A community context perspective on community-led local development under the LEADER programme

The support to bottom-up community led developed in rural areas and small urban setting has drawn substantive interest by targeted communities across the European Union, and by the current multi-annual planning cycle of 2021-2027 an approximate 3,500 CLLD/LEADER programme Local Action Groups (LAG) are expected to be operational. This raises the question of how CLLD/LEADER funding of LAG based local development strategies integrate into local economic, social and political conditions. To evaluate the link between CLLD/LEADER programme and local contexts we argue that the non-inclusion of local economic and social conditions related variables among the CLLD/LEADER scoring indicators is equivalent to assuming that the means of the LAG groups across the LAG territories and populations are all the same. To test this hypothesis, we explore the relationship between LEADER interventions and community economic and social contexts using a set of three proxy variables. The one-way analysis of variance results provides sufficient evidence of a statistically significant difference between local authorities’ mean per capita income share in 24 LAG comparisons. This contradicts the assumption of nonsystematic variance of local authorities’ per capita own income share by LAGs. This is especially relevant as, according to the regression results, the 2023-2027 funding round is also statistically significantly associated with LAGs level mean per capita own income share of local authorities. The potential role per capita own income share of local authorities plays in CLLD/LEADER funding levels has been overlooked. Therefore, not accounting for the local authority’s economic context at the LAGs level results in the 2023 CLLD/LEADER funding in Romania’s Centre region being redistributive in nature. More explicitly, local economies that generate lower per capita incomes are rewarded with larger levels of CLLD/LEADER funding. The estimated additional one-EUR LAG level per capita income tax quota allocation, EUR 3.60 per capita less, was awarded in the 2023-2027 funding round.