaluation” (ibidem, p. 156). From the third programming period, the horizontal dimension of the partnership principle was improved through the involvement of new actors in addition to the participation of the social ones, that is, the environmental partners and gender equity organizations. The aim was to guarantee a total participation to all the national and regional actors that usually operate in priority sectors of the EU Cohesion Policy (for more detail, see Catalano and Graziano 2016; Fargion and Profeti 2016). In order to realize this goal, the Commission also explicitly asked the MSs to consult all the partners in the phases of management, monitoring, and evaluation of the Ops. This should be realized through the elaboration of specific plans for the involvement of all the partners within the MCs. These plans should be approved by the Commission contextually to the CSF and the single OPs. In addition, also during the drafting of the SPDs, the partners should be consulted. In November 2005, the DG REGIO published a discussion paper about the implementation of the partnership principle during the 2000–2006 programming period within MS. Based on the results of a survey of social partners, the aim of this study was to understand their role in all the phases of the programming cycle. The results showed that the method of application of the partnership principle was not fully transparent and clearly defined. More in detail, although it [was] clear from the analysis that a wider range of partners than ever before [was] involved in cohesion policy, in some cases, the involvement of partners at different stages of the programming cycle [was] not considered as equally necessary and sometimes [was] even seen as causing an additional burden on time and resources. It [was] not always clear whether the selection of partners [was] based on their specific expertise or on political preference. Some partners indicated a preference for matching the specific expertise of the partners with a particular stage in the programming cycle for maximum impact and efficiency. Many partners felt that their role was little known or recognized with little public awareness of the issue. (ibidem, p. 12)

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The empirical evidence which emerged from this study represented a ground for discussion also during the negotiations for the following regulations. In fact, the persistent problems in the application of the partnership principle within several MSs also encountered during the 2000–2006 programming cycle were considered to be even more alarming after the forthcoming participation of the new Eastern MSs to the EU’s programming. The most important news introduced by the regulations for the application of this principle during the 2007–2013 programming cycle was two. On the one hand, the possible types of partners should also include “any other appropriate body representing civil society, environmental partners, [and] non-governmental organizations” (OJEU 2006, p.  39). On the other hand, partnership has gone from being a simple close consultation to a close cooperation, and its application should have been strengthened in all the phases of both the NSRF and the subsequent OPs. In addition, Commission interest in the partnership issue was not only limited to formal introduction of these rules. On the contrary, it intensified during the strategic years of the implementation of the fourth programming cycle. In fact, the European institutions were apprehensive about the unequal implementation of this principle across the new and the old MSs. Therefore, in order to stimulate the use of the partnership practices, in 2012 the Commission published a Commission Staff Working Document that should help MSs in the implementation of this principle, by providing them a set of elements for a European Code of Conduct on Partnership (CEC 2012). For these reasons, it started in presenting the added value that the application of the partnership principle should have within a multi-level context, since it “helps to reduce coordination and capacity gaps in policy making in terms of information, resources, funding, administrative and policy fragmentation” (ibidem, p. 3). Contextually, it emphasized the benefits of the partnership in “enhancing collective commitment and ownership of EU policies, increasing the available knowledge, expertise and view-points in the strategies’ design and implementation, as well as ensuring greater transparency in decision-making processes” (ivi). Moreover, it suggested that its difference depended “on national institutional set-ups and political cultures […] [and] on the technical ability of the partners to contribute substantively to the process, raising the question of capacity-building (ibidem).” In other terms, the Commission clearly explicated that the incorrect implementation of the partnership principle does not only depend on political and cultural

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elements. On the contrary, issues concerned with the technical knowledge of the funds by the partners and their capacity to mobilize their respective common interests have to be considered as possible causes of this implementation gap. For this reason, the Working Document also provided specific recommendations to the MSs in order to help them (1) to decide which partner to select and how to guarantee assistance to them; (2) how to involve the partners in the preparation of the programming documents, as well as in the implementation phase and the evaluation one; and (3) how to guarantee a continuous exchange of good practices. Subsequently, these recommendations were formalized within the Commission Delegated Regulation 240/2014 on the “European Code of Conduct on Partnership in the Framework of the European Structural and Investment Funds,” which provided several indications for the implementation of the principle during the 2014–2020 programming cycle. For example, Art. 5 clearly specified that also the urban and other public authorities “shall be involved by Member States in the preparation of Partnership Agreements and progress reports and throughout the preparation and implementation of programs, including through participation in the monitoring committees for programs.” Moreover, the PAs—that “shall be drawn up by Member States in cooperation with the partners” (Art. 14)—shall set out “an indicative list of the partners […] and a summary of the actions taken to involve them […] and of their role in the preparation of the Partnership Agreement “ (Art. 15) and in its progress reports that MSs shall submit to the Commission by 31 August 2017 and by 31 August 2019. In other words, the new regulations confirmed not only the technical vision of the partnership principle, its political vision as well. Since the start of the negotiations, it was clear that the application of these new prescriptions around all the MSs should be an ambition, because of the lessons of the previously mentioned reports that clearly showed the limits of the application of the principle. For this reason, the Commission specified that the provisions of this new code of conduct should be implemented in accordance with the institutional and legal framework of each MS. To sum up, since 1988, the partnership principle has been subject to several changes. If in a first period it was used to promote multi-level governance among supra-national, national, and sub-national actors, its further adjustments tried to guarantee a complete inclusion of public and private actors, as well as of the civil society, by stabilizing democratic practices over the MSs, above all after the 2004 inclusion of the new eight

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CEE countries (Baun and Marek 2017; Da ̨browski 2014; Ferry 2013). The establishment of this principle over the MSs met several problems that were caused by their institutional misfit with respect to its basic philosophy. Moreover, according to Bache (2010) and Jordana et al. (2012), the evolution of the Regulations has become apparent as partnership has long ceased to be only a technical instrument to guarantee the transparency of the policy process. On the contrary, it “also informed by a political vision of Europe in which the value of non-state and sub-national participation in public governance is valued both intrinsically and extrinsically—a notion not always shared by key domestic actors” (Bache 2010, p. 63). In addition, both official reports and academic studies emphasized the benefit of partnership practices. As Piattoni (2006, p. 62) pointed out, the opening of the decision-making process guarantees the participation to new stakeholders that “offer ideas, expertise, resources and ultimately legitimacy to the process,” as well as the elaboration of “development programs that are […] more likely to succeed than development programs ideated in isolation by a group of technocrats.” Moreover, as Leonardi and Holguin noted (2016, p. 437), the role of the private sector and non-governmental organizations “is not only to make the Cohesion policy politically viable— that is, supported by a broad social consensus—but also to make the policy economically sustainable over time.” In fact, their involvement should be not only limited to take physically part at the governance arena, but also realized with appropriate economic investments in order to “produce sustainable levels of development and growth” (ivi). 2.3.4  Additionality In order to contribute to the promotion of economic development and increase the impact of the community’s investments, until the first programming period, in formulating the CSF and its OPs, additional European resources should be provided with respect to those allocated by the national government and the private sector: the co-funding of the latter should be around the 50% for the areas with a GNI above 90% of the Community average and around the 25% for the other ones. Even if confirmed in all subsequent revisions of the regulations, the main technical characteristics of this principle were in part modified over the decades. Due to the implementation gaps of the first programming period, Regulation 2082/1993 tried to reinforce its application also

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providing more stringent measures for the Objective 1 regions. The co-­ financing requirement was also reduced to 15% for the projects financed by the new Cohesion Fund. Even if the application of the additionality principle remained substantially unchanged during the 2000–2006 programming period, it was subjected to substantial changes during the 2007–2013 period. While parts of these changes were implemented by the new regulations, others were a result of the post-2008 economic crisis that gravely undermined the economies of many European governments and their respective banks. On the one hand, “a financial corrective mechanism was introduced in the event of this principle not being respected” (Brunazzo 2016, p.  30). On the other hand, the level of co-financing was fixed to 10% for the underdeveloped regions and to 25% for the others. As Leonardi and Holguin pointed out (2016, p. 436), “the rationale for this change in the co-financing rules was the expectation that the EU financial package was available in the Commission’s coffers, while the national co-financing portion remained subject to the vagaries of the recession.” These co-financing percentages were also confirmed for the 2014–2020 programming period.

2.4   The Transnational Arena: Building the Policy 2.4.1  The Debate on Cohesion Policy Reforms Even if only the Commission holds the right of legislative initiative, other European actors such as the Parliament and the Council of the European Union (CEU) can have an indirect role in this phase, carrying out a lobbying activity. The latter can also be used by the sub-national actors, in particular by the regions, both collectively on specific subjects through the Committee of the Regions (CoR) and individually. For example, possible deficiencies in the implementation phase during a programming cycle could affect the debate around the new regulations of the following one. In order to better understand around which the debate on Cohesion Policy reforms covered, it is appropriate to introduce the specific focusing event (Dearing and Rogers 1996) that conditioned it, as well as to explain how the Commission had used during these decades papers and reports in order to legitimize its position about Cohesion Policy reform. Both will be subsequently discussed.

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The main focusing events which conditioned the orientations of Cohesion Policy reform were different for each programming period. First, the Treaty of Maastricht, signed in February 1992, strongly conditioned the debate before the start of the negotiations for the 1993–1999 regulations. In fact, not only did it confirm the centrality of this policy as a necessary condition for the construction of the EMU (Art. 2), but it also “referred to the need to address MS’s concern about the operation of the funds (particularly in view of the substantial increase in structural funding), and the enlargement to include Finland, Sweden and Austria (which would take place in 1995)” (Brunazzo 2016, p.  24). Contextually, in order to facilitate the realization of the goal of the EMU, it also confirmed and reinforced the role of the Commission for the preparation of specific proposals. The issue of the enlargement of the EU also influenced the debate over Cohesion Policy reform for the following two programming periods. For example, the Agenda 2000 document, elaborated by the Commission and presented to the Parliament in July 1997, presented a detailed strategy for the consolidation of the EMU and the impact that the Eastern enlargement could have for it, since the quasi totality of the territories of the new candidate countries would have been classified as Objective 1 areas. It started to divide the debate among those MSs that pressed for the increase of the EU budget and those that were reluctant to raise their annual budget in favor of the new Eastern countries. The latter debate has occurred with greater emphasis after the 2003 and 2005 Treaties of Accession, since the entry of new 12 Eastern countries would create “an even greater effect on disparities between regions than between countries” (CEC 2004, p. 6). Finally, the issue of the budget also significantly influenced the debate for the reform of the current programming, but in a different way as compared to the past. In fact, while the discussion previously concerned the amount of resources that the old MSs would lose after the enlargements of the EU, in the last debate, it was strongly influenced by the effects of the global economic crisis that significantly changed the tenor of the debate on reform and influenced the strive for new standards such as the stringency of spending (Huggins 2018). This new exogenous shock influenced the debate in two different ways (interview with EU official). On the one hand, the new EU austerity policies limited the ability to maneuver and initiative of the MSs, enabling the Commission to gain even more ground. On the other hand, the global financial crisis represented an opportunity to rethink the more general management of the ESIFs. In fact,

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the post-crisis period has provided additional motivation for reforming the way the ESIFs are planned and used. In a climate of declining overall investment, maximising the ESIFs’ impact is a top priority, especially as they provide the majority of public investment in many countries. Reforming the ESIFs has led to more emphasis on results, funding being more focused, and investments based on better strategic planning and capacity to deliver. The ESIFs are now a forward-looking investment policy tool, ready to tackle the challenges facing Europe today and in the years to come. (CEC 2015, p. 2, emphasis added)

This new great emphasis on both administrative capacity and result orientation enables a better understanding of the changes in the use of papers and reports by the Commission in the different periods. The Maastricht Treaty obligated the Commission to submit a report every three years to the CEU, the European Parliament (EP), the Economic and Social Committee (ESC), and the CoR “on the progress made towards achieving economic and social cohesion,” also providing that the “report shall, if necessary, be accompanied by appropriate proposals” (Art. 130b). As a consequence, after the entry into force of the Treaty, six reports have been published by the Commission. All of them represented for it an opportunity not only to show the effects of the previous interventions, but also to present specific issues that would then have entered into agenda. For example, the First Cohesion Report was published in 1996 (CEC 1996a) and it oriented the agenda setting phase for the 2000–2006 negotiations, since it “was [tactically] presented as a defense of the Commission’s efforts to promote cohesion” (Bachtler 1998, p. 648). Similarly, already in the Introduction of the Second Cohesion Report, published in 2001, the Commission clearly explicated that its analysis “attempt[ed] to set out the main issues to be addressed in order to prepare the basis for a debate on the future of cohesion policies” (CEC 2001a, p. XXII), disputing the fact that past experience of reforming cohesion policy reveals an increasing tendency for discussion at Member State (Council) level to concentrate on financial aspects. For example, in the negotiations on the financial perspectives for 2000 to 2006 (‘Agenda 2000’), discussions on cohesion policy probably focused more on the amount and division of funding between Member States than on the content of the policy. Arguably, a more logical order would be to begin with the content—and, in particular, to identify priorities for future cohesion policies—before going on to address issues relating to the delivery system and financial allocations. (ivi, emphasis added)

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A similar approach also characterized the Fifth Cohesion Report, published in 2010, and that influenced the debate of the 2014–2020 reform (CEC 2010). Already the previous Cohesion Report, published in 2007, represented an opportunity for the Commission to present the first lessons of the ongoing programming cycle, proposing the first reflections for a drastic change in the management of the policy, in order to make it more flexible and more strategic. In other words, the Fourth Cohesion Report anticipated the new guidelines for reform that were subsequently specified in depth within the 2010 report. The more radical behavior of the Commission as compared to the past emerged in two elements. First, it specified that a re-orientation of the strategic choices of the European policy due to the crisis could only “succeed through coordinated action focused on [few] priorities” and working for “a Cohesion Policy that brings results” (CEC 2010, pp. iii–iv). As a consequence, it clearly said that the aim of the Report should be to open “a public consultation on the future of Cohesion Policy. This [was] organized around a series of questions on the main ideas for its reform” (ibidem, p. xxiii, emphasis added). In other words, the Commission has been able to direct the debate of the reform, since it proposed a set of detailed options for how to (1) increase the effectiveness of the added value of the policy; (2) reinforce the governance of the policy; and (3) simplify both its management system and its general architecture. On closer inspection, this new orientation of the Commission toward a more strategic, effective, and efficient approach to the policy also emerged within two different reports that it decided to commission in the first years of the economic crisis (and that also coincided with the strategic years of the implementation of the 2007–2013 OPs). The first was the Barca Report. Published in 2009 (Barca 2009), it summarized the results of a discussion group on the future of the policy that was subsequently presented to all the MSs. The second was the Evaluation network delivering policy analysis on the performance of Cohesion Policy 2007–2013 (Applica, IsmeriEuropa 2010), which synthesized the results of the single national reports that all the MSs submitted to the Commission and that described the first results of the implementation and evaluation of the 2007–2013 OPs up to the end of 2009. Therefore, the Commission was able to legitimate its same action, using the evidence that emerged from them. In terms of governance, for example, the Barca Report proposed to strengthen the role of the Commission in all the stages of the policy (Avdikos and Chardas 2016, p. 115).

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As compensation, the agenda setting process was characterized by an unusual consultation process that strongly differentiated it from what happened during the 1990s and the 2000s. For example, opening for the first time to the MSs the possibility to have access in the preparation and in the deliberation of the first proposal reform, the Commission decided to establish High-Level Groups within which MSs should reflect and debate about the future of the policy. The use of this new consultative approach adopted for use during the years of the economic crisis must be therefore considered as a sort of “carrot” (Bemelmans-Videc et al. 2003) that the Commission wanted to give to the MSs against a preponderance of studies that clearly showed their deficiencies in implementing the policy within the decentralized system of the 2007–2013 programming period (see par. 2.5.1. for more detail). 2.4.2   The Dynamics of Negotiations on the Reform of Structural Funds The formal presentation of the Commission’s proposal paved the way for around two years of negotiations between European and domestic institutions. They involved both the definition of the general “rules of the games” that MSs would have to follow in implementing the policy and financial issues connected with the budget and the allocation of the resources between the single Objectives (including the criteria for the area designation). Moreover, after the approval of legislative and the financial package, the last step of this phase concerns the debate between the Commission and the MSs for the negotiation of the domestic development plans. In the following pages, the general rules of the negotiation phase and the main actors involved in the negotiation of the legislative and financial package will be first of all presented. Second, the way in which the criteria for the area designation had been calculated in each programming period will be introduced. The final section will discuss how the relationship between the Commission and the domestic actors changed with respect to the phase of negotiation of the domestic development plans. 2.4.2.1 Negotiation of the Legislative and the Financial Package The negotiation of the legislative package comprises three phases (Brunazzo and Piattoni 2004; Bachtler and Mendez 2016). The Commission proposal is first of all informally discussed by MSs within a special session of the CEU. The first phase ends with the realization of an

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official regulation proposal that is later discussed in depth during the second phase of the negotiation. It involves a greater number of single and collective actors, since it starts with the transmission of the regulation reform by the Commission to the MSs, the EP, the ESC, and the CoR. Each of these institutions delivers formal opinions in order to modify or to maintain the previous proposal. Finally, all these opinions are summed up by the Commission into a final proposal, which is discussed and negotiated within the CEU. In this phase, the CoR and the ESC are only consultative bodies. Similarly, the EP did not have formal legislative powers for the final approval of each regulation. In fact, in the case of the general regulations and of the regulation for the Cohesion Fund, unanimity within the CEU is necessary, and the role of the EP within the decision-making context is limited to the assent-consensus. On the contrary, it plays a major role in the approval of the regulations for the single ESIFs, since it co-­ decides with a CEU qualified majority. More generally, “the negotiation of Cohesion policy substance […] operates according to a technocratic model of decision-making on the basis of expertise and problem-oriented discussions rather than bargaining or politics” (Bachtler et al. 2013, p. 264), since its main decision-making level is represented by the Structural Affairs Working Group within the CEU, that is, a strong technocratic working group in which the high policy official of the Commission and of the MSs meet weekly. Their constant meetings limit to a large extent the possibility of political interference, since the discussions on single proposals are chaired and coordinated by the CEU Presidency with the support of the Council secretariat. Moreover, they are above all meetings that cover technical discussion on single articles of the regulation. The dynamics for the definition of the budget financial package are very similar to those previously described. Their main differences concern both the nature of the decision-making process and the European institutions involved in the final decision. As imaginable, the issues of the financial allocation and the eligibility criteria meet political and particularistic interests within each MSs, inducing their greater interest and involvement in the decision-making phase. In this case, the previous debate about the second Commission proposal is summarized within a General Affairs Session of the Council of Ministers, and the final decision requires both the unanimity of the European Council and the assent-consent of the EP. For this reason, each MS can use its veto power in order to prevent the overturning of its favorable final decision. Therefore, the chances of

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conflict among the MSs are inevitably higher, and they open the way to the establishment of multiple coalitions in accordance with the positive effects from which each MS could benefit. After the entry in force of the Treaty of Lisbon, approved in December 2009, the rules previously described were partially modified, altering the balance of powers between the European institutions formally involved in the negotiations. The most important changes were two. On the one hand, there has been an extension of the qualified majority voting in the Council. On the other hand, the role of the Parliament was strongly empowered during the legislative process, since it became a co-legislator with the Council not only for specific fund regulations, but also for the entire regulation framework. These changes inevitably increased the role of the CEU and of the EP during the formal negotiations of the 2014–2020 Multi-annual Financial Framework (MFF) and of Cohesion Policy regulations. Moreover, several unusual informal meetings between these two institutions had taken place as compared to the previous rounds of reforms. As a consequence, the Council had a great impact in the conclusion of the 2014–2020 MFF, also considering that for the first time the President of the CEU was involved in the elaboration and discussion of the financial budget proposal. In addition, the need for the consent of the EP for the final approval created different moments of tension between the EP and the Commission. Nevertheless the coming into play of the Treaty of Lisbon during the negotiations for the 2014–2020 regulations—that at least on paper should have limited the historical role played by the Commission in this phase of the policy cycle—the analysis of the final agreements with respect to both the legislative and the financial package showed that its initial proposals were not radically changed. On the contrary, the changes made were not substantial. In fact, on the one hand, the objectives of the Commission were largely achieved with respect to the content of the policy, and, on the other hand, around a third of the commitment appropriations under the MFF 2014–2020 were paid to its initial proposal (Bachtler and Mendez 2016, p. 135). It is possible to underline the presence of at least three interconnected reasons that can help in understanding the centrality the Commission had in this phase also during the last negotiations. First, the Commission showed an excellent diplomatic capacity to defend its proposals, consolidating its previous experience in this type of negotiation. Moreover, its luck was twofold. In fact, on the one hand, because of its formal

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participation in the negotiations for the first time, the Presidency of the CEU showed a substantial diplomatic inexperience in crucial moments of the negotiations for the financial budget. It happened, for example, in 2012, during the Cyprus Presidency. On the other hand, the proposal presented by the Commission was reinforced upstream by the so-called Friends Better Spending, that is, those MSs that were particularly interested in the strict conditionalities that it proposed for the implementation of the 2014–2020 programming period, such as the ex-ante and macroeconomic conditionalities (see par. 2.5.1). 2.4.2.2 Negotiating Area Designation Beyond the financial allocations, a crucial issue of discussion during the negotiation phase concerned the criteria to be used in order to delimit the areas of intervention. As previously described, the concentration principle was subject to several modifications from the first programming period to the present, since the intervention targets of the Commission have been frequently modified. Contextually, also the eligibility criteria were changed in several cases, creating a constant issue of discussion between MSs and the Commission itself. On closer inspection, the main changes on eligibility criteria did not concern the delimitation of the most underdevelopment regions. In fact, their definition remained substantially unchanged since the 1988 reform: all the European NUTS II regions with a GDP per head of less than 75% of the community average were classified as Objective 1 during the first three programming periods, as Convergence Regions during the 2007–2013 one, and as “Less Development Regions” during the current one. In other words, since 1988, by introducing a technical criterion, the Commission was able to control this issue limiting the bargaining of the MSs, as well as their influence in the decision-making phase (Ansell et al. 1997). By contrast, their bargaining power has historically been higher for the definition of the eligibility of the other Objectives, since a greater flexibility has been present for their designation. According to Art. 9 of Regulation n. 4253/1988, the designation area for the Objective 2 regions should have considered three indicators, that is, (1) the average rate of unemployment greater than the community average in the previous three years, (2) the percentage share of industrial employment greater than the community average in any reference year from 1975, and (3) the employment decline in accordance with the previous indicator. Nevertheless, even the use of technical criteria prevailed if

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also in this case, MSs were able to influence the designation of these areas. In fact, the same Art. 9 expected that: in establishing the list […] the Commission shall seek to ensure that assistance is genuinely concentrated on the areas most seriously affected, at the most appropriate geographical level, taking into account the particular situation of the areas concerned. Member States shall supply to the Commission all information which might be of assistance to it in this task.

In other words, this provision increased the margin of maneuver of both national and sub-national actors. In fact, MSs had first of all a responsibility to produce a first list of eligible regions. Consequently, the approval of the final list required a constant dialogue between European and domestic actors in order to make the area eligible. This also happened for the designation of the Objective 5b area, since in addition to the GDP per capita the criteria used included specific technical criteria that were not directly available from the Commission, such as the levels of agricultural employment and agricultural income. Both eligibility mechanisms remained substantially unchanged for the 1994–1999 programming period. Nevertheless, the negotiation phase was characterized by an intensive debate on this issue, that it was connected with a perverse effect in the designation of the 1989–1993 maps that for at least two reasons facilitated the concomitant co-existence of two different lists of regions collocated in this area (Yuill et  al. 1993, pp. 87–92). On the one hand, for the different official data used by the single MSs in their first list proposal. On the other hand, the “areas that [were] eligible for Community regional policy, but not national regional policies, [were] treated slightly more favourably than those eligible for neither form of assistance” (ibidem, p. 89). This issue was first of all discussed within the two Directorates-General for Competition and Regional Policy. In fact, while the DGVVI showed in favor of the status quo maintenance, the DGIV argued “that the basis for designating Objective 2 and 5b areas had been ill-defined and unscientific, exposing the whole process to a high degree of political influence” (Yuill et al. 1995, p. 89). The area designation system for the Objective 2 and Objective 5b areas was successively revised in each of the following programming periods, and it was characterized by a constant alternation between its top-down definition, in which the Commission continued to control the “rules of the game,” and a bottom-up one, in which MSs had a greater national influence. The former prevailed for the 2000–2006 area designation since

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the Commission opted for the introduction of “hard criteria” (Wishlade 1999, p. 5) for the rural and industrial areas’ eligibility, which included (1) a new ceiling equal to 18% of the community’s population and (2) the so-­ called safety net, that is, “the maximum reduction in population covered by Objective 2 (including the areas that were formerly Objective 1 but which now meet the Objective 2 criteria) [was] set as one-third of the population covered by Objective 2 and 5b in the 1994–1009 period” (ibidem, 4). On the contrary, the responsibility of the MSs increased during the fourth programming period, since they could determine single domestic indicators for the eligibility. The unique difference with the ongoing programming period is that the actual Transition Regions are designated with this status if they had a GDP between 75% and 90% of the community average, without taking into account their Convergence status during the previous programming period. This change in the issue of Transition Regions was strongly supported by the Commission during the negotiations, since it was persuaded that the maintenance of the previous system would limit the share of funding available for the richest MSs (Mendez 2013; Pzos-Vidal 2014). 2.4.2.3 Negotiating CSF As previously discussed, the formal process for the approval of the CSFs and of their national and multiregional OPs has been subject to several modifications since the 1988 reform. Contextually, also the role of the MSs and of the Commission changed, to the advantage of the latter. In previous pages I discussed the way in which the formal approval procedure of the CSFs and the OPs has been modified across the five programming periods. More generally, it is possible to underline the presence of two different trends in this negotiation process. They are strongly interconnected and cover the progressive alignment of the domestic strategies with the European objectives and strategies, on the one hand, and the different capacity that the Commission had to influence the nature of the domestic documents, using direct and indirect tools, on the other hand. In the next pages I will discuss the way in which they changed across the investigated programming periods, showing that this phase was characterized by a constant process of alternation between formalism and re-centralization at the hands of the Commission, on the one hand, and simplification and decentralization in favor of domestic actors, on the other hand. In continuity with the first round of negotiations, the regulations for the 1993–1999 programming periods confirmed the centrality that the

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Commission should have before the final approval of the CSFs and the OPs, since after their submission it should both express a formal opinion and evaluate the documents ex-ante. The MSs should follow its instructions in elaborating of the drafts of their development plans. Moreover, the regulations already provided a set of conditions, such as the control of the additionality and several target indicators, that the domestic actors should respect in preparing their development strategies. The role of guidance of the Commission was not limited to what I have so far described. In fact, during the negotiations it was able to drastically modify the contents of several Objective 1, 2, and 5b OPs with respect to the allocation of the priorities of investment and/or the re-allocation of the resources. Moreover, its orientation was also to more drastically intervene in the structure of the investment priorities, by their radical simplification and rationalization. In the case of Germany, for example, it denied the possibility of using the SPD. The strong power of the Commission during this phase also continued during the negotiations of the 2000–2006 development plans. As in the past, in July 1999 it started elaborating the strategic orientations that the MSs should take into account in the elaboration of their documents, and the compliance with which would have represented “a major component of the added value by the Community” (CEC 2001a, p. 11). In fact, they not only “provided a useful basis for negotiations on the plans and programmes,” but they also “established the basis for the discussions on the nature of the choices made by the Member States in terms of priorities and strategic objectives and the corresponding allocation of resources” (ibidem, p. 3). This negotiation process required five months more than the time formally expected by the regulations, due to both the inconsistent quality of the documents submitted by the MSs and the fact that the Commission “was concerned that the indicative Guidelines should be followed to the greatest possible extent by the Member States” (ibidem, p. 11). As a consequence, their use “achieve[d] useful adjustments to national priorities in programming for 2000–2006. [For example,] this was true of the initial proposals made by Spain, Greece, France and Italy” (ivi). Also during the 2007–2013 negotiations, the Commission’s role as guide in the preparation of the national and sub-national strategies continued to be conducted first through the publication, of specific European guidelines, that is, the CSG, and subsequently during the negations of the NSFRs and of the OPs. Nevertheless, it is possible to underline the presence of three important changes in the action carried out by the Commission in those years with respect to its classical approach to this issue.

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First, for the first time, the CSGs were not unilaterally approved by the Commission, since before the formal approval of the Council, it elaborated them in consultation with the MSs, that therefore were for the first time involved in the elaboration of the EU’s guidelines. In fact, they were the subject of a deep discussion before their final approval, increasing the dialogue between the Commission and the MSs that would then have to put them into practice. In other words, in the mid-2000s, a new approach—that was characterized by a constant dialogue between Bruxelles and the national governments—prevailed in the inter-institutional relationship between the Commission and the MSs. On the basis of my argumentation, it represents the second important change. It clearly emerged in all the EU documents consulted, within which for the first time the Commission considered this new approach based on a constant dialogue with the MSs as an added value for the 2007–2013 negotiation phase. In fact, the added value of the negotiation process goes well beyond the financial resources. The discussions with Member States, regions, partners and local actors demonstrated that the policy had acted as a catalyst for change. […] As a result of the negotiation process, the quality of the programmes has improved substantially, and their content has become more closely aligned with major Community priorities. […] The dialogue engaged in during programme preparation allowed a broader range of stakeholders to participate in the process of designing effective regional and sectoral development strategies, which was also supported by the reform of state aid policy offering additional possibilities for better targeting national and Community funding. […] The recent dialogue with Member States and regions has led to adoption of strategically oriented programmes which are set to invest large proportions of their financial resources in creating the conditions for successful competition in the global world. […]. The dialogue between the Commission, Member States and regions led also to a considerable improvement in the quality of the programmes, including more emphasis on evaluation, indicators and monitoring. It has also changed the debate inside Member States and regions on the design and development of more innovative, inclusive and forward-looking public-policy strategies and programmes […]. Moreover, the relatively rapid agreements with Member States on the new programmes were obtained thanks to engaging in an informal dialogue already at the final stage of preparation of the relevant Community legislation. (CEC 2008, pp. 2–12, emphasis added)

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The third change emerged in the previous excerpt. In fact, while in the past the negotiations have resulted in a drastic change in the organizational structure of the documents presented by the domestic actors, for the first time, the intervention strategy of the Commission toward the national proposals was only to revise the proposed expenditure issues in order to guarantee a closer integration between their earmarked expenditure and the Lisbon strategy, and ensuring the conditions that this alignment was present not only in the NSRFs, but also in all the respective OPs. This point clearly emerges, for example, in the following excerpts extrapolated from the 2008 Communication of the Commission to the EP, the CEU, the ECSC, and the CoR on the results of the negotiations concerning Cohesion Policy strategies and programs for the programming period 2007–2013. The new generation of cohesion policy for 2007–2013 is crucial to the Lisbon agenda as a result of a number of key reforms introduced for the new programming period. One key negotiation result is the substantial increase, compared to the past, in investments supporting the growth and jobs agenda, especially in the areas of innovation, research, skills and human capital. In the less-developed regions in EU- 27, under the Convergence Objective, 65% of the funds are intended for Lisbon related expenditure, while the more-developed regions, under the Regional Competitiveness and Employment Objective, plan to invest 82% of the funds in Lisbon-related priorities. More specifically, in the Convergence regions of the EU- 15 Member States, 74% of the investments, and in the Regional Competitiveness and Employment regions, 83% were allocated for Lisbon-type expenditure. […] As a result, the ownership of the Lisbon agenda has been further extended to the regional and local level and to a broader spectrum of stakeholders, hence addressing a key weakness of the first Lisbon policy cycle 2000–200516. For example, in France, the Commission, national and regional authorities and international experts have worked together on developing regional innovation strategies. In Germany, most of the new employment-related interventions have been programmed at regional level. This increased ownership has been accompanied by an increased focus of Lisbon related actions on skills and life-long learning. (ibidem, pp. 3–9)

A re-empowerment of the Commission has taken hold during the 2014–2020 negotiation phase, which clearly emerges by comparing the three changes previously described, that is, the institutional mechanisms for the elaboration and the approval of the EU guidelines, the philosophy

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of intervention adopted by the Commission during the negotiation of the domestic development plans, and its capacity and will to modify the first proposal of the MSs, with the new approach the Commission adopted in the latter negotiation process. Each of these will be subsequently discussed. First, as previously mentioned, the CSF was adopted by the Commission, but without the approval of the CEU. Moreover, as previously discussed by Baun and Dan Marek (2014, pp. 127–128), the empowerment of the Commission in this issue also emerges by analyzing additional elements. In fact, its increasing power is visible considering that it could propose “delegated acts in order to supplement or amend’ the sections of the CSF dealing with the coordination between ESI funds and other EU policies and instruments, and the priority areas for cooperation activities using the ESI funds,” and that for the first time it had the formal competence “to submit a proposal to review the CSF, with the possibility of revising it, in the event of “major changes in the social and economic situation in the Union” or changes to the Europe 2020 strategy.” Second, the new philosophy of the Commission during the negotiations of the domestic development plans was centered in an attempt to introduce within all the MSs the key reforms which the 2014–2020 regulations had covered, and that were directed “towards a more focused policy approach, a stronger results orientation, solid framework conditions for investments, better coordinated use of ESIF funding […] and improved links between EU priorities and regional needs” (CEC 2015, p. 5). This new approach was to a large extent conditioned by the fact that an evident misfit between the quasi totality of the domestic administrative procedures—within both old and new MSs—and the radical nature of the new changes introduced by the 2014–2020 regulation was present (interview with EU official). In addition, all the work made by the Commission during the negotiations was guided by the idea that the application of the new principles should be only carried out guaranteeing a general simplification of the domestic procedures. In fact, according to the Commission, simplification, that is, “a continuous process through which simple yet sound implementation practices are identified and put to work,” is “an important factor in access to funding” (CEC 2015, p. 7). As a consequence, all the work made by the Commission staff during the negotiation of the domestic development strategies was aimed at maximizing the integration of these concepts within the draft plans submitted by the MSs, and, in particular, to strengthen their institutional capacity and to consolidate their efficient public administration (interview with EU

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official). In fact, starting from the assumption that “the quality of public administration has a direct impact on the economic environment and is thus crucial to stimulating productivity, competitiveness and growth as a key priority for the successful implementation of the Europe 2020 Strategy” (ibidem, p. 15), in the four years preceding the start of negotiations, the Commission did a meticulous inquiry into the MSs in order to understand their possible deficiencies in Cohesion Policy implementation. The less than positive results it reached legitimated the Commission to use these results as a starting point during the discussions with the MSs (interview with EU official). In addition, these discussions were for the first time rooted in in-depth socio-economic analysis at national and sub-­national levels which it explicitly commissioned, as well as in the results of the single CSRs. The simultaneous use of these tools allowed for the Commission to recover the margin of intervention on domestic proposals that it had explicitly wanted to drop. In fact, the final PAs or OPs approved were in several cases very different as compared the first draft, both in terms of priorities of investments and in the organizational structure of the development plans. For example, “as a result of discussions with Member States, the planned allocations from all ESIFs into financial instruments have increased considerably” (ibidem, p. 6). More generally, “more than two-thirds of the CSRs adopted in 2014 were relevant for cohesion policy investment and have been taken into account in Member States’ programme priorities” (ibidem, p. 5).

2.5   The Domestic Arena: From Policy to Implementation The aim of this section is to explain the main changes to the Cohesion Policy from the first programming principle to the present, in order to understand if, when, and how they may have altered the role of the domestic actors, introducing specific challenges for them. In order to do so, on the basis of the nature of the investigated policy, in the next sub-paragraphs, I will describe the fundamental changes of the EU regulations that modified the “rule of the games” for its implementation, by covering the management, monitoring, and evaluation of structural funds. The last sub-paragraph will summarize all the main lessons that were learned from the analysis.

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2.5.1  Management The management phase of the structural funds starts after the final approval of the OP. The process begins with the selection, the approval, and the subsequent management of the single projects that compose the development program. In this phase, the domestic actors can differentiate in both their management approach and the choice of competent institutional bodies involved. Nevertheless, in each of the five programming period, the regulations provided specific rules that the national and the sub-national actors would have to comply with. In more detail, it is possible to recognize the presence of three different phases in this stage. The first phase coincides with the 1989–1993 and 1994–1999 programming cycles, during which the foundations were laid for the general architecture of the policy. The following programming period represented an important watershed for the management stage, since it introduced several reforms which led to a redefinition of the domestic institutions which had been present until then and the administrative practices previously adopted for the management of the structural funds. Even if with some changes in the degree of decentralization of the policy, this second phase was consolidated during the 2007–2013 programming period. By contrast, the ongoing period is opening a new phase, that is, the third one according to my arguments, that is focused on a strengthening of the institutional capacity, and an increased focus on results and administrative performance (Capello and Perucca 2019a, b). The most important characteristics of each of the three phases will be discussed below. First of all, the regulations for the 1989–1993 programming period established a system of commitments and payments, according to which the Commission commits to annually pay, after the formal approval of the project, a part of the resources to the beneficiaries, and to give them the final sale after the end of the operations. Within six months of the completion of the works, the domestic institutions involved would have to send to Bruxelles a detailed report containing all the information about the implementation of the projects, and the Commission would have paid the final balance within two months of its formal receipt. The final beneficiaries should have received their respective amount of resources by the Payment Authority (PAU) within two months. This system was confirmed during the 1994–1999 programming period. On the basis of the delays encountered in several MSs during the previous cycle, the Commission opted for an even stronger intervention toward domestic actors, through

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both the elaboration of a code of conduct on the implementation of the structural funds to which MSs would have had to adapt and the imposition of time limits necessary for them to comply with the various stages of payment to the final beneficiaries. The drastic changes in implementation phase made by the 1999 reform of the regulations were aimed at increasing the efficiency of the expenditure. In more detail, efficiency was explicitly added among the principles of the structural funds, like that of programming, additionality, partnership, and concentration of the resources (CEC 1998, 1999). In order to increase compliance in the program management, the Commission was persuaded that several changes were necessary, not only as concerned the general domestic approach to the management of the development projects, but also on both the institutions involved and the compliance with the timeframes (Sweco 2010). More generally, the 2000–2006 programming cycle was characterized by the start of a process of decentralization of responsibilities toward the MSs, during which the Commission had nevertheless continued to control and supervise the general management of the policy. The key concepts of the reform were the simplification of the procedures, and the clarification of the responsibilities between all the actors involved, above all through assigning more responsibility to the MSs for the program content (Casula 2018). This was first of all realized through the designation of a new institutional body—the so-called Management Authority (MA)—that had full responsibility for the management and the execution of each OP. Its creation represented an important challenge in the implementation of the policy since for the first time the responsibility for each OP was formally conferred to a domestic institution, covering all its main phases, and becoming a reference point for all the final beneficiaries. Among its responsibilities there were the writing of the main programming documents and annual execution reports; the selection of operations; the supervision of the regularity of management and the realization of the interventions financed by the structural funds, and their on-spot verifications; the creation and consolidation of an accounting system; the publicity of the information; and so on. The regulations also introduced several novelties for the payment system. In fact, after that the initial balance (that is equal to 7% of the total) was paid, the following payments would have been given only if the costs were really incurred. This new provision tried to stimulate and to encourage a discipline in financial management. For this reason a new obligation,

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that is, the so-called de-commitment rule, was introduced. It required that the funds should be spent within two years (n + 2), otherwise they would be lost. The implementation system did not substantially change for the 2007–2013 programming period, since both the general rules and the institutional architecture remained unchanged. Nevertheless, an analysis of the results of the negotiations shows that the Commission supported the desire of many MSs to significantly rationalize the management of funds, both decentralizing the implementation system and reducing the administrative obligations. In the face of these changes, the Commission itself hoped for a reinforcement of the institutional capacity of the national and the sub-national authorities as a necessary condition for the realization of a new decentralized approach in Cohesion Policy implementation. Moreover, considering the crucial role that the institutional capacity should have during the four programming periods, several funds were used in order to increase the institutional quality of the domestic institutions. Inevitably, it should be above all realized within the most underdeveloped European areas. In fact, within a new “cohesion policy system of multi-level governance based on decentralisation of responsibilities and a stronger role for actors on the ground,” the reinforcement of the institutional capacities of domestic administrations was considered by the Commission itself as a necessary condition in order to realize “more economic efficiency, as the local and regional levels increasingly tend to be best placed to meet and benefit from global changes” (CEC 2008, p.  12, emphasis added). As partially described in previous pages, the decentralized approach adopted during the fourth programming period has been confirmed by the regulations of the ongoing programming period. Nevertheless, domestic actors are required to implement their OPs under a new and unusual role of supervision of the Commission, since the latter is increasingly using new policy instruments in order to exercise a direct or indirect action in this phase of the policy cycle (as well as during the monitoring and evaluation phases). The strong decentralized process clearly emerged in consideration of two elements (Turok and Hatfield 2018). On the one hand, the system of financial control has been further devolved to MSs and to their sub-­ national actors. On the other hand, the role of the local actors increasingly

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reinforced in the implementation of the 2014–2020 programming cycle since they are required to elaborate an integrated approach to territorial development—the so-called place-based approach—by using two new implementation tools which have become the main delivery instruments for the 2014–2020 OPs, that is, the Community-Led Local Development (CLLD) and the Integrated Territorial Investment (ITI). At the same time, the Commission, confirming the result-based approach and the strengthened emphasis on results and performance (Bachtler et al. 2018; Medeiros and Rauhut 2020), drastically changed its approach in the mechanisms of control of these aspects (Casula 2019). In fact, “despite requirements for objectives, indicators and targets in the past, they were not systematically or rigorously applied […] the improvements introduced for the 2014–2020 period ensure that programs have more robust result orientation, with investment needs linked to specific objectives and priorities with corresponding indicators and targets for outputs and results” (CEC 2015, p. 6, emphasis added). Concretely, the creation of a Performance Framework for each OP has been made compulsory. Its aim is to monitor the OP performance, the achievement of its general objectives, and the overall field policy performance. The introduction of this new instrument represents an important change for the management of structural funds, since the control action of the Commission in the expenditure of each OP is increasingly consolidating, demanding for its proportional performance from the start to the end of the programming cycle (interview with EU official). In fact, until this moment it has always demanded that the expenditure was certified throughout all the programming cycle, but the Commission never concretely did anything to ensure this would happen. Second, two new types of conditionalities will operate in the 2014–2020 programming period (Avdikos and Chardas 2016, pp. 107–109), that is, macroeconomic conditionalities that “will operate as part of the wider macroeconomic surveillance of the budgetary limitations that will accompany the common currency” (ibidem, p. 107)2 and those that will operate inside the context of the Cohesion Policy since “the Commission explicitly links the start of the implementation of the OPs with conditionality for each Structural Fund (ex ante conditionality) that has to be adopted before the start of the OPs, or until the end of 2016” (ibidem, p. 109).

2

 For further information about the macroeconomic conditionalities, see Sacher (2019).

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2.5.2  Monitoring Just as in other phases of the policy cycle, for the monitoring of the interventions, it is also possible to underline the presence of several changes during the five programming periods. They cover both the structures involved in this phase and the requirements the domestic actors had to respect in reporting the progress of the projects’ implementation to Bruxelles. These changes also represented an alternation in the balance of powers between the Commission and the domestic actors, since the procedures for financial control were subject to a constant trend between a decentralization to the MSs and a re-centralization under the supervision of the Commission. The basic characteristics of the monitoring system were provided, in June 1988, by Regulation n. 2052. The monitoring obligations for the MSs required both the periodic collection of physical and financial data of the projects and the submission to the Commission of annual progress reports (and a final one) for the CSF and for each OPs. In addition, the above-mentioned MCs should have been set up in each region. Their aim would have been to periodically review the progress of each OP and to propose modifications in their structure and alterations in the nature of the programming interventions. Even if the regulatory requirements have been progressively clarified and reinforced, the monitoring system remained substantially unchanged for the 1994–1999 and 2000–2006 programming cycles. Two elements characterized these periods, that is, the clarification of the role of the MCs, on the one hand, and the new direct and indirect role that the Commission started to have in the monitoring and financial control, on the other hand. For example, the 1994–1999 framework, within the more general aim to make the monitoring system more effective, increased the responsibility of the MCs, assigning them the possibility to modify both the procedures adopted for the implementation of the OP and the rate of assistance among all the development interventions. In addition, the 2000–2006 regulations eliminated the possibility for the Commission to be part of the MCs. In fact, while in the past it had the formal right of vote, from this moment on it could participate only as an observer. This change notwithstanding, its role during the monitoring phase increased. Its involvement emerges in two different elements (Baun and Dan Marek 2014, p. 135). On the one hand, the Commission intensified the consultations and reviews with the MAs, at least on an annual basis. According to Art. 34 of

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the Regulation n. 1260/1999, the main outcomes of the interventions conducted in the previous year shall be reviewed by the Commission and the MA. After this review, the Commission may make comments and recommendations to the MSs and the MAs, in presence of an inadequate management system, “for adjustments aimed at improving the effectiveness of the monitoring or management arrangements for the assistance. […] The managing authority shall subsequently demonstrate the steps taken to improve the monitoring or management arrangements or it shall explain why it has not taken any.” On the other hand, recognizing its: responsibility for the implementation of the general budget of the European Communities [the Commission] shall ensure that Member States have smoothly functioning management and control systems so that Community funds are efficiently and correctly used. To that end, without prejudice to checks carried out by the Member States in accordance with national laws, regulations and administrative provisions, Commission officials or servants may, in accordance with arrangements agreed with the Member State […], carry out on-the-spot checks, including sample checks, on the operations financed by the Funds and on management and control systems with a minimum of one working day’s notice. The Commission shall give notice to the Member State concerned with a view to obtaining all the assistance necessary. Officials or servants of the Member State concerned may take part in such checks. The Commission may require the Member State concerned to carry out an on-­ the-­ spot check to verify the correctness of one or more transactions. Commission officials or servants may take part in such checks. (Art. 38 of the Regulation No 1260/1999, emphasis added)

Moreover “after due verification, [it] may suspend all or part of an interim payment if it finds that the expenditure concerned is linked to a serious irregularity which has not been corrected and that immediate action is needed” (ivi). The specialized work made by the Commission in these years had positive effects on both the collection of the data and on the elaboration of the indicators within the MSs, and more generally in the reinforcement of the monitoring culture in Europe. In other words, even if it was not formally represented within the MCs, it was able to indirectly influence this phase. In fact, as the same Commission said: the Commission and the Member States are required to ensure effective monitoring using quantified objectives and indicators defined in the programs approved these indicators have been structured so as to describe the

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socio-economic situation in the region or sector concerned and measure the effects of assistance. They range from indicators of physical implementation (provision of infrastructure, amount of training etc.) to indicators of results (immediate gains in efficiency) and socio-economic impact described in terms of changes in the structures of production and employment. Significant progress may also be detected as regards the establishment of systems of shared key indicators (e.g. eEurope indicators), so that the efficiency of programs, priorities or measures can be compared. A good example is Scotland, where this type of approach has been developed on the basis of precise methodological guidelines. (CEC 2001a, p. 20)

In other words, during the 2000–2006 programming period, the monitoring system within the beneficiary countries underwent a significant consolidation, in terms of both availability of data and reporting activity. To this purpose, two new bodies were created for each OP, that is, the Audit Authority (AA) and the Certifying Authority (CA). The AA had the responsibility for all the control systems in front of the Commission, presenting an initial audit strategy within nine months of the approval of the OP, and annually submitting both a report setting out the findings of the audit carried out in the reference year and a formal opinion on the effective functioning of the management and control system and the correction of the expenditure presented to Bruxelles. In addition, it should ensure that, for each OP, the audit activities were in line with the international audit standards and that audits were carried out in order to verify the effective functioning of the system of management and control. Contextually, the CA had responsibility to draw up and to submit to the Commission both the payment requests and the certified expenditure statements. Within a more general trend of decentralization, the change made for the 2007–2013 programming cycle in terms of monitoring of the interventions was done in order to both make MSs more accountable and guarantee a greater coherence between the Lisbon Strategy and the implementation of structural funds. For this purpose, two important changes were introduced. First, the procedures for financial control were decentralized to the MSs, that should take into account new target indicators elaborated by the Commission only at priority level. As a consequence, the role of the CA was intensified with respect to the previous programming period, assigning it a greater role of supervision with verifications of activities of the MA and making sure that the data that it produced was correct and that all of its activities were reliable. To this purpose, a formal segregation of duties between these three authorities was requested.

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As a consequence of this new decentralized approach to financial control, the direct influence of the Commission in this phase was much lower than in previous cycles, since its audit activities were significantly reduced. Nevertheless, it continued to exercise an indirect role, both with respect to the previously mentioned reporting activity and in ensuring that the domestic actors should continue to perform well during the fourth programming cycle, and within the MCs (interview with EU official). As in the case of other phases of the implementation of EU Cohesion Policy, also the monitoring of the interventions has been characterized by a process of re-centralization at the hands of the Commission in the 2014–2020 programming period, since it resumed its direct role of control in the monitoring activities of the domestic actors. More specifically, even if the devolved system of financial management and control of the previous programming cycle was confirmed, it came to be mainly supervised by the Commission. In addition, the reporting activities for the MSs were reinforced. In fact, by confirming the presence of the Annual Implementation Reports and of the Annual Review Meetings, MSs should submit progress reports on implementation of the PA to the Commission by 31 August 2017 and 31 August 2019. As established by Art. 52 of Regulation No 1303/2013, their aim is to set out information about the progress of the PA and, among other things, to assess “changes in the development need in the Member States […]; progress made towards achievement of the Union strategy for smart, sustainable and inclusive growth […]; implementation of the integrated approach to territorial development […]; actions taken, and progress made, with regard to reducing the administrative burden on beneficiaries.” In other words, the Commission is now able to have detailed information not only about the lines of development interventions of the MSs, but also about their implementation gap and the actions undertaken in order to increase the administrative capacity of the final beneficiaries. 2.5.3   Evaluation As in the case of management and monitoring, evaluation rules were also constantly changed, in terms of how to conduct the evaluation as well as what and who should have been evaluated. Also for this phase of implementation of structural funds, the most important changes can be interpreted using the dichotomy between centralization and decentralization, and taking advantage of three different dimensions, that is, (1) the nature

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of the subjects responsible to carrying out the single evaluations; (2) the emphasis the Commission put on the evaluation approach, in terms of both compulsory and methodologically rigorous, or a more flexible approach; (3) the possible use of new instruments by the Commission during this phase in order to indirectly control domestic actors. According to them, the presence of three different phases can be identified. The former covers the first three programming periods during which there has been both a tightening and a clarification of the evaluation rules. It was also characterized by a strong centralization approach in the hands of the Commission, in order to progressively reinforce the same evaluation within MSs, since the strong misfit they present with these practices (Bache 1998; Bailey and de Propris 2002). On the contrary, a more flexible need-­ based approach was introduced during the 2007–2013 programming period (the second phase), before returning to have a more controlled use of the evaluation during the ongoing programming period. In fact, a new approach to evaluation is now prevailing during the actual programming period, that is, the third phase, during which the Commission is using new policy instruments in order to supervise the actions of MSs. Each of these three phases will be discussed in depth below. The regulations for the 1989–1993 programming period served to lay the foundations of the evaluation rules, introducing the idea that all the structural funds and their objective priorities should be evaluated (European Commission 1995). Nevertheless, there was not a clear attribution of responsibility, since they provided that ex-ante and ex-post evaluations should be realized mainly by the Commission. It created a vacuum that legitimated several domestic actors in not putting any particular emphasis on these practices in the early years of the management of Cohesion Policy. On the contrary, there was a greater clarification of the responsibilities between European and domestic actors for the evaluation of the 1994–1999 CSF and OPs, since they should be ex-ante evaluated by MSs and ex-post by the Commission. Contextually, it has begun to introduce the practice of the in-itinere evaluation. In fact, even if it was not formally envisaged by the regulations and therefore it was not mandatory, the Commission strongly wanted that some references to it were present within the domestic CSFs and OPs. Moreover, a strong emphasis on ex-ante evaluation as a necessary condition for the correct subsequent implementation of the funds was present, since all the OPs for the Objectives 1, 2, and 5b should include an evaluation of the environmental impact.

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This emphasis on ex-ante evaluation was also a discussion point during the debate for the negotiation of the 2000–2006 legislative package. In fact, the Commission was persuaded that a more rigorous approach to the evaluation should be introduced, and that the latter should not have been simply limited to be an isolated practice. Rather, it should also have started using evaluation for management purposes as well. For this reason, the MSs were required to do a thorough ex-ante evaluation within the SPD which should have served as a starting point for the elaboration of subsequent domestic documents. In addition, an assessment of the impact of the operations on gender equality and labor market should have also been included. Leaving the Commission to do only the ex-post assessments of the structural interventions, also the in-itinere evaluation (contextually with the ex-ante one) was for the first time made mandatory for the MSs. Moreover, beyond this formal obligation, since the start of the programming period, the Commission put a great emphasis on ongoing evaluation, expressly declaring that it should have been a learning process. In fact, its aim should not only be to “show the extent to which [the results-­ oriented management model] had an effect on implementation.” On the contrary, it ought to be an additional opportunity to “draw the lessons from this, especially with regard to the reconciliation of simplicity, quality, effectiveness and transparency. Such lessons should help in the forthcoming exercise to prepare programs […] for the next generation of Structural Funds programs after 2006” (CEC 2001a, p. 5). Moreover, after a first review of the ex-ante evaluation conducted by MSs, the Commission was not totally satisfied with their methodological quality and investigative accuracy, urging domestic actors that “in the later phases of programming, evaluations will have to be more detailed and based on precise information on the types of measures envisaged and the extent to which they are integrated into the plans and programs in question” (ibidem, p. 10). Therefore, the changes introduced during the third programming period in the evaluation phase were aimed to increase the performance of the OPs and to stimulate more efficient management among the domestic actors. To this purpose a performance reserve equal to the 4% of the total available funds was allocated only to the best OPs (in terms of efficiency, management, and financial implementation). It has inevitably increased the control of the Commission toward the MSs, since it elaborated a new instrument able to increase its supervision pressure on national and sub-­ national activities, in terms of both deadline compliance and quality of their actions.

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While in the three programming cycles the Commission had a strong direct and indirect role of control in the evaluation phase in order to consolidate its qualitative and quantitative use within MSs, during the 2007–2013 programming cycle, it was characterized by a more flexible approach since the evaluation constraints became much less stringent. This new approach clearly emerged by analyzing two different elements. Each of them marked a clear line of demarcation over what had been done during the third programming cycle. First, the emphasis on evaluation is partially decreased from the regulations, since while the ex-ante evaluation is mandatory only for the Convergence area, the in-itinere one become optional. Second, the community performance reserve was eliminated and allowing the MSs to adopt a national reserve equal to the 3% of the funds allocated for the Convergence and the RCE. Finally, the Commission’s emphasis on evaluation was once again strengthened during the actual programming period (Casula 2019), it being considered as “an essential element of the strengthened results-­ focus of the policy” and requiring the MAs “to carry out evaluations which assess the effects of the ESIF programs” (CEC 2015, p. 3). To a greater extent than in the 2000–2006 cycle, the Commission started to directly engage so that MSs commit themselves to really putting the evaluations into practice. Even if domestic actors are increasingly involved in the evaluation activities, the Commission decided to elaborate new indirect control tools. First, by confirming that the ex-ante evaluation should be conducted by MSs and the in-itinere one should not have been compulsory, the new regulations introduced a new option for the ex-post evaluations. In fact, they could be conducted by the Commission or by the MS. In the latter case domestic actors should work in close cooperation with the EU officials. Second, it has been requested for the first time to each MA to use both the “theory-based impact evaluation” and the “counter-factual impact evaluation” (Polverari 2015, pp. 17–20) and to elaborate an evaluation plan for each OP. These additions were considered by the Commission itself as “an essential part of the life cycle of a program,” since they: will support quality evaluations as well as their effective use by Managing Authorities; it will facilitate sharing of knowledge on what works and how in different policy fields; and, ultimately, it will contribute to the design and implementation of evidence based programs and policies. (CEC 2015, p. 3)

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Moreover, their tasks should be to improve the quality of evaluations through proper planning, including through identification and collection of necessary data (Article 54(2) CPR); enable informed program management and policy decisions on the basis of evaluation findings; provide a framework to plan impact evaluations (Article 56(3)CPR); ensure that evaluations provide inputs for annual implementation and progress reports; facilitate the synthesis of findings from different Member States by the Commission and the exchange of available evidence; ensure that resources for funding and managing the evaluations are appropriate (Article 54(2) CPR). (ibidem, p. 4)

Finally, a new performance reserve equal to the 6% of the national allocation was once again made mandatory in the actual programming period. At the end of the programming period, it will be directed toward the OPs which will achieve the highest level of efficiency based on specific output and result indicators will be later elaborated and will compare the initial objectives of the OPs with the expected results. 2.5.4  An Overview The analysis so far conducted has been useful in order to better understand the “rules of the game” within which the Italian and the Spanish national and sub-national actors structured their domestic choices in the different programming cycles from the 1989 to the present. The use of the dichotomy between centralization and de-centralization helped in understanding at which specific moments domestic actors could mainly model the policy according to their preferences, facilitating the building of a comparative framework for the following empirical analysis. More generally, even if the Commission always had a direct and/or indirect role in each phase of the policy cycle during all the five programming periods, the evolution of the regulations showed a progressive decentralization under the Commission supervision until the third programming period, for the management, monitoring, and evaluation of structural funds. On the contrary, the 2007–2013 programming period was characterized by a further decentralization in the implementation of the funds to the MS (without a strong control of the Commission), with also a reduction of the constraints for the domestic actors in terms of monitoring and evaluation. The starting point of this new decentralized approach was that the increased role of the actors on the ground would have contributed to

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stimulate the economic efficiency of the structural interventions. At the same time, since the negotiation phase, the Commission persuaded the MSs that this new management approach should be realized contextually with a reinforcement of the domestic institutional capacity. Therefore, for the purpose of my analysis, it becomes interesting to understand how this decentralization happened within each MS, as well as which implications it had for the management of the single OPs. The preliminary documental analysis based on the EU’s official reports that have been presented in previous pages showed that general implementation problems that were encountered during the four programming periods in the management of several OPs in Europe, on the one hand, and the new rigorous spending policies imposed by the economic crisis, on the other hand, legitimated the Commission to resume its strong supervisory role in each phase of the policy cycle. In fact, even if the role of the local actors was reinforced by the regulations for the 2014–2020 programming period, the same introduced new instruments of indirect control for the Commission in phases of management, monitoring, and evaluation.

2.6   Which Challenges for the Domestic Actors In the previous chapter I presented the main characteristics of the three challenges that the 1988 reform of the European regional policy introduced to the domestic actors. Combining the information about the evolution of the four basic principles with the lessons learned from the changes that occurred in the different phases of the policy cycle from the 1989–1993 programming period to the present, it is now possible to explain in depth the single types of institutional, strategic, and administrative challenges introduced in each programming period by the EU regulations. They will be introduced in detail in the following sub-paragraphs. The theoretical aspects introduced in the previous chapter will be also taken into account: on the one hand, the way in which it is possible to apply Hirschman’s theories on the study of structural funds will be revisited and it will be deepened further on the basis of the challenges introduced at each stage of reform of the regulations; on the other hand, the analysis will make simultaneous use of the literature of Europeanization and historical institutionalism in explaining how the change could have happened.

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2.6.1  The Institutional Challenge As discussed in the previous chapter, the way in which domestic actors responded to this first challenge refers, in Hirschmanian terms, to how they have decided to build their own decision-maker for development. At the same time, it has been discussed that the recent literature on Europeanization analyzed the change of the domestic institutions as a result of the European “adaptational pressures” debating about the validity of the “goodness of fit hypothesis.” The previous analysis showed that it is possible to distinguish two different phases during which MSs were asked to re-formulate their institutional preferences. A first one concerns the first two programming cycles, during which they had to decide how to effectively formulate their ­decision-maker for development according to their previous institutions charged with the coordination of the domestic regional policy. The following two programming periods opened the way to the second phase, during which it was requested of the MSs to introduce new institutions tasked with the management and the monitoring of structural interventions, such as the MA, the CA, and the AA. Their introduction required of the domestic actors to choose whether to re-define their overall governance system or to reinforce the previous one. In more detail, in analyzing the way in which a MS decided to build its decision-maker for development during the first two programming cycles, it is necessary to consider both the main internal characteristics of the central structures designated to coordinating regional policy, and its external relationship with the main actors involved in the decision-making and implementation phase, such as the sub-national actors, the other public and private organizations, and the political apparatuses that often interact with it in elaborating the general strategic choices. In Hirshmanian terms, the former element concerns the institutional characteristics of the decision-maker for development in the strict sense, that is, the timing in the creation of the national structures dedicated to the general coordination of the European policy, as well as its possible variations during the years; the technical characteristics of the senior managers involved; and the possible internal organizational criticalities which may have contributed in reducing the desired role of coordination that the center should have. Instead, on the basis of the Hirshmanian approach I decided to adopt, two elements can be considered in analyzing the main relationships between the designed institutional decision-maker for development and

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other actors involved in the implementation of the policy. The first one concerns the choice of the single MSs to centralize, rather than decentralize, the management of the funds, assigning more responsibilities to the center or to the sub-national actors. It first of all emerges analyzing the percentage of resources allocated between the different levels of government. At the same time, it can also be visible by analyzing how the different types of partners (institutional, socio-economic, and of the third sector) were involved in the definition of the general strategy and in the following phases of the policy cycle. The following two programming periods represented for the MSs an opportunity to re-define their governance system for the implementation of the regional policy. By confirming the two previously mentioned elements, the introduction of institutional bodies with specific competences in the different phases of the policy cycle represented a double challenge for the domestic actors. On the one hand, it asked to them to independently choose the collocation of these new authorities within the previous system of multi-level governance, and, therefore, decide whether to continue to have or not the same centralistic or decentralized system adopted in the previous two programming periods. On the other hand, their establishment required that new adequate structures to be created in time, also in this case taking into account the Hirschmanian recommendations. This has been especially true for the CA, due to the increased role it had during the 2007–2013 programming period. 2.6.2  The Strategic Challenge In the previous chapter I argued that the presence of a decision-maker for development with specific institutional characteristics could guarantee the elaboration of coherent and long-lasting development plans, characterized by focused and selective actions from a territorial and a thematic point of view. In each of the four investigated programming periods, two interconnected strategic challenges were always encountered, that is, the careful selection of appropriate investment priorities that are coherent with the development problems of their own territories, and the programing of a set of coherent development strategies during all the programming periods able to guarantee a strategic coherence with the previous period and with the development actions until this moment realized.

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In organizing the general strategy, the decision-maker for development should have first of all taken into consideration the philosophy of the Delors reforms and that, according to the additionality principle, every MS should have set up its own regional policy relative to its own needs, with Commission co-financing support. In order to elaborate a consistent development strategy, it has been requested to the domestic actors not only to guarantee a clear territorial and thematic allocation of the EU aid that is coherent with the present structural deficits, but also to assure an integration between the general strategy and the single actions taken (unless it is necessary to consider the needs of specific territories). It is clear that the perpetuation of incorrect ideologies of underdevelopment, as a result of consolidated legacies, could inhibit the achievement of this performance, above all during the first programming period. As a consequence, in the following period, a drastic change with respect to the previous adopted approach would be necessary, along with a learning process, rather than a flawed routine. It is clear that in shape their policy choices, domestic actors tended to invest more in a strategic macro-area rather than in another one not only on the basis of the development needs of a specific region but also considering the more general community objectives during each programming cycle. For this purpose, it is important to present the main investment trends of the European underdeveloped regions in order to better understand and interpret the following Italian and Spanish investment choices. As Table 2.2 shows, the infrastructural investments (for transport, energy, telecom, social infrastructure, and environment) prevailed during the first Table 2.2  Cohesion Policy funding by broad policy area in EU-15, 1989–2013 %

1989–1993

Business support (including RTDI) Infrastructure (transport, energy, telecom, social infrastructure) Human capital (labor market, education, social inclusion, etc.) Environment Other Technical assistance Total Source: adaptation from CEC (2014, p. 2014)

1994–1999 2000–2006 2007–2013

31.5 36.3

33.0 26.1

28.0 30.9

34.4 23.2

20.6

24.7

24.5

22.3

1.6 9.7 0.4 100

14.3 1.9 0.0 100

14.0 0.8 1.8 100

15.4 0.4 4.3 100

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two programming periods and then diminished to the benefit of the business support (equal to the 34.4 of the total resources during the 2007–2013 programming period). It was to a large extent conditioned by both the completion of the transport network in several European regions (CEC 2014, p. 206) and the new investment priorities expected by the Lisbon Strategy. On the contrary, the investment in Human Capital remained substantially constant during the years: 20.6% of the total resources in 1989–1993, 24.7 in 1994–1999, 24.5 in 2000–2006, 22.3 in 2007–2013. 2.6.3  The Administrative Challenge The concepts of change and policy learning can also help in understanding the way in which domestic actors faced the third challenge I investigated in my research. In the previous chapter I presented the segment of studies on Europeanization that explained how the administrative change can take place, discussing the concepts of negation, adaptation, and learning in depth. Taking into account the way in which the policy changed in the management, monitoring, and evaluation phases, this paragraph will summarize the main administrative challenges introduced by the former regulations and the following ones. In Hirschmanian terms, development depends above all on the possibility and capacity to call on forth resources that are scattered or poorly utilized. Among them, the administrative ones are those that could more rapidly develop, since their feedback effects are immediate and fertile. The building or the consolidation of the administrative capacity within each administration could happen through a bottom-up push coming from the single bureaucrats. Contextually, or alternatively, a decision-maker for development with the institutional characteristics previously described could induce a process of administrative learning by using formal and/or informal instruments. Fully sharing this approach, the next pages will present the single sub-challenges introduced by the regulations in terms of management, monitoring, and evaluation of the structural funds. According to Leonardi’s classification (2005), for each of these challenges, domestic actors could have responded through a negation of the community’s procedures, or an adaptation of them, rather than by initiating a learning process. The 1988 reform introduced a new management culture, by first of all requiring that all the funds should be spent within a limited time span and that they should be invested in new and original development projects.

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This approach was subsequently reinforced from the 2000–2006 programming period through the introduction of the n  +  2 rule. Its role should also be to stimulate discipline in the implementation phase, since compliance with the rule was a condition for obtaining funds. Contextually, programming period after programming period, domestic actors should increase their capacity in the use of the funds, by reinforcing their technical knowledge of community procedures and by adapting themselves to the possible changes in the management of the funds required by the new rules. These elements should be also facilitated by a structured system of transfer of knowledge between the single administrations involved in the management of the funds, as well as between each of them and their respective final beneficiaries. At the same time, a supportive role could also come from part of the resources that, in each programming period, were devoted to bolstering the technical assistance of the bureaucracies involved. The latter should not have been a substitute of the ordinary administrations. Rather, they should temporarily learn from the external competences and eventually internalize them, learning from them and reinforcing their capacity building. The reinforcement of the administrative capacity was also a necessary condition in order to correctly respect the decentralized management approach provided by the regulations for the 2007–2013 programming period. The monitoring of the interventions also represents an essential element of the programming cycle. Since the first programming period, its aims have always been multiple, concerning the control of the correct functioning of the implementation procedures of the OP and of its measures and projects in order to promptly propose appropriate corrective remedies; the monitoring of individual projects to ensure that they contribute to the achievement of the set goals; the collection of data and its subsequent dissemination among all the partners involved in the OP in order to raise their awareness about the opportunities; and the possible advantages of their participation. Therefore, the sought for introduction of a monitoring culture within the domestic bureaucracies should have been accompanied by a drastic change which should have involved both national and sub-national structures, as well as different types of domestic actors. In fact, the creation of new administrative structures with specific technical knowledge was first of all required, the goal of which was not only to organize and systematize all the monitoring data of their projects but also to support beneficiaries in collecting them. At the same time, a collection of data as accurate as possible should have required a cultural

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change among all the beneficiaries of the single OPs, since they should have developed a monitoring culture that should have led them to make their data frequently available to the outside. This should have covered not only the institutional and socio-economic actors involved in the implementation of the single projects but also the respective political class. Therefore, until the first programming period, the consolidation of the monitoring system within each national and sub-national authority should have been realized in three different ways: (1) by introducing a system of indicators and procedures that should have been in line with the European standards; (2) by guaranteeing a frequent and sufficient availability of physical, financial, and procedural data and by making them public within an annual monitoring report; (3) by using them for management purposes, in order to improve the performance of the single project and of the general OP of which it is part. These general characteristics of the monitoring phase remained essentially unchanged across the investigated programming period, requiring domestic actors to learn from the previous mistakes and to implement new procedures in order to improve the general monitoring system and to make the same development policy more accountable. The most important changes concern the role of the monitoring system within the general management of the single OP and the types of indicators used by the domestic actors. In fact, since the second programming period, the role of the MC significantly increased in this phase since it started to have an active role in the management of the OPs in modifying the procedures used for its implementation and having a supportive role for all structural interventions. At the same time, the regulations for the 2000–2006 programming period required a reinforcement of the reporting activities of the domestic actors, which, if not realized, could also have led to a reduction in EU funding. Contextually, the Commission required a more quantified and focused use of the specific indicators of each OP for the construction of a common system of eEurope indicators.3 Either the provisions were confirmed for the following programming period, assuming that domestic actors should have started a learning process during the 3  During the field analysis conducted, several national and sub-national officials involved in the implementation phase of EU Cohesion policy highlighted several doubts about the eEurope indicators provided by the EU regulations. As a Spanish regional official pointed out, for example, these indicators “were too vague and complex and in several cases beneficiaries were not able to understand what to put in” (interview with regional official).

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third programming period that would have facilitated them in implementing the decentralized monitoring system of the 2007–2013 programming period. Finally, the development of an evaluation culture within each MS should have been realized not only by starting to frequently produce reports and evaluations in accordance with the EU’s regulations, but also to use the reports and evaluations for management purposes. After the first programming period, during which there was not a clear attribution of responsibility between the Commission and the MSs, it was requested to the domestic actors to produce the ex-ante evaluation of both the CSF and the OPs, with an additional emphasis on the environmental impact of the structural interventions. It is clear that beyond this provision, they could independently decide to do additional ex-ante, in-itinere and ex-­ post evaluations. The third programming period represented an important watershed for the domestic actors also in terms of evaluation. In fact, for the first time, the Commission clearly supported the relevance that the use of the evaluation for management purposes should have, considering the same evaluation as a potential source of learning to improve the management not only of the 2000–2006 OPs but also of the 2007–2013 one. To this purpose, the Commission required to the MS to put more focus on the ex-ante evaluation, by using a more rigorous approach. At the same time the in-itinere evaluation was made compulsory. Beyond these two new challenges in terms of evaluation, the introduction of the performance reverse also required an additional cultural change among the domestic actors, since they had to change their administrative routines and practices in order to improve the performance of their OPs. Also in this case the administrative challenges introduced by the regulations for the third programming period should have the purpose of improving the capacity building of the domestic administrations and of their main actors, that would have facilitated them in correctly adapting to the more flexible approach to the evaluation of the fourth programming period.

2.7   How to Study Domestic Answers? After the presentation of the main challenges that each programming period introduced for the domestic actors, the method I used in order to study the domestic answers of the Italian and Spanish national and sub-­ national actors will be introduced. More in general, the research is based on both in-depth documentary analysis and more than 100 interviews I

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conducted in Bruxelles, Rome, Madrid, and in the Italian and Spanish regions starting from the end of 2015. Contextually considering both the length of time considered, that is, from the end of the 1980s to March 2017, and the different levels of analysis investigated, it is not possible to quantify the exact number of interviews I did for each case. To mere title exemplifying, in several cases the interviews had contextually worked as national official during a programming period and as external consultant for one or more regions during another one. Moreover, some of them spent part of their job career within the European institutions. In addition the quasi totality of them preferred to keep anonymity due to the salience information they communicated and the institutional role that in several cases they are continuing to have in this issue, at both European and domestic level. From a methodological point of view, through the use of the process tracing technique (George and Bennett 2005), that is, “an analytic tool for drawing descriptive and causal inferences from diagnostic pieces of evidence—often understood as part of a temporal sequence of events or phenomena” (Collier 2011), I tried to identify the main causal concatenations, transforming a mere description of historical events in a rigorous analytical explanation. For the comparison of the national strategies, I started from the analysis of both the secondary literature and the main official documents elaborated during the years by the European and the domestic institutions. These information had been triangulated with the testimonies of the main actors involved, since they had an overview of the strategies adopted and, for each of them, the domestic strengths and weakness. In this case, the reference point was only the Objective 1/Convergence system. For the Italian case I met not only the main officials involved in the different national structures that changed over the years, but also the Directors of the ERDF MA of the Southern regions, administering to them a semi-­ structure questionnaire concerning their experience when they covered this position. In the Spanish case, however, I collected data in Madrid since the MA is located at the central level for all the Autonomous Communities of Spain (CCAAs). All these information allow me to understand how Italy and Spain met the institutional, strategic, and administrative challenges on the basis of the information previous discussed. I interpreted the sub-national strategies of the four regions under investigation from the first to the third programming period similarly to what I did for the national ones. Even if the research concerned the ESI funds, a

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strong focus was put in the analysis of the ERDF, in order to guarantee a greater comparability among the regions. Even if in several cases Plurifund Operational Programme (POP) were used, this above all concerned the strategic choice. For the analysis of the administrative performance of their respective 2007–2013 ERDF OPs, instead, I investigated what political and institutional factors positively or negatively affected the main phases of an OP, that is, programming, project preparation and selection, project management, monitoring, and evaluation. Afterward, I identified the main dimensions of each phase of the OP and for each of them I assessed its administrative performance during the implementation of the ERDF OP (dependent variable). In the case of the programming phase, for example, I analyzed the original program organization, the possible changes occurred during the programming period, and the way in which the OP was implemented, the quality of the program documents, and the speed of the process of negotiation and approval of the OP. Limiting the analysis to the most representative axis of each ERDF OP, I also investigated the quality of the project generation and of the mechanisms of project selection/approval. On the basis of these elements, the analysis of the administrative performance of the phase of the project management, instead, concerned the stage of the project payment and the financial management and control, as well as the management capacity of the beneficiaries involved in the main projects. Finally, in order to investigate the diffusion of a monitoring and an evaluation culture, I explored the quality of the regional system of monitoring procedures on the basis of the EU’s previsions; the availability of physical, financial, and procedural data, and their use for management purposes, for the former phase; and the types of evaluation activities and the use of evaluation carried out for program management, for the latter phase. For each of these subdimensions, the independent variables concerned three elements that I felt to be particular relevant on the basis of the Hirschmanian approach I decided to use in my research. First, I investigated the institutional characteristics of the main organizational structure/structures involved in each phase, in terms of right allocation of responsibilities, internal coordination, organizational stability, enough availability of qualified staff, and so on. Second, I tried to understand the possible relationship and/or influence of the regional and/or local politics on administration, as well as its positive or negative effect on the management of the single parts of the OP. Third, I investigated the capacity of the main institutional, socio-economic, and of the third sector stakeholders

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involved or potentially involved to have an active role in the single phases of the ERDF OP, on the basis of both the European regulations described in Chap. 2 and the domestic formal and informal roles consolidated during the previous programming periods.

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CEC. (1998, October 30). Ninth Annual Report of the Structural Funds 1997, COM (98) 562 final. CEC. (1999, October 15). The Structural Funds in 1998, Tenth Annual Report, COM (99) 467 final. CEC. (2001a). Unity, Solidarity, Diversity for Europe, Its People and Its Territory, Second Report on Economic and Social Cohesion (adopted by the European Commission on 31 January 2001). Retrieved November, 27, from http:// ec.europa.eu/regional_policy/sources/docof fic/of ficial/repor ts/ contentpdf_en.htm. CEC. (2001b, May 7). Comuncazione della Commissione al Consiglio, al Parlamento Europeo, al Comitato Economico e Sociale e al Comitato delle Regioni – I Risultati della Programmazione dei Fondi Strutturali per il periodo 2000/2006 (Obiettivo 1), Bruxelles, COM(2001) 378 final. CEC. (2004). Third Report on Economic and Social Cohesion – A New Partnership for Cohesion: Convergence, Competitiveness, Cooperation, COM(2004) 107 final. CEC. (2008). Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the Results of the Negotiations Concerning Cohesion Policy Strategies and Programmes for the Programming Period 2007–2013, COM(2008) 0301 final. CEC. (2010). Fifth Report on Economic, Social and Territorial Cohesion: The Future of Cohesion Policy, CEC(2010) 1348 final. CEC. (2012, December 15). Commission Staff Working Document Delivering the Single Market Act: State of Play, SWD(2012), 21 final. CEC. (2014). Investment for Jobs and Growth. Promoting Development and Good Governance in EU Regions and Cities. Sixth Report on Economic, Social and Territorial Cohesion. Retrieved July, 27, 2019, from http://ec.europa.eu/ regional_policy/cohesion_report. CEC. (2015). Communication from the Commission – Investing in Jobs and Growth. Brussels: EC. Collier, D. (2011). Understanding Process Tracing. PS: Political Science and Politics, 44(4), 823–830. Da ̨browski, M. (2014). EU Cohesion Policy, Horizontal Partnership and the Patterns of Sub-national Governance: Insights from Central and Eastern Europe. European Urban and Regional Studies, 21(3), 364–383. Dearing, J.  W., & Rogers, E.  M. (1996). Agenda-Setting. London: SAGE Publications. Dettamer, B., & Sauer, T. (2019). Implementation of European Cohesion Policy at the Sub‐National Level: Evidence from Beneficiary Data in Eastern Germany. Papers Regional Science, 98, 167–189. https://doi.org/10.1111/pirs.12348. European Commission. (1995). Report from the Commission. 16th Annual Report on Implementation of Structural Funds 2004. Brussels, 28.10.2005 Com (2005) 533 final.

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Fargion, V., & Profeti, S. (2016). The Social Dimension of Cohesion Policy. In S.  Piattoni & L.  Polverari (Eds.), Handbook on Cohesion Policy in the EU (pp. 475–490). Cheltenham: Edward Elgar. Fargion, V., Morlino, L., & Profeti, S. (2006). Europeanisation and Territorial Representation in Italy. West European Politics, 29(4), 757–783. Ferry, M. (2013). Cohesion Policy and Its Components: Past, Present and Future. WP8 Task 2: Cohesion Policy Lessons From Earlier EU/EC Enlargements. Spain Case Study Report. European Policies Research Centre. George, A. L., & Bennett, A. (2005). Case Studies and Theory Development in the Social Sciences. Cambridge, MA: MIT Press. Hooghe, L. (1996). Cohesion Policy and European Integration: Building Multi-­ Level Governance. Oxford: Oxford University Press. Huggins, C. (2018). Did EU Regional Spending Affect the Brexit Referendum? Regional Studies, Regional Science, 5(1), 388–397. Jordana, J., Mota, F., & Noferini, A. (2012). The Role of Social Capital Within Policy Networks: Evidence from EU Cohesion Policy in Spain. International Review ofAdministrative Sciences, 78(4), 642–664. Kelleher, J., Batterbuty, S., & Stern, E. (1999). The Thematic Evaluation of the Partnership Principle  – Final Synthesis Report February 1999 Prepared by the Tavistock Institute Evaluation Development and Review Unit with the Assistance of ECOTEC Research and Consulting Ltd. and Experts in Each of the Member States. Retrieved November 27, 2017, from http://ec.europa.eu/regional_ policy/sources/docgener/evaluation/doc/rathe/cov-cont.pdf. Leonardi, R. (2005). Cohesion Policy in the European Union. The Building of Europe. London: Palgrave Macmillan. Leonardi, R., & Holguin, C. (2016). The ‘Real’ Principles of Cohesion Policy. In S. Piattoni & L. Polverari (Eds.), The Handbook of Cohesion Policy in the EU (pp. 429–442). Cheltenham: Edward Elgar. Leonardi, R., & Nanetti, R. (2001). L’innovazione dei QCS: il processo interattivo tra Stato, Regioni e Unione Europea. Le Istituzioni del Federalismo, 22(2), 325–359. Manzella, G.  P., & Mendez, C. (2009). The Turning Points of EU Cohesion Policy. Working Paper Report to Barca Report. Retrieved November 19, 2017, from http://ec.europa.eu/regional policy/archive/policy/future/ pdf/8manzellafinal-formatted.pdf. Marks, G. (1993). Structural Policy and Multilevel Governance in the EC.  In A. Cafruny & G. Rosenthal (Eds.), The State of the European Community (Vol. 2, pp. 391–410). Boulder, CO: Lynne Rienner. Marks, G. (1996). An Actor-Centred Approach to Multi-Level Governance. Regional and Federal Studies, 6(2), 20–40. McCann, P., & Ortega-Argilés, R. (2015). Smart Specialization, Regional Growth and Applications to European Union Cohesion Policy. Regional Studies, 49(8), 1291–1302. https://doi.org/10.1080/00343404.2013.799769.

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Medeiros, E. (2017). From Smart Growth to European Spatial Planning: A New Paradigm for EU Cohesion Policy Post-2020. European Planning Studies, 25(10), 1856–1875. Medeiros, E., & Rauhut, D. (2020). Territorial Cohesion Cities: A Policy Recipe for Achieving Territorial Cohesion? Regional Studies, 54(1), 120–128. https:// doi.org/10.1080/00343404.2018.1548764. Mendez, C. (2013). The Post-2013 Reform of EU Cohesion Policy and the Place-­ Based Narrative. Journal of European Public Policy, 20(5), 639–659. Nanetti, R. (1994). Cohesion Policy and Territorial Restructuring in the Member States. Anuari (Barcelona: Societat Catalana d’Economi), 11, 101–113. OJEU. (2006). Council Regulation (EC) No. 1083/2006 of 11 July 2006 Laying Down General Provisions on the European Regional Development Fund, the European Social Fund, and the Cohesion Fund and Repealing Regulation (EC) No. 1260/1999. Official Journal of the European Union (L.210), 31 July. Piattoni, S. (2006). Informal Governance in Structural Policy. Perspectives on European Politics and Society, 7(1), 56–74. Polverari, L. (2015). The Monitoring and Evaluation of 2014–2020 EU Cohesion Policy Programmes. IQ-Net Thematic Paper 36(2), European Policies Research Centre, University of Strathclyde. Pzos-Vidal, S. (2014). The Partnership Principle in Cohesion Policy 2014–2020. Breaking New Ground in Multi-Level Governance? European Structural and Investment Funds Journal, 4, 277–288. Sacher, M. (2019). Macroeconomic Conditionalities: Using the Controversial Link Between EU Cohesion Policy and Economic Governance. Journal of Contemporary European Research, 15(2), 179–193. https://doi.org/10.30950/ jcer.v15i2.1005. Šlander, S., & Wostner, P. (2018). Additionality of European Cohesion Policy. European Review, 26(4), 721–737. https://doi.org/10.1017/ S1062798718000339. Sweco. (2010). Regional Governance in the Context of Globalisation: Reviewing Governance Mechanisms & Administrative Costs. Administrative Workload and Costs for Member State Public Authorities of the Implementation of ERDF and Cohesion Fund, Deliverable 7 – Revised Final Report. Turok, I., & Hatfield, M. (2018). Reinforcing Regions in Precarious Times. Regional Studies, 52(1), 1–3. Wishlade, F. G. (1999, October). Eligible Areas and Financial Allocations Under the New Structural Funds: Quarts, Pint Pots and Half-Measures? Report to the European Regional Policy Research Consortium. Glasgow: European Policies Research Centre, University of Strathclyde. Yuill, D., et al. (1993). European Regional Incentives. London: Bowker Saur. Yuill, D., et al. (1995). European Regional Incentives. London: Bowker Saur.

CHAPTER 3

The Italian Case: Between Decentralization and the Legacies of the Past

3.1   Introduction The legacies of the “Extraordinary Intervention” molded the Italian system of implementing EU structural funds at least until the mid-point of the second programming period: a mere preservation of the existing structures, rather than an adaptation to the management modalities required by the EU regulations, characterized the Italian case in those years, at both national and regional level. In addition, the overlapping of the first programming period with the operation of the Fund for the South did not allow for a clear-cut redistribution of competences among the domestic actors as recommended by the new EU principles. The aim of restructuring Italian regional policy and to harmonizing it with the European regulation as soon as possible was pursued from 1996 under the new center-left government led by Romano Prodi, and, more specifically, by the new Minister of Treasury Carlo Azeglio Ciampi. After his appointment, Ciampi immediately identified the structural funds as a possible development booster, elaborating ad hoc solutions in order to maximize the use of 1994–1999 funds and, more precisely, to prepare in the best possible way for the third programming period. For these reasons, a new “season” for Italian regional policy was launched in 1998, that is, the so-called Nuova Programmazione (“New Programming”). To paraphrase what Ciampi had argued in his introduction to the First Report on the Developmental Policies of the South (Ministero del Tesoro, © The Author(s) 2020 M. Casula, Economic Growth and Cohesion Policy Implementation in Italy and Spain, International Series on Public Policy, https://doi.org/10.1007/978-3-030-36998-9_3

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del Bilancio e della Programmazione Economica 1999), the Nuova Programmazione was meant to represent “a unique opportunity for the country, for less developed areas, […] to reduce areas of social discomfort” (p. 5). For these reasons, the Mezzogiorno was identified as a possible “growth flywheel for the whole country” (ivi). This new approach to development policy in Southern Italy, whose theoretical references can be traced back to the New Economic Geography, identified two major drivers for development, namely: • Public investment, shifting the focus from direct incentives for enterprises to the production of public goods in order to promote a favourable environment for development; • Institution and capacity building, reinforcing governance of both development and other policy, giving relevance to the promotion of collective actions and transfer of knowledge to local actors (instead of reproducing top-down approaches), reorganising public administration and increasing its efficiency. (Applica, IsmeriEuropa 2009a, p. 12) According to Ciampi, the Nuova Programmazione would have to be “in concert with local autonomy and social forces” in order to “involve civil society in the decision-making process of public investment, to arouse sense of responsibility” (ibidem, p. 6) and to strengthen vertical relations between central and regional, and provincial and local administrations, as well as to create a more inclusive collaboration between public administrations and social partners. From an institutional point of view, the main change brought about by the Nuova Programmazione has been the creation, within the Treasury, of the Department for Development and Cohesion Policies (DPS), that is, a new body with a “pivotal role in co-ordinating policies for the South and mediating with the European Commission” (Bull and Baudner 2004, p.  1069). According to the Head of the DPS Fabrizio Barca (2001, p. 426), an economist from the Bank of Italy directly appointed by Ciampi, the task of the DPS should be to “draw, guarantee and monitor the rules of the game according to which the ‘local State’ will have to operate so that the local State can reinforce and provide itself with the ability to carry out these tasks: diagnostic monitoring, technical support, and production of evaluations methods.”

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In other words, the DPS became an observation and coordination center for Italian regional policy rather than a subject of direct action. Starting with the assumption that “the center” has failed until this moment in elaborating a coherent development policy for the Mezzogiorno, the new governance of the structural funds in Italy was characterized by a centrality of the regions, in terms of both institutional responsibilities and the amount of resources directly managed by them. It happened within a more general trend of decentralization of functions to the sub-national actors.1 In other words, the new institutional solution adopted in Italy starting from 2000 has laid down a new “season” for Community funds during which a new decision-maker for development was consolidated, the skills of whom are divided between the national and the regional actors: the choice was to entrust the overall address and coordination role to the center and the leaders, and the programming and direct control of the interventions to the regions, since the Management Authorities (MAs) were under their direct control. Considering that the goals of the Nuova Programmazione were not even partially successful until after around 15 years from its launch, the Position Paper of the Commission Services on the preparation of the 2014–2020 programming period emphasized, in 2012, the necessity to centralize the Italian system, creating an independent body in order to increase central control functions (European Commission 2012). Taking into account the aforementioned shift in executive governance, criticism encountered during the Nuova Programmazione should be understood by looking at both the central and the regional level. Following this criticism, Barca, in his End Mandate Report (April 2013), discussing the critical points which have so far been identified and the possible innovations in methodology that should have been introduced for the 2014–2020 programming period (European Commission 2013), recommends building “a strong national garrison, through the activation of regional task forces, the execution of observation missions and the timely communication of their outcomes, and the support of the national center of expertise” (Barca 2013, p. 18, emphasis added). This guideline took shape with the creation, in 2013, of the Agenzia per la coesione territoriale (Agency for territorial cohesion, hereinafter “Agency”), that is, a new centralized institutional instrument that should have increased the efficiency of the 1  For an evolution of the Italian local government toward the last decades, see Casula (2015, 2016, 2017a, 2017b, 2019) and Bolgherini et al. (2018a, 2018b, 2018c, 2019).

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Italian implementation system starting from the final years of the fourth programming period. In this chapter, my empirical analysis of the Italian experience shows that the change of policy paradigm and its following consolidation, in the triple acceptation of change that I am investigating in this work (institutional, strategic, and administrative), is subordinate to the political leadership that had previously promoted it. With the onset of drastic political change and lacking in shared and legitimized technical leadership able to autonomously strengthen the new practices, the new policy paradigm was destined to fail. By using the metaphor of the pendulum, I showcase by means of the Italian experience that a rapid increase in capacity management is dependent upon strong political support, and that the absence thereof not only inhibits the consolidation of good institutional, strategic, and administrative practices but also creates conditions for their retrenchment (by using Radaelli’s classification). This interpretation, perfectly in line with a Hirschmanian reading of development, is confirmed by the evidence emerging from my empirical analysis at both national and regional level. I present this evidence throughout this chapter. For each of the three dimensions I am investigating in this book, it is possible to distinguish between two phases that respectively coincide with the 1990s and the subsequent years (during which the DPS was established and the Nuova Programmazione was launched), therefore, respectively covering the first and last two programming cycles. This institutional parabola not only had several implications for strategic and administrative change, but it also negatively affected the management of regional OPs, as the cases of Calabria and Campania will show.

3.2   The Legacies of the Past 3.3   The Years of the “Extraordinary Intervention” The socio-economic delay of the Italian Mezzogiorno entered the national political agenda in the years following the start of the Republican period, overlapping with the launch of the Marshall Plan, and being facilitated by a new epistemic community which in those years started to consolidate in Italy. For example, for the treatments of the 1943–1945 loan given by the United Nations Relief and Rehabilitation Administration for the Southern

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Italian regions, in January 1947, Alcide De Gasperi decided to invite the general director of the Bank of Italy Donato Menichella, to accompany him on an official trip to the USA (Cafiero 2000, pp. 15–16). In those years, Menichella was one of the leading figures of the Italian economy, and he enjoyed widespread international appreciation: with other important Italian economists, such as Francesco Giordani and Pasquale Saraceno, he managed, through the Istituto per la Ricostruzione Industriale (“Institute for Industrial Rebuilding” (IRI)), the contacts with the US government. With an orientation neither Statist or Keynesian, they were not “favorable for the interventions to support economy, typical of the approach to development of Roosevelt’s “depressed areas”, but conversely more sensitive to the need for strict policies aimed at controlling domestic consumption, inflation and government spending, defense stability, the lira, maintenance over the balance of payments” (La Spina 2003, p. 196). Moreover, their orientation took form in 1946, as they were applied in the Associazione per lo Sviluppo dell’Industria nel Mezzogiorno (“Association for the Development of Industry on the Mezzogiorno,” SVIMEZ). The latter immediately expressed the will to use the bulk of American aid for the growth of the Southern regions. This aim was also shared by the US government, which was concerned that the persistence of regional socio-­ economic gaps and of social conflict could open the road for an establishment of Communist forces (Del Monte and Giannola 1978). Upon his return from the American trip, Menichella immediately expressed his desire that Italy be admitted into the newly created International Bank for Reconstruction and Development (IBRD). Italy’s official admission into the IBRD was confirmed in March, 1947. Following the admission, the contacts between the Italian government and the IBRD greatly intensified until the presentation, in 1949, to the Bank by Francesco Giordani of the Financing of Economic Development of Southern Italy, a multi-annual plan of aids for the Mezzogiorno elaborated by SVIMEZ and based on incentives for the strengthening of infrastructures and industrialization (Lepore 2013). According to this proposal, the IBRD would cease to finance individual projects, but would undertake an organic program of public interventions dedicated entirely to the Mezzogiorno (Cafiero 2000, p. 22). The USA’s particular interest in the Mezzogiorno issue, on the one hand, and the great diplomatic skill of the Italian mediators, on the other, secured a financial multi-annual program of financial aid for Southern Italian regions that would also extend beyond the expiry date of the Marshall Plan, in 1951.

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In order to realize the conditions for this Extraordinary Intervention, the IBRD called for the creation of an independent agency that would coordinate and manage the aid and account for its actions to Washington. Menichella argued: taking into account the Roosveltian experience of the Tennessee Valley Authority, it was considered that here too it is to take place through a particular instrument, flexible and not bureaucratic, which was assigned, in the state budget, an unchanging annual endowment throughout the decade, for carrying out tasks of an extraordinary nature and with the power to spend in the following years that part of the appropriations that had not been dispensed in the pertinent year. The creation of such an instrument was also anticipated by the need to facilitate the successful completion of the practices that the Bank of Italy had long since begun with the International Bank […]: it seemed clear, in fact, that the World Bank would be required to establish relationships, rather than with several ministries, with a single entity, modernly designed and organized, through which you are able to follow the progress of the work of corroboration and monitor in the proper sense the loans that it had granted. (Menichella 1986, pp.  282–283, emphasis added)

A solution, supported by the majority of the Italian government and by Prime Minister De Gasperi, was found in the establishment (in compliance with Law No 646/1950), of the Cassa per Opere Straordinarie di pubblico interesse nell’Italia Meridionale, or Cassa per il Mezzogiorno (“Fund for the South”). Since it was classified as an extraordinary body, its activities would have to cease by summer of 1960. Nevertheless, several extensions were allowed in subsequent years and it continued to operate until 6 August 1984, when it was officially dissolved by the Decree of the President of the Italian Republic (Dpr). However, the Extraordinary Intervention continued until 1992. Law No 64/1986 allowed for the establishment of a new agency, the Agenzia per la promozione dello sviluppo nel Mezzogiorno (“Agency for the Promotion of Development of the Mezzogiorno,” AGENSUD) that succeeded the Fund for the South, inaugurating a new and organic discipline for intervention in the Mezzogiorno. It operated until 1992, when the Extraordinary Intervention was definitively abolished by Law No 488. As mentioned, the Extraordinary Intervention was the main development policy before the European regional policy reform in 1988, representing the primary legacy in terms of the institutional relationships among

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national, regional, and local actors. Therefore, it is worth the effort to retrace its 42-year-old evolution in order to understand context within which the EU Cohesion Policy has operated. To do so, I will present this evolution as a four-stage process elaborated by Antonio La Spina (2003, pp. 233–253) that explains the main characteristics of Italian regional policy and its implications for inter-institutional relations and strategic choices established and made over the decades. During the first stage, there were several external constraints of the IBRD. As a consequence, there was a strong centralized approach in the management of the policy, since it was completely controlled by the Fund for the South. In accordance with its independent and autonomous nature, it operated in a very selective and discretionary way, giving particular emphasis on infrastructure investments. Afterward, the launch of Law No 634/1957 opened the way to the start of the second stage, during which the policy for the Mezzogiorno was re-oriented in favor of creating an industrial pole for development, considerably decreasing the investments for agriculture. This stage continued to be characterized by a centralistic approach, since the new development projects were selected exclusively by the Fund for the South. Contextually, an increase in state holdings also took place, above all those of the IRI. Third, the establishment of ordinary regions in 1970 and the following decrees 1-11/1972 that sanctioned the transfer of functions listed in Art. 117 of the Italian Constitution to these regions facilitated the start of a new stage in the history of the Extraordinary Intervention. In fact, from the end of the 1960s, the Fund for the South started becoming less centralized, and the interventions less selective, giving priority to the strengthening of endogenous development that had the perverse effect of reinforcing their distributive aims. For example, Law No 853/1971 abolished the Committee of Ministers for the South and entrusted a new coordinating role for policy management to the Inter-ministerial Committee on Economic Planning (CIPE). It also institutionalized new contractual practices between national and sub-national actors for the design and programming of the interventions in the Southern regions that significantly contributed to scaling down the discretionary power of the Fund for the South to the benefit of new power relationships between the central political authorities and the public and private local ones. Two instruments were most important instruments—the “special projects” and the “planning agreements.” The former concerned different areas of intervention

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for the Mezzogiorno; these could be formulated by the regional governments or by the Minister for the South. While these projects were selected and approved by the CIPE, the Fund for the South was assigned with the task of implementing them. The latter, already informally launched by 1968, has been based on concerted practices between government and entrepreneurs in defining a set of interventions for the Mezzogiorno. The last stage coincided with the years between the close of AGENSUD, in 1987, and the subsequent abolition of the Extraordinary Intervention, in 1992. The measures taken during those years greatly suffered from a new idea for development that from the first years of the 1980s began to spread among Italian policy advisors, that is, the idea that endogenous development started to have several positive effects in some areas of the Mezzogiorno. This ideology took shape with Law No 64/1986, which inaugurated a new paradigm for the Extraordinary Intervention characterized by a bottom-up approach and by an unusual polycentrism that was completely opposite from the original top-down and centralistic approach of the Fund for the South. In fact, the new Extraordinary Intervention was characterized by […] a plurality of actors. While the previous formula was based on the main role played by the Fund for the South, which concentrated in the programming, financing and execution of the interventions. These three functions were assigned to different subjects as part of the new law: the first to the minister, department and regions; the second to the agency, the third to an “open” executive structure that occasionally included public bodies (which would then carry out the execution according to their own regulations) and, sometimes, the private agents. (La Spina 2003, p. 228)

Analyzing the institutional and administrative results of the Extraordinary Intervention, Trigilia (1994) showed that during the 1970s and 1980s, it was conceived by the government parties as a way to consolidate their social base in the Mezzogiorno. In fact: industrialization of the south tended to create ‘cathedrals in the desert’: large state-backed industrialization projects which failed to stimulate any spontaneous growth in  local and regional economies around them. The more state intervention was extended in the 1970s and 1980s to address economic decline the more it became the main vehicle for the policies of patronage and clientelism operated by the parties of government to reinforce their social base in the south. In this way, southern policy became one

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of the mainstays of the long-term dominance of the Christian Democrats in government. (Baudner and Bull 2005, p. 301)

At the same time, both the consolidation of these policies of patronage and their top-down approach “had done little to encourage the responsibility and accountability of regional and local actors” (ibidem, p.  303). Also, this consolidation took effect after the approval of the Law No 64/1986. Although the regions could officially present annual development plans, they were not able to take full advantage of this possibility. As previous works show (in particular: Corso 1990; De Siervo 1985), this was dependent upon the (lack of) initiative of local actors, the (poor) qualification of the regional staff, the (fragile) collaboration between the political and administrative unities, and the (in)capacity of regional bureaucracies to independently decide on the projects to finance on the basis of development needs of their territories and ensure that these are managed efficiently. In addition, in Campania and Calabria, the implementation of the Law No 64/1986 took place simultaneously with the management of the Integrated Mediterranean Programs (IMPs). The document and field analysis conducted in the two regions showed a difference in regional performance on this issue. In Campania, the more general policy of patronage that characterized all stages of the Extraordinary Intervention continued to be applied in the management of the IMP. In fact, the local and regional actors were not able to take advantage of the European possibility, given that no institutional, strategic, or administrative changes took place during those years (interview with external evaluator). The management of the funds, 90% of which were allocated to the metropolitan area of Napoli, was monitored by the regional Service Relationships together with the Commission of the European Communities (CEC). Composed of an executive and five officials, it controlled all the stages of managing the program, without having sufficient knowledge and technical resources available: “clear problems in communication with other offices for the regional programming were present […], without a system for competences: for these reasons, several practices in those years died in the account department” (interview with regional official). Conversely, a greater effort to take advantage of the European opportunity has been observed in Calabria. For example, the IMP of this region was characterized by greater strategic coherence: it was divided into three

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areas of intervention, covering both two priority areas (i.e., the Alto Ionio Cosentino and the Basso Ionio Cosentino) and the Integrated Programming Area, dividing the territory of this region into 13 integrated areas, in order to establish connections between weaker and stronger areas. The superior strategic performance of this region, that also had several positive implications in the subsequent management of the IMP, must be attributed to the quality of the human resources involved: in 1985 the regional administration decided to organize training courses in the field of managing European affairs in Rome at the FORMEZ, an esteemed formative center in the field of public administration, and, subsequently, to allocate human resources to the programming offices of the Calabria Region. They were considered a “group of visionaries” within the regional administrations, and due to the cultural resistance of the “old guard,” the innovations they tried to introduce were not absorbed (interview with external evaluator). This “group of visionaries” also attempted to introduce new administrative procedures, as well as to create a unit for project evaluations. Similarly, these initiatives were not absorbed by other regional offices and, in many cases, their revolutionary action was obstructed by the “old guard” (interview with regional official). One example was the case of applying the partnership principle. Although the partnership principle was not respected in the elaboration of the development program, a target communication strategy in the area and several debate meetings were organized by a forward-thinking regional director. His aim was to spark interest of institutional and socio-economic actors into the European opportunities. In line with the aim of this work, after describing the main characteristics of the Italian regional policy before the launch of the first programming cycle, it is necessary to understand whether it was a fit or misfit with the new EU regulations and to link this argumentation with the Hirschmanian principles. 3.3.1  A Consolidated Misfit The aim of this section is to discuss the degree of “fit and misfit” of the Italian regional policy with the 1989–1993 community regulations. In order to do so, I will take into account the triple challenge I am investigating in this work and, later, I will discuss this challenge in Hirschmanian terms. As compared with the institutional challenge, it is necessary to point out that before the launch of the first programming period, a structured

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and well-established regional policy was present in Italy, and it was characterized by a system of inter-governmental relationships based on a constant debate between center and periphery, and the presence of national and sub-national structures formally in charge of managing the development plans. Nevertheless, the experience of the Extraordinary Intervention was marked by the prevalence of conflicting relationships between national and regional actors, as well as of regional and municipal actors. Moreover, even if a structure for central coordination had always been present, an institution with great powers in Hirschmanian terms has failed over the years. In addition, it was showed that starting from the middle of the 1980s, a process of delegating responsibilities was started in several regions, requiring institutional reorganization. Nevertheless, as the Calabrian case teaches, this desired institutional change faced internal cultural resistance. Finally, several Southern regions had structural human resource deficits and the aim of professionalization was never pursued, patronage in recruitment and career advancement having been favored instead. Similarly, in strategic terms, there was a substantial “inconsistency” between the European policy and the previous domestic one. Rather than merely procedural, it was to a large extent brought about by a substantial misalignment with the new principles of the European policy (Graziano 2004, 2011, 2012): although formally propelled by Law No 717/1965, the programming principle had never found real application in Italy, since the interventions were characterized by a marked fragmentation and lack of coherence with a unitary design for the development of the Mezzogiorno; the additionality principle was not considered in Italy before 1989. Even if the principle of financial concentration of resources was present within Italian legislation, it was never truly applied. In other terms, as both the literature review and my empirical analysis point out, the programming of the interventions was purely aimed at favoring local patronage policies. Substantial political interference had an indirect influence on the management and monitoring culture which had been rooted in Italy for decades and a direct influence on the evaluation practices that were historically prevalent. The multi-annual experience of the Extraordinary Intervention did not allow for the professionalization of the national and sub-national bureaucratic apparatus: starting from the third phase of the Extraordinary Intervention, excessive political control inhibited the consolidation of a process-oriented culture in Italy. In the case of the culture of evaluation, instead, a perverse effect characterized the establishment of

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these practices during the 1980s. Law No 64/1986 brought forth the Nucleo di Valutazione degli Investimenti (Unit for Investment Assessments), with the aim of introducing new evaluation practices in Italy for the approval of development projects in line with international standards. Despite such great innovation in methodology, the implementation of this rule—in line with Italian tradition—encouraged the above-mentioned patronage policy: evaluation became a new instrument for perpetuating traditional distributive logics, rather than a vehicle for increasing the capacities for socio-economic development. According to two national officials involved in the activities of the Unit during this time (Pennisi and Peterlini 1987), its activities did not help the consolidation of a culture of evaluation in Italy since its activities were characterized not only by technical inefficiencies, but also by the approval of unjustifiable development projects that were only aimed to favor special benefits for particular interests. To sum up, before the start of the 1989–1993 programming cycle, Italian regional policy had historically been characterized by a management approach that, even if centralized, involved a plurality of actors and utilized unusual contractual mechanisms between State and Regions and between regional and local actors, aimed at favoring patronage policies. For each of the three dimensions considered here, a total disengagement from Hirschmanian principles in the last stages of the Extraordinary Intervention has been detected. It was also a long-lasting and consolidated policy that to a large extent failed to fit the new European principles. In this capacity, the policy has certainly not created the conditions for an easy and swift adaptation of domestic structures to new European standards. The details of this transition will be discussed in the following section.

3.4   Explaining National Strategies 3.4.1  Meeting the Institutional Challenge: A System (Still) Searching for an Identity 3.4.1.1 Ten Years of Difficult Adaptation The national structures involved in the management of the 1989–1993 Common Strategic Framework (CSF) were three: the Department for Communitarian Policies, the Department for the Mezzogiorno, and

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AGENSUD.  The first, established in 1987 within the Prime Minister’s Cabinet, had a very marginal role in the coordination of the policy, since its sole aim was to implement and actualize European directives and manage State aid. The crucial roles were occupied by AGENSUD and the Department for the Mezzogiorno. The former was the operational arm for the Objective 1 Operational Programmes (OPs), with those activities supervised by the Department for the Mezzogiorno, which also represented the political side of the 1989–1993 programming period as it was founded within the Presidency of the Council (under the Ministry for the South). It was also “entrusted with the financial evaluation of the projects” (Milio 2007, p. 432). The application of the partnership principle in drawing up the 1989–1999 CSF and its following OPs was problematic, since the general interest for involving Italian sub-national actors was very limited. The reason was twofold. On the one hand, due to the centralistic approach of the Extraordinary Intervention, the application of the partnership principle was not embedded within the traditional operation of the Italian government. On the other hand, the central administrators were worried that the new European policy could excessively reinforce Southern regions. The orientation of the Italian policy maker was not shared by the Commission, which held that bypassing central government established direct relationships with the Italian regions, involving them in the elaboration of the 1989–1993 CSF. The Italian policy maker has even abandoned the guidelines with which the principle was meant to be understood. In the Report on participation of Italy to the EU process, submitted on 7 December 1989, by the Minister for the Coordination of Communitarian Policies, the Italian government notified the Commission that it has dismissed the correct application of partnership principle, since it “insists on an unacceptable tendency of action being taken directly by the regions, a procedure that may seem—and perhaps wrongly—quicker, […] which, in practice, leaving ample freedom to the Commission for choice and manoeuvre” (Ministro per il coordinamento delle politiche comunitarie 1989, p. 36). The inadequate application of the partnership principle also determined the following implementation of the Objective 1 OPs. In fact, the presence of a plurality of national institutions without a clear distribution of responsibilities between them led to “general confusion” in the management of structural funds (interview with national official), due to the national structures not being able to conform to the European

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procedures. Poor understanding of the procedures among the single national directions that took care of the activities of single funds brought about this problem (Ministro per il coordinamento delle politiche comunitarie 1989, p.  35). Contextually, regional administrators—who were assigned with roughly 55% of European aid—appeared to be completely unable to manage the funds in accordance with new Community rules. On the one hand, the regional offices were overburdened with bureaucratic work (Svimez 1996, p. 273), since in the first years the application of the principle of partnership during the management phase was limited to the regions. Neither local authorities nor social partners or other public subjects were involved, while private staffing support to streamline the activities of the regions were similarly left out. On the other hand, the national system of distributing competencies between the national and the regional level was still lacking in clarity, which limited the behavior of regional administrators in the few cases in which a greater will and capacity was present (interview with national official). The Italian debacle was not only caused by the overlapping of the start of the first programming period with the last years of the Extraordinary Intervention, but also by specific institutional characteristics of national structures that appeared to significantly deviate from Hirschmanian principles. In fact, most critical defects during those years were induced by the presence of a decision–maker for development that was not only unable to distribute clear responsibilities between all institutional levels and coordinate the policy as whole, but lacked knowledge, competences, and resources as well. With regard to the former, the main defects concerned the lack of integration between both the national and sub-national institutions involved and the single structural funds, creating problems “not only in financial terms but also in strategic terms, resulting in the absence of synergy between different actions in order to contribute to achieving main objectives” (IsmeriEuropa 1995, p. 11). Several problems also concerned the availability of human and financial resources. The deficit of the former was linked to scarce staff availability and scarce technical knowledge within the central structures for carrying out procedures required by the new Community regulations. In addition, the financial resources at the level of the entire CSF appeared adequate only at the start of the programming, since “the successive reduction in national funds dedicated to development—because of the cuts in public spending initiated in 1991—then increased the “relative value” of the Community resources and sometimes also caused difficulties in their

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cofinancing” (ibidem, p. 12). This also happened for several OPs, such as the Industry and Services and Tourism MOPs, in which “the resources available were insufficient to attain the proposed objectives” (ivi). Due to difficulties that were highlighted, in 1994, with the approval of the 1994–1999 CSF and two years after the official end of the Extraordinary Intervention, there were several attempts to reorganize the national multi-­ level system with the aim of clearly distributing responsibilities between national institutions involved and ensuring the presence of a clear central garrison. From the point of view of national structures involved, and as part of a more general attempt to re-attribute AGENSUD competencies, a board was assigned for each structural found: the Budgetary Ministry, apart from supervising the financial circuit control and coordinating regional OPs, was to coordinate the implementation of the ERDF; the ESF was to be coordinated by the Ministry of Labour; the EAGF and the FIFG by the Ministry of Agriculture, Food and Forests. Even if they did not directly manage OPs, each of the boards became the reference board for the Commission with regard to their funds, making sure in this way that a reinforcement of the vertical partnership principle between the European institutions and the Italian national ones: the leader board transmitted to the Commission the requests for payment […]. Previously this transpired in a myriad of ways, by means of different types of forms…all administrations did as they preferred […]…through AGENSUD or through the regions […]. However, from this moment the regions passed through a competent minister […] to have the “supply chain” centralized partially; this helped in reducing previous inefficiencies. (Interview with national official)

In addition, the management of the funds was entrusted to the Budgetary Ministry and to the CIPE. The aim of the latter was to deliberate “on national co-financing Funds, the financing requests by each administration officially responsible for an OP, and the consistency of these requests with the financial plans and the community rules” (IsmeriEuropa 2002a, p. 173). An Observatory for Regional Policy was also found in order to improve the direction role of the center. The reasons for its establishment were connected with a national debate on the way in which cohesion policy should be applied. In more detail, the issue under discussion was the creation of an instrument of “technical

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coordination” which was supposed to “elaborate new methodologies” and to “verify the trend and efficacy of the interventions in the underdeveloped areas and […] of the EU cohesion policy” (Graziano 2004, p. 1990). There were two lines of thought, respectively divided between […] the Department for Communitary Policies […] and the sectorial administrations (single Ministries). The idea of the former, of which Giuseppe Romita was the leading exponent, was to imitate the French model of the DATAR, a structure that should be: established within the Presidency, dependent upon the Prime Minister, and politically oriented towards single priorities. The structures that managed the funds opposed this idea. (Interview with national official)

The final resolution was the creation of a new body within the Budgetary Ministry that would have to be “composed of a president and four members chosen among renowned experts and independent from the economic, juridical, corporate and urban sectors” (art. 4, d.lgs. 96/1993) (Graziano 2004, p. 1990). In spite of this modification, strong political will to initiate the restructuration of the multi-level system, and to build a clear decision-maker for development, was lacking until 1998. In fact, the institutional change realized between the end of the first programming period and the start of the second was highly symbolic. Although this institutional shift was not meant to effectively modify the implementation system, it was supposed “to send a message” that drastic institutional change was necessary: the powers given to the Budgetary Ministry continued to lack in clarity, and it was therefore unable to carry out to its assigned role of coordinating interventions and establishing informational connection between all levels involved in the implementation system (interview with national official); the Observatory for Regional Policy had a marginal role, since it was not entrusted with an operational task (interview with national official); the new Ministers seemed unprepared to take up all aspects of their new roles (IsmeriEuropa 2002a, 2002b). As a consequence, a lack of a unitary understanding of the rules among the single national administrations and the sub-national actors continued to be present, with inevitable overlays of competencies that inhibited the correct management of the OPs (interview with national official). The symbolic value of these changes was also confirmed by the analysis of

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resource allocation between national and sub-national administrations: “without having solved the problem of poor performance of regional administrations, CSF II placed a similarly high share of funds (49 per cent) under their authority” (Tondl 1998, p. 119). Nevertheless, several experiments continued in 1994 as a preliminary stage of the institutional reform, which began with the establishment of the DPS. For example, L. 341/1995 introduced new national and regional structures within the already complex system of Italian multi-level system, that is, the so-called Cabina di Regia (Monitoring Committees). The creation of this new “network system” was meant to “simplify and rationalize the administrative actions […] in depressed areas” (Armao 1997, p. 481). In fact, it was: responsible for operational support to Community Interventions […] The scope will be broadened to include the management of projects and measures which would reduce the burden of public administration and introduce more effective implementation mechanism. This will also require clear working procedures and co-ordination mechanism between administrations and external experts. To increase its effectiveness, Monitoring Committees will be assisted by a permanent Evaluation group, which will supervise on-­ going evaluations and help decision making within these Committees. (EU Commission 1997, p. 95)

In addition, from 1996, a further procedure of both centralization and re-organization dependent upon exogenous and endogenous factors was continued by the Treasury. For the first time, due to Italy’s difficulties in adapting to the European procedures and, in particular, in order to hasten the expenditure in the cycle 1994–1999 (see par. 3.3.3.1), the Commission launched several solicitations to the Italian policy maker in order to introduce rigorous national policies on the use of EU funds. These solicitations were positively received by the new center-left government elected in 1996, which was explicit about its pro-European attitude from the very onset of the election campaign. All these issues were discussed in depth, in July 1997, by Carlo Azeglio Ciampi (as Italian Minister of the Treasury) and the European Commissioner Monika Wulf-Mathies. At the end of their meeting, they arrived at a final agreement according to which Italy commits to improve the quality of program management. The proposed solution was the reinforcement of the role of the Treasury, to which the coordination of the

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multi-fund programs and their financial control were assigned: the coordination and supervision of the financial flows of the ESF were transferred, in 1996, to the department of the Treasury named Ispettorato Generale per i rapporti finanziari con l’unione europea (General Inspectorate for Financial Relations with the European Union, IGRUE). In addition, the need to centralize the coordination system became necessary following the start of Italian decentralization that, from the second half of the 1990s, began to gradually reinforce the role of the meso-level of governance in the Italian institutional architecture. In other terms, the obvious incapacity of Southern regions to manage funds required the strengthening of a central system of information and control. As a result of this general institutional change between 1994 and the launch of the Nuova Programmazione, several positive improvements were achieved. Data analysis and interviews emphasized not only reinforcement in vertical partnership, but also greater coordination among the national structures compared to the 1989–1993 programming cycle. For example, an independent evaluator pointed out that for the first time in Italy, a state institution agreed to an automatic reduction in its budget if it did not achieve spending objectives. Even though this had already occurred in actual fact, from the official point of view the acceptance of these rules, with no imposition, represented a considerable change in state attitudes. Overall, this collaboration was then positively reflected in the different relationships between regions, central government and the European Commission. (IsmeriEuropa 2002a, p. 17, emphasis added)

An additional institutional change could be found in the relationships between the European, the national, and the sub-national actors: during the last years of the 1994–1999 programming period, there was a dialectic relationship between EU, the State and the regions […] until this moment nothing was understood. Obviously, it continued to be conflicting and they fought a lot since everyone tried to defend their position […] but it is was routine […] and the decisions were always taken […] with general consensus. […] Moreover, for the first time the Italian actors have come together as a team and they were inclined to learn the new methodologies proposed by the Commission. (Interview with national official)

In all these cases, a crucial role was played by Carlo Azeglio Ciampi. In fact:

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he understood the needs coming from the administration and he became the banner-bearer of a rejuvenating national undertaking […]. Otherwise, without political support, nothing could have been done […]. For example, in 1998, there was a general reprogramming with respect to the initial state of implementation and several OPs were cut. Between the reprogramming stages in the first two programming cycles, this one was the most important. The others were “small potatoes” in comparison. It was decided by Ciampi, who took charge of the situation, that all administrations be imposed with the objective to spend 38% of the resources until the end of 1997 […]. The rules for reprogramming were decided between March 1997 and the end of the year, when it was approved not with a majority but with all actors in partnership. (Interview with national official, emphasis added)

In spite of these institutional changes, many criticisms persisted before the start of the Nuova Programmazione, that is, nearly a decade after the formal launch of the first programming cycle. In Hirschmanian terms, these criticisms were caused by the Italian decision-maker for development still failing to establish an identity and being unable to coordinate the overall “supply chain” of structural funds. In fact, in the face of the many processes of reorganization of structures, mainly at the central level, and the common tendency “to centralise co-ordination of actions into a single internal structure […,] the centralisation of general co-ordination […] was often carried out over too-long a time-scale and was not accompanied by a complete overhaul of the organisational and functional structure” (Ismeri Europa 2002a, p. 172, emphasis added). In addition, the powers that were bestowed upon the Ministry of Budget continued to be unclear, and it was unable to pursue its assigned role of information linkage across all levels of the national implementation system. Contextually: […] the organizational improvement [was] […] not equally widespread in the different Ministries. […] Co-ordination of individual funds by the Ministry for Employment and the Ministry for Agriculture has also increased but to a lesser extent. The causes for the difference may be continuing understaffing and lower operating ability. […]. The Industry Ministry defined the implementing procedures of law 488/92 aid scheme only in 1995. In the Ministry for Universities and Research centralization of co-ordination, besides being completed only in 1999, never became operational. Following the complete re-ordering of the Ministry, all the functions relating to the MOP were put under a single structure that headed six distinct offices responsible for the various types of actions. Only one of these took on the

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management of actions expressly activated by the program […] Management of the Ops in other ministries showed lower efficiency (for example, the Ministry of Public Works, the Ministry of Employment and the Ministry for the Environment) caused both by increasing decentralization that lowered their ability to interact with other bodies, and a lack of international organization. (ibidem, pp. 175–178, emphasis added)

Several problems also persisted within the operative staffs of the national structures. They concerned not only a lack of staff but also a general inadequacy of professional skills. One of the main problems was a lack of political will to invest in the operative staffs within the national administrations due to a general lack of confidence in the European system (interview with national official). All these elements clearly emerge when analyzing the internal defects of the national Cabina di Regia. In fact, even if its establishment represented an improvement in the exchange of learning among the national and sub-­ national administrations, it did not improve the decision-making phase: its establishment within a preexistent institution limited the clear definition of its powers and tasks, since it “did not find a position in the hierarchy of the Treasury, and its responsibilities were often vague, when not overlapping” (IsmeriEuropa 2002a, p. 177). In other terms, its negative performance was to a large extent caused by the incapacity of this new instrument to break with the past and with antecedent structures: it inherited all the administrative structures, human resources, and the composition of the previous Regional Policy Observatory (interview with national official), as well as its functions. Therefore, it was a (new) instrument that did not have an actual effect on national programming since its functions were limited to the control over and monitoring of the use of financial resources. For example, one of its main tasks during the years was the collaboration with the Budgetary Ministry for the collection of data and information for preparing the Relazione Previsionale e Programmatica (Provisional and Programming Report). In addition to these endogenous characteristics of the national ­decision-maker for development, an inadequate element concerned the implementation of horizontal partnership that in those years continued to be “under-developed or not developed at all” (ibidem, p. 17). This focal point can be better understood coming from one of the most important national officials involved in the implementation of the first and second programming period:

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the main problem of the partnership was that when the partners were called to the negotiating table, they would not show up, or if they were present they were not at the table when it was time to work. Secondly, the partners, and especially the socio-economic ones, have always remained the bearers of their own interests without ever having the collective interest in mind and without taking into account the real effects of their actions […]. They had always been carriers of interests that, although legitimate, were narrow […]. Another issue was their claim to be co-decision makers: the regulations had always maintained that within this partnership, it is especially important that those who have to decide must have complete information before making a final decision. (Interview with national official)

The Nuova Programmazione began to operate in Italy in the late 1990s within this complex and uncertain institutional framework. 3.4.1.2 The Parabola of the Nuova Programmazione The start of the Nuova Programmazione partially modified the multi-level governance for the management of the structural funds, attributing new roles and responsibilities for each of the main institutional actors. It also contributed to create a new Italian decision-maker for development. First of all, the programming phase for the elaboration of the 2000–2006 general strategy was characterized by an unusual bottom-up mobilization under the coordination of the DPS that culminated in the presentation in Catania, in December 1998, of the document Cento Idee per lo Sviluppo (“100 Ideas for the Development”). Its main programmatic orientations were in-depth discussed with representatives of the national administrations, regions, local authorities, and socio-economic stakeholders. Moreover, the 2000–2006 and 2007–2013 CSFs identified the regionalization of the structural interventions as a new development driver. It is clearly visible analyzing both the percentage of allocation of resources between the national and the regional administrations and the physical allocation of the new institutional bodies required by the new regulations: either allocated around the 70% of the EU’s resources under the regional control, and they opted for the collocation of the MA, CA, and the AA under the umbrella of the regional administrations (therefore, requiring a revitalization of the regional programming centers in order to fulfill to these new responsibilities). The establishment of this new MLG also inaugurated a constant process of contractualization between the national and the regional actors

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(Baudner and Bull 2013; Domorenok 2014; La Spina 2003, 2012) which has come to fruition with the creation of new institutional cooperation mechanisms between the central government and the regions. They were realized through the use of the Intese Istituzionali di Programma (Institutional Framework Programs) and the Accordi di Programma Quadro (Framework Program Agreements), that is, “documents shared by several administrations, in which different financial resources are allocated to a single intervention program” (Viesti 2011, p.  105). As a consequence, the task of the ‘centre’ […] will be to design and monitor the rules where the ‘local state’ will have to act to strengthen the local state and have the capacity to carry out these tasks: diagnostic monitoring, technical support, and evaluation methods. (Barca 2001, p. 857)

Therefore, a new Italian decision-maker for development was created for the third and the fourth programming period: even if the center continued to have a partial role of supervision of the policy, new crucial rules were assigned to the regions. Next pages will in-depth describe the main institutional characteristics of the national structures, arguing around the criticalities found across the years. National Structures One of the main positive effects that the establishment of the DPS immediately had for the consolidation of the Cohesion Policy in Italy was the reinforcement of the vertical partnership principle between the European actors and the domestic ones. In fact, the establishment of a “new gatekeeper to Europe” (Baudner and Bull 2013, p. 215) facilitated a drastic changing point on the Italian approach during the negotiation phase (Damonte 2001), that until the 2000–2006 programming period totally failed in its ability to condition both the EU regulations and the allocations of the funds (Brunazzo 2007; Damonte 2001; Gualmini 2004). In fact, “for the first time since the first reform of the Structural Funds in 1988, Italy managed not only to formulate a national position on the new Structural Funds’ regulation, but also managed to promote it consistently during the relevant negotiation phases” (Brunazzo and Piattoni 2004,

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p. 170). This policy learning of the Italian negotiators must be attributed to the creation of a domestic institution such as DPS that has been able to organize a national consultative process with a great involvement of the regions and, consequently, not only to present an univocal position in Bruxelles but also to condition the decision-making process. At the same time, the achievement of this positive result was facilitated by the strong political investment of these years: In the first two cycles, the Italian negotiators were the governments and they were almost absent […]. This was related to the lack of a national presidency […]. If the policies are not in the agenda of national governments, there are no negotiators […]. The garrison that it had been able to secure in Italy during the period 1989–1993 was represented only by the Ministry of the Mezzogiorno which was unable to express a clear line due to an exclusive focus on extraordinary intervention. And on the other hand, it was a time when the attention to Europe was minimal: by way of example, I remember that there was a Commissioner for Agriculture who gave up this job in Brussels for a secondary position in Italy […] something that would be unthinkable today […]. There was an investment in Europe that was missing. During the negotiation phase of the first two cycles, the Ministry was assisted by technical assistance. After all, everything has changed since we started to have a firm structure wanted by Ciampi and supervised by Barca: people who negotiated the 2000–2006 programmes did not happen by chance and without the support of the national politics they would never have been. (Interview with national official)

From an organizational point of view, the DPS was collocated within the Ministry of the Treasury, Budget and Economic Planning (Ministero del Tesoro, del Bilancio e della Programmazione Economica, MTBPE), that at the end of the 1990s was the most important national center in the matter of political economy, therefore playing a crucial role also in the more general governmental choices. As in the case of its four Departments, the DPS was organized by large organic functional areas within which all the technical, human, and financial resources need to carry out their functions were collocated (Dente 1999). It was composed by five services— one of which was specifically dedicated to the management of the structural funds, becoming the main Italian interlocutor with the Commission and supporting the activities of the national and regional administrations deputed to the management of the OPs. Moreover, it inherited from the Budgetary the Technical Evaluation and Investigation Testing Unit

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(Nucleo Tecnico di Valutazione e Verifica Investimenti, NUVAL) and the secretariat of the CIPE (DPS 2007). The latter had specific tasks of programming cycle instruction, representing a link between politics and administration. During the first years of the establishment of the DPS, the high technical leadership of Fabrizio Barca was recognized by all the members of the Department. Thanks to the great autonomy he had and to the total political support he enjoyed, Barca was able to build a well-organized organizational structure with a vertical coordination and to do a parsimonious scout activity which allowed him to have the best personalities within the Ministry. As emerged during the field analysis I did within the national offices in Rome, these years also represented a season of great professional growth, with an unique focus on the achievement of the objectives. It was also facilitated by the possibility to recruit up to a maximum of 60 external technical consultants with specific professional skills directly nominated by the Department. In the first years, their presence also facilitated a learning process of the whole national administration. After describing the main institutional change introduced by the Nuova Programmazione, the following pages will seek to understand which has been the variations of the national decision-maker for development with respect its original characteristics, as well as the main criticisms of the new governance system of the Structural Funds for the management of the 2000–2006 and 2007–2013 programming cycles. More in detail, I will present three different moments of criticisms had over the years and that in a different way they had undermined the proper functioning of the national institutions deputed to the coordination of the regional policy. By using a Hirschmanian approach, I will underline that in each of these three phases, it has been deprived by specific institutional features that until then had characterized it and allowed it to properly and adequately fulfill that desired role of guidance and direction that, according to the initial idea of Ciampi, it should have. The first moment of criticism reached only few months later the formal establishment of the DPS. It immediately highlighted a structural problem of the Italian institutions deputed for the coordination of the structural funds and that in Hirschmanian terms can be traced back to the excessive dependence of the national bureaucracies to the governmental policy choices, above all in adversity situations for the decision-maker for development. It was largely influenced by the stormy events between Barca, that is, the undisputed technical leader of this first season, and the various political leaders that have succeeded over the years. As said, at a very early

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stage, he had an important political referent in Ciampi, which enabled him to brilliantly and correctly implement the principles of the Nuova Programmazione, since he had wide autonomy in the choices of political economy. On the contrary, the climate of political instability that characterized the Italian political system between 1999 and 2000 for the alternation of three different governments—namely, the D’Alema I, D’Alema II and Amato II governments—established a progressive loss of management autonomy for the DPS and, conversely, a prevalence of the political leadership on the technical one in national policy choices. The latter have been geared toward both a generalized cut in resources for the Nuova Programmazione and their re-orientation to incentive policies for businesses. This cut led, in 1999, to Barca’s resignation, creating a stall in the decision-making process and in the activities of the DPS. Although he was replaced as Head of Department by Renato Scognamiglio from 1999 to 2001, the lack of a fully recognized technical leader by all the staff has led to a stalemate in the DPS activity in those years (interview with national official). In fact, Scognamiglio’s appointment had negative repercussions within the DPS internal organization as well as in its capacity to maintain a strong relationship with the Ministry due to both the absence of a relationship of mutual esteem and trust between the Head of Department and the General Directors, and the incapacity of the new Head of Department to impose his technical and scientific authority in front the Ministry (interview with national official). The parabola reached its peak from 2001 to 2006. In fact, during those years Barca was reconfirmed as Head of Department by the Berlusconi II Government, marking a strong resumption in the activities of the DPS and returning to have that role of guidance and address for the national and regional administrations that instead lost during the (short) Scognamiglio parenthesis. Thanks to the new support given by the new center-right government, the DPS was able to implement the principles enshrined of the Nuova Programmazione, and it also decreed the launch of a new era of modernization of the Italian administrative machine, at both national and regional level (Giannelli and Profeti 2006). Since 2006, the fortune has been against the national decision-maker for development: the victory of the center-left during the national elections and the following establishment of the new Prodi II government has led to a number of policy choices that, although not directly weakening interventions in the Mezzogiorno, have once again de-institutionalized

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the role of the DPS, having several important consequences in its strategic and developmental drive. At a time of great political change, the Ministry of Economy and Finance (MEF) came into the eye of the viewfinder for the great skills it enjoyed. Even in order to differentiate itself from the political decisions taken in previous legislatures, its dramatic downsizing would have allowed the balance between the Italian Ministries to be restored. The choice was to move the DPS from MEF to the Ministry of Economic Development (MISE). This decision had a threefold perverse effect on the driving and addressing activities that the Department ought to have. First of all, his move to a non-governmental department with general economic policy declines a substantial downsizing of its previous role, limiting it to having a more sectorial address and depriving it of the decision-making autonomy that until this moment it had. Second, this shift was accompanied by the separation of CIPE’s secretariat from the DPS to the Presidency of the Council of Ministers. This led to the fact that the programming acts were placed on an external screen of different types, thus diminishing the effectiveness that up to that time characterized the instruction of the programming cycle. As a result of that, in those years, a drastic cut in human resources inside the DPS was achieved, ranging from 511 units in 2005, 393 in 2006, and 350 in 2008, involving mainly staffing staff. It was not just a quantitative cut. In fact, it involved some key elements in the management of the central administrative machine, endowed with extreme technical and procedural skills (interview with national official). While during the second critical moment the central decision-maker for development was deprived of the appropriate skills and human resources that until this moment it had, during the third one—which began in 2009—some institutional and financial resources that until then had guaranteed him to pursue the tasks that had been entrusted to it have failed. The criticalities of this third phase require to be understood starting from the rhetoric of change envisaged within the National Strategic Framework 2007–2013. On the basis of the criticisms previously found, a set of method innovations have been embedded in a threefold way of action: (1) to strengthen the central structures responsible for the management of cohesion policy, (2) to strengthen the national presidency and its role of coordination with regional administrations, and (3) to create a unified regional policy which, in order to re-establish a coherent logic between all types of interventions in the field of re-balancing regional gaps in Italy, would unify, within a single strategic framework, both European and

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domestic funds. The latter was represented by the Fondo Aree Sottoutilizzate (Fund for Under-utilized Areas, FAS). Despite these methodological premises, the lack of some institutional resources for the central decision maker, on the one hand, and of adequate financial resources, on the other, have strongly weakened the role of the center in the early and fundamental years of the 2007–2013 programming period, creating with inevitable consequences in the management of the entire programming cycle. As for the first, a relevant internal reorganization of the DPS led to the suppression of the General Directorate of Studies and Statistics, which until that time had been drafting the annual report on the implementation of regional policy for the South. Its abolition has not only resulted in a significant delay in the production of the 2010 and 2011 annual reports (Polverari 2013, p. 581). It has also led to the lack of a solid reference point for regional administrations, since until this moment they used its extensive production of reports and research as an additional way of transferring knowledge and best practices (interviews with regional MA ERDF OPs). Second, since 2008 luck has again been adversely to the decisionmaker for development. In fact, following the settlement in the new Berlusconi IV government, whose economic policy was different from that of the previous government, DPS has once again lost many of its strategic functions also because in those years its activities began to be “under two different masters” (interview with national official). In fact, while on the one hand it continued to have its own political referent in the MISE, on the other hand, since 2010 many of its competencies have been placed under the responsibility of the Ministry for Regional Affairs. In addition, between 2008 and 2011, there had also been a gradual dismemberment of the previously prepared unitary regional policy, with inevitable repercussions also in the management of European funding. Two relevant elements can help us understand why (Casula 2017c; Leonardi 2014, 2015; Polverari 2013; Trigilia 2012; Viesti 2011): the new government removed the previous economic policy objectives to allocate 45% of capital spending to the Southern regions; since 2008, there had been a drastic reduction in FAS resources that had occurred in the abolition of its national quota and that decreed its allocation for current expenditure or intervention targets outside the Mezzogiorno, and that at the same time allowed the regions of the Southern Italy to use them for purposes other than regional development policy in the strict sense, such as for the recovery of debts in the healthcare sector.

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It should be noted that to the three critical issues so far discussed have to add a fourth, still ongoing, that coincided with the creation of the new Agency, which has mined for two different reasons the correct management of the whole Italian administrative machine in the last years of implementation of the programming cycle 2007–2013. First of all, its establishment, happened in 2013, was preceded by a heated debate between the central government and the regional ones, that temporarily shifted the attention of various administrations to diplomatic issues, rather than to managerial one during a fundamental period for the implementation of the 2007–2013 OPs. More in detail, discussion was about both the maintenance of the MAs within the regional administrative structures and the possibility that the Agency could use substitute powers in the event of delays in the implementation of funds by the respective competent administrations. These solutions originated the birth of a regionalist protest movement, since the regions were concerned about the excessive role of controller in the use of funds that they could give to the center. The final solution was a compromise to ensure the historic role played by the regions on this matter and the mere accompanying role the central government until now had: the MAs continue to be maintained under the control of the regional governments and the use of the substitute power is now only in the case of a low level of implementation of the OPs. Second, the field analysis had revealed that in the months following the establishment of the Agency the operational focus was shifted to issues relating to the internal administrative reorganization of national structures rather than on the management and coordination aspects of the entire Italian administrative machine. In tradition with what had historically been done in the several organizational steps described in this chapter from the 1990s to the present, the creation of the Agency involved a reorganization of the organic plant of the former Department, with the displacement of about 190 staff. It was only planned to enter new 30 officials by public call. According to an insider, it was once again an operation that “had distracted the staff, taking time to coordinate the overall Italian machine and in its various regions” (interview with national official).

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3.4.2   Meeting the Strategic Challenge: A Fragmented and Unplanned Endogenous Development 3.4.2.1 Searching for a Coherent Development Strategy The Italian 1989–1993 CSF—that involved all the eight Southern Italian regions—was characterized by a total absence of a coherent economic development strategy able to bring the structural deficits of the Mezzogiorno. In fact, the strategy it proposed was too vague, by “accelerating socioeconomic cohesion with the rest of the country, notably through a re-launch of public and private investment,” and by providing for “a strategy of global actions and supporting economic activities by pursuing the industrialization process, the agricultural specialization and reconversion as well as the improvement of services, in particular the tourist sector” (CEC 1990, p.  10). For these reasons, around 39% of the resources were allocated in favor of the productive sector and around 21% to the human resources and employment ones. The expenditure authorized for the reinforcement of the infrastructural gap was limited to the 22% of the total CSF and it mainly included the improvement of the telecommunications and of the water-supply networks. On the contrary, as the 1989 Annual Report on the Implementation of the Reform of the Structural Funds clearly pointed out (CEC 1991, p.  49), with respect other underdeveloped countries such as Ireland, Portugal, and Spain, in Italy a relatively little emphasis was placed for the road and the motorway networks. In strategic terms a general flawed routine was adopted, with the result that the national programming only occurred in the time frame of the structural funds cycle, without taking account of the Delors reform and, more in detail, of the additionality principle, leading to poor efficacy of the programming phase. As a consequence, one of the main problems of the 1989–1999 CSF concerned the insufficient availability of the national co-­ financing during all the years and maintaining additionality for the Objective 1 regions in front a progressive reduction of the national budget. These problems were further exacerbated by the poor quality of the first Italian programming. In fact, even when a CSF was present, it was poorly organized, without an exhaustive SWOT analysis and lacking integration among individual programs. For example, it has been clearly stated that the only starting point for the elaboration of the Italian CSF was the analysis of the structural problems of the eight Objective 1 regions (CEC 1990, p.  11). More in general, it was characterized by high level of

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complexity, but without any synergy and integration within the same OP and among them: it was “consisted of about 39 programmes: 12 multiregional programmes, 12 large projects and seven community initiatives to be administered by the central government, and eight regional programmes with each of them covering eight to ten policy topics” (Tondl 1998, p. 118). In the case of the Tourism MOP, for example, “the synergies between [its] different measures […] were never properly exploited” (IsmeriEuropa 1995, p.  14). The lack of programming capacity also emerged from the analysis of the regional OPs, that clearly showed that their character was still very conventional: “many [of them] were too similar when considering the differences existing at regional level [, and] […] the fragmentation of regional intervention did not permit the identification of territorial priorities” (ibidem, p.  17). The unicum of the Italian regional OPs was also recognized in several cases by the Annual Report on the Implementation of the Reform of the Structural Funds. For example, the 1990 Report clearly pointed out that “as regards the ESF the content of the measures planned at regional level [was] not entirely appropriate to the basic training needs of young people aged 18 to 25” (CEC 1992, p. 36) and that “the presentation of the regional operational programmes [was] standardized, that is, it includes basic training for young people from 15 to 18 years of age, second-level training for young people from 18 to 25 years of age and common measures for Objective 3 and 4, the long-term unemployed, disadvantaged groups and work-place training” (ibidem, p. 50). Similarly to the thematic allocation of funds, also the territorial one was not present, since any strategic direction of development was identified. On the contrary, a strong fragmentation of the EU’s aid prevailed. In the case of the productive sector, for example, the 39.3% of the resources were found to finance around 2700 SMEs, following “a much less selective strategy than those of Ireland, Portugal or Spain” (Tondl 1998, p. 120). In other words, in tradition with the Southern clientelistic system, their aim continued to be mainly to satisfy the greater number of beneficiaries, rather than the least (La Spina 2003, p. 266). According to the ex-post evaluation of the Italian CSF Objective 1 (IsmeriEuropa 1995, pp. 13–17), all the criticalities until now described significantly contributed to limit the economic impact of the CSF. More in detail, the main obstacles concerned not only the administrative difficulties encouraged and that they will be following in-depth described, but also the need to frequently reorganize

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intervention strategy, the lack of definition of sectoral objectives. These problems above all concerned the infrastructure sector. The 1994–1999 CSF tried to take into account these criticalities, starting from the observation that it was necessary to avoid re-committing mistakes made so far by focusing on specific competitiveness factors of the economic-productive system of Mezzogiorno and improving the production environment through a new orientation of strategic goals and of the strategic choices (CEC 1994c, pp. 6–10). Therefore, “the new approach [was] apparently a forceful one: it cannot be seriously disputed that without an extension of the production base in the Mezzogiorno, transfer of public funds will no longer be able to sustain consumption and welfare levels indefinably” (European Commission DG XVI, p. 10). For these reasons, the investments on the productive sector increasingly grow with respect to the previous programming cycle, interesting around the 48% of the whole CSF. They were considered “the only way to sustain endogenous growth” (ivi). On the contrary, as a percentage of employment and human resources remained largely unaltered, under CSF II only the 16.67% of the resources were allocated in the economic infrastructure sector. Nevertheless a greater thematic concentration of the resources with respect to the previous programming period was present, any real change in the Italian programming approach really happened, so that the independent evaluator in writing its ex-post analysis of the CSF II provocatively reported that any development strategy was present in Italy during the second programming period. Its justifications are reported as follows: The problem of the strategy for the CSF 1994–1999 was not that it was unsuitable in terms of the area’s economic opportunities or weaknesses. The real problem was that all the CSF programmes, even though each had its own rationale, did not compose an integrated consistent strategy for development (the stringent selection and quantification of final objectives, the identification and definition of objective variables and variables in the means of achieving actions, specification of the causal mechanisms that would lead to the achievement of a certain economic goal, and the identification of objectives that did not come into possible goals). A strategy with too many overambitious objectives, which contains a very high number of actions and measures, and includes actions of normal on-going maintenance, is not a development strategy in the true sense of the words. […] This lack of strategy has its causes and also its effects. The cause is the place held by community programming within national policies, while the effects are the fragmenting of resources and a lack of integration between measures. (IsmeriEuropa 2002b, pp. 14–15, emphasis added)

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The main causes of the lack of a development strategy of the CSF continued to concern its lack of integration with national and regional sector and area programming: “the CSF has been considered since its conception phase as a combination of sector actions in the tradition of state action in Italy” (ibidem, p. 216, emphasis added). Moreover, perpetuating the historically prevalent practices, national and sub-national actors were less interested in aspects relating to economic context and, on the contrary, they privileged the financial progresses of the projects. This incapacity to mark a breaking point with respect to the established legacies of the past clearly emerges analyzing the widespread diffusion during the second part of this programming period of the so-called progetti sponda (“sponda projects”), that is, projects already financed by national resources that were accounted with European funds and that, therefore, have limited the additional added value of the Italian interventions. They were around the 30% of the total projects financed during the 1994–1999 programming period. 3.4.2.2 A Bankrupt Breaking Strategy In elaborating the main development drivers of the Nuova Programmazione, it was tried to take into account the mistakes made so far from the previous programming experiences, above all in terms of integration of the funds, additionality of the resources, and excessive use of the sponda projects: The first and main lesson moves towards a concentration of interventions far greater than the past. It seems appropriate to come up with large integrated programs of intervention. So: to a smaller number of programs (to facilitate their implementation); to larger programs (to increase their impact); to integrated programs (to be able to touch all the different aspects of the intervention areas). Structural programs need to be drawn up: that is, in the spirit and in the letter of community regulations, additional programs than those in normal public intervention, programs that can structurally enhance economic business conveniences and the quality of life for citizens. (Ministero del tesoro, del bilancio e della programmazione economica 1998, p. 7)

The CSF 2000–2006, negotiated with the Commission and finally approved in August 2000, put these recommendations into practice, and, recognizing the negative trend of the Southern economy, it clearly argued that

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conditions must be created for a decisive reversal of the trend through the implementation of a “breaking” strategy with the past, based on the concerted action of the CSF and complementary national policies aimed at inducing structural reforms. The goal of this strategy is through permanent improvement of the economic, social and environmental context, that of creating a discontinuity in the behaviours and attitudes of economic operators. Improving the economic environment should be reflected in behaviour of the coherent variables identified as decisive for “breaking” with the tendencies of the past and accentuating the positive trends already in place. This process must induce a qualitative leap into total factor productivity and then trigger a process of development and attraction of mobile resources, specifically of private investment, and the exploitation of territorial resources, thus causing a substantial increase in the growth rate of the Mezzogiorno and a recovery of the relative lag of the southern economy. (CEC 2000, p.  32, emphasis added)

These changes should have allowed the realization of the two main objectives of the 2000–2006 CSF: that is, to drastically reduce social discomfort and to achieve by the fourth year of the 2000–2006 period a significantly higher growth rate in the Mezzogiorno than that of the EU (ibidem, p. 33). In strategic terms, these objectives were based on a main line of action, that is, “a shift of resources from direct support to enterprises to investment in infrastructure and the supply of public goods” (Applica, IsmeriEuropa 2009a, p. 13), with the former types of support only finalized “to compensate context imbalances where there was an infrastructure underdevelopment of the Mezzogiorno” (interview with national official, emphasis added). Therefore, shifting the focus of incentives from infrastructures and SMEs to new territorial policies, it was inaugurated a new season in Italian economic policy in which the idea of endogenous development prevailed and it was based on the concept of “integration” of resources in order to promote a “greater empowerment of the local ruling class and a greater degree of involvement from local politicians.” In order to realize this strategy, the DPS put pressure on regions to include in their 2000–2006 OPs “Territorial Integrated Programmes” (TIPs), that is, “intersectoral actions, consistent and interlinked with each other, and converging towards a common territorial development objective and justifying a unitary approach.” As a consequence, the new allocation of resources by main policy sectors awarded the territorial policy and environmental and energy infrastructure area, with around 38% of the resources. The other main

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policy areas concerned the support to manufacturing and services (around 21%), transport and communication infrastructure (around 20%), agriculture (around 10%), and labor market policy and human resources (around 18%). Nevertheless these ambitious promises, the learning process was limited. Several elements help in understanding why. In discussing the influence of the 1994–1999 programming period on the following one, the independent evaluators pointed out that national, area, and sector programming had not concretely progressed: “community programming thus remain[ed] the only programming for development, and its integration with national policies [was] still vague and sporadic” (IsmeriEuropa 2002a, p. 221). One of the main programming problems—that was also underlined by the Commission during the negotiation phase of the CSF—concerned the real lack of a development policy for the Mezzogiorno. In fact, even if several ideas were present from a methodological point of view, that is, to re-interpret the local figures, they were absent from the real content point of view and each region has been therefore totally free to build its endogenous development strategy (interview with national official). In addition, an unpublished internal study of the FAS conducted by the DPS found that in the same years of the third programming period, the direct support to enterprises with domestic funds continued to prevail, unbalancing in this way the initial strategy of the CSF III (interview with national official). The illusory change to really limit this type of support during the 2000–2006 programming period also emerged within the ex-­ post evaluation of cohesion policy programs 2000–2006 financed by the ERDF in Objective 1 regions, and it can be traced back to political reasons. In fact, its study on funds allocated on environmental and energy infrastructure and territorial policy showed that a large amount for direct support to enterprises prevailed and that “it was not fully consistent with the overall strategy. In practice, no reform of national policy on subsidies occurred and political preferences prevented the share going to enterprises from being significantly reduced in the CSF ” (Applica, IsmeriEuropa 2009a, p. 14, emphasis added). Finally, the approved projects were not able to achieve critical mass due to the persistent problems of the previous programming periods, that is, the massive use of the sponda projects, and the fragmentation and pulverization of resources that involved not only the investments in infrastructure, but also the new territorial policy. In the transport sector, for example,

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the big projects were few and present, such as in the case of the SalernoReggio Calabria motorway and in the Tyrrenic and Adriatic rail lines, their aim was to improve and to modernize the existing transport links. In addition, even if projects to connect local network with national and European ones were present, their results were very limited. In general, result indicate that: the overall national and EU efforts, though significant, were less than what was needed (for over 20 years in Objective 1 regions the transport network has remained substantially unchanged and not very efficient) in terms of high-speed connections and increased use of rail; efforts increasingly concentrated on rail rather than road, but not sufficiently so, due to the lack of national investment in rail and in infrastructure to connect rail with road and other modes; delays in completing infrastructure projects, due to the length of time construction took, resulted in the postponement of the start up of new projects. (ibidem, p.  23, emphasis added)

Instead, in the case of territorial policy, in 2003, 132 TIPs were present in the Objective 1 Regions, affecting 85% of municipalities. Therefore, there were 132 “small coalitions scattered punctiform throughout the territory,” characterized by “fragmentation, poor strategic framework, low quality of the projects” (Applica, IsmeriEuropa 2010b, p. 40). As a consequence, also in this case, their impact on economic growth had been very limited (Tulumello 2016), and their negative elements above all were: inadequate selection of projects which was at the root of the often poor quality of projects and their limited integration with other measures, the fragmentation of projects, low concentration of funding which only rarely produced agglomeration effects and significant delays in their project execution, as a result of lengthy preparation periods. (ibidem, p. 27)

In elaborating the development strategy for the 2007–2013 programming period, the criticalities of the first season of the Nuova Programmazione until now described were in-depth discussed and they represented a starting point for the NSFR. More in detail, the hoped learning process should have come in fruition in two different ways, that is, by unifying within a common framework the development priorities and the intervention modalities of the European and the national aids (FAS) from the beginning of the programming cycle and by eliminating the common tendency in the use of the sponda projects.

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Moreover, in its initial form, the Italian NSRF, tak[ing] account the lessons from the previous period and outlin[ing] the approach to regional policy in 4 macro-objectives […] propose[d] some important innovations in comparison to the past:  – a major and increasing effort to develop the knowledge economy […];  – a reduction in capital grants and an increase in financial support for investment in research and innovation in enterprises; – a significant commitment to renewable energy production; – the abandonment of a widespread local development approach» (Applica, IsmeriEuropa 2010b, p. 10, emphasis added)

Nevertheless this rhetoric of change in the approach of the economic development, several criticalities continued to characterize the Italian strategy. While part of them were already presented in the initial framework of the NSFR, others emerged during the implementation phase. According to the 2010 Country Report on Achievement of Cohesion Policy (Applica, IsmeriEuropa 2010b, pp.  13–14), two main problems characterized the NSFR and its OPs already in the first years of the implementation of the fourth programming cycle, that is: the vagueness of the Operational Programmes [that] do not encourage concentration and selectivity in the choice of projects; [and] the weakness of some sectoral strategies, such as the delays in updating of the national and regional aid schemes for investment, the undefined strategy for broadband and the absence of a national energy plan to coordinate priorities as regards renewables. This can reduce the potential effects of individual measures because they are not linked to other interventions within a coherent operational framework.

In addition, after having thoroughly studied the evolution of ERDF investment priorities from the first programming period to the fourth one and comparing them, Rainoldi (2010, p.  33) showed that the choices made during the 2007–2013 programming period were substantially identical with those of the first one: the percentage of the ERDF resources that were allocated to the infrastructural investments was equal to 65% in 1989 and to 64% in 2007, instead those for the industry and the tourism sectors were, respectively, equal to 35% and 36%. In other words, Italy “came back to the policy of twenty years ago” (ivi).

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The following problems had concerned the implementation phase and many of them were the same as those characterizing the third cycle. More in general, one of the main limits of the strategy concerns the lack of strict conditions and rules to change behaviour in pursuing the ambitious objectives which have been set. Examples include reforms to improve the quality of the projects and speed up their implementation, a more efficient organisation and increased capacity at national level so as to give clear and operational indications to local and regional administrations, and a set of intermediate objectives to achieve within a particular time scale. (Applica, IsmeriEuropa 2010b, p. 13, emphasis added)

The clear incapacity to mark a break with the mistakes of the previous programming periods emerges, for example, by analyzing the additionality and the integration issues. On the one hand, “Italy did not meet the level of commitments required to fulfil the additionality principle. Therefore there were negotiations with the European Commission (EC) in order to change the levels” (CEC 2014, p. 65). On the other hand, the FAS cut during the last strategic years of implementation of the fourth programming period has completely failed the initial integration (interview with national official). In addition, as in the case of the previous programming period, the Italian 2007–2013 programming was not characterized by a “concentration of resources on significant, strategic and effective projects” (Applica, IsmeriEuropa 2010a, p. 42). Rather, a proliferation of projects “without generating critical mass,” as well as “the inclusion of a large number of ‘deadweight’ projects” prevailed (ibidem, p. 10). For example, according to the database OpenCoesione, projects financed numbered less than 200,000 during 2007–2013. Moreover, in those years, on the one hand, only 4100 projects had an amount exceeding one million, on the other hand, despite having no real skills and human resources (interview with national official), more than 60% of the municipalities of the Convergence Regions, managed one or more projects. In addition, this percentage passed 90% in three of them, Puglia, Campania, and Calabria. In other words, this high level of pulverization was “made to respond to the many and various political and social demands which can no longer be satisfied from national funding” (ib., p. 30, emphasis added), rather than to respect the European principle of concentration of resources. In the case of the

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territorial development, for example, “in Convergence [Area] […] 1,195 projects of various nature were carried out, directly or indirectly aimed to attract tourism. The achievements [were] scattered and of small size; no information on results and on impact [was] available” (Applica, IsmeriEuropa 2010b, p. 20). 3.4.3  Meeting the Administrative Challenge: An (Unusual) Case of Retrenchment? 3.4.3.1 From Negation to Adaptation The analysis of the administrative change in Italy during the first two programming periods showed that the incorporation of the Community’s rules and procedures that persisted until the middle of 1990s was initially resisted. The previously discussed process of re-centralization in Italy started in 1997 and the following reinforcement of the Treasury’s role in governing structural funds in Italy also had a positive impact on the administrative dimension: until the first years of implementation of the second programming period, the technical and political Italian elites deliberately rejected the new administrative principles of the regulations, but then gradually adapted and formally adopted the changes during the last years of the 1994–1999 programming period. On closer inspection, the latter did not entail full compliance with European rules, as several problems persisted at the level of management, monitoring, and evaluation. Reasons are going to be thoroughly described in what follows, from the methodological approach that I have adopted to administrative challenges that I presented in Chap. 2. The lack of a European management culture during the first programming period is apparent from the absorption capacity of the Italian administrations: at the end of 1993, only 47% of community resources were spent. Five elements can help in understanding the bureaucracy’s incompetence in the face of the new intervention model proposed by the regulations (CEC 1992; DG XVI unpublished study paper; CEC 1995; interviews with national officials): (1) their inability to solve administrative and informational problems after the Extraordinary Intervention; (2) failure to grasp administrative and organizational innovations for facilitating the use of structural funds; (3) the inability of the regions to create regional programming centers; (4) failure to utilize technical assistance; (5) the

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lack of success by the center in occupying an address role in building a monitoring culture. As previously discussed, based on the solicitations by the Commission to the Italian national policy maker to introduce rigorous national policies on the use of the funds, the new center-left government elected in 1996 started an intensive persuasion campaign targeted at all domestic organizations involved in the second programming period in order to increase the efficiency of fund usage. Although the problems persisted during these years—the usage of funds was 25% in 1996, 52% in 1998, and 82% in 2000—in 1999 the commitments came to 115%, producing an overbooking. It was caused by the introduction of the aforementioned sponda projects. In other words, the change that occurred in Italy during those years only suggests an adaptation process and not a learning one, since the actions undertaken by the national and sub-national administrations were only meant to produce a positive image of Italy for Europe rather than implied a process of real administrative change (interview with EU official; interview with national official). In fact, according to the Ex-Post Evaluation of the Objective 1994–1999, even if “compared with the previous period important improvements in managing and implementing structural actions occurred at different institutional level (central, regional and local) […] a still unsatisfactory competence affected many institutions” (IsmeriEuropa 2002a, p. 172). The Italian management system faced criticism due to “the lack of co-ordination within various organisations, which led to the duplication of administrative actions and the complication of the implementation process.” In addition, “the Regions’ management abilities often show[ed] serious shortcomings and very differentiated performances” (ibidem, p. 178), and the latter was exacerbated by “the large number of players involved in the programming and implementation of actions” (ibidem, p. 179). In addition, during the implementation of the 1989–1993 CSF, the monitoring and evaluation systems “did not function properly. They have often been limited to a check on the state of financial progress, while little interest has been devoted to the effectiveness of the actions taken in terms of achievements over the set targets” (Svimez 1996). The elements that underlay the process of adaptation in Italy were different for the monitoring and the evaluation phase. For the former, the main changes concerned the greater availability of financial and physical data, and technical advances in the monitoring systems at both national

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and sub-national level. In spite of these changes, a learning process was not pursued, not only because “Italian administrations deliberately continued in failing to provide information about the procedural character of the projects” (interview with national official), but also for utterly failing to monitor for managerial purposes due to the lack of a central address (interview with national official). In terms of evaluation, on the other hand, although during the 1994–1999 period “the evaluation of separate OPs called for increased attention with regard to the evaluation capacity and opened a new market for consulting […] [;] the diffusion of an evaluation culture was significant […] [and] the resources invested into this issue promoted in the public administration a progressive interest and a more focused use of evaluation” (interview with national official). In fact, the administrations were not prepared to manage this function, and often felt the evaluation as control or obligation, and not like a support. This approach derived from the tradition of our administration, which is oriented to the formal control, and is not used to verify accountability and results. […] In general, this evolution appears poor in terms of the number of the treated themes and in the methodological approaches. For example, the experiments on the evaluation of the net effects in training were concentrated in Central-Northern regions and only one survey interested objective 1 (Sardinia). Frequently evaluation focused excessively on the financial performance of the programmes, losing sight of the qualitative results and the comparative reading of the outcome. (IsmeriEuropa 2002a, pp. 203–204, emphasis added)

3.4.3.2 From Adaptation to Learning, and Beyond Barca was persuaded that a radical administrative change and a renovation of Italian public administration should be the two necessary conditions for successful implementation of the Nuova Programmazione. For this reason, starting from the final years of the second programming period, he introduced a set of novel and innovative solutions aimed at improving the institutional capacity of national and sub-national actors, in areas of management, monitoring, and evaluation of structural funds. First, Italy was the only beneficiary state that placed the European reward reserve (4%) a national one (6%) side by side, during the 2000–2006 programming period. The aim of the national reward reserve was supposed to be the incentivizing of national and regional administrators to

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increase their administrative efficiency and planning capacity.2 Second, a process of centralization of the monitoring phase started during those years through the creation of a national MONIT database, with the aim of storing output indicators and financial information of all national and sub-­ national OPs to support their implementation. Third, in order to seal the structural gaps in the area of evaluation that until this moment characterized the Ministries and Regions, Evaluation Units were established within the most important administrations involved in the implementation of the Nuova Programmazione strategy. This project was coordinated by a central Evaluation Unit, the so-called NUVAL (Nucleo di Valutazione e Verifica degli Investimenti Pubblici), located within the same Ministry of the DPS. Its intended role was to promote an evaluation culture in Italy, by fostering professional skills within the administrations involved, and it was meant to operate “on a wealth of knowledge they shared and use it for stimulating development, dissemination of high technical skills and the transfer of know-how.”3 More precisely, thanks to great recruitment that was done after strong requests by Ciampi and Barca […], the NUVAL led the national and regional administrations, providing methodological orientation to all administrations. […] So, at the beginning, NUVAL tried to be there for them, especially from an organizational point of view. By being a ‘listener’ for both national and regional administrations, […] a practical and methodological orientation task was given to guide all Cohesion Policy administrations, by setting up meetings and by giving feedback for evaluation activity the administrations carried out. […] During the 2000–2006 evaluation cycle particularly, efforts were made to urge the administrations to follow ex-ante evaluations and those in progress, initiating a self-assessment cycle for giving people space to figure out exactly what to do. That was very watchful at the time, as we went around doing these great self-assessment sessions asking the administrations to respond to our demands from the reports of the Monitoring Committees. (Interview with national official)

In 2001, the great emphasis that the NUVAL placed on ex-ante evaluation was also recognized by the Commission within its document The 2  Cfr. http://www.dps.tesoro.it/documentazione/docs/all/doc15_capV.pdf; accessed 23 October 2018. 3  Cfr. http://focus.formez.it/content/nuval-formazione-e-aggiornamento-nuclei-valutazione-e-verifica-investimenti-pubblici; accessed 16 November 2018.

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Results of the Programming of the Structural Funds for 2000–2006 (Objective 1), addressed to the CEU, the European Parliament (EP), the Economic and Social Committee (ESC), and the Committee of the Regions (CoR). Specifying the debate on the quality of ex-ante evaluations proposed by MSs, the document clearly argued that the more systematic approaches included that for Italy, where the ex-ante evaluation undertaken under the auspices of the evaluation unit in the Ministry of the Treasury formed an integral part of the development plan for the Mezzogiorno. It was based on the following points: a detailed SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis at the level of the priorities and sectors; development of an ad hoc model to estimate the impact of the plan and an analysis of internal consistency to ensure that resources were correctly allocated between priorities. (CEC 2001a, p. 9)

While these three main institutional changes significantly contributed to the administrative change in Italy during the first years of implementation of the 2000–2006 cycle (Giannelli and Profeti 2006), the learning process was not being consolidated during the programming cycle. In the years prior to the cycle, it went hand in hand with the institutional parabola described above. In fact, during the third programming period in Italy, improvements […] were insufficient to produce a significant improvement in the effectiveness and efficiency of public administration and development policy. The expected benefits of capacity building, such as the promotion of collective actions, the transfer of knowledge and better projects, were limited [and] the learning process continues to be slow. Formal adaptation to new rules (n+2, national reserve, etc.) prevailed over real learning and the development of new forms of organisation and procedures. Though there were exceptions in all regions, they related to individual offices rather than to the organisation as a whole (Applica, IsmeriEuropa 2009a, pp.  37–38, emphasis added)

Despite the ambitions of the Italian national policy maker, the introduction of additional national premium mechanisms aimed at encouraging the achievement of administrative and regulatory targets “was only partly effective because, although the rules were respected in almost all cases, at least in formal terms, there was little incentive to change decision-­ making procedures” (Applica, IsmeriEuropa 2009a, 34, emphasis added). In addition, Antonio La Spina, from analyzing the implementation of the

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Nuova Programmazione and the results it had in reinforcing administrative capacity building in Southern Italy, concluded that the way it was managed was unsatisfactory: “Southern regions were required to show mostly formal allegiance to national rules. Therefore, what they possibly “learned” [was] that it was not important to modify in-depth bureaucratic features: it is sufficient to exhibit the appearance of innovation” (La Spina 2007, p. 5, emphasis added). An administrative change that was similarly inadequate involved the consolidation of a monitoring and evaluation culture in Italy. As concerned to the former, “the appearance of innovation was represented by the creation of national and regional support structures aimed at clarifying what monitoring really was for local beneficiaries, and the latter meant greater availability of financial and physical data” (interview with external evaluator), the real problem during the 2000–2006 programming period was not so much the amount of data collected as their quality […]. This entailed a fundamental limitation of Italian public administrations, namely the lack of a monitoring culture. This lack concerned above all the Southern structures not only because of their lack of IT facilities, but above all because of their cultural mistrust resulting from a reluctance to ensure that the data of particular projects was made public. In addition, the quality of procedural data was only fragmented patchwork since it was not compulsory to collect it and there was no national processing. (Interview with national official)

Moreover, the authorities often interpreted [evaluation] in a very formal restrictive way and were unable to use it constructively. The consequent uneven quality of the evaluations (in most cases little more than monitoring reports, in a few cases broad and well informed reflections) was the result. The public evaluation units in the Ministries and the regions spread a culture of evaluation but failed to increase evaluation capacity. Independent evaluators were restricted in their activities by the rigid limitations set by the Managing Authorities. (Applica, IsmeriEuropa 2009a, p. 35, emphasis added)

Poor management, monitoring, and evaluation during the final years of the 2000–2006 structural interventions also had an impact on the following programming period. In fact, in accordance with Radaelli’s classification (2003), the administrative change that happened in Italy during these

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years can be considered an unusual case of retrenchment, since the Italian administrative performance seemed to be even worse than what was recorded in the first part of the Nuova Programmazione. The problems encountered during the management, monitoring, and evaluation phases that I am going to present over the following pages will call back to many critical points observed during the 1990s and from which Barca and Ciampi began to build the methodological innovations for the Nuova Programmazione. First, the financial performance of the 2007–2013 OPs was much worse than during the previous programming cycle: as Fig. 3.1 shows, less than 50% of the ERDF resources were spent by the end of 2013, and less than 80% by the end of 2015. The suggestions that there had been retrenchment are visible by analyzing both the actions that the DPS undertook to deal with the solicitations of the Commission, and the causes for such delays. From 2010, national task forces were established within several

Fig. 3.1  Time profile of payments from the ERDF to Italy for the 2007–2013 period (% of total funding available). (Source: WP1: Synthesis report—Ex post evaluation of Cohesion Policy Programmes 2007–2013, focusing on the European Regional Development Fund (ERDF) and the Cohesion Fund (CF)—Task 3 Country Report Italy—September 2016 (Applica, IsmeriEuropa 2016, p. 15))

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Southern regional administrations, in order to support the activities of the MAs during the implementation phase and to accelerate expenditure. In 2015, a recovery plan to avoid decommitments in three regional ERDF OPs (Calabria, Campania, and Sicily) and in the Transport OPs was agreed on due to both an inadequate administrative capacity of the administrations involved and the complexity of national procedures and rules. Namely, this stem[med] from the overly complex nature of the regional structure of the system resulting in poor coordination between national and regional authorities and a lack of skills and expertise among personnel to assess the needs of potential funding recipients and to manage procurement, monitoring and finances. High personnel turnover at managerial level resulted in a loss of institutional knowledge and experience. In addition, because of complicated procedures and public procurement regulations, potential and actual funding recipients had difficulty in complying with the regulations. (ibidem, p. 16, emphasis added)

More generally, the field analysis I conducted and the qualitative data I accumulated from the testimonies of the main national and sub-national actors involved in the implementation of the 2007–2013 ERDF OPs showed that the reasons for such delays were cultural, institutional, and political. First, with regard to the ERDF OPs managed at sub-national level, several directors of the MAs of the Convergence regions openly argued that, in addition to previously mentioned reasons, both the political discontinuities of the respective regional governments and the overlap between the closure of the 2000–2006 programming period and the start of the 2007–2013 ERDF projects created the conditions for greater expenditure in the final years available (interviews with ERDF MAs). Moreover, cultural reasons are apparent when we analyze both the mechanisms for the transfer of good practices between the administrations involved and the role that technical assistants had during the fourth programming period. With respect to the former, for example: very often the administrations did not have the courage to take part in the game, since the sharing of good practices was often seen as competition. This mainly concerned the Southern administrations. This was a cultural matter because in order to transfer a good practice, it was necessary for staffs to get involved; but, since the Italian administrative staff was often very old, their mindset was: «Who will make me undergo restructuring?» (interview with national official)

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In addition, the use of technical assistance in Italy during those years was limited to a substitutive role in domestic public administrations. In fact, as highlighted by a senior national official who was directly involved in managing a project of technical assistance provided by the national administration to the regional ones during the last programming period, except for a few cases in which organizational modalities and the approaches to work radically changed (i.e. telematic tools and younger talent in the use of computer technology), the transfer of desired skills and expertise never occurred. Some new ways of organizing work and processes were set up during the first phase, but the investment into expertise of employees has not been made for the long run. The lack of motivation for staff member stems from the outsourcing to external consultants because they are considered better and therefore more valuable from the economic viewpoint. While the employee is paid on the basis of collective bargaining, consultants earn almost double the income as they are employed on a fixed term. Then personnel spots are closed, and this mode has prevailed throughout the cycle in question. (Interview with national official)

The negative performance of Italian administrations in terms of efficiency of expenditure was also caused by the incapacity of domestic actors for correctly implementing the control principles of the 2007–2013 regulations, which I described in the second section. It above all concerned the sub-national ERDF MAs. The first problem concerned the establishment of the Audit Authority (AA) which was meant to replace the Organismo di Controllo di II livello (Level II Control Body) of the 2000–2006 cycle. Compared to the latter, the AA was to become a structure occupying the top of the apex, with its own staff and an absolute separation of functions. In continuity with the Italian tradition, its establishment within the regional structures was carried out by reappropriating the existing model (interview with EU official). The main impact concerned the separation of Level I controls, as the 2007–2013 regulations required a separation between management functions and Level I controls. Transferring these responsibilities to an external administrative structure with respect to the MA implied the start of intensive training and support activities. The regional administrations were reluctant to introduce these novelties, implying direct intervention by the Commission that for around a year and a half suspended payments for several ERDF OPs:

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this also coincides with the fact that for the first time, in 2007–2013, the obligation was introduced to validate the management and control system before the payment request. Therefore, the payment application could not be started before the system of management and control was validated, which resulted in a slowdown in defining this document; in principle, it led the vast majority of administrations to submit the application for nullification to IGRUE, and then to the Commission at the end of the first semester of 2009. The first, biggest spending target, was in 2009 […] there was a move forward and for about a year and a half there was no expenditure. (Interview with national official)

More generally, the monitoring phase was influenced by the negative dynamics of the 2007–2013 expenditure (Applica, IsmeriEuropa 2011). Following accelerazione della spesa (accelerating the expenditure), the consistent and stable use of monitoring for management purposes failed, and instead began to consolidate in the early years of the fourth programming cycle. The monitoring of interventions in Italy thus became “a tool that has only been used to account for the financial outlay in view of the targets set by the European Union” (interview with national official). More generally, the data produced by the monitoring systems [were] of low quality and often the indicators [were] not relevant to illustrate the program results. Apart from few cases of good practice, there are many limitations in the reliability of the data (e.g. inconsistent definitions and unit of measures, difficult interpretation, unclear linkages with the policy objectives) and in the processes used to collect them which call for a thorough check/verification. Such verification was not carried out by regional or central authorities, apart from sporadic attempts. The low quality concerns both core and non-core indicators. (CEC 2013a, p. 20, emphasis added)

Finally, it is vital to illustrate why a process of retrenchment happened within Italian administrations with respect to their evaluation activities. Although an average of two evaluations were conducted for each of the ERDF national or sub-national OPs (Fiorillo et al. 2014), in Italy evaluation has not been able to interpret and explain the overall performance of the regional policy. The different and uncoordinated reports do not provide a persuasive and complete narrative of the current programming period; in some cases reports only reproduced, or slightly extended, monitoring data and did not investigate the structural changes related to the interventions, in

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other cases they focused only on old and also abandoned interventions. (CEC 2013a, p. 44, emphasis added)

Several reasons of a different nature help in understanding this (Applica, IsmeriEuropa 2010b; Fiorillo et al. 2014; interviews with national official; interviews with NVVIP directors). First of all, the coordination between the central NVVIP in Rome and the regional NVVIP during the last phase of the 2007–2013 programming period was poor. In fact, several directors of the NVVIPs of the Convergence regions complained of limited support by the central NVVIP with regard to the organizational changes the DPS was facing, as well as “a weakening of enthusiasm at the center without which the institutionalization of the evaluation at regional level could not take place in previous years” (interview with national official). “[O]n the basis of” a Policy Analysis of the Performance of Cohesion Policy 2007–2013 by the Expert Evaluation Network, “a public administration […] consider[ed] evaluation and accountability marginal activities rather than useful and systematic policy tools. This approach [was] connected to the administrations’ weak commitment to policy objectives, which [was] often one of the main causes of failure in implementation” (Applica, IsmeriEuropa 2010b, p. 40, emphasis added). In other words, the retrenchment in terms of evaluation has to be attributed to cultural and political issues more than to institutional ones. This is confirmed by a high national official involved in the activities of the Evaluation Units from the early 2000s: The idea of motivating choice, which means that when I decide to fund something, there is a needs analysis in the background showing me that this tool can work, is a security practice that is at the core of an evaluation culture within administrations, and which allows you to do other things. But this practice (to motivate choice), which should be standard, did not become established in Italy. That is why in some contexts today, not having to motivate choice is considered a demonstration of power. This is part and parcel of Italian tradition and culture. Those regions that function always motivate choice. Not having to motivate choice becomes a kind of value, and this becomes very dangerous. The assessment of interventions is realized; the problem occurs when you use knowledge at the right time and in the right place, and above all, with the competent people. This above all happens within regional administrations. (Interview with national official, emphasis added)

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3.5   Evidence from Regional Experiences 3.5.1  The Case of Campania: Another (Regional) Parabola? The implementation of structural funds in Campania during the four programming periods under investigation here showed the same dynamics that I described in previous pages: the change of the policy paradigm and its subsequent consolidation in terms of institutional innovations, strategic priorities, and administrative change were dependent upon political support from different regional governments. In Campania, the main factors behind the failure of EU Cohesion Policy were above all political. As the administrative performance of the 2007–2013 ERDF OP later showed, the lack of strong political support during all the years of implementation of this OP negatively affected its phases. In addition, the idea of change that was perpetuated by the main beneficiaries involved was incorrect, which made the implementation less ambitious than what the regional decision makers had desired. All these aspects will be described in detail in the following pages. 3.5.1.1 The Institutional Challenge The first years of implementation of the 1989–1993 programming cycle in Campania were managed along similar lines as the previous IMP, both in terms of structure and human resources (Regione Campania 2000). With the aim improving management efficiency of regional offices, regional law 11/1991 radically changed the administrative structure of the Campania Region, instating a regional presidency and nine departments, each of them divided in areas and sectors. This change was supposed to involve the management of Community policies, with the creation of a Department with three functions (programming, implementation, and communication). Yet, during the entirety of the 1990s, no drastic and substantial institutional changes were made to the internal structures of this region: the implementation of the 1989–1993 and 1994–1999 programming periods in Campania was left to chance more than to a decision-maker for development of Hirschmanian memory. The first study on regional organization conducted by Sacchetti during the first half of the 1990s showed that the main problems in Campania concerned excessive fragmentation of the regional offices and the lack of coordination within the Department, hampering

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a coherent and integrated programming (Sacchetti 1993). These problems persisted during the following programming period. In fact, during the second programming period, the institutional part seemed problematic and caused substantial failure even at the implementation level. There was a multitude of offices managing the structural interventions, the fragmentation of subjects, and the increasingly loose connection with project implementers, without structured organization. Everything was left to chance, so an institutional architecture for the structural funds was created without reforming or modifying what it was until then […]. These were architectures utterly lacking in coordination. (Interview with external evaluator)

In addition, the regional reform was not able to alter the Weberian bureaucratic organization that historically characterized the Region, that is, it was a system: where the norm prevail[ed], it [was] a system that ha[d] the peculiarity of being loaded with operating mechanisms (rules of operation) aimed more at the control of actions, than on the control of people and the development of the system. Where the result [was] not under control and the merit [was] not rewarded, where the application of the norm [was] to determin[e] the processes, de-empowerment behaviours (the norms and procedures used as an eligibility alibi) and resignation attitudes for those who [were] not […] inside the system predominated. (Regione Campania 2011, p.141)

As a consequence, the regional bureaucratic apparatus continued to be subjected to political decisions for a long time: “the regional administration was dominated by regional politics and where there was a strong official, everything was done to eclipse him/her” (interview with regional official). Although formally foreseeable for the elaboration of the 1989–1993 OP, the external relations with horizontal partners remained largely non-transparent throughout the 1990s (interview with socio-­ economic regional stakeholder). The aim of effectively shrinking regional administration was pursued from the first years of 2000s by the new center-left administration led by Antonio Bassolino, through the project La Regione che cambia (“The Changing Region”). This was an organizational process of the regional administration aimed at drastic institutional change by means of development of regional management, investment into permanent training,

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reduction of organizational areas, overcoming the interferences of politics into administration, and the consolidation of a regional administration more efficient and more driven to achieve quantifiable results. Specifically, the reinforcement of regional institutions involved in the management of structural funds was identified by Bassolino as a new fuel for regional growth. Despite this initial drive, the application of these ambitious and innovative methods was discontinued as soon as the political support from the regional junta failed: “the project of organizational change has in fact been abandoned, in its overall vision, with the second Junta Bassolino and with the passing away of some cardinal figures who had strongly sponsored it” (Regione Campania 2011, p. 142, emphasis added). This is apparent from looking at three different aspects that emerged during my research: the relationship between politics and administration, the learning process of the regional administration, and the absence of a directing role of the MA. Looking at all three aspects together shows that for the implementation of the 2000–2006 programming period in Campania, any decisionmaker for development of a Hirschmanian mold continued to be present. As concerned with the relationship between politics and administration, the implementation of the 2000–2006 OPs in Campania was carried out during a drastic change in the regional junta, even if a political continuity continued to be present. Until 2005, Bassolino had significant influence over regional council members due to great political homogeneity among the members of the junta, but later he reshuffled the cabinet together with the parties of the center due to the waste crisis that struck the region in the mid-2000s. The cabinet reshuffle had several implications for the management of the ERDF OP, since it implied changes in the administrative summits of each regional Department. This resulted in a drastic change in the administrative routine for managing community resources, in terms of the competence of the regional official as well as final beneficiaries. The ex-post evaluation of the 2000–2006 ERDF OP, in passages reflecting on the impact political dynamics had for its implementation, stated that politics has influenced the organizational structure set up to manage the OP. The analysis carried out showed that it is possible to recognize different management periods within the same OP, during which different management styles have been established and, from time to time, shaped new relational structures, precisely in line with dynamics of a political nature. Indeed, over time, leadership styles have been promoted which advocated more or less

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involvement of regional staff, who assigned different roles to some new figures or functions introduced within the OP. In this context, at all levels, it was difficult for anyone to feel truly responsible for the results and, in particular, the lowest levels of the organization could not always fully perceive choices regarding the implementation of the OP, for example, the choices determined by financial constraints. This has also influenced the margins of decision-making autonomy, and in some cases, led to individual attitudes often geared towards seeking political consensus rather than the enhancement of individual competences and, last but not least, organizational learning, potentially linked to the management of the OP, was strongly affected. (Regione Campania 2011, p. 172, emphasis added)

Consequently, the political dynamics inhibited the general learning process of the regional administration and the consolidation of a regional decision-maker for development with adequate human resources. As the field analysis revealed, the training courses were perceived by the internal staff as “repetitive and of little use” (interview with regional official) and any mechanisms for stimulating the internal performance were implemented. Hence, “the activities relating to structural funds remained secondary and were often carried out outside of working hours” (interview with regional official, emphasis added). In addition, the absence of strong and qualified technical leadership within the different administrative units contributed to the general dispersion of organizational learning consolidated during the first years of the Bassolino era. In fact, after the first season of the Bassolino era, the training courses were stopped and one of the problems historically present in our administration, namely the excessive dependence on external technical assistance, has returned and [it has] ceased to play that role of empowerment within regional administration, which was aspired to by Europe and Bassolino’s political program. (Interview with regional official)

The problem of dependence on external assistance particularly involved the ERDF MA due to the administrative changes in its summit, which inhibited the institutionalization of common administrative practices. During the implementation of the 2000–2006 ERDF OP, there were four changes within its administrative vertices, and only during the second MA (from mid-2002 to mid-2005) was there true institutional learning (interviews with regional officials). In fact, while the same approach as in previous programming periods was adopted during the first MA (until

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mid-2002), the third and the fourth periods (respectively from 2005 to 2010 and from 2010 to the final closure of the OP) were organized only to report expenditure and program closure. 3.5.1.2 The Strategic Challenge No specific development objectives were envisaged as part of the 1989–1993 POP. In fact, the objectives were very general and concerned a myriad of vague elements: the increase in employment levels, the improvement of quality of life, and increased economic competitiveness of the regional system. As one of the issues high on the priority list, it was contemplated within the 1989–1993 POP how the overpopulation problems of the metropolitan area of Naples and the opposite trend of depopulation in the inner areas can be solved: The 1989/93 POP has been engaged in this process of trying to trigger an endogenous self-centered (self-sustaining) development mechanism based on the exploitation of local resources and supported by initiatives that can be adapted to the overall regional development strategies. In this sense, a path was conceived aimed at connecting these strategies, in functional terms, to the general objectives of global growth with the more specific ones that can be determined within the sectors and which are considered most important in terms of the specificity and peculiarity of the Campania reality. (Deloitte and Touche 1999, p. 7)

Due to the hopeless vagueness of the 1989–1993 POP, all the main projects financed during the first programming period were a continuation of older projects implemented during the IPM experience, perpetuating a policy orientation of regional actors for maximizing political consensus rather than making choices aimed at guaranteeing a coherent and strategic development strategy. Consequently, its “actual effect did not meet expectations, since the implementation of the program crashed due to a number of operational difficulties and system start-ups that slowed down the initial phase, delaying its conclusion” (Deloitte and Touche 1999, p.11). The regional strategy for the 1994–1999 programming cycle was characterized by a strong continuity with respect to the previous programming period. Even if there was greater awareness that Campania needed preconditions for development that would be accomplished by “filling infrastructural gaps and easing congestion,” in concrete terms, the strategy

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continued to be characterized by an overly fragmented and uncertain vision of regional development, that is: “how the injection of capital would bring about the desired change was […] not clear” (CEC 2013b, p. 15). The great initial emphasis on infrastructure, for example, was substantially reduced during the years due to management problems that were encountered with implementing these kinds of projects (interview with regional stakeholder). The 1994–1999 OP underwent a number of changes in its implementation, which led to a substantial increase in investment in the tourism axis (+22%) and a corresponding decrease in budget allocation for the infrastructure axis (−14.6%). The weak points of the first two programming periods were the starting points for building the subsequent development strategy. Driven by the more general climate of national change of the Nuova Programmazione, the 2000–2006 ERDF OP was the first to start from a SWOT analysis for a more accurate assessment of the territory’s needs. The reinforcement of the basic infrastructure was the main strategic objective of the OP, yet there were 13 clearly stated target objectives to be achieved by the end of the programming period. Nevertheless, several old weaknesses persisted during the implementation of the OP. One of the main problems, for example, was proper application of the integration principle, which ha[s] been well interpreted in the programming phase, while in the implementation phase ha[s] resulted, in some cases, in a fragmentation of resources on small-scale investments, which, alone, did not prove to be suitable for triggering a process of local development. In particular, in some cases, punctual operations were carried out throughout the implementation phase without checking the complete consistency with the logical framework of reference, which had been identified instead as programmatic. (Regione Campania 2013, p. 67)

It was estimated that over 1500 projects were financed through the 2000–2006 ERDF OP, with an average cost equal to 1,272,453 Euros (excluding the big infrastructural projects that were only attempted). This extreme fragmentation also involved 51 TIPs financed by the OP (Casula and Regalia 2015), limiting their capacity for positive impact on regional growth (Marra 2012). In accordance with the ex-post evaluation of the TIPs financed by the 2000–2006 ERDF OP in Campania, conducted by the NVVIP of this region, the impact of TIPs

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was not significant, either for the limited implementation of all initially scheduled operations (with some “voids” especially relevant, as in the case of the interventions in support of the business system), or because they were not completed, for the gap between the implementation of the interventions and their most effective use (with most of the works that have not yet entered a phase of actual realization). (Regione Campania 2011, p. 169)

Their limited impact can be traced back to several different and mutually interconnected aspects that came up in both the same evaluation and my field analysis. The first concerned the regional competent officers who did not play a supporting role in elaborating the strategies of the single TIP, since “the local actors had to design their interventions on the basis of top-down models without these being adequately explained” (interview with regional stakeholders). An additional problem characterized the integrated planning in Campania. Where realized, it consisted of “a set of projects, first and foremost infrastructural, which were basically independent of each other, and above all, systematically deprived of actions of intangible, actual and related support to the entrepreneurial fabric and human capital” (Regione Campania 2011, p. 169). In other terms, their action perpetuated “a certain continuity of a development model already in place and lacking in determining those discontinuities and those breaks that they wanted and that should have been achieved” (ivi), since they “were not in themselves an instrument for supporting a real concentration of development strategies, but paradoxically induced a sometimes-distorted concentration of expenditure” (ibidem, p. 170). 3.5.1.3 The Administrative Challenge The management phase was characterized by several problems and deficiencies, that show the absence of a real administrative learning. Three elements help in understanding why. They are respectively connected with a poor administrative capacity in project selection, the absence of a cultural change of the local beneficiaries, and an excessive emphasis in the duty to comply with the spending targets. Merely by way of example, during the 1994–1999 programming cycle, the first call ended at the middle of 1996 (interview with regional stakeholder). This delay was not only conditioned by the poor quality of the projects received—“the 70% of them were very ballpark and unacceptable” (interview with external evaluators)—but also by the total lack of a unitary and integrated regional framework within

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which these projects would have to be designed (interview with regional institutional stakeholder). The insufficient management capacity was therefore influenced by the poor programming. At the implementation level, however, both the documentary analysis and the interviews carried out have highlighted that any administrative change in the management style involved the main beneficiaries—that during the first two cycles above all concerned the municipalities. Urged to explain this poor performance, an official of the Campania Region involved in the first two programming cycles claimed that it was the main custom to have “direct telephone contacts between the mayor and the regional administration to solicit sending subsequent payments without a real and an effective completion of part of the projects” (interview with regional official). To about, it should also be noted that in those years there had been a total lack of action by the regional administration in order to ensure a proper and substantial way of exchanging knowledge. In fact, field analysis showed that the only actions taken were formal meetings between the regional administration and the various beneficiaries to inform and explain them the practices for the eligibility of expenditure and the subsequent reporting. Immediately, it was clear that the only regional goal was to respect the expenditure targets, regardless of the quality of the projects delivered. In this respect, two examples are impressive. The first concerns the need to participate in the financing of the project by the beneficiaries through the payment of a 5% tax. This practice was removed in each of the two programming cycles whenever it was necessary to report expenditure to meet individual Community targets in order to facilitate the completion of the same project. The second, however, concerned a small “ploy” devised by the regional administration to overcome the length of the procedures due to the down payment and subsequent final balance by decree of the president or the councilor. It was decided, in fact, that the regional accounting could pay by declaring that all the conditions were fulfilled, while waiting for the presidential decree (that therefore was in several cases only a post-paid formal act). On the contrary, a total negation to the European principles characterized the monitoring and evaluation phase during the first two programming periods. Until 1999, for example, the monitoring system in Campania did not practically existed, inhibiting, therefore, the use of the monitoring for management purposes:

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until 1999 the monitoring system did not exist. […] We did not have a structured monitoring system, even because IGRUE did not want physical and procedural data, just the financial one. It was a period in which within the Campania Region there was a personal computer for each office, so initially the early years were only managed with Excel […]. It was a handicraft management. Towards the middle of the programming, we have provided, with the use of the technical assistance, a monitoring system [that was] the program MORECA, made in Access. Even then, we had files generated and created by the beneficiaries in Excel format. […] The fact is that we did not have any obligation from the Ministry to encourage it in particular formats. […] Until 1999, only financial data were present and the single measures were all managed by the central Department and not by other areas of the Campania Region […]. The main reason of this monitoring lack was the poor interest of the regional politics, except for financial reasons, which explains why the widely used data were the financial ones. (Interview with regional official)

The lack of a monitoring culture had also been reflected in the activities of the MC. Its role, in fact, continued to be almost ineffective during the 1994–1999 programming period despite the new Community input. According to a socio-economic stakeholder that I urged to explain if and how the role of the partners changed during the second programming period on the basis of the Community novelties I presented in the second chapter, in Campania, [these] novelties […] had never really materialized. The MC became a kind of theatre where everyone was saying something but all the decisions had already been taken by the regional structure together with the Commission. The MC has never been in a position to express the true function that was assigned by the regulations in substance. (Interview with socio-economic stakeholder)

Likewise, until the subsequent establishment of the NVVIP, a type of evaluation in line with the community practices in Campania was almost absent, since it was limited to the sole evaluation of individual projects for their possible eligibility for the subsequent funding. The analysis of the ex-post evaluation of the 1989–1993 POP, for example, showed that it was limited to provide a brief description of what it was invested and where, but without providing some structured recommendations for the following programming. In other words, “even if present, evaluators were

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not frequently used and the evaluation was considered a mere fulfillment to be performed, rather than an added value to provide for the same evaluation” (interview with external evaluator). Similarly, during the first two programming cycles, the in-itinere evaluation of the OPs was considered as a mere fulfillment to be carried out, having the characteristics of a monitoring report rather than a real evaluation. They were in fact limited to a summary of the financial data so far collected and the expenditure trend: to be honest, at least until the end of the 1990s, that was the only object of interest for the European structural funds in Campania—to give impetus the expenditure and to have an idea of how it could be for the closure of the program. (Interview with regional official)

In building the project La Regione che Cambia, Bassolino took into account the criticalities until now described and he decided to introduce several novelties aimed to increase the management, monitoring, and evaluation of the structural interventions. According to a regional manager, for example, during the third programming period “it was the first time that the Region approached the concrete deal with the European expenditure” (interview with regional official), since a serious and structure use of the pricing mechanisms to increase the efficiency within the public administrations was implemented: in the view of Bassolino, the respect of the expenditure targets become an instrument to give a prominence of the Campania’s image in Europe. As a consequence, the monitoring of the interventions should become a valid instrument in order to pursue this goal and, therefore, it should be carefully financed with “carpet training courses” in the regional and municipal administrations. In addition, Bassolino identified the evaluation as “a practice of decision making support” (Regione Campania 2013, p. 71): thanks to the great support of the central NVVIP that identified the Campania Region as a “privileged laboratory” for the introduction of institutional innovations within the Objective Regions 1, he did a parsimonious scout activity by selecting the best evaluators at the time present in Italy (interview with external evaluator; interview with national official). Despite several processes of administrative change started and a clear link with the Community method was for the first time introduced, these elements have been stopped with time and they only maintained on the evaluation stage. More in general,

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the issues related to the last few years have focused on issues related to certification, reporting, relationship with beneficiaries, monitoring system and control tracks. The slogans were “spending” and “avoiding automatic decommitment”. In particular, the issue of slowness in the implementation of projects is also expressed by the final beneficiaries; the final beneficiaries outside the Campania Region and, in general, the other contracting stations continued to make significant delays in compliance with implementation chronograms. Delays in the implementation of operations, with particular reference to those of an infrastructure nature, have had unavoidable repercussions on spending, in line with the timing of reporting the Region to the European Commission […]. Starting from 2008, the 2000–2006 program did not represent any more things to accomplish, programs to implement, enthusiasm for a new season; rather, it has translated into boredom for unfulfilled fulfillment, expectations disappointed by the behaviours of the beneficiaries, in the desire to close the game before they jump off new rules or that political changes would sweep away the priorities. The program was at a problematic stage and there were only few best projects. (Regione Campania 2011, pp. 148–156, emphasis added)

The main problems concerned the administrative capacity of the local beneficiaries to manage the great number of resources that they were assigned, due to “the cultural resistances they have shown to overcome the various “localisms” present” (interview with external evaluator). At the same time, the monitoring news introduced by the IGRUE have been perceived as a mere obligation to fulfill since the same beneficiaries “showed little interest in uploading the data because this item was often perceived as something that did not return them useful” (interview with regional official). The lack of an initial enthusiasm also emerges by analyzing the activities of the MC in Campania: while the participation of the institutional, socio-­ economic, and of the third sector actors was constant and productive for the management of the OP during the first years of implementation of the 2000–2006 OPs, it collapsed during the following years (interview with regional official). Several good results were on the contrary achieved in terms of evaluation, such as a diffusion of a common evaluation culture not only within the member of the NVVIP, but also within the other offices of the Region; the use of an integrated, motivated, and competent evaluation, with also the use of indicators of sustainable wealth (as recommended by the regulations); an evaluation activity not only limited to the projects, but also to

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the strategic orientations of the OPs. The achievements of these good results had to be attributed not only to the combination of the positive elements I previously discussed, but also to the consolidation within the NVVIP of a strong technical leadership that had been able to contribute to the diffusion of an evaluation culture in Campania. Its consolidation was also facilitated by the strong political support given to the NVVIP by both Bassolino and Stefano Caldoro (the new center-right regional president elected in 2010). It is enough to argue, for example, that the members of the Campania Evaluation Unit were the only ones in the Italian Mezzogiorno to have enjoyed a five-year renewal of fixed contracts (from 2008 to 2013). 3.5.1.4 Administrative Performance in 2007–2013 ERDF OP The initial programming in Campania was the most problematic phase for the implementation of the 2007–2013 ERDF OP, and it conditioned all the following programming and the other phases under investigation. Three different phases of the same OP can be in fact detected, and each of them was characterized by different programmatic lines and different programming structures. The reasons were twofold. Upstream, there was the poor communication capacity of the regional actors and their substantial lack of a programmatic idea for the regional development. It concerned the low level of political staff’s interest in setting up a specialized team able to create a clear idea of the way in which regional development should have to be achieved, after the failure of previous 2000–2006 experience. Downstream, however, it covered the main beneficiaries of the first projects financed by the ERDF OP due to their lack of cultural change to the new desirable development practices, and a perpetuated focus on the management of fragmented intervention lines aimed at maximizing the local political interests. The first programming started from the observation that the TIPs’ experience failed and that the programming of this region should have radically changed, through an exclusive focus on large projects to be concentrated in the cities with over 50,000 inhabitants. Despite this relevant idea of how the change should have been realized, several problems have continued to be present also during the first stage of the OP. For example, even if an ex-ante evaluation was carried out, “its main mistake was that the lessons learned for the 2000–2006 cycle were overturned in the 2007–2013 documents, without saying anything new” (interview with external evaluator). Another problem concerned the

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partnership approach, since the institutional and socio-economic partners have not been able to present a coherent and unambiguous position in the negotiating table. At the same time, the single proposed positions, when present, had not been taken into account, perpetuating, therefore, a historically prevalent problem in Campania during the previous three programmings. As a representative of one of the main socio-­economic partners pointed out, one of their proposals—ranging from a classic Campania problem that had already existed from 1989–1993 POP and never resolved, that is, the differentiation between the outer and the coastal strip of the Region—had been to “make development projects in concert with the territorial plans for sub-regional development to move from old-fashioned localism to the idea of territorial unity” (interview with regional representative). The documents proposed for the negotiation of the OP were still of poor quality and this had deterred a very long negotiation process during which the reciprocal confrontation between the Commission and the Region was often in total opposition since the latter was reluctant to implement the merit indicators suggested by the former (interview with EU official). As far acceptable, the final documents were “very prosaic” (interview with external evaluator) and still far from a definite and coherent development idea. For example, a structural problem involved the excessive fragmentation of responsibilities between the various actors in the management of some parts of the OP. This resulted in a very low spending capacity until 2011, which followed the launch of a second phase with the aim of keeping track of the programming and spending dynamics at the regional level. The changes involved both the financial management (see later) and the programming of the interventions. In fact, Stefano Caldoro paid great attention to the issue of the unitary programming without altering the overall structure of programming. For example, a Cabina di Regia composed by external experts was built, which should have been coordinated both upstream and in the implementation, in order to direct the choices toward greater concentration of resources and interventions. Rather than to give a radical turnaround to programming, this change had to be interpret as a signal from Caldoro to mark a differentiation line from the previous center-left regional government. The third stage of programming continued to be therefore influenced by both the respect of the spending targets and the electoral political dynamics. In the latter, the initial programming was completely overturned and it was focused on immediate-spending

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projects, that is, the so-called accelerazione della spesa. As I said, the reasons were two. Fragmentation in small projects would, in fact, make it possible to immediately reach the expense targets, them being more manageable. At the same time it was a clear political choice to think of something more expansive and distributive, in approaching, in 2015, the election of the new regional junta. Compared to the documents of the first two phases, those of this third phase were also more dry and more adherent to the reality, with an emphasis on the role of the Campania Region in Europe. As concerned the phases of project generation and project approval/ selection, several criticalities were found for the projects financed through the traditional mechanism of the public call and for those that were financed within the Protocolli di Intesa (Intesa Protocols). With respect to both procedures, in each of the three programming phases of the ERDF OP previous discussed, “the region asked the municipalities to indicate a set of interventions to be financed, engaging themselves in realizing them” (interview with regional official). The main factors that negatively affected this phase predominantly had a political nature and they clearly emerge by analyzing the dynamics of two Regional Directorates within which each of the two procedures were used. They are the General Direction for the Regional Mobility and the Direction for the Environment and the Ecosystem. Either were two relevant Directions within the general OP due to the large number of projects and resources they controlled. The first Direction managed infrastructural projects financed within Three-Year Plans concerted between the Region and local authorities and approved by the regional government. The main problems of these projects concerned both their nature and the system of selection used. On the one hand, the single projects were not integrated among them due to the lack of a coherent regional political vision of the transport and infrastructural need of the region. On the other hand, their funding admission was fully provided by the Regional Assessorato for the Mobility without a previous clear selection process. The Direction for the Environment and the Ecosystem, instead, was one of the main Direction involved during the phase of the accelerazione della spesa. One of the main problems that characterized these projects was the poor quality of the proposed projects since in the quasi totality of the cases there were not immediately buildable and in several cases they were the mere reproduction of previous design proposals (interview with regional official). More in general, the main problem that it was found within the local beneficiaries was “their lack of

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knowledge of the European rules which often led them to do mistakes when they decided to take part in a public call since they were not used to these rules” (interview with regional official). As it happened in other Southern Italian regions, the main factor that negatively influenced the management phase of the 2007–2013 ERDF OP was the suspension of payments by the Commission because of the disrespect of the separation between management and control functions provided within the new regulations. As I indicated in previous pages, it inevitably had several consequences for the phases of project payment and project management. Through the field analysis I did, it is possible to better understand additional institutional problems that could had negatively affected the performance of this phase in Campania. The main problems in terms of project payment concerned both the regional offices and the local beneficiaries. Within the former, several regional officials that I interviewed had complained of a poor organization of the offices, as well as a lack of specialization of officials who have often caused them to rely heavily on technical assistance. The beneficiaries, moreover, showed a scarce European culture of managing the dossiers and the expense documentation. The latter problem above all concerned the institutional partners and, among them, the municipalities since “the quasi totality of them don’t have a highly qualified staff to interact with the regional monitoring system that is often too farraginous” (interview with institutional partner). The same problems also concerned the phase of the project management and, according to all the types of partners I interviewed (i.e., the institutional, the socio-­ economic, and of the third sector), the poor administrative performance during this phase of the project management was also conditioned by the poor support role provided during these years by the MA. The analysis of the monitoring of interventions has still shown the prevalence of poor monitoring culture for each of the indicators considered: the system of indicators and the monitoring of procedures seemed to be still incomplete with obvious operational malfunctions, and not totally in line with European standards; only the financial data were found to be perfectly present (less physical and procedural); there was a total lack of use of monitoring for management purposes. The reasons of this poor performance can be realized in the low interest of regional political class in this phase which has prevented the possibility of creating a solid central regional coordination structure, having a chain effect on all the other institutional actors involved at this stage. I am going for order. First, the

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system of monitoring procedures has not undergone any substantial organizational change over what it was done during the 2000–2006 programming period. Although IGRUE urged for each fund to have its own system, the choice of the regional administration was to not conform to it. In fact, despite a lengthy consultation process, the final choice was to perpetuate the same practices adopted during the previous programming. The latter denoted a “real fear of the new since maintaining a unitary system means not centralizing everything but maintaining the unique local systems” (interview with national official). At the same time, starting from 2011, based on the bankruptcy results of the previous programming, a structure of 8/9 people was created with the task of providing assistance and training to all those responsible for operational goals. When present, this structure had positive results as its desired coordination role. However, it lasted only eight months, so it was then decided to move this staff to the already-mentioned Level I controls. Therefore, all the coordination activities continued to be present in the hands of the Executive Operations Unit, Monitoring and Financial Implementation, that consisted of only two officials, an employee, and an interim executive. Only the financial data were totally available, being the unique to be linked to the certification of the expenditure and the consequent access to funding. In general, the poor availability of other types of data have to be attributed to the same cultural problems encountered during the management phase. In general, in the absence of a structured link, the multiple beneficiaries of the 2007–2013 ERDF OP perceived this phase as further, as well as not essential and ineffective. However, this problem must be brought back not only to cultural issues but also to the lack of coordination by regional structures and political impetus. Upstream, in fact, the political class was totally disinterested to the monitoring issue, “being interested only to have the financial data when necessary to externally publicize […] and not on how the data was obtained” (interview with regional official). At the same time, carpet training activities have not been done by the managers of the operational objectives, above all for their high turn-over rate that did not allow the consolidation of a coherent training system for their beneficiaries. Finally, any form of monitoring for management purposes was present: “our activities are not served […] you realize what there is behind and its activities have been pushing to create a monitoring group but our documents and reports always remained in the desk […] never among the new regional programmatic actions” (interview with regional official).

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Finally, a strong performance was found for each of the two dimensions considered in terms of evaluation. This element showed that the NVVIP in Campania continued its process of institutionalization that it was started during the Bassolino era. Using a Hirschmanian approach, the reasons of this performance had to be linked to the undoubtedly strengthening role of the NVVIP, facilitated by the positive political support of the regional governments during these years. They are visible by considering (interview with national official; interview with external evaluator; interview with regional official): (1) the long-term contracts I discussed in previous pages; (2) the official recognition of the NVVIP as a regional structure, while ensuring the maintaining of its formal independence; (3) the recognition of the role of the NVVIP from the whole regional administration, that is visible in the frequent contracts between its members and the regional directions. In addition, the structure proved to be excellent in terms of skills and human resources. This was not only facilitated by the strong investment made by the Region on this issue, but also by the strong technical leadership that had come to light. 3.5.2  The Case of Calabria: An Immobile Region? The implementation of the structural funds in Calabria was affected by several political, cultural, and institutional factors, among them interconnected and substantially unchanged. Upstream, there had always been a poor political will to define both clear and appropriate intervention lines, and institutional innovations. Rather, the management of the structural funds in this region continued to be characterized by several dynamics too similar to the season of the Extraordinary Intervention. Downstream, instead, cultural resistance and incorrect image of the change prevailed among the main actors, involving both the institutional and socio-­ economic beneficiaries, and the regional technical staff that for long time was reluctant to implement the few innovations introduced. With respect to the case of Campania, the implementation of the 2007–2013 ERDF OP in Calabria had a greater administrative performance in terms of programming and management. Nevertheless, the latter cannot be positively interpreted since it was to a large extent conditioned by the general structure of the OP that had the same development strategy of the previous programming, therefore facilitating its implementation but without significantly contributing to the regional growth.

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3.5.2.1 The Institutional Challenge During the first programming period, the same institutional architecture elaborated for the implementation of the IPM was adopted in Calabria: the presence of a strong technical leadership, on the one hand, and the consolidation of experience of the “group of visionaries,” on the other hand, facilitated a good adaptation of the Calabrian institutions. On the contrary, more criticalities were found during the following programming period due to a mix of exogenous and endogenous factors: while the evolution of the EU regulations and the reinforcement of the national garrison required a partial modification of the organizational and administrative choices, the definitive end of the Intervento Straordinario moved the attention of the regional political class from the domestic resources to the European ones. Three new institutional bodies were created: the regional Cabina di Regia, the Department Budget and Finance, Community Policies and Economic Development, and the Comitato di Direzione (Management Committee). Considering the national recommendations, the aim of the Cabina di Regia was to ensure a greater coordination for the implementation of the structural interventions. The other two bodies were created by the regional law No 7/1996: while the aim of the former was to create a unique regional center for the evaluation of the projects and the financial and regional programming, the latter was supposed to guarantee a greater integration among the regional structures involved. In other terms, a clear attempt to create a regional decision-maker for development was done in Calabria during the second programming period. As it will be better described in the section about the administrative challenge, the consolidation of this system ensured good results in terms of economic performance with respect to other Italian Objective 1 Regions. Nevertheless, the interest of the political class became so prevalent that it would not allow the consolidation of autonomous structures of the regional administration. The distorted political influence in regional administration clearly emerged by analyzing the internal criticalities of the Cabina di Regia. The latter consisted of representatives of the regional junta, the regional administrations, and external experts: the predominance of the former did not allow the Cabina di Regia to have a concrete role for the general coordination of the structural interventions in Calabria (interview with regional official). As a consequence, one of the main institutional problems occurred during this programming period concerned the absence of a coordination both within the regional administration and

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between the latter and the local beneficiaries (Regione Calabria 2000; interview with regional official; interview with institutional stakeholder). Despite the important changes that the Italian regions should have introduced as a result of the novelties provided by the regulations for the new programming cycle and the national choice to attribute several responsibilities to the sub-national actors, for the management of the 2000–2006 structural funds a mere adaptation to the previous institutional solutions prevailed in Calabria. The most important news concerned the creation of a Struttura Operativa di Gestione (Operational Management Structure, SOG), aimed to provide specialized technical assistance to the regional administrative structure involved in the management of the OPs. Nevertheless this institutional change, its impact on the management system, was limited not only for several organizational problems related to its creation and establishment, but also for more general cultural reasons. First of all, the SOG was not able to absolve to its desired role since it was constantly under organic during the years and only few investments in training were done. In addition, similarly to what happened during the years of the first IMP experience, “several regional officials were reluctant to the idea that a new and outside structure tell them what to do and how” (interview with regional official). The latter consideration introduces the main problem that it was found in Calabria during the first years of the Nuova Programmazione and that significantly differ this region with respect to the case of Campania—that is the prevalence of a conservative logic that had inhibited real potential for change, with inevitable consequences also for the administrative dimension. As a senior official of the Calabria Region pointed out: while during the 1990s a great enthusiasm to do things was present, it progressively failed starting from 2000, since “a running race” from the regional leadership was missed. The real problem in Calabria was that after the Commission decided to give more powers to the regions […] we have wrapped ourselves up in the excessive procedures required […]. The life of the regional offices was complicated since we used the same identical system of the two previous cycles without taking into account the great novelties introduced by the Community regulations. (Interview with regional official)

Similarly to what emerged from my field analysis, the ex-post evaluation of the 2000–2006 ERDF OP clearly pointed out that “on the central management side, long-standing administrative oversight has experienced shifting and change of address that had significantly weakened the

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system’s ability to maneuver” (p. 151). It clearly emerges by analyzing two important structures involved in this phase—the responsabili di misura (regional managers responsible for a single priority axis of which an OP is composed) and the MA. The former were unable to guarantee a garrison of the measures assigned to them. In several cases, in fact, the identification of the responsabili di misura was very slow and it was characterized by several organizational difficulties: in 2007, for example, more than 25% of the measures were not assigned to a specific responsabile di misura (Regione Calabria 2007). In addition, several regional officials considered this new responsibility as secondary and superfluous, and their relevance was not perceived “since very often many of them were left alone in implementing the new Community rules, without a leading role or technical or political guidance that could make them understand their possible utility for the overall system and for the region” (interview with regional official). Finally, the history of the ERDF MA shows that in the face of the lack of a coherent project for the reinforcement of the management of the structural funds, a discontinuity in its direction can determine an institutional paralysis. Its directors, in fact, changed four times of which three times up to 2005, and any formal director was nominated until the middle of 2002, and this role was exercised by a manager of another Department. Moreover, after the 2005 regional elections, the new regional president nominated a new director that continued to hold this position until the end of the formal closure of the OP. While until the 2005 the internal organizational features of the MA were characterized by both a total absence of a coordination among the departments and an unclear definition of the staff rules and responsibilities, the next greater stability of the MA contributed not only to an its internal institutionalization, but also to a better management of the OP. 3.5.2.2 The Strategic Challenge As in the case of the institutional challenge, the development strategy elaborated in Calabria during the first programming cycle was a continuity of the previous strategic model of the IPM. Its general mission, in fact, continued to be the building of the “preconditions” for the regional development, but without a clear definition of the strategic interventions to pursue. During the second programming period, a greater search for change was tried to pursue, by identifying specific infrastructural projects that, according to the Hirschmanian idea of development poles, should have to produce investments in the adjacent areas to where they were originally built.

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Among them, in 1995, a major project of ECU 40 million was implemented and it concerned “the conversion of the Gioia Tauro port into a large container port specialized in transhipment with the aim to adapt its basis infrastructure to trend in world to sea transport” (CEC 1998, p. 52). Nevertheless these changes, the prevalence of too excessive objectives did not contribute to a clear definition of the interventions to be realized and the projects to implement (Regione Calabria 2000, p. 5). At least in its programming orientations, the development strategy elaborated for the 2000–2006 programming period knew a substantial change with respect the previous ones. In fact, on the basis of the general indications of the national CSF, in Calabria the TIPs become the main development instruments for the implementation of the OPs. Moreover, the new ERDF OP clearly recognized that a drastic change with respect to the development practices historically prevalent should have been realized in this region. Unlike the past, external resources will have to be “bent” to the needs of a development project of the credible and sustainable Calabria, i.e. non-­ emulative development and pursuit of Calabria, on the contrary, based on specific regional resources, on valorisation of potential, human and material, endogenous growth. This is the real challenge, the most radical discontinuity of the Calabrian Operational Program: to have identified a socially and politically shared intervention strategy focusing primarily on “localized” resources, on their integrated enhancement, on regional institutional and entrepreneurial actors, the opposite of the dominant practices of the past obsessed solely by the drainable public finances of the center and the hope of exogenous resolution interventions. The Operational Program instead adopts the philosophy of “putting to work” Calabrian society, its leading groups, entrepreneurial groups and social forces on a self-centered and sustainable development project, which presupposes first of all the overcoming of internal constraints and obstacles to growth of income, employment and social quality, which first of all deals with what Calabria can and must do for development, even before asking for external aid and support. (Regione Calabria 2000, p. 33)

Despite this initial emphasis and the will to want to score a break with respect to the previous two bankruptcy management experiences of the structural funds, a set of criticalities emerged during the following implementation phase and that limited the real possibilities to growth for this region. These criticalities concerned (IrsCultResco 2009, pp. 1–26) (1) an

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excessive fragmentation of the activities and the lack of integration and concentration of resources on strategic interventions to strengthen the regional economic system; (2) a massive use of the sponda, above all in the infrastructural projects (equal to 94.7% of the total financed projects); (3) a still inadequate ability to design project from both a qualitative and a quantitative point of view. 3.5.2.3 The Administrative Challenge As compared to other Southern Italian regions, a good administrative performance in terms of expenditure was present in Calabria throughout the 1990s (Leonardi 2005; Milio 2007): the 80% of the resources were spent during the first programming period and the 84% during the second one. Despite the internal coordination issues previously described, the strong technical leadership consolidated during the first programming period and the first part of the second one facilitated the respect of the expenditure targets. On the contrary, the re-proposing of the same institutional arrangements adopted during the 1990s for the implementation of the 2000–2006 OPs negatively affected also this dimension. As the case of the responsabili di misura showed, for example, the diffusion of a European administrative culture was limited only to single actors of the regional management system. More in detail, the main problems concerned the interactions of the political, institutional, and socio-economic actors involved within the policy-making, since in several cases they were more driven by power-sharing logics rather than by specific goals of economic development. The latter clearly emerged by analyzing the excessive length of the average closing time of the public calls, which in many cases exceed 1000 days. This length was not only due to the lack of technical capacity of the proposed structures to handle the practices but also by the selection criteria that led to several judicial appeals, due to the dubious transparency. Moreover, this regional case is a clear example of the incorrect administrative change happened in Italy as a consequence of the introduction of the national reserve (6%) and that I previously described: rather than a process of development of knowledge and human and technical competence, the national reserve was perceived as a mere formal act which should have been achieved only to give an external message that a change was being made, even without worrying that it was really realizing within the regional administration. As pure example of this, in just one year, eight of the ten indicators provided by the DPS were totally achieved. Nevertheless, the real functioning of the regional structures linked to them showed that

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beyond the mere formal introduction of new roles and procedures in line with the national requirements, an incorrect administrative change happened. It clearly emerges by analyzing the monitoring and the evaluation phase. Until the end of the second programming period, the monitoring of the structural interventions “had always been identified as an additional act rather than as an ordinary practice to follow” (interview with regional official), therefore limiting the consolidation of a monitoring culture as well as its use for management purposes. The main reasons concerned the “bad system power” that was present until the late 1990s, since “it was rudimentary not structured” (interview with regional official). The creation of a new informative system at the end of the 1990s—called RENDICONTA—facilitated the presence of a greater data availability since for the first time the responsabili di misura were obliged to load data on the system. Nevertheless these institutional changes, the monitoring phase did not know any significant change in the concrete since it “was used as a mere fulfilment to the reward system” (interview with regional official). Moreover, as compared to the case of Campania, the NVVIP in this region was not able to start and consolidate a process of institutionalization. Among the main activities related to the 2000–2006 ERDF OP that it did, for example, several activities similarly to those carried out elsewhere by the technical assistance continued to be present. This poor performance had to be returned to different reasons among them interconnected that are the absence of a strong regional investment on the evaluation issue, the instability of its organizational structure, and the excessive alternation of its director that inhibited the consolidation of a strong technical leadership. During the first phase of implementation of the third programming period, the establishment of the NVVIP appeared to be a mere fulfillment to the national prescription without the real will to consolidate an evaluation culture within this region in order to improve the performance of the OP. In fact, until 2003 it was made up of only three members, without the formal appointment of any director. In addition, the following frequent changes of the director of the NVVIP inhibited the consolidation during the year of a strong technical leadership due to the lack of interest that the regional political class put on this issue. As an internal member of the NVVIP pointed out: in Calabria there has been an instrumentalization of the top position of the Evaluation Unit: history taught us that the directors have chosen to do this

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job to have the salary of general directors just before their retirement […]. This covered all the types of regional executives, both right and left, becoming the director appointed by the president of the regional junta. […] We have often had people with little knowledge on the evaluation issue […]. As a result of this we have never been enhanced as evaluators since the training courses organized by the region were very few. The only training courses were made by the national evaluation network […]. In practice, the Evaluation Unit in Calabria was kept upside down not by a local will but by a national network that used us at will […] but not systematically. (Interview with regional official)

3.5.2.4 Administrative Performance in 2007–2013 ERDF OP With respect to the 2007–2013 ERDF OP of the Campania Region, the programming process in Calabria was more linear and less problematic since the programming line in this region did not undergo major variations. On the other hand, the negotiation phase and the quality of the documents presented had the same problems and causes. In detail, the negotiation process was very long and complex, since the first document presented was not able to clearly indicate what should have been done for the growth of the region. This negative performance was conditioned by different institutional and political reasons: (1) during the programming phase, the attention of the policy makers continued to be directed toward the closure of the previous OP; (2) it had always worked on programming in watertight compartments, with prevailing political pressure on individual directions, which have led to the creation of a shared, consistent, and coherent development strategy; (3) the participation of the institutional, socio-economic, and of the third sector partners during the programming phase was virtually absent, not only because they were not able to present a common strategy to contribute to the overall definition of the regional development but also because even during the fourth programming period, a regional partnership office was not present. Therefore, their involvement, on the mere formal issues of Community regulations, was only limited to the description of the sectorial programming lines. The best performance on the first sub-dimension selected would be related to issues of overall programming and the choice to “re-propose” the same 2000–2006 development strategy in terms of areas of intervention and investment priorities. In fact, only three financial remodelings were carried out and they were of little magnitude (every three years).

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The implementation tools of the ERDF OP become the Progetti Integrati di Sviluppo Locale (Integrated Local Development Projects, PISL). They were considered by the Region as “the necessary instrument for launching a development policy based on concentration and integration of interventions in the country with the aim of generating processes of internal cohesion and a greater competitiveness of local systems” (Regione Calabria 2014, p. 20). As in the case of the Campania Region, it is possible to identify the main problems found during the project generation and approval/selection through the analyzing of two Directions involved in the activities of the 2007–2013 ERDF OP, that is, the Direction for the Public Works and the Direction for the Economic Development. While the former projects were generated within specific Protocolli di Intesa, the latter launched public calls that above all involved SMEs. The main problem of the former concerned, for example, the poor design quality since the quasi totality of them were financed as sponda projects. Similar problems also concerned the projects generated by the SMEs in Calabria. A socio-economic stakeholder, moreover, complained with the total absence of planning capacity of the SMEs in this region. Within this type of projects, also the phase of the project selection was problematic because of the lack of an enough and qualified staff within the Direction that in several cases has significantly had to resort to external technical assistance. While for the management phase the same problems and the same causes that I described for the Campania case were found, in the case of the monitoring of the interventions, I observed negative outcomes for each of the three indicators I considered in the analysis. In addition, as concerned the monitoring system structure, many doubts on the part of the Commission were advanced on several occasions. This was due to an incorrect system of governance of the same monitoring in Calabria, since the latter has foreseen an increase in the role of responsabili di misura, each of them refers to the general manager responsible for the whole axis. The data upload system was then based on uploading by the responsabili di misura on the SIGECO system, following the data being sent to an excel table by the single beneficiary. More in general, the final beneficiaries had the same problems found in Campania. In addition to the structural problems of those responsabili di misura and their organizations, another problem discussed in the case of Campania was found in this region: the low interest of the regional political class in Calabria at this stage. Moreover, these offices can be considered as “mere statistical offices, never interested in using this data to improve the quality

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of programming itself” (interview with regional official). The main problems of the organizational structure concerned the excessive turn-over rate of the responsabili di misura and the lack of continuity and consolidation in their work and common working practices, that were also found during the previous programming cycle. To this is added a structural problem of the region, that is the sub-organ of these offices that led them to require a massive side of technical assistance. In addition to the lack of a culture of monitoring, the implementation of the 2007–2013 ERDF OP saw a total absence of any forms of evaluation culture, that continued to distinguish this region from the Campania case. In fact, there was not only a complete absence of evaluation for management purposes, but also an evaluation activity very close to technical assistance. By virtue of the list of activities carried out by the NVVIP related to the 2007–2013 ERDF OP, it is apparent that the primary activity was devoted to the evaluation/ex ante approval of approximately 200 projects (with its opinion more or less binding). The reasons for this lack of administrative performance on evaluation are merely political, due to the total absence of investment by the regional politics. They are enucleated in at least two aspects: (1) many resources officially attributable to the evaluation have subsequently been moved to other sectors of regional intervention; (2) there was a complete lack of consolidation of a solid internal leadership. In general, the internal skills were good, but the lack of investment on NVVIP has undermined the continuous training of its members, still anchored to previous evaluation methods. Compared to the Campania case, however, no form of stakeholder involvement was encountered during the evaluation phase.

3.6   Implementing the 2014–2020 Programming Period: New Challenges and Old Answers? As described in Chap. 2, the current programming period have both a strong result-based approach and an emphasis on results and performance. In this context, the implementation of 2014–2020 OPs is characterized by the use of unusual control policy instruments from the EC in order to avoid possible implementation gaps within MSs. In addition to that, since the negotiation of the Italian PA, the EC was persuaded that specific actions had to be carried out in Italy due to the criticalities until now encountered. More in detail, in addition to the request to create a strong national task described in the introduction of this chapter, the EC opted

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as ex-ante conditionality for Italy also the rationalization of the national and sub-national administrative systems. These requests culminated in the consolidation of a new governance system which pivoted in the previously mentioned Agency, on the one hand, and, on the other hand, in targeted actions aimed at increasing the administrative capacity of Italian administrations (including their evaluation practices). As concerned the consolidation of a new governance system for the management of ESIFs in Italy, the EC pushed toward the creation of an integrated National OP, the so-called “NOP Governance and Institutional Capacity ESF-ERDF 2014–2020” in order to contribute to the objectives of Europe 2020 through institutional capacity building. The measures financed within this OP are intended to enhancing coordination between the different levels of government for the implementation of structural investments in Italy, having the general aim to innovate the methods, models, and procedures in which solutions and tools are offered, for a more efficient and effective public administration in Italy. In pushing toward the creation of this NOP, that is a unicum in Europe, in fact, the EC started from the observation that during all the previous four programmings, any structured actions to overcome the problem of the lack of a clear attribution of responsibility in some policy areas had been carried out. In some policy sectors (e.g., the environment), in fact, different levels of government (municipal, provincial, regional, and national) participate in the implementation of the same measure financed by the structural funds, without the presence of an institutional coordination. Its birth, therefore, refers to an Italian historical problem, found since the implementation of the programming cycle 1989–1993, but for which no way was ever identified to put together standardized and defined procedures aimed at establishing a right attribution of responsibility. Therefore, the “NOP Governance and Institutional Capacity ESF-­ ERDF 2014–2020” is trying to find solutions and new ways to get all the public and private Italian actors to talk to solve the historic institutional problems found in Italy since the implementation of the 1989–1993 programming period, also due to the fact that in the Italian legal system there are many forms of autonomy, even at supra-municipal level, to which more responsibility has always been attributed during the last decade. Without modifying the entire system of decentralized Italian governance and without envisaging a strengthening of national institutions (including those of ministries), a functional type of coordination is assigned to the Agency, with the task of supervising the entire supply chain, and intervening in the

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event of criticality through the activation of task forces not addressed at the level of the OP but operating on single policy sectors that are considered more problematic (primarily, the environment and Smart Specialisation Strategy). The aim of the “NOP Governance and Institutional Capacity ESF-­ ERDF 2014–2020” is also to achieve the process of rationalization of the national and sub-national administrative systems through the implementation of the so-called Administrative Capacity-Building Plans (ACPs) that each organization responsible for an OP had to elaborate. In detail, each administration has had to make a self-diagnosis of the administrative procedures adopted until now in order to understand where critical issues were lurking within the administration. The document containing this self-­diagnosis was then sent to the EC, whose approval was an ex-ante condition for the approval of the same OP. In other words, each Italian public administration involved in the front line in the management of the 2014–2020 OPs had to make an analysis of all the organizational processes and administrative procedures that had previously given problems, also proposing a modification of the same administration in some cases (with fairly defined targets, including reduction of time, internal reorganization of structures and personnel, attribution of responsibility to organizational top management, etc.). In the more general process of rationalizing the administrative machine, a key role has also been attributed to the evaluation activity, being the latter considered an essential part of the life cycle of the OP (as described in Chap. 2). Considering the evaluation gap that characterized Italian administrations also in the 2007–2013 programming cycle, during the negotiation for the approval of the PA, the EC expressly requested the creation of a National System for evaluating the policy, in order to build widespread evaluation capacity, promote the request, implementation and use of assessments, and help the administrations holding the OP to build their own evaluation plans (as required by the new regulations). This new national evaluation system has therefore gone to join the already existing network of NVVIPs, going to activate specific mobilization activities through working groups also open to other technical presidents and representatives of the administrations, dedicated to accompanying and mutually supporting analysis and evaluation activities conducted by the participants in some areas (e.g., social innovation and active labor policies)—or sharing common methods and practices (e.g., ex-ante evaluation of projects and use of indicators).

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The introduction of these two novelties within the Italian implementation system of EU structural funds is starting to have its first positive results for the management of the 2014–2020 OPs. First of all: the process that led to the fulfillment of the ex ante conditionalities introduced in the current programming cycle as pre-requisites for implementation […] produced widespread growth in skills and greater coordination between the various levels of government, and was successfully concluded. This contributed to a faster definition of plans and strategies in many important sectors for development, the environment and social innovation, and accelerating the achievement of the acquis communautaire. (Ministero dell’Economia e delle Finanze 2019, p. 9)

Moreover: in 2018 all the national and regional co-financed operational programs (OPs) of the 2014–2020 programming cycle have entered into full operation. The date of 31 December of the same year was marked as the deadline for the first verification of the certification of expenditure, as well as achieving the target of the Performance Framework for all the OPs approved in 2015, or almost all of the ERDF OPs, according to the N+3 rule.

In relation to spending, the results achieved made it possible not only to the strong commitment by the MAs involved as a result of the previously mentioned targeted actions from the EC, but also to a renewed political impulse of the new government formed from the Five Star Movement and League North established during the 2018. The latter, in fact, renewed its commitment to the Mezzogiorno issue as a national issue and the centrality of cohesion policies, with the institution of the figure of the Minister of the South to whom the relative delegations have been assigned. In the period before the certification expenditure deadline, in fact, the presence of “control room” was confirmed and reinforced as an instrument of institutional cooperation and unitary programming of the funds allocated to cohesion, with a strengthened role in relation to monitoring the progress of OPs. While recognizing the merits of this general result, a tendency to accelerate the expenditure in the last months before the deadline has continued to be present as in the previous programming periods, showing therefore

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a traditional problem encouraged in Italy in the management of EU structural funds. In other words, the will for administrative change seems to have been more imposed by the actions perpetuated by the EC during the last years rather than an explicitly desired that arose from the Italian administrations. These path dependency constraints seem to be evident also analyzing a set of criticalities that are currently encouraging in Italy, by covering the institutional, strategic, and administrative dimensions of Cohesion Policy implementation. The first, and most important, is related to the new governance of the Structural Funds in Italy that continues to be characterized by uncertain responsibilities not only between the center and the periphery but also among the main national institutions involved. In fact, there is an overlapping of competences between the Agency and the institutes to which have been assigned specific functions and tasks, that is, the Presidency of the Council of Ministers and the Agenzia nazionale per l’attrazione degli investimenti e lo sviluppo d’impresa (National Agency for the Investment Invitation and Enterprise Development, Invitalia). On the one hand, given that the “functions relating to cohesion policy are shared between the Presidency of the Council of Ministers and the Agency,” the aim of the former “is to play a central role […] in the field of coordination activities, addressing and programming in terms of concrete implementation in the field of development policies” (Sbrescia 2014, p. 568). On the other hand, however, the Agency could use Invitalia “to ensure the timely implementation of the programs cofinanced by the Structural Funds […] and the full use of the European Union’s assigned resources” (Article 3, Legislative Decree No. 88/2011). Nonetheless, the relationships between these institutions are still difficult today, once again because of the overall complexity of the rules: it is for example, the case of the revision of Community legislation. It is a competence that according to the legislation should be attributed to the Presidency of the Council because the Agency is following the implementation [phase]. So if it is so, why I, as an Agency, must deal with Community regulatory review processes and, therefore, handle quintals and quintals of paper in the language when there really is a Department that must do this. This is a theme, however, on which we are not working even though the Presidency of the Council is in an eternal restructure […] with several departments that carry out the same activities, creating, therefore, a duplication of costs and activities. (Interview with national official)

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And still: The question of the clear attribution of skills is an internal problem, because it is necessary to clarify the relationship between the Agency and the Department […] is it true that the Agency is so dependent but supervised by the Presidency of the Council and what is this vigilance? […] It is true that the desire to plan our business is entirely innovative but I still do not have this factual declination that would also give certainty to the operators, knowing that this is a climate of non-dissenting cooperation that could help. (Interview with national official)

In this context, moreover, the compromise solution adopted to continue to maintain the MA within the regional architectures is continuing to create undisputed procedural problems that jeopardize the proper conduct of the Italian structural funds governance. Indeed, decision-making procedures are now more closely related to the opinion expressed by the State-Regions Conference, even though the implementing rules of this law are still incomplete and unclear. The same level of procedural clarity is also present considering the possible substitute role that the Agency could have being, at the middle of 2019, “still in the absence of further implementing rules that well specify how and when this power can be concretely applied” (interview with national official). As concerned the strategic choices, moreover, two traditional problems continue to persist during the ongoing programming period. The former concerns the respect of the additionality principle, since, in 2018, the Italian government has started a negotiation with the EC to reduce the national co-financing rate for some 2014–2020 OPs, following realized. A lack of integration among several regional OPs and the general national strategic orientation, moreover, continues to be present in Italy (interview with EU official), due to the incapacity of the MAs to conduct an accurate contextual analysis during the programming phase (interview with national official). Finally, in line with the Italian administrative tradition, both national and sub-national administrations involved in the elaboration of the ACPs and of the evaluation plans have shown a lack of familiarity with the self-­ assessment mechanisms required for their evaluation (interview with national official; interview with external evaluator), only rarely coming to highlight the real structural elements of difficulty, and never involving the political dimension of the issue (interview with EU official).

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CHAPTER 4

The Spanish Case: The Benefits of a National Coordination

4.1   Introduction This chapter is about Cohesion Policy implementation in Spain. By following the same structure I used for the Italian case, the next section presents the main characteristics of the Spanish regional development policy before the launch, in 1988, of the first programming period with the aim of understanding whether a degree of fit/misfit was present as compared to the new Community regulations and, contextually, with the Hirschmanian principles. The way in which the European policy was molded according to the domestic preferences and the legacies historically rooted in the issue of regional development will be described in depth in the second section, by analyzing how the three investigated challenges (institutional, strategic, and administrative) had been addressed during the different programming cycles, as well as the possible benefits and/or criticalities that they had implicated. On the basis of the national characteristics, the third section will re-propose the same analysis in Andalusia and Galicia during the first three programming periods, then understanding which political and institutional factors affected the implementation of their respective 2007–2013 ERDF OP (in terms of programming, project selection, management, monitoring, and evaluation). According to the theoretical background introduced in Chap. 1, also in the analysis of the Spanish case, the aim is to collect a “mass of

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information” in order to explore my theory and the link between economic growth and Hirschmanian principles in the implementation of a development policy.

4.2   The Legacies of the Past 4.2.1  A (Consolidated) Centralized Approach to Regional Development Even if present since the start of the Franco regime, Spanish regional development policy did not have a significant relevance until the middle of the Eighties. Its evolution from the end of the Civil War to the 1988 reform of structural funds was shaped by the succession of different political systems, and it was to a large extent conditioned by their different ideas of the institutional architecture of the State and the role the Autonomous Communities of Spain (CCAAs) should have in its consolidation. In more detail, three steps in the history of the Spanish regional development policy before the launch of the first programming period can be recognized. The first one covers all the years of Franco’s dictatorship (1940–1975). In line with its autarchy and isolation strategy, Spanish development policy was strongly centralized in those years, it was characterized by a national interventionist vision of regional development, and the “regionalism was an essentially technocratic exercise derived from functional considerations of national resource allocation” (Hebbert 1982, p. 114): Provincias and their respective administrations (the so-called diputaciones provincials) were centrally supervised; no form of local democracy was permitted; regions were not recognized as political entities; all the social, political, and economic measures were ordered and administrated by the central government. The following Spanish transition process to democracy opened the way for the approval of the new democratic Constitution (1978) that radically modified center-periphery relationships, institutionalizing a new state institutional architecture that, even if it cannot be considered as federal, it presented a strong regionalism (Keating 1998, p.  115): declaring “the indissoluble unity of the Spanish Nation […] it recognize[d] and guarantee[d] the right to self-government of the nationalities and regions of which it is composed and the solidarity among them all” (section 2 of the 1978 Spanish Constitution). Extending the right of self-government from only the three Spanish historical nationalities to another 14 new Autonomous Communities, it also inaugurated a new type of regionalism that has been defined by

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Hebbert (1982, p. 114) as political being “negotiated consensually by all political parties.” Nevertheless, the aforementioned process of devolution was not accompanied by a reinforcement of the Spanish regional development policy, rather by its “virtual disappearance” (Mancha-Navarro and Garrido-Yserte 2010, p. 53). Spain’s entry into the EC, in January 1986, and the consequent need to adapt to the EU norms and criteria (Cuadrado-­ Roura 2010a, p. 16), on the one hand, and the “progressive consolidation and adjustment of the so-called Estado de las Autonomías (State of Autonomies) set in the Spanish Constitution of 1978” (Mancha-Navarro and Garrido-Yserte 2010, p. 58), on the other hand, opened the way to a new season of rejuvenation of Spanish regional development policy and its progressive alignment to the new Communities principles. Therefore, it is worth retracing the evolution of Spanish regional policy before the start of the first programming period (1989–1993) in order to better understand how objectives, principles, and priorities changed in the three above-mentioned steps, as well as which policy instruments for the rebalancing of the territorial disparities had been used and with what intensity. As I previously did for the Italian case, the aim of this description is to understand the degree of fit and misfit with the European regulations, as well as to know whether the consolidated Spanish regional policy mirrored with Hirschmanian principles. It is possible to retrace the presence of two further sub-stages of the Spanish regional development policy under the Franco regime. The first one is between 1939 and 1959 and it coincided with the adoption of several policies with a territorial dimension—but not of a regional nature– [only in a very limited way sought to promote the poorest regions…]. Actually, the actions carried out by one of the bodies which was in charge of industrializing the country—the Instituto Nacional de Industria—reflect that, with the exception of a limited number of cases, the location of new factories was more due to criteria linked to some natural resources sited in specific regions and to political criteria, than to the wish to use this tool as a means for promoting regional development. Something similar can be said about the infrastructures or the policy of provincial plans, just for mentioning two more examples. Only part of the so-called colonization policies, which were mainly oriented to promoting farming estates in specially backward regions, could be said that belong to what nowadays is regarded as “regional development policies” as well as the start of specific plans for the provinces of Jaén and Badajoz, although the results were rather limited”. (Cuadrado-­ Roura 2010a, pp. 13–14, emphasis added)

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Since the end of 1950s, the overly protectionist policy adopted by Franco was subject to a downsizing. Even if not radical, beings always anchored to the principles of the authoritarian system, it had many repercussions on both national and regional economic policy: for the first time during the regime of the Generalissimo, “economics held primacy over politics” in Spain (Baklanoff 1976, p. 757), and between 1960 and 1975, a general reconstruction of the Spanish economic system of both the internal and the external political economy was present. For the former, there were a general reorganization of the banking and the credit system, a new process of industrialization and urbanization, and a new period of deregulation of the economic system. At the same time, since the end of the Second World War, Spain intensified its international economic transitions as well as its foreign investments. For example, analyzing data of the International Monetary Fund, and of the Banco de España and de Bilbao, Baklanoff (1976, pp. 754–756) showed an exponential growth on both Spanish exports and imports from 1957 to 1973: estimated on $476 million in 1957, exports became equal to 745 in 1960, 1019 in 1965, 2483 in 1970, and 5040 in 1973; imports moved from 856 million in 1957, to 697 in 1960, 2778 in 1965, 4357 in 1970, and 8640 in 1973. Several elements can help in understanding the reasons of this change in Falange government that opened the way for a new liberalization of the Spanish markets, and a period in which the authoritarian system was characterized by a “limited but undeniable pluralism” (Payne 1971, p. 343). They concern both external and internal changes. The former were connected with the signing, in 1953, of the Pact of Madrid between Spain and the USA. Beside the great quantity of social and economic aid provided by the Pact, it contributed to limiting the isolation of the country toward the other Western countries. The internal changes concerned both cultural and political issues that I am going to present. As also happened in Italy, cultural issues were related to a drastic change among the main intellectual circles of the time, and, more in detail, among the main economists that rotated around the Franco regime. Even if Spain was not one of the CEE country founders, a new and unusual Europeanist school of thought consolidated within the regime. Its basic idea was that an isolationist policy would undermine a Spanish future growth, and that, therefore, Spain should have started a process of economic and social integration with other European countries. The idea of “the reintegration of the Spanish economic into the international economy” was later placed side by side with that “of planning, in the sense of an economy rationally

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controlled and the problems associated with the workings of the free market avoided (recurrent crises, unemployment and social inequalities, foreign imbalances, etc.)” (Ramos-Gorostiza and Jiménez 2009, p. 77). By reconstructing the way in which the idea of planning, that derived from the French experience of the 1940s, developed previously among Spanish intellectual circles and afterward among government buildings, Ramos-Gorostiza and Jiménez (2009, pp.  78–84) pointed out that Franco’s choices in these years were strongly conditioned by the thought of two of the main Spanish economists of the 1940s and 1950s, that is, Higino Paris and Manuel de Torres. The former, that was “one of the fundamental ideologists of the economic control of autarchy,” proposed, in his work El plan económico de una sociedad libre (1947), “to influence the market in previously planned directions through pseudo-Keynesian measures and with a time period of fifteen years” (ibidem, p. 79). Even if Paris did not explicitly support the planning approach, he proposed two different ideas of how Spanish economic system would change. Either ideas “would be essentially maintained as the base of the development rhetoric of the 1960s” (ibidem, p. 80). On one side, the idea of the existence of key sectors that were necessary to stimulate from a global and expansive vision of temporary objectives, with the aim of achieving fast national development with firm bases; and on the other side, the idea that it was necessary to impose order on the maker system since competition tended to create socio-economic wastefulness and imbalances and did not make way for the harmonic development of the economy. (ibidem, p. 80)

The planning approach was once again taken five years later in Torres’s book La coordinación de la politica económica in Espana (1953) that summarized his economic thought, and his idea of how the Franco government would intervene in order to lift up Spanish economy. Following a Keynesian approach, he proposed “the creation of a central organism of planning and coordination […] with the purpose of contributing to the preparation of the economic policy: drawing up of annual macro-­economic previsions that would reduce uncertainly in the formulation of economic policy decisions and increasing the efficiency and coherence of the measures of action defined” (Zaratiegui 2015, p.  34, emphasis added). Gonzáles (1978) underlined that Torres’s idea to create a similar central body for the preparation of the national economic policy followed from

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the Dutch model of the Central Planning Bureau, established in 1945. Its aim was not to concretely designate or realize development plans. Rather, it was: “exclusively a technical aid” for government policy and business life […]; [its] task […] [was] to carry out all activities relating to the preparation of a Central Economic Plan, which at regular times shall be lain down by the government for the benefit of the co-ordination of the government’s policy in the economic, social and financial fields, as well as the submission of recommendations on general questions which may arise with respect to the realization of the Plan. (Griffiths 1980, p. 138)

Moreover, Torres was persuaded that the Spanish economic elite would continually work together with the government one in order to improve the quality of political decisions. Either Torres’s ideas were concretely realized during the two-year period 1956–1957, during which the Spain State Corp of Economists and the Oficina de coordinación y planificación económica (Office of Economic Planning and Coordination) were established. The creation of the latter was also very much conditioned by the other order of factors previously mentioned, that is, the political one. In February 1957, a new government was established, administered by los “tecnócratas” (the technocrats), that is, a group of young economists linked to the Opus Dei and affiliated with López Rodó. They were immediately interested in linking Spain with the most important international organizations present in those years: Spain become member of the International Monetary Fund (IMF) in 1958, and of the Organisation for Economic Co-operation and Development (OECD) in 1959. Both international organizations recommended the new Spanish government to start a process of deregulation of the market and to elaborate new macroeconomic policies based on devaluation of the peseta, on the cooling of the salaries, the restraining of inflation, and the liberalization of the economic transitions and of the flux of capitals. These suggestions found application, in 1959, in the Plan de Establización (Stabilization Plan). It represented: the first step towards introducing the proper practice of IP [Indicative Planning] and was in a way a guarantee for successful elaboration of the DP [Development Plan]. […] [It] was a genuine success and marked the beginning of a “golden age” in Spanish economy, characterized by rapid economic growth, economic liberalization and international market integration.

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[…]. The success of the plan increased “the prestige and social recognition of the Spanish economists as professionals capable of playing an important role in the orientation of public concerns became established. It was considered a fundamental asset for the drawing up of a “desired” development plan”. (Zaratiegui 2015, p. 35)

The elaboration of DPs was also one of the main recommendations provided, in 1962, by the World Bank Report that the Spanish Minister of Public Finance required it to elaborate in order to contribute to the improvement of the quality of the strategic choices until this moment up to now formulated within the Spanish regional policy. Their formulation was assigned to a new body, that is, the Comisaría del Plan de Desarrollo, that was created in Madrid within the Presidency Department and was coordinated by López Rodó. Following the already mentioned French model, since 1964 four quadrennial DPs were implemented.1 They were characterized by a sectorial approach, including actions with regional targets. Nevertheless, regions were “fully in keeping with the meaning of this concept” (Cuadrado-Roura 2010a, p.  15), since “the principal regional policy instrument (the “development poles”) was an exclusive competence of the Plan’s Commissariat, with no interference from the provincial governments or the local authorities, which were generally closer to neo-­ falangist political sectors” (Cuadrado-Roura 2010b, p. 30). For the perspective of this work, the use of these policy tools inaugurated a new approach of the Spanish regional policy to the concentration principle of the resources. In fact, even if collocated in specific Spanish underdevelopment areas, the so-called polos de desarrollo (development poles) were designated identifying specific towns that would have had the potential to grow the entrepreneurial environment; after, investment proposals would be selected by the central authorities through a public call. Among the 12 polos de desarrollo that were created from 1964 to 1972, some of them were allocated, for example, in the underdeveloped regions of Galicia (Vigo and La Coruña), Andalusia (Seville and Cordova), and Castile y León (Valladolid and Burgos) that, in the third quadrennial DP, were identified as Grandes Áreas de Expansión Industrial (Great Areas of Industrial Development). Burgos, for example, was selected not only in 1  Even if formally elaborated, the fourth DP (1976–1979) was never applied since it coincided with the years of the Spanish transition into democracy after the death of the Generalissimo.

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order to guarantee a link between Madrid and the Northern part of the country (notoriously among the less developed of the country), but also for its potential to become a new productive industrial site. Contextually with the implementation of the three DPs, the Instituto Nacional de Industria (INI) was subject to reconstruction. Established in 1942—with the aim, in service of the nation, to propel and finance the creation and revival of Spanish industries (Art. 2.2)—it was subject to an internal organizational restructuration at the end of the 1950s and to an opening to the private sector. Moreover, it was recognized a special status to it within the Spanish regional policy in these years. As concerned the polos de desarrollo, the INI’s choice to allocate resources, even if based on the concentration principle, tried to strengthen and to restructure the Spanish industrial poles present in the most developed area of the country (among them, the cities of Madrid and Barcelona). In addition, the INI’s activities in these years were subject to several criticisms for its incapacity to guarantee measures for the rebalancing of the interregional disparities. The solution was found in the creation of specific regional development agencies, that is, the so-called Sociedades de Desarrollo Regional (SODI), in several underdevelopment regions, such as in Extremadura, Galicia, and Andalusia. To summarize, during all the first stage, Spanish regional policy existed more in form than in substance, due to the centralistic vision of the Franco regime that did not consider the existence of the regions per se and that considered few bodies directly nominated by the center as the unique forms of local democracy. The lack of involvement of regional actors in regional policy’s choices, on the one hand, and the scarce coordination among the ministers, on the other hand, contributed to accentuate an overlapping among national and regional goals as well as a lack of continuity in regional policies. Summarizing the main difficulties of the Spanish regional policy during this period, several scholars (among them: Fuentes Quintana 1984; Mella Marquez 1993; Medhurst 1973; Yuill et al. 1990; Richardson 1975) highlighted that the central choice to adopt for a long time a sectorial approach determined a territorial dispersion of aid that, even if concentrated into specific areas, was characterized by a lack of differentiation with respect to the problems facing each region. Moreover, the incentives were often given to both the development poles and industries not always promising and often poorly localized, and the projects with intensive capital were less funded.

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During the years between the death of Francisco Franco and Spain’s access to the EU, a similar approach in regional development policy was adopted to those consolidated in previous decades, since a centralized management of the policy continued to prevail. Moreover, the use of two new policy instruments was consolidated during those years: the subvencion a la inversion (the subsidy on the inversion) was aimed to finance selective projects in the manufacturing sector; the Fondo de Compensación Interterritorial (Inter-territorial Compensation Fund, ICF)—previously established in 1978 but never implemented until 1984—was inspired by the new constitutional principle of solidarity and it was directed to finance infrastructural investments in selected CCAAs in order to “compensate” the economic unbalances among Spanish regions (Morata and Muñoz 1996). The main implications of the latter instrument on Spanish regional policy concerned the obligation for the CCAAs to draw up Plan de Desarrollo Regional (Regional Development Plans, RDPs) inspired by similar provisions required by the EU for the elaboration of the ERDF development projects. Galicia and Andalusia, for example, benefited from these funds. In addition, starting from 1989 the criteria to have access to the ICF were equated with those provided by the 1989–1993 regulations, that is, only the regions with a GPD less than the 75% of the Spanish average could have access to it. To sum up, the preparation for Spain’s entry in the European Union inaugurated the introduction of new principles within domestic regional development policy that were approaching more and more to the principles contemplated within the following European regulations for the first programming period (1989–1993). It was also conditioned by the spillover effect created by the presentation, in 1985, of the first Spanish regional development plan to the EC. Nevertheless, the centralistic approach of the previous decade continued to prevail, limiting regional participation in the definition of national and sub-national development strategies. In fact, the Ministry of Economy and Finance was persuaded that in order to maximize the financial benefits of adhesion to the EU, a presence of national coordination in deciding the sub-national investment priorities and the subsequent approval of the local projects was required. 4.2.2  A Limited Degree of Misfit As done for the Italian case, after describing the evolution of Spanish regional policy before the start of the first programming period, I will

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discuss about its degree of fit/misfit with the European regulations, as well as whether a closeness with the Hirschmanian principles was traditionally present. As concerned the institutional challenge, the Spanish regional policy was less consolidated than the Italian one. In fact, even if formally recognized within the Spanish Constitution, it virtually disappeared until the years before the Spanish entry in the EU. On the contrary, since the 1980s the new “European mood” facilitated both the renaissance of the regional policy in this country and the introduction and the consolidation of the new European principles. It was, for example, the case of the new RDPs that the Autonomous Community of Spain (CCAA) had to prepare in concert with the central government. Therefore, they represented a first attempt to institutionalize practices of institutional partnership. Nevertheless, several legacies of the Franco regime continued to be present, with a persistency of the traditional strong centralistic approach of Spanish regional policy. In Hirschmanian terms, moreover, with respect to the Italian case, two elements continued to characterize Spanish regional policy—the absence of contractual mechanisms among the State and the regions due to the prevalent role played by the former and the birth of RDAs since the 1950s. In strategic terms, instead, both the principle of the territorial concentration of resources and the planning approach had been historically tested in Spain and their use was consolidated starting from the second half of the 1980s, also creating new criteria in line with the European ones. Moreover, in Hirschmanian terms, the sectorial allocation of the domestic interventions preferred the infrastructural investments and Spain experienced the creation of development poles. In addition, with respect to the last phases of the Italian Extraordinary intervention, several scholars (among them: Arraujo, 1988; Mella Marquez, 1993; Ramos-Gorostiza and Jiménez, 2009) showed the presence of a poor political discretion in Spain, with the local beneficiaries directly interfaced with Madrid, and not with their respective regional authorities. Finally, Spanish regional administrations had never experienced a strong management, monitoring, and evaluation culture due to the centralist orientation of Spanish regional policy. In fact, it inhibited the consolidation of common practices within the single sub-national administrations. Nevertheless, even if absent, it did not allow the consolidation of perverse practices, as was the case in the Southern Italian regions. Also for the administrative challenge, an alignment with the European principles consolidated in the years before the entry of Spain into the EU (interview with EU official). For example, discussing the lack of an evaluation

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culture in Spain, Viñas (2009, p.  461) pointed out that “when Spain joined the European Union in 1986 […] comparatively speaking much progress has been made” and that the reasons of the late development of an evaluation culture in Spain were six, which are (1) poor public investments, (2) the weak tradition of applied social research, (3) the strong legal culture of the Spanish administrative elite, (4) the lack of incentives to encourage evaluation practices, (5) the strong party discipline that limits its controlling function (at both the national and regional level), and (6) the excessive focus of the national and regional audit offices on control, rather than on evaluation. The last three reasons also conditioned the lack of a monitoring culture in Spain until the end of the 1980s (interview with national official).

4.3   Explaining National Strategies 4.3.1  Meeting the Institutional Challenge: A (Quasi) Centralized System in a Regionalist State In view of a similar institutional misfit, the central government considered it inappropriate to attribute excessive responsibility to the CCAA in the implementation phase of the European funds. For this reason, while taking account of the institutional Spanish regionalist architecture, it elaborated a regionalist implementation system of the funds with a strong central coordination. Its main characteristics were outlined by Bache and Jones in their pioneer research on the role that EU regional policy had during the first two programming cycles in the empowerment of regional authorities. As they argued, in Spain, central government retained responsibility for programme proposals, payments to the Commission, authorization or modification of projects, the administration of ERDF receipts, and the transfer of funding to the appropriate authority. Ministry of Economy and Finance officials considered that the transfer of all information and resources should be via central government. According to one Ministry official, ‘the state is finally responsible and central control and coordination are essential.’ (Bache and Jones 2000, pp. 8–9)

With few exceptions, this system has remained substantially unchanged up to the current programming period. Obviously, several changes have

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occurred during the fourth investigated period, such as in the allocation of resources between national and sub-national actors, or as concerned to the involvement of regions in the different phases of the policy cycle, also as a consequence of the change of the “rule of the game” described in Chap. 2. Nevertheless, since the first programming cycle, both control and management of the structural funds remained under a central responsibility: even though communication and information systems have progressively increased over the years, the center continues to be identified as the main referent. Using a Hirschmanian approach, the next pages will describe how the foundations for the establishment of a national decision-maker for development were laid during the first two programming periods, on the one hand, and how it was consolidated starting from the 2000s, on the other hand. At the same time, I will discuss the benefits of the Spanish institutional architecture, as emerged from the documental and field analysis done. 4.3.1.1 Building a National Garrison The Ministerio de Economia y Hacienda has always played a central role in the implementation of Spain’s cohesion policy. Within this body, since 1989, the Dirección General de Fondos Comunitarios y Financiación Territorial (Planning Directorate) was designated as responsible for the coordination of the national policy decisions (and of its CSF and the national and regional OPs), and it was composed of seven Sub-Directorates. Among them, the Subdirección General de Gestión del Fondo Europeo de Desarrollo Regional was designed to be a Payment Authority (PA) for both multiregional and regional OPs starting from the first programming period, and it also controlled the financial circuit. From an organizational point of view, during the 1990s it was composed of approximately 25 people. Thanks to consolidated technical experience gained from the strong formative investments of these years, they were able to coordinate the management of all Spanish ERDF OPs (interview with national official; interview with EU official). It also allowed the consolidation of a good knowledge of the national managers during the 1990s, as recognized by the Spain Ex-Post Evaluation of Objective 1 Programmes 1994–1999: through this experience, managers had a good knowledge of the contextual issues to be addressed as well as existing organizational and financial capacity. Specific knowledge relating to the delivery of Structural Funds interven-

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tions was gained during the programme period through: formal training for programme managers, guidance provided by the Commission and through experience obtained during the programme period. (CEET-ECOTEC Research & Consulting Ltd 2002a, p. 203)

Moreover, since the end of the 1980s, leader boards have been identified for the other structural funds: the Ministry of Labour and Social Affairs for the ESF, the Ministry of Agriculture, Fisheries and Food for the EAGGF and for the FIFG.  By discussing the performance of these Ministries and of the Ministry of Finance, the same report pointed out that these Units had responsibility for the development of the horizontal and regional Operational Programmes relating to the particular Fund and reprogramming decisions in negotiation with DGXVI, the Planning Directorate of the Ministry for Economic Affairs and Treasury, and the regional governments through the Programme Monitoring Committees. The Units also centrally co-ordinated management of Operational Programme delivery including accessing and distributing Structural Funds to the regions, providing guidance to the regional governments on management and delivery, monitoring and evaluating Structural Fund interventions, and reporting progress to the Commission. Each Operational Programme was allocated a dedicated member of staff within the national Administrative Unit as appropriate. The national Administrative Units worked with the regional secretariats to gather the monitoring information required for reporting to the Commission and Programme Monitoring Committees. […] [They] played a strong co-ordinating and mediating role on the Committees—particularly between the Commission and regional representatives. (CEET-ECOTEC Research & Consulting Ltd 2002a, pp. 193–199, emphasis added)

Since all the main responsibilities were allocated at the national level, an intermediate organism between the Planning Directorate and the Managing Units has always been present, as well as a clear agreement on the attribution of functions among them (interview with national official). Since the first programming period, the solution was found in the creation of a Directorate for Structural Fund Management within the regional Ministries of Economic Affairs and Treasury. It was an intermediary between the national unites and the regional managing ones. In several cases it was also involved in programming and reprogramming decisions with the central administrators and the European Commission, as well as in strategic and financial decisions. Under the supervision of the relevant

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national competent authority, it also had the power to approve project proposals. Additionally, within the Regional Departments, regional secretariats were often established, with the aim to inform and to collect data on regional management and to report them to the high-ranking national structures. Moreover, as a consequence of the consolidated legacies of the past, starting from the first programming period, part of the resources of several sub-national OPs started to be directly managed by Regional Development Agencies (RDAs), that were identified as intermediary bodies. In Murcia, for example, the first European RDA was set up in order to implement EU funds, that is, the so-called Instituto de Fomento de la Region de Murcia. Where present, RDAs “were crucial for implementing the projects included in some ERDF Priority Areas (i.e. Spatial articulation and integration; Industry, services and craft; Rural Development, etc.) and ESF measures (i.e. Professional Training-Agriculture, Professional Training-­ Fishery” (ibidem, p. 55), and they contributed to improve the administrative autonomy in the management of the respective sub-national OPs (interview with national official). In keeping with the Spanish centralized approach, the elaboration of the general strategy of the CSF 1989–1993 was entirely realized by the Planning Directorate and regions were not involved in the final decision of the single regional OPs. Obviously, several multilateral and bilateral meetings between national and sub-national actors took place, but they were limited to the first phase of formulation of the regional OPs. In addition, even where regions had autonomy in policy implementation, “central government continued to retain key powers over the process, particularly through setting indicative budget levels for each region” (Bache and Jones 2000, p. 6). CCAAs complained about the isolation to which they were subjected in the first programming cycle. The Central state took this into account during the first part of the second programming cycle. It clearly emerged in two aspects. On the one hand, more bilateral and multilateral meetings were organized in order to involve the Comunidades in the elaboration of the new strategy. On the other hand, the central government started to devolve new responsibilities to sub-national actors. In fact, during the 1994–1999 programming period, regions managed slightly more than 30% of the funds and local administrators around 10%. Nevertheless, the new policy of regional involvement was more symbolic than real. In fact, the role of regions during the policy process did not change with respect

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to the previous programming period (interview with national official). In addition, during the second programming period, the previous centralized coordination structure was consolidated, by continuing to assume a pivotal role: on the one hand, it continued to be the unique interlocutor with the EU Commission, and on the other hand, it managed the information with sub-national actors. To sum up, in line with the historic centralized approach of Spanish regional policy, during the first two programming periods, a national garrison was created that had many points in common with the Hirschmanian idea of the decision-maker for development. In fact, since the end of the 1980s, that is, contextually with the start of the first programming period, a national structure was consolidated with adequate knowledge, skills, and possibility to control, from above, the general implementation of the structural funds in Spain, without a strong participation of the sub-national actors during the programming phase. At the same, the new Spanish institutional architecture recognized the historic RDAs that were present in several regions which were assigned the management of part of the resources of the ERDF OPs. The next pages will present the changes happened during the third and the fourth programming periods of the Spanish institutional architecture until now described. 4.3.1.2 Reinforcing a National Garrison As described in Chap. 2, the 2000–2006 regulations introduced several institutional challenges for the domestic actors. The choice of the establishment of the Management Authority (MA) within their previous governance for the management of the structural funds, for example, had to find a balance between management efficiency choices and consolidated administrative traditions. The Spanish choice was to consolidate the previous institutional solution, by creating a unique MA in Madrid for each fund which should have coordinated the management of all the national and sub-national OPs. Considering the Spanish regional system, this choice was a unicum in Europe and it was also the result of a strong negotiation with the CEC. In fact, as also underlined within the 2001 Communication about the results of the programming of the structural funds for 2000–2006 (Objective 1) “in Spain, negotiations have resulted in a compromise: the managing authority is not the region, but still a central authority in Madrid, with the regions having joint responsibility” (CEC 2001, p. 14, emphasis added).

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This choice can be better understood starting from the words of a high national official that for long time has coordinated the activities of the ERDF MA in Madrid, leading it to a triple reason: to better defend the interest of Spain and its regions in front of Brussels, to guarantee a greater national coordination, and to create a set of institutional solutions in order to isolate as much as possible from distorted political interests. He said: As a country, Spain can be better defended because the Commission has a tendency to “divide and win” […] therefore we think it is better for this, because in this way a better coordination between regions and the ministry can be guaranteed. The regions have accepted this proposal and this possibility has not been disputed since there is a constant support from the center. In our case, the center is a sort of referee able to provide peace and security to other bodies. […] The choice of the ministry is strange because the country is very decentralized and the natural thing would be to have many MAs. However, we have thought that in this way we have tried to guarantee as much as possible opportunistic needs. In this system we speak exclusively with technicians and not with political parties and this had led to the consolidation of a bureaucratic autonomy within the regions. (interview with national official)

As a consequence of the last mentioned reason, for example, Morata and Popartan (2008) pointed out that during the third programming cycle, the prevalence of bureaucratic actors over political ones had been more visible at the regional level. In fact, political actors were not completely familiar with the contents of the European procedures, due to their frequent changes and their excessive technicalities. On the contrary, in terms of elites, the main force in the implementation was the regional techno-structure with the support of the experts “who control the proceedings, the technical resources, acting on its own in the middle of weakly structured social networks, with limited resources”. (ibidem)

Similarly, the Ex-Post Evaluation of the Cohesion Policy Objective 1 2000–2006 OPs emphasized that: multi-annual programming has also brought about a more stable policy environment, encouraging longer-term planning in Spanish regions and reducing the effect of political changes on development policy. […] The strong emphasis of the Structural Fund regulations on accountability has led to the

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incorporation of accountability and a more results-based approach to financial management in regional governments, though Structural Fund managers complain that the bureaucracy associated. (Applica, IsmeriEuropa Wiiw 2010, p. 23, emphasis added)

The reinforcement of an institutional architecture of Hirschmanian mold clearly emerges by analyzing the three elements that I in depth discussed in previous chapters, that is, the involvement of the sub-national actors during the programming phase, the functional and organizational characteristics of the Spanish national decision-maker for development, and the nature of the other actors involved in the implementation phase in Spain. Each of them will be in-depth discussed in the following pages. First of all, during the third programming period, vertical partnership “has been improved along with the creation of a single Community Support Framework that is almost fully regionalized” (Morata 2004, p. 150). The latter had been to a large extent conditioned by the capacity of regions “to make their voices heard in Brussels,” by using external channels such as the Committee of Regions (interview with national official). Nevertheless, due to its formal competences as provided for the EU regulations, the MA continued to centrally coordinate the programming phase, with respect to both the definition of the general strategy and the single regional ones: “the Spanish government [was], in the main entrusted (though now in collaboration with the regions) with the task of negotiating at the EU level, and also with transposing EU directives and establishing general standards and programs to be implemented at the regional level” (ivi). The same approach was also adopted for the development of the 2007–2013 NSFR and of its OPs. In fact, during the four programming period: from the perspective of the central government, the development of the NSRF [did] not present a particular challenge because the Directorate General for EU Funding ha[d] always played a strong coordinating role in the programming process, particularly in the Objective 1 Community Support Framework […]. The overall assessment of the process amongst the regions consulted was mixed. Some expressed dissatisfaction with the transparency and level of feedback received from central administration in ­collating and aggregating the input of regional governments and other central Ministries to the NSRF. […] Other argued that the process [was] well on track, pointing instead to failures at the EU level in terms of the delays in reaching budgetary agreement and the subsequent approval of the draft regulations and Community Strategic Guidelines which must form the basis for the drafting of the programming documents. (Yuill et al. 2006, p. 53)

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As a high senior official interviewed in Madrid pointed out, “in Spain the programming phase had continued to be under the central control, as among all the phases of the implementation of an OP it is considered as the phase in which the political interference could be counterproductive: MA had a crucial role in this stage since it predominantly conducted the negotiation with the Commission and it defined the content of the real operations of the OPs, as well as their operating procedures” (interview with national official). A similar approach also characterized the involvement of the socio-economic and of the third sector actors in those years. In fact, their involvement was based on the elaboration of sectorial plans that were coordinated by the MA and that were following used for the elaboration of the domestic strategies. In the case of the environmental partners, for example, their articulation guaranteed to the national MA the acquisition of several information “that would not have been possible otherwise” (interview with national official). In describing the functional and organizational characteristics of the Spanish national decision-maker for development during the last two programming periods, it is necessary to analyze its three different features, that is, the general characteristics of the new Spanish governance system, the internal organizational peculiarities of the Spanish MA in Madrid, and the main characteristics of its human resources in order to understand how the national decision-maker for development had been able to guarantee a national garrison on the basis of the skills and knowledge of the central staff. The new Spanish governance system did not change during the third and fourth programming periods, and it was stabilized, in 2007, through the formal elaboration of a documento de attribution de funciones (function attribution document) where all the competencies of the single actors involved were identified: “nevertheless the absence of a similar document did not affect the general implementation since the MA in Madrid had always checked daily the implementation of each OP, by assigning each of them to a single member of the staff that had at least two or three contacts [each day] with the single intermediate bodies” (interview with national official). In fact, all the Spanish governance system, even if it wheels around the MA that “always had the inspection and control role and always demand information on the current expenditure” (interview with national official), has been traditionally composed of other two levels, that is, the intermediary bodies (IB) and the final beneficiaries. Three types of intermediary bodies were present: the CCAAs (type A); the RDAs, where

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present (type B); and the local authorities (type C). With respect to the Italian case, therefore, the regions have the same institutional status of the other types of intermediary bodies, with the only exception that they manage more resources of the OP and they can directly nominate other secondary level intermediary bodies (beyond those already present). Nevertheless, the latter possibility represents “a constant issue of discussion and negotiation between MA and the regions, since their appointment is ultimately validated by Madrid” (interview with national official). In addition, during the years the MA had not undergone drastic internal changes, if not to comply with the variations required by the EU regulations: it presents a vertical structure with three offices that support the activities of the director formally designated as director of the MA, and, below them, the staff designated as program director for each ERDF OP. Moreover, despite the variations of the national political executives, it remained unchanged and even when a shift from one Ministry to another was present—such as in 2012 from the Ministry of Economic and Finance to the Minister of Finance and Public Function—no substantial changes or de-expansion of its activities occurred: it is because in Spain it is understood that the European funds are important for the realization of national economic policy and that “you shouldn't play with your food”. […] The unique thing that it was made from one ministry to another was the change of the logo in the cards, but only me had noticed this fact since I signed the documents, but not all the rest of the staff. (interview with national official)

Based on the qualitative data collected within the MA in Madrid, I identified the main quantitatively and qualitatively characteristics of the internal staff of the Spanish decision-maker for development. As Table  4.1 shows, during the last decade, the staff of the Spanish ERDF MA was reduced from 61 to 36 units. Nevertheless, this cut did not had a negative impact on the general management of the “Spanish machine” since part of its staff was repositioned in other sub-directions involved in the implementation of the structural funds. It happened, in 2007, contextually with the start of the fourth programming period during which, as I in depth discussed in Chap. 2, it was requested to the domestic actors to reinforce their inspection and certification actions by creating ad hoc solutions in order to differentiate them from the authorities directly involved in the management phase. Also in this case, the

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Table 4.1  The Evolution of the Organizational Plan of the Dirección General de Fondos Comunitarios SubDirección

2006

2007

2009

2010

2011

2012

2013

2014

Unidad de Apoyo S.G. De Relaciones Presupuestarias con la Union Europa S.G. De Programacion Y Evaluacion de Programas Comunitarios S.G. De Gestion del Fondo Europeo de Desarrollo Regional S.G. De Cooperation Territorial Europea Y Desarrollo Urbano S.G. De Incentivos Regionales

33

6

7

8

5

6

6

5

5

5

10

10

10

9

9

9

9

9

S.G. De Inspeccion Y Control

2016

17

29

27

24

25

26

26

26

24

22

61

44

39

38

38

36

36

37

34

36

23

29

27

32

31

30

30

30

38

39

50

50

40

36

35

34

30

30

26

27

19

33

32

30

29

28

27

27

27

30

10

17

18

20

20

21

20

20

19

201

199

196

193

189

185

184

183

187

S.G. De Certificacion Y Pagos Total

2015

203

Source: internal technical relation of the Spanish ERDF MA and interviews with national official

Spanish choice had been to reinforce the guidance role of the central decision-maker for development. In addition, two main elements had historically characterized the human resources involved in the activities of the ERDF MA, that is, the recruitment system of its top positions, and the skills over the years maturated by its staff. As concerned the former, while in Spain it is possible to use national public calls and direct designations, a third system had been consolidated over the years and it concerned the possibility to do a short-­ term appointment (on the basis of an informal public call) and to confirm his/her office after a trial of three/five months. The latter system—which has prevailed over the last decade and that it is a unicum within the national Spanish administrations—guaranteed a better recruitment since due to the complexity of the EU regulations, the ERDF MA in Madrid presents a very specialized way of working that is different than elsewhere (interview with national official). Similarly, for the other staff of the MA, constant training courses had always been organized and their benefits were only made possible by the lack of constant rotation between internal staff. According to a senior official, these elements: facilitated the building of a common mentality and motivation in the general directorate: we try to plan the objectives and communicate the news. […] Communication and training help listen to the people and consider all the opinions and respect all of them […]. For these reasons it is very comfortable to work here and it helped our daily activities […]. Personally,

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I have been working here even before the official entry of Spain into the European Union and during this period we had always grown up with the European Union […]. It had been a natural learning process. (interview with national official)

Moreover, a general sense of responsibility of their actions for the whole country was often highlighted during the field analysis conducted. Here, and example: it is the people of this unity that was able to give an added value to the management of the Cohesion Policy in Spain. Ever since I was here I saw that our work really has a significant influence. And surely this influence is greater than when I was an engineer. […] Ever since I arrived, this direction has always been looking for improvement. […] In my view, […] we have among the most competent staff of all central Spanish administrations and it was a clear political choice to invest in this sector. (interview with national official)

To conclude, as previously discussed, despite the prevalent Spanish centralistic approach, the implementation system in this MS had also involved different types of intermediary bodies, requiring a constant interaction among the MA and them. It concretely happened by their participation “to three official annual meetings in Madrid, during which the issue connected with the internal regulations and the eligibility rules are subject of debate with the aim to have the widest possible consent and to contribute to increase the national spirit of collaboration” (interview with national official). On the basis of the same reasons, it is possible to explain the increased role of the RDA starting from the third programming period. In fact, in addition to their role of promotion of internationalization and of enterprise, as well as of management of part of the regional funds and of the “Global Grant,” they had been also able to use financial instruments (interview with intermediary body). Finally, during the last programming period, the number of intermediary bodies was radically decreased (around 40 in total), confirming this role to all the CCAA, on the one hand, and reducing the number of those of small size, on the other hand. 4.3.2  Meeting the Strategic Challenge: Perpetuating a Thematic and a Territorial Selectivity In discussing the evolution of the Spanish development strategy during the four investigated programming periods, according to the Hirschmanian

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approach adopted in this book, it is possible to identify two different phases, which respectively coincide with the first and the last two programming periods. They can be better understood starting from the words of a senior member of the MA that coordinate the Spanish strategic choices since the first programming period. He said: “at its inception, the European opportunity was used for putting together the “skeleton” of Spanish economy and for creating the conditions for reinforcing the interchange between the different regions and connect them by means of infrastructure. When Spain assembled its “skeleton,” it could grow economically and establish a better connection with Europe” (interview with national official). These actions were realized through a strong investment in infrastructural plans directly managed by the national authorities and through the elaboration of a coherent development policy within each CSF from both a territorial and a sectorial point of view: in the 1980s, “the only link with a speed of over 80 km per hour was Valencia to Barcelona. By 1990, average speeds increased […]. By 2000, the average speed in […] Spain […] had risen substantially, on some links reaching over 100 km per hour. By 2012, speeds on the links in Spain […] had caught up with those in the highly developed Member States. These improvements in the speed of the main road network […] have been largely financed by Cohesion Policy” (CEC 2014, p, 41, emphasis added). In the last decade, the actions have been turned toward the reinforcement of the innovation sector due to the gap in this issue of the Spanish entrepreneurs and that limited the possibilities for a better connection between Spain and the other European area. The main characteristics, the results, and the possible criticalities of the two phases are described in depth in the following text. The analysis will show that Spanish economic policy choices knew a strong closeness to the Hirschmanian theory of unbalanced growth. In terms of territorial priorities, starting from the first programming period, a selective choice was made, since a great quantity of resources had been used in order to start a development process in Andalusia. Consequently, this choice had positive effects in neighboring areas, since the national strategy was to invest in big infrastructural and multiregional projects. In terms of thematic priorities, a selective choice in favor of infrastructural investment was made. Within this choice, the Spanish decision-maker for development was able to modify the nature of infrastructural priorities programming period after programming period based on the results achieved in previous investments.

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4.3.2.1 Connecting Center and Peripheries The 1989–1993 CSF was aimed “to prepare the Spanish Objective 1 regions for the Single Market and to reduce the existing discrepancies (in economic and social development), both as regards the other regions of the Community and as between the various Spanish regions” (CEC 1995, p. 26). This choice was in keeping with the aim of the national decisionmaker for development whose mandate was to “ensure the conditions in order to connect regions and peripheral areas of the country with the traditional axes of economic development” (Svimez 1996, p.  307). For this reason, the 1989–1993 CSF placed a strong emphasis on infrastructures “which were considered to pose the main bottleneck to development” (CEC 1997, p. 49): 70,6% of the Cohesion Fund and 40,4% of the other structural funds in the Objective 1 area were used in order to finance infrastructural projects (ibidem, 47). For example, in the case of the ERDF, “the proportion of funding devoted to bringing basic infrastructures up to scratch remain[ed] very considerable” (CEC 1990, p. 24), and it was equal to the 67% of total funding. These projects involved basic infrastructure and the rail network. As concerned the former, for example, the 1989 Annual Report on the Implementation of the Reform of the Structural Funds (ibidem, p. 32) underlined that Spain and the UK were the unique European countries in which a support investment within the CSF was present: Spain “has requested Community assistance of ECU 600 million towards the high-speed train project” (ibidem, p.  49). All these investments were previously supported by ex-ante evaluation on their sustainability. For example, as Tondl (1998, p. 113) pointed out, one of the main policy advisor for the Spanish government during those years was de la Fuente, whose studies “showed that, in the 1980s, infrastructural expenditure had a considerable impact on Spanish regional growth performance.” These studies supported the idea that a large number of infrastructural projects in Objective 1 regions were financed (including transport infrastructures, motorways), and significant investments had to be planned for the Madrid-Seville TGV (CEC 1991, p. 21). From a territorial point of view, about a quarter of regionalized Spanish resources were used in order to start the process of large-scale development in Andalusia. In fact, “following the idea of development that proceeds through “diffusion” among geographically adjacent areas, it was natural to elaborate a “prosecution” design toward the South of the more dynamic Spanish axis of economic growth, i.e. the Mediterranean one, which stops at the level of Murcia” (Svimez 1996, p.  308). As a

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consequence, during the first programming period, the concentration of assistance was not equal among the regions: “Andalusia absorbed almost 30% of the ERDF contribution, Castilla-La Mancha 13%, Castilla y Leon 122%, Galicia and Valencia 9%, Canaries and Extremadura 8%, Asturias 6%, and Murcia 3%” (CEC, 1995). In addition, under the ERDF, it was opted for the creation of seven different projects in each of the most underdeveloped Spanish regions, and they were elaborated on the basis of their structural deficits: Andalusia, comprising a contribution from public funds to the capital and guarantee funds of mutual insurance companies; in the Canary Islands, the urban renewal of the metropolitan areas of Santa Cruz de Tenerife; in Galicia, with the “Canal de Eiras” project, and in Castille-Leon with the modernization for tourism purposes of urban facilities in the historic centre of Salamanca. The three other regions, Castille-La Mancha, the Autonomous Community of Valencia and Asturias will benefit from various schemes for the cleaning up and treatment of waste water as part of the “protection and improvement of the environment” priority in the CSF. (CEC 1992)

During the second programming period, the general strategic objective of the CSF and its operational objectives did not changed (CEC 1994, p. 27): while the general objective continued to be the reduction of the income and the unemployment disparities between Objective 1 regions and the other part of Spain and the EU, four operational objectives were developed, respectively: the improvement of the production system, the strengthening of human capital and the improvement of the quality of life, the regional integration (airports, railroads, roads, telecommunications, etc.), and the development of basic water and energy infrastructure. Moreover, in order to achieve them, eight priorities were identified, that is, regional integration and articulation, development of the production system, tourism, agriculture and rural development, fisheries, support infrastructure for economic activities, strengthening of human resources, and technical assistance. As in the case of the first programming period, investments in infrastructure were centrally controlled by the Ministry of Public Works, and they were financed on the basis of its Plan Director de Infraestructuras (National Infrastructure Plan). The main differences with respect to the previous programming period concerned the territorial and the thematic allocation of the resources, since during the negotiation phase, the Commission required to the

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Spanish authorities a greater balance of the Spanish strategic choices (CEC 1997). From a thematic point of view, the changes in the planned distribution of resources were the following (Mancha-Navarro and Cuadrado 1999): from 25.4% (to the total amount of the CSF) to 34.5% for the improvement of the production system, from 33.8% to 33.4% in the case of the strength of the human capital and the improvement of the quality of life, from 33.0% to 24.8% in the case of the regional integration, from 7.8% to 7.3% in the case of the development of basic water and energy infrastructure. In terms of fund allocation, the main differences are observed in Extremadura and Valencia. The share of Extremadura, the poorest Objective 1 region in terms of GDP per capita, in total resources of the Structural Funds in Objective 1 regions is significantly higher than its share in total population of Objective 1 regions. On the contrary, the share of Valencia, a relative rich region when compared to the rest of Objective 1 regions, in total resources of the Structural Funds in Objective 1 regions is significantly lower than its share in total population of Objective 1 regions. (CEET-ECOTEC Research & Consulting Ltd 2002a, p. 38)

4.3.2.2 Connecting Spain with Europe During the 2000–2006 programming period, the strategic objectives of regional development were three, by covering the promotion of a real process of convergence; the fostering of the job creation; and the promotion of sustainable development, social welfare, and the quality of life. While the former objective covered the 70% of the total finances of the third CSF, the second and the third, respectively, the 17% and the 13%. In general, according to the Ex-Post Evaluation of Cohesion Policy Programmes 2000–2006 financed by the ERDF in Objective 1 regions, “there were strong synergies between the EU and national/regional development strategies [and] the allocation [was] consistent with strategic priorities and objectives set out in the programming documents and changes in resources allocation over the period have maintained this consistency” (Applica, IsmeriEuropa Wiiw 2010, p. 10). Within the more general aim to connect Spain and its regions with the most strategic European area, the 37.9% of the ERDF expenditure was used in the Transport and Energy sector. The aim of the main projects that were financed with these funds was the creation of a permanent connection with other crucial European area by land (e.g., through the

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Figueres-Perpignan TGV), by sea (e.g., the enlargement of the Barcelona port), and by sky (e.g., through the enlargement of the Barcelona port, the enlargement of the Madrid airport). In addition to these specific results, “the length of speed road and rail networks increased considerably over the period.” As a result of these structural actions: several studies have shown a positive relationship between transport investment and regional GDP in Spain. The scale of investment relative to GDP over the period was well above the EU average, which helped to narrow the gap in infrastructure endowment with the rest of Europe. (ibidem, p. 16)

Following the excellent results obtained in Spain in the infrastructural reinforcement (Ecorys et al. 2006), and in line with the Lisbon Agenda orientation, during the 2007–2013 programming period, a contrary trend emerged. More in general the strategic objectives of the Spanish NSRF were three: (1) to make Spain a more attractive place to invest, (2) to improve the knowledge and the innovation sectors, and (3) to increase and to improve jobs. For these reasons the general strategy was characterized by reduced emphasis on basic infrastructure, in favor of innovation, business development, and knowledge economy (Ferry 2013, pp. 11–17). For example, in the less developed regions, resources for Axis “Transport and Energy” made up 37.9% of the total in the 2000–2006 cycle and 30% during the 2007–2013 cycle. In contrast to this, resources for the Axis Knowledge society were 11.3% in the 2000–2006 cycle and 23% during the 2007–2013 cycle. Nevertheless, the investments in both infrastructure and innovation were addressed to the creation of a set of conditions in order to reinforce the link between Spain and the other MSs. The former, for example, were used in order to change all the main Spanish networks of the railways since they historically presented a different dimension with respect to the European one (1.5 vs. 1.6): their aim was to create a common technology and their inter-operability with the networks of the adjacent MSs. Nevertheless the new strong investment in the innovation sector, the Spanish results had not been completely satisfactory since “it was not possible to develop a new body of investigation during a single programming period because it is necessary to change the structure of the Spanish company and the mentality of the investors” (interview with national official). It clearly pointed out that moving from strong investments in infrastructure directly managed by the central government to a new policy in which local actors should be determinant for its proper implementation created several problems also in this MS.

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4.3.3  Meeting the Administrative Challenge: Stimulating a Learning Process from Above 4.3.3.1 From Adaptation to Learning Despite the moderate degree of misfit between the EU’s orientations and the administrative practices historically prevalent in Spain, an adaptation strategy prevailed during the first programming period within the Spanish administrations, and it above all emerged during the management phase. At the end of 1993, in fact, around the 90% of the resources were spent. The main reason of this positive result was the efficient Spanish administrative system that during those years started to be consolidated. The building and the following reinforcement of the latter had to be attributed to the strong national coordination presented since the end of the 1980s and that contributed to increase the sense of responsibility of the national and sub-national administrations involved (interview with EU official). More in general, management problems were few due to the strong financial and informatics flows established in Madrid, as well as to the heavy use of the technical assistance directly controlled by the center. Although not fully internalized by the national and regional administrations, moreover, the monitoring and the evaluation activities showed a good performance, demonstrating that a process of adaptation was taking place in Spain during those years. In the field of evaluation, moreover, several senior officials in Bruxelles and in Madrid pointed out that the lack of the consolidation of an administrative culture for the evaluation of EU plans in Spain during the first programming period was to a large extent conditioned by the ambiguities of the first EU regulations discussed in Chap. 2 of this book. During the second programming period, the centralized coordination structure was reinforced: the Planning Directorate continued to assume a pivotal role, since, on the one hand, it continued to be the sole interlocutor with the Commission and, on the other hand, it managed information related to the implementation of EU plans with the respective sub-national actors and the other national institutions involved. As a consequence, the capacity to manage the 1994–1999 OPs for the Objective 1 area continued to be a great deal in comparison with the previous cycle. In fact, “given the high degree of administrative competences at the regional level, and the clear division of responsibilities […], the implementation and administration of CSF programmes has been fairly unproblematic, even though the Spanish CSF involves a high number of operational

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programmes (64 in 1994–1999)” (Tondl 1998, p. 113). For example, the percentages of funds that were used were equal to 30% at the end of 1996, 60% at the end of 1998, and 88% at the end of 2000. At the regional level, it was to a large extent conditioned by the fact that the 1994–1999 programming period was characterized by a generalized learning process within the sub-national administrations, and it was mainly due to the strong investment in training programs for civil servants that was realized during those years, both in Spain and in Bruxelles (interview with national official). As the Ex-Post Evaluation of Objective 1 Programmes 1994–1999 emphasized: a large amount of organisational learning took place during the programming period and a number of actions have been taken to address the weaknesses in the management arrangements during the programme […]. The national administrative units issued reference and guidance materials to the managers of the different Operational Programmes. Regional administrations also developed guidance for example on co-financing regulations. Furthermore, regions have shared experience of managing programmes—for example through the Programme Monitoring Committees […]. In the course of the programming period the capacity for implementation improved thanks mainly to the accumulation of experience. Better knowledge of the cost of the different actions permitted an increase in efficiency. (ECOTEC Research & Consulting Limited 2002b, pp. 213–214, emphasis added)

Moreover, in order to overcome the criticalities found during the first programming period, several improvements were developed also in the field of monitoring and evaluation. This included both “the development of effective monitoring indicators as well as computer systems for the effective collection and aggregation of monitoring data” and the establishment of an Evaluation Technical Group “to foster evaluation activity” (ibidem, p. 213). 4.3.3.2 Consolidating Learning The learning process started during the second programming period was consolidated during the following programming period. As in the past, this administrative change was facilitated by the presence of a strong national garrison and, more in detail, by the previously mentioned choice to collocate in Madrid the MA, the AA, the CA, and the PAU. In fact, these four bodies become directly responsible of the expenditure in front of the Commission and were able to guarantee a coordination among all

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the main Spanish institutions and actors involved. In the case of the monitoring phase, moreover, “with the aim of establishing a uniform monitoring framework which would facilitate overall evaluation” (EPRC 2008, p.  9), a new national monitoring system—called FONDOS 2000—was developed, and it should have integrated all the structural funds, including information about structural, financial, and physical data. In other terms, the consolidation of the learning process that characterized the Spanish administrations during the last two programming periods had to be attributed to the perpetuation of a strategy aimed to assign to the center a role of supervision, as well as a constant interaction between the Planning Directorate and the beneficiaries that culminated in the elaboration of an annual control plan (interview with national official). In the case of the horizontal OPs, in addition, a new intermediate organism was created in order to guarantee a better coordination between the national and the regional secretariats, and, following, to increase their financial management. In addition, the Directorate began to solicit the CCAA in order to create stable confrontation tables through the involvement of external actors. It was, for example, “the case of Castille-La Manche where the regional technical staff usually invite experts from other regions and from other MSs in order to understand how it works elsewhere and the possible best practices from which the region can benefit from” (interview with national official). As a consequence of these actions and the previous consolidated organizational learning, during both the 2000–2006 and 2007–2013 programming periods, Spanish administrators have shown to have both the competencies and the capacities to implement EU regional policy. This clearly emerged, for example, in the Expert Evaluation Network delivering policy analysis on the performance of Cohesion policy 2007–2013 (Applica, IsmeriEuropa 2010b). Referring to the important operational reprogramming realized “in June 2010 to address the implementations problems posed by dramatic changes in the economic situation” (p. 32), the Report ends in the following way: […]. Naturally, the reprogramming actions must be designed and implemented carefully, but Spain, its financial sector and public administration specialized in the management of community funds have enough human resources and expertise to fulfill these goals with a reasonable amount of success. (p. 34, my emphasis)

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As well as in the case of management and monitoring of the structural funds, the national decision-maker for development tried to reinforce the evaluation practices in Spain through direct and indirect actions aimed to consolidate an evaluation culture within the national and sub-national administrations. In fact, since 2001 it elaborated evaluation methods to which they should have been attended, and for each OP, they were divided in three key activities, that is, “- drawing up of the terms of reference for the mid-term reviews;—collaboration in the selection process for independent assessors;—compilation of a “Methodology Guide” for evaluation operational programmes” (CEC 2002, p. 73). A great emphasis, moreover, was put in the ex-ante evaluation of the 2000–2006 structural interventions. In fact: at national level, the Spanish CSF was subject to a threefold ex ante evaluation, including an analysis of overall coherence, an assessment of macro-­ economic impact, and a study on the impact of the CSF on the environment and on gender equality. It focused on making strategic recommendations in relation to the main socio-economic needs and strengths. The evaluation also assessed the quantification of targets for each of the different Priorities, as well as the level of coherence between strategic goals and the actions to be implemented. The conclusions of the ex ante evaluation noted a strong correlation between the CSF Priorities and recommendations derived from the socio-economic analysis. (EPRC 2008, p. 7)

As a consequence of this strong investment for the reinforcement of the evaluation in Spain, “continuous […] evaluation procedures have permeated into national policy” (Applica, IsmeriEuropa Wiiw 2010, p. 21). On the contrary, in several cases at regional level, they have often been “simply accounting exercises rather than true systematic impact” (ivi). Even if a process of learning was taking place at the middle of the 2000s, “evaluation was not totally well organized in Spain” (interview with national official). In order to reinforce it and to contribute to the dissemination of an evaluation culture, four actions were implemented during the fourth programming period (interview with national official; interview with EU official), which were (1) the elaboration of a National Evaluation Plan aimed to establish a solid evaluation system and to connect evaluation with the management of the single OPs; (2) the organization of annual evaluation groups with the involvement of the intermediate bodies in order to discuss about the actions implemented by the

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administrations, and to give them recommendations; (3) the organization of specific training courses at least three times a year; (4) a strong emphasis on thematic evaluations in specific sectors (such as gender equality, social integration, infrastructural policies, and R&D). The introduction of these four actions: led to a progress in capacity building and evaluation, since they produced some […] evaluation documents with a clear interest and they helped to make progress in evaluation culture. On the goal of the actions there was to develop capacity in evaluation and they contributed to consolidate a learning by doing process, a greater performance in evaluation, and an idea of public management more transparent and reliable […]. While the evaluation is more consolidated at national level, in the regions there are different situations since in some of them several problems to create critical mass and a technical team are present. We can find regions with more evaluation and background. (interview with EU official)

4.4   Evidence from Regional Experiences 4.4.1  The Case of Andalusia: Reinforcing the National Garrison at the Regional Level The case of Andalusia clearly shows the benefits of a national garrison for the management of the structural interventions: until the first programming period, the national government directly recognized the strategic relevance of this region for the Spanish economy, and it decided to contribute to the consolidation of a European culture in this region, through a strong reinforcement of the national garrison at the regional level. 4.4.1.1 The Institutional Challenge Considering the high number of resources that during the first programming cycle were used to finance infrastructural projects, the national choice was to attribute few responsibilities to the regional administration due to possible negative influence that regional politics could have for the national strategy: despite a clear attribution of responsibility to single regional directorates was assigned, the latter have never exercised a direct role of management responsibility during the 1989–1993 programming period. This national choice was related to the fact that before the launch of the first programming period, the administrative model of the Andalusia

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region was characterized by a recruitment system of the regional staff similar to those prevalent in several regions of the Mezzogiorno: the confíanza politica that traditionally characterized this CCAA limited the specialization and the professionalization of the human resources in this region, and it increased the fragmentation of the administrative procedures. The regional system significantly changed starting from 1995. The slightest emphasis that the 1994–1999 CSF put on this region due to the positive results of the infrastructural investments made during the first programming period required a reinforcement of the regional administrative structure because of the great responsibility it started to take over in those years. More in detail, the regional system for the management of the structural funds significantly changed at the middle of the 1990s, and it consolidated during the second and third programming period, by assuming several characteristics of the decision-maker for development of Hirschmanian memory. The reasons of this change were related to both national and regional political dynamics. On the one hand, there was the continuity of single-color governments that over the years put a great emphasis in the issue of the structural funds as a necessary condition for the economic growth of this region. On the other hand, there was a strong central push from Madrid for the consolidation of a similar administrative model due to the strategic relevance that this region had continued to have within the Spanish economy and which led to the creation and consolidation of an institutional mechanism aimed to consolidate the conditions for the creation of a further regional supervisor, that continued to be directly controlled by Madrid. In Hirschmanian terms, the main characteristics of the new Andalusian regional garrison during these years were, therefore, the following (interview with EU official; interview with regional official; interview with national official; Andalusia Region 2000; Andalusia Region 2003): its capacity to become a reference point of the other actors involved (i.e., RDA, Consejeriás, beneficiaries, etc.) to bring all their information together, its role as a stimulus of the consolidation of the institutional and socio-economic partnership that was able to significantly contribute to the elaboration of the interventions of the third programming cycle, the presence of a great staffing capacity, the consolidation of the former process of personalization that was above all facilitated by the introduction of performance-oriented management measures, and the consolidation of a strong coordination system that facilitated the transmission of technical and financial information.

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4.4.1.2 The Strategic Challenge The analysis of EU Cohesion Policy investments in Andalusia during the first three programming periods shows “a tendency to invest in infrastructure projects, whereas the development of intangibles (qualification of human resources, R&D capacity) has been neglected” (Schaub 2004, p. 112): around 30% of the resources were used during each programming period for the regional territorial integration (infrastructure, roads, railways, ports, telecommunications, etc.). Moreover, “the CF reinforced this tendency as this fund financed only investments in the field of transport and environment” (ivi). In addition, these strategic choices presented a general coherence, as compared both the single projects that were financed and between the more general national objectives and the structural interventions realized in this region (Andalusia Region 2003). That was related to both the strong national coordination in defining the regional strategy and the previously mentioned role that the regional administrations had for the involvement of the partners for its determination. These two elements—a strong emphasis in infrastructure and the great internal and external coherence of the strategic choices in Andalusia during the first three programming periods—facilitated the obtaining of positive results that significantly contributed to the Andalusian economic growth (CEC 2013a). In fact, in front of the excessive peripherality and territorial disarticulation that characterized this region during the 1980s, with the EU funds related to the first programming period, the previously mentioned project Madrid-Seville was created. In order to attenuate this disarticulation, instead, the 1994–1999 investments were above all used for highways and roads projects aimed to complete the vertebrate axes of this region and its interprovincial and country networks (CEC 2013a, p. 24). During the third programming period, finally, the main aim was to improve the internal and external integration of the territory through investments in social infrastructure, the construction and renovation of highways and roads, and investments in rail (ivi). In other words, the main efforts of the ERDF projects in Andalusia “were aimed at improving the accessibility and connectivity of the region. Two main challenges were identified, namely the development of the longitudinal axis for east-west connections and the north-south axis for accessibility” (ibidem, p. 42). 4.4.1.3 The Administrative Challenge The strong centralized management of the first programming cycle attributed a poor role to the regional actors, at which, therefore, was never

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explicitly required to create a solid management, monitoring, and evaluation culture during the first years of the 1990s. In order to better understand the way in which the administrative change happened in Andalusia, it is therefore more appropriate to analyze the second and the third programming periods. More in detail, a learning strategy characterized Andalusian administration in terms of management and evaluation starting from the middle of the 1990s, and it consolidated during the 2000s. In terms of monitoring, instead, due to the national dynamics described in previous pages, a process of adaptation prevailed during the second programming period and a learning strategy in the next one. The positive management performance was to a large extent conditioned by the strong investment in training courses for the local beneficiaries during the 1990s, and the use of the Technical Assistance directly coordinated by Madrid. At the end of second programming period, moreover, the evaluation culture in Andalusia gradually started to consolidate within regional administration, above all because there was an increase production of evaluation reports, and an internalization of the evaluation activities. A great emphasis was, for example, put in this region for the ex-­ ante evaluation of the 2000–2006 OPs (Andalusia Region 2003), with also a first attempt to use it as a programming tool for all purposes (interview with national official). Only an adaptation strategy, instead, prevailed in terms of monitoring until the end of the 1990s. The monitoring practices, in fact, were not too consolidated in this region: while the use of the monitoring for management purposes, even if present, was limited, the procedural data were fewer with respect to the total availability of physical and financial data. The great emphasis that the national garrison put in the monitoring phase starting from the beginning of the last decade, and the effects of the training courses conducted during those years in this issue, facilitated the development of a learning process also in terms of monitoring (for each of the two dimensions considered). The latter was not only conditioned by the strong national emphasis put in this issue, but also by the cultural change that involved institutional and socio-economic partners during those years, as a consequence of the great number of projects they started to manage as local beneficiaries (interview with national official). 4.4.1.4 Administrative Performance in 2007–2013 ERDF OP The implementation of the 2007–2013 ERDF OP confirms that the greater is the national garrison, the higher is the administrative

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performance. The latter interpretation clearly emerges by analyzing the programming phase that, as discussed in previous pages, had continued to be predominantly controlled by Madrid: nevertheless the elaboration of the strategy and its programming documents, and their following negotiations with Bruxelles are subject of a constant discussion between the MA and the regional administration, this phase was under the responsibility of the MA. As a national official pointed out: “the regional technicians sent an initial proposal to the MA which was subsequently an object of discussion. The aim of the centre, in this case, was to coordinate not to impose” (interview with national official). As a consequence, the OP was officially approved without relevant delays (interview with EU official). One of the main elements that contributed to the quality of the first regional proposal was the stability of the organizational structure, as well as the strong experience of the regional staff that with the help of the technical assistance was able to present a valid proposal for the regional development (interview with national official). As a consequence of that, the general strategy that was negotiated in 2007 by the MA with the Commission has not drastically changed. In fact, despite the crisis, the changes occurred were limited to single investment priorities, and the general objective to consolidate the trans-European transport infrastructure network remained unaltered. Similarly with what happened for the project selection/generation phase, the strong national garrison, moreover, had a positive impact also in the management phase and, more in detail, in the management of the financial and control flows. As described in previous pages, the latter, in fact, were directly controlled by the CA and the MA in Madrid that did annual control and, in case of irregularity, temporarily suspended the payments. In addition, the strong regional garrison and the prevalence of projects directly managed by the regional administration contributed to a greater performance of the management of the infrastructural projects. In the case of the smaller projects, instead, a direct responsibility in supporting the local beneficiaries was attributed to the Agencia de Innovación y Desarrollo de Andalucía (IDEA) since it managed the Global Grants. Moreover, the technical characteristics of the national system FONDOS 2007 indirectly contributed to the achievement of a greater performance in the availability of financial, physical, and procedural data. In fact, the system requires to the beneficiaries to insert specific data, and at the end of the procedure, it returns the physical, financial, and procedural data required by the regulations. The insertion of these data within the

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informatics system was a necessary condition for the beneficiaries to receive the financial allocation. The use of the monitoring for management purposes, instead, started to consolidate only during the last years of the implementation of the OPs due to the strong emphasis put by the regional governments in this issue contextually with the evaluation phase. In fact, even if evaluation activities were common also during the previous programming period, a widespread diffusion of the evaluation culture had delayed to be consolidated in Andalusia: even if expected, the use of evaluation in program management was not always implemented (interview with external evaluator). 4.4.2  The Case of Galicia: Central Planning and Learning Paths The case of Galicia will be described in the next pages, following the same approach used for the other three regions investigated. The main policy lesson that emerges from the reading of the implementation of four programming periods in this regional context is that the presence of a strong central planning facilitated the establishment of independent sub-national institutional arrangements with which the upper level of government interacts and subsequently facilitates the consolidation of a learning response, as concerned not only the administrative practices implemented but also the strategic choices, in terms of both strategic choices to pursue and administrative practices to implement. 4.4.2.1 The Institutional Challenge During the first programming period, the building of the Galician administrative structures deputed to the control and coordination of the structural funds met a general process of institutional change of the regional organization during the first years of the 1990s. In this context, several institutional changes of Hirschmanian memory were launched, such as the modernization of the regional administrative machine, its computerization, and the introduction of the managerial principles within the regional administrative action. They were to a large extent conditioned by the strong training activity that was conducted starting from these years. As a consequence, already from the first programming period: the framework of the Structural Funds facilitated strategic planning and action coordination as well as favouring a process of institutional learning. In this respect, as noted in the evaluation by CADMOS (EC, DG, Regional

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Policy 1991), the Structural Funds have had positive effects on the rationalisation of preparedness mechanisms of public decision-making, especially in the field of regional autonomy. (CEC 2013b, p. 93)

In addition, starting from the first years of implementation of the second programming period, a Regional Secretariat was created, in order to improve the institutional coordination between Madrid and the regional actors involved in the implementation phase. The process of consolidation of a regional garrison was realized during the third programming period, during which the “institutional machine was reinforced and it was totally able to coordinate at the central level the implementation of the regional programmes” (interview with socio-economic stakeholder). As a result of this, the Galician administration involved in the management of the structural funds was characterized, already at the end of the 1990s, by both a clear definition of the roles and a strong coordination mechanism among all the regional departments involved (interview with EU official; interview with national official; interview with regional official). 4.4.2.2 The Strategic Challenge In Hirschmanian terms, the Galician development strategy and the priorities and objectives of the first three ERDF OPs were characterized by a coherent evolution across the programming periods. More in detail, they aimed to improve the Galician internal access through a strong focus on transport and environmental infrastructures during the 1989–1993 programming period; to promote the Galician external accessibility with the center of the Spain during the 1994–1999 programming period, with a new focus on transport infrastructures; and to complete it during the third programming period (by also starting to invest in R&D in order to improve the internationalization of the Galician SMEs). This coherent development strategy was also accompanied by a strong complementarity and synergy with the other domestic and structural interventions in Galicia. More in general, in strategic terms, one of the most important lessons learned from the Galician experience relates to the effect of accessibility in peripheral lagging regions. Enhanced accessibility to a large integrated market is a good way to boost structural adjustment and productivity. The combination of the strong investment policy supported by ERDF and increase competition in the single European market has been demonstrated as a powerful vehicle for economic development and convergence. (CEC 2013b, p. 93, emphasis added)

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The investments in infrastructures were therefore considered by the national decision-maker for development as the main instruments in order to achieve a greater economic convergence. Their main results had been recently systematized by the CEC (2013b, pp.  57–63). During the 1989–1993 period, a set of communications network were realized in order to improve both the interior north-south and east-west axes and the road infrastructure along the coast (CEC 1994). During the 1994–1999 period, the main actions carried out were focused on national highways, national roads, connections in rural areas, and with both Portugal and the main north-south and east-west roads. Finally, during the third programming period, “work continued to focus on roads and motorways, aimed at connecting the high-capacity roads with metropolitan areas and the interior of the region and improving the network of conventional roads” (ibidem, p.  58). The same report also quantified Galician infrastructural improvements as a result of the ERDF investments. For example, “Galicia’s highway network grew between 1994 and 2009 (the last year used for certification for the period 2000–2006) by 722 kilometres” (ivi). In other terms, thanks to both a strong thematic selectivity and the presence of a national garrison, these regions “went from being a region with serious communications deficiencies to having infrastructure slightly above the national average, with its number of motorways rising from 47.5 percent of the Spanish average in 1990 to 116 percent in 2010” (ivi). 4.4.2.3 The Administrative Challenge The administrative change that happened in Galicia during the first three programming periods had been in depth investigated by Mota and Noferini (2010). The two scholars argued that the process of administrative change that involved the Galician actors during the first three programming period can be synthesized as a “incremental learning process from the 1994–1999 period onward that moved administrative capacity from developing to consolidated” (Mota and Noferini 2010, p. 131, emphasis added). More in detail, in terms of management, correct “management [capacity] […] [was] guaranteed by the leading role performed by the regional department of economy” (ibidem, p. 130). Moreover: monitoring provisions for the 1994–1999 period were very weak and only financial monitoring was really performed. Indicators for the physical measurement of the results of SFs interventions […] were not properly func-

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tioning in Galicia. The lack of results for monitoring activities, combined with a weak capacity for evaluation, meant that evaluation activity during the programme was limited. For the 2000–2006 financial period, however, [Galicia] seriously committed to the definition of an effective monitoring system that includes physical and financial variables. Throughout this latter period, the monitoring system has worked properly […] and has constituted the most reliable instrument for measuring the improvement in the implementation of ROPs. (ibidem, p. 131)

The administrative learning also involved the evaluation phase. On the one hand, “both ex-ante and in itinere evaluations have been carried out and evaluation reports have been assigned to independent consultants” (ivi). On the other hand, “evaluation reports are equally detailed and extensive […] [and] as far as the culture of evaluation is concerned […] the introduction of evaluation methodology [was] becoming much more accepted” (ivi) at the end of the third programming period. Nevertheless, some isolated problems related to the evaluation activities continued to be present, and they were very similar to those found in the previous pages related to the national strategy. In fact, as a regional official argued, “the absence of a real consolidation of the evaluation in Galicia until the middle of 2000s reflected a Spanish structural and cultural problem. Moreover, the Galician political class had put little emphasis on this stage, interpreting evaluation only as an evaluation of the performance, rather than of the achieved results” (interview with regional official). 4.4.2.4 Administrative Performance in 2007–2013 ERDF OP A strong administrative performance was first of all achieved during the programming phase for each of the three dimensions under investigation, and it was to a large extent conditioned by institutional factors, that is, the stability of the organizational structures deputed to elaborate and to coordinate this phase, and the strong technical expertise of the main actors involved. In addition, even a regional government change was present in 2009, it did not affect the programming phase due to the characteristics of the Spanish governance systems I discussed in previous pages. More in general, the initial programming was well structured and implemented. It was based on the recommendations of the 2000–2006 in-itinere evaluation that suggested to continue to reinforce the link between Galicia and the rest of Spain. For these reasons, the main development tools continued to be transport and environmental and solid

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waste, on the one hand, and investment in R&D, on the other hand. While the former projects were directly managed by the regional authorities, the latter involved the Galician SMEs. The positive results of the programming phase were also conditioned by the strong involvement of the partners during the phase of elaboration of the 2007–2013 ERDF OP. It happened in two different ways (interview with regional official). On the one hand, through an internal call, the institutional and socio-­ economic actors could propose new guidelines to include, and the majority of them were following taken into account being responded to the need of the region. On the other hand, other partners were involved in several working groups. In addition, the documents proposed were “well structured, simple to read and with a clear strategic focus” (interview with national official). This good performance was to a large extent conditioned by both the constant interaction between the MA and the regional officials during their preparation, and the consolidated experience of the regional staff, since “most of them worked in this phase already for the preparation of the 2000–2006 documents” (interview with regional official). The same factors also positively affected the negotiation and approval of the OP. This phase was in fact speedy and without significant technical problems. On the basis of the Galician development strategy, two main types of projects were financed by the 2007–2013 ERDF OP: while part of them was infrastructural and they were directly generated and managed by the regional administration, others were financed through grants for the SMEs. The former had a very good performance in terms of both project generation and project approval, due to the consolidated learning of the main institutional beneficiaries involved. On the contrary, the performance of the latter was to a large extent conditioned by both cultural and contingent factors. In terms of project generation, for example, “half of the projects were not totally satisfactory in innovation terms” (interview with external evaluator). As a consequence, the Galician RDA continued to stimulate the SMEs, through the organization of workshops, clusters, and a constant technical consultant (interview with regional official). A very good performance, instead, was found during the phase of approval and selection of the projects, since “the average length of the procedures never exceeded 4/5 months” (interview with regional official). The institutional characteristics of the main actors involved also positively affected the management phase. In fact, as a regional official pointed out

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We know that the local authorities are very politicized and it could be a problem for the project management. It above all happened during the previous programming period, during which several attempts were made to involve the local authorities. But we understood that their involvement could be negative for Galicia’s growth. […] Local authorities do not have a European culture since their technical and human resources for the management of the projects are limited. Only the big cities had these elements since in the past they participated in the Urban Initiatives […] but they are only 5 or 6 in Galicia, not more. […] It is a problem of need identification, as well as the identification of the authority that has the highest competence to do it. For this reason, the regional government has always decided to directly manage the structural funds and it guaranteed a great management advantage. (interview with regional official)

While the regional administrations did not encounter major management problems, the unique problems found by the SMEs were to a large extent conditioned by the global financial crisis. In fact, their possibility to continue to finance the projects significantly declined. Nevertheless, under a strong solicitation of the central MA, the regional government decided both to improve the use of the financial aids through the Joint European Resources for Micro to Medium Enterprises (JEREMIE) initiative set up in 2007 by the EC and to involve the banks for the expenditure certification. As a consequence of this good performance, and the presence of a consolidate regional structure, no substantial problems were found during the phase of project payment, and there was no de-commitment. The monitoring phase was characterized by both a good quality of the regional system of monitoring procedures and a strong availability of physical, financial, and procedural data during all the programming period. As a regional official pointed out, “it was conditioned by the strong persuasive action made by the regional government during the 2000–2006 programming period that created the conditions for the consolidation of a learning process over the years and the building of solid indicators” (interview with regional official). On the contrary, the use of the monitoring for management purposes had continued to be not totally deep-rooted within the Galician administration during the first part of the implementation of the 2007–2013 ERDF OP. Nevertheless, in 2015 regional government had decided to build a regional task force in order “to guarantee maximum impact of the monitoring data on decision-making” (interview with regional official).

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Finally, the analysis of the Galician evaluation activities as concerned the 2007–2013 ERDF OP showed that a learning strategy prevailed in this region during the years of implementation of the same OP. In fact, even if evaluation continues to be not perfectly deep-rooted within the regional administration, several attempts to consolidate it were done by the regional government. More in general, the greater positive results in evaluation terms with respect to, for example, Andalusia and Calabria were related to both the quality of the evaluation activity and the aim to involve the partners also during this phase. The evaluation activities of the Galician Evaluation Unit—that is collocated within the Regional Ministry for Finance and it composed of two stable personnel with a consolidated experience in evaluation—only concerned issues related to the OP and not to its projects. Its basic philosophy, in fact, had always been to comply with the EU regulations, on the one hand, and to try to use evaluation for management purposes, on the other hand. As a consequence, its activities concretively concerned: the in-itinere evaluation of the ERDF OP that support a following reprogramming, the evaluation of the Communication Plan (two evaluation reports), tasks associated with the improvement of the activities of the MC, and an evaluation of the synergies between the development strategy of the ERDF OP and the other regional development priorities. Moreover, the partners were involved both during the elaboration of the regional evaluation plan and through a survey that the regional government decided to conduct in order to understand the degree of satisfaction of the population with regard to the use of the structural funds in Galicia. The latter analysis was also used for writing of the evaluation of the Communication Plan for the 2014–2020 programming period.

4.5   Implementing the 2014–2020 Programming Period: A Learning Response with a Top-Down Approach As described in Chap. 2, the 2014–2020 programming period is characterized by a strong decentralization of responsibilities toward sub-national actors and an increasing role for actors on the ground within the more general implementation of the place-based approach. In this context, due to the margins of maneuver left to the MSs by the EU regulations, the Spanish governance system of structural funds is not radically changed as

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compared to the previous programming periods, by therefore preserving the presence of a national garrison. As concerned the general programming phase, for example, the Programming and Evaluation Unit at the DG for European Funds did coordinate with all potential IBs (both from central and regional governments) and get their proposals for designing and building up the OPs (taking into account the thematic concentration corresponding to the regional categories). The unique change concerned the number of IBs involved. Due to the EC recommendations, in fact, the occurrence of IBs has been dramatically decreased. Regional OPs have, on a general rule, just one IB (the Regional Government). On the other hand, the Central Government bodies are present only in the Plurirregional OP of Spain, including two that cover the urban initiatives. There weren’t role changes excepting local entities, which are only entitled to select operations (therefore they are called “Light IBs”) and are under the supervision of these two IBs that cover the urban initiatives. So central and local administrators are concentrated in just one OP. The MA in Madrid, therefore, continues to be the pivot of the Spanish governance. In this context, moreover, the role of supervision of the MA toward the IBs and the implementation bodies are also increased, since the managers of the regional OPs present in Madrid now cover just one IB (while since its establishment, in 2000s, they had relationship with up to 20 IBs). Moreover, there is a specific team for the follow up of the Plurirregional OP in Spain, due to its size, since it currently covers almost half of the ERDF allocation. By considering the implementation of the place-based approach, the PA opted for an optional use of the CLLD at the regional OPs, but not for the Plurirregional OP of Spain. While this implementation tool is less used by CCAAs, ITIs are seen like a visibility tool, since the operations and funds that contribute to an ITI sum up to create an overall total, but ITIs lack a specific budget. A total of five ITIs are present in Spain (namely, ITI Azul, ITI Cádiz, ITI del Mar Menor, ITI de la provicnia de Tereul, ITI de Castilla–La Mancha). These five ITIs are radically different. ITI Azul (Blue ITI), for example, corresponds to the Atlantic Strategy and covers all operations of some specific objectives in some regional OPs and some regions in the Plurirregional OP of Spain, and there is not a specific body or institution promoting it. On the other hand, ITI Cádiz has a promoting actor behind (the Diputación de Cádiz, provincial government) ensuring dissemination of all calls and opportunities, so although the lack of

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specific budget, the chances of getting ERDF support are higher, and this is clearly the case for Urban initiatives from Cádiz. In general, the public and private actors involved in the implementation of the 2014–2020 OPs remained the same compared to the previous programming period, but due to the thematic concentration, the allocations on low-carbon economy and other axis that contribute to the concentration have meant an important increase of the resources the competent bodies have to manage. On the other hand, IBs associated to axis not contributing to the thematic concentration have reduced their project folder, this being relevant mainly in all kind of infrastructures. In this context, moreover, some IBs have now more resources for their policies than even before. This means that there are absorption problems in areas where low-carbon economy is not an issue, like in the unpopulated regions of Spain. On the other hand, other bodies related to SMEs have had high absorption rates in industrial regions, almost ending with the allocated resources for these regions. A learning process is therefore involving the Spanish SMEs that due to the great investment the MA did during these years appears to be able to reduce the management and implementation gaps encountered during the previous programming period. On the contrary, some criticalities are found by the local authorities when they cover as implementation bodies of the ITIs, especially when more attribution of responsibilities for them is present. By looking at the administrative challenges introduced by the new regulation in terms of evaluation—in which as described in previous pages a learning process was less radicated in this MS until the end of the fourth programming period—Spain has evolved the previous evaluation culture to a better standard and a more foreseeable output at all levels during the last years, with appropriate coordination and sharing tools like a common catalogue for result indicators. This has been a bet of the Programming and Evaluation Unit at the DG for European Funds that was well understood by the regions and bodies. More in detail, with a comprehensive training program and the help of the corresponding unit of the Instituto de Estudios Fiscales, a robust framework has been created and all participants (public bodies, but also external consultants) share a common view of the evaluation rules and are able to get all the evaluation types nowadays. In this context, Spanish administrations are now able to currently implement the evaluation rules provided within the new EU 2014–2020 regulations (e.g., the use of “theory-based impact evaluation” and the “counter-factual impact evaluation”). Moreover, within a general national

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Evaluation Plan, each Spanish OPs has now its own Evaluation Plan: “this reduces somehow the responsibility of the regional IB and enables them to focus on the more specific evaluations, while allowing the Programming and Evaluation Unit to tackle the wider evaluations (nationwide or those from the Plurirregional OP of Spain) with good results” (interview with national official).

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CEC. (2001, May 7). Comuncazione della Commissione al Consiglio, al Parlamento Europeo, al Comitato Economico e Sociale e al Comitato delle Regioni – I Risultati della Programmazione dei Fondi Strutturali per il periodo 2000/2006 (Obiettivo 1), Bruxelles, COM(2001) 378 final. CEC. (2002, October 10). Thirtheenth Annual Report on the Structural Funds 2001, Brussels, COM(2002)591 final. CEC. (2013a, July 10). Evaluation of the Main Achievements of Cohesion Policy Programmes and Projects over the Longer Term in 15 Selected Regions (From 1989–1993 Programming Period to the Present), 2011.CE.16.B.AT.015. Case Study Andalucia. Retrieved November 28, 2017, from http://ec.europa.eu/ regional_policy/sources/docgener/evaluation/pdf/eval2007/cohesion_ achievements/andalucia.pdf. CEC. (2013b). Evaluation of the Main Achievements of Cohesion Policy Programmes and Projects Over the Longer Term in 15 Selected Regions (From 1989–1993 Programming Period to the Present), 2011.CE.16.B.AT.015. Case Study Galicia. Retrieved September 20, 2013, from http://ec.europa.eu/regional_policy/ sources/docgener/evaluation/pdf/eval2007/cohesion_achievements/ galicia.pdf. CEC. (2014). Investment for Jobs and Growth. Promoting Development and Good Governance in EU Regions and Cities. Sixth Report on Economic, Social and Territorial Cohesion. Retrieved July, 27, 2019, from http://ec.europa.eu/ regional_policy/cohesion_report. CEET  – ECOTEC Research & Consulting Ltd. (2002a). Member State Report Objective 1 Evaluation 1994–1999 Spain, mimeo. CEET – ECOTEC Research & Consulting Ltd. (2002b). Ex-Post Evaluation of Objective 1 1994–1999. A Final Report to the Directorate General for Regional Policy, mimeo. Cuadrado-Roura, J. R. (2010a). Spain as a Case-Study: Regional Problems and Policies. In J. R. Cuadrado-Roura (Ed.), Regional Policy, Economic Growth and Convergence. Lessons from the Spanish Case (pp.  3–18). Berlin and Heidelberg: Springer. Cuadrado-Roura, J.  R. (2010b). Regional Economy and Policy in Spain (1960–1975). In J.  R. Cuadrado-Roura (Ed.), Regional Policy, Economic Growth and Convergence. Lessons from the Spanish Case (pp. 19–51). Berlin and Heidelberg: Springer. ECORYS et  al. (2006). Strategic Evaluation on Transport Investment Priorities Under Structural and Cohesion Funds for the Programming Period 2007–2013. No 2005 CE.16.AT-014. Synthesis Report. Ferry, M. (2013). Cohesion Policy and Its Components: Past, Present and Future. WP8 Task 2: Cohesion Policy Lessons From Earlier EU/EC Enlargements. Spain Case Study Report. European Policies Research Centre. Fuentes Quintana. (1984). La situación económica española. Boletín de Información, 73.

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CHAPTER 5

Conclusions: Two Cases in a Comparative Perspective

5.1   Results Following the American tradition of development studies, this book suggested that public policy analysis can be fruitful for understanding economic growth and cohesion, if it were to reconstruct domestic public interventions for development and the institutional characteristics of the subjects responsible for pursuing development goals. To do so, this book derived its theoretical foundations from the traditional debate on the role of state actors in promoting economic development and on the institutional characteristics that the public authorities involved in the process of economic development should display, empirically dealing with EU Cohesion Policy implementation and the economic convergence of underdeveloped regions in Italy and Spain, as a case study. It investigated the political and institutional factors that have determined the successes and failures of EU Cohesion Policy implementation at national and sub-­ national levels from the first programming period and their following impact on economic growth. Focusing on the aim of the research and the complexity of the investigated policy, I elaborated—in Chaps. 1 and 2—a theoretical framework that improved our understanding of how national and sub-national actors faced the triple challenge introduced by EU regulations, in order to comprehend whether standards akin to Hirschmanian principles were utilized by separate national states in the process of implementation. Building on this information, the book revealed if and how the © The Author(s) 2020 M. Casula, Economic Growth and Cohesion Policy Implementation in Italy and Spain, International Series on Public Policy, https://doi.org/10.1007/978-3-030-36998-9_5

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closer institutional approximation of Hirschmanian principles guarantees greater capacity for overcoming underdevelopment, collected sufficient information for assessing the role of state actors, be it direct or actively indirect, for the management of a development policy in institutional, strategic, and administrative terms. The main results obtained from observing the Italian and Spanish systems will be described in the following pages, focusing on the different ways domestic actors faced the three challenges under investigation. The Spanish case confirms that with greater closeness to Hirschmanian principles, the possibilities for socio-economic development increase. Since the first programming cycle, Spanish decision-making for development has always been centralized, particularly with regard to expertise and resources. Although it was established within a Ministry, the desire of political actors to invade the sphere of its competence was minimal. When a decentralization process occurred, it took effect only gradually and it had a mostly symbolic value. In fact, central structures continue to be the gatekeepers of the state-level implementation system in Spain, while RDAs are becoming increasingly important in sub-national implementation of policy. Moreover, at the regional level, the occurrence of technical actors being “captured” by political ones is by far less prevalent than in the Italian case, due to the position of the ERDF MA in Madrid. Considering these institutional arrangements, the central planning for development facilitated political-economic choices alongside the unbalanced growth principles. The latter arose from additional territorial selective choices, above all in the first programming periods, but also from the thematic territorial choices throughout all cycles. In other words, the Spanish (central) decision-maker for development was able, one programming period after another, to stimulate growth, inducing feedback effects that also involved administrative procedures. Conversely, the Italian case confirms that in the absence of Hirschmanian principles, possibilities for escaping underdevelopment are deficient, creating rather a “trap” from which underdevelopment cannot be overcome. After ten uncertain years, the final decision as part of the institutionalization of the Nuova Programmazione was the creation of a partially central and partially regional decision-maker for development. Nevertheless, the regional component prevailed. For more than a third of its activity, the Department for Development and Cohesion Policies (DPS) had few resources, and it was not fully able to centrally coordinate policy implementation, due to the effects of government changes on both its activities

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and its choices of economic policy. In more general terms, its establishment institutionalized the clientelistic and informal roles that existed between center and periphery (i.e., State-Regions) and regional and local actors. As a consequence, neither strategic territorial choices nor thematic decisions were really made. Conversely, the aim was to satisfy the greater number of sub-national actors in all the territories of the Southern Italian regions. Finally, harmful ideologies and persistent cultural influences among local and regional actors are continuing to create traps for underdevelopment. A general incapacity to learn from previous mistakes prevails. In the eyes of the central government, the Italian Mezzogiorno continues to appear unable to use the development funds in an efficient way. For this reason, Cohesion Policy in Italy often appears to be left to its own devices. Considering institutional challenge, the Spanish system has drawn closer to the Hirschmanian model of decision-maker for development. Neither system opted to assign the general management of the policy to an independent body, like a National Independent Agency. Nevertheless, several differences are present in terms of competences between national and sub-national actors. The Spanish decision-maker for development has always been centralized, with all MAs that are collocated at the national level. While in Italy the MAs are positioned at the regional level and their internal composition continues to be influenced both by the electoral cycle and local interests, the Spanish approach allowed for greater stability in the central management of the OPs. Only around 30–35% of resources have ever been managed by the CCAAs from the first programming period to this day. In addition, strong central coordination has always been present, and the central decision-maker for development has decided to gradually assign new responsibilities to sub-national bodies. Nevertheless, the management of funds continues to be centralized, demonstrating that recent Spanish decentralization is largely symbolic in nature. This becomes apparent in two aspects. On the one hand, at the sub-national level, a general process of reinforcing the RDAs is present. Since these are autonomous and independent bodies, they show a lot of similarity to Hirschmanian principles. On the other hand, the Directorate General for EU Funding continued to play, even in the 2014–2020 cycle, “a strong coordination role in the development of the programs,” contributing its share in the elaboration of the national strategy as well (Yuill et  al. 2006, 70). As a consequence, “a number of regions are pushing for Managing Authority status to be devolved to the regional level” (ibidem, p. 68).

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A similar difference between the two cases can be seen in the different amounts of resources available to the respective decision-makers. Decisions in Spain have always been taken by a small number of people with adequate resources, while the Italian central actors only had adequate resources during the intermediate stage of the Nuova Programmazione. These were limited both before the establishment of the DPS and after 2006. The limitations were caused both by the increasing workload of the DPS over the years and by the absence of staff turnover. In addition, all previous DPS staff has now switched to the Agency for Territorial Cohesion. In other words, “since the establishment of the DPS, national staff continues to be the same, except for a few entrances and exits due to transfers and retirements” (interview with national official). Furthermore, as compared to other Agencies for regional development present in Europe, the Agency for Territorial Cohesion “did not have institutional celerity” (interview with EU official), and it only dealt with policy implementation. In fact, programming continues to be under the Department for Cohesion Policy, which was established under the Presidency of the Council. In light of the economic challenge, Spanish economic policy choices showed a greater closeness to the Hirschmanian theory of unbalanced growth. In terms of territorial priorities, starting from the first programming period, a selective choice was made, since significant amounts of resources had been used in order to begin development in Andalusia. This choice had positive effects in neighboring areas, as the national strategy was to invest in big infrastructural and multiregional projects. Today, investments in infrastructure and in Knowledge and Society continue to be a priority for central government. This view contrasts with that of AC governments, since they consider “territorial cohesion to be a priority” (Kölling 2015, 76). As a consequence, in terms of thematic priorities, a selective choice in favor of infrastructural investment was made. As part of this choice, the Spanish decision-maker for development was able to modify programming period after programming period based on the nature of infrastructural priorities and the results obtained from previous investments. By contrast, in the Italian Mezzogiorno, territorial cohesion was never prioritized and investments in small projects prevailed. Moreover, the focus on infrastructural investment was historically narrow, and investments in new territorial policies—without obtaining positive results from previous infrastructural investments—prevailed during the Nuova Programmazione.

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In dealing with the administrative challenge, field and documentary analysis shows that the Italian Mezzogiorno continues to fail to take advantage of its development potential, since an incorrect image of change still prevails among all the actors of the system. In fact, in keeping up with the legacies of the past, the idea continues to be that all actors of the system have to be completely involved in the implementation system. This is accompanied by a general failure to recognize that drastic change is necessary. Several elements can help us understand why. First, Italian administrators continue to give priority to the control of expenditure over programming, which becomes apparent in the tendency to spend all funds in the last two years available. Second, Italian governments in the last decade paid little attention to the Mezzogiorno issue and to the Cohesion Policy more specifically. The latter is to a large extent caused by the cultural idea that Mezzogiorno will never be able to grow and by the observation that very few administrative learning-by-doing processes were realized in Southern Regions. A process of retrenchment in terms of management, monitoring, and evaluation characterized Southern administrations during the last programming period. Third, in several interviews with national and regional officials, a passive general observation regarding Italian procedures came to light. Answers such as “It is the way it has always been done,” “This is how it’s done in the other regions as well,” or “We have to continue to be an Objective 1 region in order to have more funds” have been given. Finally, circumstances were more favorable in Spain than in Italy. For example, the fact that Spanish regional policy disappeared after 1978 allowed for an easier adaptation to the European body, since the legacies of previous management were minimal. Moreover, the fact that in 1989 the underdeveloped regions were not concentrated in only one part of the national territory granted the decision maker more freedom in economic policy choices. Nevertheless, without a clear choice at the center, these policies would not have had positive effects and the favorable Spanish circumstances would not have been exploited.

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5.2   Lessons for Studies on Europeanization and Economic Development My research drew several lessons for studies on Europeanization and economic development. On the one hand, it contributed to the ongoing debate on the Europeanization of national and sub-national actors in terms of institutional and administrative change. On the other hand, it provided a great deal of information on the possible benefits of endogenous development, the idea of promoting the State, and the role of independent development agencies in promoting growth. In terms of institutional change, this study is in line with the most recent debate on the validity of the “goodness of fit” hypothesis, since it confirmed that domestic actors are increasingly predisposed to the “usage” of EU Cohesion policy within the confines of their preferences and traditions, since this policy mobilizes strategic and legitimizing usages within MSs. In fact, my research has shown that the Europeanization process of national and sub-national institutions in Spain and in Italy had been to a large extent conditioned by the legacies of the past, as well as by previously existing contexts. After a difficult ten-year period of adaptation, the previously informal and clientelistic rules have been institutionalized in Italy. In this context, the most recent Italian decisions to keep the MA within the regional administrations, to mitigate the possible use of substitute powers by the center, to institutionalize the role of the State-Regions Conference in the general process, and to assign an unusual role as a “director” to the Presidency of the Council of Ministers rather than opting for a strengthening of the powers of a technical and bureaucratic body such as the Agency could become, must be understood on the basis of the inter-institutional relations that historically prevailed in Italy. In other words, the persistency of these types of contractual mechanisms between the State and the Regions are more and more recalling the Extraordinary Intervention experience, and its path dependency constraints. Conversely, the absence of a pre-existing structure for regional policy in Spain allowed for the application of EU principles to take place with greater ease. In this context, the legacy of the Franco authoritarian regime continued for a long time to influence the institutional solutions adopted and strengthened the centralistic approach in the management of policy that today continues to differentiate Spain from other MSs with a similar institutional architecture. In terms of administrative change, the study showed that retrenchment is also a possible solution in the field of EU Cohesion Policy

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implementation. In fact, even if the choice of participating in the policy applies to all domestic actors (Leonardi 2005), the Italian case at both national and sub-national level showed that a retrenchment is possible as compared to a previous consolidated type of administrative change. The administrative process which happened in Italy until the mid-2000s had been subordinated to the political leadership that previously promoted it, without simultaneous consolidation of a strong technical leadership able to autonomously reinforce newly established administrative practices. In addition, my study confirmed that in adopting a negation, adaptation, or learning strategy, the choice of domestic actors is not only intentional or unintentional, but it could be induced, from above, by a central garrison. Second, my research showed the limits of the approach on endogenous development. According to several scholars (among them: Lucàs 1988; Romer 1990), the possible benefits of endogenous development could be realized by increasing the human capital and their professionalism through the activation of local learning processes. The limits of this approach are clearly visible by analyzing not only the empirical evidence of the Italian case, but also the defects found in Spain during the 2007–2013 programming period for a great new emphasis placed on the issue of the R&D. On the contrary, my analysis showed the benefits of a state-centered model of development able to create the conditions for success of a development policy and economic growth more generally. By using the dichotomy between a soft and hard state formulated by Myrdal (1970), the Spanish case appeared to have the characteristics of the latter due to its capacity to promote informal roles that had the positive effects on consolidating efficient management structures and an autonomous public administration. Similarly, the analysis of the Spanish case confirmed the positive role that independent development agencies could have in promoting development. Based on some cases of successful development policies that have benefited from independent development agencies with competent and highly qualified technical personnel who have been delegated the management of the same public policies, such as the Ireland Industrial Development Authority in Ireland and the Welsh Development Agency, my research confirmed the role of these types of institutions in achieving a greater administrative performance.

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5.3   Policy Recommendations The main policy lesson that can be drawn from my empirical analysis is that the presence of central coordination positively affects the management of a structural fund. Comparing the administrative performances of the four ERDF OPs that I investigated showed that, in presence of a multi-level and multi-actor arrangement, the larger the central garrison, the greater the administrative performance in terms of programming, project generation/approval, management, monitoring, and evaluation. To sum up, the Italian governance system places the Management Authority (MA), Audit Authority (AA), and Payment Authority (PAU) under the care of regions, and, therefore, the management of the OPs is completely under the control of sub-national governments. In terms of programming, the regional actors decide on development strategies and investment priorities, as well as elaborate the programming documents and negotiate them with the Commission; in terms of project generation/ approval, they autonomously decide the characteristics of public calls and regional institutions deputed to their management and control; in terms of management, they have a direct interlocutor with the local beneficiaries during the different phases of the implementation of the projects; in terms of monitoring, they have to elaborate regional monitoring systems and directly support the beneficiaries for the uploading data; in terms of evaluation, they have to create and consolidate evaluation units aimed not only at producing frequent evaluation reports but also supporting with their activities the more general programming. This system significantly differs in Spain, where all previous activities deputed to the MA are not directly managed by the regions, but by the central MA in Madrid. In addition, regional actors have to manage the project generation/approval phase on the basis of a common system of national rules, as well as within the recommendations provided daily by the MA. Only evaluation is directly managed by regional governments. The analysis showed that in the Italian 2007–2013 ERDF OPs, the programming phase was the most problematic due to the lack of programming capacity of regional governments and the perpetuation of logic aimed at reinforcing local patronage. As the case of Campania and Calabria showed, it also conditioned the other phases of implementation of the OPs and, above all, the management projects. Conversely, the greater national garrison that continued to be present in Spain during the four programming periods, characterized by strong centralization, facilitated the consolidation of a development strategy based on tangible and achievable projects. The negative performance that I found in terms of

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evaluation in Spain had to be attributed to the lack of a clear national strategy in this issue (at least until the fourth programming period). Hence, the policy recommendation for EU Cohesion policy implementation that was brought forth from my analysis should be taken into account for the management of the 2014–2020 cycle and, more precisely, for the place-based approach it is providing. A former analysis of its implementation, in fact, showed several defects on the parts of the local actors. These defects are appearing to be higher in Italy, being in Spain mitigated by the perpetuated presence of a national garrison that had voluntarily decided to top-down monitor the implementation of the place-based approach. In Italy, instead, these defects continued to be the same I found in my empirical analysis since the first programming cycles and, above all, during the implementation of the TIPs. New institutional solutions of Hirschmanian memory should also be used for the implementation of a place-based approach in Italy in order to stimulate the reinforcement of the administrative capacity of local actors. This seems to be the direction of the recent “NOP Governance and Institutional Capacity ESF-ERDF 2014–2020,” which is aimed at elaborating new institutional modalities in order to create the conditions for greater dialogue between the actors. At the time of writing, on the basis of the empirical evidence collected in the first four and a half years of implementation of this OP, I am not sure that this innovative method will have the positive desired effects. As my book has showed, in fact, the institutionalization of these practices requires the sharing of a common belief system by all the public and private actors involved. This condition continues to be far from fully realized in Italy.

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Index1

A Absorption capacity, 148 Adaptation, 28, 29, 31, 32, 34, 100, 111, 122, 150–158, 176, 177, 223–224, 230, 249–251 Added value, 57, 66, 72, 79, 80, 142, 168, 217 Additionality, 17, 50, 52, 54, 68–69, 79, 85, 99, 121, 139, 142, 147, 189 Administrative capacity, xvi, 8, 22, 60, 61, 71, 91, 100, 101, 153, 155, 165, 169, 185, 234, 253 Administrative Capacity-Building Plan (ACP), 186, 189 Administrative change, xvii, xviii, 14, 21, 26, 32, 34, 36, 37, 100, 114, 119, 148–150, 152, 153, 159, 166, 168, 180, 181, 188, 224, 230, 234, 250, 251 Administrative learning, xix, 100, 165, 235, 249

Administrative performance, 38, 84, 105, 154, 159, 170–175, 180, 184, 230–232, 235–238, 252 Agenda 2000, 70, 71 Andalusia, 203–205, 218–220, 238, 248 Audit, 90, 91, 207 Autonomous Community of Spain (CCAA), 104, 198, 205–207, 210, 214, 217, 225, 228, 239, 247 C Calabria, 22, 38, 39, 114, 119, 147, 155, 175, 238, 252 Campania, 22, 38, 39, 114, 119, 147, 155, 159–175, 177, 181, 183, 184, 252 Capacity building, 66, 101, 103, 112, 152, 153, 227 Centralization, 91, 92, 95, 127, 129, 151, 252

 Note: Page numbers followed by ‘n’ refer to notes.

1

© The Author(s) 2020 M. Casula, Economic Growth and Cohesion Policy Implementation in Italy and Spain, International Series on Public Policy, https://doi.org/10.1007/978-3-030-36998-9

277

278 

INDEX

Civil society, 32, 66, 67, 112 Clientelism, 25, 118 Cohesion, xvi–xviii, 1, 2, 18, 20, 53, 71, 113, 139, 183, 187, 245, 248 Cohesion Fund (CF), 24, 59, 69, 74, 154, 219, 229 Cohesion Policy (EU Regional Policy), xv, xvi, 17, 50–56, 207, 225 Cohesion policy reforms, 50, 69–73 Cohesion Report, 71, 72 Commission of the European Communities (CEC), 2–4, 18, 24, 52, 53, 56, 58, 59, 61, 64, 66, 70–72, 79, 80, 82, 85–87, 90, 93, 94, 100, 119, 139, 141, 143, 147, 148, 152, 157, 158, 164, 179, 211, 218–221, 226, 229, 233, 234 Committee of the Regions (CoR), 69, 71, 74, 81, 152 Common Strategic Framework (CSF), 23, 24, 60–62, 65, 68, 78–83, 88, 92, 103, 122–125, 127, 131, 139–144, 149, 179, 208, 210, 218–221, 223, 226, 228 Community Initiative (CI), 57–59, 140 Community-Led Local Development (CLLD), 87, 239 Community Strategic Guidelines (CSG), 61, 62, 79, 80, 213 Concentration, xv, 17, 20, 50, 52, 56–60, 76, 85, 121, 141, 142, 145–147, 165, 171, 180, 183, 203, 204, 206, 220, 239, 240 Convergence, xv, xvi, 1–5, 10, 14, 15, 19, 21, 23, 24, 28, 51, 52, 58, 59, 61, 78, 94, 104, 148, 221, 233, 234, 245 Convergence Objective, 58, 81 Council of the European Union (CEU), 69, 71, 73–76, 81, 82

D Decentralization, 49, 50, 61, 64, 78, 84–86, 88, 90, 91, 95, 96, 111–189, 238, 246, 247 De-commitment rule, 86 Delors, J., 99, 139 Department for Development and Cohesion Policies (DPS), 112–114, 127, 131–137, 143, 144, 151, 154, 158, 180, 246, 248 Development Plan (DP), 9, 26, 60, 73, 79, 82, 83, 98, 119, 121, 152, 202–205, 203n1 Directorate-General for Regional Policies and Cohesion (DG Regio, DG XVI), 3, 51, 65, 148 E Economic and Monetary Union (EMU), 18, 19, 53 Economic and Social Committee (ESC), 71, 74, 152 Economic growth, xv–xviii, 3, 18, 22, 52, 145, 198, 202, 219, 228, 229, 245, 251 Employment, xvi, 51, 58, 76, 77, 90, 139, 141, 163, 179 Endogenous development, theories, 118, 143 Enlargement, 3, 52, 70, 222 EU institutions, 28 European Agricultural Guidance and Guarantee Fund (EAGGF), 17, 51, 209 European Community (EC), 2, 17, 19, 55, 59, 89, 184–189, 199, 205, 232, 237, 239 European Economic Community (EEC), 1, 4, 51, 52, 54

 INDEX 

European Investment Bank (EIB), 50, 51, 54 Europeanization, xvi, xix, 25, 27–30, 36, 96, 97, 100, 250–251 European Parliament (EP), 71, 74, 75, 81, 152 European Regional Development Fund (ERDF), 17, 24, 38, 53, 54, 57, 105, 125, 144, 146, 154, 155, 157, 205, 207, 219–221, 229, 233, 234, 239, 240 European Social Fund (ESF), 17, 51, 125, 140, 209, 210 European Structural and Investment (ESI funds), 67, 82, 104 European Union (EU), xv, xvi, xviii, xix, 3, 4, 17, 19, 21, 22, 25–30, 33–36, 34n3, 49, 50, 52–54, 56, 57, 66, 69, 70, 80–83, 96, 99, 102, 102n3, 111, 120, 126, 128, 132, 143, 145, 157, 176, 187, 188, 199, 205–207, 210, 213, 215–217, 220–223, 229, 238, 240, 245, 250 Evaluation, xv, 2, 14, 21, 24, 26, 38, 50, 55, 56, 60, 64, 65, 67, 72, 80, 83, 86, 91–96, 100, 103, 105, 112, 120–123, 127, 132, 140, 144, 148–154, 157, 158, 165–170, 175, 176, 181, 182, 184–186, 189, 197, 206, 207, 223–232, 235, 238, 240, 241, 249, 252, 253 F Financial resources, 19, 26, 52, 80, 124, 130, 132, 133, 136, 137 G Galicia, 38, 39, 197, 203–205, 220, 232–238 Global financial crisis, 70, 237

279

Governance, xv, xvi, 35, 63, 68, 72, 97, 98, 112, 113, 128, 134, 183, 185, 186, 188, 189, 211, 214, 235, 238, 239, 252, 253 Gross Domestic Product (GDP), xvi, 2–4, 22–24, 38, 39, 58, 59, 76–78, 221, 222 Gross National Product (GNP), 2 H Hirschman, A. O., xvii, xviii, 7–10, 24, 25, 96 Hirschmanian approach, xviii, xix, 25–27, 37, 105, 134, 175, 208, 217 I Implementation, xvi, 5, 15–24, 49, 83–96, 114, 197, 245 Implementation gap, 67, 68, 91, 184, 240 Infrastructure investments, 117 Institutional actors, 131, 173 Institutionalism (neo-­ institutionalism), xix, 96 Integrated Development Operation (IDO), 55 Integrated Development Programme (IDP), 54, 54n1 Integrated Mediterranean Programme (IMP), 55, 57, 119, 120, 159, 177 Integrated Territorial Investment (ITI), 87, 239, 240 Inter-governmental relations, 121 Intermediary body (IB), 210, 214, 215, 217, 239–241 International Bank for Reconstruction and Development (IBRD), 115

280 

INDEX

Ispettorato Generale per i rapporti finanziari con l’unione europea (IGRUE, General Inspectorate for Financial Relations with the European Union), 128, 157, 169, 174 Italian Evaluation Unit (NUVAL), 134, 151 Italian regions, xvi, 22, 123 Italy, xvi, xviii, 1, 3, 15–24, 37, 104, 113–115, 121, 122, 127, 128, 131–133, 136, 139, 141, 146–154, 156–158, 168, 180, 184, 185, 188, 189, 200, 245, 247, 249–251, 253 L Leadership, 114, 134, 135, 161, 162, 170, 176, 177, 180, 181, 184, 251 Learning, xix, 27, 31, 33, 34, 38, 81, 93, 99–103, 130, 133, 134, 144, 145, 149–158, 161, 162, 165, 217, 223–227, 230, 232–241, 251 Leonardi, R., xvi, xvii, 1–3, 6, 17–19, 23, 31–34, 55, 68, 69, 100, 137, 180, 251 Less developed regions, 4, 18, 19, 22, 51, 59, 222 Lisbon Agenda (Lisbon Strategy), 81, 90, 100, 222 Local authorities, 124, 131, 172, 203, 237, 240 Local development, 146, 164 M Management Authority (MA), 85, 88–90, 94, 97, 104, 113, 131, 137, 138, 155, 156, 161, 162, 173, 178, 187, 189, 211–218, 224, 231, 236, 237, 239, 240, 246, 247, 250, 252

Member State (MS), xvii, 1, 3, 4, 16–18, 20, 21, 25, 29, 35, 38, 49, 51–54, 56–58, 60–68, 70–86, 88–98, 103, 152, 184, 217, 218, 222, 225, 238, 250 Mezzogiorno, 3, 22–24, 112–115, 117, 118, 121, 135, 137, 139, 141, 143, 144, 152, 170, 187, 228, 247–249 Monitoring, xv, 5, 14, 21, 26, 38, 50, 55, 56, 60, 63–65, 67, 80, 83, 86, 88–91, 95–97, 100–103, 105, 112, 121, 130, 132, 148–151, 153–155, 157, 166–169, 173, 174, 181, 183, 184, 187, 197, 206, 207, 209, 223–226, 230, 232, 234, 235, 237, 249, 252 Monitoring Committee (MC), 55, 64, 65, 88, 89, 91, 102, 127, 151, 167, 169, 238 Multi-Annual Financial Framework (MFF), 75 Multi-level governance, xv, 25, 30, 67, 86, 98, 131 N Nanetti, R.Y., xvii, 10, 17, 18, 55, 63 National Strategic Reference Framework (NSFR), 61, 79, 145, 146, 213 Negation, 31, 32, 34, 79, 100, 148–150, 166, 251 Nomenclature of Units for Territorial Statistics (NUTS), 2, 4, 76 O Objective 1 regions, 22–24, 69, 139, 144, 145, 219–221, 249 Operational Programme (OP), 16, 38, 85, 87, 88, 90, 94, 101, 102, 105, 106, 123, 125, 140, 146, 159–164,

 INDEX 

169–175, 177–179, 181, 185, 186, 197, 209, 214, 215, 224, 226, 230–232, 235–239, 241, 253 P Partnership Agreement (PA), 62, 67, 91, 184, 186, 239 Partnership principle, xv, 63–67, 120, 123, 125, 132 Path dependency, 36, 188, 250 Payment Authority (PAU), 84, 208, 224, 252 Plurifund Operational Programme (POP), 105, 163, 167, 171 Process tracing, 104 Programme Complement (PC), 61 Programming, xv, xvi, xviii, xix, 15–17, 20–23, 26, 27, 36–38, 49, 50, 55–70, 72, 73, 76–79, 81, 83–88, 90–106, 111, 113, 114, 117–124, 126, 128–132, 134, 136–142, 144–150, 152–168, 170–172, 174–182, 184–189, 197–199, 205, 207–215, 217, 218, 220–241, 246–249, 251–253 Purchasing Power Standards (PPS), 2, 23, 38, 39 R Regional Competitiveness and Employment (RCE), 58, 62, 81, 94 Regional Development Agency (RDA), 204, 206, 210, 211, 214, 217, 228, 236, 246, 247 Regional development, theories, 62, 170 Regionalization, 131 Regional policy, 16–18, 20, 22, 25, 30, 35, 58, 63, 77, 96–99, 111,

281

113, 116, 120–122, 134, 136, 137, 146, 157, 199, 203–206, 211, 249, 250 Responsibilities, distribution of, 123 S Single European Act (SEA), 2, 17, 18 Single Programming Document (SPD), 60, 61, 65, 79, 93 Socio-economic actors, 64, 102, 120, 180, 236 Spain, xvi, xviii, 3, 15–24, 37, 79, 104, 139, 140, 197, 199, 200, 202, 205–208, 211–226, 233, 235, 239–241, 245, 246, 248–253 State actors, xvii, xviii, 6, 14, 15, 245, 246 Statistical effect, 22 Strategic choices, xviii, 9, 36, 72, 97, 105, 117, 141, 189, 203, 218, 221, 229, 232 Structural funds, xv–xviii, 14, 20, 24–27, 30, 33, 35, 50, 55, 56, 61, 64, 73–85, 87, 90–92, 96, 100, 111, 113, 123, 124, 129, 131–134, 139, 148, 150, 159–162, 168, 175, 177–179, 185, 187–189, 198, 208, 209, 211–213, 215, 219, 225, 226, 228, 232, 233, 237, 238, 252 Sub-national actors, xv, xvi, xix, 14, 16, 17, 21, 25, 36, 49, 67, 69, 77, 84, 86, 95, 97, 98, 103, 113, 117, 123, 126, 128, 142, 150, 155, 177, 208, 210, 211, 213, 223, 238, 245, 247, 250 Sub-national authorities, 20, 60, 86, 102 Sub-national governments, 22, 55, 252 Sub-national level, xv, 19, 21, 31, 38, 64, 83, 150, 155, 245, 247, 251

282 

INDEX

T Territorial Integrated Programme (TIP), 143, 145, 164, 165, 170, 179, 253 Third sector actors, 56, 169, 214 Treaty of Rome, 1, 3, 17, 50

U Unbalanced growth, 8, 9, 218, 246, 248 Unemployment, 57, 76, 201, 220 United Kingdom (UK), 61, 219