First of all it needs to be said that cohesion policy or the regional policy at the European level are not the same a regional development in member or candidate states. The two concepts are often misinterpreted and a need for calibrating the two is over rated. Cohesion policy offers a frame for the development of Europe on large level and offers several opportunities for regions and national states to pick from while the financial mechanisms are there to be implemented through strict rules and administrative procedures in order to keep transparency and efficiency of the tax-payers money raised for regional policy and all other policies being implemented in European union.



Cohesion policy (IPA and later when becoming member states ERDF, ESF and CF, including the CBC-components) are one of the financial sources of the regional development which should be developing several other funding mechanisms from non-financial to loans and equity. Cohesion policy is asking regional level to develop integrated projects in order to reach target groups and minimize negative effect projects do have in their environment. Regional development plans are here welcome tool to develop complex or better integrated and cross-sectorial projects where several funding sources would be invested in order to share risks and intervene in the area of specialization of each fund available.

Structures of Cohesion policy remain administrative and rigid since their aim is to evaluate the project and implement it in a most efficient and transparent manner possible. People working in these structures are more technically trained and procedural. While on the other hand regional development plans offer a more dynamics and room for changes and long-term view. It is the regional level to manage different projects and finance them from different programs while following the overall objective of the region.

EU cohesion policy offers countries to choose their priorities and select them by own will based on internal analysis and decisions so is the national level to offer regions possibilities to choose priorities they need to follow and being able to finance to follow their priorities and strategies defined. Leaving the decision on priorities to regions raises their motivation to implement regional development plans and capacity to implement them while national level is there to develop implementing structures and follow transparency and efficiency procedures. Priorities, strategies and implementing arrangements of regions need to be based on culture, history, tradition and opportunities of the region not on the base of decision of the government or European Commission so should be funding opportunities.

Territorial dimension of regional development is important for the localization of infrastructure projects while projects need to understand target groups and the relevance of priorities and results of regional development plans for target groups. More focus needs to be given to urban cities and their capacity to form networks and partnerships in their territory and from nets among them this will bring more potential in terms of impact and cohesion effect in the future.

Text is a part of Regional Development in South East Europe and study being developed from experiences from Croatia, Serbia, Macedonia and Albania being developed by Stefan Elsing and Jurij Kobal. More will be available when the study is finalized.


The myth that small enterprises drives growth and employment is an old one, one that is firmly in the rooted in minds of policy makers and development practitioners here in RSA and in our region. There seems to be a confusion between correlation and causation. Even if statistics shows that 60% of people in RSA are employed in small enterprises thus a correlation seem to exist between small firms and employment it does not tell us anything about causation does small firms create employment, or does more employment lead to more small firms being created. Research by many reputable scholars have shown that small enterprises hardly drives growth, but that it often responds to growth; it is more likely that larger better resourced companies will drive growth and efficiency in the economy, with ecosystems of small firms emerging around them providing specialized and also some general services.For instance, the reputable scholar Thorsten Beck argues that the dynamism of enterprises is more important than the size of small firms in the total economy. I first came across Becks work while doing my PhD research he has since moved from the Worlbank to Tilburg University. Beck has done many cross-country micro economic studies and argues that:“Policy efforts targeted at SMEs have often been justified with arguments that1 SMEs are an engine of innovation and growth and2 they help reduce poverty because they are labor-intensive and thus stimulate job growth, but3 they are constrained by institutional and market failures.Cross-country, country-level, and microeconomic studies, however, do not support these claims. One study shows that, although faster-growing economies have a higher share of SME employment in their manufacturing sectors, it is not the size of this segment that drives growth“.

via Dr. Shawn Cunningham « Shawn Cunninghams Weblog.