Local Economic Assessment: Learning from International Practice

1. Dr Jonathan Potter Senior Economist, OECD Local Economic and Employment Development Programme (LEED) Local Economic Assessment: Learning from International Practice

2. Structure • The OECD • Strategy issues • Good practice • Case study: regional strategies in Latvia • Pitfalls • Messages for North East England

3. OECD Forum for governments to work together . . . on the economic, social and environmental challenges of interdependence and globalisation. 30 member countries – countries pursuing democracy and market economies. Process of enlargement and enhanced engagement.

4. OECD OECD Member countries Non-Members working with OECD

5. LEED Programme Messages Activities Peer reviews Guidance Conferences and seminars Training events • Integrated strategies • Partnerships • Entrepreneurship as a job generator • Culture of evaluation

6. Strategy issues Source: ODPM, 2003.

7. Strategy issues Source: ODPM, 2003.

8. Strategy fundamentals Aim of strategy • Where are we? • Where do we want to get to? • How do we want to get there? Best strategies are • Clear and explicit on objectives and priorities • Clear on needs and opportunities • Practical and implementable • Creative and flexible

9. Good practice • Defining objectives • Identifying options • Assessing expected impacts • Using evidence • Implementation plan

10. Good practice Defining objectives • Consider indicators to assemble and areas for benchmarking • Consider scale of intervention and ensure that objectives complement at different scales • Take a long-term perspective • Identify beneficiaries

11. Good practice Identifying options • Make sure options fit objectives • Make process transparent • Fit to needs of specific groups • Include stakeholders in defining and selecting options • Consider management questions • Set out the full costs and benefits to society • Use evidence to assess options

12. Good practice Assessing expected impacts • Have a clear sense of purpose • Set targets to achieve • Use the logic model • Have a clear sense of relevant indicators on intermediate and final effects • Be prepared to offer a range of estimates

13. Good practice Implementation plan • Have strong commitment and leadership • Define review milestones and progress measures • Report progress, encouraging good behaving and impose sanctions for inappropriate behaviour • Conduct regular checks • Recycle learning and establish communities of practice

14. Case study: regional strategies in Latvia • Mobilising the region • Understanding the region • Defining a strategy and action plan • Financing the strategy • Evaluating and improving • Assessment • Guidelines • Learning models

15. Latvian planning system • Set up 1991 – challenge not to reject planning but set up a democratic approach • Three spatial levels: national, regional, local • Three time scales: long term (25 years), medium term (7 years), short-term (2 years) • Process of administrative reform underway

16. Mobilising the region Strengths Weaknesses Only target group was private entrepreneurs Considered as a bureaucratic process subject to change Surprising similarities between national, regional and local plans Formal, not real consultation • Presence of competent staff • Transparency of documents • Widespread knowledge of the system

17. Understanding the region Strengths Weaknesses Lack of shared evidence bases Limited skills and resources at local level Little city-region or rural analysis Little sub-regional data No attempt to fix NSO data gaps locally Little attempt at causal analysis Limited use of scenarios • Political will for evidence-based policies • NSO collecting wide range of data • Research projects on NSO data • Evidence of both quantitative and qualitative techniques

18. Defining strategy and action plan Strengths Weaknesses Regional level creates strategies but has no autonomy or resources Some localities developing too many plans, some developing none Existing plans are really spatial plans not strategy Competitive niches are not clear Disconnect with finance and implementation tools • Desire to develop long term vision • A lot of work being undertaken

19. Financing Strengths Weaknesses Little understanding of potential private sources • Clear plan to absorb EU financing

20. Evaluating and improving Strengths Weaknesses Top-down steering system Hostility to evaluation Limited skills and resources Stakeholders not used as information source Focus on monitoring not evaluation Lack of intermediate results information Lack of self assessments • Good regional data • EU emphasises role of monitoring and evaluation • Strengthened strategic capacity in central government

21. Pitfalls Defining objectives • Data – too aggregated, no time trajectory • Ignoring the relationship with the surrounding area • Excluding particular stakeholder groups • Ignoring sustainability • Ignoring local specificities • Relying on markets to distribute benefits • Assuming monitoring and evaluation can be set up later

22. Pitfalls Identifying options • Ignoring the ‘do nothing’ option • Concentrating on infrastructure at the expense of social and innovation • Being afraid of different approaches • Ignoring stakeholders • Forgetting to look at risks • Neglecting the ‘Plan B’

23. Pitfalls Assessing expected impacts • Being over-sophisticated • Omitting important expected effects • Ignoring factors likely to influence the problem • Ignoring key groups of beneficiaries • Ignoring the possibility that things may turn out differently

24. Pitfalls Using evidence • Assume that assessment results will automatically be used • Rely on a single written report

25. Pitfalls Implementation plan • Trying to turn everyone into a strategist • Stifling innovation and flexibility • Undervaluing experience against theory • Making processes overcomplicated • Frequently changing performance metrics • Raising expectations of short-term impact • Allowing a gap to grow between strategic messages and staff, customer and stakeholder understanding

26. Messages for North East England • Move from evidence to policy choices by considering: • options • alternatives • expected impacts • Use logic models • Focus on beneficiaries • Consider scenarios • Focus on where policy can make a difference • Look for distinctiveness to other regions • Fill data gaps locally