Multi-level Governance in South East Europe (ESRC grant no. RES-062-23-0183 Project Paper CP/2 - Cohesion Policy and Multi-level Governance in Greece, Slovenia, Croatia and Macedonia: The Story So Fari Ian Bache Centre for International Policy Research Department of Politics University of Sheffield January 2007 Cohesion Policy and Multi-level Governance in Greece, Slovenia, Croatia and Macedonia: The Story So Farii Introduction As a starting point for understanding the domestic governance effects of cohesion policy in member and accession states, the framework of simple and compound polities developed by Schmidt (2006) is highlighted as a heuristic device…. In this framework, a distinction is drawn between EU effects in ‘compound’ and ‘simple’ polities. In the former, ‘power, influence and voice are diffused through multiple levels and modes of governance’ (e.g., Germany, Italy, Spain), while in the latter, ‘power, influence and voice are more concentrated in a single level and mode of governance’ (e.g., Britain, France, Greece) (Schmidt, 2003: 2). Table 1. Key characteristics of compound and simple polities Structures Power Authorities _________________________________________________________________ Simple polities Unitary Concentrated Single (Fr, UK) Compound polities Regionalized Partially diffuse Somewhat multiple Federal Multiple (Sp, It) Compound polities (Ger, US) Diffuse Highly compound Quasi-federal Highly diffuse Highly multiple (EU) __________________________________________________________________ Source: Adapted from Schmidt 2006, 51 Schmidt’s schema links well with research on multi-level governance. In particular, it brings into focus the distinction between the vertical and horizontal dimensions of multi-level governance. Specifically, it highlights both structures of the state (and policy processes) and places these alongside analysis of the nature of politics. Changes in the former relate to changes in vertical relations as new state structures emerge or are strengthened at levels above and below the nation state, while changes to the latter relate to the sideways movement of power and influence to nonstate actors that may demand different types of political interactions and interactions reflect horizontal rather than hierarchical relations. The most obvious alternative candidate for organising the empirical material would be Lijphart’s (1984; 1999) continuum, which places majoritarianism on one extreme point of the axis and consensualism on the other. Here the two key dimensions are federal-unitary and executive-parties. This approach also has merit comparative analysis, but Schmidt’s (2006) approach has a number of advantages in studying multi-level governance. First, Schmidt includes a third category of (nation) state structures to the two identified by Lijphart, which is regionalized. A number of EU states now fit into this category (Spain and Italy being the most obvious), while others may follow. Second, she replaces the executive-parties dimension with two more nuanced categories of representative politics and policymaking processes. Third, Lijphart’s two-fold categorisation of policymaking processes as pluralist and corporatist is made three-fold to include statist processes (Schmidt 2006, 228) (Figure 1.1) Figure 1 Member-states along a continuum from statist to corporatist processes 2 Fr Gr UK It Statist Ger Sw NL Corporatist Source: Schmidt 2006, 108. In relation to politics, which for Lijphart is the overarching dichotomy between consensual and majoritarian systems, Schmidt includes this within the larger dichotomy between compound and simple polities. The politics dimension is separated from the systems dimension, because, as Schmidt (2006, 229) argues ‘Lijphart’s distinction implies that majoritarian democracies will always have confrontation and consensus ones the opposite. But in real life this is not the case’.. In short, the term compound polity refers to a state with a combination of a proportional representation system, corporatist policymaking processes and regionalized or federalized structures. The term simple polity refers to a state with a combination of a majoritarian system of representation, statist policymaking processes and a unitary state structure (Schmidt 2006, 227). Using these categories, the EU is defined as a highly compound regional polity, which places it at the extreme end of the continuum that includes its member states (Figure 1.2), and one which tends to pull all member states – irrespective of their place on the continuum - in this direction. Figure 2 EU and member-states on a continuum between simple and compound polity EU UK Fr Ire Sw NL It Simple polity Ger Sp B Compound polity 3 (Source: Schmidt 2006, 229). However, and consistent with the ‘goodness of fit’ argument emanating from the literature on Europeanization (ref), the impact on states furthest away from the EU on this continuum is likely to be comparatively greater. This leads us on to the case studies here, which by any standards would all be categorised as ‘simple polities’ and, as such, should be subject to strong adaptational pressures from engaging with the compound polity of the EU. As was discussed in an earlier paperiii, the requirements for EU cohesion policy resonate strongly with the image and conception of the EU as a compound polity. What soon becomes evident from the summary below, as might be expected, is that while a substantial amount of research has been undertaken on the Greek case, there is relatively little to date on Slovenia that address the questions of concern here and none to speak of in relation to Macedonia and Croatia. We address each of these in turn. Greece Traditionally, government and politics Greece is seen to have a high degree of misfit with EU governance in general terms and in relation to the specific requirements of EU cohesion policy (specifically, regionalisation and partnership requirements). The political and administrative structure is hierarchical and centralized, civil society is weak, and there is an absence of a consensus-building approach amongst political elites. The country as a whole received Objective 1 structural fundingiv from 1989 and, before that, faced similar governance requirements from the Integrated Mediterranean Programmes (IMPs). The scale of funding has remained high throughout the Greek period of membershipv. In this context, significant adaptational pressures have been generated by structural fund requirements: ‘The introduction of the “subsidiarity” and “partnership” principles and the promotion of the integrated approach to planning totally misfit with the Greek centralized and interventionist administrative tradition, the predominance of 4 the state and the limited participation of social and private actors’ (Getemis and Demetropoulou 2004, 358). Not surprisingly therefore, the early period of membership witnessed some resistance to EU cohesion policy requirements. However, EU structural policy soon began to have effects on domestic governance. On the vertical dimension, the most important effect of cohesion policy was the creation of a regional level of government, which followed the introduction of the IMPs into Greece in 1985. The IMPs pioneered the multi-annual, multi-sectoral approach (Hooghe and Keating 1994), which include requirements for regional partnerships to be created. In response to these requirements, Greece was initially divided into six regions, although the division was purely administrative and limited in institutional terms to the monitoring committees required to oversee the IMPs. Subsequent legislation in 1986 divided the country into 13 NUTS 2 regions, which were to provide the basis for Community Support Frameworks (CSFs). These regions had a centrally-appointed regional secretary supported by a small cohort of civil servants drawn from central government. In addition, regional councils were established that were made up of appointees from central and local government and chaired by the regional secretary (Andreou 2006, 244-5). After this initial burst of activity, decentralization halted and in some areas regressed (Verney and Papageorgiou 1993). More specifically in relation to the structural funds, Kelleher, Batterbury and Stern (1999, 64) noted an ‘absence of decentralisation’ in the Greek Objective 1 programme and only a marginal role afforded to regional bodies. Generally, regional-level networks were slow to emerge and were ‘mostly fragmented and controlled by the state, despite impressions of relevant autonomy’ (Getemis and Demetropoulou 2004, 374). Beyond the creation of regional structures in 1986, the main features of decentralisation and territorial relations that have developed in Greece during the period of EU membership have been attributed primarily to domestic factors (Leontitsis 2006, 17-18). Andreou (2006, 246) concluded that ‘EU cohesion policy acted as a catalyst for the creation of new institutions at the regional level. However, the structure, functions and evolution of these new entities were shaped by domestic factors’. In relation to the horizontal dimension, the legacy of authoritarian statism in Greece was a weak civil society and an abundance of political mistrust. Despite this, 5 structural policy did stimulate horizontal partnerships by promoting the role of a number of non-state organisations (NGOs, social groups) at the regional level, even though the state retained a pivotal role (Kelleher, Batterbury and Stern 1996, 64). On the post-2000 period, Getemis and Demetropoulou (2004 374) said ‘It could be argued that the partnership trends of the 1990s are being re-placed by a pseudocorporatism of state control… current trends do not leave much room for optimism about a more rapid adaptation at the regional level’. However, Andreou (2006, 250) suggested that the relative failure of meaningful partnerships to develop in Greece was partly a consequence of subnational and non-state actors lacking the necessary capacity to engage effectively. In this context, centralized programming and management of the funds was probably a ‘necessary evil’ in the short term at least: an argument that has resonance with developments in the accession states of central and eastern Europe (below). Overall, the picture of cohesion policy effects in Greece is one of some decentralisation occurring, but with a subsequent clawing back of control by the centre, leaving the regional level remaining weak within the Greek system. Similarly, horizontal partnerships were established in the regions, but central government retained a key role in decision-making. Clearly, the central state had to adjust to the new realities of multi-level governance generated by the structural funds, but did so in a strategic way. To the extent that there was learning, it was generally ‘thin’. Getemis and Demetropoulou (2004, 371) concluded that ‘‘the structure and the administrative tradition of the Greek state, the peculiarities of Greek centre–periphery relations and the traditional weakness of Greek civil society have considerably limited the capacity of the regional institutional infrastructure for learning and adaptation’. As such, the Greek case most closely approximates to the category of accommodation set out in the literature on Europeanization (Andreou 2006, 253) and it has not moved very far towards the compound end of the continuum as a result of Europeanization. Slovenia There is much less academic reflection on developments in Slovenia than on Greece, but there is some good material on the background to cohesion policy in both official (mainly EU) documents and in a small number of academic papers. Two academic papers on the pre-accession period are particularly useful (Faro 2004vi and Lajh 2003). 6 Slovenia’s first funding from the EU came in 1992 for a period running to 1995. The funding in this initial period came from the Phare programme, which plays a similar role to the Objective 1 programmes of the structural funds (see Paper CP1). In this first phase, funding was directed towards privatisation, public services and banking business (20%), infrastructure (20%), the TEMPUS programme and education (20%) and science and technology, the environment, energy and tourism (20%) (Lajh 2003, 7). Subsequently, the funding was re-directed to focus specifically on advancing the pre-accession strategy. In the second period of the Phare programme (1995-99), particular attention was given to: strengthening the public administration for the efficient co-ordination of EU affairs; informing the public about EU matters and Slovenia’s accession to the EU; and supporting the National Assembly in its preaccession activities (Lajh 2003, 7). In the third phase of this funding (2000-06), which spanned the early accession period, these priorities continued alongside Phare funding for cross-border programmes (with Italy, Austria and Hungary) along with other initiatives (mainly funded by ISPA and SAPARD). In this period, the Phare programme was alongside the two other pre-accession instruments (ISPA and SAPARD) in an overall framework of multi-annual programming for the preaccession funds that set the funding priorities (Figure 1 below). 7 Figure 3: Pre-accession assistance programming framework Source: {http://www.gov.si/svez/}, April 2003 reproduced in Lajh 2003, 4. In response to EU requirements for effective an implementation process, the structure established to implement pre-accession funds in Slovenia was one that would anticipate that required under the circumstances of accession and receipt of the structural funds (Figure 2 below). 8 Figure 4: Implementation of pre-accession assistance in Slovenia Source: {http://www.gov.si/svez/}, April 2003, reproduced by Lajh 2003, 10. The effects of the pre-accession aid requirements on the promotion of multi-level governance in Slovenia have not been substantial. The structures outlined above were established and new responsibilities allocated within central government ministries for coordination of aid, with, in 2003, the creation of a new Government Office for Structural Policy and Regional Development. However, short of mapping the structures, research is not evident on any significant change in horizontal interactions (between public, private and voluntary actors). On the vertical level, where more change might be expected, there is a story to tell – but it is one of support for 9 regionalisation for cohesion policy purposes within Slovenia being stymied by the Commission’s desire to complete the preparations for accession. RDAs were created, but during the final months of accession negotiations over the regional policy chapter of the acquis, the Commission decided that it would be most efficient for Slovenia to be treated as a single region and for the centre to lead the process (Faro 2004, 4). Croatia The main policy framework guiding EU-Croatia relations (along with other countries of the Western Balkans) is the Stability and Accession Process (SAP). In the period 2001-2004, Croatia received £262 million under the CARDS programme, designed primarily to support SAP, which covered the following priorities: - Return of refugees, sustainable development in return areas, reconstruction and civil society development (28.5% of total) - Trade, investment climate, social cohesion including TEMPUS (26.3%) - Reform of the judiciary and police, migration and asylum, integrated border management, the fight against organised crime (24%) - Public administration reform, regional and local development, public finance (15.6%) - Environmental approximation, institution strengthening, monitoring and planning, investment preparation (4.8%). Source (European Commission 2007: In 2005, pre-accession funding to Croatia was 105m euros (Phare 8m; ISPA 25m) and this increased to 140m euros in 2006 (Phare 80m, ISPA 35m, SAPARD 25m). From 2007, Croatia would be eligible for funding under the new pre-accession instrument (IPA) that combined the previous programmes (see paper CP1). To date, there is no academic research on the impact of these funds on the development of multi-level governance or related issues. However, interviews in the Commission (author 2006) suggested that the priority was to develop effective national-level structures and developing effective technocratic capacity for implementing the programmes. There was a newly created central department for 10 coordinating the funds and a secretary of state given specific responsibility for development strategy and EU funds. The Republic of Macedonia As with Croatia, relations with the EU for the Republic of Macedonia take place within the framework of SAP. It benefits from assistance under the CARDS programme, which in this case focuses in particular on democratic stabilisation. This includes support for improving inter-ethnic relations and for supporting civil society. There is also assistance for public administration reform – specifically to support national ministries and other public bodies to develop sound administrative practices, enhance local government capacities and promote education. Before the CARDS programme began, financial assistance from the EU to Macedonia focused on a similar set of priorities, so CARDS has built on the work of previous programmes. An illustrative breakdown of the coverage of the CARDS programme is shown below. Table 2: Republic of Macedonia CARDS Annual Programme 2004 (million EUR) Subject and Amount Democracy and rule of law 3.0 - Inter-ethnic relations & civil society 3.0 Economic and social development 22.5 - Private and financial sector development 4.5 - Trade 4.0 - Local infrastructure development 8.5 - Social cohesion 2.5 - Tempus (Commission managed) 3.0 Justice and home affairs 15.5 - Reform of the judiciary 1.5 - Integrated border management 10.0 - Fight against crime 4.0 Environment and natural resources 2.0 - Environment 2.0 Other 3.0 - General technical assistance facility & programme reserve 3.0 11 Total 46.0 Source: http://www.ear.eu.int/macedonia/macedonia.htm Again, there is no academic literature on the topics that concern our study in this case. The concern of the main internal study focuses on ‘EU Development Funds and the Republic Macedonia’ is the capacity of the country to effectively absorb funding. Conclusions On Greece, there is a significant amount of literature on cohesion policy and issues relating to multi-level governance. The consensus of this material is that changes in horizontal relations through cohesion policy in Greece have been slow to emerge, but are perceptible, suggesting some EU influence on the promotion of multi-level governance on this dimension. There has also been a degree of regionalisation in Greece over the period in which the EU has played a role, but the main drivers of change have been domestic. Overall, Greece has only moved slightly along towards the compound end of the continuum identified by Schmidt: it remains a highly centralised and statist polity. In Slovenia, cohesion policy has had a similarly limited impact to date although there is evidence that there was potential for cohesion policy to have a stronger impact on regionalisation, but this was constrained by the Commission in the run-up to accession. In both Croatia and the Republic of Macedonia, the research to date has been limited and no clear picture has emerged. References Andreou, G. 2006. EU Cohesion Policy in Greece: Patterns of Governance and Europeanization. South European Society and Politics 11 (2): 241–60. Bache I (forthcoming 2008) Europeanization and Multi-level Governance: Cohesion Policy in the European Union and Britain, Rowman and Littlefield. 12 European Commission (2007) Enlargement Country Profile, Croatia, http://europa.eu/enlargement/croatia/eu_croatia_relations_en.htm Faro, J. 2004. Europeanization as Regionalisation: Forecasting the Impact of EU Regional-policy Export upon the Governance Structure of Slovenia, www.ksg.harvard.edu/kokkalis/GSW7/GSW%206/Jeremy%20Faro%20Paper.pdf (accessed September 4, 2006). Getimis, P. and Demetropoulou, L. (2004) ‘Towards New Forms of Regional Governance in Greece: The South Aegean Islands’, Regional and Federal Studies, Vol. 14, No. 3, pp.355-378. Hooghe, L., and M. Keating. 1994. The Politics of EC Regional Policy. Journal of European Public Policy 3 (3): 367–93. Kelleher, J., Batterbury, S. and Stern, E. (1999): The Thematic Evaluation of the Partnership Principle: Final Synthesis Report, London: The Tavistock Institute Evaluation Development and Review Unit. Lajh, D. (2003) ‘Managing the EU Pre-accession Assistance Programmes in Slovenia’ Central European Political Studies Review, http://www.gov.si/svez/ (accessed December 4, 2006). Leontitsis, V. (2006). Territorial Restructuring in Greece: A Case of Europeanisation? Paper presented at the UACES Annual Conference at Limerick, Ireland, 31/08-02/09/06. Lijphart, A. (1984). Democracies. London: Yale University Press. Lijphart, A. (1999). Patterns of Democracy. London: Yale University Press. 13 Mrak, M. and Uzunov, V (2005) EU Development Funds and the Republic of Macedonia, Sector for European Integration, General Secretariat of the Government of the Republic of Macedonia. Schmidt, V. (2003) ‘The Europeanization of Governance in Larger European Democracies’, paper prepared for presentation at the biannual conference of the European Studies Association, Nashville, USA, March 26-29. Schmidt, V. (2005) ‘The Role of Public Discourse in European Social Democratic Reform Projects’, European Integration Online Papers (EIOP) Vol. 9, No. 8, http://eiop.or.at/eiop/texte/2005-008.htm (accessed 14.6.06) Schmidt, V. (2006) Democracy in Europe, Oxford: Oxford University Press Verney, S., and F. Papageorgiou. 1993. Regional Planning and the Integrated Mediterranean Progammes. In The Regions and the European Union, ed. R. Leonardi, 109-138. London: Frank Cass. i This paper draws on material from Bache I. (forthcoming 2008) Europeanization and Multilevel Governance, Cohesion Policy in the European Union and Britain, Rowman and Littlefield. ii This paper draws on material from Bache I. (forthcoming 2008) Europeanization and Multilevel Governance, Cohesion Policy in the European Union and Britain, Rowman and Littlefield. iii See Project paper CP1 – add link. iv See Project paper CP1 for an overview of the cohesion policy, the structural funds and related instruments. v Over the period 1994-2006, structural and cohesion fund transfers to Greece were 41 billion euros. Between 2000-06 they represented almost 3 per cent of GDP and almost 8 per cent of the total investment budget. In terms of aid intensity, Greece was the largest beneficiary of structural and cohesion funding in this period (European Commission 2005c, 25). 14