Presentation on "Regional Development Strategies in OECD Countries: Trends and tools" made at the workshop on Decentralisation and Territorial Reforms in Ukraine and in OECD Countries held in Kiev, Ukraine, by Ms. Maria-Varinia Michalun, Regional Development Policy Division, OECD More information: www.oecd.org/regional/regional-policy/multi-levelgovernance.htm

1. 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

2. Introduction
• What’s happening in OECD regions?
• Regional development objectives
• Trends in regional development
• Governance tools
• Conclusions
2

3. 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)
OECDRegionsataGlance2016-©OECD2016
3

4. 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
OECDRegionsataGlance2016-©OECD2016
-10123456
LUX
NZL
GRC
PRT
ITA
DNK
JPN
FRA
HUN
CHE
SWE
DEU
NOR
NLD
BEL
SVN
GBR
FIN
ESP
AUT
IRL
CZE
EST
POL
SVK
KOR
%
Urban Intermediate Rural
4

5. 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
OECDRegionsataGlance2016-©OECD2016
0.0 0.1 0.2 0.3 0.4 0.5
CHL
MEX
SVK
IRL
TUR
HUN
KOR
EST
POL
GBR
CAN
AUS
CHE
OECD31
ITA
DNK
AUT
USA
NZL
FRA
CZE
DEU
NOR
PRT
SVN
ESP
FIN
JPN
BEL
SWE
NLD
GRC
IDN
COL
RUS
BRA
CHN
LVA
LTU
ZAF
2013 2000
%
5

6. 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
OECDRegionsataGlance2016-©OECD2016
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

7. Regional development in OECD countries:
Country objectives
• Competitiveness, Growth and Inclusiveness
15
15
16
16
17
18
19
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
OECDRegionalOutlook2016-©OECD2016
7

8. 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

9. 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
9

10. Regional development in OECD countries:
Governance tools
• Framework policies are common, especially in
Europe
OECDRegionalOutlook2016-©OECD2016
10

11. 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
11

12. 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
OECDRegionalOutlook2016-©OECD2016
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
12

13. 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

14. 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 of
these
mechanisms
At least one
mechanism
involving many
sectors
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
5
18
9
No regural
dialogue
Formal or ad hoc
platform for
dialogue
The platform has
decision-making
authority

15. 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

16. Regional development in OECD countries:
Governance tools
• Multi-level governance reform in three dimensions
16
Institutional
reorganising
powers,
responsibilities and
resources
Public
management:
reorganising
administrative
processes
Territorial
reorganising
territorial
structures
Japan
New
Zealand
Italy
France
Finland

17. 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
17

18. Thank you