Economic development in rural regions in the EU: empirical findings and theories

Transcription

1 Economic development in rural regions in the EU: empirical findings and theories Presentation at the IAMO Forum 2013 Rural areas in transition, June 19-21, 2013 Dr. Ida Terluin, Agricultural Economics Research Institute (LEI), The Hague (

2 Fascinated by the question Why do economic growth rates differ among countries? engine of economic growth translated into: Why do economic growth rates differ among rural regions? Analysis facilitated by the OECD rural typology

3 Four concepts in the title of this presentation Economic development in rural regions In the EU: empirical findings and theories

4 Economic development 1. Narrow approach: Rise in income per capita plus change in economic structure (agr: -; industry and services: +); Y= (L,C) employment growth 2. Broad approach: changes in social indicators like life expectancy, education level, income distribution, number of hospital beds and doctors, efficient institutional structures, democracy etc. are added to the narrow concept

5 Rural regions (1) What is rural? Spatial approach: rural as a distinctive type of locality with boundaries on a map Constructivist approach: rural as a mental construct (countryside idyll, agriculture, quietness, non-urban, nature, etc.) Spatial approach in this presentation

6 Rural regions (2) What is a rural region? A territorial entity - which covers a regional economy with agricultural, industrial and services activities - with a low population density - with one or more small or medium sized towns - and with a large area of unbuilt space Size: labour market area

7 Rural regions (3) - OECD typology of rural regions derived from population density - Distinguishes three types of regions: - 1. Most rural regions - 2. Intermediate rural regions - 3. Most urban regions

8 Rural regions (4) in the EU27 Rurality Most rural Intermediate rural Most urban

9 Empirical findings and theories Empirical findings: Statistical data analysis and experiences from case studies Theories: Theories on economic development in rural regions from (1) regional economics and (2) rural studies

10 Plan of this presentation 1. Data on economic development in leading and lagging rural regions in the EU 2. Empirical findings from case studies in rural regions 3. Theories on economic development in rural regions 4. Guideline for economic development strategies

11 Definition of leading and lagging regions, derived from employment growth Within each country regions are ranked according to their employment growth in the 1990s from high to low Top 1/3 Leading regions Middle 1/3 Middle regions Bottom 1/3 Lagging regions

12 Employment and population growth in EU15 regions, Employment growth (% p.a.) Population growth (% p.a.) Leading most rural Leading intermediate rural Lagging most rural Lagging intermediate rural Most urban All regions

13 Leading and lagging regions in the EU15, 1990s

14 Employment dynamics in the EU in the 1990s: why not more recent data? Problem with long term regional employment data analysis in the EU: changes in regional borders (NUTS3) huge efforts are needed to reconstruct consistent regions over a longer period

15 More recent data: employment and population growth in The Netherlands, Employment growth Population growth (% p.a.) (% p.a.) Leading most rural Leading intermediate rural Lagging most rural Lagging intermediate rural Most urban All regions

16 Share agriculture in employment and GDP/capita in the EU27 regions Share agriculture in employment, 2009 (%) GDP/capita, 2008 (PPS, index EU27=100) Most rural Intermediate rural 6 88 Most urban 1 125

17 Development of rural regions: a mosaic Rural Europe is no longer the scene of losses of population and jobs but - a rural mosaic with winners, in-betweens and losers - agriculture is no longer the backbone of the rural economy

18 18 leading and lagging case study regions from the RUREMPLO project L e g e n d L e a d i n g r e g i o n s L a g g i n g r e g i o n s M i k k e l i n L ä ä n i K e s k i S u o m e n L ä ä n i G r o n i n g e n D r e n t h e L ü n e b u r g ( E a s t e r n p a r t ) L u x e m b o u r g ( B ) N i e d e r b a y e r n A r d e n n e s ( F R ) L i e z e n Z a m o r a N i è v r e P e s a r o O s t t i r o l M a c e r a t a A l p e s d e H a u t e P r o v e n c e A l b a c e t e S t e r e a E l l a d a ( F t h i o t i s ) P e l o p o n n i s o s ( K o r i n t h i a )

19 Case study regions: main similarities Leading regions Lagging regions Natural resources + + Rual amenities + + Infrastructure + -/+

20 Case study regions: main differences are related to actors Leading regions Lagging regions Mobilisation and organisation of actors Capacity of actors (knowlegde, skills, attitude) Internal networks + - External networks + - Migration balance + -

21 Overview of theories Based on: 1. Regional economics 2. Multidisciplinary field of rural studies

22 Debate in regional economics Theories consist both of: - abstract spatial economic models - institutional perspectives on regional economic development, in relation to a complex web of social, cultural, political and historical factors Contributions from economists and economic geographers Theories focus on growth of a region s output: production function Y = f ( L, K, X)

23 Theories on regional economic growth Production function: Y = f( L, K, X) In which: Y = output L = labour K = capital X = factor X; something in addition, like technology, agglomeration, networks, trust, innovation etc. driving force behind economic development

24 Classification theories regional economics debate Traditional models Pure agglomeration models Local milieu models Territorial innovation models Productio n function Y = f (L, K) Y = f (AE, L, K) Y = f (LM, L, K) Y = f (I, LM, L, K) Theories Neoclassical growth theory Keynesian approach: export base theory Cumulative causation theories Growth pole theories New Economic Geography (NEG) theories Endogenous growth models Theories based on changes in the organization of labour Incubator theories Product life cycles Theory of the innovative milieu Porter's theory on the competitive advantage of nations

25 Debate on economic development in rural studies Multidisciplinary field of rural studies: contributions from rural geography, rural sociology, agricultural economy, demography, ecology, rural planning and administrative sciences Central question: how can rural regions be put on a viable economic growth trajectory?

26 3 main approaches in debate in rural studies 1. Exogenous development approach 2. Endogenous development approach - Bryden s theory on the potentials of immobile resources - Community-led rural development theory 3. Mixed exogenous/endogenous development approach

27 Link between both debates Exogeneoous development approach Pure agglomeration models Endogeneoous development approach Local milieu models Mixed exogeneoous/ endogeneoous development approach Territorial innovation models

28 My PhD thesis: theory = empirical evidence??? Examining whether empirical evidence is according to the predictions of one or more theories By means of: - empirical evidence from 18 case studies in leading and lagging rural regions in the EU - method of pattern-matching

29 Which theories can be used for the explanation of economic development in rural regions in the EU? (1) mixed exogenous/endogenous development approach community-led development theory are supported by empirical evidence from 16 of the 18 case studies

30 Which theories can be used for the explanation of economic development in rural regions in the EU? (2) Briefly, these theories assume that (given L and K): if X (if rural regions have high values for capacity of local actors and for the strength of the internal and external networks) then Y (it is likely to have employment growth)

31 Guideline for territorial development strategies for rural regions (1) 1. Think global and act local (development process in rural regions is affected by the interplay of global forces and local responses) 2. Improve the capacity (knowledge, skills and attitude) of local actors for establishing and sustaining development within the region

32 Guideline for territorial development strategies for rural regions (2) 3. Strengthen the cooperation of local actors inside and outside the region 4. Try to affect the balance of power in the external networks in such a way that local actors are able to benefit to a reasonable extent from these networks

33 Guideline for territorial development strategies for rural regions (3) 5. Adjust administrative structures in such a way that they encourage and respond to bottom-up initiatives 6. Use a comprehensive territorial development plan, based on the strengths, weaknesses, opportunities and threats of the region

34 Implications for rural development policy Economic development in rural regions is the result of a bottom-up process; rural development policies should take this into account Bottom-up approach in EU rural development policy: LEADER approach : community-led local development

35 About LEI and the author Agricultural Economics Research Institute (LEI), The Hague (NL) develops economic expertise in the field of food, agriculture and the natural environment. Dr. Ida Terluin is a senior rural economist at LEI. She has 23 years of professional experience in analyses of common agricultural and structural policies and rural development in the EU. Her research is characterized by an international comparative approach of topics. Often she focuses at time series analysis of socio-economic indicators in EU regions, in which she applies a typology of rural, intermediate and urban regions. She usually combines such quantitative analyses by qualitative field work in order to identify driving forces behind the data. In this way she found in her PhD thesis (2001) that differentials in socio-economic performance among rural regions in the EU are related to the degree of mobilization and organization of the local actors. The emphasize on the role of local actors in rural development is since her PhD thesis present in her research. She participated in many EU projects, like the FAIR project RUREMPLO ( ), the FAIR 5 Marketowns project, the FP6 RURBAN project on rural areas under urban pressure in the EU, in SEAMLESS, in the evaluation of the LFA policy, the IPTS project on rural typologies (2007) and the SCENAR2020 and SCENAR2 projects on CAP reforms. She is also involved in many projects for the Dutch Ministry of Agriculture, like a comparative analysis of eight RDPs , a design of a rural-urban typology for the Dutch NUTS 3 regions, an analysis of the rural economy in The Netherlands, and a project designing and testing an alternative evaluation method to the CMEF. Currently she is working on an analysis of the involvement of local groups of farmers in the management of agri-environmental measures in the Netherlands. Contact: ida.terluin@wur.nl