UNIVERSITA’ DEGLI STUDI DI MILANO GRADUATE SCHOOL IN SOCIAL AND POLITICAL STUDIES Department of Social and Political Sciences (SPS) Doctoral program in Political Studies (XXIX Cohort) Specialization in Public Policy Cohesion policy: the ideational dimension Explaining the change in cohesion policy instruments across the 1988, 1993 and 2013 reform processes Doctoral Research Dissertation by Niccolò T. Donati Supervisor: Prof. Maurizio Ferrera, University of Milan INTRODUCTION 5 CHAPTER I - COHESION POLICY: THE IDEATIONAL DIMENSION 13 1. The issue of inter-territorial diversity in the European Union 14 2. The Launch Era, 1954-1968 16 2.1 The embryonic regional policy in the Treaty of Rome 16 2.2 Regional Policy in transition 19 3. The Doldrums Era 25 3.1 Towards the European Regional Development Program 25 3.2 The "hors quota" struggle 38 4. The Boom Era 44 4.1 The 1988 reform 44 4.2 The 1993 and 1999 reforms 49 4.3 Cohesion policy after the Eastern European enlargement 52 4.4 The sovereign debt crisis 55 4.5 Cohesion in the face of the adversity: austerity and/or solidarity 59 5. Summary 65 CHAPTER II – LITERATURE REVIEW 67 1. The debate on cohesion policy and Structural Funds: the main approaches 67 1.1 Multi-level governance and cohesion policy 69 1.2 Liberal intergovernmentalism and cohesion policy 71 1.3 Development studies and cohesion policy 73 2. Ideational approaches to cohesion policy 74 2.1 Cohesion policy and European solidarity 74 2.2 Cohesion policy and the EU macroeconomic policy 77 2.3 Cohesion policy and ideational studies 79 3. Summary 83 CHAPTER III - RESEARCH DESIGN AND THE ANALYTICAL FRAMEWORK 85 1. Ideas and causal analysis 86 1.1 Causality: effects and mechanisms 86 1.2 Do ideas matter? How to measure their causal effect? 89 1.3 Designing the congruence procedure 90 1.4 Research questions and the causal model 95 2. Analytical Framework 99 2.1 Diagnostic and prognostic framing of policy issues 99 2.2 The four discourses 101 2.3 How the analysis works: methodological issues 106 3. Summary indicators 110 4. Data selection 111 1 5. Summary 113 CHAPTER IV. COHESION POLICY AND INTER-TERRITORIAL SOLIDARITY 115 1. Cohesion policy from the perspective of inter-territorial solidarity 115 1.1 Inter-territorial solidarity in the EU: a conceptual framework 117 1.2 Inter-territorial solidarity in the EU: three constitutive dimensions 121 2. Inter-territorial solidarity dimension: eligibility, redistribution and conditionality 124 2.1 Eligibility 125 2.2 Redistribution 130 2.3 Conditionality 135 3. Summary 140 CHAPTER V – COHESION POLICY: THE 1988 REFORM 143 1. The 1988 Reform 143 1.1 Status quo ex-ante 143 1.2 The 1988 reform: an overview 148 2. 1988 cohesion policy reform: speech analysis 152 2.1 Overview of the Commission policy preferences (1986-1988) 153 2.2 Solidarity discourse in the 1988 reform 156 2.3 Stability discourse in the 1988 reform 165 2.4 Place-based discourse in the 1988 reform 171 2.5 Sectoral discourse in the 1988 reform 178 3. 1988 cohesion policy reform: summary 184 CHAPTER VI – COHESION POLICY: THE 1993 REFORM 187 1. The 1993 Reform 187 1.1 Status quo ex-ante 187 1.2 The 1993 reform: an overview 189 2. 1993 cohesion policy reform: speech analysis 199 2.1 Overview of the Commission policy preferences (1990-1993) 199 2.2 Solidarity discourse in the 1993 reform 204 2.3 Stability discourse in the 1993 reform 211 2.4 Place-based discourse in the 1993 reform 220 2.5 Sectoral discourse in the 1993 reform 227 3. 1993 cohesion policy reform: summary 233 CHAPTER VII – COHESION POLICY: THE 2013 REFORM 235 1. The 2013 Reform 235 1.1 The 2013 reform: status quo ex ante 235 1.2 The 2013 reform: an overview 238 2. 2013 cohesion policy reform: speech analysis 246 2.1 Overview of the Commission policy preferences (2010-2013) 246 2.2 Solidarity discourse in the 2013 reform 249 2 2.3 Stability discourse in the 2013 reform 255 2.4 Place-based discourse in the 2013 reform 260 2.5 Sectoral discourse in the 2013 reform 265 3. 2013 cohesion policy reform: summary 272 CONCLUSIONS 275 BIBLIOGRAPHY 281 APPENDIX A - INDEPENDENT VARIABLE 299 1. Data collection 299 2. Coding 303 3. Creation of the coding scheme 305 4. Coding scheme 307 APPENDIX B – DEPENDENT VARIABLE 315 1. Empirical measures: ideal types and fuzzy-sets analysis 315 2. Turning concepts into fuzzy-sets: eligibility, redistribution, and conditionality 318 3 4 Introduction The European Union, as a polity-in-the-making, is a political entity that exists as long as it produces tangible consequences. To do so, it needs to sensibly affect the life of those who are supposed to believe in its existence: first and foremost, the EU citizens. In this sense, Robert Schumann argued that Europe was going to be made through concrete achievements, creating at first "une solidarité de fait.” As miracles are supposed to align our belief system with our perception of reality, solidarity is what, substantially, brings Europe into existence. The general understanding of solidarity in national contexts has been, at large, that of “people prosperity”: in the form of “interpersonal solidarity,” this conception has translated into policies that have individuals as their main recipients, regardless of where they live. Winnick (1966: 281, cited in Bolton 1992: 189) describes a different type of solidarity which emerges in political systems, typically federations, where legislators represent geographical areas de facto and not only de jure. In catering to the needs of their constituencies, federal legislators create a distinctive type of solidarity, which follows the ideal of improving the life-chances of groups that are defined by their inherent spatial proximity. This second type is called “place prosperity.” The ensuing politics is the one variously defined as territorial solidarity (Béland and Lecours 2005, Mueller and Keil 2013) or federal solidarity (Bauböck 2017: 98). This second type of solidarity emerged in the EU throughout a lengthy process that started with the Treaty of Rome and that culminated with the creation of cohesion policy in 1988. Cohesion policy is, at its core, a place-based policy that absorbs one-third of the EU budget. Its relevance in the European context is explained as a function of the territorial inequality that affects the EU to a great extent. According to a recent report issued by the EU Directorate-General for Regional and Urban Policy, “in the new millennium (...) inequality among NUTS-2 regions has turned sharply up again having fallen in 5 the 1990s from a high level in 1980" (EC 2017: 4). The downward trend that the DG Regio refers to was prompted, in the late eighties, by two events: the creation of the Single Market and the agreement on the Delors I budgetary package: the latter allowed to better share among the European partners the dividend of the economic growth created by the Single Market (Everdeen et al. 2002). The policy that operated through the reinvigorated EU budget was cohesion policy. Lately, however, the trend towards convergence has reverted due to a combination of trade liberalization and technological change, that resulted in a stark economic contrast between the core and the peripheral areas of the European Union (EC 2017: 4). The necessity for cohesion policy, therefore, is still present today. What about the capacity of cohesion policy to embody the ideal of EU solidarity? As the June 2017 Eurobarometer reveals, the widespread view among EU citizens is favorable to cohesion policy: three out of four respondents consider the impact of cohesion policy in their region or city to be positive. And, while 53% of respondents approve the fact that this policy invests in all of Europe's regions and not just in the most disadvantaged, there is as well a widespread acceptance for the redistributive component of cohesion policy: more than the 70% of respondents attribute the utmost priority to aiding the regions with high unemployment. Since cohesion policy absorbs a large portion of the EU budget, its redistributive component implies the capacity to move a significant amount of financial resources from one part of Europe to the other (Hooghe 1998). Where European funds are employed, infrastructures are created along with social schemes, environmental policies and so on. As over a third of the Eurobarometer respondents declare that they have heard about EU co-financed projects in their area, it is safe to say that cohesion policy is a tangible expression of the presence of the EU in the life of the ordinary citizens and that its effort to create a more equitable distribution of resources among the European territories is widely appreciated. There is, however, another side to the story. Scholarly literature in recent years has increasingly criticized cohesion policy for its lack of coherence, by describing it as an “overambitious policy” and as “ambiguous.” As the argument goes, successive reforms have added new policy goals and policy instruments that were out of place in the policy architecture, creating confusion about the objectives of the policy (Eiselt 2008, Begg 2010). There is also evidence of contradictions that run 6 at a deeper level, both in terms of conflicting economic principles that rule cohesion policy (Behrens and Smyrl 1999) and in terms of contradictory intervention theories — how cohesion policy is supposed to achieve its goals (Budd 2007). These concerns are not confined to the intellectual sphere: as a matter of fact, during the last cohesion policy reform, this notion entered the decision-making arena with the Barca Report, officially requested by the European Commissioner for Regional Policy Danuta Hübner.