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Local Economic Development Agencies for governance and internationalization of local economies
How to set-up a LEDA in other countries

The strategies, the objectives, the specific organizational forms, and the services provided by a LEDA always depend on the cultural, political, institutional, economic and social context of the territory. However, there are some important aspects that determine its success and need to be considered in any country.



PROMOTIONAL METHOD



It is advisable to use the accumulated experiences of other similar agencies, which can provide technical assistance and training for the creation of a new one. A bottom-up approach will be utilized, and it implies:

• Participation and active engagement of public and private local actors, including communities;

• Concerted vision, strategies, objectives, and instruments for territorial development. Agreements with local actors could be achieved in different ways and different times;

• Elaboration of LEDA business plans, which include objectives, organization, services, and financial plans for the long term sustainability.

MINIMAL CONDITIONS FOR SUCCESS



The minimal conditions for the success of a LEDA are:

• Legal and administrative autonomy, needed to reduce the risk of dependence on the most powerful institutions or bodies;

• Private-public partnership, needed to guarantee a constant balance between economic growth, human development, equality, and environmental protection;

• Strategies focused on the development of endogenous potential, in order to reduce the risk of exploitation by strong national and international powers;

• Supply of a comprehensive system of services;

• Professional management and experts, which are an indispensable condition for success. This requires very rigorous selection mechanisms and human resources management.

FINANCIAL CONDITIONS



To promote a LEDA it is necessary to have an initial investment to fund the following activities:

• Technical assistance for the initial process of promotion and creation;

• Professional training for local actors;

• Capital for fixed investments: infrastructure, office equipment, means of transport, service contracts;

• Capital to cover initial operational costs of the LEDA, until financial autonomy is reached;

• Capital for the credit fund (guarantee fund or other mechanisms of revolving credit).

LEGAL FRAMEWORK



A LEDA is a non-profit organization consisting of public and private institutions designed to provide integrated services, including loans. The legal framework depends on each country’s existing legislation. The most widespread legal forms are associations, foundations, and mixed consortiums. During the promotional phase of a LEDA it is necessary to check which laws and regulations in the country regard the creation of organizations founded on the partnership between public and private sectors and on the absence of profit.



In countries that don’t allow the public administration to enter into partnership with the private sector, the LEDA can become an instrument to initiate these relations in the territory. It is important, in any case, to promote adequate national regulations, in collaboration with interested national institutions and political actors. Besides permitting the creation of LEDAs, these regulations basically open a road for the establishment of territorial services with modern mixed management forms, and the exploitation of available territorial resources. Even agreements between LEDAs and financial institutions to carry out local credit activities involve various legal aspects, depending on contexts, and this must be handled and resolved with the help of national institutions and legal experts.