The Vienna Institute for ISMERI EUROPA International Economic Studies

Ex Post Evaluation of Cohesion Policy Programmes 2000-2006 financed by the European Regional Development Fund in Objective 1 and 2 regions

Work package 1: Coordination, analysis and synthesis

Task 4: Development and achievements in Member States

THE

WP1 – Coordination of evaluation of SF 2000-2006: Task 4 The Netherlands

TABLE OF CONTENTS

PREFACE...... 2

EXECUTIVE SUMMARY ...... 3

MAP OF THE NETHERLANDS– OBJECTIVE 1 AND 2 REGIONS ...... 5

1 REGIONAL CHARACTERISTICS AND SOCIO-ECONOMIC CONTEXT ...... 6

2 NATIONAL MACROECONOMIC CONTEXT AND POLICY...... 7

3 REGIONAL DEVELOPMENT POLICY AND CONTRIBUTION OF STRUCTURAL FUNDS ...... 8

4 EFFECTS OF INTERVENTIONS IN DIFFERENT POLICY AREAS ...... 11

5 FORM OF INTERVENTION IN THE DIFFERENT POLICY AREAS...... 14

6 POLICY IMPLEMENTATION ...... 16

7 GLOBAL EFFECTS...... 17

8 ADDED VALUE OF THE EU CONTRIBUTION ...... 18

REFERENCES ...... 19

TABLES...... 21

CORRESPONDENCE BETWEEN POLICY INSTRUMENTS AND FOI CATEGORIES...... 22

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PREFACE

This report is intended to summarise the main aspects of regional disparities, the changes in these which occurred over the 2000-2006 programming period and the principal features of regional development policy over this period in terms of the objectives, the way that it was implemented and the contribution of the Structural Funds. It also reviews the evidence on the effects of policy as regards both the direct results of expenditure in the different policy areas and the wider impact on development as such.

It is based on three primary sources of information. The statistical data on regional and national developments over the period so far as possible come from Eurostat in order to ensure comparability with other studies carried out at EU level as well as with the other national reports produced as part of the ex post exercise.

The data on the allocation of funding and expenditure come from the INFOVIEW database maintained by DG REGIO, which itself is based on regular information from the Member States on the allocation of funding and the payments made.

Information on policy objectives, on the results of expenditure and the wider effects of this and on the procedures adopted as regards the implementation of policy comes from various programming documents and national evaluation reports as well as from impact studies which have been carried out on the actual or intended effects of programmes.

The reports, therefore, are based on existing information – or more precisely, the information available at the time they were prepared (around mid-2008) – and no new evaluation has been undertaken for purposes of preparing the report.

The report has been prepared by the Applica-Ismeri Europa- wiiw Consortium, which is coordinating the work on the ex post evaluation of ERDF expenditure in Objective 1 and 2 regions, working closely with a national expert who was responsible for interpreting the quantitative data and the other information indicated above.1 Although the contents of the report have been checked with officials in DG REGIO and with the national authorities, responsibility for any errors in the factual information presented or its interpretation rests with the authors and the views expressed do not necessarily reflect those of DG REGIO or the national authorities.

1 This report was produced with the assistance of Lourens Broersma, University of

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EXECUTIVE SUMMARY

In the Netherlands, a number of regions were eligible for support from the EU Structural Funds between 2000 and 2006. The province of Flevoland was a (phasing out) Objective 1 region, while several regions in the northern, eastern and southern part of the country, as well as in the urban area comprising the four largest cities in the central and southern part of the country were all Objective 2 areas.

The programme for Flevoland was designed to narrow the gap in GDP per head with that in the rest of the country by stimulating economic activity within the region and curbing the very high rates of outbound commuting. These problems are related to the specific character of this province, which comprises reclaimed land from the sea and was formally established only in 1986. It is primarily a residential region, where many people work in the neighbouring area, the economic core of the Netherlands. The programme was reasonably successful as GDP per head increased in relative terms and the number of firms and hence jobs inside Flevoland increased. Only unemployment remains a problem since the difference relative to the national average widened between 2000 and 2006.

The programme for the North of the country was designed to narrow the gap with the rest of the country by strengthening the economic structure. This gap arises from relatively high unemployment rates in the North, relatively low GDP per head (especially when corrected for extraction of natural gas), and over-representation of traditional sectors (agriculture and basic manufacturing). These problems have been acknowledged for decades. The 2000- 2006 development programme is considered to have been successful, since from 1999 onwards there is clear evidence of a more positive development in unemployment rates. In addition, evaluation reports also note that the development programme has been a success in establishing an additional 16,000 jobs over and above what would otherwise have been expected.

The programme for the eastern part of the country was focused on realising sustainable and balanced economic and social development, preserving the natural, environmental and scenic features of the area. This pursuit of this goal was organised around a number of priority areas: (i) spatial development, (ii) economic stimulation and (iii) social cohesion. While the programme had some success in achieving the first priority, this was less the case for the other two. The focus was less on employment creation than in the North and the programme was smaller in financial terms.

The goals of the programme in the South were much the same as those in the East. In this case, the programme is considered to have been relatively successful, except for the closure of agricultural businesses and the limited creation of jobs, both of which compared

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unfavourably to the national average. Finally, the programme for the urban area was aimed at improving the social and economic environment within the cities concerned and, in terms of output at least, was relatively successful.

The total Structural Fund budget for the Flevoland Objective 1 region was EUR 132 million, while that for the Objective 2 regions was EUR 859 million, of which 42% went to the Northern provinces, 17% each to the East and South and the remaining 24% to the urban area. The programmes for Flevoland and the North have been evaluated positively in terms of the effectiveness and efficiency with which projects were implemented. Whether or not these projects would have been undertaken without EU funding, however, is difficult to assess based on the evaluation reports.

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MAP OF THE NETHERLANDS– OBJECTIVE 1 AND 2 REGIONS

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1 REGIONAL CHARACTERISTICS AND SOCIO-ECONOMIC CONTEXT

The main regional disparity in the Netherlands has for a long time been the lag in economic development of the three Northern provinces (NUTS-2) of Groningen, and compared to the rest of the country. From 1959 onwards the whole of the North of the country was continuously a major focal point for regional policy2 and these regions were the only ones in the Netherlands over the period 2000-2006 for which a specific regional development programme was implemented by the national authorities.3

The long-term economic growth of the North of the country has continuously lagged behind growth in other regions. This is particularly evident if the extraction of natural gas (the deposits in Groningen being the largest in Europe outside Russia) is excluded from GDP. When gas extraction is included, GDP per head in Groningen is among the highest in Europe (especially if the effect of commuting in the case of capital city regions is taken into account). When it is excluded, which it arguably should be since almost all of the income generated goes outside the region4, GDP per head is reduced to a much more modest level.

The province of Flevoland, the sole (phasing out) Objective 1 region in the Netherlands is also unusual. This province consists of reclaimed land from the IJsselmeer and was officially established only in 1986.5 Flevoland has no mining to distort its GDP, but its GDP per head is still relatively low – below 75% of GDP when eligibility for Objective 1 support was determined for the 1994-1999 period. This is because Flevoland is primarily a residential region, characterised by a high level of commuting out of the region, many people living there working in the neighbouring Randstad area, which is the economic core of the country comprising a ring of the four largest cities (, Rotterdam, and ), as well as several medium-sized ones. The GDP of Flevoland is, therefore, low because the

2 Before then regional policy was devoted to specific parts of provinces. From 1959 onwards the whole of the three provinces were addressed as problem areas, to which regional policy was aimed.

3 In the past, regional support was given to other regions in other provinces as well, such as the province of that received support after the Dutch coal mines, all located in the province, were shut down between 1965-1975.

4 Recent investigation has shown that 88% of the gas revenues were spent in the west, 9% went to the south, 2% to the east and a mere 1% in the north itself.

5 In comprises the , reclaimed between 1940 and 1950 and the , reclaimed between 1960 and 1976.

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production of many of its inhabitants counts instead towards that of neighbouring regions. GDP per head of Flevoland, therefore, does not reflect the prosperity of the people living there.

In the Northern provinces, employment has developed at a much slower rate than in the rest of the country for a long time. This downward trend, however, seems to have been reversed since the end of the 1990s, since when employment has increased faster than in the rest of the country. As a consequence, unemployment rates which rose in the 1980s and 1990s relative to the national average declined towards the national average over the programming period.

2 NATIONAL MACROECONOMIC CONTEXT AND POLICY

The pattern of growth of GDP in the Netherlands has differed in some degree from that in the EU as a whole. Over the period 1995-1999, GDP growth exceeded the EU by over 1 percentage point a year. From then to 2001 and from 2004 to 2006, it was much the same as the EU average, but between 2001 and 2004, it was around 1 percentage point below average.

The Netherlands is an open economy in which exports account for almost 60% of GDP and imports for some 50%. The balance of trade, largely because of energy exports, has been in surplus for a long period of time, and this surplus increased further during the 2000-2006 programming period, contributing to GDP growth.

The government budget balance went into deficit during the years of slow growth between 2001 and 2003, reaching 3% of GDP in the latter year, so helping to offset some of the deflationary forces from the slowdown in the global economy. Since then, however, the deficit has been transformed into a small surplus as fiscal policy has been tightened as growth has risen. Inflation, which was consistently above the EU average during the first part of the period, fell to below the EU average over the years 2003-2006.

Despite the apparent tightening of fiscal policy, general government expenditure remained relatively constant as a share of GDP throughout the programming period, suggesting that the resources going to expenditure programmes grew in real terms in line with GDP. Moreover, government fixed investment increased as a share of total government expenditure (from 6.5% at the beginning of the period to over 7% at the end), implying significant real growth in the resources going to capital formation in the public sector.

Regional development over the period, therefore, occurred in the context of relatively stable macroeconomic policy, with more resources going to investment but with relatively slow growth of the national economy, especially in relation to the preceding years.

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3 REGIONAL DEVELOPMENT POLICY AND CONTRIBUTION OF STRUCTURAL FUNDS

Main goals of regional development policy 2000-2006 in the Objective 1 phasing out region

The objectives and priorities of the development programme for Flevoland were in line with the Community Strategic Guidelines. The development programme for 2000-2006 was called ‘Towards a balanced Flevoland’6, the main goal being to bring population, employment, transport links, amenities and income more in line with each other. This goal was translated into the following quantified aims:

1. to create 5,500 new business establishments in the region (1999: 17,200 establishments)

2. to raise per capita regional GDP above 80% of the EU15 average (75% in 2000)

3. to reduce the unemployment rate below the national average (in 1999, it was 4.9% in the region, 4.4% in the country)

4. to create 9,000 additional filled vacancies (2,100 vacancies in 1999)

5. to reduce the commuting rate to less than 40% (49% in 1999)

6. to increase the participation rate of women in the labour force to over 65% (57% in 1999).

These operational objectives all implied the need to attract more economic activities in terms of firms and jobs into the province. These aims were also reflected in the allocation of national funding to Flevoland.

Main goals of regional development policy 2000-2006 in Objective 2 regions

The most important Objective 2 areas, both in terms of EU funding and with respect to the national development programme are those located in the three northern provinces of Groningen, Friesland and Drenthe. The nationally funded development programme

6 In Dutch: ‘Naar een evenwichtig Flevoland’. This programme has been evaluated by Hagens et al. (2003). The 2005 annual report of the province of Flevoland contains updated information. The information presented here is based on these two sources.

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implemented between 2000 and 2006 was called ‘Compass for the North’7, the main goal being to narrow the so-called ‘phase difference’ between the region and the country as a whole. This difference relates to the difference in the employment rate (called the ‘net participation rate’ in the Netherlands) between the region and the country as a whole. To achieve this over the period amounted to creating net additional 13-23 thousand jobs, which was to be achieved by strengthening the economic structure of the region while at the same time preserving its natural, scenic and environmental features.

This main aim of the Compass programme was made operational by defining three sub- programmes, each of which was built around a number of themes, as follows:

1. Economic core areas/strengthening market sectors

• improving conditions for the establishment of business in core areas

• strengthening the market sector (and SMEs in particular)

• increasing the labour supply

• optimising the infrastructure

2. Urban centres

• development of urban ‘landscapes’ for living and working

• repair and improvement of houses

• maintaining existing and creating new working locations

• improving urban amenities

• stimulating higher education and knowledge creation

• ensuring the accessibility of urban centres

3. Rural areas

• ensuring a ‘healthy’ agricultural sector as a means of ensuring a ‘healthy’ environment

• renewal of rural areas

• improving the quality of life

• strengthening the role of tourism and recreational activities

7 In Dutch: ‘Kompas voor het Noorden’. This programme is financed by the Ministry of Economic Affairs and the EU. It has been evaluated by Gibcus et al. (2007). Earlier evaluation reports of Boot et al. (2003) and Verkennis (2005) were also used in this section.

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While regional employment growth was also the aim in Flevoland, the aim in the North was more oriented towards achieving a differential pattern of development in the economic core areas, in which it was intended economic activities should be concentrated, and the surrounding rural areas in which recreational and tourist activities should take place. This meant promoting agglomeration effects in the core areas which are then assumed to have positive spin-offs on the rest of the region.

The smaller Objective 2 programmes in the East, South and urban areas were all supplemented by funding from national sources. In these areas, there was no underlying regional development strategy formulated by the national authorities, though there were development programmes. The main aim of these was also to strengthen the economic base. In the East and South, the focus was on rural area, agriculture and the development of business sites. In the urban area, which differs in being not an unbroken region but a set of separated urban areas with similar problems and opportunities, the goal was slightly different. Here the focus was on employment creation, support for SMEs, improving public spaces in the cities and trying to ensure a better qualitative match between jobs and job seekers.

Allocation of expenditure in Objective 1 phasing out region

In Flevoland, the total financial support from the Structural Funds amounted to some EUR 132 million, or 2% of the GDP of the region in 2000, which is broadly in line with the scale of support to Objective 1 regions in other parts of the EU. The way support was allocated between priority areas gives a guide to the policy priorities and how far they coincided with the stated priorities in programming documents. From the allocation of expenditure, the strategy in Flevoland was to focus on territorial development. This accounted for 41% of total funding and covered tourism (which received 26% of the total under this heading), planning and rehabilitation of old industrial sites (which received 45%) and development of rural areas (22%).

Around 25% of the total EU funding for Flevoland was spent on human resources, particularly labour market policy (which received 60% of this total). Around 17% went on improving the enterprise environment, less than in other Objective 1 regions in countries with a relatively high level of GDP per head, two-thirds of this going to support of SMEs and 24% going to R&D and innovation (RTDI).

In addition to the EU funding, national, regional and local authorities also contributed some EUR 285 million. The allocation of this other public funding reflected the same focus on territorial policy (58% of the total budget).

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Allocation of expenditure in Objective 2 regions

As in Flevoland, EU funding in Objective 2 regions was also concentrated on territorial development, which accounted for over half (52%) of the total, this going mainly on promoting tourism and the planning and rehabilitation of old industrial sites. Strengthening of the business environment was also important, particularly support for SMEs, which accounted for almost a quarter of total EU funding. Concentration of support on territorial policy and business activities was in line with that in Objective 2 regions in other comparable countries. It is also consistent with the stated strategy of attempting to diversify the structure of economic activity away from declining industries and to make more productive use of resources and local attributes in rural areas.

Financial execution

By the end of 2008, expenditure in Flevoland exceeded the budget initially allocated by around 5%. The extent of the excess was especially large (18%) as regards territorial development and, in particular, tourism and the development of rural areas. Spending on environmental infrastructure on the other hand was some 8% below the allocation.

In the Dutch Objective 2 regions, 93% of EU funding had been spent, on average, by the end of 2008. Although the programme for the South, in particular, initially encountered problems in spending commitments and ran foul of the N+2 rule, this problem was resolved during the second part of the period.

4 EFFECTS OF INTERVENTIONS IN DIFFERENT POLICY AREAS

Agriculture and fishery

The budget on fisheries in Flevoland went almost exclusively to the town of , which has traditionally depended heavily on the industry.8 Much of the budget was used to restructure the fishing fleet, on the one hand, and provide support for the processing, promotion and distribution of fishery products, on the other. Support for agriculture went primarily on promoting sales of high quality products and increasing the diversification of activities in order to create and expand additional sources of income. In the Objective 2 regions, no funding was allocated to this policy area.

8 This used to be an island in the former (now IJsselmeer) nowadays encapsulated by the reclaimed land of Flevoland.

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Enterprise environment

A set of quantified goals was identified initially for expenditure in the enterprise environment in Flevoland: This included increasing the number of business establishments by 5,500 new establishments, either through start-ups, delayed exits or the inward migration of firms. Between 1999 and mid-2005, there was a net increase in the number of establishments of 4,4009, which means that 18 months before the end of the period, the programme was on course for achieving the target.

This growth in the number of establishments led to a rise in the number of jobs of 27,000 over the same period.10 GDP per head was also well above the target of 80% of the EU15 average in 2005 (it was, in fact, over 85%).

The aim of reducing the regional unemployment to rate below the national rate has not been met so far. In 2000, the unemployment rate in Flevoland was 4.7% as against 3.8% in the country as a whole. In 2006, it was 5.2% as against 3.9%. Whether the goal of reducing the share of commuting has been achieved is hard to assess, but there does seem to have been a reduction.

As far as execution of the programme is concerned, the mid-term evaluation reported an urgent need for more project development, since at the end of the first half of the programming period only a limited number of projects had been reported. In the second half of the period, however, the number of projects initiated increased markedly.

The primary goal for the northern Objective 2 regions was to generate 13,000-23,000 net additional jobs, which were necessary to bring down the difference between regional and national employment rates. Between 2000 and 2006, the gap closed by roughly 8,000 jobs. However, the additional number of jobs in the North that can be linked to policy measures – i.e. taking account of the autonomous change in employment – is estimated at almost 16,000 jobs11, which implies that the Compass programme achieved its main goal.

In most cases the projects in the main policy areas achieved the targets set at the start of the project – in terms, for example, of new business parks, new office space and the number of SMEs involved in projects – which resulted in turn in job creation to meet the ultimate objective. The only exception was the renovation of office space, for which at the end of 2006, only 12% of the target amount had been completed. The measures to improve the

9 Annual Report Flevoland, 2006.

10 These are jobs of at least 1 hour a week.

11 Gibcus and Verhoeven, 2007, table 31.

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enterprise environment have not had strong employment effects in the East, South and urban area. The only target which was achieved in the first two regions was the number of firms participating in projects to strengthen the competitiveness of SMEs, while in the urban area this was also the case as regards the number of participants in projects.

Human resources

The start-up of new businesses is an explicit goal of the development programme in Flevoland, the aim being to boost employment, lower unemployment and reduce commuting. A number of projects, therefore, included the development of entrepreneurship as part of their activities. The main focus of this policy area in both the Objective 1 and 2 regions was the education and training of the unemployed. This was especially the case in the North where unemployment rates were relatively high.

Transport and telecommunications

Since Flevoland was already well linked to the economic core of the country, investment in infrastructure focused on harbour projects for both commercial fishing and tourist activities. The North is more remote and less accessible. While connections by road to Randstad are relatively good, there is no high-speed train connection and although the original development plan included such a link, the plan was abandoned. The investment supported in this policy area focused more on improving roads and transport facilities within the region than on linking the region with the western part of the country.

Environment and energy

Support of SMEs in Flevoland took the form of subsidies specifically designed to ensure that firms can afford to invest in technological innovations which do less damage to the environment. In Objective 2 regions, projects in this area are in most cases of minor importance, except in the urban area, where projects are aimed at improving the urban environment in cities for both businesses and people.

Territorial policy

Measures to increase the attractiveness to tourists were important in both Objective 1 and Objective 2 regions. In the latter, these took the form in part of the clean up and reclamation of old industrial sites. This contributed to the diversification of the economy both directly and indirectly by encouraging the development of new activities.

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5 FORM OF INTERVENTION IN THE DIFFERENT POLICY AREAS

In most cases, funding went largely to support specific investment projects aimed at strengthening businesses generally, though, for example the establishment of advice centres or aid for start ups, rather than to direct subsidies to firms. Only businesses in the fishing industry in Flevoland received direct support and in this case to encourage them to reduce their activities. The main interventions are summarised below12.

Expenditure by broad category and form in Objective 1 phasing out region

Total public Policy category expenses Main forms of intervention € million % 1 Direct support to 153.2 35.0 - Firms in fishery receive direct support when firms restructuring - Advise for SMEs in many areas - Advise for and stimulus of new start-ups - IPR investment subsidies (generic) to individual firms 2 RTDI 16.5 3.8 21 Direct support to 5.8 1.3 - Technological and environmental innovation subsidies firms for innovation (TMI-arrangement) to individual firms 22 Indirect support for 10.8 2.5 - Investment projects enabling ICT use and ICT innovation infrastructure 3 Infrastructure 30.2 6.9 31 Transport 18.1 4.1 - Investment subsidies to open up areas to stimulate infrastructure economic activity (roads to worksites, bridges), tourism (parking, cycle tracks, bridges), etc. 32 Other infrastructure 12.1 2.8 - Investment subsidy to restructure harbour facilities 4 Human capital 3.8 0.9 - (Re-)integration by stimulating employability of (un)employed (training) - SME training for use of HRM in their business operation - Establishing of knowledge institutes and knowledge transfer 5 Local environment 233.6 53.4 - Investment subsidies in rural area that raise value added in agriculture (e.g. certification of regional products) - Investments subsidies in urban area that improve living and social climate as well as (urban) business requirements - Investment subsidies in tourism - Create new nature reserves and wetlands Total 437.3 100.0 Note: The IPR investment subsidy is an instrument aimed at providing incentives to firms in relation to the location, nature, size and timing of investment.

12 This is based on the DG Regional Policy ‘Infoview’ database. For the relationship between the forms of intervention (the ‘instruments’) and the Infoview categories, see the table at the end of the report.

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Expenditure by broad category and form in Objective 2 regions

Total public Policy category expenses Main forms of intervention € million % 1 Direct support to 1,276.4 62.8 - Development, revitalisation, extension of business firms parks - IPR investment subsidies (generic) to individual firms - Renewal SME activities (generic) - Advise, promotion activities 2 RTDI 28.4 1.4

21 Direct support to 22.6 1.1 - Stimulating E-business firms for innovation 22 Indirect support for 5.9 0.3 - Establishing Technology Centre North- Netherlands innovation (TCN) - Northern Innovation Support Facility (financial innovation facility) 3 Infrastructure 138.6 6.8

31 Transport 101.4 5.0 - Investment subsidies in bridges, harbour docks, cycle infrastructure tracks, etc 32 Other infrastructure 37.2 1.8 - subsidies for establishing ICT infrastructure (e.g. broadband internet connection) 4 Human capital 56.5 2.8 - Improve functioning labour market by training, re- integration activities, stimulating HRM initiative for SME - Knowledge institutes – LOFAR 5 Local environment 532.3 26.2 - Investments subsidies in urban areas, for railway station areas, city centres and amenities; facilities to enhance city culture, sports, tourism - Investments subsidies in agricultural, rural areas to enhance efficient agricultural industry, improve tourism infrastructure and (water) recreation Total 2,032.3 100.0

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6 POLICY IMPLEMENTATION

The mid-term evaluation of the programme for Flevoland led to some shift in the allocation of the budget between different policy measures. Since the budget for strengthening the economic base was not spent because of the preponderance of SMEs in the region combined with the economic downturn, funding from this was moved to the restructuring of business sites and the development of tourism, where spending threatened to exceed allocations. There was also a shift from support for strengthening the fishing industry to reducing the size of the fleet.

The mid-term evaluation made a number of suggestions to revise the output indicators, most of which were adopted in the updated results of the Annual Report 2005.

The development programme itself was well organised, with a clear separation of responsibilities13. The decision-making body is the college of provincial delegates (in Dutch, gedeputeerde staten GS), which was subject to democratic control, and a supervisory board monitored the projects. The province established a specific department, the Programme Management Europe (PME), for the actual development and execution of projects, the PME and the Development Association of Flevoland (in Dutch: Ontwikkelingsmaatschappij Flevoland) being responsible for programme management and control.

Changes in the strategy of the Compass programme in the North led to shifts in the national budget that the Ministry of Economic Affairs allocated to each of the policy areas. The budget for knowledge infrastructure rose at the expense of measures directed at businesses and the labour market. Since in a large number of projects, national funding was combined with EU funding, this shift also had consequences for the allocation of Structural Fund support, company specific investment subsidies being taken over from the ministerial budget.

The output targets of most projects within the Compass programme were, in general, realised in a relatively efficient way, according to an independent assessment, and the design and execution of the programmes well managed14. At the same time, the administration costs of the programme were relatively low (at only 3% of the total finance made available). The role of the Advisory Board for the Market (in Dutch: Adviescollege voor de Markt – AMa), which mainly served to encourage firms and institutions to propose projects, was regarded as positive. This was also the case as regards the organisation of the

13 Hagens et al. 2003, chapter 6.

14 Gibcus and Verhoeven 2007, chapter 5 and 6.

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programme, with the executive body (SNN UO) handling applications as well as monitoring progress, which proved to be helpful in avoiding problems in implementation.

As noted above, one major project planned initially, the high-speed rail link between the North and Randstad, the so-called ‘Zuiderzeelijn’15, was cancelled by the central government. The idea was that the line would encourage workers to move out of the crowded Randstad area to the more spacious North, while at the same time, making it easier for people in the North to access a large reservoir of jobs in Randstad. Both regions, would, therefore, potentially benefit. The financial risks attached to such a large scale construction project, however, were judged to be larger than the potential benefits.

7 GLOBAL EFFECTS

The main problem with Flevoland was essentially its unbalanced structure, in the sense that around half the people living who were in employment worked in another region. The solution was seen as encouraging the people concerned to take a job locally. The proximity of Flevoland to Randstad, the economic core of the country, makes this a difficult task. Nevertheless, the programme has stimulated employment growth in the region and only unemployment, which is a feature of the larger cities ( and ), still poses a problem. In general terms, therefore, the programme contributed to achieving more balanced development as well as stimulating entrepreneurship on a local scale.

The Compass programme for the development of the three Northern provinces also proved successful. The net effect on employment attributable to the programme was an additional number of almost 16,000 jobs over the period. This helped to close the gap in the employment rate with the rest of the country.

The Compass programme also contributed to reinforcing the division in the North between centres of economic activity, where employment is concentrated, and rural areas, which remained residential and places for leisure and recreation. Accordingly, the concentration of businesses in particular areas gives rise to agglomeration effects and externalities, with gains to employment and productivity for the region as a whole, while the rural nature of other areas is preserved. This strategy has proved successful in the sense that job growth was concentrated over the period in these ‘core areas’, while at the same time the North as a whole experienced a reversal of the negative employment trends which had been evident for many years.

15 This is named after the old name of the IJsselmeer before it lost its connection to the sea (Zuiderzee). Its track runs through Flevoland.

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Despite this seeming success, GDP per head in the North, after adjusting for the effect of natural gas extraction, still lags behind the rest of the country. The programme, therefore, focused on strengthening the economic base and reducing its dependence on traditional industries, particularly manufacturing, and helped to continue the shift in the structure of economic activity away from these16. It also helped to simulate innovation in a number of businesses, though the processes are long-term and require a longer time period to have their full effect.

The employment effects in the other Objective 2 regions were positive, but job gains were generally less than initially expected, particularly in the South and East. Moreover, it remains unclear how far EU funding was responsible for the increase in employment that occurred, since the evaluation measures job gains in gross rather than net terms.

8 ADDED VALUE OF THE EU CONTRIBUTION

There is no doubt that the EU contributed to the positive outcome of the development programmes, but none of the evaluation reports or other official documents make mention of projects within these programmes that would not have been carried out without EU support.

The extent to which EU cohesion policy led to improvements in decision-making is not mentioned in the evaluation reports. What is mentioned is the fact that use has been made of evaluation standards designed to make a valid assessment of projects co-financed by the EU and that this encouraged the development of an evaluation culture17. This has led, in turn, to similar arrangements being applied to other programmes in the Netherlands. It has also led to a more project based approach by the authorities implementing these programmes.

16 See Broersma et al. (2006), chapter 2.

17 The evaluation standards were set out in ‘Evaluation Framework Structural Funds’ by Ecorys-NEI (in Dutch: Evaluatiekader Structuurfondsen, see Boot et al. 2003 and Hagens et al. 2003.

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REFERENCES

Objective 1 region (Flevoland)

Hagens, J. A. Gaaff, P. Hanemaaijer, H. Harmelink, 2003, ‘Mid Term Review EPD Flevoland 2000-2006’, Utrecht/Den Haag/Amerfoort: Terp Advies/Buiten/LEI.

Hagens, J. A. Gaaff, P. Hanemaaijer, H. Harmelink, 2003, ‘Bijlagen Mid Term Review EPD Flevoland 2000-2006’, Utrecht/Den Haag/Amerfoort: Terp Advies/Buiten/LEI.

Provincie Flevoland, 2005, Jaarverslag 2005: Uitvoering Europese programma’s in Flevoland in de periode 2000-2006’, Lelystad: Provincie Flevoland, Afdeling Programma Management Europe (PME)

Objective 2 region (North)

Boot, L. M. Wienhoven, A. Verkennis, 2003, ‘Mid Term Review Kompas voor het Noorden’, Rotterdam: Ecorys.

Gibcus, P. W.H.J. Verhoeven, 2007, ‘Mid Term Review Kompas voor het Noorden, Update 2007’, Zoetermeer: EIM.

Samenwerkingsverband Noord-Nederland, 2006, ‘Jaarverslag 2006’, Groningen: SNN.

Samenwerkingsverband Noord-Nederland, 2006, ‘Kompas op koers: het Kompas voor het Noorden geijkt’, Groningen: SNN.

Verkennis, A. M. Wienhoven, W. Vos, 2005, ‘Update MTE EPD Noord-Nederland’, Rotterdam: Ecorys.

Objective 2 region (East)

EU Programmasecretariaat, 2005, ‘Update tssentijdse ealuatie EPD Oost-Nederland’, : Provincie .

Bureau Bartels, 2003, ‘Mid Term evaluatie EPD Oost-Nederland’, Amersfoort: Bureau Bartels.

Objective 2 region (South)

Hagens, J. P. Wagemans en G. Boon, 2008, ‘Update Mid-term evaluatie EPD Zuid- Nederland’, Utrecht: Bureau Buiten.

Objective 2 region (Urban area)

Ministry of Interior Affairs, 2006, ‘Jaarverslag 2006 Stedelijke gebieden Neerland, Den Haag: Ministerie BKZ.

Boot, L. D. Holt, A. Koopman en S. van der Meij, 2003, ‘Mid-term evaluatie Doelstelling 2 gebieden Stedelijk Gebieden Nederland’, Rotterdam: Ecorys.

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Other references

Bijvoet, C.C., C.C Koopmans, 2004, ‘Literatuurstudie IBO Regionaal Beleid’, Amsterdam: SEO.

(Literature Survey IBO Regional Policy, for Dutch Ministry of Economic Affairs)

Broersma, L. J. van Dijk, D. Stelder, 2006, Noordelijke arbeidsmarketverkenning 2006, Provinces of Groningen, Friesland, Drenthe and CWI North Netherlands. (Northern labour market survey 2006)

Buck Consultants International, 2004, ‘Evaluatie IPR 1998-2002’, Nijmegen: Buck. (Evaluation IPR)

OECD, 1998, Boosting Innovation: The Cluster Approach, Paris: OECD.

Statistics Netherlands (CBS), 1999, Innovatie en provincie, Voorburg: CBS. (Innovation and Province).

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TABLES

See Excel file for Tables 1 to 6:

Table 1: Regional disparities and trends

Table 2: Macro-economic developments

Tables 3: Allocation of resources by main policy area

Table 4: Expenditure at 2007 by policy area

Table 5: Allocation of resources by programme

Table 6: Expenditure by programme

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CORRESPONDENCE BETWEEN POLICY INSTRUMENTS AND FOI CATEGORIES code Policy instruments FOI Categories 1 Direct support to firms 11 Agriculture 111+114 12 Forestry 121+122 13 Fisheries 142+143+144 14 Large businesses 151+152+153+154+155 15 Small businesses 161+162+163+164+165+166 16 Tourism 171+172+173 17 ICT 322+324 18 Development of rural areas 1307+1309+1314 19 Planning and rehabilitation 351 2 RTDI 21 Direct support to firms for innovation 182 22 Indirect support for innovation 181+183 3 Infrastructure 31 Transport infrastructure 31 32 Other infrastructure 321 Telecommunication 321 321 Energy infrastructure (production, delivery) 33 321 Environmental infrastructure (including water) 34 4 Human capital Developing educational and vocational training 41 23+113+128+167+174 (persons, firms) Workforce flexibility, entrepreneurial activity, 42 innovation, information and communication 24+184 technologies (persons, firms) 5 Local environment Indirect support to firms (agriculture, forestry, 112+1182+123+124+125+126+127+141 51 fisheries) +145+147+148 52 Social infrastructure and public health 36 53 Planning and rehabilitation 352+353+354 54 Labour market policy 21 55 Social inclusion and equal opportunity 22+25 1301+1302+1303+1304+1305+1306+ 56 Development of rural areas 1308+1310+1311+1312+1313+1399 ICT Services and applications for the citizen 57 322 (health, administration, education) 58 Miscellaneous 4 Note: Forms of Intervention – FOI. See Regulation 438/2001, Annex IV, Classification 3

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