Dr Yiannis Psycharis

Transcription

1 The Political Economy of the Regional Allocation of Public Investment in Greece Dr Yiannis Psycharis Assistant Professor Department of Planning and Regional Development, University of Thessaly, Greece

2 Aim of the paper The paper aims to examine the spatiotemporal development of the Greek Public Investment Budget over the period The key issues addressed are: The pattern of regional allocation of Public Investment in Greece The temporal evolution of regional allocation of Public Investment in Greece The determinants of regional allocation of Public Investment in Greece

3 The Major Determinants Economic Social Political Geographical

4 The geography of public finance Public finance is involved with the three essential questions: first, how is revenue raised, second, how is public expenditure allocated to finance public goods and services, and third, what is the balance between revenue and expenditure. The geographical analysis of public finance places the emphasis on the spatial pattern of revenue-raising, the spatial pattern of public expenditure, and the spatial balance between revenue and expenditure. In Britain, the debate over devolution has thrown up specifically spatial questions about the present distribution of public expenditure in order to determine who gets what, where.

5 Literature Review Initial Contributions Buchanan (1949), (1950), (1952) Musgrave (1959), (1983) Scott (1952), (1964) Samuelson (1954) Tiebout (1956) Oates (1972), (1991) Nordhaus (1975), (1989) Bennett (1980) Contemporary Contributions Heald (1980), (1994), (1999) Short (1978), (1981) MacKay (1993), (1996), (2001) Gramlich (1977) Ladd (1990) Anderson and Tollison (1991) Wallis (1996) Oates (1998), Collective Volume

6 Statistical Data and Sources The Greek Public Investment Budget is part and parcel of the Greek Annual Budget. It forms a very important constituent of the Public Budget and of course is approved by the Parliament. It brings the most updated time-series of primary data for the period referred above. The data have been deflated at constant 1970 prices. They are broken down at the prefectural level. The year 2000 Ordinary Budget expenditure: Public Investment Budget: 32.0% of GDP 4.7% of GDP

7 GREECE S TIERS OF LOCAL GOVERNMENT AND DECENTRALIZED STRUCTURES Perifereia 3 rd tier of decentralization (regional level) 13 Perifereies Regions Nomos 2hd tier of self-government (prefectural level) 51 Nomoi which are grouped into 50 Nomarchiakes Self-government organizations. Demos 1st tier of self-government (local level) Demoi Municipalities Non-existent till 1986 Legislated for in 1986, but not fully functional till 1997 Since 1997 fully functional with a centrally-appointed General Secretary (Periferiarchis) and co-opted members participating in the Regional Council Led by a single government-appointed Prefect (Nomarchis) till 1982 Increased participation with co-opted members in the Prefectural Council established in Prefect remains centrally appointed Fully elected tier of self-government since Fully elected throughout the period studied Underwent drastic amalgamation in 1999 in a process of municipalisation (5825 previously existing municipalities and communes (438 and 5387 respectively) were reduced into 1033 municipalities and communes (900 and 133 respectively)

8 The choice of Prefectures as the base Unit for our Analysis 51 Prefectures (NUTS III level) Prefecture is a key feature of the Greek political, administrative and planning structure and also the base unit for constituencies

9 Map of Greece

10 Periodising of the Post-dictatorial Greek Governments New Democracy Party - Liberal Party PASOK - Socialist Party PASOK- Socialist Party PASOK- Socialist Party New Democracy Party - Liberal Party PASOK - Socialist Party PASOK- Socialist Party PASOK- Socialist Party

11 Step towards to the European Integration 1981 Entry to European Economic Community Mediterranean Integrated Programs First Community Support Framework Second Community Support Framework Third Community Support Framework 2001 Entry to the European Monetary Union (EMU)

12 Financial Recourses of Greek Public Investment Budget lines at constant prices 1999 in million euros 8000 Public Investment Budget Borrowing transferd to Public Enterprices Borrowing EU Structural Funds Own resources TOTAL 100% Public Investment Budget Borrowing transferd to Public Enterprices Borrowing EU Structural Funds Own resources % % % % % Return

13 : The establishment of the Democracy (New Democracy Party in Power) Funds Prefectures (Nuts III) Greece = PI per capita Unit Public Investment (PI) per capita in percentage of average Greece Attiki GDP per capita 1976 Share (%) Gross Domestic Product (GDP) per capita in percentage of average Greece Attiki Share (%) Prefectures (NUTS ΙII) Greece , Evros Evrytania Serres Ileia Ioannina Attiki Thessaloniki Imathia Karditsa Kozani Larisa Trikala

14 : The Socialist Era (Socialist Party in Power) Prefectures (Nuts III) Greece = Funds 400 PI per capita GDP per capita 1982 Unit Public Investment (PI) Per capita in percentage of average of Greece Attiki Share (%) Gross Domestic Product (GDP) Per capita in percentage of average of Greece Attiki Share (%) Prefectures (NUTS III) Greece Evrytania Kefallinia Voiotia Rethymni Evros Attiki Thessaloniki Fthiotida Imathia Ileia Korinthia

15 & : The two Socialist Governments of the 80s Funds Prefectures (Nuts III) Greece = Prefectures (Nuts III) Greece = PI per capita PI per capita GDP per capita 1982 GDP per capita 1986

16 Changes in the spatial pattern between and Unit Change in ranking for Public Investment per capita Prefectures (NUTS III) Greece Rethymni Karditsa Arta Drama Kastoria Irakleio Evvoia Fokida Aitoloakarnania Argolida Thessaloniki Korinthia Pella Attiki Serres Ileia

17 : The return of New Democracy Prefectures (Nuts III) Greece = Funds 400 PI per capita GDP per capita 1990 Unit Public Investment (PI) Per capita In percentage of average Greece Attiki Share (%) Gross Domestic Product (GDP) Per capita In percentage of average Greece Attiki Share (%) Prefectures (NUTS III) Greece Evrytania Fokida Grevena Samos Xanthi Attiki Imathia Thessaloniki Ileia Korinthia

18 Changes in the spatial pattern between and Unit Change in ranking for Public Investment per capita Prefectures (NUTS III) Greece Xanthi Kerkyra Fthiotida Aitoloakarnania Evros Kefallinia Evvoia Messinia Dodekanisos Lasithi Rethymni

19 : The return of the Socialists Prefectures (Nuts III) Greece = Funds 400 PI per capita Unit Public Investment (PI) per capita in percentage of average of Greece Attiki GDP per capita 1994 Share (%) Gross Domestic Product (GDP) per capita in percentage of average of Greece Attiki Share (%) Prefectures (NUTS III) Greece Samos Thesprotia Preveza Lefkada Evros Attiki Thessaloniki Evvoia Larisa Pella Korinthia Imathia

20 & : The two Socialist Governments of the 90s Funds Prefectures (Nuts III) Greece = PI per capita GDP per capita 1994 Prefectures (Nuts III) Greece = PI per capita GDP per capita 1997

21 Changes in the spatial pattern between and Unit Change in ranking for Public Investment per capita Prefectures (NUTS III) Greece Achaia Fthiotida Rodopi Ileia Attiki Pieria Chalkidiki Zakynthos Thessaloniki Evros Lakonia Pella Evrytania Xanthi Karditsa Messinia Ioannina Fokida Voiotia

22 The accumulation of Public Investment in Greece

23 Summary statistics Per capita Index Public Investment (PI) in million euro at constant 1970 prices Prefectures (NUTS ΙII) Average Standard Deviation Max/Min Ratio Coefficient of Variance Weighted Coefficient of Variance

24 Overview Observing the transitions in the spatial distribution of public investments in Greece during the period, a circle appears to have been completed. Beginning from an intensely centralizing pattern for the spatial distribution of public investment, during the 1970s, which gave priority to the country s urban development poles and selectively to certain agricultural or moderately urbanized areas, we passed, in the 1980s, to an intensely decentralizing and redistributive model with certain clear exceptions. This pattern was extended into the first years of the 1990s. From the around the mid-point of the 1990s to 2001, a change came about in the regional distribution pattern for the country s public investment, characterized by the spatial concentration of public investments on the dynamic development poles and axes of the country. This pattern continued to apply during the first years of the new century. Attiki, Thessaloniki and Achaia and the links between them have played a catalytic role in the evolution of this pattern.

25 Concluding remarks Summarizing four tentative conclusions can be drawn. First, the level of underdevelopment of prefectures does not appear to have constantly and systematically constitute the principal criterion for the regional distribution of public investment in Greece during the study period.

26 Concluding remarks Second, the concentration of population and economic activity in the two large urban centres of the country acted catalytically on the regional distribution model for public investment in the country's prefectures. 50% of the country's population resides in Attiki or Thessaloniki, where 50% of the GDP is produced. Although per capita public investments in these two prefectures have fluctuated, in Attiki around average, and in Thessloniki below it, the absolute values have consistently comprised more than 30% and usually up to 45% of total public investment.

27 Concluding remarks Third, the policy concerning the regional distribution of public investment that was followed throughout the study period does not seem to have been dictated by a higher-level strategic regional development plan. For this to have been the case the government should have been systematically monitoring and recording the public capital balance by department, noting potential gaps, the omissions, the inequalities and the needs and to distribute resources accordingly. Sadly, this was not the case. In contrast to this, the regional distribution of public investments seems to be dictated more by faltering, ad hoc interventions based on opportunistic and some times indeterminate criteria, rather than by coordinated interventions dictated by some well researched plan of recorded needs.

28 Concluding remarks Last, but not least, the regional distribution of public investment seems to be related to the electoral geography. The electoral preferences of prefectures, even the area of origin of certain members of each government, seem to comprise explanatory variables for the regional distribution of public investment. Obviously this conclusion requires more carefully collected evidence, and cannot be generalized, but certainly, contribute to the better understanding of the regional distribution of public investments in Greece.

29 The End

30 Summary statistics Box plot Index Public Investment (PI) per capita Prefectures (NUTS ΙII) Average Standard Deviation Max/Min Ratio Coefficient of Variance Weighted Coefficient of Variance

31 Regional Distribution of Public Investment per period

32 Regional Distribution of Public Investment per period Return Summary Statistics

33 Financial Recourses of Greek Public Investment Budget at constant prices 1999 in million euros 8000 Public Investment Budget Own resources EU Structural Funds Borrowing total TOTAL Public Investment Budget Own resources EU Structural Funds Borrowing total Return