When Evaluations Do Not Function as Learning Exercises:
The 1989-1999 Objective 1 Evaluations in Italy
By
Robert Leonardi, London School of Economics
1. Introduction: The low socio-economic performance of Italian southern regions
In 2003 the European Union’s cohesion policy entered its fourteenth year of existence. Since its inception in 1989, the policy has covered a significant part of the EU member states’ territory and population. Starting in 1989, Italy had eight regions in Objective 1 (Abruzzo, Basilicata, Calabria, Campagnia, Molise, Puglia, Sardinia and Sicily). During the second CSF cycle, Abruzzo became Italy’s and the EU’s first region to exist from Objective 1. During the current CSF cycle, 2000-2006, a second Italian region, Molise, has exited from Objective 1, and it is expected that for the fourth CSF cycle, 2007-2013, two more Italian regions, Basilicata and Sardinia, will join their previous two Italian counterparts already mentioned in going into transition out of Objective 1, thereby leaving only half of the previous eight regions still benefiting from Objective 1 programmes.
At first glance the constant and steady stream of Italian regions existing from Objective 1 seems to suggest that the country has had an enviable level of success in conceiving and implementing its Objective 1 programmes. However, if we look at the data in Table 1 comparing the relative performance of the Italian Objective 1 regions vis-à-vis other Mediterranean regions in the European Union, we see that the level of GDP per capita as expressed in PPS has hardly budged during the last two decades and half are relatively worse off than they were in 1980. In absolute terms the Italian Objective 1 regions have improved their levels of well-being from the levels that existed in 1980 but in relative terms the other Northern Mediterranean Objective 1 and non-Objective 1 regions are quickly catching up with their southern Italian counterparts. Why is this the case, and why haven’t the southern Italian regions been able to use the Structural Funds to maintain the gap between Italian and other Mediterranean regions which existed in 1980 and why have Italy’s Objective 1 regions—despite their access to conspicuous Structural Funds financing vis-à-vis their northern counterparts—not even been able to grow at the same rate as other Italian regions.
The thesis of this paper is that part of the reason for this less than brilliant performance levels of southern Italian regions is, in part, due to the inability to make full use of Structural Funds financing to begin a new phase in socio-economic development. Graphs 1 to 8 illustrate the low socio-economic performance of southern Italian regions between 1981 and 2000 vis-à-vis their northern and central Italian counterparts in terms of GDP per capita, investments, and unemployment. The same trend is registered for other socio-economic variables, such as activity rates and employment levels.
The careful review of the Graphs also point out the differentiated level of socio-economic performance between two groups of southern regions: the four regions with the smaller populations (Abruzzo, Basilicata, Molise and Sardinia) and the four larger regions (Calabria, Campania, Puglia and Sicily). The investment data in Graphs 5 and 6 are particularly eloquent in highlighting the significant differences between the smaller vis-à-vis the larger regions.
Another significant difference between small and large southern Italian regions is noticeable in the capacity to spend by the regions (see Table 2) over the three programming cycles of the Structural Funds. During the first period, 1989-93, Basilicata and the other smaller regions had already demonstrated higher levels expenditure capacities that the other southern regions, and this difference through the 19994-99 period and into the new programming cycle.
The question that can be asked relative to the entirety of Italy’s southern regions is “why have they performed so poorly vis-à-vis their Mediterranean counterparts?” and within Italy itself “why have the larger southern regions performed so poorly in comparison to their smaller neighbours?” The thesis of this paper is that the southern Italian regions are at a disadvantage visi-a-vis other Mediterranean and EU Objective 1 regions because prior to the reform of the Structural Funds in 1988 and up to 1992 (i.e., three years into the first CSF cycle) they were the beneficiaries of a national regional policy that basically was a sectoral development policy that did not contain many of the features common today in the EU’s cohesion policy approach. We will argue that this previous experience with a fully developed national regional development policy slowed down the mechanism for adapting to and learning the new approaches implemented by the instituted by the EU’s cohesion policy.
2. Italy’s regional development policy prior to 1988.
Before the initiation of an EU regional development policy, the Italian South was the recipient of an extensive national one that immediately began in the postwar period. In 1950 Italy inaugurated an ambitious regional development policy for its less-developed regions in the South by creating with law 646 the Cassa per opere straordinarie di pubblico interesse nell’Italia meridionale (Casmez) or “Fund for extraordinary projects of public interest in southern Italy”. The primary goal of the Casmez was to reduce the gap in levels of development present in southern Italy vis-à-vis the rest of the country. However, the Casmez was not a fully developed regional development policy. Instead, it was sectorially oriented—that is, it focussed on specific economic sectors as a means of spurring overall socio-economic development. The Casmez began with investments in land reclamation, reforestation, and water supply projects to help modernise agricultural production in the South. These interventions were not grouped by region. The Casmez operated throughout the South as a whole and did not distinguish between one or groups of regions vis-à-vis the whole.
In 1959 industrialization was added as a goal for the operation of the Casmez through the designation of the first industrial growth poles around vertically organised capital intensive facilities in steel manufacturing (Bagnoli and Taranto), petrochemicals (Brindisi and Gela), oil refining (Gela and Milazzo) and automobile manufacturing (Termini Imirese and Termoli). Six years later tourism was defined as an important economic sector in spurring growth. 1965 also saw the initiation of programmes to aid particularly impoverished areas. Twenty-one years later in 1986 the Casmez was substituted by the Agency for the South (Agensud) through law 64 in recognition of the regularity of the national government’s intervention in the South. Unexpectedly, the Agensud was terminated in 1992 when the first Amato government put an end to the extraordinary intervention of the Italian state in the southern regions and integrated all national development programmes for the Mezzogiorno into the Structural Funds programmes—i.e., rather than intervening with national programmes in pursuing a completely separate objectives the Amato government restricted national intervention to the cofinancing of Structural Funds interventions .
With an initial allocation of one thousand two hundred billion lire (600 million euros) for the Casmez (decade of the 1950s) and then 87 thousand billion lire (43 billion euros) for the decade in which the Agensud was supposed to operate from1986 onwards (both allocations were worth an annual GDP shock of 3% for the South), the gap between North and South surprisingly did not change. The gap between the southern regions and their centre-north counterparts remained substantially the same. In 1950 GDP per capita in the North was almost four to 1 (3.81/1) times higher than in the South. Thirty-five years later that ratio was still 3.78/1.[1] the time-span was short term (single year financial allocations that were stretched out over a ten-year period), no instruments of verification were instituted other than those normally used by the national administration to report its expenditures, no regional participation war foreseen, nor was there a role for social partners. The evaluation of programmatic outputs and outcomes was not a normal part of the policy making or implementation cycle.
As illustrated in Figures 1 and 2 the differences between the Cassa per il Mezzogiorno approach to policy making and implementation was strikingly different from the one that was implemented with the initiation of the EU’s cohesion policy for Objective 1 regions. Thus, Italy’s southern regions experienced a three-year overlap between the two policies from the 1989 to 1992 when the Italian national regional development policy for the South was suddenly terminated and all national support for regional development was subsequently subsumed into the country’s participation in the co-financing of Structural Funds expenditures. What is of concern here is: how was the shift between one approach and the other managed? Were administrators given access to training courses on the new approach and were stages in Brussels or experimental programmes undertaken to transfer the knowledge of how to use the new principles, rules and procedures on behalf of the administrative personnel involved in the implementation of the programmes?
The answer to these questions is simply that no systematic training programme was undertaken to help administrative personnel to make the immediate transition during the first CSF cycle, 1989-93, from the existing Fund for the South approach to the formulation and implementation of development programmes and that instituted by the EU’s cohesion policy and that during the second CSF cycle, 1994-99, Italy did begin a whole series of training programmes at the national, regional and local levels on how to participate in Structural Funds programmes, but these training programmes (entitled PASS or Sub-Programme for the Formation of Personnel of the Public Administration) were purely voluntary in nature (administrators could participate in the training programmes if they wanted to) but no incentives (e.g., increase in pay or administrative status) were provided by the funding authority (Department for Public Administration of the Presidency of the Council of Ministers) for those who participated in the programmes. Financial incentives were strong for those who offered the courses (i.e., consulting firms that had won the public bids to set-up the training courses) rather than for those participating in the courses that came from the public administration. Thus, the lack of a coherent programme to prepare the national, regional and local administrators in the new rules and procedures led to an effective paralysis as observed by the ex-post evaluation of the Objective 1 programmes in Italy. Given the haphazard transition from the old national regional policy and the new cohesion policy, “these problems have paralysed a local bureaucracy which is still tied to the outdated organization and procedural rules”.[2] Thus, the winding down of the national regional policy and the implementation of the new cohesion policy required not only a shift in rules and procedures but also a shift of administrative responsibilities--from the national to the regional-- for the operational programmes.
The implications of these two significant changes can be conceptualised by the contents of Figure 2 which describes the conceptual loop associated with the decision making and implementation processes associated with the previous national regional policy and the Community Support Framework (Figure 3). The major differences between the two conceptual frameworks are: 1. the cohesion policy is multi-level in its inputs and management while the national regional policy involved only one actor—the nation-state; 2. the decisions on what to invest in were never part of a comprehensive programme but were rather the result of piecemeal decisions by the national authorities; 3. regions did not have a role in conceiving or carryout out development policies. The responsibility resided exclusively with the national authorities; 4. Evaluations were not part of the decision-making or implementation process. All controls were internal to the national government; and 5. The interventions were conceived as one-off or extraordinary actions rather than as part of a normal programme of interventions.
The method used to implement cohesion policy within the EU represents an approach that not only values but requires the participation of different socio-economic forces as well as different levels of government in both the policy making and policy implementation phases of the process. As indicated in Figure 3 the formulation and implementation of the EU’s cohesion policy is based not only on a system of a vertical multi-level governance but also on a horizontal form of governance capable of involving a multiplicity of political/administrative as well as socio-economic actors in the process.
On the left-hand side of Figure 3 we find the multiple institutional actors involved in the multi-level aspects of governance used to formulate and carry out the cohesion policies. In Italy where sub-national regional governmental actors have official responsibilities in economic development, vocational education, transport, agriculture, tourism, and other socio-economic sectors, the sub-national level actively participates in the formulation of its own operational programs for Objective 1. The negotiations are carried out through formal meetings, seminars, roundtables and other types of encounters designed to achieve agreement between the national and regional levels on the planning and financial commitments that provide the legal basis in carrying out the cohesion policy in Objective 1 areas.
Another aspect of the planning system created by the cohesion policy that is reflected in Figure 3 is the conceptual separation of the phase of decision-making from implementation.[3] The decision-making phase begins with the formulation of the development programmes for the Objective 1 region, but before policies can be formulated an analysis needs to take place of the socio-economic context[4] based on consultations with representatives of civil society and organized interests to identify the strengths and weakness of the territory and the priorities that need to underpin the future development programme. Such an evaluation was never carried out in an explicit manner to feed into the policy formulation process before 1989. Studies were instead carried out to document the level of need and formulate possible solutions to the South’s socio-economic problems, but the actual policies that were implemented were not explicitly tied to the analysis of socio-economic conditions as is the case now.
In Italy the national government continues to be responsible for the formulation of the initial development plan that is then transformed into the Community Support Framework in negotiations with DG Regio. Regional governments are subsequently responsible for the formulation of their individual operational programmes (ROPs). The ROPs are subsequently finalized into complementary planning documents that have attempted during the third CSF cycle to define into stricter terms the actual nature of the “measures” and “actions” that will be used to operationalise the programme objectives.