© 2007. Berman Group.

Evolution of the Czech Regional Policy

in the Context of the EU Regional Policy

RNDr. Jan Vozáb, PhDexternal lecturer, Charles University, Prague

consultant, partner Berman Group

© 2007. Berman Group.

Background for Czech regional policy evolution

• Character of regional differences– Prague vs. Rest of the country– West-East gradient– Micro-regional vs. mezo-regional differences

• Structures for Czech regional policy– State interventions vs. local and later regional

interventions– Strong sectoral ministries but weak ministry for regional

development -> weak formal/official regional policy– Limited (or lack of) co-operation, networking and

partnership, both, horizontally and vertically

© 2007. Berman Group.

Evolution stages of the Czech regional policy and main influences forming it

First half

of 90s

Moderate regional policyPhare instrument and pre-accesion funds

Second half of 90s

Pre-accession2000-04

EU accession 2004-06

Creation of regional governments, devolutionEU accession – Chapter 21, acquis

Two parallel systems

New programming

2007-13

Towardsintegration

Economic transition

© 2007. Berman Group.

Development of the Czech RP until 1996

• Moderate regional disparities emerging at microregional/local level mostly

• Pro-claimed economic liberalism– very narrow official/explicit regional policy

– no programming/strategic documents

– very limited supporting mechanisms aimed at SMEs support on a project basis

• Sectoral and fiscal policy instruments much larger than RP, with unintentional and unconceived regional impacts

• No influence of EU RP: Phare instrument focused on transition issues and mostly institutional building

© 2007. Berman Group.

Regional policy in the second half of 90s

• Increasing unemployment (3.5% -> 9%), growing regional disparities both, at NUTS III as well as at local level

• Moderate regional policy of the new government– first programming documents at national and regional levels– more and stronger delivery agencies– The Act on Regional Development, Government Principles

of RP • Non-regional policy instruments prevail, partly intentional

regional impacts (SMEs support, labour market policy)• Modest preparation for EU ESC policy started

– separated Phare and CZ policies, Phare project based, very limited support in the field of EU ESC policy

– first („training“) operational programmes (e.g. ROPs) – usually no or very modest implementation

© 2007. Berman Group.

Czech regional policy prior EU accession: 2000-2004

• High unemployment remains with regional differences, economy grows, regional disparities continue to grow

• Pre-accession instruments support – direct aim at EU ESC policy adjustment – but still project

based– pilot SF like „programmes“ implemented at small scale at

local level• National preparing for EU ESC policy

– programming (two rounds) as well as project preparation– new implementing structures built – parallel to existing ones– twinning – no particular effects – NUTS II level created

• Former national/regional policies continue unchanged• Public administration reform

© 2007. Berman Group.

Differences between pre-accession instruments and Structural Funds

Pre-accession instr.• International aid -

– Centralised, EC responsibility– Spending technically based

• Accession oriented =>IB projects important

• Limited financial resources• Many projects not

supported• Larger projects prefered • Support „out-of-system“• Selection of projects

similar to public procurements

STRUCTURAL FUNDS• Support to national policies

• Decentralised, member state responsibility

• Spending based on programming• ESC oriented => Economic

development objectives• Larger financial resources• Absorption capacity threat

• Small projects are usual• SF co-finances regular

national programs• „First come first serve“ project

selection possible

© 2007. Berman Group.

Czech regional policy after EU accession2004-2006: two parallel systems

• EU ESC policy and programmes parallel to the Czech ones– parallel programmes and other documents– new implementing bodies – eg. Reg. Councils, Secretariats – new dept. of existing ones – eg. CzechInvest, Regional Labour

Offices, – parallel delivery mechanisms – based on demand of high number of

small local and regional stake-holders– parallel financial flows, too much match funding for end users

• Former Czech RP and national „programmes“ continue unchanged, sometimes competitive to EU Funds´ programmes

• New interventions introduced by ESC policy– more development and target oriented (incl. indicators)– new fields (e.g. innovations, life-long learning)– new roles of programme management structures – MAs, IBs,

• Serious absorption capacity problems

© 2007. Berman Group.

Comparison of EU ESC policy and Czech national policies interventions

Czech

poli

cies

inter

vent

ions

In-system

Top down

Bottom-up

Supply driven projects

Demand driven projects

ESC poli

cy

inter

vent

ions

Out-of-system

© 2007. Berman Group.

Czech regional policy in the new programming period 2007-2013

• Continuous economic growth, decreased unemployment• Large EU funds indicative allocation for the Czech Republic• ESC policy becomes the core of the Czech RP, aimed

particularly at– Innovations, research & development, HR adaptation, Adjustment

to EU environmental standards (accession requirements), transportation infrastructue, interventions from regional level (ROPs)

• Merging national and EU programmes – Former national interventions in the field of ESC policy mostly (not

fully) integrated into SF programmes– SF implementation structures partly adapted, many new created

due to new programmes -> likely difficulties in co-ordination – Financial flows for SF programmes/projects partly streamlined

• Big threat of insufficient SF absorption, delays in SF implementation

© 2007. Berman Group.

CZ regional policy vs. EU regional policy

welfareconcept

pro-active policyre-active policy

developmentconcept

Czech RP in 90s

EU ESC policy

Merging CZ RP

and EU ESC policy

© 2007. Berman Group.

Conclusion: New policy paradigm partially accepted but old institutions prevail

• New interventions – more Lisbon or a development nature, BUT– old delivery mechanisms to continue– wide and non-targeted intervention focus still planned

• Merging national programmes into SF programmes, BUT– excessive fragmentation continues: 24 OPs, 15 MAs– attempts to „hide“ non-ESC policy interventions into SF OPs– redistribution nature of SF OPs – real implementation at the

lowest possible level• Financial flows streamlined for SF implementation BUT old

legislation and bureaucratic structures– high administrative burden at the level of MAs and IBs – complicated project management for FBs and end users