Local development initiatives in the Lake Ladoga Region: Reasons for success and approaches to funding

The peripheral (rural) regions in most countries face four vicious circles that contribute to their low level of development and inability to achieve the sustainable level of development. The first vicious circle is related to demography and is caused by the vulnerable population; very few young people and imbalance of women and men lead to poor economy, i.e. dominance of subsistence economy over production or trade; unfavorable age structure combined with poor services lead to very low birth rate and high levels of migration. The second vicious circle of remoteness is related to the fact that poor infrastructure does not attract businesses or new residents in the area, which contributes to high levels of migration as young and working-age population, especially families with young children, move out. The third vicious circle is related to education: the low level of education and skills mean that there is no labor force available in the region, which prevents business from entering the local market. Lack of employment means high poverty risk, which again accelerates migration from the rural areas. All these processes undermine the possibilities for local development simply because there is not enough human or economic capital to sustain rural development. These negative trends are not only typical for rural areas of Russia but have a strong impact on peripheral areas of many other post-socialist and European countries. The governments in Russia and European Union introduced various programs and measures to promote local development so that to overcome the negative consequences of all the mentioned vicious circles. In the first part of the article, the authors evaluate some local development efforts funded by the Ladoga Initiative project, successful and failed projects aimed at overcoming the vicious circles. In the second part of the article, the authors describe grant and priority programs introduced in Russia to support local development.