Multi-level Governance Architecture Matters for Leader’s Added Value

Finland – Evaluation of the regional and local rural development operating model

Multi-level Governance Architecture Matters for Leader’s Added Value

In recent years, there has been a strong focus on proving the added value of Leader in the rural development system. Significant steps have been taken to define the theoretical model for Leader added value, which has also been tested in practice. Less attention, however, has been awarded to the governance system of rural development that permits Leader to produce the added value.

In a recent Finnish evaluation, the architecture of the multi-level governance of the rural development was assessed. The evaluation focused, amongst others, on the cooperation arrangements and practice between the national, regional, and local levels.

Successful multi-level governance requires explicit roles

One of the strongest messages from the evaluation is that the clarity of institutional roles matters. Namely, the Finnish rural development governance model has two (regional and local). Over the programming periods, the roles of the levels and actors have become more clearly defined.

The project funding of the Finnish CAP Strategic Plan is implemented by the regional intermediary bodies, namely the Centres for Economic Development (recently renamed elinvoimakeskukset), which fund larger, regionally significant projects. The Centres for Economic Development are state bodies handling a wide range of regional development, funding, and control tasks. Their responsibilities include promoting business and employment, developing agriculture, maintaining the transport network, and safeguarding natural resources and the environment. The regional level funds investments and development activities of SMEs especially in sparsely populated and heartland rural areas. as well as projects supporting the development of the entire region. The Centres of Economic Development also have a role in the Leader implementation, as they make the official funding decisions for the projects prioritised by the LAGs in the region.

At the local level, the 53 Leader groups cover almost the entire country, urban fringes included. The LAGs fund local initiatives, such as village hall renovation, local youth projects, and  investments into recreational infrastructure that support the quality of life in rural areas. The LAGs also fund investments and development activities of micro enterprises and business start-ups.

The evaluation concludes that, after several programming periods, the division of labour between the regional and local level have become genuinely clear. Furthermore, the cooperation between the two levels is mostly smooth and well-established. The cooperation is based on co-operation agreements and established processes, continuous communication, as well as on accumulated trust and routines.

Functioning overall architecture of the multi-level governance delivers results

This clearer division of responsibilities between the regional and local levels has reduced overlaps, shortened project handling times, and strengthened the complementary roles of regional and local actors. Rather than competing for the same projects and clients, each governance level now focuses on what it does best. Whereas the regional level has a broader view on regional development, the local level focuses on local development needs and smaller beneficiaries. They also direct potential beneficiaries to each other in case the project idea fits the instruments and objectives of the other level better.

More importantly, the overall governance architecture in Finland explicates not only demarcation but also synergies between the two levels. The regional Centres for Economic Development and the LAGs in  given region are required to draft and ratify a co-operation agreement that stipulates the common division of labour, as well as the co-ordination and co-operation arrangements and processes for the programming period.  The co-ordination agreements cover wider strategic aspects on funding, as well as day-to-day co-operation especially related to LAG project funding.

Linking rural development governance to regional development governance matters

The evaluation points out that while the collaboration between within the rural development governance system has improved, the links between rural development and wider regional development strategies and institutions governing them have weakened.

Overall, the rural priorities are less visible within the wider regional programmes, which are developed by the Regional Councils, and which steer the targeting of Structural Funds. Furthermore, even though rural themes align relatively well with the regional Smart Specialisation spearheads, the governance mechanisms of the regional and rural development operate in parallel.  This implies that rural priorities are not consistently feeding into regional innovation agendas.

In several regions, the regional cooperation structures no longer include formal LAG representation. Furthermore, the institutional and informal connections between the Regional Councils and LAGs vary considerably across Finland. Thus, the evaluation recommends actively strengthening coordination and coherence between the Regional Councils, the regional Centres for Economic Development, and the LAGs. The suggestion is to develop the composition and functioning of the regional cooperation group, the standing forum where these actors coordinate (maakunnan yhteistyöryhmä). Institutionalisation of co-operation is important as the coherence within the multi-level governance is not kept automatically after design, but it also has to be reinforced through institutionalised arrangements.

Linking rural and regional development governance matters for policy coherence and maximising the contribution of the different levels. In order for Leader to produce added value, the governance arrangements must not only permit it but to actually support it.

International comparisons show there is no single best model

The evaluation also compared the Leader governance in Finland with Sweden, Austria and Poland through comparative case studies. Rather than identifying a single exemplary governance model, the comparison demonstrated that successful systems reflect different institutional traditions. Whereas the Austrian model gives regions greater responsibility in LEADER decision-making, Sweden operates a more centralised administrative model for Leader. Poland, on the other hand, combines national and regional responsibilities. Finland stands out for supporting a broad range of rural businesses beyond agriculture at a regional and local level through a coordinated governance system.

The comparison shows that there is no universal governance blueprint. Rather, deliberate institutional architecture which provides clarity of roles, adequate resources, thought-out synergies and well-functioning co-operation and co-ordination arrangements will deliver added value at each level of governance.

Rannanpää, S., Heikkinen, B., Sillanpää, K., & Ålander, T. (2026). Alueellisen ja paikallisen maaseudun kehittämisen toimintamallin arviointi [Evaluation of the regional and local rural development operating model]. (EU:n yhteinen maatalouspolitiikka Suomessa – Arviointeja ja selvityksiä, 2026:4). https://urn.fi/URN:ISBN:978-952-366-160-8

The evaluation, carried out by NordEval Oy and TK-Eval Ay for Finland’s Ministry of Agriculture and Forestry, covered both the 2014–2022 Rural Development Programme and the ongoing implementation of the 2023–2027 CAP Strategic Plan.

Author:

Sari Rannanpää, CEO of NordEval Oy, is a rural development and evaluation expert with extensive experience in CLLD, Leader implementation, rural development, and regional policy across Finland and Europe.