STRUCTURE AUTHORITY LOCAL DENMARK’S REFORM OF STRUCTURE AUTHORITY LOCAL DENMARK’S REFORM OF JOURNAL OF JOURNAL OF NORDREGIO NORDREGIO municipalities shouldDenmark have How manycountiesand in thefuture? THE ADDEDVALUEOF THE ADDEDVALUEOF p. 7 THE STRUCTURAL THE STRUCTURAL A NORDICPERSPECTIVE FUNDS: FUNDS: p. 21 No. 1 March • Volume 1 – 2004 www.nordregio.se Fa T Sweden SE-111 86Stockholm Box 1658 NORDREGIO FEATURE RIGHT NOW NEWS CONTENTS JOURNAL OF ADRESSES: MARGARETA DAHLSTRÖM CHRIS SMITH JON P.KNUDSEN HALLGEIR AALBU l +4684635400 el. NORDREGIO x +46 84635401 8TRANSNATIONAL CO-OPERATION – 18 1THEADDEDVALUE OFTHESTRUCTURALFUNDS: 21 3370YEARSOFGOVERNANCE 13 5REGIONALGOVERNANCE– 15 6 4 7 3 IN DENMARK NEED FORLOCALGOVERNMENTREFORM AND SOCIALCAPITAL BUILDING AN INSTRUMENTFORORGANISATIONAL LEARNING LATEST DEVELOPMENTSINNORWAY TRENDS, MODELSANDTHE COMING TOANEND? STRUCTURE REFORM OFDENMARK’SLOCALAUTHORITY EDITORIAL A NORDICPERSPECTIVE IN SHORT Language Editor Director Editor development, established bytheNordicCouncil ofMinisters. Nordregio isacentre forresearch,educationanddocumentation onspatial NORDIC COUNCILOFMINISTERS E-mail [email protected] T Norway NO-4780 Brekkestø Espevik JON P.KNUDSEN l +4737275690 el. Book ReviewsEditor ISSN 1650–5891 C Subscription: [email protected] charge. Allarticlesexpresstheviewsoftheirauthors. The journalappearsquarterlyandisdistributedfreeof Nordic CentreforSpatialDevelopment(NORDREGIO). Journal ofNordregioisownedanddistributedbythe Fa T Sweden SE-111 86Stockholm Box 1658 Nordregio MARGARETA DAHLSTRÖM opyright ©JournalofNordregio l +4684635400 el. x +46 84635401 No. 1 March • Volume 1–2004

www.osigraf.no 4505 frontpage photo: photobank JOURNAL OF NORDREGIO EDITORIAL 3

This is remarkable as it contrasts the fragmented municipal structure unable CH-CH-CH- current discussions in Denmark, to conceive and integrate policy sche- Finland, where such a regional test case mes on a broader regional scale. is going to be set in place in Kainuu This warning should be heeded in CHANGES… next year, and in Norway where the the other Nordic capitals as well where debate on the regional administrative national policies are not too precise, to systems lingers on nurtured by a recent put it gently, concerning the tasks of governmental report on the regional regional planning. effects stemming from broad sectoral policies (Effektutvalget). The Norwegian In the end, changes can occur in report is primarily technical in nature many ways. To think, describe and even though it does nevertheless point to the dream them may seem easy, but to set need for a strengthening of regional them into practice will often prove hard

David Bowie was certainly not com- menting upon the present develop- Proposing six models to alter the traditional county and municipal ments in Nordic administrative thin- structure of the country, the commission has stuck to its professional king when he wrote his famous song guidelines and left the politics to the politicians. on the fluctuating aspects of life in general, but the odd title is nevertheless the most striking common denomina- tor to describe this winter’s Nordic dis- coordination in the administrative sys- as old habits, vested interests and syste- cussions on future regional administra- tem in order to enhance its overall per- mic obstructions all work in favour of tive practice. formance. More interestingly perhaps the proven solutions and inherited from a policy point of view is the fact that administrative patterns. Decades after The most salient case is of course that the report’s conclusions are going to be the last important municipal reforms in of Denmark; where the Structure processed by a national commission on the four large Nordic countries, there Commission (Strukturkommissionen) regional policy (Distriktskommisjonen) are inhabitants and voters longing for has stirred a debate that certainly will which is going to present its conclusions the old entities to be restored. In last until the elections in 2005 if not for in September. Norway as in Sweden some municipal longer. Proposing six models to alter divorces have been recorded recently to the traditional county and municipal One can thus ask whether or not these substantiate the case. structure of the country, the commissi- initiatives reflect more general tenden- on has stuck to its professional guideli- cies in respect of a need to maintain Administrative reforms may be about nes and left the politics to the politici- and monitor administrative systems meeting rationality with a fresh mind, ans. It will soon become obvious, as regardless of national context. Whereas but the affective side of it should never- was demonstrated when a similar com- recent efforts in many countries in theless not be underestimated. There mission proposed alternative adminis- Europe have been put in place to meet may, as Paul Simons claims, be fifty trative models in Norway in 2000, that the need for enhanced economic ways to leave your lover. But, as we all it is much easier to hatch a set of growth and regional innovation polici- now, most of them are for theoretical models than to implement them. es, the obvious need to overhaul the considerations or songwriters only. Though the political climate for impor- administrative system has either been In this landscape of prophesised and tant changes, it should be admitted, neglected or left in the conceptual debated administrative changes, it seems much riper in Demark in 2004 limbo of governance and partnership should be mentioned that the Icelandic than it was in Norway 2000. arrangements. processes of municipal mergers proce- In Sweden a commission on adminis- A recent Finnish experience exempli- ed according to a timetable not set by trative division of labour fies this dilemma. When the OECD ter- reports and commission, but a working (Ansvarsutredningen) at the end of ritorial report on the greater Helsinki practice of negotiations and referenda. 2003 presented a first report on possible region published its analysis last year, Is this, at last, something to be inspi- responsibility patterns in the regional the Finns as ever expected praise for red by? administrative system. One of the basic their advanced policy initiatives on inn- discussions undertaken by the commis- ovation and technological renewal. sion is whether the main responsibility Instead they where told that the for regional policy initiatives and coordi- Helsinki metropolitan region suffered nation should reside with the state or from bad management. Geographically the municipalities. The obvious third manifest social cleavages were growing, case, to identify a more politically potent while housing and other infrastructure regional level of activity, is curiously policies were not adequate et cetera. enough not even mentioned. The main problem was identified as a 4 IN SHORT JOURNAL OF NORDREGIO

IN SHORT…

cooperative political board be establis- value in supporting the development of hed that is capable of dealing with ques- the present regional centres program- tions concerning physical planning, mes into a more elaborated regional housing, transport, regional develop- centres policy. West Coast Growth Ambitions ment and relations between the metro- Following the nationally conceived regio- politan region and the state. The report Cooperation Even in the Future nal development scheme that was launc- recommends that a legal basis should hed by the Government last year, the four be prepared as an underpinning for the Having presented a preliminary report coastal municipalities of Holmsland, board’s operation. The practical coope- on the future of the Finnish regional Ulfborg-Vemb, Thyborøn-Harboøre and ration is going to take place, it has alre- administrative system on the 26th of Hanstholm have joined with regional and ady been proposed, in existing munici- February, the rector of the University of national authorities to present a develop- pal and regional bureaucracies and on a Lapland, Esko Riepula, prescribes the ment scheme to make these fishery- project basis, thus giving the chief future administration of the regional dependent communities more diversified municipal officers a key role in the daily policy measures to be kept on a coope- and thus able to meet future occupational operations. rative and project basis as was previous- needs. This is necessary, the mayors of ly the case. There is no need for buil- the municipalities argue, to spark growth ding new regional administrative struc- National Goals for Regional Policy in otherwise peripheral areas. tures, Riepula concludes. On the natio- Adopted nal level, though, he advocates a more Think-Tank on Future Growth On 15th January the Government concerted national administration of the regional development budgets suppor- The Minister of Economic and Business adopted a set of revised goals for the Affairs has commissioned a think-tank regional development policy field. ted by a regionally recruited national with a view to offering proposals and sce- Following already well-known paths of board charged with channelling the narios for coping with future economic project-organisation, two features various regional ambitions and policy growth and business development in should be marked here as being of par- inputs into the national process of poli- Denmark. Representatives in the think- ticular interest. Firstly the lessons from cy formation. thank come predominantly from the the Centres of Expertise and Urban Danish business community and are tas- Centres Programmes are combined in ked with considering the impact of globa- an effort to enhance the performance of lisation on the country’s economic life. important second cities, such as Tampere, Turku, Oulu, Jyväskylä, Cottages in the Coastal Periphery Kuopio, Lahti, Lappeenranta/Imatra Commission to Analyse Alternatives to and Vasa. Secondly special measures Social Security Contributions The Government has recently decided to were announced to strengthen the open up some peripheral coast areas for weak regions of the east and north, Following the recent compromise bet- new summer cottages. The number of cot- notably Kainuu and Lappi. ween the European Surveillance tages to be established is limited to 8 000 Authority (ESA) and the Norwegian in the country as a whole with the argu- Mixed Evaluation of the Urban Government on important amend- ment that this will make a contribution to ments to the regionally differentiated Centres Programme regions that otherwise have a meagre eco- social security contributions, the nomic basis. The decision is none the less Having met with a lot of interest as a Norwegian government has charged a contested as, according to its critics, it pilot project in regional policy design, commission to analyse the potential violates important obligations to environ- the Finnish Urban Centres Programme alternative arrangements to be used for ment protection. has recently undergone a mid-term regional business support in certain evaluation from Net Effect Oy. The eva- peripheral areas. The commission is to luators point to increased specialisation conclude before the summer. and dynamism in the regions included in the programme. They also highlight ESA Accepts New Transport Support the need for a number of improve- Cooperation in the Greater Helsinki Arrangement ments in the programme in the years Region Needs a Legal Basis ahead. These suggestions imply the The European Surveillance Agency (ESA) has accepted a new transport sup- Jussi-Pekka Alanen, commissioned by clearer involvement in the programme port arrangement comprising most of the Government to propose new forms of various state ministries and the pro- Northern Norway, and peripheral regi- of governance in the Helsinki metropo- vision of a better -coordinated regional ons in the central and western part of litan region, presented his report on 2 structure of initiative and implementati- the country. This regime will be imple- March. The report proposes that a new on. The Ministry of the Interior has already announced that the report is of mented as of 1st January 2004. JOURNAL OF NORDREGIO IN SHORT 5

The measures have been adopted as a consequence of the changes made to the regionally differentiated social secu- rity contributions cited above.

Processes on municipality and county mergers Responding to a governmental initiati- ve, the Association of Local and Regional Authorities has decided to join in a nationwide project to analyse the conditions for future changes in muni- cipal and county structures.

Worry over the Future of Local INVITATION TO SEMINAR Government The future of local government should be safe-guarded by strengthened legal Finance, planning and economic measures, the Swedish Association of Local Authorities and the Swedish development: what next for urban Federation of County Councils note in a demarche to the Public Committee regeneration in Birmingham? charged with reviewing the competen- ces within the Swedish administrative Presentation by Dr Jane Pollard, senior lecturer at the Centre for Urban and system (Ansvarskommittén). The two Regional Development Studies, University of Newcastle upon Tyne, UK organisations fear that the boundaries of competence could be so moved as to Tuesday 27 April 2004, 13:15 -15:00 significantly diminish traditional local political autonomy, as the legal basis of such local powers has traditionally This seminar considers the strategy of city centre regeneration in been more de facto than de jure. As Birmingham, UK and how such extensive projects have impacts such, they have asked the Government on the city’s diverse economic communities. It presents a study of to look into this question when it con- Birmingham’s historic Jewellery Quarter, a once proud Marshallian siders its future ambitions for constitu- industrial district in the nineteenth century, and how the regenera- tional amendments. tion project has comprised attempts to rejuvenate this area. The conclusions stress that it is important to understand the “bottom up”, daily lived experiences of “the economic” as understood and practised by the city’s entrepreneurs and residents.

The seminar is organised by the Department of Human Geography at Stockholm University in cooperation with the Nordregio Academy. It is free of charge and open to students, researchers and practitioners. The seminar takes place at the Department of Human Geography at the Stockholm University Frescati Campus in the Geo-Science Building (Geovetenskapens hus), room X30. For directions see: http://www.humangeo.su.se/eng/department/locati- on/way.htm

Enquiries: Brita Hermelin ([email protected]) 6 RIGHT NOW JOURNAL OF NORDREGIO

mented in Denmark. This was an effec- and handicapped adults. The same app- tive reform, which has demonstrated its lies for comprehensive special educati- value for decades, but the time has on for school children. In both instan- NEED FOR come for a new perspective. In my opi- ces the aim is to distinguish more clear- nion, the time has come for a reform ly between areas of responsibility, resul- LOCAL which will result in strengthening and ting in better co-ordination of tasks to ensuring the future of local govern- the advantage of the individual citizen. ment. GOVERNMENT As far as the labour market is concer- ned, municipalities should take over the Placing the citizen at the centre REFORM IN localised labour market tasks of the cen- It is crucial that the upcoming reform tral government which are today provi- DENMARK place citizens at the centre. We must ded by the Danish Manpower offices ensure that all citizens become part of (Arbejdsformidlinger). In the future’s strong organisations, which can also public sector, it should make no diffe- look after society’s disadvantaged rence whether the unemployed have groups. unemployment insurance or not, or whether they are potential labour mar- A reform of responsibilities and struc- ket participants or not. ture is a singular opportunity to provide citizens with simpler and better service Need for structural changes than is currently the case. This is why local authorities in Denmark are also It is evident that a changed division of concerned with making local govern- responsibility must and shall mean ment the citizens’ main entranceway to changes to the local government struc- the public sector. There is broad con- ture. In my opinion, larger regional sensus among Denmark’s local govern- hospital districts should be created, to ment politicians that, to ensure contin- replace the current regions. Coupled By Anker Boye, uity in service provided to citizens, with assurance of high quality in the Mayor of Odense (Social Democrate) and three areas of responsibility should be future hospital system, larger regions Vice-chairman of Local Government transferred to the municipalities from could focus on regional development. Denmark (Kommunernes Landsforening) the national and regional level. These Major initiatives are needed with regard are social welfare, comprehensive speci- to economic development, overall plan- al education and labour market policy. ning and traffic. A reform of the responsibilities and structure of local government is underway The objective, seen from the citizens’ One consequence of the increased in Denmark. The public sector has been perspective, is to give these services tasks is the necessity of having larger subject to a major examination, and now more continuity and transparency. municipalities. Today over 100 of the political debate is in high gear. The Responsibility for connected tasks Denmark’s 271 municipalities have less Danish parliament «Folketinget» is should, to the greatest extent possible, than 10,000 residents. The minimum expected to nail down the framework for be placed with the same authority. The population size for a municipality needs a reform in the course of the coming year. citizens should be able to see clearly to be substantially increased. A mini- This article presents a personal view of who they can hold responsible. mum municipal size of 30,000 resi- what such a reform should include. dents would be a reasonable figure In the field of health care, which com- here. The point of departure should be prises a fourth important area under that municipalities of the future should debate in Denmark, it is proposed that or several years now the public sec- to the greatest extent possible have a from now on the municipalities pay for F tor has been the focus of serious town centre. debate in Denmark. Which should not health services. This will give them an come as a surprise, since in recent incentive to work towards speeding For local governments, a reform of years we have been experiencing major admissions and discharges from hospi- their tasks and structures is a great changes in the premises for public sec- tals, to work on health prevention, etc. chance to inject new life and new visi- tor activities. One could mention, for As things are today, there are far too ons into the development of the welfare instance, increased demands from citi- many examples of citizens being left state we, too, wish to enjoy in the futu- zens, a dramatic change in the populati- out in the cold, because the regional re. The politicians should recognise the on structure, with more elderly people and local governments cannot agree hour has come. It would be a fatal mis- and fewer of working age, and tight who is to pay, e.g. for rehabilitation. take to let this historical opportunity public finances. This is disgraceful. pass by unheeded. The current organisation of the public As far as social welfare is concerned, sector dates back to 1970, when the last local governments should assume the local government reforms were imple- entire responsibility for children, youth Translated from Danish by Keneva Kunz JOURNAL OF NORDREGIO FEATURE 7

REGIONAL NORDEN IN THE MAKING

This winter has seen important developments occur in Denmark, Norway and Sweden respectively with regard to the reform of their regional admi- nistrative systems. In Denmark and Norway in particular, the temperature of the public deba- te on the future of municipaliti- es and regions has risen stee- ply. Though each of these deba- tes is of course nationally focussed they do nevertheless harbour important similarities. The Journal of Nordregio has therefore invited John Jørgensen, Noralv Veggeland and Göran Hallin to evaluate REFORM OF them and to draw up some markers for further debate. DENMARK’S LOCAL AUTHORITY STRUCTURE

Introduction If the counties are to exist at all, are they then to be headed by directly elected ithin a couple of days in January politicians, and should they uphold their 2004 the Danish government W right to levy their own taxes? The other issued two white papers, each contai- white paper, issued by ning suggestions for a wide and swee- Finansieringsudvalget, deals with the ping reform of the local authority struc- principles on which a reform of the local ture in Denmark. The white paper from government equalisation system could the so-called Strukturkommission dis- be based (Betænkning 1437, 2004). The cusses a new geographical structure for equalisation scheme, which equalises the public sector in Denmark John Jørgensen expenditure needs and the tax base bet- , (Betænkning 1434, 2004). The most Senior Research Fellow, PhD, Nordregio radical proposals in the white paper ween municipalities, ensures a more [email protected] would see Denmark’s three-tier system uniform relationship between taxes and supplanted by a two-tier system. The services as differences between rich and basic questions addressed by the white poor municipalities are levelled out. paper and argued out in the public deba- Although the Ministry of the Interior te that has taken place in the wake of its and Health issued both white papers publication are rather simple but nonet- they have not been directly co-ordinated heless they give rise to very complex in the preparation phase. However, in considerations: How many counties and the political debate that has taken place municipalities should Denmark have since they were published efforts have in the future? What division of labour been made to link the discussions about should be established between the state, local government reform to considerati- the counties and the municipalities? ons of the equalisation issue. 8 FEATURE JOURNAL OF NORDREGIO

Interestingly, Sweden is also in the sing this clash play a prominent part in and 1960s it had become apparent that process of evaluating its administrative the white paper: efficiency and demo- the traditional rural districts (sogne- structure and it is quite instructive to cracy. The latter being the issue of what kommuner) were inadequately placed to compare the mandates for the Danish structures can best secure accountabili- solve the tasks related to the emerging strukturkommission and the Swedish ty and citizens’ control. The two other welfare state. Furthermore, the munici- Ansvarskommittén (SOU: 123, 2003). dimensions that Keating identifies, i.e. pal privileges that the larger cities had In each country both issues, i.e. the distribution and development, do not upheld since medieval times were con- division of labour between the adminis- play any significant role here. As we sidered outdated. The result of the local trative tiers, and the size of the local already saw, the issue of distribution, government reform in 1970 was that authorities have been brought up for i.e. how the most equitable distribution 1,366 rural districts and 86 municipali- discussion, and in both countries this of services and tax burdens is achieved, ties (købstadskommuner) were amalga- has been done without discussing the is dealt with in a separate white paper. mated into 277 municipalities. At the special problems of co-ordination that The issue of development, i.e. which same occasion the number of counties face the areas around the larger cities. structures are best equipped to promote was reduced to 14 and the counties If, however, the processes and the con- economic growth is not really on the were strengthened financially and made tents of the work done by the commissi- agenda in the Danish white paper. responsible for hospitals, regional plan- ons in the two countries are compared Again this forms an interesting diffe- ning and the co-ordination of regional some interesting differences are revea- rence with the Swedish white paper, transportation - and later on for the led. Unlike Sweden, where the work of where the ‘developmental’ discourse is upper secondary schools. The local the commission has been divided into very prominent. Hence, despite the government act prepared the ground- phases, the Danish commission has length of the Danish white paper it can work for a decentralised welfare state. chosen to issue its analyses and propo- be seen as a rather abridged version of The counties and the municipalities sals at once – accordingly the Swedish the clash between arguments defending were thought to be large enough to take white paper is just under 200 pages in fragmentation and arguments for the care of welfare provision and indeed in length, while the Danish white paper consolidation and amalgamation of sub- the following years, more and more runs to more than 1,500 pages. If only national authorities. tasks were transferred from the state to for that reason alone the debates and the regional and the local levels. As the outcome of the debates will be inter- If the intentions of the Danish govern- counties and municipalities levy their esting to follow in the years to come. ment are fulfilled, the white papers will own taxes, and receive grants from the One particular thought-provoking diffe- inform the discussions that will eventu- state, the sub-national level actually dis- rence between the reports stems from ally take place in Parliament later this tributes one-third of Danish GNP, the fact that the Swedish white paper year, where the parliamentarians will which by far places Denmark as the discusses how internationalisation and discuss a proposal for the reform of most decentralised welfare state in the further integration within the EU pose local government. The reform is then world (the second being Sweden, where sub-national authorities with new per- set to take effect in 2006, when the one-fourth of GNP is distributed by the spectives and challenges, while this is next local elections will be held. local authorities). The largest areas of not discussed in the Danish white Paradoxically, if the reform is carried expenditure, accounting for more than paper at all. Indeed, such words as through on the premises laid out by 90% of all expenditures in the munici- ‘Europe’ and ‘European’ cannot be the two white papers, then the most palities are: child care, primary schools, found in the main report at all, while radical changes in the geography of care of senior citizens, and matters con- the EU is only referred to seven times public administration in Denmark for cerning roads and administration. in the 773 pages of the Danish white more than thirty years will hardly have The local government act resulted in a paper. The absence of an analysis of the been accompanied by any geographical municipal structure with a considerable surrounding world seems to be rather analysis. Neither with respect to an ana- variation in size (measured by numbers short-sighted, if not parochial, in what lysis of the surrounding world nor of inhabitants). The largest municipality is a rapidly changing world. Instead the when it comes to analyses of the impact is the City of Copenhagen with more Danish white primarily functions as a of the reform in various parts of the than half a million inhabitants, whereas discussion on the appropriate size of country and in various types of munici- the smallest municipalities have about sub-national authorities. palities. The implications of the latter should be clearer in the following, but 3,000 inhabitants, most notably in In a way the Danish white paper can some of the islands. Apart from the firstly some background information be read as a textbook case of the clash islands the smallest municipalities are and a description of the content of the between consolidationalists, who argue mostly to be found in the southern part white paper from the strukturkommis- that local governments should amalga- of the country (southern part of Jutland, sionen will be provided. mate into larger units to obtain the and on Funen, Lolland, Falster and most efficient scale of structure, while Western Zealand – and until the volun- Background producing more services for the lowest tary amalgamations in the later years cost, and the defenders of fragmentati- The local government structure in also on the islands of Bornholm and on. Indeed, two of the four dimensions Denmark was modernised at the begin- Langeland). This variation in size has that Keating (1995) uses while analy- ning of the 1970s. During the 1950s given rise to considerable problems JOURNAL OF NORDREGIO FEATURE 9

concurrently with more and more (also whereas the commission should not provision, subsidiarity, citizens’ legal more complicated) tasks have been scrutinize the ‘upper limits’. rights and the choice between different transferred to the municipalities. service providers, transparency and At the regional level the decentralizati- Hence, many minor municipalities coherence between competence and on of responsibilities and the growing have had to set up inter-municipal co- economic responsibilities (Bet. 1434:1, complexity of tasks, especially in the operations in order to fulfil their obliga- p. 12). To this list of criteria the mem- hospital sector, naturally invoked consi- tions, and to reap some benefits from bers of the commission added simplici- derations as to whether the tasks were economies of scale. In times of budge- ty and ‘dirigibility’ – the power to direct handled in an efficient way. This even- tary constrains within the public sector - (Bet. 1434:1, p. 22). The mandate pro- tually led to the appointment of a con- this has fuelled a debate on the appro- vides that the commission appraises sultative committee for the hospital priate size of municipalities in terms of various geographical criteria that could sector. In 2003 it concluded its work by economic sustainability. be use in the decision-making process, arguing that hospitals should be main- but it is specifically stated that the com- tained at the regional level (Ministry of Consequently, in the years before the mission should avoid providing any the Interior and Health, 2003). The commission was appointed examinati- conclusive statements on the geographi- complexity of the tasks, however, would ons of the connection between the size cal structure as such (Bet. 1434:1, pp. require that the counties should have a and expenditure level of local authoriti- 12-13). es drew significant attention in the population base of 400,000 to public debate. As investigations of 700,000 inhabitants, equivalent to 7-10 The commission has chosen to pre- municipal expenses, measured as net counties or hospital-regions. Again, this sent its considerations in the form of 6 operational expenditures and the costs has fuelled the debate on the appropri- ‘models’, or guiding principles, for the of providing various kinds of services, ate size of sub-national governments. reorganisation of the governmental showed that economies of scale were to structure: Parallel to the developments, descri- be obtained if the municipalities were bed above, undergone with regard to • Three-tier models, all levels headed by amalgamated, it was almost inevitable local welfare and service provision, elected politicians: that the reform discussions would focus qualitative changes that may eventually on this aspect. In one study it was Unchanged division of labour (betwe- redefine the conditions for local demo- shown that the lowest-cost authorities en the tiers), but with larger counties cracy have also occurred. A few of these have between 25,000 and 35,000 inha- and municipalities can be sketched out. One example is bitants (Ministry of the Interior and that tax-financed welfare and service "Broad county-model", where the Health, 2000), and in another study the provision under political control is counties, and to a certain extent the range was estimated to be between giving way to arrangements were the municipalities, are strengthened by 30,000 and 50,000 inhabitants users of welfare measures now pay for decentralising more tasks from the (Houlberg, 2000). Although it was such services – in full or in part. Does state level shown in the same two studies, that the this mean that the relationship between benefits of merging the smaller muni- politicians and the electorate is going to "Broad municipality-model", where cipalities would amount to less than 2% give way to institutions, which are fur- the tasks of the counties are reduced, of the overall local authority expenditu- nished with boards where users (rather while the municipalities have more re, the idea that merging authorities than citizens) are represented? Another tasks transferred from the state and was the way forward had attracted an example is that private enterprises are the counties inevitable momentum. So, when the competing with each other - and with • Three-tier models, politicians are elec- commission was appointed in 2002 it public service providers – to obtain ted directly at the state and municipal was widely accepted that larger units contracts for specified services. This rai- levels, but indirectly elected at the regio- were to be created. For an example, ses the question of how the quality of nal level: Local Government Denmark, an associ- welfare services is controlled. ation of Danish municipalities, accepted "Municipal-regional-model" (kommu- the mandate of the commission. It is The recommendations of the neregionsmodel), where the munici- interesting, though that the two studies Strukturkommissionen palities have more tasks to fulfil, referred to here actually pointed to the while the counties have reduced fact that disadvantages of scale also With this background in mind it is responsibilities, and are led by regio- could be detected. The fact that expendi- no wonder that the commission was nal councils where the councillors are tures have a U-formed relation to size asked to assess the advantages and dis- selected by (and presumably from ) did not influence the mandate for the advantages of different ways of organi- the politicians in the municipal coun- commission; hence it was not the con- zing the public sector. The commission ties cern of the commission to debate whet- was specifically asked to weigh the fol- her the larger municipalities should be lowing criteria against each other: "Party-regional-model" (partiregions- subdivided. To sum up, the discourse Efficiency and sustainability (economi- model), where the municipalities on the appropriate size of local authori- cally), democratic control, citizens’ par- have more tasks to fulfil, while the ties was limited to the discussion about ticipation and the dialogue between citi- counties have reduced responsibili- the ‘critical mass’ of municipalities, zens and politicians, quality in service ties, and are led by regional councils 10 FEATURE JOURNAL OF NORDREGIO

where the councillors are selected by an overrepresentation of local actors, or mission, has had quite a lot of support the parties represented in the munici- that regional functions should be gover- in the public debate. When it comes to pal counties ned by the state (for example with the question of the counties however regard to hospitals, regional planning the reform may very well turn out to be • Two-tier model, both headed by elec- and public transportation). a mixture of some of the models, for ted politicians: Furthermore, they argue that the wel- example either the broad county-model "State model", where all tasks are car- fare provision schemes and the need for or the broad municipal-model combin- ried out either by the state or the local economic policies would require ed with special-purpose companies wit- municipalities. larger units of no less than 30,000 hin certain areas – the latter would be inhabitants. in tune with the government’s ideas To a large extent the main report is a that more public areas should be sub- rather inconclusive display of the ‘pros’ The public debate ject to ‘marketization’ and privatization. and ‘cons’ with respect to the six models (this discussion is more than In the weeks prior to the publication As was the case with the main report, 100 pages long). It is now left to the of the white paper – and in the period the focus in the debate that followed its politicians to decide which model (or immediately after the day of issue – publication, has to a large degree dealt combination of models) shall be adop- politicians and decision-makers had a with the issue of size. It is striking ted. The main impression is that the busy time ventilating their views, however, that the debate evolves around first three models mentioned would which is understandable given the the problems of the present-day, where- further the process of decentralization, ‘technical’ and ambiguous messages of as the very obvious argument that what while the latter three would strengthen the white paper. The most dominant is considered to be an ideal size today the state’s role when it comes to co- feature in the debate at the national might be seen as inadequate in only a ordination, distribution and the questi- level is that the top-politicians in the few years time, seems to have been on of priorities. This is interesting, two largest political parties, the centre- somewhat ignored. There is still consi- because the question of ‘centralisation liberal party, Venstre, and the social derable uncertainty as to whether the vs. decentralisation’ was never previous- democrats, are in favour of rather dras- reform is going to allow for some vari- ly defined as being central to the consi- tic steps when it comes to merging local ance in size (Schmidt, 2003). Even if derations of the commission, as regards authorities, while the local politicians the political process condenses around the presentation of the mandate. from the very same parties, that domi- a certain minimum-size, counter-argu- nate local and regional councils are ments from those in the islands and With regard to the recommendations more reluctant to do so. Despite the the sparsely populated areas in concerning size, the commission asses- tensions within the centre-liberal party, Northwestern Jutland might lead to a ses that a minimum size of some which forms the current coalition renunciation of a very rigid minimum- 20,000 inhabitants would ensure an government with the conservatives, size. In the former case, the islands appropriate and professional handling Prime Minister Anders Fogh would have a better opportunity to of present-day tasks, while having some Rasmussen is pushing forward for a raise their voices. In the latter case the additional tasks added. A minimum- new local government act. The reform formation of municipalities covering size of 30,000 inhabitants would ena- will have to be based on an agreement large areas (according to Danish stan- ble municipalities to carry out more between the centre-right coalition dards) could be prevented. On the other substantial and complicated tasks than government and the social democrats; hand this would involve the formation can be dealt with currently – and scale otherwise the reform would not be fea- of municipalities dominated by rural economies might be reaped up until the sible. As the social democrats have been areas, which would go against the size of 34,000 inhabitants. It is thus a rather heavy proponents of preserving grain, because the commission has not very fundamental reform of the govern- the counties, the right-wing party, discussed the problems of peripheral mental structure, and if the minimum- Dansk Folkeparti, which in this rural areas at any length. size of 30,000 inhabitants is applied Parliament has usually the supported then only 40 of the 268 currently exis- At the regional level a more flexible the government, executed a volte-face ting municipalities will survive as admi- approach would allow for a solution to shortly before the publication of the nistrative entities – and more than half the problems of co-ordinating hospitals, white paper. Rather than risk being the population will find themselves in public transportation and planning unable to exert any influence on the newly formed municipalities. issues in a wider Copenhagen metropo- reform it chose to give up arguing that litan area that might cover most of, if the counties should be abolished. The three independent members of not all, of Zealand without creating Instead they are now opting for indi- the commission have produced a sepa- equivalent mega-regions in Jutland, rectly elected regional councils without rate statement in which they advocate which is what most commentators, independent rights to levy taxes. In that direct elections are important in especially those from Jutland, have war- what form the counties will survive has relation to accountability and transpa- ned against. rency. They argue that rather than yet to be seen. It can be noted, however, have indirectly elected regional tiers, that the argument about regional com- Despite the tensions between the top operations should either be handled by panies, amongst others put forward by and the bottom of the leading parties regional companies led by boards with the independent members of the com- and the uncertainties concerning mini- JOURNAL OF NORDREGIO FEATURE 11

mum-size and the variance of size, sed. The same goes for transnational In the volume containing the sector many local politicians are acting as if and cross-border co-operation, implying analysis (Bet. 1434:3) it is evident that the reform will actually happen. Some that the Øresundsregion as well as the the sectors are analysed separately, mayors and politicians in neighbouring co-operation between Slesvig and which itself implies that there was no municipalities are already negotiating Schleswig are not subject to any analy- overarching discussion of the possibili- the prospective terms of amalgamation. sis. All in all, ‘territorial’ considerations ties of overcoming sectoral thinking in In one case, in the municipality of are almost non-existent. Although the the counties and municipalities. As Vamdrup in Jutland, an indicative refe- analysis of demographic developments such, it is the rationale within each of rendum has been held. The referendum points to the existence of ‘classic’ perip- the sectors with respect to the local aut- should indicate to which of the two horities’ size and organization that is in heral problems in some regions (Bet. neighbouring municipalities the citi- focus. In the main report, though there 1434:2, chapter 25), and the analysis of zens want to amalgamate with. is a discussion (from a political scientis- mobility and travel-to-work areas reveals Allegations of overspending in some t’s point of view) of how sub-national functional relationships across several municipalities can also be seen as a authorities can ensure the co-ordination sign of pre-calculation. If one is expec- existing borders of counties (Bet. of sectoral activities (Bet. 1434:1, chapter ting to become absorbed by a larger 1434:2, chapter 27), these findings are 7). The interesting conclusion from that unit, one might as well use one’s basically neglected in the concluding chapter, namely, that smaller municipali- savings and set oneself a hallmark, chapters and in the discussion of the six ties have been more successful in co- seems to be the logic here. In a way the models. Moreover, the appraisal of the ordinating sectoral activities, while the white paper is almost like a self-fulfil- various geographical criteria that could larger municipalities have been more ling prophecy: amalgamations will be used in the decision-making process inclined to follow the ’logics’ of the vari- occur whether or not they are decided (Bet. 1434:1, chapter 21) is not utilised ous sectors, is not directly linked to the on in Parliament – despite the fact in the concluding chapters either. All in substantial analyses of the scale econo- that the costs of merger has not been all, the conclusions of the commission mies in each of those sectors. This impli- calculated, but instead solely stipulated are unaffected by considerations of ter- es that the clash between principles on hypothetical savings on a long-term ritorial specificities and variance. favoured by consolidationalists and frag- basis. mentationalists is not in fact scrutinized Imposing a model biased by conside- in any depth at all. Hence, the underly- The complexity of the issue has led rations on size, without focusing on ing assumption, that scale economies some politicians and researchers to municipalities with common features, can be obtained, is not challenged, and it conclude that the reform should be such as rural districts, islands and pro- is not at all clear from the analysis whet- implemented step by step, for example blems related to the larger cities, may her sub-national authorities will have by deciding on the need for the regional however lead to unintended conse- better opportunities to solve cross-secto- level first, then giving the municipaliti- quences. Tanwig (2004) argues that the ral problems, for example with regard to es the opportunity to amalgamate current polarization between the larger environmental questions, in the future. voluntarily over the next 4-6 years. cities and areas dominated by rural dis- Hereafter, decisions will be taken at the tricts might be accentuated if proper When the local government act passed national level in cases where local solu- measures are not taken to prevent it. through Parliament at the beginning of tions could not be found. The risk asso- According to Tanwig it is necessary to the 1970s it was prepared in close con- ciated with implementing this appro- incorporate discussions on the develop- nection with a reform of the planning ach is that some municipalities will ments in rural districts and city-regions system (1969-1974). As society today is have difficulty in finding collaborators, before reform is decided on. not in a state of expansion it is probably and consequently they will be left not to be expected that a reform of the behind and thus severely disadvantaged In other words, it seems hasty, to governmental structure should be in the race to achieve an appropriate insist on one particular model based on accompanied by an equivalent reform of size. the idea of a minimum-size, irrespecti- the planning system, but as regional ve of whether it is Læsø or the city of planning has been a prominent feature Issues related to urban and regional Copenhagen, and irrespective of whet- in the three-tier system some considera- policy and planning her it is a rich municipality or a poorer tions of importance to planning might municipality at the other end of the be of relevance when choosing between In the introduction it was noted that equalization scheme. By enforcing one the different models. Unfortunately, the considerations pertaining to the model, one may therefore end up with only time spatial planning is mentioned European integration process were not 50-100 municipalities, which will fare in the main report is when it is observed included in the main report, although well economically, and 60-80 munici- that the municipal plan will have to be the analysis of environmental policies palities, which are less well off – wit- strengthened unless ’the broad county- and local economic policies does con- hout discussing the principles of equali- model’ is chosen (Bet. 1434:1, p.50). On tain some elements thereof. The pro- zation thoroughly at the same time – the other hand, no direct critique is rai- spect of, the municipalities acting in a this reform thus may not last as long sed when the organization of the Danish European universe characterized by as its predecessor. planning system is discussed. Planning ‘multi-level governance’ is not discus- related issues are not included in the 12 FEATURE JOURNAL OF NORDREGIO

considerations of the concluding chap- References: me). The volumes can be downloaded ters, which is probably related to the from www.im.dk, and hard copies are avai- Houlberg, Kurt (2000) Kommunale stor- fact that the analysis of the planning lable through www.netboghandel.dk. driftsfordele – hvor finder vi dem, og hvor system ends with the following sen- store er de? AKF Forlaget, Copenhagen. Betænkning nr. 1437 (2004) tence: Finansieringsudvalgets betænkning. Et nyt Keating, Michael (1995) Size, Efficiency udligningssystem. Ministry of the Interior ’… it is difficult to give any in-depth and Democracy: Consolidation, and Health, Copenhagen. (Consisting of 3 evaluations of the strengths and weak- Fragmentation and Public Choice. In: volumes, 1,135 pages.). The volumes can nesses of the present organization within Judge, David et al. (eds.) Theories of be downloaded from www.im.dk, and hard the planning field, as studies that docu- Urban Politics. Sage Publications, London, copies are available through www.netbog- ment the strengths and weaknesses of pp.117-134. handel.dk. the Danish planning system are not avai- Ministry of the Interior (2000) Den kom- lable’ (Bet. 1434:3, p.294). Statens offentliga utredningar (2003): munale sektor. Størrelseseffekter i den Utvecklingskraft för hållbar välfärd. The absence of an overview of the abili- kommunale sektor. Copenhagen. (Ansvarskommittén, SOU: 123). ty of local authorities’ to solve cross-sec- Ministry of the Interior and Health (2003) Stockholm. toral problems in an age of European, Sundhedsvæsenets organisering – sygehu- multi-level governance, the insensitive Tandvig, Hanne (2004) Hvilken indflydelse se, incitamenter, amter og alternativer. analysis when it comes to the ramificati- får strukturkommissionens visioner for Copenhagen. ons of a governmental reform in diffe- landdistriktspolitikken og byudviklingen? rent types of municipalities in various Schmidt, Torben Dall (2003) Stor og stærk In: Skov & Landskabskonferencen 2004. parts of the country, and the neglect of eller lille og vågen?AKF-nyt, 4. Center for Skov, Landskab og Planlægning, planning related issues in the commissi- Copenhagen. KVL, Hørsholm. on’s main report leads the current aut- Betænkning nr. 1434 (2004) hor to conclude with a paradox: The Strukturkommisssionens betænkning. public sector in Denmark is going to Ministry of the Interior and Health, have a new geographical structure, yet Copenhagen. (Consisting of 3 volumes. 1: the analytic, preparatory work has only Main report, 2: Appendences – thematic partly evaluated the geographical precon- chapters, 3: Appendences –structural chap- ditions for and impacts of local govern- ters, 1,522 pages. The summary of the ment reform. main report is issued in a separate volu- JOURNAL OF NORDREGIO FEATURE 13

one counties (län) still 'governed' by the reform of the Swedish government sys- governors (landshövdingar), thus pro- tem. For example, ubiquitous ICT servi- ving to be a very solid system. From ces have made public administration Oxenstierna onwards a sedimentary increasingly accessible to citizens, dra- development can be seen to have taken matically reducing the need for face-to- place that added new layers of structu- face or even telephone contacts; while at res on top of this: i.e. the municipality the same time potentially reducing system developed in the late 19th centu- public interest in political issues, which ry was given its present day structure of have thus become more fragmented and 292 municipal local authorities (kom- action-oriented rather than coherent and By Göran Hallin, muner) in principle in the 1970s. dialogue-based; as well as throwing up a Director of analysis and evaluation, much more complex set of demands The administrative structure designed Institute for Growth Policy Studies, with regard to the provision of public by Oxenstierna and developed since [email protected] services, giving life to entirely new areas then is now being challenged. A public of policy overlapping the traditional sec- committee is now half way through revi- toral policy fields. «All that is solid melts into air» Karl ewing the general public administrative Marx wrote in his legendary Das Kapital structure. This process parallels work The committee report does not howe- some one hundred and twenty five years that has been underway for some time ver suggest major reform at this stage. ago. now in Denmark and in Norway. In Instead it outlines some of the basic what follows the findings of the inte- olid enough, but yet exposed to an principles for the committee’s future rim report of the committee will be dis- immense current of change, is the work. The first of these principles is S cussed. (SOU 2003:123). administrative structure of the Swedish increased potential for development. Instead of a narrow concept of producti- vity, the committee wishes to stress that any changes in the governmental struc- ture need to be designed in such a way 370 YEARS OF GOVERNANCE that the public services can better meet these new demands - for example to COMING TO AN END? improve the ability to cope with increa- sing demand or with the scarcity of Sweden Reviews resources. Hence the structures sugge- sted must be more flexible than those of its Political Administration today. Secondly, the committee stresses the importance of inclusion and the dangers of exclusion with regard to citi- zens and the public services. state. In many ways the foundation of While Sweden was designed to be Individuals and civic structures must therefore be invited by government to modern Sweden was carved out in the governed by governments - local, regio- take part in the production and con- 1600s. In a recent biography Gunnar nal and national - the 21st century raises sumption of services to a larger extent Wetterberg (2002) portrays the archi- a number of new challenges to these than that which pertains today. Thirdly, tect behind Sweden's modern adminis- governments. Different attempts have cross- sectoral collaboration is seen as an trative system - the chancellor Axel been made to pinpoint what exactly it is increasingly important strategy giving Oxenstierna (1583-1654). Parts of the that raises these challenges (see e.g. service providers the ability to cope with building blocks of what is today’s admi- Pierre & Peters 2000). In the committee change and to maintain flexibility. The nistrative system in Sweden were in report the demographic trend is identifi- report is however not particularly clear fact Oxenstierna's work, e.g. the divisi- ed as a key issue in relation to the on how it wants to see such collaboration on of roles between the government government. In future, demographic come about. A few hints may however be ministries and the national agencies, developments will cause both demand traced, as the report concludes that: and main layout of the regional map of and a supply side stress on public servi- the state. ces - as society grows older, the demand 'Evidence tells us that it is difficult to for public services will increase, while break with state sectorisation, especially Wetterberg (p.624) writes on the struc- the supply of labour to provide these ser- at the national level./.../ The ability to ture of the regional reform in 1634: 'The vices or the taxes to pay for them will country was divided into twenty three increase central cross-sectoral change diminish. Financial pressure will thus 'provinces', each under a governor. The must remain in a concerted strategy for perhaps be the most important source governor had the role of being the com- increased potential for develop- of government reform in the next few mander of the king.' (author’s own ment./../There are reasons to investigate years. translation) This layout has in fact which windows of opportunities can be remained more or less intact until the The report identifies a further 20 created by cross-sectoral state operations present day - when Sweden has twenty observations of relevance for a structural at the local or regional levels...' (p.162) 14 FEATURE JOURNAL OF NORDREGIO

One interpretation may be that the Thirdly, the role of national, regional Sweden in a few years from now. The further work of the committee will and local governments is a huge issue at number of issues for the committee to involve suggestions for the regionaliza- stake. Different readings of the commit- resolve, and the relatively short time at tion of national authorities, cutting tee report are probably possible, but one its disposal in combination with the across current policy-sectors, e.g. simi- reading suggests that the government tremendous political sensitivity involved lar to developments in Finland during may be strengthened at the regional level as regards many of the issues may give the 1990s. As we will have to await the – perhaps through the regionalization of rise to the following speculation: May it further work of the committee to see government agencies or through a revita- be that Marx was wrong – as such, the the details of its proposals for a new lization of the County Administrative solidity of the Swedish administrative government structure we may conclude Boards. In both instances such a develop- system makes it appear unlikely to by ascertaining what issues really are ment is likely to involve a measure of melt just yet. at stake here. cross-sectoral cooperation. One very important aspect of this development is Firstly, the issue of the division of the future role of the county councils, References roles between the government ministri- whose main responsibilities today are in es and government agencies - which Wetterberg, G., 2002, Kanslern Axel health service provision and in public has been called the Swedish model for Oxenstierna i sin tid, Atlantis, Stockholm. transport. Vociferous calls have already public administration - the creation of been made to bring health service provi- Marx, K. Das Kapital, 1867 Axel Oxenstierna. The model has come sion into the hands of national govern- under increased pressure lately. This is Pierre, J -B., G. Peters, 2000, Governance, ment, with public transport being handed understood partly in relation to the fact politics and the state. Macmillan, Hong to the municipal authorities. In March that the government has experienced Kong. 2003 two analysts from the Swedish an increasing lack of control and /or Labour Union (LO) echoed demands pre- SOU 2003: 123, Utvecklingskraft för hållbar lack of expert resources in relation to viously heard mainly from conservative tillväxt, Ansvarskommitténs delbetänkan- negotiations and decision making wit- politicians to place health care issues de. hin the European Union. When for under central government (DN, debatt, 13 example Sweden, in preparatory mee- Dagens Nyheter debatt, Irene Wennemo Mach, 2003). At the local level, the over- tings, is represented by agency officials och Anna Fransson. arching problem is to make ends meet rather than by ministry officials, this needs. Hence many municipalities are may cause a lack of clarity in the final engaged in increasingly encompassing stages of negotiations within the cooperation with other municipalities on Council. The committee’s comment on service production. Thus far, Sweden has this issue is that the Swedish model in not seen mergers between local authoriti- general has served us well so far. es the like of which has occurred on Secondly, the issue of cross- sectoral Danish Bornholm. In many regions challenges is present on multiple levels. however talks on this matter are being New demands and the ever increasing carried out between local officials and needs of coping with change will eventu- politicians. ally demand cross-sectoral change at dif- Finally we have a whole set of geograp- ferent levels within the public sector. At hical issues not even dealt with by the the central level this is in fact connected committee thus far. At the local level, to first issue, since the relative autonomy administrative geography may be taken of national agencies may simply serve to care of either by increased cooperation reinforce sectoral divides within the cen- between municipalities or through mer- tral state. This is often the case where gers. At the regional level these may you have largescale sectoral agencies and develop as separate issues. A need for a smaller scale ministerial offices - e.g. wit- new regional geography has been evident hin the labour market policy field. Fiscal for a number of years now. However crosssectoral coordination may be carried whether it should be a regional division out mainly from within the ministry of for the central state (CABs), county coun- finance, while there is no corresponding cils, both, and/or different regional divisi- domain for other cross sectoral coordina- ons for different national agencies tion. Different options that may be consi- remains as yet unclear, and thus needs dered by the committee include the to be addressed immediately. strengthening of the ministry of finance, the strengthening of the prime ministers' Looking at what has thus far been office, or the introduction of new coordi- said by the committee, it is extremely nating agencies with powers to control unclear as to where we will stand regar- other agencies. ding the administrative structure of JOURNAL OF NORDREGIO FEATURE 15

REGIONAL GOVERNANCE – TRENDS, MODELS AND THE LATEST DEVELOPMENTS IN NORWAY

Norway has also experienced the mostly by Norwegian right wing politi- impact of international commitments, cians and political parties. The first rela- such as those to the WTO and those in tes to the performance of public servi- relation to the EU/EEA agreement. ces, when it is declared that the actual While the many independent and un- regional service production functions, coordinated Public Law Agencies anchored at the county municipality (PLAs) and Private Law Bodies (PLBs) level, are redundant. The alternative (see definition in OECD Report prospect is that state agencies (PLAs) 2002:22), often also organisationally and state companies (PLBs), in addition regionalised, are challenging the traditi- to their municipality engagements, Noralv Veggeland, onal approaches in the field of may very well take over the service pro- Professor, Lillehammer University College Norwegian regional policies (Veggeland vision functions and their attendant [email protected] 2003). public governance responsibilities in the actual service sectors (Veggeland Introduction Critics 2003). – For instance, in 2002 the he focus on the weakened position county owned hospitals of the regions The Norwegian political system basi- of the nation-state and elected parli- were organised as regionalised PLAs, T cally consists of three administrative aments at all government levels has with ownership being transferred to tires or levels, the state, the counties increased in the wake of distributed the central state authorities. and the municipalities, all of which public governance arrangements, and play important roles in regional deve- The second and more politically neu- generated the political issue of demo- lopment policies. In the traditional tral criticism relates to the inefficiency cratic deficit – in Norway as elsewhere approach, each of the 19 Norwegian of the county municipality’s role and in Europe (OECD 2002, Veggeland counties consists of two authorities: the function as the principal responsible 2004). We know that this trend of governor (French “prefecture”) repre- political authority for regional planning democratic deficit developments is senting the central state performing complex, that it is caused by globalisati- and development initiatives. At the time legal control, and from 1976 the “fyl- on processes, by the deregulation of of their establishment in the 1970s, keskommunen”/county municipality. markets, and the distribution of public this role of the region-municipality was The latter, the democratic county muni- governance both across state borders to already being performed surreptitiously cipality unit, is governed by an elected international co-operation bodies, and and indeed successfully. When the regional assembly and is the responsi- internally to arm’s-length independent period of industrial expansion stalled ble authority for certain public services state agencies and other government in the 1980s these new administrative and for regional planning and industri- organs in the regions. The latter’s exe- arrangements were thus put into questi- al developments (Veggeland 2000, cutives have become principals and gai- on. Since then the emphasis has steadi- Selstad 2003). ned strategic power superior to both ly moved away from that of being an central and local government authoriti- Since the 1990s, the county munici- active regional development initiator es, while all the time suffering from a pal authorities in particular have been with control over their own policy mea- fundamental lack of transparency. criticised on two principal grounds, sures, to that of becoming a weak regi- 16 FEATURE JOURNAL OF NORDREGIO

onal planning authority without financi- somewhat equivocal. With consequen- Ngan, Weir 2002). Even so, the RA- al instruments (Veggeland 2000). ces, the term may for instance imply model is seen to be the preferred Moreover, in general, studies indicate downward devolution of competence to model of the Norwegian right wing par- that the narrow regional measures of elected regional assemblies, or just to ties, and is expected to be implemented the state targeting development in the organisational regionalised state PLAs after 2005. But who knows? and PLBs (Veggeland 2004). peripheral areas also had only a small The Regional Democracy RD-Model: effect compared to the impact of ordina- Given the equivocal nature of this Based on the prospect of the survival of ry sector policies (NOU 2004:2). concept, regional policies in EU mem- the county municipalities and their aut- Hence, progressively in the wake of ber states designed to enhance or adapt horities at the regional level, though globalisation, market liberalism, compe- to the principle of the new regionalism, their number would be considerably tition policies, competing region con- and the demand for independently reduced from 19 to 5 - 8 territorial cepts, and the outsourcing of public acting regional authorities, appear in units, as this would be essential to governance and service functions to many shapes and forms (Loughlin and making them effective by including state agencies (“Innovation Norway”, Mazey 1995, Webb and Collis 2000). more extensive human and infrastruc- “SIVA”, “Statens vegvesen”, “Aetat” etc This is also the case in Norway, where ture resources. This prospect is pointed ), overarching regional master plans the central state authorities are model- out in reports from at least two Official became discredited. Rational public ling a new role for the regional level Commissions (NOU 2000: 22, NOU planning was considered to be an obsta- governance institutions, while targe- 2004:2). Each of these new greater regi- cle to effective market competition, ting building regions to become impor- onal authorities should be made politi- development actions and tasks tant arenas for developing competitive- cally stronger and should continue to be (Veggeland 2004). Regional develop- ness, local identity, and for the produc- responsible for regional planning and ment programming and planning beca- tion of certain infrastructure services. development in order to perform effec- tive governance. Consequently, they me almost disconnected from the many Basically, the new role of the regional new fragmented strategic policies per- should be established as the superior level as being responsible for develop- regional authorities, with the regionali- formed by the numerous regional ment tasks and planning actions seems PLAs and PLBs. Accordingly, the legiti- sed state PLAs and PLBs as their strate- to be politically imagined and perfor- gic instruments (NOU 2004:2). macy and accountability of the county med in the framework of either one or municipality authority declined. During Eventual fusion of local municipalities other of these three different (ideologi- may be looked upon as a matter for the 1990s and 2000s the failure of legi- cal) models: timacy appeared in the election of the voluntary endeavours. - This model counties’ representative assembly as The Regional Agency RA-Model: weighs decentralisation and democratic steadily decreasing numbers of citizens Based on the prospect of the future dis- governance as presuppositions for regi- casting their votes. - Now essential regi- mantling of the county municipality, onal legitimacy, identity and regional onal reforms are under way, but which and continued outsourcing of state competitiveness. set of reforms will be implemented functions and governance. The many The Regional Partnership RP-Model: (Gjertsen 2002, Veggeland 2003)? already existing regionalised PLAs and Based on the prospect of the survival of PLBs, as strong competing develop- all 19 existing county municipalities, Norwegian new regionalism ment actors and service producers and and the establishment of county – eventually as partnership institutions, county and county – local municipality In Norway the advantages of the should take over governance functions partnership, in order to strengthen European new regionalism, strategic and as such represent the regional level regional development capacities and promotion of structural changes and authorities. Reforms target a considera- efficiency. Both functions and public competitive regions, are politically ble reduction in the number of local governance abilities should be transfer- recognised; with the region viewed as municipality units that should be tasked red to negotiated and agreed partners- an arena for the building of innovation with performing stronger governance hip institutions, besides the regionali- systems and economic growth, for authorities at this level, voluntarily or by sed state PLAs and PLBs. In principle cross-border co-operation, for national force, using economic instruments. - this model is recommended by White competitiveness, and for bottom up This model weighs central control and paper no. 19 (2001-2002) (St. meld. nr. democracy and accountability (Hansen technocratic governance as presupposi- 19) on regional policy from the and Selstad 1999). Moreover, the fact tions for regional competitiveness and Norwegian Government, and in diffe- that the EU demands that member sta- development (Veggeland 2000). The rent designs is already implemented in tes have, in accordance with the princi- model has in principle been practised a number of counties. (For instance: ple of subsidiarity, a compulsory regio- in England since the 1980s, but is criti- Oppland county in a large number of nal tier in order that they may attain cised here because of the democratic development partnerships with local support from the Structural Funds and deficit it inherits causing a lack of local municipalities and other regional agen- the Interreg-programmes, influences mobilisation, and the many develop- cies and bodies, in Telemark, in the regional thinking of an EEA coun- ment actors it creates causing fragmen- Buskerud, and in Vestfold in a county try such as Norway (Veggeland 2000). tation of achievements and significant to county territorial partnership ). The However, the term subsidiarity is transaction costs (Beetham, Byrne, regional democratic authorities get into JOURNAL OF NORDREGIO FEATURE 17

and organise a wide range of partners- central authorities profoundly underes- References hip institutions. - The model weighs timate the level of cultural and econo- Beetham, D., Byrne, I., Ngan, P., Weir, S. the partnership arrangements’ intended mic differences with regard to develop- (2002): Democracy under Blair. A ability to avoid the consequences of the ment potentials among Norwegian regi- Democratic Audit of the United Kingdom. now fragmented regional configuration ons when they demand that regional London: Politico Publishing. of actors which may cause great co-ordi- objectives be primarily in line with nation problems and transaction costs, national development objectives. Hansen, J. Chr and Selstad, T. (1999): i.e. inefficiency (Östhol and Regional omstilling: strukturbestemt eller Svensson(eds) (2002). The critical limit • The Norwegian oil-economy contri- styrbar? Oslo: Universitetsforlaget. of transaction costs has, as Fritz Scharp butes to the heavy pressure on the Gjertsen, A. (2002): ‘The Norwegian found them, to be an exponential func- redistribution aspects of regional polici- Cases. Partnerships Out of Step’. In op.cit. tion of the actors involved (Scharpf’s es, and consequently to a climate of Östhol and Svensson (eds) pp 203-233. Law; Scharpf 1997): detailed central state control. Policy measures, which might create regional Loughlin, J. and Mazey, S. (1995): The End and social differences, are not really of the French Unitary State. Ten years of accepted. (Yet, such an acceptance is regionalisation in France 1982-1992. Transaction costs proclaimed to be introduced as a basic London: Frank Cass. national supposition for regional deve- NOU 2000:22: Om oppgavefordeling mel- lopment in a report to be published lom stat, region og kommune. Oslo:KRD. Critical limit later this year from an official Commission, Distriktskommisjonen. NOU 2004:2: Effekter og effektivitet. Oslo:KRD. • There is a lack of structural options with regard to developing coherence OECD report (2002): Distributed Public Number of actors between the region’s own holistic and Governance. Agencies, authorities and its democratically decided objectives other government bodies. Paris:OECD. and regional planning strategies, and Scharpf, F. (1997): Games Real Actors Play: Here it may be remarked that too the objectives and strategies of the frag- many territorial and functional part- Actor-Centred Institutionalism in Policy mented state PLAs and PLBs and the Research. Westview Press. Boulder. nerships will in themselves, according growing number of territorial and func- to the figure, make the number of deve- tional partnerships. Taken together, the Selstad, T. (2003): Det nye fylket og regio- lopment actors grow, and increase the latter bodies generate significant co- naliseringen. Bergen: Fagbokforlaget. transaction costs in a critical manner ordination problems and transaction St. meld. nr. 19: St.meld. nr. 19 (200-2002): (Veggeland 2003). costs, which are growing exponentially. Nye oppgaver for lokaldemokratiet – regio- Thus far, the county municipal authori- nalt og lokalt nivå. Oslo: KRD. Conclusions on regional governance ty has not been in a political position Veggeland, N. (2000): Den nye regionalis- in Norway and thus has not had steering capacity men. Flernivåstyring og europeisk integra- to handle this threat adequately. The political choice of the model for, sjon. Bergen: Fagbokforlaget. and the approach to, new regional • Moreover, it is likely that the princi- Veggeland, N. (2003): Det nye demokrati- governance structures and development ples of the regional democratic RD- strategies in Norway has yet to be et. Et politisk laboratorium for partnerskap. model analysed in this paper may in Kristiansand: Høyskoleforlaget. unveiled. Though the points raised in future be the chosen model for the this paper may be seen as those that regional governance structure. In the Veggeland, N. (2004): The Competitive will most probably structure the ulti- first instance because European experi- Society – how democratic and effective? mate decisions to be taken in the ences are promising, and steadily more Kristiansand: The Norwegian Academic Norwegian Parliament. What we have experts and official commissions Press. (Coming) pointed out is the following: recommend it. As such, democratic Webb, D. and Collis, C. (2000): ‘Regional • Regional democracy institutions are regional learning from Continental Development: Agencies and the Nes threatened by a democratic deficit; con- Europe seems at last to have acquired Regionalism in England’. Regional Studies, fer the establishment of the regionali- acceptance (Loughlin and Mazey (eds) Vol. 34.9, pp. 857-873. 1995), OECD report 2002, Veggeland sed PLAs and PLBs. When first establis- Östhol, A. and Svensson, B. (eds) (2002): 2000, 2003, 2004). hed, they start functioning at arm’s Partnership Responses – Regional length from governments at all levels Governance in the Nordic states. and without adequate openness and Stockholm: Nordregio. transparency, and thus they fail in accountability terms with significant negative public and private mobilisation effects in the region. • Too much power and authority is regained at the central state level; the 18 FEATURE JOURNAL OF NORDREGIO

REGIONAL EUROPE

The European models of regional development continue to interest politicians and researchers. In this volume of the Journal of Nordregio John Bachtler and Sandra Taylor investigate the features of regional funding in Denmark, Finland and Sweden, while Kai Böhme and François Josserand look into the results of recent Scottish-Nordic cooperation. TRANSNATIONAL CO-OPERATION – AN INSTRUMENT FOR ORGANISATIONAL LEARNING AND SOCIAL CAPITAL BUILDING

rans-national co-operation is increa- Periphery and the Interreg IIC North T singly becoming a topic of interest Sea Programme, deeper insights have in regional planning and development, been gained into the lessons learned by not least since the launch of the regional and local partners in trans-nati- INTERREG IIC Community Initiative onal and inter-regional co-operation in 1996 and its continuation in the cur- projects in the field of spatial planning rent INTERREG IIIB programmes. and regional development. Furthermore, the Third Cohesion This article highlights some of the fin- Report and the debate on EU Regional dings of the study. After stressing the Policies post 2006 signal that European importance of communalities, we dis- By Kai Böhme, territorial co-operation is now conside- cuss how learning occurs in projects Senior Research Fellow, Nordregio red to be an important instrument for and what it changes, before concluding [email protected] promoting the harmonious and balan- with a few reflections on social capital ced development of the EU territory. François Josserand, building in trans-national co-operation. Research Fellow, EPRC University of Strathclyde With this growing interest in trans- [email protected] national co-operation in an increasingly How much communality is needed to integrated EU it would now seem to be secure understanding? an opportune time to reflect on the experiences of recent co-operation pro- By definition, trans-national co-opera- grammes. tion projects involve partners from dif- ferent countries and different professio- Evaluations of trans-national co-opera- nal backgrounds. As a result, the lear- tion traditionally emphasise the esta- ning environment for project partners blishment of contact webs and mutual is characterised by interdisciplinary and learning as important effects of pro- trans-national diversity. jects. In a recent study undertaken on behalf of the Nordic Senior Officials' Despite the constraints this involves Committee for Regional Policy (NÄRP) in terms of linguistic, cultural, adminis- trative and legal diversity, projects are and the Scottish Executive, Nordregio brought together by some sort of com- and the European Policies Research monality between project partners. In Centre (EPRC) explored the issue of our case, the strong commonalities in what learning means in trans-national the spatial conditions in the Nordic co-operation. countries and in Scotland constitute the By looking at Nordic-Scottish project starting point for the projects assessed, co-operations carried out under the where partners are confronted with Article 10 programme Northern similar challenges. Nevertheless, the JOURNAL OF NORDREGIO FEATURE 19

production of joint results is perceived trans-national project group. Secondly, issues require a ‘hands-on’ approach. A as challenging and the exchange of learning occurs within national, regio- number of projects suggest that intensi- experience and good practice usually nal or local sub-groups in which project ve reporting and dissemination certain- dominates over the elaboration of joint partners are also involved. Third, the ly plays its role, but it cannot replace solutions and the generation of shared major question is: how is this learning the hands-on experience provided by knowledge. transported from the individual partici- trans-national co-operation projects. pant in the project to his/her home Second, the efforts and time invested in Differences in the administrative and organisation i.e. in terms of the sharing projects are rarely considered to be part legal systems, as well as in culture, of this new knowledge with colleagues. of the individual participants’ normal hampered the transfer of experience This last step is important as regards workload but are seen as additional, if between countries. At least once during the use and implementation of know- not secondary tasks. As a result, there is almost every project, participants consi- ledge gained in trans-national co-opera- often insufficient integration of the pro- dered that it might be impossible to tion that may lead to the changing of ject activity or results into the work of transfer knowledge. The challenge here routines. Individual project partners are the participating organisation. This is then was the establishment of a com- the crucial link between the three levels often affected by the position of project mon understanding of concepts across of trans-national, regional and organisa- participants within their home organi- various professional backgrounds and tional learning. Their role is essential to sations. national contexts. For instance everybo- the transfer of knowledge and experi- dy agrees that regional planning needs ence from one forum to another. In conclusion, knowledge gained wit- to be reinforced, but what really is regi- hin the projects seems to be more indi- onal planning and is it the same in The changing of routines is conside- vidual than institutional, although it fil- Northern Sweden as it is in Scotland? red to be a major indication of the use ters down in small doses to other collea- and implementation of results. The gues through discussion. Other projects Generally, as regards the capability of knowledge gained by project members support the thesis that the development mutual understanding and transferring can stay with the individuals and poten- of personal skills is an important by experiences between countries, different tially lead to changing personal routi- product of such trans-national pro- types of projects can be distinguished, nes, but it can also be transferred to jects; as such projects are often consi- both as regards the composition of the their home organisation thus contribu- dered to provide an opportunity for team and as regards the task of the pro- ting to institutional learning, i.e. to the some partners to develop their personal ject. Teams involving partners with a change in routines for the organisation skills and competences. rather homogenous professional back- as a whole. It is obviously a challenge to ground as well as projects focusing on transfer experience and knowledge gai- Does trans-national learning change concrete, practical tasks and hands-on ned in co-operation projects to collea- life? approaches or joint tasks, faced fewer gues who did not take part. As this difficulties. Whereas teams with rather knowledge to a significant degree The picture painted thus far suggests heterogeneous professional back- remained with the project participants, that trans-national co-operation is a grounds or projects focusing on more individual learning dominates over costly approach to individual learning. strategic and policy oriented projects, organisational learning and this However, a number of projects show often needed to put aside a considerable impacts significantly on the possibility part of their project time to establish a that insights gained through trans-nati- of translating learning into changes in common understanding. Thus new onal exchanges can be applied by part- routines. knowledge creation or the transfer of ners and can thus lead to changes of knowledge came a poor second. At least two factors contribute to hin- routines. Those projects provide us with dering the process to organisational a picture of trans-national co-operation In any case, most partners stated by learning. First, the majority of project as a risk-investment, which can bring the end of the project that they have significant benefits. learned something and that this has been of value if not for themselves then As already mentioned above it seems at least for third parties. that projects with rather concrete, practi- cal tasks and hands-on approaches faced How can partners learn in trans-natio- less difficulties as compared to those that nal co-operation? were more policy-oriented in nature. Thus, one project on the Re-Use of Peat When it comes to the application of Production Areas found that involving learning in co-operation projects one partners from other countries proved very needs to distinguish between individual valuable in bringing together new ideas learning and collective/organisational and experiences as to what possibilities learning. This is illustrated by three were available for the re-use of peat areas. ‘moments’ that can be identified in the Indeed, one of the Scottish partners learning process. involved in the project went on to work as First, there is learning about co-opera- a consultant for a Finnish municipality to tion and about the project content in the further develop work on peat areas. 20 FEATURE JOURNAL OF NORDREGIO

Another such practical example can be importance of social capital as a source tative differences. The vast majority found in a project on technical of regional competitiveness. Indeed, being in the field concerned with infor- exchange co-operation across the project partners that managed to apply mation exchange and knowhow trans- Northern Periphery road district, where knowledge gained in their trans-natio- fer. This however poses the question partners among others learned from nal co-operation confirm this. that, such knowledge may be nice to each other how a steel net could be know, but so what? What has the infor- In general, three aspects of social capi- used under the road surface to reinforce mation exchanged actually been used tal can be distinguished: the work’s structure. This project also for? Approximately one fifth was inde- allowed at least one of the partners to Firstly, the form of social capital based ed in the field of new ideas and approa- question domestic routes and consider on trust, reciprocity, shared norms and ches to problem solving. In cases where changing established practices, as more institutions, facilitates cooperation wit- these are used and implemented we effective standards existed in other hin and among groups leading to mutu- have the powerful effects of trans-natio- countries. al benefits, has for example been of nal learning described above. importance in projects where totally However, the question is how can a Considering organisational learning new teams came together and a lot of project be designed such that it is more and social capital building rather than time was needed in order to establish likely that its results will be used and standard ERDF evaluation criteria, it trust and common understanding as not just documented in a report and can be shown that trans-national co- well as things like a shared identity. then forgotten. In this context four key operation projects have effects that Considering that these were Nordic- aspects can be pointed out: extend beyond the fulfilment of formal Scottish co-operation projects, it is programme or project aims, with a wide • practical, concrete, hands-on project somewhat surprising that establishing range of achievements. task, trust was considered to be such an important project outcome or benefit. The study also illustrates that trans- • relevance of the project task for the However, this point neatly illustrates national co-operation is a form of risk- daily, ordinary work of each project just how important the establishment taking for the partners getting involved member, of the trust-element of social capital is in the projects. The framework provi- • the right composition of the project in co-operation areas that have even ded and the combination of trans-natio- team as regards communalities and less of a history of common and fruitful nal and interdisciplinary partnerships expertise, and co-operation than does Scotland and thus offers a broad range of good opp- the Nordic Countries. ortunities to produce potentially valua- • the right persons from each partner ble results, though there is no guaran- Secondly, social capital cements net- organisation that has the means to pro- tee without the motivation and commit- , stimulating successful regional mote the project in its home organisati- works ment of individuals. on. clusters as well as regional innovation strategies and policies. Almost one If these criteria are fulfilled the pro- third of the classified benefits of the co- The full report is entitled, ‘Transnational ject will have a good chance of obtai- operation projects relate to increased Nordic-Scottish Co-operation: Lessons ning value for money and of contribu- co-operation networks and the esta- for policy and practice’, and is available ting to organisational learning and blishment of constant co-operation. social capital building. as Nordregio Working Paper 2003:3 With regard to project impacts, stress (http://www.nordregio.se/Files/wp0303. should be put on constant co-operation pdf). HOW IMPORTANT IS patterns, although increased co-operati- SOCIAL CAPITAL? on networks are mentioned far more For further information on Nordic- The study shows that focusing on often as benefits; the amount of e-mail Scottish co-operation, please visit social capital when assessing trans-nati- addresses and phone numbers in our http://www.eprc.strath.ac.uk/nordic. onal co-operation may present a useful address books is only of value if we way of getting hold of the more interes- make use of them. Thus, the existence ting results of the projects than for of a network per se is as exciting as instance merely holding a number of yesterday’s newspaper if it under-used. meetings and documenting the number As such only consistent use give it of reports published etc. Following the value. conclusions of this discussion, projects Thirdly, social capital can improve the should from the very beginning put an collective processes of learning and is emphasis on securing organisational thus a key element in knowledge creati- learning and thus social capital building on, diffusion and transfer – all of which in a broader sense. are critical for innovation and regional This way of thinking is also supported competitiveness. Indeed, almost half of by ideas presented in the Third the benefits of the reviewed co-operati- Cohesion Report, acknowledging that on networks were seen in this field. there is a growing consensus on the However, there were considerable quali- JOURNAL OF NORDREGIO FEATURE 21

head in the Objective 2 areas and ¤10- THE ADDED VALUE OF THE 14 per head in other areas. The relatively broad allocation of STRUCTURAL FUNDS: expenditure among priorities and mea- sures has also provided opportunities A NORDIC PERSPECTIVE for regional and local organisations to engage with Structural Funds (see Figure 1). Both Finland and Sweden have allocated around two-thirds of Objective 1 spending to productive investment (much moreso than in most other Objective 1 areas of the EU), with a strong focus on assistance to SMEs, added value of the Structural Funds in a RTD and agriculture and rural develop- Nordic context 3. Beginning with a brief ment. Finland places more emphasis summary of the EU funding provided on aid to large firms, labour market to Denmark, Finland and Sweden, the policy measures and forestry under article examines the quantitative impact Objective 1, while Sweden has larger John Bachtler, and qualitative influences of the allocations to tourism and infrastructu- Professor and Director of the European Policies Structural Funds in the three countries, re spending under the heading of tele- Research Centre, University of Strathclyde, concluding with some observations on communications and the information [email protected] improving the added value of the Funds society. after 2006. Sandra Taylor, The breakdown of non-Objective 1 spending allocations in Finland and Senior Research Fellow, European Policies Structural Funds in the Nordic coun- Sweden is broadly similar to the EU15 Research Centre, University of Strathclyde, tries [email protected] average. The ranking of priorities is the As in other prosperous countries of same as under Objective 1, the main the EU, Structural Funds in Denmark, differences being less support to agri- The concept of added value Sweden and Finland represent a very culture and a greater emphasis given to n the recently published Third small proportion of national GDP (0.1- promoting human resources, entrepre- ICohesion Report, the European 0.2 percent in the 2000-06 period). neurship and spending on the environ- Commission emphasises the importan- Nevertheless, the Objective 1, 2 and 3 ment. In Denmark, the breakdown of ce of the ‘Community added value’ of programmes represent a sizeable expenditure is very much dominated by the Structural Funds. In addition to the quantitative impact of the Funds, it Table 1: Structural Funds in the Nordic countries, 2000-2006 identifies “the contribution made to Denmark Finland Sweden regional development by factors such as Allocation (¤ mill) 822 2120 2223 strategic planning, integrated regional Allocation (% of GDP) 0.1 0.2 0.1 development policies, partnership, eva- Population coverage (%) 10.2 51.9 23.6 luation and the exchange of experience, Allocation per year per inhabitant (¤) know-how and good practice between Objective 1 - 121.1 104.1 regions”2. The issue of added value is Objective 2 41.4 41.4 41.4 also at the heart of the debate on the future of EU regional policy. The Objective 3 9.9 14.2 12.3 European Commission and Member Source: Third Cohesion Report, 2004. States agree that a post-2006 EU regio- nal policy must seek to maximise the amount of funding, collectively invol- human resources, reflecting the fact added value of EU interventions, in par- ving a total of ¤5 bn in the three coun- that the Objective 3 programme compri- ticular under any policy support provi- tries in the 2000-06 period (see Table ses 60 percent of EU funding, the ded outside the less-developed regions. 1) and providing potential scope for smaller Objective 2 programme focu- achieving at least some added value. sing primarily on SME support, RTD The concept of added value, is howe- The Objective 1 and 2 areas cover a sig- and environmental measures. ver, not well-defined and entails consi- nificant proportion of the national derable subjectivity. Different actors, population, especially in Finland where Quantitative added value – impacts working within or outside EU regional more than half of the population are in on cohesion policy at different levels, may perceive designated areas. Per capita allocations The starting point for assessing the and interpret the added value of the vary greatly, from the ¤100-120 per added value of the Structural Funds is Structural Funds in very different ways. head per year in the Objective 1 areas of the impact on cohesion. This is, howe- The following article examines the Finland and Sweden to the ¤41 per 22 FEATURE JOURNAL OF NORDREGIO

Figure 1: Indicative breakdown of Structural Fund allocations, 2000-06 a catalyst for regeneration. An impor- tant point is that Structural Fund pro- grammes have influenced the availabili- ty of national resources for economic development, in particular at local level. In all three countries, policy-makers agree that EU funding has reinforced the position of regional policy on the ‘political agenda’ and ensured that co- funding for EU regional development programmes is ring-fenced, safeguar- ding resources from budgetary cutbacks or diversion to other policy priorities. Indeed, in Denmark, since the abolition Source: Third Cohesion Report, 2004. Objective2/3 figures include Community Initiatives. of regional policy aid schemes at the start of the 1990s, the Structural Funds ver, very difficult to identify because of gests that some 27,600 jobs were asso- have comprised the only programme deficiencies in the availability of reliable ciated with the Objective 2 programmes involving policy measures in designated monitoring data and the methodologi- in Finland and 39,400 in Sweden over areas 4. cal problems of disaggregating the 1995-99 period. Under Objective 6, Structural Fund support from other it was estimated that some 12,200 jobs Qualitative added value public sector funding and accurately were created/maintained in Finland quantifying impacts. The recent evalua- and 3,800 in Sweden. An indication of Looking beyond the quantitative tions of programme performance con- the scope for error in these figures is impacts, the question is what has been ducted for the EC, for example, make that the Objective 6 estimates (based on the broader ‘added value’ of the Funds. frequent references to the limitations of sample investigations) are only about 15 In this context, added value can be defi- their analyses of ‘effectiveness’. percent of the jobs recorded in the pro- ned as “something which has been gramme monitoring data. enabled or which could not have been Notwithstanding the data and metho- done without Community assistance”, dological problems, some insight into Whatever the macro-economic and can be observed in several areas. the scale of job creation is available impacts of EU cohesion policy, there is from the periodic EC ex post evaluati- evidence at regional and local levels that First, the EU approach has contribu- ted to the fundamental change in the ‘paradigm’ of regional policy that has Table 2: Estimated employment effects of Structural Fund regional programmes taken place in the three countries over Denmark Finland Sweden the past decade. This is evident in parti- 1989-93: Obj.2 cular in the regionalisation of regional ERDF jobs created 2,616 -- -- policy (Finland, Sweden) and the grea- ESF jobs created 1,501 -- -- ter vertical coordination between levels Total jobs created 4,117 -- -- of government (Denmark). Structural Funds have brought about a new form 1994-99: Obj.2 of relations between the state and the ERDF jobs created 6,900 9,700 21,000 regions, enabling regional actors to ESF jobs created 4,200 17,900 18,400 have a much stronger role in influen- Total jobs created 11,100 27,600 39,400 cing both policy formulation and imple- mentation. In Finland and Sweden, the 1995-99: Obj.6 Funds have also encouraged the shift Jobs created -- 3,200 2,000 away from an exclusive focus on the Jobs maintained -- 9,000 1,800 peripheral and sparsely populated areas Sources: Ex post evaluation of 1989-93 Objective 2 programmes, Ernst & Young, 1996. Ex post evalua- to address the problems of other types tion of 1994-1999 Objective 2 Programmes, CSES, 2003. Ex post evaluation of Objective 6 programmes of region 5. in Finland and Sweden 1995-99, Levón Institute, University of Vaasa, 2002. Related, the EU has promoted a strate- ons, for the 1989-94 and 1994-99 peri- the Funds have enabled additional eco- gic dimension in regional development ods (see Table 2). For Denmark, the nomic activity to take place. The Funds policymaking in the three countries. results suggest that some 15,300 jobs have been associated with substantial Regional development has become were attributable to the Structural Fund numbers of new firms created, SMEs more integrated and coherent through programmes between 1989 and 1999. assisted, R&D activity facilitated and the multi-sectoral and geographically In Finland and Sweden, Structural other outputs. Further, it is argued that focused approach of programmes. Funds only became available in 1995, programmes have improved the quality Multi-annual programming periods but the recent ex post evaluation sug- of economic development and acted as have provided a more stable policy envi- JOURNAL OF NORDREGIO FEATURE 23

ronment, allowing longer term plan- cy has have provided an exceptionally Also, the regional development environ- ning. There is evidence that the lessons stable yet adaptable policy framework, ment within which Funds will operate of EU programming are being transfer- which has promoted a dynamic of eva- in the next period will be different from red into domestic policies. In Sweden, luation, learning and innovation. In the situation in 1989 (in the case of for example, the multi-annual Regional some, but by no means all regions, the Denmark) and 1995 (in Finland and Growth Agreements established in Funds have helped to institutionalise a Sweden). Regional policy now operates 1998 (now being renewed as Regional ‘learning reflex’ as part of the routine in new ways, and, as noted above, many Growth Programmes), were inspired by delivery of regional economic develop- important aspects of Community added the EU Structural Fund programmes; ment policy. value have become embedded within other aspects of Swedish economic national policies. Lastly, an important effect of the development funding are also being Structural Funds is to make the EU Improving the added value of the delivered through more strategically more ‘visible’ to citizens, communities, Funds will, therefore, require new thin- defined and targeted programmes than businesses and public authorities. The king on the part of national govern- was previously the case. programmes have different levels of ments as well as regional and local aut- The most frequently cited area of visibility in the three countries, partly horities. If the EC proposals were to be added value associated with the because of varying levels of publicity (at agreed, Member States would have gre- Structural Funds is partnership. This least prior to 2000), and also because ater flexibility for implementing EU fundamental principle of Structural public awareness and media exposure cohesion policy. They would also need Fund programming is considered to are sometimes mediated by the conte- to be imaginative in thinking about the have brought enhanced transparency, sted nature of Member State/EU relati- targets for expenditure (eg. to promote co-operation and co-ordination to the ons. Nevertheless, there are tangible innovation, risk-taking and the network design and delivery of regional develop- outcomes in terms of the encourage- economy) as well as future delivery ment policy, and - it is claimed - better ment given to regional and local organi- mechanisms if the Funds are truly to quality regional development interventi- sations to become involved in European make a difference and provide genuine ons as a result. The commonly cited political and policy debates and to added value after 2006. benefits of partnership are improved ‘internationalise’ their operations by vertical coherence, stronger involve- participating in international networ- Acknowledgements ment of local actors, a greater aware- king and exchange of experience as well ness of the ‘bigger picture’, collaborati- as developing commercial links. The research on which this article is ve working and co-operation on econo- based also draws on work by Ruth Improving the added value of mic development initiatives, and impro- Downes and Douglas Yuill (EPRC) and Structural Funds after 2006 ved decision-making in the manage- Henrik Halkier (Aalborg University) whose contributions are gratefully ment of economic development inter- The Third Cohesion Report proposes acknowledged. ventions. While the Structural Funds a much greater decentralisation, and have clearly encouraged greater levels of some simplification, of Structural Fund cooperation between economic develop- management after 2006. Member ment actors - among regions/counties, States would have a greater responsibili- between regions/counties and munici- ty for thematic and geographic concen- 2 palities, and among municipalities - in tration and for the design and delivery A new partnership for cohesion: convergence, competitiveness, cooperation: Third Report on the preparation of programmes and of programmes. The themes proposed economic and social cohesion, Commission of projects – the process has been uneven by the EC reflect the growth and com- the European Communities, Brussels, p.138. across regions and over time. Again, petitiveness focus of national regional 3 The article draws on EU-wide research under- there is evidence that the partnership policies in Denmark, Sweden and taken under the IQ-Net network of programming principle is being adopted within natio- Finland. authorities, which includes partners from Denmark, Finland and Sweden, and is reported nal policy. Apart from the Swedish regi- The EC envisages that the key features more fully in: Bachtler J and Taylor S (2003) The onal growth agreements/programmes, Added Value of the Structural Funds: A Regional the organisational principles underlying of programming should be retained, Perspective, IQ-Net Special Paper the Structural Funds are at the heart of notably coherence (integrated, multi- (www.eprc.strath.ac.uk/iqnet/iq-net/index.html). sectoral development), stability (multi- It should be noted that the views expressed in the recent Danish White Paper which this article are those of the authors alone. proposes ‘regional growth coalitions’ as annual programmes), collaborative wor- 4 Halkier H (2001) Regional Policy in Transition - a new organisational framework for the king (partnership) and accountability (monitoring and evaluation). However, A Multi-Level Perspective on the Case of most peripheral Danish localities. The Denmark, European Planning Studies 9(3): 323- new regional development legislation with the rules on additionality being 38. enacted in Finland in 2003 also requi- relaxed, and national governments 5 Lindström B (2000) Nordic Regional Policy – res cooperation between regional and having more scope to determine the Ten Years Later, North, 5/6, December. Halkier H and Flockhart J E (2002) The Danish Cases – local authorities. implementation of the Funds, it cannot be assumed that the current approaches Bottom-up Initiatives between Regional and National Environments, in Anders Östhol and Bo There is a further dimension of added to managing and delivering the Funds Svensson (Eds.) Partnership responses – value related to the ‘learning effects’ of in Denmark, Finland and Sweden will Regional Governance in the Nordic States, the Structural Funds. EU cohesion poli- automatically continue beyond 2006. Stockholm, Nordregio, 41-84. NORDREGIO produces Books, Reports and Working Papers. 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2004 WORKING PAPERS: TRANS-NATIONAL NORDIC-SCOTTISH CO-OPERATION: LESSONS FOR WORKING PAPERS: POLICY AND PRACTICE. Kai Böhme et al. (Nordregio WP 2003:3) 88 pages. SEK 100. STADSPOLITIK I NORDEN - FALLSTUDIER KRING HÅLLBAR STADSOM- VANDLING: - FÖRTÄTNING MED KVALITET. ARBEIDSPROGRAM 2004-2006. Malin Hansen et al. (Nordregio WP 2004:1) 72 s. SEK 80. (2,6Mb) (Nordregio WP 2003:2) 26 pages. No charge. 2003 Knudsen, Jon P.: FUTURE CHALLENGES AND INSTITUTIONAL PRECONDI- TIONS FOR REGIONAL DEVELOPMENT POLICY - SUMMARY FROM THE LOCAL RESPONSES TO GLOBAL CHANGES: ECONOMIC AND SOCIAL FIRST PHASE OF A NORDIC RESEARCH PROGRAMME. DEVELOPMENT IN NORTHERN EUROPE'S COUNTRYSIDE. (Nordregio WP 2003:1) 28 pp. SEK 50 Lars Olof Persson, Ann-Mari Sätre Ålander and Hans Westlund (eds). National Institute for Working Life, 2003. 292 pp. Purchase or download from Arbetslivsinstitutet ELECTRONIC PAPERS: THE NEBI YEARBOOK 2003. NORTH EUROPEAN AND BALTIC SEA INTEGRATION. Lähteenmäki-Smith, Kaisa and Jon Moxnes Steineke: ETAMPERE: BUILDING Editors Lars Hedegaard and Bjarne Lindström. Berlin: Springer-Verlag, 2003. 498 AN ELECTRONIC PATHWAY TO THE FUTURE? EVALUATION OF pp. ETAMPERE. (Nordregio EP 2003:4) 64 pp. (1,29Mb) NORDREGIO ANNUAL REPORT 2002. 24 pp. Free of charge Böhme, Kai: NATIONELLA RUMSLIGA PLANER I FEM LÄNDER. NATIONELL HORISONTAL OCH VERTIKAL INTEGRATION OCH EUROPEISK SAMORD- NING. 2001. REPORTS: (Nordregio EP 2003:3) 38 s. (4,06Mb)

ENVIRONMENTAL ASSESSMENT OF PLANS AND PROGRAMS: NORDIC Lähteenmäki-Smith, Kaisa: REGIONAL POLICY AND INTER-REGIONAL EXPERIENCES IN RELATION TO THE IMPLEMENTATION OF THE EU STRATEGIC COOPERATION IN THE NORTH-CALOTTE: CROSS-BORDER DIRECTIVE 2001/42/EC. CO-OPERATION AS AN INSTRUMENT OF REGIONAL DEVELOPMENT. Edited by Tuija Hilding-Rydevik. (Nordregio Report 2003:4) 200 pp. SEK 200 (Nordkalottrådets publikationsserie, rapport nr 61) (Nordregio EP 2003:2) 58 pp. ISBN 91-89332-34-2 (0,2Mb) INNOVATIONS, REGIONS AND PROJECTS: STUDIES IN NEW FORMS OF NORDIC EXPERIENCES OF IMPACT ASSESSMENT OF PLANS AND PRO- KNOWLEDGE GOVERNANCE. GRAMMES. Edited by Bjørn Terje Asheim and Åge Mariussen. (Nordregio Report 2003:3) 348 SEA workshop, 11-12 February 2002, Stockholm. Workshop proceedings edited by pp. SEK 350 Tuija Hilding-Rydevik. (Nordregio EP 2003:1) 72 pp. (0,8Mb)

Bjarnadóttir, Hólmfrídur och Bradley, Karin: NY KURS FÖR NORDEN – PLANE- RING OCH HÅLLBAR UTVECKLING. (NORDREGIO REPORT 2003:2) 145 s. SEK 150 ISBN 91-89332-32-6

Clement, Keith, Hansen, Malin and Bradley, Karin: SUSTAINABLE REGIONAL DEVELOPMENT: LEARNING FROM NORDIC EXPERIENCE. (NORDREGIO REPORT 2003:1) 121 pp. SEK 150 ISBN 91-89332-31-8