OECD Regional Outlook 2011

OECD Regional Outlook 2011

Building Resilient Regions for Stronger Economies You do not have access to this content

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05 Dec 2011
9789264120983 (PDF) ;9789264111707(print)

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The OECD Regional Outlook 2011 provides an overview of the main developments in performance among OECD regions and the challenges for regional policy after the crisis. The first two chapters present fresh analysis of regional growth and labour-market trends, exploring their implications for policy. This is followed by three chapters offering focused analyses of key policy issues. The first, and most immediate, concerns the state of sub-national government finances in the wake of the crisis and its implications for managing public investment, in particular, during a period of austerity. The next two chapters are concerned with the potential contribution of regions and regional policies to addressing the longer-term challenges of innovation and green growth. Part 3 of the Outlook presents a "policy forum", a wide-ranging debate on the role of regional policy today involving experts and officials from within and outside the OECD. Finally, the Outlook includes individual country pages providing detailed quantitative and qualitative information on regional performance, institutions and policy settings in OECD members.

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  • Foreword
    The central concern of this OECD Regional Outlook is to understand how regional policies can contribute to aggregate performance, in terms not only of economic growth, but of a broader development agenda as well, integrating equity and environmental objectives. Building stronger, fairer and cleaner OECD regions is a particularly salient issue in the wake of the recent crisis, as OECD policy makers seek to sustain a still uncertain recovery against a backdrop of fiscal consolidation and, in many economies, limited room for manoeuvre in monetary policy. It also highlights the dangers of overlooking the regional dimension, particularly in the field of public finance. Sub-national governments’ success in managing public investment is likely to be a key factor in determining the strength of the recovery in many places. At the same time, the impact of the crisis on sub-national public budgets represents an often under-appreciated challenge to fiscal health and economic performance in some countries.
  • Acknowledgements
    The OECD Regional Outlook was co-ordinated and supervised by Joaquim Oliveira Martins. It was prepared by the Regional Development Policy Division of the Directorate for Public Governance and Territorial Development, and received inputs from Dorothée Allain-Dupré, Monica Brezzi, Claire Charbit, Jose-Enrique Garcilazo, Lamia Kamal-Chaoui, Soo-Jin Kim, Karen Maguire, Joaquim Oliveira Martins, Adam Ostry, Mario Piacentini, William Tompson, Raffaele Trapasso and Camila Vammalle. The OECD Local Economic and Employment Development Programme (LEED) prepared the section on local labour-market policies. Statistical support was provided by Vicente Ruiz and Daniel Sanchez-Serra. Julie Harris edited the report and Jeanette Duboys prepared it for publication.
  • Acronyms and Abbreviations
  • List of TL2 Regions
  • Preface
    On behalf of the OECD Territorial Development Policy Committee, it is my honour and privilege to introduce to you the first-ever OECD Regional Outlook. The production of such a volume is a remarkable undertaking, made possible by the close co-operation of member countries and the hard work of OECD staff.
  • Executive Summary
    In the wake of the global economic crisis, policy makers are keenly aware of the need for innovative policy and governance "toolkits" to generate new sources of growth, while enhancing social inclusion and environmental sustainability, as expressed in the OECD’s stronger, cleaner and fairer agenda or the EU 2020 goals of a smart, inclusive and sustainable economy. Traditionally, policy debates have tended to focus on trade-offs between these three objectives, often overlooking potential synergies and interdependencies between them. Today, there is a growing awareness of the need to pursue these three objectives in a more balanced and complementary way.
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  • Expand / Collapse Hide / Show all Abstracts Key Regional Trends and Policies

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    • Regional Growth
      This chapter begins with an assessment of the growth problem confronting OECD economies and the relevance of regional policy to the challenge of achieving strong, sustainable and equitable growth. It then turns to an analysis of the relationship between regional and aggregate growth performance, before analysing in depth two of the long-term forces shaping regional development: ageing and migration.
    • Regional Responses to the Jobs Crisis
      This chapter offers a preliminary analysis of the impact of the crisis on regional labour markets, using recent regional employment data. The discussion then examines the kind of policies needed to foster the creation of sustainable employment during the recovery phase and the extent to which regional or local action may be critical to the effectiveness of such policies.
    • Chapter 3. Dealing with Sub-National Finances under Strain
      This chapter discusses the impact of the crisis on the finances of sub-national governments, a crucial but often under-appreciated aspect of the current fiscal environment. These are major challenges to be addressed by both national and regional policies. At issue are both fiscal sustainability, which may be jeopardised if sub-national financial strains are not addressed, and the strength of the current recovery, which will depend in part on the extent to which increasingly limited public investment resources are managed efficiently and in ways that promote growth.
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  • Expand / Collapse Hide / Show all Abstracts Special Focus: Innovation and Green Growth in Regions

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    • Regions Matter for Innovation
      Innovation is increasingly seen as the key to increasing or sustaining long-term job creation and economic growth, particularly in economies struggling with heavy debt burdens and the challenge of fiscal consolidation. While economy-wide policies are clearly important, innovation tends to be a highly place-based activity. The present chapter therefore looks at evidence on the role of regions in fostering innovation and at the ways in which regions could better support innovation-driven growth.
    • Green Growth for Regional Development
      This chapter focuses on the regional dimension of the shift towards a greener economy, which is currently a major policy priority for OECD countries. Its principal emphasis is on the potential contribution of cities and urban policies in meeting this challenge, but it also looks at the potential for renewable energy development to drive both cleaner growth and the revival of some rural areas. Finally, it also looks at multi-level governance of water, one of the most important and yet environmentally sensitive goods.
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  • Expand / Collapse Hide / Show all Abstracts Policy Forum: Place-Based or Spatially Blind Development Models?

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    • Why Location Matters
      This introduction to the OECD Regional Outlook Policy Forum presents a brief overview of the long-running debate over the "New Economic Geography" and its relevance for policy, before reflecting on the significance of this debate for the wider development agenda that is central to this Outlook. The introduction then examines some recent changes in US policy in the context of this discussion. This is followed by brief introductions of the contributions to the debate that follows.
    • Improving Regional Development Policies
      This chapter begins with an essentially sceptical critique of the case for "placebased" policies, presenting "a rule of thumb for calibrating regional development policies" that specifies those circumstances in which a place-based approach might make sense. It then compares the Irish, Iberian and Italian approaches to regional policy over the last few decades, concluding that there is a strong association between growth and agglomeration and arguing that regional policies should facilitate agglomeration, migration and specialisation rather than resisting them. The chapter then looks at the implications of this view for public policy in the current tight fiscal environment, with particular emphasis on social policy and connectivity.
    • Places, in Places, but People Everywhere
      This chapter argues the case for a new balance between policies that target places and those that target specific groups of people, without regard for where they are. While accepting the case for policy interventions to address some spatial inequities, it calls for a much more rigorous understanding of their causes. It suggests that in most cases policies are best applied in a way that reaches those in need regardless of where they live and that attempts to reduce spatial inequities can be highly distortionary, especially when addressing intra- rather than inter-regional disparities.
    • Non-market Effects on Agglomeration and their Policy Responses
      This chapter focuses on the effects of agglomeration, distinguishing certain nonmarket effects – particularly the tendency of many governments to bias public investment spending in favour of primary or capital cities – from market effects (productivity gains, transportation costs, etc.). The chapter emphasises that agglomeration is not only an economic phenomenon but a political and social one and that its determinants are similarly complex. For policy makers, it is important to distinguish between the non-market effects and market effects of agglomeration. Regional policy responses to agglomeration processes will differ between developing and developed countries, and these responses need to reflect the full range of market and non-market causes of agglomeration.
    • Why and When Development Policy Should Be Place-Based
      This chapter argues that "spatially blind" policies are rarely spatially neutral, because they typically end up as capital-city promotion policies. Ostensibly, this reflects the economics of agglomeration, but to a great extent it is a product of the national rent-capturing influence of capital-city elites in all areas of public life. Since the evidence suggests that many core urban centres will grow without the need for significant policy interventions, the chapter raises the question as to whether development objectives should be shifted from promoting efficiency in the core to enhancing the potential for growth and development in every territory. The chapter argues that place-based approaches offer a greater possibility of harnessing untapped potential in all regions in a co-ordinated and systematic way.
    • Alternative Approaches to Development Policy
      This chapter concludes the OECD Regional Outlook Policy Forum with an examination of the intersections and divergences between alternative approaches to regional development, paying particular attention to their underlying assumptions about markets and other institutions. The chapter then relates this analysis to the emergence of the OECD’s "New Regional Paradigm", as well as to recent developments in regional policy in the European Union, the United States and elsewhere.
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