The making of local development: Highlights from Integrated Territorial Projects

Evaluation Open Days in RomaEvaluation Open Days in Roma

July 4thJuly 4th, , 200 20066

Marco Magrassi

Investment Evaluation Unit

Department for Development Policies - Ministry of Economy of Italy

CONTENTS

1.Main features of Integrated Territorial Projects

2.Methods and issues in project identification and selection

3.Some lessons and open questions

INTEGRATED TERRITORIAL PROJECT:

Formal Definition from the CSF 2000-06

“Composite project for the development of an area, which includes a set of different interventions that all contribute, in interaction with each other, to a common development strategy, devised by local actors in response to concrete needs and opportunities.”

Defining Integrated Territorial Projects (ITPs)....

The “WHY” question:

policy goals and assumptions behind ITPs...

“Local knows better”: bottom-up development planning better and strategic project choices

Local level coordination of multi-sectoral interventions synergies, stronger results

Local level partnerships between municipalities, public institutions, private sector stronger government and governance

It is fair to devolve expenditure power to local level, elected bodies

Detailed operations of different nature

CORE OBJECTIVE(Strategic idea: provides coherence, integration)

Example: To increase cultural tourism

Historic preservationEnvironment (restoring

buildings, cleaning polluted sites)

Infrastructure(Roads,

telecommunications Tourist Info points)

Productive sector (Support to local mfg. of

typical products)

Human Resources (training skills needed in the tourism sector)

Unified Project Management (one municipal govt. chosen to lead project)

Measurable Expected Outcomes:Increased N. of visitors, Employment, reduced out-migration

The basic ITP scheme…

Local ITP partnership selects single investments (10 to 50) and present them to the Region as “package”

Single investments at different stages in technical design

Regions evaluate/approve ITP as a whole package of projects

Integrated Territorial Projects are important in Italy…

Almost € 6-billion in 7 ROPs in Southern Italy OBJ.1 ( 20% CSF resources)

About 160 projects, more than 6,000 investments

In Obj. 2, many Regions autonomously decided to adopt ITP model.(e.g. Tuscany Region 30% of the ROP)

Municipalities covered by ITPs in Southern Italy: almost 2,000 (more than 90% of total)

20

812

57

10 2

23

0

10

20

30

40

50

60

Industrial Develop.

Agriculture Food

Urban Develop.

TourismCulture

EnvironmentNatural Parks

Transportnetworks

Generic objective

Category Core Objective

Nu

mb

er

of

ITP

What are the goals that municipalities have selected to improve economic and social welfare? Core Objectives…

Distribution of Core Objectives by Thematic Category

ITP with special features:

1. Single-municipality (urban) ITPs: 22 projects in medium/large cities (more than € 1 billion)

2. Sector-based integrated and inter-municipal projects (social services, industrial development) --sectors and target areas selected through Regional plans

  Min Mean Max

Number of Municipalities 1 16 145

Population 2.509181.224

(median 86.263)1.322.612

Total Funding(millions of €)

3.54541.764

(median 31.274)191.478

Investment per capita (€) 30404

(median 330)4.129

A very diversified universe…

Obj. 1 Regions

Number of ITP

Total Public Funding for ITP (millions of €)

ITP % of Total Regional Program

Basilicata 8 330 26,3%

Calabria 23 423 11,3%

Campania 51 1.576 22,9%

Molise 7 63 15,0%

Puglia 10 1.102 23,5%

Sardegna 13 265 6,8%

Sicilia 27 990 13,0%

TOTAL 139 4750 16,7%

ITP by Region and incidence on total EU Regional Funds available (2004 figures. Currently is more)

ITP identification and selection

ITPs provide opportunity to examine the “negotiated approach”:

A selection procedure that pursues quality through cooperation between Region and final beneficiaries

Sometimes, it combines cooperative and competitive elements

Here, we examine it for ITPs, but was applied in many priorities and measures (also sector-based)

Issues in ITP identification and selection

Campania Negotiated, mixed

Sicily Competitive, bottom-up

Calabria Negotiated, top-down

Puglia Negotiated, top-down

Molise Negotiated, mixed

Sardiniacompetitive, bottom-up

Basilicata Negotiated, mixed

Competitive, negotiated and mixed slection procedures in the ITP experience...

Two types of identification and selection procedures

A: competitive, bottom up B: negotiated, top down

Municipalities associate. Prepare and submit detailed project

proposal

Regions established bidding criteria for municipalities and published a

call for projects

Municipalities associate; prepare project following Regional

geographical, financial, and sometimes sectorial decisions

Regions divide all territory, group municipalities, allocate funds ex-

ante

Regions appraise and approve projects according to project quality and other criteria

Regions appraise and approve projects once they reach a minimum

quality standard

Competitive CfP (Sicily) Negotiated ex-ante (Calabria)

Regional Criteria for ITP identification and selection

Proposals evaluated and attributed max 100 points

•Planning/project quality (max 30 points)

•Contribution to regional priorities (20 points)

•Technical sustainability (8 points)

•Environmental sustainability (8 points)

•Financial sustainability (8 points)

•Socioeconomic and institutional sustainability (8 points)

•Administrative and management sustainability (18 points)

•Max 25 projects in all Region

•ITP areas cannot be in more than one Provincial territory (gminas) and should be sub-provincial in size

•7 Medium and large cities would be granted specific resources

•Funds distributed ex-ante according to demographic criteria

Tuscany example: role of the Provinces (powiats) in ITP identification and selection…

1. Region established rules; divided funds equitably among Provinces

2. Then delegated to 10 Provinces tasks of “animating” and assisting the territory to organize and prepare project proposals (Reg provided TA funds)

3. Inter-municipal associations presented projects

4. Provinces developed a first scoring and ranking of projects

5. Regions evaluated and approved; but Provincial ranking incorporated in the scoring formula…

Advantages and risks in ‘negotiated’ procedure

Advantages and risks in competitive CfP

+ more freedom for municipal initiative (demand-based)

+ better project quality

+ in theory, more transparent

- increases conflicts/political costs

- difficult to properly evaluate

- can penalize poorer final beneficiaries who are more in need

+ more equitable in distributive terms

+ implement regional strategy

+ reduce political conflict

- reproduce top-down, centralized policy process (supply-based)

- less incentive for quality (but…)

- less freedom for territory to self-organize

From goal setting, to programming, to implementation:

General lessons from urban ITPs

Lessons from 22 Integrated Projects in medium/large cities totaling € 1 billion+ currently in implementation

Ambitious goals of combining economic transformation with social development

Evaluation evidence from 2000-2006: the South…

3%

9%

6%29%

21%

14%

4%

15%

0% 5% 10% 15% 20% 25% 30%

ECONOMIC INFRASTRUCTURE

SPORT AND LEISURE INFR.

SOCIAL/CULTURAL INFR.

PARKING, TRANSPORT

PUBLIC SPACE/RESTORATION

OTHER INFRASTR.

SME SUBSIDIES

TRAINING

Sectorial distribution of 490 investments in 20 urban projects (% of total funds)

Were strategic goals reached? A proxy answer from types of investments actually financed...

Half of total resources in transport,roads and public space ...“traditional” investments prevail.

If this was programming of 22 urban projects, how is implementation going? Apparently, it confirms mixed results...

Urban infrastructure still dominates, but also well on social services

Economic and innovation investment (enterprise support, economic infrastr.) very slow implementation

In Central-Northern Italy, things don’t go much better (EU zoning problem)...

NEW INVESTMENT ONLY

Contracts Closed (€481M)

Urban Infrastructure 53% Facilities for social/public services 12% Facilities sport/leisure 11% Plans, stuides, monitoring 8% Training fo employed workers 4% Transport infrastr. 3% Transfers to No-profit org. 2%

Minor investment in urban competitiveness, economic infrastructure, FDI promotion, internationalization

Little financial engagement of the private sector Very few projects involve metro-area or city-region (e.g.

Catania, Cagliari) Urban development strategies were rushed, often week “Institutional” bottlenecks: financial administration,

municipal internal organization, project management, City-Region inter-govt. relations, engineering/procurement cycles....

Evaluation evidence that fed negotiation strategy for 2007-13...

Also...lack of strategic planning negatively affected effectiveness of urban development funding

Overall lessons

Overall lessons (1)…

1. In weaker territories, a “radical” bottom-up approach has strong limitations…Regions and other actors must assist continuously

2. In stronger territories or larger urban areas, you can decentralize more and have ambitious goals (innovation, growth). But still does note come “naturally”...

3. Partnership with civil society and private economic actors crucial, but very difficult to build...

4. Better projects where local govts. have some capacity/experience in development planning?

5. Financial streamlining, project management design/resources, crucial issues to fix in 2007-13

Other questions to discuss…

1. What role for Regions in defining boundaries and selecting territories? Better piloting or comprehnsive policy ? What balance b/en top-down and bottom-up?

2. (a) Larger cities, (b) small (or rural) municipal networks, (c) sector-based local policies…should we diversify strategic and operational approaches? How?

3. The “timing” issue:local coalition & strategy-building takes time, but projects must advance and disburse…How to pursue both?