Post on 25-Dec-2015
WHAT
IS A
GOOD
PROJECT?
RE
GI O
NA
L D
EV
EL O
PM
EN
T
July
24, 2012 ЛЕТНИЙ КАМПУС
АКАДЕМИИ ПРИ ПРЕЗИДЕНТЕ РФ -2012
1
PROFESSOR CAROL SCOTT LEONARD PRANEPA, CO-DIRECTOR, CENTER FOR
RUSSIAN STUDIESFELLOW ST ANTONY’S
COLLEGE, OXFORD UNIVERSITY
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OUTLINEMulti-level Governance: Age of
Experimentation
Challenges for regions
Experimentation as a Way of Governing
The example of Kaluga
What is a Successful Project?
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24, 2012
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MULTI-L
EVEL
GOVERNANCE
AG
E O
F EX
PE
RI M
EN
T AT
I ON
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MULTI-LEVEL GOVERNANCEEvolving Patterns
Regions, previously ignored, now central to
theorizing
Historical industries and new sectors
Traditions of governance evolving, Taylorism
declining
Globalization of Trade and Information
Current Era: one of Experimentation
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24, 2012
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DECENTRALIZATIONUS and Germany:
Regions acquiring greater authority over programs
Coordination between Federal and Regional levels for cross-border issues
Sustainability policies: they work better at the regional level
At all levels: Integrative policy approaches
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24, 2012
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ISSUES FOR REGIONS: THE ENVIRONMENT IN THE US
• Environmental issues previously resolved at the Federal level now allocated to regions
• State spending grew far faster than Federal Spending
• From 40% in 1980s to 60% of programs now at state level; states spend twice the amount
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24, 2012
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EQUALIZATION OR GROWTH:THE TRADE-OFF IN REGIONAL POLICYFederal and Regional programs
Some fiscal transfers for welfare
Some sectoral policies
Some competitive pressures
Multi-level planning is critical
Make up for regional differences in capacity for solving problems, capacity for learning new routines, economic advantages
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24, 2012
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BOTH GOALS IMPORTANTChoices require flexibility
The answer tomorrow may be different from the answer today
Is the answer going to help govern better?
I.E.:
Does the answer promote learning, is it incentive compatible with growth, is it incentive compatible with multi-level cooperation
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24, 2012
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REGIONAL/FEDERAL PROGRAMS MUST BE COORDINATEDCanada, Austria and Switzerland, among
federations, have the greatest difficulty coordinating regional and national planning
US and Germany are more successful, there is more devolution at planning stage and more federal support for local plans
New: Multi-level regulation, combining positive hierarchical coordination with innovative and competitive regional policies
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24, 2012
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MANY FEDERATED STATES ARE RELATIVELY CENTRALIZED
Tax collection almost entirely centralized for efficiency (mobility of the tax base and tax composition within the country)
In Russia—lack of trust in fairness and organizational capacity of the regions; an effort to increase tax discipline
Legal and administrative affairs are centralized
Spending (via transfers) is largely targeted funds
Who decides what to target?
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24, 2012
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CENTRALIZATION TENDENCIES
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24, 2012
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DIFFERENT COUNTRIES DIVERGECanada allocates decision-making
downward (except not to municipalities)
The principle is adaptivity
Profit tax is federal, but provinces can add to it
The chart below shows how this has evolved:
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24, 2012
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RUSSIAN FEDERALISM: EXPERIMENTATION
Centralized Soviet command economy
Decentralization in the early 1990s
Recentralization in late 1990s, vertical imposed
Post 2012 re-decentralization
The 83 Regions:
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24, 2012
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RUSSIA’S FAST ADVANCING REGIONS:
MOST = NEXT =
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WHY MANY COUNTRIES STILL FOLLOW CENTRALIZED MODELRegions can be greatly influenced by interest groups,
and devolution can lead to extreme inequality
Regional interests can dominate over classic views of efficiency (example—regions in Canada resist the VAT)
Also, provincial voters can be unsure about trade-offs (education vs health care—young/old voters)
Also, this system is expensive: Russia is still moving toward an improved administration
But regions may eventually acquire the profit tax revenue
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24, 2012
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DISTRIBUTED GOVERNANCET R E N D S
State (polity=C) has shrunk
Society (society=A) has expanded
New actors link all three
Policies are shared
Technologies “co-evolve”
B O U L D I N G T R I A N G L E
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24, 2012
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EXPERIMENTAL GOVERNANCE
Supple public and private organizations
Capable of regularly redistributing responsibility according to the nature of the task rather than on the basis of a rigid authority structure.
Spontaneous determination of the most appropriate level for wielding power and taking responsibility
Weakening the attribute of most prevailing governance systems--hierarchical or top-down methods for determining goals and means
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24, 2012
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CHALLENGES F
OR
RUSSIA’S
REGIO
NS
KE
Y I
SS
UE
S
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REGIONAL GENERAL ISSUESWater
Electricity
Sewage
Police
Roads
Education
Care: disabled, elderly, unemployed
Emergencies: floods
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24, 2012
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SPECIAL ISSUES
Diversification in energy abundatnt regions Ecology-Exploration Trade-off in ArcticAgricultural infrastructureDrought and FloodTransportationOne-industry TownsCorruption and Trust
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24, 2012
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EACH SPHERE HAS BUNDLE OF TASKS
For example, Human Resources
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24, 2012
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HUMAN RESOURCES
Must be approached by:
Multi-level government
New technology (digitalization of records)
Training for E-government
Youth programs (Tatarstan!)
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24, 2012
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DROUGHT IN
RUSSIA
’S
SOUTH
What
is th
e an
swer
?
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24, 2012
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DROUGHT MANAGEMENT WILL DIFFER
In Rostov, Volgograd, Stavropol and Kalmykia Republic (South)
Saratov, Orenburg (Volga federal district)
Kurgan, Chelyabinsk (Urals)
Kemerovo (Siberian federal district)
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24, 2012
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DROUGHT MANAGEMENTCaused by combinations of meteorological, hydrological
and storage water deficiencies: long-term response Surface water storage: on and off-stream storages.
Groundwater
Re-use: treated sewage and grey water.
Storm water: for treatment and supply by water authorities.
Networking systems: transfers of water within and between basins which were previously independent harvesting and supply systems.
Rainwater tanks
Dead storage pumping: water contained below conventional offtake levels.
Cloud seeding: a potential long-term measure, previously undertaken by the CSIRO to stimulate rainfall from suitable cloud formations.
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FLOODIN
G
Feder
al ,
Loca
l and R
egio
nal In
tera
ctio
n
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REGIONAL PROJECTS FOR FLOOD MANAGEMENT
Stormwater Flood Management Grants to manage stormwater runoff to reduce floodingGroundwater recharge, water quality improvements, ecosystem restoration benefits, and reduction of in-stream erosion and sedimentation.
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FLOOD MANAGEMENT: REGIONAL AND LOCAL
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EXPERIM
ENTATI
ON
AS
A W
AY
OF G
OV
ER
NI N
G
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24, 2012
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WHAT SEEMS TO WORK
Ideas from other transition countries
Ideas from the EU
Ideas from Russia’s own experience
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24, 2012
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ANSWERS EMERGING
Regions as “Investment Machines”• Coordinated policies toward inward
investment• Combined efforts by Regions, State,
Localities• Good government • Predictability• Trustworthiness
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24, 2012
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ANSWERS FROM RUSSIA: LEADERSHIP
In the 1990s, right resources seemed to be the answer (no military industries)
Now it is clear that the right leaders is the answer
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24, 2012
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THE
KALUGA JO
INT
SUCCESS
Spillin
g ove
r with
succ
ess
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24, 2012
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FEDERAL AND SUBNATIONAL EFFORTPro-Investment Strategy
Begins 2006
Results staggering:
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STARTING POINT: 1998Location: • Along Moscow–Kiev motorway, backbone of the spatial
economic organization • Proximitiy to Moscow (170 km)
Regional economy • Military-oriented (one/half employees in 1980s)• Machine-building• Production of transportation and related equipment
(mainly for railroads), • Science, nuclear physics research Russia’s First
Nuclear Reactor:
in Obninsk (106,000 population)• Few natural resources (some ag, timber, logging) • Wood-working and paper industries
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24, 2012
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THEN DECLINE, THEN GROWTHIn 1990s, output shrank by almost 60%
After 2006, it began to grow far faster than Russian average
As next figure shows* *Dmitry Zimin, “Promoting Investment in Russia’s
Regions,” Eurasian Geography and Economics, 2010, 51, No. 5, pp. 653–668.
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WHAT HAPPENED?“Investment Promotion Machine” as in
Central European States• Foreign involvement does not always produce
wealth (financial gap, no spillovers)
• Require consensus among political and economic elites at national/regional/local level
• No single project can do it
• Requires stable, predictable and honest government
• Greenfield investments work best
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KALUGA PROJECTS (2005-8)WITH FEDERAL SUPPORT
• Public funds invested in industrial parks (techno-parks)
• Public funds invested in transportation infrastructure (Federal investment in Moscow-Kiev motorway connecting Kaluga/Obninsk with Moscow
• Investment financed by borrowing (new corporation)
The Russian Detroit
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PUBLIC AND PRIVATE PARTNERSHIPTECHNOPARK “VOLVO-VOSTOK”
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INDUSTRIAL ZONES• Created four industrial zones
(linking Kaluga, Obninsk with businesses)
Public funds reconstructed them, then carefully sold to private investors
• Created One-stop shop for investors (Kaluga Regional Development Agency)
Helped investors with permissions (environmental, safety), services, meetings with public officials
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STARTED WITH 4 MAJOR INVESTORSVolkswagen, PSA joint venture,
Samsung Electronics and Volvo Trucks
A stream of others followed
Only Greenfield projects: property rights still insufficiently protected
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SPILLOVERS
Real estate investors (housing construction boom)
Residence and Entertainment Parks
Entry of investors from many countries
South Korea, Russia, French, Swedish
Foreign retail chains
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RESULTSRegional Industrial Output
Grew by 63% from 2006-2008
Particular in automotive industry
Foreign investment skyrocketed
Retail sector grew
Public sector funded a new Development Corporation to look for more funds
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PARTNERSHIPS
Federal level industrial policy:
High duties on imported cars
Allows foreign automotive investors to bring in parts duty free
Local production required for 30% of total cost
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EXPLOITING PROXIMITY TO MOSCOWTransportation infrastructure allows
close communication
As Moscow grows more expensive, Kaluga is attractive alternative for investors
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PROBLEMS
Corruption continues
There are high costs—construction
Financial crisis struck Kaluga
Debt rises (result of borrowing)
Budget income fell by 4% (nominal)
However, federal transfers rose by 14%
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SUCCESSFUL REGIONAL PROJECT
Weak Regional
Leadership
Investment “Machine”
Federal Support
Greenfield Investment
One-Stop Shop
Transportation improvement
Federal Support
Brownfield Investment
Tax Incentives
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24, 2012
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WHAT
IS A
SUCCESSFU
L
PROJE
CT?
CO
NC
L US
I ON
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24, 2012
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TECHNOLOGICAL AND INVESTMENT ORIENTATIONTechnologies that foster economic,
social and technological dynamism, participation
Outcomes must include learning, changing
Reconciliation of winners and losers
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DIFFUSION OF GOVERNANCE CAPACITY
Foundation is the law at the Federal level
But there are intangibles to be produced by regional policy-making:
By delegating: find creative solutions
By localizing stimulate learning and participation
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24, 2012
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ADAPTABLE TASK-ORIENTED PROJECTS
Federal level can resolve what would create conflict at the regional level
Regions can learn to work through these conflicts
Find a balance between loose and controlled governance that suits the situation
Flexible supply networks for newly identified needs
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24, 2012
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LOOSE AND CONTROLLED GOVERNANCE
Contracts should be transactional or relational
Depending on whether the task calls for loose or controlled governance
Relational tend to be more effective
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INDICATORS FOR CONTROLLED PROJECTS
Results or process oriented
Outcomes are important
Demographic, social, economic
Responsibility for projects is localized and clear
Milestones and targets well defined
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INDICATORS FOR LOOSE GOVERNANCE
Improved skills and processes
Improved trust between levels of government
Amicable agreements
Implemented by “soft laws” rather than commands and strict regimes
Milestones: Innovation, adaptability, and learning capacity
Development of networks of independent actors.
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THE
END
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24, 2012
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