REGIONAL DEVELOPMENT STRATEGIES IN OECD COUNTRIES Trends and Tools

Maria-Varinia Michalun

OECD Seminar:

Supporting Decentralisation and Deconcentration in Ukraine

Kyiv, Ukraine

26 January 2017

Introduction

• What’s happening in OECD regions?

• Regional development objectives

• Trends in regional development

• Governance tools

• Conclusions

2

What’s happening in OECD regions?: Growth and Disparities

• Growth is concentrated in a few leading regions

0

10

20

30

40

50

60

70

80

90

%

Regional concentration of GDP growth among top 20% regions with

highest GDP growth rates (2000-2013)

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What’s happening in OECD regions?: Growth and Disparities

• Growth is not always strongest in urban regions

GDP annual growth rate by type of TL3 regions, 2000-13

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-10

12

34

56

LUX

NZL

GR

C

PR

T

ITA

DN

K

JPN

FRA

HU

N

CH

E

SWE

DEU

NO

R

NLDBEL

SVN

GB

R

FIN

ESP

AU

T

IRL

CZEES

T

PO

L

SVK

KO

R

% Urban Intermediate Rural

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What’s happening in OECD regions?: Growth and Disparities

• No general pattern to changes in inequalities

Gini index of

inequality of GDP

per capita across

TL3 regions, 2000

and 2013

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0.0 0.1 0.2 0.3 0.4 0.5

CHLMEXSVKIRL

TURHUNKORESTPOLGBRCANAUSCHE

OECD31ITA

DNKAUTUSANZLFRACZEDEUNORPRTSVNESPFINJPNBEL

SWENLDGRC

IDNCOLRUSBRACHNLVALTUZAF

2013 2000

%

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What’s happening in OECD regions?: Well-being dimensions

• Well-being is not uniform across regions

Disparities in well-being dimensions among TL2 regions in all OECD countries, 2003 and 2014. Theil index

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0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

Health

Life satisfaction

Community

Civic engagement

Education

Access to services

Housing

GDP per capita

Environment

Jobs

Income

Safety

%

2014 2003

6

Regional development in OECD countries: Country objectives

• Competitiveness, Growth and Inclusiveness

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15

16

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17

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20

21

24

26

28

0 5 10 15 20 25 30

Revive distressed areas (population shocks)

Reduce intraregional disparities

Increase accessibility of peripheral areas

Address environmental and climate change issues

Build capacity for local/regional governments

Foster rural-urban linkages

Revive distressed areas (industrial shocks)

Reduce interregional disparities

Provide reasonable access to public services

Achieve balanced growth

Increase competitiveness of lagging regions

Increase competitiveness of all regions (i.e. global…

Number of countries

Regional development policy:

Countries rating objectives as high priority

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Regional development in OECD countries: Country trends

• Focus on competitiveness and productivity

drivers

– Business development

– Fostering innovation

– Promote investment rather than subsidies

• Reduce inter-regional inequalities

– Support lagging regions

8

Regional development in OECD Countries: Country trends

• Promote urban-rural linkages – Support integrated development policies between

urban and rural areas

– Recognition of complementarities

– Definition or redefinition of rural-urban systems

• Strengthen subnational governance and capacity – Support resource availability and capability

• Fiscal/financial capital, human resources, infrastructure

– Promote greater vertical and horizontal coordination

– Consider metropolitan governance arrangements where appropriate

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Regional development in OECD countries:

Governance tools

• Framework policies are common, especially in

Europe

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Regional Development in OECD Countries: Governance tools

Strategy Where are we

going?

Policy(-ies) How are we

getting there?

Programs What takes us

there?

National Strategy for Regional Development

Decentralisation Policy

Sector Decentralisation; Decentralisation

programmes/plans

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Regional development in OECD countries: Governance tools

• Responsibility for regional, urban and rural development

policy is most often split among ministries or national

level bodies

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Regional development

Rural development

Urban development

Denmark, Iceland,

Netherlands, New Zealand,

Switzerland

Czech Republic, Estonia,

Finland, France, Ireland,

Japan, Luxembourg,

Poland , Slovak Republic

Hungary

Austria, Israel, Korea,

Mexico, Norway,

Sweden

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Regional development in OECD countries: Governance tools

• Regional Development Agencies

– Accountable to central or regional government, or to a

public-private board

– In the OECD most are regionally managed

– Objectives range from

• Administering a range of sector programmes and building

complementarities

to

• Sector specialisation (e.g. business development and innovation)

– Funding varies

• 40% of surveyed RDAs have multi-level funding (in Europe).

13

Regional development in OECD countries:

Governance tools

14

The country has a mechanisms to ensure co-ordination

across levels of governments: RDAs, national

representatives appointed in SNGs, and contracts or

agreements

a. None of these

b. At least one of these mechanisms

c. At least one of these mechanisms involving several

sectors

3

13 16

None of these At least one ofthese

mechanisms

At least onemechanism

involving manysectors

Vertical co-ordination instruments to support regional investments

Multi-level dialogue to define investment priorities for regional development

The country conducts regular dialogue(s) between

national and sub-national levels on regional development

policy including investment priorities

a. No platform to conduct regular dialogue

b. Formal or ad hoc platforms to dialogue on regional

development and investment priorities

c. The platform for dialogue has decision-making

authority

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9

No reguraldialogue

Formal or ad hocplatform for

dialogue

The platform hasdecision-making

authority

Regional development in OECD countries: Governance tools

• Deconcentration

– Trend toward delegating more powers and/or

strengthening institutional capacity

• Reforming sub-national levels

– Boundaries based on functional areas

– Number of subnational tiers and/or administrative areas

– Competence attribution

15

Regional development in OECD countries: Governance tools

• Multi-level governance reform in three dimensions

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Institutional reorganising

powers, responsibilities and

resources

Public management:

reorganising administrative

processes

Territorial reorganising

territorial structures

Japan

New

Zealand

Italy

France

Finland

Regional development in OECD countries: Conclusions with respect to Ukraine

• Significantly “on trend” with OECD countries – Focus on competitiveness, inclusiveness and well-being

– National level strategic framework and policy cascade

– Addressing administrative boundaries and levels • Discussion regarding number of rayon

• Hospital districts

– Building sub-national capacity with decentralisation tools • Newly amalgamated communities and inter-municipal cooperation

• Fiscal decentralisation for greater resource capacity

• Supporting urban-rural linkages

• Strengthening potential of rural and possibly lagging areas

• Resulting in expected greater: – Competitiveness and well-being in communities

– Investment in service and infrastructure

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Thank you