Need for transformative change – Part 3

July 2024

We talk about the need to change things. In a series of blog posts, we look at ways to change things. The idea is not to always agree with each other on what changes are necessary to do. The idea is to get people thinking.

In the first blog post (S'ouvre dans une nouvelle fenêtre), we looked at why we need transformative changes. We also talked about economic and industrial changes. In the second blog post (S'ouvre dans une nouvelle fenêtre), we talked about climate change adaptation and mitigation. In this blog post, we talk about transformative government and governance. We also talk about the need for a transformative EU.

This series of blog posts was inspired by discussions with Franziska Sielker and Maria Toptsidou about changing framework conditions in the Danube region.

Transformative government and governance

Effective and efficient institutions and governance arrangements are essential. Good governance helps democracy, public trust, effective policy making, economic growth and the returns of public investments. It also helps translate regional investments and support into regional growth. In times of financial constraints, good government and governance are more important. This will be key to any of the transformations above. In future, there will be more focus on high-quality government and governance. Some other things might also be discussed:

• Europe closer to places. Putting an even stronger emphasis on places and place-sensitive policies may become more important in future, as an effort to put local needs at the forefront. The European Parliament says that the question of what to do should be replaced by where to do it. This means adapting institutions to changes in society.

• Better institutions and improved trust. Good governance, community engagement, empowerment and addressing the geography of discontent require better institutions and improved trust. Currently, there are significant differences in institutional capacities and trust both within and across regions EU. This is shown by how people rate their governments and the EU Barometer. Rural areas have less trust in the EU than urban areas. People trust local and regional governments more than national ones. Lack of trust in public institutions is causing people to feel left behind. This increases the risk of discontent and anti-EU sentiment.

• Digital Governance. New digital platforms and technologies are being used to make government more open and accountable. The EU is leading the way in regulating digital spaces, ensuring transparency, data protection, and citizen rights. The General Data Protection Regulation (GDPR) sets global standards for data privacy. The Digital Services Act and the Digital Markets Act aim to create safer digital spaces and fairer market conditions. Looking to the future, an important area is integrating digital services in public administration to improve accessibility, efficiency, and responsiveness. Additionally, cybersecurity remains a concern, necessitating updates to regulatory frameworks to protect against evolving threats. As digital technology becomes more important in our lives, it is important to make sure that we have good digital governance. This includes making sure that everyone can access e-governance services and that people are able to use digital technology.

Transformative EU 27+

The EU is also going through a change, not least because of the possibility of future enlargements. The EU is going through a big change. This is because of things like new countries joining the EU, problems in other countries and problems in the EU itself. The EU is looking at how it works and how it can get more money to help it work better.

• Cohesion challenges. Some new EU member states are being considered. These are Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia in the Western Balkans, as well as Ukraine, Moldova, and possibly Georgia. They all have a GDP per capita lower than Bulgaria, which is the least developed member state. This, along with regional differences within the country, and the need for reconstruction in Ukraine, will change how Europe thinks about economic, social and territorial cohesion. The accession of new countries will also affect regions in current EU member states that are next to potential new member states. These regions might be the first to experience the effects of integration.

• The functioning of the EU. The EU is at a crossroads. Reforms could make it more functional, democratic and ready for new members. The reforms are complex because different countries have different ideas about the EU. The EU needs to act quickly to deal with the challenges it faces and to expand. The effort to make these reforms will not only make the EU stronger, but also show that it still cares about democracy and shared prosperity. See our earlier blog post about why the EU needs to reform (S'ouvre dans une nouvelle fenêtre).

Spatial implications

The changes in government and governance will affect local and regional development and differences between EU countries. Good institutions are important for local and regional development, democracy, and policy implementation. Policies that take local needs into account are needed, but there are differences in how regions are governed and how much people trust their governments. Regions with better governance and more trust in their governments are more likely to benefit from public investments, but regions with weaker institutions may struggle, which can make territorial disparities worse.

Digital governance and digital services in public administration can improve accessibility, efficiency, and transparency. However, digital literacy and access to e-governance services can lead to further disparities. As the EU faces potential enlargement, the inclusion of new member states with lower GDP per capita will alter the dynamics of economic, social, and territorial cohesion. This enlargement could make it harder to manage the EU's resources and make it more important to reform the EU to make it ready for new members. The EU is changing a lot, and this can lead to economic and spatial concentration in leading areas. To deal with these challenges, we need to improve how the EU is run, work together across borders, and make sure that policies and investments benefit everyone.

Furthermore, the government and governance must adapt to climate change, economic transitions, and social changes. This means focusing on more than just green, digital, and demographic transitions to ensure sustainable development. It is important to strengthen administrative capacities and cooperate across sectors and borders to reduce the risks of increased territorial disparities and to make the most of transformative changes for all regions.

All the changes that could shape our future have the potential to change what we consider the status quo, disrupt current developments, leapfrog changes and offer desirable future prospects to all places and people. However, this is not straightforward. Linked to territorial development and cohesion, revolutions and transitions often lead to economic and spatial concentration. Many of the transformations above champion leading areas, big economic players or leading networks of players as frontrunners for transformation. This implies more concentration and thus more cohesion challenges in the years to come.

After a transformation, we can expect a phase of diffusion with convergence between economic players and places. Each new wave of industrial revolutions is shorter than the previous one. This is mainly due to accelerated scientific and technological progress. The prospect of ever faster technological revolutions poses considerable challenges to cohesion. This could mean that economic and spatial concentration will be shorter, followed by shorter periods of technological diffusion and cohesion.

The transformative aspects outlined above will affect cohesion and are also related to Cohesion Policy and territorial cooperation. This concerns the thematic orientation in terms of transformative topics going beyond support to green, digital and demographic transitions, but becoming more focused on transformative missions. This also concerns the links between Cohesion Policy and other EU and national policies. These need to work together to become transformative, especially because of limited financial resources. It also concerns strengthening administrative capacities at all levels and in all countries to ensure that public policies and investments deliver the best possible returns. Finally, it concerns the importance of cooperation across sectors, across administrative levels and across national borders.

by Kai Böhme