Linking Regions and Central Governments: Indicators for Regional Development Policy

1. Linking regions and central governments: Indicators for performance-based regional development policy 6th EUROPEAN CONFERENCE ON EVALUATION OF COHESION POLICY WARSAW, 30 NOV to 1 DEC 2009 note: this presentation is best viewed as a slide show

2. This presentation will answer various questions • Questions in today’s programme (click icon to reveal & hide) • As well as: • What contribution can indicators make to the governance of regional development policy? • How are indicator systems designed and used to enhance the performance of regional development policy? • What factors facilitate or inhibit the implementation of these indicator systems? • What lessons can be drawn about the use of indicators as a tool for enhancing governance?

3. Putting indicators systems in context

4. What contribution can indicators make to the governance of regional development policy? • There is mutual dependence among actors…but information gaps exist among actors operating at different or the same level of government • In this context, indicator systems can be used to: • Reduce information asymmetries between levels of gov`t • Help the central government transfer knowledge across sub central authorities (facilitates benchmarking) • Encourage performance improvements; alter behaviour • Provide a common frame of reference and basis for dialogue among actors • This includes benchmarking regional economies to provide an indication of “starting position” prior to the selection of appropriate policies and programmatic interventions • How can common interpretation of indicators be ensured? • Common core set of indicators • Joint selection (CG/SCG) • Common methodologies & data timetables • Ex ante: clarification regarding use • Ex post: transparent, regular reporting • Training

5. How are indicator systems designed and used to enhance the performance of regional policy? • No “optimal” design - objectivesfor the indicator system and for policies and programmes fundamentally affect design • Incentivesare inevitable; choice is which type to rely on: • Implicit (e.g. reputation effects) - arise because reporting performance data is not neutral • Explicit (e.g. rewards/sanctions) – arise through direct manipulation • Use of data should be anticipated • Reduces inefficiencies • Tight linkages with “high-stakes” decisions should be carefully considered • Partnershipbetween levels of government is crucial for enhancing the usefulness of indicator systems • What do indicators measure? • Emphasis on: • Spending • Processes/public admin • Programmatic outputs • Outcomes Indicators alone do not explain impacts. Impact assessment requires evaluation.

6. What factors constrain and facilitate the effective implementation of indicator systems? • Where and how can causal links be established among indicators? • Inputs  activities  outputs should be mapped • Assumptions regarding linkages and time lags should be clear • Intermediate outcomes can bridge outputs and final outcomes (regional economic growth) • What time-lag is tolerable…that still allows establishing causal links? • Research provides indication of lags • OECD: human capital and infrastructure investments in ~ 3 yrs; innovation in ~5 yrs • Also depends on extent of threats to internal validity • Factors that constrain • Characteristics of regional policy • Multi-sector (w/interactions) • Multi-actor (w/joint outcomes) • Multi-objective • Multi-year • Stakeholder capacity • Data availability and quality • Direct financial costs • Indirect “costs” • Mechanisms that facilitate • Participatory design • Pilot projects • Use of consultants • Streamlining procedures • Capacity support • Linking indicators and actors’ realm of influence • Strong enforcement context

7. What lessons can be drawn about the overall use of indicators as a tool for enhancing governance? • Can a limited number of indicators reflect complexity? • Full complexity cannot be captured • Choose and specify indicators strategically and carefully • Are quantitative indicators appropriate …to express impacts? • Qualitative information is crucial to understanding context • Impact assessment is an evaluation task and cannot rely solely on indicators • Indicators provide an indication… not an explanation IF appropriately designed and used: • Indicator systems are an important tool in a “good governance” toolkit - there is an obligation to monitor • (In addition to other benefits) they can help to: • Stimulate effort in particular areas • Facilitate collective learning • But…some important caveats: • Benefits are not automatic and must be planned for • Costs and complexities should not be overlooked • Outcome measurement goes in the right direction, but it can be difficult. Focus on outcomes; seek intermediate measures