The promotion of sustainable growth in regions is increasingly emerging as an objective for regional policy. It expands the more traditional emphasis on supporting economic growth and competitiveness. The current pandemic reminds us that many countries have harnessed human and natural capitals in such a way that resources have been depleted, and magnifies the uneven spread and vulnerabilities of longer-term economic gains.
Against this background of unsustainable development patterns, recent expressions of sustainability in regional policy assign greater priority to regional and citizen wellbeing. Sustainability and wellbeing, however, are not easily defined and significant challenges exist in translating these concepts into actual policy practice. How can regional policy mobilise actors from different territorial levels to pursue sustainable objectives effectively? Are there conflicts or trade-offs in balancing different wellbeing dimensions and territorial levels? What are the implications for policy?
Sustainability and wellbeing principles in regional Policy
Sustainability is understood and mobilised in different ways. This ranges from safeguarding mere economic sustainability to adhering to the UN Sustainable Development Goals (SDGs). A relatively novel policy approach to sustainability adopts a key focus on regional wellbeing. This approach argues that the long-term vitality of communities rests on residents’ wellbeing, inclusion and environmental sustainability, alongside the economic strength and competitiveness of their region. Based on this understanding, regional development policies should then work to address territorial differences in all those areas.[i]
The regional wellbeing approach carries two basic assumptions:
- People’s ideas of wellbeing are strongly influenced by where they live and work and the main frame of reference for these activities is the regional scale.
- People’s prosperity and quality of life are multidimensional. Income is a dimension, but so are social progress, health, social networks and the state of the environment in which they live.[ii]
The increased emphasis on wellbeing has important consequences for the conceptualisation and implementation of regional policy. If wellbeing – operationalised as everything of value – was seen as a key policy objective, multiple non-economic imbalances between regions would be given more prominence. This could include healthcare, access to facilities and services, the natural environment and how satisfied people are with their lives (social cohesion, civic engagement, friendships), all of which compose wellbeing and have to be sustainable over time to be of value.
This operationalisation feeds into three dimensions of wellbeing: materiality (‘economy’); living conditions (‘social’); and the natural living environment (‘ecology’).[iii] While economic indicators and GDP statistics have tended to dominate regional development policy analysis, the other dimensions of wellbeing are now gaining a growing presence in national regulation and legislation. In 2011, for example, the OECD set up the monitoring system How’s Life? to assess wellbeing trends, resources that sustain wellbeing over time, and wider equality issues.[iv] This has paved the way for regional policies to widen the framing of wellbeing and broaden indicator sets. The greater mainstreaming of sustainability and wellbeing principles is further expressed by new cross-country platforms such as the Wellbeing Economy Governments partnership (see box) and national policy applications.
The Wellbeing Economy Governments partnership (WEGo) is a collaboration of national and regional governments promoting sharing of expertise and transferable policy practices. The aim is to deepen their understanding and advance their shared ambition of building wellbeing economies. WEGo currently comprises Scotland, New Zealand, Iceland, Wales and Finland, and is founded on the recognition that development in the 21st century entails delivering human and ecological wellbeing. WEGo members commit to:
Wellbeing in regional policy: The case of the dutch region deals
Regional policy approaches to advance regional wellbeing encourage the framing of policy strategies in terms of human and ecological wellbeing, alongside economic growth. The Region Deals in the Netherlands are one regional policy instrument that takes a ‘broad welfare’ perspective on territorial development. In financial terms, in addition to regulatory support to overcome administrative challenges, the Deals receive support from the Regional Budget which is managed by the Ministry of Agriculture, Nature and Food Quality. The Regional Budget includes a national contribution of €950 million for the years 2018-2022. It is designed as a one-off stimulus, and its delivery is staged in three parts:
The second and third blocks of funding have been allocated in the form of negotiated Deals, in which national and sub-national governments, knowledge institutes and businesses form multi-level partnerships. The national contribution to each Deal is to be complemented with EU, regional or private sector funding, thus unlocking regional (private) funds and boosting new partnerships within regions. In principle, all self-formed partnerships are eligible and the allocated Deals indicate a relatively even geographical spread (see Figure 1).
Figure 1: Geographical spread and national contribution to the 30 Region Deals
Source: Netherlands Ministry of Agriculture, Nature and Food Quality (2021)
The Region Deals have explicit economic, social and environmental development objectives, with a rather diverse thematic orientation. Some Deals address horizontal regional challenges such as population decline, ageing, knowledge gaps or competiveness, whereas others target sectoral problems (e.g. housing, socio-economic welfare, economic transition, ecological challenges). All proposals are assessed against their application of a ‘broad definition of welfare’ to these diverse interests, adding social and ecological values alongside economic growth objectives as benchmarks for selection. Although the geographical distribution of the Deals is relatively even, variations appear between the awarded regions. Some municipalities are not included in any Deal, for example, whereas others are part of multiple Deals. Figure 2 displays the distribution of the municipalities involved in the Deals and the size of the national contribution per inhabitant.
Figure 2. National contribution to the Region Deals per capita
Source: EPRC research.
Note: the deal with the three Caribbean islands is not shown; deals targeting urban neighbourhoods are calculated using the municipal totals.
An early evaluation gave a positive assessment of the new approach based on its broader understanding of welfare, such as the socio-economic, liveability and environmental sustainability criteria that are part of the selection process. In particular, it highlighted the approach to territorial development as transitional and dedicated to the regional scale.[vi] The partnerships are ‘coalitions of the willing’, which has resulted in multi-level governments joining forces around explicit challenges. National officials are able to understand and address issues within their regional context, since challenges are identified bottom-up. The ‘broad welfare’ approach, and the accompanying open monitoring systems of wellbeing indicators (undertaken by national research agencies), provide conceptual tools to assess the Deals’ future- and outward-looking approach and the integration of economic, social and ecological indicators. Lastly, the Deals provide regions with new networks and forms of governance that could allow them to maintain momentum in the longer term.[vii]
A changing regional policy arena? trade-offs and policy implications
Academic and policy analyses have identified three areas of trade-off when considering the application of sustainable development to policy reality: (i) balancing of economic, social and environmental priorities; (ii) here vs elsewhere; and (iii) now vs later.
Clearly, countries and regions do not function in isolation: developments in the social, economic or environmental domains in one area are likely to affect the regional resources (different forms of capital) and thus wellbeing elsewhere. The current COVID-19 pandemic and its socio-economic effects are a pervasive example of regionally-specific repercussions and of the connectedness of environmental, economic and social challenges. Likewise, the climate crisis is a prime example where fossil-fuel based economic growth now – essentially exchanging natural resources for economic resources – leads to negative impacts on social, economic and environmental resources later.
In this context, the adoption and integration of sustainability and wellbeing principles uncover number of concrete policy implications. First, the prioritisation of the regional scale as functional level for everyday wellbeing underlines the need for regionally-specific policy and tailor-made responses to the global trends that challenge their economic, social and environmental fabric. Second, the addition of trade-offs elsewhere and later present policymakers with new spatial and temporal dimensions to their policies. With these in mind, two ways to ensure regions can play into technological, demographic and environmental changes emerge:
- The use of functional areas, rather than administrative boundaries, as definitive for successful policy implementation. The fragmentation of metropolitan areas or between urban and rural areas can generate economic, social and environmental deterioration on all sides of the administrative borders;[viii]
- The explicit recognition of policy choices for all three trade-off areas. Policies should address the fundamental question: on whom, where and when will the policy have an effect?
Recent policy applications show that new forms of collaboration can emerge when addressing regional wellbeing challenges. In addition to the Dutch Region Deals example outlined above, in Finland the Regional Development Decision seeks new organisational forms between the national government and (regional) cities on land use, housing, transport and innovation ecosystems. Such cooperation agreements stimulate regional strategic programmes to select their own priorities in line with the objectives of national schemes and measures. Within very different territorial development contexts, the Dutch and Finnish examples share a partnership approach to (multi-level) governance.[ix] This approach to present-day societal challenges and territorial imbalances increases the options to embed sustainability in regional policy.
As these instruments develop, new actors and thematic concepts add to the dynamics of the regional policy field. Thus far, present applications of regional wellbeing have taught us three primary policy and governance lessons:
- Complex trade-offs across the different dimensions of sustainability will emerge. The ‘here versus elsewhere’ trade-off for instance raises issues of scale and cross-border action. Likewise, the ‘now versus later’ trade-off challenges new commitments to future action, for instance in the area of emission reduction. (In)action now will affect future regional wellbeing.
- The range of public and private partners will likely increase. Bottom-up formation of ‘coalitions of the willing’ are stimulated, but also present coordination challenges. For example, regions may suggest a non-administrative boundary (a functional area or a socio-cultural border) based on existing cooperation with common and already agreed economic or social ambitions. Although they may take on a coordinating role, national ministries may keep a lower profile in the delivery of the policy.
- The capacity for legal arrangements, personnel and monitoring activity will have to be flexible. New cooperation approaches require a significant logistical operation and (regional) stakeholder ideas’ may not fit into existing regulations. The multi-lateral involvement of different administrative levels may lead to frequent re-prioritisation of existing capacity. Newly emerging priorities or new stakeholders require employment of technical expertise to support effective implementation and impact evaluation, which track the regional wellbeing effects at interchangeable territorial units.
[i] The OECD, for example, defines regional development as the effort to enhance wellbeing and living standards in all types of regions: OECD Regional Outlook 2019: Leveraging Megatrends for Cities and Rural Areas. Paris: OECD Publishing. https://doi.org/10.1787/9789264312838-en (accessed 30.3.2021).
[ii] Stiglitz J., Sen A. & Fitoussi J.-P. (2009) Commission on the Measurement of Economic Performance and Social Progress, available at http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.215.58&rep=rep1&type=pdf (accessed 11.4.2021).
[iii] Evenhuis, E., Weterings, A. & Thissen, M. (2020) Bevorderen van brede welvaart in de regio: keuzes voor beleid. The Hague: PBL Netherlands Environmental Assessment Agency. https://www.pbl.nl/publicaties/bevorderen-van-brede-welvaart-in-de-regio-keuzes-voor-beleid (accessed 4.12.20).
[vi] Available online at http://www.pbl.nl/publicaties/regio-deals (accessed 1.7.2020).
[vii] Hoed, W. (2019) Enhancing regional cooperation in the Netherlands through the Regional Budget. EoRPA Policy Briefing. European Policies Research Centre Glasgow: February 2019.
[viii] OECD (2019) op.cit.
[ix] Ferry, M (2021) Sealing the Deal? Negotiated Governance in Regional Policy, Paper CBW1/2021 to the EoRPA Regional Policy Research Consortium, European Policies Research Centre.
Ministry of Economic Affairs and Employment of Finland (2020) The regional development decision 2020–2023: Sustainable and vital regions. Helsinki: Ministry of Economic Affairs and Employment Regions, 2020:37, https://julkaisut.valtioneuvosto.fi/handle/10024/162336 (accessed 31.3.2021).