Can Rural Development Be Measured? Design and Application of a Synthetic Index to Portuguese Municipalities

Abstract

Starting the discussion about the framework 2021–2027, and regarding the increasing importance given to rural areas by the European Union, multifunctionality of agriculture and its positive externalities can be the leverage factor to a sustainable rural development. It is therefore crucial to identify the success issues in these territories where public investment can more effectively influence the private sector. Despite the existence of many indices of development, none of them is specifically designed for the evaluation of rural areas. This lack of rural development measures hampers the process of assessing the impact of public policies applied in a particular territory, or, in an ex-ante perspective, the identification of the areas where the use of public funds would be more effective. This work hence proposes the design of a Rural Development Index which would cover the defining characteristics of each region’s development. The index has been constructed based on four dimensions: population, social, economic and environmental, with each of them being composed of different indicators. The index is finally applied it to 15 municipalities in a Portuguese NUT III region (North Alentejo) using the most recent data available from the 2011 Portuguese Census. The use of the index has allowed a comparative analysis of values of each territorial unit in different years, producing some conclusions on the effectiveness of the implementation of public policies. It was also possible to identify the dimensions in which the public development policies can improve their results, and how these dimensions contribute to different development levels of the territories.