METHODS OF ASSESSING STRUCTURAL POLICY

UNIVERSITY OF ATHENS

SCHOOL OF LAW, ECONOMICS, AND POLITICAL SCIENCES

DEPARTMENT OF POLITICAL SCIENCE AND PUBLIC ADMINISTRATION

Master’s Program: “European and International Studies”

LESSON: STRUCTURAL POLICY

PROFESSORS: Nap. Maravegias, G. Andreou

Work

Anna Karamanou

Eleftheria Fygka

STRUCTURAL POLICY AND DEVELOPMENT OF THE GREEK REGIONS

METHODS OF ASSESSING STRUCTURAL POLICY

The Case of the Regional Program of South Aegean

Athens, February 2006

CONTENTS.

1. INTRODUCTION

2. EVALUATION – THEORETICAL FRAMEWORK

3. THE CONTRIBUTION OF GREECE TO THE FORMULATION OF THE EU’S REGIONAL POLICY

4. THEORIES OF REGIONAL DEVELOPMENT

5. THE REGIONAL PROGRAM OF THE Aegean SEA

6. THE CONTRIBUTION OF THE REGION OF THE AEGEAN TO DEVELOPMENT

7. INTERMEDIATE EVALUATION OF THE REGIONAL OPERATIONAL PROGRAM OF THE AEGEAN ISLANDS – SUCCESS INDICATORS

8. REGIONAL DEVELOPMENT AND SOCIAL CAPITAL

9. SUCCESSIVE EVALUATIONS OF THE N. AEGEAN REGION

10. CONCLUSIONS

1. INTRODUCTION

In the course of European integration, the EU’s Structural Policy plays a central role, as it has the declared goal of economic and social cohesion of the Union, through the elimination of the differences and inequalities observed among various regions. The theoretical analyses regarding the concept of cohesion vary. According to those inspired by the functional perspective of politics, cohesion is the Union’s response to the problem of uneven development, while from the viewpoint of rational choice analyses, cohesion represents a negotiating concession of certain national governments in exchange for arrangements for the internal market. Governments, that is, act based on their own priorities and the power they possess. (Moravcic, 1993, Andreou 2002, p.10-1).

Beyond the different theoretical approaches, Cohesion Policy along with its instruments – the Structural Funds and the Cohesion Fund – constitutes an important tool in the fight against inequalities in economic and social development. However, its effectiveness has been seriously questioned, as the achievement of cohesion, twenty years after its implementation, has not progressed to a satisfactory degree and it is evident that the Structural Funds do not function as tools for interregional redistribution. The differences observed between various regions of the EU regarding GDP, infrastructure, levels of employment and education, and growth rates remain significant. According to estimates from the European Commission itself (2004, Third Report on Cohesion), among the different regions, despite the reduction of income disparities, there are still large socioeconomic inequalities and deviations in terms of prosperity and dynamism of the economy.

The purpose of this work is to investigate and evaluate whether the strategy of structural policy contributes to the regional development of Greece and to cohesion, through the analysis and evaluation of the case of the South Aegean Region. In terms of methodology, in section 2 we will examine the theoretical framework of evaluation, in section 3 briefly the contribution of Greece to the shaping of the regional policy of the Union, and the Europeanization of Greek policy, in section 4 the main theories of regional development, in section 5 the peculiarities of the insular area of the South Aegean and whether fragmentation affects development and intra-regional inequalities, in section 6 the priorities of the Operational Program, in section 7 the intermediate evaluation, in section 8 the role of social capital in the development of the South Aegean, in section 9 the successive evaluations of the South Aegean Operational Program and in section 10 the conclusions.

2. EVALUATION – THEORETICAL FRAMEWORK

2.1. Ιστορικές καταβολές της αξιολόγησης

The concept of evaluation as a distinct domain of the code of professional ethics emerges in North America after World War II. Initially, it is used in the educational system as a tool for assessing the new educational programs introduced at that time. It is also utilized in the design and preparation of the budgetary program, linking evaluation with resource allocation, and it is widely used in programs for the elimination of poverty.^¹.

Of course, this does not mean that evaluation in the broader sense, as it is used today in the field of social and economic research, was unknown to the rest of the world. In Europe, it initially appeared in regions of Northern and Western Europe that maintained close ties with the USA and Canada, and had a strong Anglo-Saxon tradition. In Europe, the concept began to be systematically used in the 1970s, while its scope and application varies and adapts to the traditions and socio-economic systems of each country. It is initially found in the Scandinavian countries and France, countries with a strong democratic tradition, where, alongside the existence of a strong central government, strong regional and local governments coexist.

It is critical to note that evaluation is directly linked to the parameter of time. It is not a static concept but a dynamic one that changes and transforms, adapting to the demands and needs it seeks to address. While its scope varies and is directly related to the mandate holder (organization or government). It is indicative that with the rise of New Labour in 1997 to the government of Great Britain, evaluation as a method of control in governance expanded to all areas of the public sector.

In the European Union, the term is now systematically used and constitutes an integral part of the functioning of the Structural Funds (reform 1988), within the framework of the Community’s Development and Regional Policy. The funding of the Structural Funds, in the form of EU grants (which very often cover a large percentage of the project’s expenditure), is carried out through the Community Support Framework (CSF) for each country. The whole process is simple: member states submit their regional development plans to the EU, and negotiations follow between the Commission and the national governments of the member states. The CSFs outline the main directions for the relevant expenditures on a multiannual basis, thereby prioritizing programs that cover long periods and more than one region. Successive evaluations (ex ante, mid-term, ex-post) accompany each stage of the implementation of a program. It is worth noting that regarding the countries of Southern Europe, the evaluation infiltrates their reality as a derivative result, through the functioning of the Structural Funds. And it does not concern a simple, minor process. The evaluation report is considered a prerequisite and a requirement for the disbursement of the attractive funds of the Structural Funds. Today, and after the reform of 1988, the concept of evaluation is widely used and has greatly contributed to the creation of an evaluation culture ^² that involves all social partners (principle of partnership), extends to all levels of governance (local, regional, national), and runs through every activity aimed at enhancing cohesion and the consequent elimination of regional inequalities, whether these involve inequalities within member states or inequalities at the regional level.

2.2 The contribution of evaluation to economic and social development

In the context of economic-social development, evaluation as a process is not an end in itself. The decision to invest money, time, and effort in an evaluation program is an integral part of a comprehensive program, where the evaluation report (in qualitative and quantitative terms) will play a decisive role. Evaluation as a tool for measuring the progress of a project does not exist in isolation but is developed and operates based on the axes of expectations for the areas, regions, and sectors under examination. Of course, each economic-social development program evolves based on its own logic, and its scope varies, moving across a wide range that may cover the modernization of an industrial sector, the enhancement of productivity in rural areas, the integration of persons with disabilities, or more specific categories of citizens such as women, youth, and the elderly in employment programs.

The evaluation raises questions ^³ on our behalf and attempts to provide answers to questions such as how the daily lives of citizens will improve, which measures contribute to the socio-economic well-being of the regions, and how we can achieve high-quality services at low cost within the framework of competition. It aims at proper planning and implementation, improving the performance of ongoing programs, and reducing uncertainty about the final outcome. In the literature, the contribution of evaluation to innovative sectors is characterized as critical, helping in the more effective management of uncertainty and addressing complex situations.

The evaluation process concerns the entirety of society. It is directed at politicians, decision-makers, professional groups and associations, public officials, and local government authorities, as well as civil society ^⁴ . In this context, it is indicative that each of the aforementioned groups perceives and invokes evaluation for different reasons, based on their own particular interests. Specifically, professional associations believe that the introduction of evaluation in their profession will help them improve their professional qualifications and advance. On the other hand, civil society identifies evaluation with the demand for greater transparency, accountability, and scrutiny of the political programs that are announced. Moreover, politicians, those exercising public authority, whether in central or local government, invoke evaluation to substantiate their decisions and actions on a value-based level.

2.3. Θεωρητικό υπόβαθρο της διαδικασίας αξιολόγησης

The evaluation aims at the effective design and implementation of a program. It allows for the exercise of control, simultaneously acting as an accountability mechanism, placing every intervention undertaken under its thorough scrutiny. Furthermore, evaluation contributes to the improvement of efficiency and effectiveness, while also leveraging the advantage of accumulated experience at every phase of the project. It knows which actions need to be taken, the weaknesses that need to be corrected, a concept that is succinctly described by the term knowledge production. Finally, through the successive evaluations that accompany each phase of the project, networks of cooperation and communication are created among the involved parties, empowering the project’s implementation process.

In summary, the stages in the evaluation process could be summarized as follows: 1^st stage,Formation and design of the program (evaluability assessments), 2^nd stage, collection and analysis of data (in this category are included statistical models, regression, Delphi surveys, factor analysis, personal interviews, social surveys, focus groups). In the 3^rd stage those responsible for the evaluation consult with specialists (consultants) in order for their results to have greater depth and to cover multiple policies. Today, the implementation of interventions for the environment is necessarily accompanied by environmental impact studies, regarding their potential effects on employment, the economy, etc. In the 4^th stage we have the publication of the evaluation results. The report is submitted in writing, and if it contains technical terminology, it must be accompanied by the corresponding glossary. It should also detail the methodology adopted, the indicators, and the results of all stages of the evaluation.

Three could be considered the basic prerequisites for a successful evaluation: i) the evaluator must seek the maximum outcome by combining the best possible methods with the principles of realism. ii) the evaluation process must be an integral part of the decision-making and program implementation processes. And it is not enough for it to be an integral part of the evaluation process at the level of principles, but it must also be regarded as such in its operation by the other parties. Otherwise, there is a risk that its work may be undermined by others who do not accept the objectivity and correctness of its decisions. It is crucial to note that the evaluation process is successful when it creates channels of communication among the involved entities, through interaction and automatic feedback of the system with new data and information that arise in each phase of the program’s implementation. And iii) it is very important that programs have continuity in time (time line of policy) ^⁵ . Because only then can there be a real, objective evaluation, taking into account the needs of yesterday, the path that has been traveled, the failures and successes in the implementation of a program, and the needs of tomorrow.

It is therefore important for the program cycle to have continuity and duration over time. The course of the program cycle begins with the initial conception of an intervention (program): the adoption of a comprehensive strategy within which the priorities of each program are defined and outlined. A key aspect is the examination of the compatibility of the measures taken for the implementation of business actions with the priorities that have been set from the outset. The content of the priorities varies, and among them are thematic, sectoral, or local/regional. ^⁶

The Structural Funds, aiming at the economic-social development of the regions, primarily use thematic priorities for the implementation of their strategy. The thematic priorities recognize a role of horizontal priority in the sense that they should be seriously considered in all policies developed within the framework of the overall strategy. The Structural Funds have used a wide range of thematic priorities. These consist of: 1) ensuring equal opportunities, by eliminating discrimination based on race, gender, religion, national origin, and political beliefs. 2) Sustainable Development, 3) strengthening institutional and administrative capacity, 4) Social inclusion and combating social exclusion, 5) strengthening and promoting the Information Society.

Equally important are the sectoral priorities, which identify economic-social development with advancement in various sectors (such as agriculture, industry, transport, tourism). And finally, the local/regional priorities, where in the approach to socioeconomic development the dimension of “space” predominates. However, in practice, the sectoral/regional priorities are used very little, due to the difficulties encountered in finding corresponding data and information by region.

In the evaluation process, the role of indicators (qualitative and quantitative indicators) is crucial. Indicators, in order to be useful, must be comparable, have access to data, be transparent, reliable, and measurable. In the first stage of designing a program, indicators help identify the areas that need to be included in the program, the socio-economic inequalities that exist, and the gaps that need to be filled. During the implementation of the program, they provide critical information about budget expenditures (overall and by intervention sector), timelines, any delays that may exist, the degree of satisfaction of beneficiaries, and whether new supporting actions for the existing ones need to be undertaken, etc. In the final stage of evaluation, indicators inform us whether the objectives were achieved, the benefits and losses from undertaking a specific activity. Typical indicators that are widely used in evaluation are output indicators, outcome indicators, impact indicators, and resource allocation indicators ^⁷ .

2.4 EVALUATION STAGES

The evaluation process includes three consecutive stages ^⁸ of the program cycle, which develop in parallel with the project. These are the ex ante evaluation, the mid-term evaluation, and the ex-post evaluation.

PRELIMINARY EVALUATION

The ex ante evaluation is prepared at the beginning of each program cycle. It focuses on the weaknesses and strengths of each region, aiding in the design of interventions, checking whether they are feasible and whether they meet the actual needs of the area in question. While based on previous programs (reminding of the importance of the time line policy), it makes assessments for the projects that are about to be initiated. The concern of the evaluation at this stage is the compatibility of the proposed programs with national and community policies. Finally, it should be noted that during the preparation of the evaluation, all involved parties are in continuous negotiation, which increases the pressures exerted and the constraints imposed.

An example might help us better understand what we mean by the phrase “compatibility of national and community policies with ongoing programs”: The strategy for reducing inequalities and achieving cohesion at the regional level has adopted as a thematic priority the fight against social exclusion and the enhancement of social integration. And indeed, there is compatibility between the program and national and community policies. The latter, moreover, are promoted at the community level within the framework of the Community Cohesion Policy, the Lisbon Strategy, linking employment with competitiveness, the European Employment Strategy.

INTERIM EVALUATION

The interim evaluation is prepared in the second stage of the programming cycle when the interventions have begun to be implemented. It informs about the effectiveness and efficiency of the programs. Knowing the budget of each project, it assesses its implementation progress, warns of possible delays, loss of resources, deviations, and adjustments. Additionally, there are instances where the interim evaluation suggests the inclusion of new projects in the program, with subsequent resource reallocation.

Finally, the interim evaluation highlights any changes in the economic-social field, focusing on the compatibility check of the programs with national and community policies.

LATER EVALUATION

The ex post evaluation assesses the program cycle as a whole. It is compiled once the projects have been completed and examines the effectiveness and efficiency of the interventions that were carried out. It examines whether the timelines were adhered to, whether there was a loss of resources. It evaluates the resources spent in direct proportion to the work that was done. Finally, it checks whether the estimates from the previous two evaluations regarding the execution of the projects were confirmed.

After we have theoretically explored the contribution of evaluation to economic-social development, in the next section and having chosen the case study of the South Aegean, we will attempt to see the implementation and contribution of evaluation in practice. We will conclude our examination of the theoretical foundation of evaluation with a remark: Critical for the success of an evaluation is the timelineofpolicy, that is, its continuity and duration over time. Successive evaluations could schematically be represented by three concentric circles. The outputs of each circle feed the next one with new data and information, ensuring the continuity of the intervention over time, until its implementation. But even when the specific intervention is completed, it continues to exist, moving from the outer circle to the inner one, and serving as data in the formulation of new interventions.

Under ideal conditions, the ex post evaluation of each completed intervention should serve as an ex ante evaluation for the planning and design of subsequent actions. However, as we have seen above, this does not happen in practice. The causes can be identified as the time inconsistencies in the implementation of the programs, delays in updating the involved stakeholders, and sometimes problematic communication between the involved stakeholders.

Ex ante evaluation

Interim evaluation

Ex post evaluation

3. THE CONTRIBUTION OF GREECE TO THE FORMULATION OF THE EU’S REGIONAL POLICY

Speaking about cohesion policy and the EU’s structural funds, it is useful to remember the significant role that Greece played in the shaping of the Union’s structural policy during the 1980s. As is well known, Greece’s accession to the European Community on January 1, 1981, occurred during a period of economic recession for the Community and significant structural problems for the Greek economy, while a few months later, in October 1981, the parliamentary elections were won by PASOK, a party with a strong anti-European and anti-Western rhetoric. However, very soon, through its participation in European institutions, PASOK discovered the economic dimension of the Community and the possibility of absorbing resources and enhancing the Greek economy from the Community budget. It realized that Greece, “the small country of the periphery,” can influence the shaping and decision-making at the European level. This shift in PASOK completely validated the theory of Szczerbiak and Taggart (2000), that anti-European politics concerns only the opposition and not the ruling parties…

3.1. το Ελληνικό Μνημόνιο και η θεωρία του Moravcsic

In March 1982, the Greek Government submitted “memorandum” through which it clarified its strategy towards the Community and that “The Greek Government is ready to jointly consider with the Community the possibility of finding special arrangements that are compatible with our development policy and support it.” The European Commission responded in March 1983, linking the satisfaction of Greece’s demands with the adoption of the CAP: “The uniqueness of the Mediterranean problems is a fact that has been recognized by the Community.” Specifically: “In the case of Greece, community action is aimed to be more extensive and more intensive than in the other Mediterranean regions of the Community.” (Ioakeimidis, 1988).

The approval of the CAP and then the adoption of “Cohesion” from the Single Act of 1987 and the decisions on the “packages” were the result mainly of the strong pressures exerted by Greece, but also of the strategy it followed towards the EEC, aiming at reducing interregional disparities. The case of Greece confirms Moravcsik’s theory (1993), that in EU negotiations, outcomes are determined by the power and interests of member states, but also by the fact that small countries (like Greece) can achieve significant results when they act rationally. It follows from the above that in international negotiations, it is not only the “big players” that matter, but also the “small players” can take advantage of opportunities to their benefit and reap significant gains.

3.2. ο εξευρωπαϊσμός του περιφερειακού σχεδιασμού της Ελλάδας

The European period of regional planning in Greece began with the implementation of the Mediterranean Integrated Programs (MIP) 1986-1992 and continued with the implementation of the three Community Support Frameworks, 1989-1993, 1994-1999, and 2000-2006. The MIPs served as a guide for the reform of European Regional Policy after the signing of the Single European Act (1986), where the “First Delors Package” was also adopted (Maravegias, 2001).

The EU harmonization of Greece’s policy, long-term planning, the integrated approach to regional problems, and the overcoming of the classical-sectoral perception had a favorable impact on the regional development of Greece. The emphasis now is on spatial development rather than sectoral. The creation of regional institutions and corporate structures, the execution of major infrastructure projects, the establishment of the elected Prefectural Self-Government institution, as well as the support for the developmental capabilities of border and island areas had a positive effect. (Konsolas, 1997, p.239).

The impact of European programs is generally assessed positively for the economy and regional development of the country. Since the start of the implementation of the Regional Operational Programs in 1986 until the end of 2006, the EU and the Greek State will have formulated 45 regional development programs, the resources of which in recent years represent a percentage ranging from 1.2% to 5.9% of the GDP of the Greek regions, excluding Attica (Kostopoulou, 2005). The Greek region with the highest per capita GDP is Sterea Ellada with 108.8% of the average community rate, the South Aegean is second with 98%, while the region with the lowest per capita GDP is Western Greece with 58.4%.

4. THEORIES OF REGIONAL DEVELOPMENT

The theoretical approaches to regional inequalities are many and diverse, just as is the case with the concept of cohesion. There is no single, universally accepted theory for regional inequalities. However, there are two main currents:

A. The economics of accumulation: market forces create internal and external economies of scale and reinforce the trends of concentration of activities in the area. It entails: a/ the design of a development policy for lagging regions and b/ this policy should be integrated into an overall plan and have a critical size, so as to provide the necessary impetus to the less developed regions (big push theory of Rosenstein-Rodan)

B. The neoclassical approach does not particularly concern itself with the causes of differences, but with the mechanisms of the economy, such as the technology of production, the productivity of capital, and trade (Petrakos-Psycharis, 2004, p. 18-19).

Lukas Tsoukalis (1998, p. 282) argues that the greatest difficulty lies not in identifying and describing inequalities, but in the interpretation and even more so in addressing them. Regional problems concern the existence and maintenance of inequalities in terms of income, productivity, and employment levels. To understand the nature of these problems, it is usually necessary to go beyond neoclassical economic theory – perfect competition, full employment, constant returns to scale, complete mobility of production factors.

The main message of the economic theories according to Tsoukalas is that there are no valid reasons to expect the resolution of regional problems through the free interaction of market forces. On the contrary, without the necessary corrective government interventions, these problems are likely to worsen (Tsoukalas, 1998, p. 284)

5. THE REGIONAL PROGRAM OF THE Aegean SEA

The Regional Operational Program (ROP) of the Southern Aegean is one of the 24 Operational Programs of the 3rd Community Support Framework (CSF). Its implementation began with its approval in the spring of 2001 and will be completed on December 31, 2008. The strategy of the program is based on the principles of programming, complementarity, partnership, and concentrating resources where there is a greater need.

5.1. οι ιδιαιτερότητες των νησιών και η «ειδική» πολιτική

Article 130A of the TEU emphasizes that in order to promote the harmonious development of the entirety of the Community, it is necessary to reduce the disparities between the levels of development of the various regions and to cover the lag of the less favored regions, such as the islands, which suffer, due to their insular character, from structural disadvantages that hinder their economic and social development. The Union is committed, with this amendment and with the declaration on the insular regions, which attaches to the Treaty, to take into account their specific nature and to approve special measures to facilitate their integration into the internal market, under the same conditions and development opportunities that the EU offers to the mainland territories.

The European Parliament also, in its report (Viola report, 1998), supported a comprehensive European island policy and proposed a series of measures and initiatives, such as compensatory measures against the disadvantages of island character, tax and economic incentives, with the aim of promoting endogenous development.

However, despite the recognition of the particularities of the islands, which has been expressed at many levels and by all EU bodies, as well as by other international organizations, no “special” policy has been implemented. The programs that have been adopted for the outermost regions (REGIS, POSEIDOM, POSEIMA, POSEICAN) and the special island program of the Aegean do not constitute a comprehensive policy in favor of the islands, which is necessary for their sustainable development (Spilanis, 1996). We observe, therefore, that the strict application of the rules of the single market undermines efforts for a coherent European island policy.

5.2. ο νησιωτικός χώρος του Νοτίου Αιγαίου

The South Aegean Region, whose administrative division includes the island complexes of the Cyclades and Dodecanese prefectures, is located at the southeastern edge of Greece and the European Union, with its seat in Ermoupolis on the island of Syros. The region covers a total area of 5,286 square kilometers – 4% of the total area of the country.

The South Aegean is ranked among the least problematic regions of the country in terms of the basic characteristics of the human resources, exhibiting population vitality and low unemployment rates. According to the 2001 census, the population of the Region is 486,680 inhabitants. The population growth rate during the periods 1971-1981, 1981-1991, and 1991-1998 is shown to be higher than the population growth rate of the country (Regional Operational Program of South Aegean, 2001-2006).

The insular area of the South Aegean has its own characteristics that affect its economic and social development: mountainous and barren land, a subsoil poor in mineral wealth, limited local markets that are vulnerable to fluctuations, seasonal employment, mono-productions (tourism, fishing, agriculture), inadequacy in water and energy resources, geographical discontinuity that hinders the diffusion of income and know-how, isolation – problems with transportation and communication, waste management issues, deficiencies in infrastructure. However, a significant comparative advantage is constituted by the rich natural and cultural resources.

5.3 the intra-regional inequalities

The fragmentation of the South Aegean Region, which consists of a total of 79 islands and numerous islets (48 inhabited and 31 uninhabited) that are located at a relatively great distance from the center, from the headquarters of the Region and from each other, as well as the intense inter-regional inequalities in space, create a peculiar web of problems in the Region. This peculiarity has been in the past a determining factor for its form and rate of development and is expected to be decisive for the future as well.

The significant intra-regional developmental disparities have led to the classification of the islands of the South Aegean Region into at least three groups, according to the table that follows, based on specific development criteria. A fourth group is added, which includes small and large islets that have minimal to no population, but are of great importance for the country and the Region and already show signs of potential integration into developmental processes.

Ranking of islands into groups based on developmental evaluation criteria:

GROUP I
THIRA	MYKONOS	SYROS
KOS	RHODES
GROUP ΙΙ
AMORGOS	KYTHNOS	SERIFOS
ANDROS	LEROS	SIFNOS
ΙΟS	MILOS	SYMI
KALYMNOS	NAXOS	TINOS
KARPATHOS	PAROS
ΚΕΑ	PATMOS
GROUP III
AGATHONISI	THIRASIA	SCHOINOUSSA
ANAFI	KASOS	TELENDOS
ANTIPAROS	KIMOLOS	TILOS
ARKOI	KOUFONISIA	FOLEGANDROS
ASTYPALAEA	LEIPSOI	CHALKI
GYALI	MEGISTE	PSERIMOS
DONUSA	NISYROS
HERACLEA	SIKINOS
GROUP ΙV
AG. GEORGIOS	DIOMEDE	NIMOS
AG. EVSTRATIOS	DYSVATO	OFIDOUSA
AG. KALI	KANELIUSSA	POLYAGOS
AKRATHIO	KASONISIA	PRASONISI
ALIMIA	KATO ANTIKERI	REYMATONISI
ANTIMILOS	KATO KOUFONISI	RHINEIA
ANHYDRO	KEROS	SHARIA
ARMATHIA	KINAROS	SERFOPOULA
GAMVROUSA	KITRIANI	SESKLIO
GYAROS	LEVITHA	STRONGYLI
DESPOTICO	MAKRONISSOS	SYRNA
DELLOS	MARATHOS	PHARMACONISI

Source: Annual report (1993) Evaluation Consultant P.E.P. South Aegean

In the intra-regional demographic inequalities, the consequences of the seasonal increase in population due to tourist traffic should also be considered. It is noted that the largest part of this seasonal population is concentrated on the islands of the 1st group, thereby creating increased demands for infrastructure.

5.4. Gross Domestic Regional Product (GDRP)

Despite the fact that per capita product does not reflect the level of development of a region, the image of the South Aegean Region has improved regarding the Gross Domestic Regional Product (GDRP), which has more than tripled in the last twenty-five years (at constant 1970 prices), while also enhancing the region’s relative contribution to the national total. The per capita Gross Domestic Regional Product (GDRP) of the region is positioned higher than the corresponding national average per capita GDP. Specifically, it amounts to 122% of the national average per capita GDP (1998 data) and corresponds to 74% of the average per capita GDP of the European Union. ( FinalReport, “SyntheticanalysisofselectedindicatorforthespatialdifferentiationoftheE.U. territory”, 2000) .

The Region produces 2.8% of the total GDP of the country. Over time, the orientation of the regional economy towards the tertiary sector intensifies, with its participation in GDP increasing alongside a decrease in the participation of the primary and secondary sectors (Getimis-Demetropoulou, 2003).

Finally, regarding productivity, the Region is at a higher level than the country, but lower than the average of the European Union. Despite the improved image of the South Aegean Region in terms of GDP size, the geographical discontinuity of the Region does not allow for the diffusion of income, know-how, skills, etc., across the entire geographical area, creating different levels of development and serious interregional inequalities. The spectacular increase in Gross Regional Product is mainly due to the 1st group of islands (Rhodes, Kos, Santorini, Mykonos, Syros), whose exclusion would place the Region in the last position among the Regions of the country.

6. THE CONTRIBUTION OF THE REGION OF THE AEGEAN TO DEVELOPMENT

6.1. προϋπολογισμός

With a total revised budget of 582 million € (including the expected private expenditure that will approach 60 million €), it is the largest development program ever implemented in the South Aegean. It is estimated that more than 500 infrastructure projects and social solidarity actions will be funded by the Program. In addition, partial funding for about 500 other private investment projects must be added.

The initial budget of the Operational Programme was approximately 497 million euros. This amount is often referred to as the “public expenditure” of the Programme, implying that it constitutes a contribution from public entities, specifically the Greek government (25%) and the European Union (75%). However, at the beginning of 2004, it increased by approximately 25 million euros thanks to the “reward” resources allocated to the 24 Programmes that constitute the 3rd CSF (following their evaluation based on qualitative and other criteria). Thus, the total budget of the Programme, including private participation, is around 582 million euros (Ministry of Finance 2005).

The programming period 2000-2006 essentially concerns the inclusion of actions that can be carried out until December 31, 2006. However, all projects require time to be completed. December 31, 2008, is the deadline for the completion and payment of projects and essentially the completion date of the Regional Operational Programme of the Southern Aegean.

6.2. priorities of the Operational Programme

The Program has five general directions (“Axes”) which are divided into subcategories (“Measures”) with similar projects. The main axes are the following:

Construction of basic infrastructures in the fields of air, sea, and land transport, education, and health-welfare.
Construction of Environmental Infrastructure.
Tourism development projects (including maintenance and restoration of archaeological sites)
Urban development projects and strengthening the competitiveness of businesses
Actions that mainly concern the upgrading of agricultural, fishing, and forestry activities and the development of the small islands of the Region.

On May 5, 2005, 407 projects or actions with a total budget of 401.6 million euros had been integrated into the Southern Aegean Operational Program. Of these, 179 are being implemented in the Dodecanese region, 153 in the Cyclades region, and 75 have a scope covering the entire Southern Aegean Region. Among the ongoing projects are port and road works, the construction of multi-purpose regional clinics, the expansion and modernization of hospitals and health centers, the construction of many water supply, sewage, and wastewater treatment networks, schools, infant and children’s daycare centers, the operation of social services, and many more – the list is long (PEP).

In the South Aegean Region, besides the Operational Program, projects are also funded by the other Operational Programs of the 3rd Community Support Framework (e.g., the Operational Programs “Fisheries,” “Health – Welfare,” “Environment,” “Culture,” etc.), the Cohesion Fund, Leader, and others.

6.3. environment

The protection of the environment and the natural beauty of the islands and coastlines holds a central position in the development effort of the South Aegean. Thirty areas have been proposed as areas of the NATURA 2000 network, while another 23 as protection zones for birds. These areas, as well as the significant wetlands and protected areas of exceptional natural beauty, create the environmental background of the Region, upon which it can base its development. At the same time, the South Aegean Region is characterized by a particularly large number of traditional settlements, amounting to 47 for the Dodecanese and 165 for the Cyclades, dispersed across 27 islands.

In the Region, as we have already mentioned, actions are currently being implemented that are co-financed by different operational programs and the Cohesion Fund, in addition to those implemented under the PEΠ, and mainly involve projects for wastewater treatment, water supply, sewerage, landfills, and the protection and promotion of the natural environment. The total of the environmental interventions amounts to 200 million euros.

One of the basic needs of the Region concerns the creation of Landfills for Waste Disposal, as well as a waste transfer station where the establishment of a landfill is not deemed necessary. There is also an urgent need for the gradual restoration of areas of uncontrolled solid waste disposal, as well as a reduction in the volume of waste through the application of recycling methods for the recovery of organic materials, in accordance with Community Directives 94/62 and 99/31.

It is estimated that by the end of the programming period, 60% of the Region’s needs in water supply networks may be met, 56% in wastewater networks, and that waste management issues may have been addressed.

6.4. φορείς υλοποίησης των δράσεων του Προγράμματος

The weaknesses of the program and the Greek structural policy in general include the small participation of social and private entities in the design and implementation of the programs, despite the EU’s directions for “bottom up” processes. The design still largely follows the “top down” model. This is due to inherent weaknesses of Greek policy and the centralized state, but also to a lack of a culture of trust and cooperation, as we will explain in the chapter on the role of social capital in development.

The bodies responsible for implementing the actions of the Operational Program are usually ministries or agencies supervised by ministries (for example, the 4th Ephorate of Byzantine Antiquities, which is under the Ministry of Culture, carries out the project “Restoration of the Knights’ House of Jem in Rhodes”), the regional self-governments of the Cyclades and Dodecanese (e.g., the Directorate of Technical Services of the Cyclades Regional Self-Government implements the project “Construction of a Lyceum in the municipality of Naxos”), Local Government Organizations, universities, etc. The South Aegean Region is also a body implementing actions of the Program, through its services.

6.5. η απορρόφηση των πόρων του ΠΕΠ

The absorption of available resources has always been a key issue during the implementation of programs. The resources of the OP are (almost) evenly distributed each year from 2001 to 2006 and must be spent at a similarly even pace. According to the n+2 rule, resources scheduled for, e.g., the year 2001 must be spent by the end of 2003 (with a two-year margin). The aim of this regulation is for EU expenditures to be distributed smoothly from year to year, and for OP expenditures not to accumulate at the end of the implementation period. Resources that are not spent within this timeframe are lost from the OP, as well as from the Third CSF in general. It is obvious that any loss of resources has a negative impact on the South Aegean Region, as well as on the entire country.

In the case of the PEP N. Aegean, at the end of 2003 the rule was successfully applied for the first time, that is, without any losses of resources. For this good performance, it was rewarded in early 2004 with an increase of 25 million euros in its budget.

On March 31, 2005, the Operational Program of the Aegean Islands had absorbed 122 million euros, that is, 23.5% of the public spending budget of the Program (approximately 522 million euros). It is evident that the goal for each Operational Program is for the absorption rate to continuously increase, so that at the end of the implementation period, it covers 100% of the resources.

7. INTERMEDIATE EVALUATION OF THE REGIONAL OPERATIONAL PROGRAM OF THE AEGEAN ISLANDS – SUCCESS INDICATORS

The interim evaluation of the Operational Programme (November 2005) has identified and recorded several weaknesses in the execution of the program, as well as successes in certain areas. The weaknesses led to a partial revision of the program and a redefinition of the strategic objectives in order to strengthen actions related to:

Environment
Agricultural development
Marine transport infrastructure
Tourist development
Innovation and research

Regarding the funding scheme of the Program, it was found on the one hand the existence of Measures for immature projects whose resources will not be able to be utilized, and on the other hand a lack of resources for projects related to environmental infrastructure, maritime transport, education, and health infrastructure. Following this, the redistribution of financial resources (intra-program transfers of resources) was deemed necessary, both in the allocation of additional funds from the reserve planning and the investment reserve.

The degree of implementation of the Program is around 30% and the cost of completed projects up to 5/9/2005 is around 13% of the total public expenditure. The evaluation report correctly points out that regarding the efficiency of the program, it is necessary to take into account the direct, indirect, and multiplicative benefits from the execution and operation of each project, both in economic outcomes and in social ones. This is particularly important for certain projects that either have direct multiplicative effects (e.g., water supply, sewage, roads in tourist or culturally significant areas) or have direct or indirect social benefits (projects in disadvantaged areas). For all these reasons, the concept of efficiency is significantly blurred when it is attempted to be approached individually in a program based on the average unit cost of a category of projects.

However, despite the large dispersion in unit cost, the picture of the program regarding implementation efficiency, according to the report, is positive, creating prospects for achieving and/or exceeding the program’s objectives.

Regarding the assessment of the program’s impacts, it is understood that this can be done after the completion of the program and after a sufficient amount of time has passed. Therefore, for a program whose degree of implementation is at 30%, there cannot be a reliable assessment of the impacts. Nevertheless, according to estimates, once the projects are completed, 1002 jobs will be created.

8. REGIONAL DEVELOPMENT AND SOCIAL CAPITAL

The theoretical and empirical research, within the framework of social, economic, and political sciences, has demonstrated that groups and regions with high social capital have a much greater chance of achieving high levels of well-being and solidarity, compared to areas with low trust indices and weak civil societies. Many claim that social capital is a prerequisite for economic development, as well as for effective governance. Christos Paraskevopoulos (2001) argues that social capital is the critical qualitative variable that supports the work of regional institutions in the developed areas of Europe, where the role of collective action is crucial in the creation of knowledge, the facilitation of institutional functions, the promotion of innovation, and the successful adaptation of regional governance to the European and global environment.

What is social capital? In the sense given to the term by P. Bourdieu (1978), J. Coleman (1988), R. Putnam (1995), F. Fukuyama (1995), and Ch. Paraskevopoulos (2001), it refers to the total of non-economic resources, real or imaginary, that are attributed to individuals, groups, or a network of social relations and are characterized by trust, reciprocity, and commonly accepted rules of behavior, which facilitate cooperation and collective action among people, aimed at the common good. Therefore, social capital can be understood as a resource that originates from collective action and can have effects on a broad economic and social scale.

Christos Paraskevopoulos researched two geographical regions in Greece which, while having approximately the same physical features and the same natural resources, and being involved in the same European regional development programs, nonetheless show very different economic outcomes based on various statistical indicators. One region has rapidly converged towards the European average (in terms of growth rate, standard of living, etc.), while the other lags behind (e.g., in terms of absorption of funds) and is among the poorest regions of the European Union. The first region is the South Aegean Region and the second consists of three islands in the Northern Aegean (Lesbos, Chios, Samos). How can the difference be explained?

The conclusion of the research is that in the Cyclades and the Dodecanese, much more than in the islands of the Northern Aegean, there is “social capital” and a “dense institutional network” operates. The network consists of “horizontal” (that is, not “vertical,” hierarchical, or clientelist) relationships among state agencies, social organizations, businesses, and citizens. The institutional networks function as “systems of interactions among public entities, private entities, groups, and individuals involved in a specific policy sector or in a certain geographical area. In contrast, the islands of the Northern Aegean are characterized by weaker local social institutions and centralized relationships around the Secretariat of the Region, that is, around the local state administration. The central role of the state in the area contributes to the creation of vertical structures (top down) that hinder collective action and partnerships for local development.

Similarly, in Italy, R.D. Putnam studied the differences in economic development between the North and the South of Italy and reached corresponding conclusions regarding the role of social capital. Where there are networks and sufficient social capital, the process of learning new ways of acting, ideas, and adapting to the changes brought about by European integration is easier. Where learning and adaptation are more intense, better economic outcomes are observed. Compared to the islands of the Northern Aegean, the societies of the Cyclades and the Dodecanese appear to excel in terms of social capital and institutional networks, which is why they have shown greater progress and convergence towards European levels of development.

Among the countries of the EU, Greece has the lowest percentage of citizen participation in clubs and informal networks (8.9%) compared to Scandinavian countries, which approaches 65% (Christoforou, 2004). If we take into account that the northern countries are also the most developed in the EU, then certainly culture and a strong civil society play their role in the process of development and social welfare. Therefore, if the conclusion is that there is a positive relationship between social capital and GDP, then the low levels of social capital in Greece can explain the conditions of low development and backwardness of the country.

9. SUCCESSIVE EVALUATIONS OF THE N. AEGEAN REGION

In the last part of the work, and after the comprehensive presentation of the PEP of the Southern Aegean in the ^second part, we will attempt to outline the application of successive stages of evaluation in this specific operational program of the 3rd CSF for the Southern Aegean area, always keeping in mind the main strategy: the promotion of economic and social development.

Let us only mention that the duration of the PEP South Aegean starts in 2000, officially ends on 31/12/2006, but based on the n+2 rule followed in the implementation of the programs (which means two additional years from the start date of a project in the program), it officially ends on 31/12/2008.

9.1. ΕΚ ΤΩΝ ΠΡΟΤΕΡΩΝ ΑΞΙΟΛΟΓΗΣΗ ΠΕΠ ΝΟΤΙΟΥ ΑΙΓΑΙΟΥ (2000-2006)^⁹

The ex ante evaluation based its proposals for the design of the Operational Program for the Southern Aegean 2000-2006 on the ex post evaluations of the two previous Operational Programs for the Southern Aegean 1989-1993 and 1994-1999, respectively. The fact that some objectives were repeatedly stated (such as transport, agricultural development, education, and environment) proves that from ’89 until today, the two Programs that were developed and executed did not manage to resolve definitively or to satisfactorily address the development needs of the Region, whether these concerned a specific Sector (e.g., transport – water) or generally one of the Objectives (e.g., control and diffusion of tourism development). This finding serves as a key “guide” for the formulation of the new Operational Program 2000 – 2006.

The ex-ante evaluation concludes that the reasons for the low effectiveness of the two previous Programs were due to a) design level, regarding the particular conditions (geographical, climatic) of the South Aegean region, b) funding level. Specifically, for the OP ’89-’93, the amount of 33 billion drachmas was disbursed (including 5.2 billion drachmas for aircraft purchases) over a 5-year implementation period (1990-1994). Resources that were assessed as particularly insufficient in relation to the needs they were called to meet. This had the consequence at the end of
In the first Operational Programme, there was a significant number of unfinished projects, the implementation of which was subsequently taken over by the second Community Support Framework (CSF ’94-99), committing resources amounting to approximately 3 billion drachmas. The budget of the CSF ’94-’99 reached 108.1 billion drachmas for a period of 7 years (1995-2001), an initially satisfactory amount but with problems identified in the inadequate readiness of the bodies and mechanisms for its absorption. Additionally, at the implementation level, serious shortcomings were observed in the organization and staffing of the bodies responsible for implementing the programs, at local and regional levels. Objective difficulties were also noted in relation to the insular nature of the area, such as: cost overruns, inability to exploit economies of scale, etc., as well as institutional – procedural restrictions (approvals, licenses, shortcomings in the “maturation” of projects).

As a positive aspect of the evolution of the content of the Programs, the transition from the fragmentation of goals and the absence of specific emphasis in the A’ PEP is appreciated, to the effort of orientation and harmonization of development policy towards the concept of sustainability of natural resources, the integration of Special Integrated interventions (PEP 1994-1999), and the increase of the share of private participation in the B’ PEP. However, any innovative efforts of the B’ PEP were gradually weakened by the way the Program was implemented: the inclusion and then, after some time, the removal of the same projects, the lack of securing private participation, the slow pace of project implementation, resulting in the reduction of its final effectiveness.

Based on the above, the ex-ante evaluation proceeded with the design of the Program, adopting its strategy, which is articulated in 4 main objectives concerning: the sustainable approach to the protection and promotion of natural and cultural resources, the utilization of the comparative advantage of the Region regarding tourism activity, the retention of the population and creation of employment opportunities, the expansion and upgrading of transportation, communications, and energy systems. Subsequently, it adopted the thematic priorities, that is, the axes that should run through the implementation of each policy to achieve its strategy.

They concerned six thematic sections:

Axis 1: Basic infrastructure, transportation, education, Health-Welfare
Axis 2: Environmental protection and sustainable management of natural resources.
Axis 3: Control of tourism development and its realignment.
Axis 4: Strengthening and utilizing the dynamic island development centers.
Axis 5: Development of rural areas and strengthening of islands and regions with low economic development.
Axis 6: Technical assistance

The ex ante evaluation considered that the Third Regional Operational Programme of the South Aegean is based on correct strategic choices regarding the addressing of the two main developmental problems of the specific area: accessibility (in terms of geographical, economic, and social isolation) and competitiveness. It also judged that positive elements of the strategy for the period 2000-2006 include: a more systematic spatial approach to actions and resources, the pursuit of complementarity with the actions of central bodies, and the anticipation of strong participation from the private sector. Additionally, the connection of actions with human resources and employment, the trend towards limiting large infrastructures in favor of innovative actions, and the assurance of the readiness and adequacy of implementation mechanisms were noted.

In this context, the increase in the total budget allocated to the Regional Operational Programme of the South Aegean is also considered positive. The table below illustrates the distance (in numbers) that separates the Programme 2000-2006 from the two previous ones.

YEAR	A’ PEP 1989-1993	B’ PEP 1994-1999	C’ PEP 2000-2006
TOTAL BUDGET	97 million euros	317 million euros	582 million euros
TIME DURATION	5 years	7 years	8 years

SOURCE: REPORT OF THE ADVISOR ON THE PRIOR EVALUATION OF THE SOUTH AEGEAN OPERATIONAL PROGRAM

9.2. ΕΝΔΙΑΜΕΣΗ ΑΞΙΟΛΟΓΗΣΗ

The interim evaluation of the Regional Operational Program of the Southern Aegean found that the overall picture of the Program up to September 2005 shows delays in relation to its effectiveness regarding its financial elements, mainly concerning the inclusion of projects and the contracts for works/sub-projects. It should be clarified that the effectiveness indicator refers to the degree of achievement of the objectives from the start of the program’s implementation until September 2005. In relation to expenditures, the picture is characterized as satisfactory, particularly with the contracted projects/sub-projects, which account for 56% of the total expenditure. By structural fund, the best performance seems to be from the ESF, where project inclusions stand at around 81%, contracts at 51% of the total public expenditure of the Fund, and payments at around 37%. Meanwhile, concerning the effectiveness of the actions of the ERDF, worrying prospects are created.

The interim evaluation found that the combination of effectiveness in achieving goals and the performance indicators presented by the projects of most categories shows a positive outlook for the completion of the projects by the end of the programming period. In order to take advantage of this positive prospect, the effectiveness and efficiency of the management, execution, and administration system of the Program, and particularly the degree of dynamism of the Final beneficiaries of the OP programs, are of particular importance.

Specifically, ^¹⁰ and selectively, for measure 1.2 concerning maritime transport, it seems that the natural goals of the Operational Program are being achieved. However, due to discounts during the tendering process, there is a possibility of unallocated funds if mature projects are not included in the program. In contrast, it is noted that for land transport (measure 1.3), in order to be successfully implemented, either an increase in funding or a reduction in goals is required.

For measure 1.5 Health Welfare, it seems that the goals are being achieved with the commitment of 73.2% of the budget. It is noted that if there are no mature projects ready for inclusion and thus a surplus in meeting the goals, there will be a risk of unallocated funds.

For measure 2.1 “Environmental Infrastructure,” there seems to be difficulty in achieving goals such as landfills. And according to the report, the inclusion of mature projects is required in order to achieve the targets by the end of the programming period. For the environment, it is assessed that based on the short time frame remaining for the completion of the actions, there is a need to intensify all implementation and management processes of the Program. At this specific stage, the reallocation of resources from actions deemed infeasible to impossible is considered necessary.

While Measure 2.3 for the protection of the natural environment does not seem to be achieved mainly due to the allocation of funds smaller than the budget of the Measure.

In measure 4.2 “Promotion services for the integration of equal opportunities,” it appears that although the objectives in the integrated projects and contracts are being achieved, the budget is not adequate given the extension of co-financed structures.

Finally, it should be mentioned that the interim evaluation referred to the Fourth Community Support Framework, which should focus its attention on the following developmental sectors:

Enhancement of competitiveness.
Improvement of accessibility.
Upgrade and differentiation of the tourism product
Upgrade, promotion, and protection of the environment.
Development of human resources and promotion of employment.

10. CONCLUSIONS

The Greek regions appear to have covered considerable ground in their ongoing journey towards regional development and convergence with other EU regions. However, the path of a region towards real convergence is a long-term process. The acquisition of new knowledge and adaptation has proven to be an especially time-consuming process at the regional level, on the one hand due to the centralized state and, on the other hand, in the case of the South Aegean, due to the insular nature of the area and the specific problems it faces.

The overconcentration of powers and responsibilities in Athens for many decades limited the potential of the Aegean Islands for genuine self-governance. The situation improved significantly after the reforms of the 1990s; however, decentralization has not been fully realized, and the centralized state continues to impose obstacles on local forces and the development of corporate relationships. The difficulties of modernization and decentralization of the Greek state and the lack of cooperation between state and society are also linked to the deep roots that the Ottoman tradition (strong state) and pre-industrial structures still have. According to Nikiforos Diamandouros (1994), the lack of consultation institutions between state and society creates an atmosphere of distrust and insecurity, which does not favor the building of cooperative relationships.

The Region of the South Aegean is considered one of the most advanced, and this has been contributed to by the significant social capital it possesses. Without doubt, the CSFs and the Community Initiatives have created a positive political environment for adaptation and modernization. However, despite the undeniable progress, the South Aegean has yet to overcome the barriers posed by the centralized national framework and its insular character (Yetimis-Dimitropoulos, 2003). Among the two prefectures of the Region, the Dodecanese seems to have a better institutional infrastructure in terms of knowledge and capacity to adapt to new conditions. The Cyclades, on the other hand, had almost no participation of non-governmental organizations or public-private partnerships in the implementation of the first and second CSFs. However, data from 1998 onwards show a clear improvement in the direction of creating horizontal and functional networks, as required by the implementation of the CSF.

In conclusion, despite the inherent difficulties, the rigidities and the centralization of the Greek Public Administration, the subordination of the General Secretariat of the Region to the central administration, the fragmentation of the Region due to its insular character, and the problems of infrastructure and communication, the area shows a high rate of absorption of new knowledge and adaptation to the requirements of the European Structural Policy.

It is acknowledged that the Structural Funds did not bring with them only huge amounts of money for the effective support of regions lagging behind in terms of development, mainly in the countries of Southern Europe. At the same time, indirectly, as a derivative policy, they attempt to “impose” from above a culture of evaluation. Moreover, the principle of partnership introduced with the reform of 1988 supports this, and it provides for the participation of all authorities, central and local government, for the effective support and convergence of the gap observed in these countries. Subsequently, the culture of evaluation expresses the demand for greater transparency, accountability, and participation. It reflects the opening of community policies towards the civil society of the Union.

Therefore, there can be no selective application of the Evaluation Culture, only for specific areas that are used in some cases for utilitarian purposes by national governments for purely electoral reasons. At a more advanced level, it could be argued that the Evaluation Culture contributes in its own way to the evolution of the European Community: it establishes an open framework for participation, with open coordination of actions in the spirit of the Lisbon Strategy.

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Websites:

http://www.hellaskps.gr
http://www.notioaigaio.gr
htpp://www.evalsed.info.frame_downloads.asp

1 In this section of the work, as a source for documenting the theoretical framework of Evaluation, the htpp://www.evalsed.info.frame_downloads.asp was used. The document I used was titled The evaluation of socio –economic development (The Guide) December 2003, Tavistock Institut p. 10.

2 Loukas Tsoukalas, (1998) The New European Economy on the Threshold of the 21^st Century, apazisis, Athens. p. 306.

3 op. cit. Guide, pp. 7-10

4 op. cit. Guide, p. 5.

5 op. cit. Guide, p. 1-4.

6 ibid. pp. 42-48.

7 op. cit. Guide, pp. 52-56.

8 ibid. Guide, 59-61.

9 For the prior assessment, the source used was htpp:///www.notioaigaio.gr