Subsidiarity in Regional Policy
Cohesion is one of only two areas, alongside the Common Agricultural Policy (CAP), in which the EU level of government/public administration plays a substantial role in formulating and delivering policy that requires significant public expenditure. Yet, a
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Iain Begg
17.1 Introduction
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Cohesion is one of only two areas, alongside the Common Agricultural Policy (CAP), in which the EU level of government/public administration plays a substantial role in formulating and delivering policy that requires significant public expenditure. Yet, although it accounts for around a third of the EU budget, cohesion policy expenditure is still a relatively small component of overall public expenditure in the Union at just under 1% of the aggregate public spending of all Member States. Moreover, the term ‘cohesion’ is open to differing interpretations. Manifestly, the EU level does not have exclusive competence in the policy areas which underlie cohesion, which comprise a combination of those aimed at supporting economic development in regions which are under-performing or less competitive, and mechanisms for the redistribution of income. In fact many of the major spending programmes of the national tier of government (and, depending on the fiscal constitution of the Member State, sub-national tiers) are intended to reduce disparities, including regional disparities in access to public services and real incomes. Formally, EU cohesion policy is not intended to redistribute current incomes, but to enhance the long-run competitive position of the regions and social groups it supports. Although the term cohesion encompasses more 1
This chapter draws on research financially supported by the European Union under the 6th Framework Programme through the DIME and EU-CONSENT Networks of Excellence. The author is grateful for this funding and also wishes to thank Arjan Lejour for helpful comments.
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than regional policy, narrowly defined (for a discussion of regional policy, see Armstrong and Taylor 2000), this chapter concentrates on the economic development component of cohesion policy and thus largely equates it with regional policy, understood as interventions designed to raise the level and/or rate of growth of economic activity and employment in regions assisted by the policy. It is important to recognize that regional policy so defined is a long-term policy and that its function is to create the conditions for improved future economic performance rather than to boost current incomes. A frequently-articulated argument against EU policy cohesion is that it is ineffective, with the implication that it ought to be re-thought and, conceivably, decentralized or renationalized (Tarschys 2003). Empirical findings on cohesion policy tend, however, to be inconclusive. Moreover, the ineffectiveness argument is as much (or more) one about whether spatially-targeted economic development policies per se are worthwhile, than about whether the EU is the appropriate level to offer them. Part of the subsidiarity question, though, is whether the approach adopted in EU cohesion policy is qualitatively worse than if it were left to national or regional/local levels of government. The chapter is structured as follows. Section 17.2 explores the rationale for having an EU regional policy, di
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