Cohesion Policy needs to boost high-quality governance

April 2024

Effective and efficient institutions and governance arrangements, enhancing the participation of people at local and regional levels are essential. They strengthen democracy, trust in public institutions, economic growth and the returns of Cohesion Policy investments. Furthermore, high quality governance helps translate regional investments and regional support into regional growth.

The report of the group of high-level specialist on the future of Cohesion Policy (Öffnet in neuem Fenster) argues that Cohesion Policy should aim not only to promote inclusive and sustainable regional development and reduce disparities but also to enhance governance, the quality of government, and the efficiency of public policy.

Better institutions can contribute to the development of strategies with a well-balanced mix of initiatives targeting regional infrastructure gaps, advancing human resource capabilities and job structures, and refining the institutional framework.

Since 2014, Cohesion Policy has increasingly strengthened its support for institutional development and capacity building in the regions and member states. However, substantially more needs to be done and efforts need to be become more place-sensitive and tailored to places’ initial conditions and stage of development.

Good institutions and participation matter

An important asset of a democratic state (governed by the rule of law) is the public administration's capacity to orchestrate and mobilise collective action. This is even more important in light of emerging global challenges, which demand novel ideas, skills, capabilities and experimentation. In this context, multidisciplinary and multilevel Cohesion Policy is important for empowering people and institutions to face the new challenges. It is indispensable for development, and for democracy, i.e. people’s trust and participation in societal decision making processes.

A place’s institutional capacity and quality governance affect economic growth, the returns of Cohesion Policy investments and regional competitiveness. Seen from the other side, corrupt or inefficient governments undermine regional potential for innovation and entrepreneurship and weaken the attractiveness of regions to investments and migrants. Furthermore, institutional capacity and quality governance play a vital role for the well-being of society, are a prerequisite for long-term, sustainable increases in living standards, and strongly influences people’s health, their access to basic services, social trust and political legitimacy. Also, a place’s environmental performance and decisions on the type of public good investment are affected, as well as the inclusiveness and participation.