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Institutional Capacity and Reluctant

Decentralization in Portugal: The Lisbon


and Tagus Valley Region

R A FF A E L L A Y . N A N E T T I w i t h
HELENA RATO and MIGUEL RODRIGUES

That European integration matters is an assertion easy to assess. Since its


inception in 1957 and through successive enlargements, the Community,
later the Union, has proved its drawing power over time vis-à-vis nation-
states large and small. But why do countries join the European Union (EU)?
The literature elaborates on a blend of reasons, centred on the economic
and political advantages and opportunities that membership offers. Of late,
this view is certainly reinforced by the realization that membership in the
EU provides a comfort zone against globalization pressures (Brocker et al.,
2003; Van Den Berg et al., 2001; Reggiani and Fabbri, 1999). With member-
ship, and even before it, come demands on a country’s institutions and their
modus operandi, as well as on a country’s civil society and its associational
forms. The very nature of integration requires the sharing of political
goals, convergence of development objectives, and compliance with prevail-
ing decision making and administrative norms and practices on the part of
current and prospective members states. But it also makes it necessary for
civil society to be engaged through new forms of participation that allow
diverse organized groups to interact in both a formal and informal manner
with policy making structures, and thus become important actors in the
formulation and implementation of development policies. In a longitudinal
perspective integration requires continuous engagement with and support of
such principles, with member states adopting a ‘learning by doing’ approach.
The onus is on member states to learn so as to incrementally adapt their
decision-making and administrative structures to the exigencies of integration
and promote the expansion and effectiveness of institutional and social
networks. The incentive is for the member states to comply so as to fully
use EU policy resources to spur socio-economic development.
However, the literature on integration has not focused on the initial
capacity and inclination of different countries to respond to these expectations,
nor on the sustainability of their learning and adaptive efforts. Even less
attention has been paid to the prospects facing the acceding CEE countries.

Regional and Federal Studies, Vol.14, No.3, Autumn 2004, pp.405–429


ISSN 1359-7566 print=1743-9434 online
DOI: 10.1080/1359756042000261379 # 2004 Taylor & Francis Ltd
406 REGIONAL a nd FEDERAL S TUDIES

In this regard the comparative scope of the ADAPT research project, which
centres on the strategically important EU regional policy and on which this
article is based, fills an important void. Essential lessons can be learned
from the experience of a member state such as Portugal, whose starting
point was the aftermath of a convulsive adjustment following the fall of a
dictatorship and the loss of the empire. The purpose of this article is to
analyse how the centralized decision-making process in Portugal has
changed as a consequence of the country’s accession into the EU in 1986
and its engagement with the EU’s regional policy. The analysis emphasizes
Portugal’s reluctance to decentralize its political and administrative structures
while at the same time it underscores learning and adaptive patterns on the
part of the country’s centralized institutions as well as of its civil society.
The Lisbon and Tagus Valley Region, encompassing the Lisbon Metropolitan
Area, has been chosen for in-depth fieldwork to illustrate the modalities of
change. Beginning with a contextual analysis of Portugal before accession
the article moves on to investigate and assess how the country’s institutions
were impacted by and adapted to the exigencies of EU membership and its
incoming regional policy.

PORTUGAL BEFORE ACCESSION: A CONTEXTUAL ANALYSIS


Portugal’s history is marked by the advent of two empires. The Romans left
a legacy of local governance deeply rooted in the municipal system whose
continuity and significance has supported the Portuguese national identity
ever since (Matoso, 1993). Independent since 1143 when the kingdom of
Portugal was internationally recognized, the country has enjoyed unchanged
borders since 1297. Toward the end of the fourteenth century the alliance
between the crown and the mercantile urban bourgeoisie gave rise to the
policy of maritime expansion and the creation of a large worldwide empire.
The administration of the empire by a small country had significant political
and administrative consequences. In time, it brought about a high degree of
centralization of political power, the sustained reliance on external economic
dynamics, the depopulation of the inland areas, and the withering of domestic
civic culture. Thus, when Brazil gained independence in 1822 the quest was
on for a new colonial course in Africa (Serrao, 1998), at great social and
political cost until a coup d’etat in 1926 established the Estado Novo. The
new Fascist-like political regime adopted a policy of isolation and imperial
autarchy (Brandao, 1989).
After the Second World War the Estado Novo, pressed by increasing
domestic woes, began to adapt to the changing European context. In 1957 it
joined EFTA, opened the country up to foreign investments and supported
large-scale industrial development concentrated in the region of Lisbon,
PORTUGAL 407

which benefited from imports from the African colonies. As a consequence


the leading role of the capital city in the life of the nation was strengthened
even further. The relationship between the regime and the economic elites
grew stronger. However, the conditions of economic underdevelopment of the
inland areas, the cost of the ensuing war of independence in the colonies –
the ‘colonial war’ – and the inability to redress social disparities, led to large
out-migration flows of Portuguese to core European Community countries
(Sousa Ferreira and Rato, 2000). The political cost of the colonial war,
which started in 1961, was to block any attempt at democratization, creating
a conundrum of reactions by increasing the control of the regime over civil
society. This lasted until the successful peaceful revolution of 25 April
1974 that brought about democracy and de-colonization.
The revolutionary period (1974 – 75) saw massive yet short-lived change
in the country’s civil society. Spontaneous civic participation spawned
various forms of interest and voluntary organizations and socialization
into a participatory culture, but that soon faded away given the lack of strong
cultural roots and resources. The deep social and economic cleavages –
North vs South, coastal vs inland areas, and urban vs rural areas – contributed
to the retrenchment of a weak and waning civil society. The strength of
Portugal’s paternalist political system and its control of power took over.
Structural institutional reforms were carried out on the basis of the Consti-
tution, which defines Portugal as a unitary state inclusive of two autonomous
regions: the archipelagos of the Azores and Madeira. Acknowledging the
principles of subsidiarity and decentralization the Constitution established
three tiers of local government: the parishes, the municipalities and the admin-
istrative regions to be created by law on the mainland. Failure to create
administrative regions has rendered even more important the role of the muni-
cipalities, which represent Portugal’s main local government structures.
In 1979 a reform law created the Regional Coordination Commissions to
promote coordination in policy implementation but also to preserve the
system of centralized and top-down policy-making (Santos, 1988).

REGIONAL POLICY-MAKING STRUCTURES:


A LONGITUDINAL ANALYSIS

Negotiations for Portugal’s accession in 1986 were conducted exclusively


by the state, with no involvement of other levels of governance or of civil
society. On the outside, the European option was supported by the two
influential institutions in Portuguese history, the Catholic Church and the
new Armed Forces. At the time of accession Portugal did not have a regional
development policy to address its deeply rooted regional disparities. Yet, the
authoritarian characteristics of the state in policy making were soon put to the
408 REGIONAL a nd FEDERAL S TUDIES

test by the pressure to conform to European norms and regulations, so that


the rules by which the state had played began to change in the search for an
acceptable ‘goodness of fit’ between the country’s governance structure and
the mandate of the European regional policy process. Portugal brought to
bear on this challenge two strategic resources: it could draw on its legacy of
administrative expertise at managing an empire, and it could look at and
learn from the incipient experimentation with regional autonomy on the part
of its island regions.

Adaptational Pressures
The influence of the EU regional policy has been paramount in Portugal’s
adoption of institutional and administrative reforms to undertake programmes
of regional development (Pires, 1998). The rules to access resources devised
by the 1988 Reform of the EU Structural Funds, and strengthened by the 1993
second Delors Package, effectively obliged Portugal to create a complex and
wide-ranging planning process, centred on the new Department of Planning
and Regional Development of the Ministry of Planning and Territorial
Administration. The main output of this process was the elaboration of the
Major Planning Options for 1989 –93, incorporating strategic guidelines for
the Regional Development Plan and the first CSF. Key to this success was
the cadre of INA-trained young administrators, experts in the very tradition
and logic of planning underwriting the EU mandate. They constituted the
technical core of the Department’s bureaucracy and were supported by the
senior staff with years of management experience who had also been assigned
to the new Department. They all shared a strong sense of urgency and the need
to ‘catch up’ with other EU member states (Nanetti, 1992).
Another way in which the EU regional policy induced a positive pressure
for change was the greater visibility acquired by the development decisions
made by the autonomous governments of Portugal’s island regions. Their
interaction with and influence over the Ministry increased, as they drew
attention to the issues of intra-island development disparities and to the
contribution that the tourism industry could make in filling the gap (Nanetti,
1992). In a similar mode, Municipalities newly empowered by the Consti-
tution with development functions played a mostly positive role in orientating
the central government towards local development issues, although at times
engaging in debate over differing regional priorities than those defined
by central government. The impact of these pressure points and the EU
critique of the first CSF as a top-down process led to significant changes in
the formulation of the second CSF (1994 –99). Business Associations, Trade
Unions, Local Civic Associations, the Association of Municipal Authorities
and individual experts participated in a consultative process that was directed
by the Ministry of Planning and preceded the Regional Development Plan.
PORTUGAL 409

In line with the stricter mandate of the Funds, including the new Cohesion
Fund, to target resources so as to reduce development gaps, the Association
of Municipal Authorities was attributed responsibility in managing invest-
ments of regional significance.

Resistance to Change
Notwithstanding the technical capacity shown by central government to
conform to the norms and procedures of the EU regional policy, significant
points of political resistance emerged. The major success of the resistance
to change was the scuttling of the attempt to create Administrative Regions
in the mainland with functions of public service management and coordination
and support of municipal activities, in spite of the provision of the 1976
Constitution. In 1991, Parliament approved a law to institutionalize the
Regions and identify their boundaries and powers, subject to a popular
referendum. The issue of regionalization was at the centre of a highly
charged national political debate that involved not only political parties
and opinion makers but also up to 25 civic movements which emerged in
support and against the proposal, a plurality of them organized by political
parties and gaining public exposure (Freire and Baun, 2001). Held in 1998,
the referendum posed two questions regarding the creation of the sub-national
regional system and the acceptance of the specific Region in the voter’s area.
With a high abstention rate of 52% the result was a 60% vote against both
questions.
The no vote saw a convergence of interests resisting change. With import-
ant individual exceptions, the government itself, national political parties
and Municipalities, and business lobbied against the proposal for a variety
of reasons. The government remained in favour of national development
priorities and feared the loss of power to regions; national political parties
feared the loss of their local power based on Municipalities; Municipalities
saw the Regions as potential competitors and not reflective of their interests;
and the business lobbies – whose activities were linked to the decisions of the
Regional Coordination Commissions – saw their interests in danger. A matter
that played against the Administrative Regions was the provision in the law
by which their boundaries did not overlap with the areas of intervention of
the Regional Development Commissions. The apathy among the public at
large is to be ascribed not only to the general low level of civic participation
but also to the sense of powerlessness in the face of a strongly paternalistic
system and the realization that the system remained attuned to elite rather
than popular interests. In spite of a decade of EU-prompted regional develop-
ment strategies to reduce regional disparities, the message of regionalization
was still not fully convincing due to the continued growth of the coastal
and urban areas in Portugal compared with the remote and inland areas.
410 REGIONAL a nd FEDERAL S TUDIES

The Portuguese core areas continued to benefit from regional policies whose
official objective was to reduce socio-economic disparities (Cabral, 1997).

Evolution of State Policy Making


Portugal’s institutional structure has undergone significant changes to align its
policy-making process with the goal of accessing EU regional development
resources and making the most effective use of them. But the direction has
been to decentralize the ministerial structure while maintaining a high
degree of central control, with the exception of the two autonomous regions
of the Azores and Madeira. Five dimensions of change can be identified
(ADAPT, Final report, National case-study: Portugal):

. Adaptation of the central government structure to the requirements of


the EU regional policy;
. Institution of sub-national ministerial units to promote the regional
development policy;
. Creation of coordination units at the national and local levels to guide the
access to and monitor EU resources;
. Organization of management units inclusive of private sector represen-
tation and of Municipalities to implement EU programmes;
. Creation of advisory units inclusive of experts and representatives of
civil society.

Created in 1985, the Ministry of Planning acquired great visibility in the


late 1980s with the work on the first CSF, when its Minister became the top
political leader for the regional policy. In 1999 the Ministry was made respon-
sible for the overall coordination of the CSF. Instead, the Ministry of Finance
had the overall control over EU resources. The task of formulating the first
CSF mandated a reorganization of the Ministry of Planning, entailing the
creation of specialized central departments, foremost the Department of
Planning and Regional Development charged to direct five sub-national
ministerial units, the Regional Coordination Commissions (RCC) of North,
Centre, Lisbon and Tagus Valley, Alentejo, and Algarve (that were created
in 1979) (see Fig. 1). The RCCs were charged with promoting and implement-
ing the central government’s regional policy decisions, coordinating the man-
agement of projects, and monitoring the use of EU expenditures. They also
developed the role as mediators between the central government and orga-
nized regional interests (Pires, 1998).
The ministerial reorganization had reinforced centripetal tendencies in
policy making. At the central level the Ministry of Planning retained the
responsibility for the preparation and approval of the Regional Physical
Plans (PROTS) that define the criteria for the spatial organization of economic
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FIGURE 1
NUTS II REGIONS IN PORTUGAL

activities and land use and provide the policy frameworks for the preparation
of Municipal Plans that were also to be approved by the Ministry. At the
sub-national level of governance the RCCs were chaired by the Director
General of the Ministry’s Department of Planning and Regional Development,
while their work was integrated into that of national agencies with technical
responsibilities for EU funds, such as the general inspectors of the Ministries
responsible for the other EU funded policies and Community initiatives.
At the local level the reorganization had spawned the creation of manage-
ment units that were in charge of operational programmes, but under the aegis
412 REGIONAL a nd FEDERAL S TUDIES

of central government (see Fig. 2). In fact for the regional programmes the
management units were presided over by the five RCCs. Municipal authorities
and regional business associations participated in the management units when
regional programmes impacted on their territory. This complex governance
structure also produced an advisory process that was particularly significant
in the phase of plan formulation. Unofficial participants in the process were
well-known politicians and business people. External consultants often
played an important role in plan preparation. The creation of the CSF

FIGURE 2
PORTUGAL 413

Observatory as an independent think-tank addressing both the definition of


development priorities and the content of EU approved plans brought to the
process the open contribution of national experts.

Non-State Institutional Actors


The impact of the EU regional policy on the policy-making role of non-state
institutionally recognized actors in Portugal has been quite limited, incremen-
tal over time, though not insignificant. In essence, three developments are
noteworthy. The involvement of experts has been promoted by and embodied
into central government policy-making; the participation of NGOs has
remained rather marginal; while the profile and presence of Regional Business
Associations have grown stronger. The slow process of change started in 1988
when, as has been pointed out, the need to integrate the norms and procedures
of the Reform of the Structural Funds led the central government to institute
a complex and wide-ranging planning process. It must be stressed that public
consultation in the planning process was previously mandated by the Consti-
tution. So a step-by-step advisory process extended to non-governmental
actors began to take shape with the formulation of the second CSF and was
strengthened with the third and current CSF.
The involvement of experts in the regional policy-making process has
grown as they have been asked to participate in formal consultative councils
at the national level, which provide valuable inputs into the planning process.
Three of these institutions have significant political clout. The Economic and
Social Council (CES) is an advisory body that promotes the participation of
social and economic actors in decision-making relating to development
policy in general and the regional policy in particular. It has a large member-
ship of 64 who represent Parliament (and that includes its president), but
also the government, trade unions, business and rural associations, the coop-
erative sector, the science and technology sector, the liberal professions,
the Autonomous Regions, non-governmental sector active in social services
provision, universities, and experts. The Employment and Vocational Train-
ing Observatory (OEFP) is an advisory council that analyses problems and
proposes solutions in the area of employment and training. Its membership
includes government officials from the Ministries of Education and Employ-
ment and Social Security, in addition to representatives from the trade
unions, trade and industry, and agriculture. At the sub-national level the
activities of the regional OEFPs are coordinated by the regional offices of
the Institute for Employment and Vocational Training (IEFP), which is an
agency of the Ministry of Employment and Social Security. The CSF Obser-
vatory has a membership composed of national specialists in the main sectors
of development planning covered by the CSF and independent experts
engaged in the evaluation of Operational Programmes.
414 REGIONAL a nd FEDERAL S TUDIES

Specific NGOs orientated toward regional development issues do not


exist, so none is represented on the advisory councils and none is considered
by the legislation that regulates NGOs in the areas of service provision
and cooperation (Barroco, 2000). Instead, attention should be given to the
several local development associations that have sprang up throughout
Portugal’s rural areas. Initially stimulated by the LEADER programme,
there is evidence that they have strengthened their grassroots approach by
expanding their reach into more diversified programmes (Rato and Rodrigues,
ADAPT, 2003). The profile of the Regional Business Associations has certainly
grown since they were incorporated into the management units for regional pro-
grammes, although the question of the significance of their role in policy
making is still open as the dialogue and negotiations among these actors and
between them and the regional/local authorities remain highly influenced by
the central government’s priorities and strategy for regional development.

The Civic Culture, Social Capital and the Role of Civil Society at Large
Civic culture as a concept in modern societies draws on patterns of behaviour
that emphasize citizenship rights and duties (Cruz, 2003). Social capital is a
three-dimensional concept, entailing trust in institutions and in social actors,
sharing of solidarity norms, and the propensity on the part of citizens to act
associationally on those norms to produce public goods (Leonardi, 1995;
Putnam, Leonardi and Nanetti, 1992). Portugal’s civic culture continues to
be assessed as weak in its political participatory forms, save for the immediate
aftermath of the revolution of 1974, when spontaneous mass demonstrations
occurred and organized rallies and other forms of public engagement saw
the participation of many citizens in public activities. Since then, most of
this elan has waned. Numerous structural factors explain why in Portugal a
strong civic culture to date lacks the capacity to sustain itself. Foremost
among these is the long-lasting colonial dictatorship under which civic and
political associations were clandestine (Cruz, 1995). But they also include
the country’s history of hierarchical and paternalistic political conduits, the
disparities in economic opportunities and educational resources across
social groups, and the clear gender gap whereby even more limited resources
are available to women (Cabral, 1997). To date civil society shows a limited
level of autonomy vis-à-vis the state.
Relatedly, the stock of social capital in Portugal, although it has not been
specifically measured in its three dimensions, is estimated to be quite low.
Studies over the last two decades have indicated a ‘power gap’ between
citizens and political power in Portugal twice or more the size of those
in Holland and Denmark (Hofstede, 1994; Cabral, 1997), with women
showing an even higher gap. Other research documents how the membership
in existing cultural and sport associations is only one third female (INE, 2002).
PORTUGAL 415

THE CASE OF LISBON AND TAGUS VALLEY REGION (LTV)

To explore in greater depth the patterns of adaptation of Portugal’s policy


making structures to the norms and procedures of the EU regional policy,
the Lisbon and Tagus Valley Region was chosen as a case study (Rato and
Rodrigues, ADAPT, 2002).1

The Choice of the Lisbon and Tagus Valley Region (LTV)


Perhaps more so than in the case of the other countries of the ADAPT
comparative study, the rationale of the research in Portugal dictated the
choice of the LTV Region. It is by far the most important region, strongest
demographically and economically, but also it is the second principal benefi-
ciary of EU’s regional policy resources and the undisputed political and
cultural powerhouse that is dominant in a country of about ten million
people through the presence of the national capital: Lisbon. The Region
itself is internally differentiated, reflecting at the same time the Region’s geo-
graphical centrality and its economic duality (Comissão de Coordenacão,
1999). In addition to the highly urbanized greater Lisbon area and Setúbal
peninsula, the Region has extensive and productive rural areas.
As a whole, the LTV Region accounts for one third of the country’s
population, has the highest population density of more than twice the national
average, boasts a GDP per capita one third over the national average and
the best transportation and communication infrastructure. It has the highest
concentration of industries and services and has attracted significant foreign
investment. Its residents have the best educational profile and the Region is
where most of Portugal’s universities and R&D centres are concentrated.
During the period 1994–99 the Region registered the best economic
performance with an increase of 36.1% in its GDP per capita. The Region, of
course, includes the most important of Portugal’s two metropolitan areas, the
Lisbon Metropolitan Area (LMA). It is because all of these comparative advan-
tages that it was assumed that the LTV Region could provide the best example
of institutional adaptation and learning (Rato and Rodrigues, ADAPT, 2003).

A Profile of the LTV Region


Centred on the historically dominant pole of Lisbon, the LTV Region experi-
enced significant spatial enlargement and restructuring when the process of
large scale industrialization got underway after World War II, spilling over
to the south bank of the Tagus river and attracting large numbers of rural
migrants (Brandão de Brito, 1989). The result of the process of concentrated
growth is a region with a high political and economic profile although also
endowed with profound internal disparities. Prominent in the Region are
rural and suburban areas with inadequate physical and social infrastructures,
416 REGIONAL a nd FEDERAL S TUDIES

new forms of urban poverty and social exclusion, and the multiple problems
associated with de-industrialization and the decline of traditional agriculture
and fishing activities. The disparities are reflected in social indicators that
show that growth within the Region has occurred at the expense of social
and economic cohesion (Bruto da Costa et al., 1999). Acknowledging this
negative trend, the Territorial Organization law of 1999 articulated the LTV
Region into three distinct planning sub-regions: the Lisbon Metropolitan
Area (LMA), the West, and the Tagus Valley (see Fig. 3).

FIGURE 3
SUB-REGIONS OF LTV REGION
PORTUGAL 417

The LMA has been impacted the most by the tremendous investment in
transport infrastructure – mostly highways – that has characterized Portu-
gal over the past 15 years through the use of EU funds. On the one hand,
territorial dynamics with positive and negative impacts were induced by the
massive change in mobility. Thus, in suburban locations housing construc-
tion has been on the rise due to very high demand from families moving
out of Lisbon and to increasing immigration, but it has also concentrated
on the supply of higher-cost dwellings, including second homes, while
the construction of affordable units has occurred often in the absence of
planning schemes and standards. While immigration has countered the
LMA’s drop in population, spatial segmentation has accentuated the con-
centration of social groups exposed to exclusion risks into degraded
inner city areas, where unemployment is high and social problems more
pervasive. On the other hand, the transport revolution has supported the
service transformation of the LMA’s economic base, so that the service
sector now accounts for about 70% of the regional GDP and employment.
The sector itself has expanded from its former dependence on the public
administration and financial services to larger shares of advanced services
to companies, R&D activities, management of national infrastructures,
trade and tourism.
The West sub-region, where the main activity was traditionally agricul-
ture, has seen urbanization and has experience substantial population
growth along the new highway corridor, but it remains characterized by a
low-skill labour force and great quality-of-life disparities between its urban
and rural areas. The Tagus Valley sub-region, spatially the largest of the
three, boasts very fertile land and a productive agricultural and cattle-breeding
economy. The new transport improvements have made its location the coun-
try’s crossroads to Europe and have provided great advantages to the area.
Notwithstanding these improvements in transport infrastructure, the Tagus
Valley faces challenges of international competition for its products and
upgrading its inadequate social infrastructure.

Development Problems
Historically the LTV Region was highly heterogeneous, but significant
growth has made it more so. It is now experiencing development problems
associated with such patterns of growth. Large demographic increases are
still occurring in Lisbon’s immediate periphery and in Setubal, where
housing demand remains strong but where the housing supply is less afford-
able. Areas in the West and Tagus Valley continue to show GDP per capita
much below the regional average, at times less than half. New forms of
social vulnerability beset groups of residents who find that their limited
skills are obsolete and that they are excluded from opportunities provided
418 REGIONAL a nd FEDERAL S TUDIES

by the new growth. Immigrant communities, lacking their traditional


support bonds, face difficulties in integrating and countering challenges of
marginality and insecurity. The emphasis placed on highway construction
has caused increasing problems of traffic congestion and have highlighted
the lack of adequate urban mass transit and suburban railway transport.
The need for an integrated approach to infrastructure planning in the
LTV Region is ever more apparent.

Interest Representation and Intermediation


Changes in the political climate of the LTV Region generally reflect those at
the national level because of its huge political and economic representative
power. Thus, when the economic crisis and social conflicts of the early
1990s brought the change of government in 1995, the debate was also
marked by the proposal to create administrative regions, and the referendum
result in the Region was in line with that in the country (Porto, 1998). One
specificity of the Region’s political climate has been the prevailing view of
optimism regarding the future, as the Region has been on the receiving
end of the bulk of public works investment and advantaged by economic
and cultural development (ESOC-LAB, 1999). The participatory opening
provided by the second CSF, in the form of the consultative process directed
by the Ministry of Planning that preceded the formulation of the country’s
Regional Development Plan, attracted the attention of the Region’s business
and trade union interests and the Municipalities.
Better positioned than those in other parts of the country to make
themselves noticed, given their vicinity in location and personal power ties
to the Ministry, they responded to the solicitations of the Ministerial officials
who made a concerted effort to mobilize local authorities. In the LTV Region
the Ministerial consultations had the greatest success, leading among others
to a series of contract-programmes between the management units in charge
of the operational programmes and the Associations of Municipalities. The
contracts included technical, administrative and financial management
of regional programmes as well as of municipal investments (Pires, 1998).
The LTV Regional Coordination Commission played a major role in this
process, acting as a mediator between the Ministry and the Associations. As
per the other actors, the patterns of interest intermediation in this process
was influenced by and contained within the boundaries defined by the sectoral
and regional objectives of the second CSF and the Cohesion Fund. Yet,
the increased activism of Municipal Associations and the engagement of
entrepreneurial and union actors were the signs of the emergence of a new
approach to policy making in the Region, emphasizing the importance of
formal and informal social and political networks.
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Mapping of Institutional Actors


Taking a closer look at who these institutional actors are in the LTV Region,
one needs to reconstruct the map that extends from the national to the munici-
pal levels, by way of the regional level. At the national level the Ministry of
Planning is the major actor in the formulation and implementation of the
regional policy through its Regional Development Directorate-General.
Because of the strong sectoral approach of the Portuguese Regional Develop-
ment Programme, other ministries play an important role in the development
of the LTV Region, in particular those for Economy, Labour, Education,
Science and Technology but also Agriculture and Fishing (Ruivo, 2000).
Because of the Region’s centrality the national associations of institutional
actors, such as Association of Municipalities and the Business Association,
are important players in the development decisions regarding the Region.
At the regional level the major player is the Regional Coordination
Commission for LTV because it is the body directly responsible for the
implementation of the regional policy and the evaluation of the sectoral and
territorial impact it has produced. To this end it is the deconcentrated minis-
terial unit that is responsible for co-ordinating municipal and inter-municipal
projects as well as for territorial integrated actions supported by EU funds.
Important public and private sector actors are the sub-regional Associations
of Municipalities and Business Associations. At the municipal level, and
playing a role as individual actors and as recipients of EU regional policy
resources, are the various Municipalities in the Region. They may choose to
form and define the scope of an Association to resolve specific local problems
and register it with the Ministry of Planning. National law in 1991 created
the Lisbon Metropolitan Area (LMA) that aggregates 18 Municipalities of
Greater Lisbon and the Setúbal Peninsula and whose functions cover public
transport and roads, sanitation, environmental resources, civil protection,
territorial planning, and inter-municipality investments (see Table 1).

Social Network Analysis (SNA)


The SNA assesses relationships or flows in a network, whereby associations
and groups represent the nodes while the connections indicate the relation-
ships between them. The assessment is reported in terms of both measure-
ments as well as mapping of the relationships. Applied to the LTV Region
the SNA profiles the characteristics of centrality and density of the network
of national, regional and local actors engaged in the regional policy there.2
The matrices show that the strongest relationships are among central
government actors (Ministry of Planning, Directorate-General Regional
Development, and LVT Regional Coordination Commission) but also
between these actors and the other actors. Very significant is the lack of
TABLE 1
INSTITUTIONAL ACTORS IN THE LTV REGION

Governance Institutional
level sector Actor Role

National Public Ministry of Planning Definition and national coordination of regional policies
Regional Development Directorate-General Responsible for drafting and executing regional development policy, for
coordinating and monitoring implementation of community-funded projects
National Municipalities Association Co-ordinates municipalities’ common interests
Private National Business Association (AEP) Global association of private companies; defends its interests (with an
important lobbying power)
NGOs CGTP Union, defends the workers’ rights and interests
UGT
Regional Public Regional Coordination Commission – Lisbon Responsible for the execution of relational planning and development policies
and Tagus Valley
Lezı́ria do Tejo Municipality Association
Setúbal Municipalities Association Coordinate common interests of municipalities in the region
Medium Tagus Municipality Association
West Municipalities Association
Lisbon Metropolitan Area (authority) Coordinates transversal issues to the metropolitan area
Private Lisbon Region Business Association
Setúbal Region Business Association
Leiria Region Business Association Associations of private companies; defends their associates interests
Portalegre Region Business Association
Santarém Region Business Association
Local Public Oeiras municipality
Nazaré municipality
Ourém municipality
Palmela municipality
Management of local public interests
Santarém municipality
Chamusca municipality
Abrantes municipality
Caldas da Raı́nha municipality
PORTUGAL 421

horizontal relationships between the Municipalities, while Business Associ-


ations do appear to have more interactive relationships, though not very
strong. In terms of network density the valued matrix result reports a value
of 1.27, representing a relatively high degree of density. But the density is
differentiated among national level actors (high density) and local actors
(lower density), indicating that knowledge flows are maintained within the
national level and restricted toward the sub-national level actors.
In terms of network centrality,3 the valued matrix indicates values of 98.6
and 140.3 for the indegree and for the outdegree centrality networks, respect-
ively, indicating that the three central actors identified above tend to have
more intense relationships with others. This result is not unexpected, given
that the first two are the only national level actors in the network and that
the third is a regional branch of the national government, which is the very
reason why regional public actors have a diminished role as they have to
follow top-down directives. The results confirm the lack of empowerment
of regional and sub-regional structures which is related to the absence of
autonomous administrative regions.

TABLE 2
FREEMAN’S DEGREE CENTRALITY MEASURES

No Symmetric
Diagonal valid
Model: 1 Degree 2 NrmDegree

1 MINPLAN 19.00 211.11


2 DGRD 16.00 177.78
3 LTVRCC 15.00 166.67
4 LTMA 12.00 133.33
5 AML 8.00 88.89
6 LRBA 7.00 77.78
7 PRBA 8.00 88.89
8 ABRANT 12.00 133.33
9 OEIRAS 7.00 77.78
10 OUREM 10.00 111.11
Descriptive Statistics
1 Mean 11.40 126.67
2 Std Dev 3.95 43.94
3 Sum 114.00 1266.67
4 Variance 15.64 1930.86
5 Euc Norm 38.16 423.97
6 Minimum 7.00 77.78
7 Maximum 19.00 211.11
Network Centralization ¼ 105.56%
Note: For valued data, the centralization index may be larger than 100%.

Source: UCINET IV 1.68/X Copyright 1991–2001 by Analytic Technologies.


422 REGIONAL a nd FEDERAL S TUDIES

In examining the structural equivalence aspect of the network, four distinct


groups of actors are found, but the only homogeneous one is that comprising
national level actors (again, the Ministry of Planning and the Directorate-
General Regional Development) and the regional actor with responsibility for
the regional policy (LTV Regional Coordination Commission). The second,
third and fourth groups are composed respectively of: two regional actors, two
regional actors and one Municipality, and two Municipalities. This configuration
means that the most central actors in the network have the same type of relation-
ships. Moreover, central government and its units have played a major role in the
institutional networks created among and between regional and local actors. The
SNA shows that relationships between Municipalities do not exist outside Munici-
pal Associations. Ultimately, therefore, the process of adaptation and learning has
been prompted by the central government’s regional policy (see Fig. 4).

FIGURE 4
STRUCTURAL EQUIVALENCE OF POLICY NETWORK ACTORS
PORTUGAL 423

Valued matrix visualization, using the metric multidimensional scaling


and producing a display of actors, highlights the centrality in the regional
policy network of the Region of the LTV Regional Coordination Commission,
the Directorate-General Regional Development and the Ministry of Planning
and the peripheral positions of the other actors (see Fig. 5).

Qualitative Analysis
The qualitative information gathered from the interviews supports the SNA
findings and contributes further insights into the process of adaptation to
European regional policy-making norms and procedures in the LTV Region.
Both the dialogue and the negotiations among regional and local actors are
reported to be directly influenced by the central government’s priorities
and strategy for regional development, even when the actor is the Lisbon
Metropolitan Authority that intervenes as a go-between when the regional
Business Associations are prompted into action. An example of the political
importance of Lisbon is the fact that its former mayor became the country’s
President. Yet, the sectoral rather than regional accent of the central
government’s development priorities is seen as creating difficulties in the dia-
logue with Lisbon and the other Municipalities. A clear trend identified by the
respondents is the activism of the entrepreneurial associations, aiming to
develop lobbying strength to better influence national decision-makers.

FIGURE 5
POLICY NETWORK PORTUGAL: METRIC MULTIDIMENSIONAL SCALING (MDS)
424 REGIONAL a nd FEDERAL S TUDIES

Respondents confirmed that in terms of regional policy there is no evidence


of formal public –private partnerships. However, it was also pointed out that
things are changing in terms of the perception of increased opportunities to
be taken advantage of, so that some municipalities have created integrated
technology centres and industrial parks to attract private companies, as in
the case of the Oeiras Municipality. At the national level the government is
seeking to pay greater attention to local demands regarding the economy,
and the example is offered of the creation of the Empresa Geral do
Fomento, an institution to support private investments. The public sector
has also created a number of private companies to undertake specific projects,
as the planning of Expo 98 or the construction of the Vasco da Gama bridge
over the Tagus.
There is a relative level of consensus among the institutional actors in the
Region when it comes to identifying the main development issues, together
with the indication that more needs to be done to address them. Foremost,
views converge on the issue of regional disparities, between urban and rural
areas, underlining the inadequacy of land use management and the problems
of congestion, housing and social exclusion. The absence of formal and
pro-active regional institutions is singled out by all respondents as the main
reason for the nonexistence of a strategic and integrated regional approach
to effectively meet the Region’s challenges.

PORTUGAL’S INSTITUTIONAL AND SOCIAL STRUCTURE:


HOW GOOD A FIT?
Directing the analysis towards Portugal at large, it is time to assess the
extent to which the country has been able to adapt its decision-making and
administrative structures to the exigencies of the European regional policy,
prompt its civil society into patterns of engagement supportive of the
policy, and ultimately be more effective in achieving development results.
The general research question to be addressed is the ‘goodness of fit’
between European policy-making rules and Portugal’s modus operandi.

Patterns of Adaptation
The EU regional policy has been a highly motivational factor for Portugal’s
institutional actors to familiarize themselves and to work with the opportu-
nities that the implementation of the policy afforded. In particular, the possi-
bilities to access financial resources and to form institutional partnerships
in promoting development stand out. Policy adaptation became the means
through which these aims could be achieved. At the national level it meant
to transpose EU directives and regulations into national laws and admini-
strative practices, at the same time to participate in and maintain control
PORTUGAL 425

over the process. At the local level it meant to acknowledge and pursue new
tasks, at the same time to participate in and maximize the benefits from the
process. It has been indeed a case of reluctant decentralization from the top,
which up until now has seen Portugal’s national level of government in the
winner’s seat.
Much of the evidence of adaptation is found in the extensive institution
building that has taken place as a result. The urge has been to restructure
the central government in order to give it the capacity to formulate regional
policy and to coordinate and manage its territorial implementation. The
core of the renewed institutional system are the Directorate-General for
Regional Development in the Ministry of Planning and the Ministry’s
Regional Coordination Commissions. But the restructuring did not stop at
the formal creation of institutions. A second important feature of the change
in Portugal has been the realization of the need to show to the EU the admini-
strative capacity to deliver results. As a consequence, a skill and meritocracy-
based approach to the staffing of the new policy-making institutions was
adopted early on in the process, a feature that may not have been expected
in a country whose other institutions, political and cultural for example,
reflect a pervasive paternalistic and hierarchical approach. Drawing on a
pool of trained young planners and the experience of former colonial admini-
strators, Portugal was in a position to boast of being the first Objective 1
country to submit on time to Brussels the Regional Development Plan that
constituted the basis for the second CSF, even ahead of Ireland.
But the most difficult and less successful adaptive change has been regard-
ing the dimension of territorial implementation of the regional policy. The
failure of the popular referendum to approve the creation of the administrative
regions has brought out the contradictions built into a system that is charged
with the elaboration and delivery of a regional policy to address highly differ-
entiated territorial needs, while at the same time it remains centrally controlled
and structured. At the local level the contradiction has surfaced more often
because over the years, and since the second CSF, the EU has required a
substantive participatory process in regional policy formulation and
implementation together with greater territorial targeting of Structural funds
resources. Central government control over the content of the regional
policy agenda is increasingly challenged, and the local actors point to
the limitations of a process which is only consultative in the formulation
stage and still needs Ministerial approval for local cooperative efforts in the
implementation stage.

Engaged Civil Society


In Portugal the EU regional policy has achieved very partial successes as a
motivational factor for a more engaged civil society. The first important
426 REGIONAL a nd FEDERAL S TUDIES

reason is that the changes in the country’s institutional structure have not been
bold enough, the failure to create administrative regions being the most sig-
nificant example and the option to form Municipal Associations being an
insufficient step in filling the participatory gap. Consequently, the pre-con-
dition of power redistribution from the central level of government to the
regional and local levels that underlines the paradigm of greater and
sustained engagement of civil society in policy-making has yet to be realized
in Portugal, notwithstanding the prompts provided by EU regional policy.
Such a reality explains a yet low learning performance.
However, within this constraining institutional structure, something has
changed in the direction of greater civil society engagement. A very active
party is the Business Associations which are responding to the solicitation
on the part of the Ministry to be more involved. They are assessing the eco-
nomic gains to come from being active as regional participants in the policy,
including the co-financing of projects. Trade unions, potentially very import-
ant players, are keeping a national profile through their participation in the
consultative councils on the regional policy but are failing to be relevant
regional actors. This attitude limits their broader engagement with the
policy, reinforces the top-down approach, and confines their role to sectoral
issues. Other potentially important players, such as professional associations
and NGOs, also maintain mainly a national profile by sitting on the consulta-
tive councils.

Effective Development Policy


The compound result of the nature of the adaptive institutional changes
and the limited changes in the opportunities for civil society engagement
has been Portugal’s half-success with the regional policy. When the policy
is evaluated in terms of development outcomes – that is, in relation to its
dual goal of economic growth and reduction of regional disparities – the
result is that Portugal has achieved substantial success in reducing the distance
between itself and other European countries, while it has not been as success-
ful in diminishing the development gap between its less and most developed
regions. In other words, Portugal has reduced the gap in social and economic
cohesion externally but not internally.
The principal development objective has been national and not regionally
balanced growth. Today, the emphasis on growth per se carries less weight
given the country’s persistent regional development disparities continue.
The weakness of regional interest representation, both institutional and
societal, has contributed to keeping away from the spotlight new disparities
that have emerged and are identifiable at the sub-regional level, such as
declining urban neighbourhoods, poorly serviced suburban developments,
and marginal agricultural areas. In part the limitation in the regional policy
PORTUGAL 427

effectiveness is to be ascribed to the insufficient territorial targeting of


resources towards the more marginal areas. But such redressing of the
policy is conditional on the more profound institutional changes that the
country has so far avoided.

CONCLUSIONS
Portugal began to participate in the EU regional policy and benefit from its
allocation of resources shortly after its accession. It was spurred on by the
urgency to catch up with the development of the rest of Europe and making
up for lost time. In many ways it was a new challenge for Portugal, given
its history of highly centralized institutions, deep territorial and social
cleavages, and weak civil society, against European norms and procedures
that required multi-level governance, geographical targeting of resources,
and accountability. Extensive adaptation and change were inevitable in formu-
lating an appropriate development policy and coordinating and managing
the EU funded programmes. A complex and broad ranging planning process
was elaborated that would incorporate the principles of the 1988 reform
of the Structural Funds. It first centred on the creation of new Ministerial
institutions at the national and regional levels and incrementally it expanded
an advisory policy process to local institutional and civil society actors. The
process of change benefited from the availability of highly skilled ministerial
officials who were assigned to the new institution.
The European requirement of monitoring Structural fund expenditures
and of measuring their effectiveness in terms of territorial impact has led to
incremental improvements in the technical capacity of local institutions.
Over time, while maintaining its characteristic of a national system, Portugal’s
governance structure came to rely more on its local government institutions,
the Municipalities, by allowing them to create formal and management
types of Associations to improve the effectiveness of the implementation of
regional programmes. New institutional attitudes and types of behaviour
have no doubt emerged. Examples of public – private partnerships have been
experimented with in facilitating the construction of major projects and
beginning to coordinate spatial decisions regarding industrial and service
park infrastructures with the interest of private companies to locate there.
Awareness of developmental choices and priorities among social groups
and the public at large has been increased by the consultative process and
the publicity it receives, although these voices are far from being a determin-
ing factors in decision-making.
The latter conclusion is related to the failure of Portugal to create admin-
istrative regions, a major drawback also because of the way in which it
happened. The aftermath of the negative vote in the referendum on regions
428 REGIONAL a nd FEDERAL S TUDIES

was to perpetuate the acrimonious political debate that had preceded it, and the
hardening of positions. It does not appear realistic to think that regions will
soon be on the horizon soon in Portugal. Yet, their very absence explains
better than anything else the constraints on performance of the regional
policy, foremost the persistent inter and intra-regional development disparities
in the country. Projects are by and large decided at the national level, accord-
ing to a predominant sectorial logic and they are regionalized a posteriori. The
rather efficient Ministry-based institutional structure, including its regional
Commissions, is no substitute for regional autonomy and a bottom up and
pro-active, integrated approach to development strategies which would be
territorially specific because it would be designed and carried out by regional
and local institutional actors. This is the main lesson that remains to be learned
in Portugal and consigned to the actors involved in the process of regional
development for 2000– 06 and beyond.

NOTES

1. The field work comprised of semi-structured interviews with key institutional actors in
policy making in the Region during the period of transition between the second CSF and the
beginning of the third, and was supported by the analysis of an extensive body of documentary
material.
2. The mapping of the institutional actors engaged with the regional policy in the LTV Region
provided a total of 25 actors who were targeted for the semi-structured interviews. Ultimately,
it was possible to gather quantitative interview data, for purposes of the SNA, from only 11
respondents representing ten institutions. Three other respondents representing agricultural
development associations were interviewed later in the research, but only qualitative
information was produced by those interviews to be incorporated in the qualitative analysis.
Notwithstanding repeated attempts, trade union representatives did not allow themselves to
be interviewed, while among the actors no NGO specifically orientated to the regional
policy had been identified. The interviewees represented the Ministry of Planning and the
Regional Development Directorate-General; the Regional Coordination Commission for
LTV, Leziria do Tejo Association of Municipalities and the Lisbon Metropolitan Area
authority; two regional Business Associations for Leiria and Portalegre; and three individual
Municipalities of Oeiras, Ourem, and Abrantes.
3. Using Freeman’s degree of centrality method the adjacency matrix identifies more properly
actors with more connections, independent of strength, while the valued matrix takes the
strengths of connections into account to evaluate how central the actors are.

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