OECD Regional Outlook 2014

OECD Regional Outlook 2014

Regions and Cities: Where Policies and People Meet You do not have access to this content

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06 Oct 2014
9789264201415 (PDF) ;9789264201408(print)

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Regions and cities are on the front lines of many challenges faced by OECD countries today, from education and jobs to health care and quality of life. Getting regions and cities "right", adapting policies to the specificities of where people live and work,  is vital to improving citizens’ well-being. This second edition of the OECD Regional Outlook aims to help countries do just that. Part I describes the main trends and challenges today. Part II has a special focus on cities, looking at public investment, urban framework policies, and rural-urban issues. Part III presents a Policy Forum on the future of cities, with five contributions from distinguished authors and policy makers. Part IV offers profiles of regional development in all 34 OECD countries.

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  • Foreword

    Regions and cities are on the front lines in the battle to achieve inclusive growth. They are where policies meet people in their daily lives. This second edition of the OECD Regional Outlook comes at a time when many regions and cities are still trying to bounce back from the financial crisis of 2008. Inequalities between places and among populations remain entrenched. Citizens are calling for a more inclusive form of growth. They want a more comprehensive approach to well-being, with policies that address daily concerns in people’s lives, from ready access to jobs and education to safe and healthy environments and efficient and effective health care for young and old. Citizens also expect and demand that regions and cities be made as resilient as possible in the face of economic and demographic developments and natural disasters.

  • Reader's Guide

    Budget balance

  • Editorial

    This issue of the Regional Outlook has a special focus on cities. And for a good reason: in OECD countries, two out of three people live in cities with populations of 50 000 and above. This share reaches 90% for a country such as Korea. And nearly half of OECD residents live in cities of 500 000 or more. At global level, the trend is even stronger: over half of the world’s population now lives in urban areas, and the United Nations estimates the global urbanisation rate will reach 60% by 2030 and 70% by 2050.

  • Executive Summary

    Inter-regional income disparities have widened in most OECD countries over recent decades; the crisis did little to change this trend. Where disparities have narrowed, this has generally reflected weak performance in wealthier regions, rather than growth in poorer ones. The crisis also accentuated disparities in unemployment across regions.

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  • Expand / Collapse Hide / Show all Abstracts Trends in regions and cities: Evidence, policies and reforms

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    • Regional trends across the OECD

      This chapter reviews recent trends in regional and city performance and their impact on inclusive growth. While many regions and cities are on the road to recovery, lingering traces of the crisis remain, in terms of jobs, economic growth and public finances. The crisis has also exacerbated inequality between people and places. Some common growth drivers and bottlenecks can be found across OECD regions, but only a place-based approach can fully do justice to a region’s geographical challenges and opportunities.

    • Drivers of city performance: The evidence

      The chapter provides an overview of the drivers of city performance. Cities have enormous potential for job creation, innovation and green growth. They are hubs and gateways for global networks such as trade. They often also constitute the locus for citizen engagement. However, cities face challenges for sustainable and inclusive growth. Understanding cities and their sphere of influence as functional urban areas requires data to "see" places that do not always map onto local administrative boundaries. Urban areas account for most of the OECD population, and are essential testing grounds for national economic, social and environmental goals. By "getting cities right", governments can create conditions for a better life for most citizens.

    • Regional governance: Policies, institutional arrangements and municipal reforms

      This chapter gives an overview of how regional development policies are managed by national governments. It considers some of the issues associated with both rural and urban development, including the increasing recognition of the importance of cities for regional development and the elements that help build a modern rural development policy. The chapter also addresses the importance of reforms modifying the size and responsibilities of different levels of sub-national government. Such reforms generally seek to reduce the number of local government bodies and are often associated with increases in their areas of responsibility.

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  • Expand / Collapse Hide / Show all Abstracts Special focus: Tools for more inclusive growth in regions and cities

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    • Public investment: Smart, co-ordinated and efficient

      This chapter highlights the importance of sub-national investment for the competitiveness of regions and cities and the well-being of their residents. Public investment serves to leverage private investment, needs to be tailored to the specific conditions in the region, and often involves different levels of government. Three sets of challenges and the associated 12 principles for smarter investing are discussed. Co-ordination challenges need to be addressed at several levels (among national ministries, between national and sub-national governments, and across local jurisdictions), to obtain better results and avoid wasted spending or investments that work at cross-purposes. Capacity at sub-national level is also needed to make these critical investment choices in a transparent manner. Finally, helpful framework conditions, regarding financing and procurement practices as well as the regulatory environment, set the stage for making smarter investments.

    • A national strategy for cities: Taking ownership of urban policy

      This chapter explores the need for cross-cutting national urban policy frameworks to help governments achieve an evidence-based, whole-of-government approach to policies with a major impact on urban development. It presents the elements to be considered in designing such a framework, as well as questions that can be used to assess the degree of policy coherence with respect to five areas: i) money (urban finances); ii) places (spatial planning and land use); iii) connectivity (within and across urban areas); iv) people (policies responding to demographic, economic and social change); v) institutions (structures for urban development policy co-ordination across sectors, jurisdictions and levels of government).

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  • Expand / Collapse Hide / Show all Abstracts The future of cities: A policy forum

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    • Urbanisation as opportunity

      This chapter explores the implications of the fact that humanity’s "urbanisation project" is likely to be largely completed by the end of this century, implying that the coming decades will see urban growth that is without precedent in history in terms of its scale and speed. The authors explore both the challenges and opportunities associated with this process, arguing that, if well-managed, the coming wave of urbanisation will enable people to build cities that will be sustainable and liveable for a very long time to come. However, the consequences of wrong choices could be equally enduring. Rather than trying to anticipate a single model of urbanisation that governments should purse, they argue for experimentation and a fairly decentralised approach, albeit one rooted in a few basic principles of urban planning. Since much urban growth is expected in countries with weak institutional capacity, such simplicity is seen as an advantage.

    • Urbanisation and economic development in Asia

      This chapter challenges some of the conventional wisdom concerning urbanisation in the world’s largest and most populous continent, Asia. It argues that recent projections have exaggerated the likely pace of urbanisation in much of Asia and that it is likely to be rapid over the next decades only in less urbanised and less developed countries. The relatively developed and larger countries in the continent are likely to limit migration in order to have more orderly urbanisation and create well-governed cities. The chapter suggests that these overly ambitious projections have had policy implications for some countries, particularly those trying actively to inhibit rural-to-urban migration. It further argues that the much-discussed link between urbanisation and income is more complex than is often supposed and that it depends to a significant extent on a country’s level of development.

    • The future of US cities: Addressing social, economic, and environmental resilience

      This chapter addresses three key priorities which the US administration sees as critical to the future of cities. The first is adapting to climate change and rebuilding after disasters. The emphasis on climate change is on energy efficiency and greening American homes, while the discussion of post-disaster action looks at two related priorities for reconstruction: ensuring bottom-up community involvement in the reconstruction process and adopting approaches to rebuilding that reduce vulnerability in the future – not least by factoring climate change mitigation and adaptation into the decision-making process. The second priority is regional planning for the future of cities. Over the last few years, the US Department of Housingand Urban Development (HUD), the US Department of Transportation (DOT) and theUS Environmental Protection Agency (EPA) have been co-ordinating their work with local communities. They aim not only to better co-ordinate federal initiatives in three areas with strong urban impact (housing, transport and the environment), but also to help connect communities and cities with the wider regional economies around them. Finally, Secretary Donovan turns to social and economic resilience. As with policies on climate change, resilience and mitigation, one key aim is to break down silos between departments and between cities, to encourage regional co-ordination in support of policies to achieve social and economic resilience. The White House Council on Strong Cities, Strong Communities takes a place-based approach and a broad perspective on resilience to the city level.

    • Cities are key to the sustainable development of the European Union

      Focusing on the future of European cities in the context of European Union (EU) policies, this chapter offers a broad vision for urban development in Europe and on the contribution European policies and instruments can make to the realisation of that vision. The challenges presented in this paper are daunting, as Europe struggles with sluggish economic and demographic dynamics, as well as processes that have to some extent decoupled economic growth from social progress. In response, the European Commission has put forward a holistic model of urban development, with a strong emphasis on policy co-ordination across both sectors and levels of government. In developing this theme of policy integration, the chapter highlights the need to give cities a greater role in the implementation not only of EU regional policies, but of a wide range of European policies in such diverse fields as transport, the environment, energy and IT.

    • Creating transport corridors: Refreshing the places other transport hasn't reached

      This paper explores the ways in which a number of places are starting to tackle a public transport challenge facing cities across the world. The main challenge is to extend efficient, effective public transport beyond the urban core into the peri-urban hinterlands of cities. Across the OECD there has been increasing discussion of the need to reduce reliance on private cars for a variety of reasons, above all environmental, and to increase reliance on public transport. This can be expensive in central cities, but it is relatively straightforward. Yet even where cities have been extremely successful in pursuing public transport-oriented development, the "peri-urban peripheries" beyond the termini of their public transport systems remain highly dependent on automobiles. As the paper shows, a growing number of cities across Europe and the Americas are using transport solutions like tram-trains and bus rapid transit, in conjunction with new approaches to economic development planning, to create public transport-oriented developments that extend deep into the hinterland of cities. This reduces the reliance on private cars in the places where they have hitherto been most prevalent.

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  • Expand / Collapse Hide / Show all Abstracts Country Notes

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    • Australia

      In September 2013, with the change of government, a new ministry responsible for regional development was created: the Department of Infrastructure and Regional Development, absorbing the regional development tasks of the previous ministry, the Department of Regional Australia, Local Government, Arts and Sport. The new ministry is responsible for infrastructure, regional development, local government, territories and administration of the National Disaster Recovery Taskforce.

    • Austria

      The ten-year strategic orientation for regional policy, ÖREK 2011, is the latest Austrian Spatial Development Concept framework. The four pillars include: i) regional and national competitiveness; ii) social diversity and solidarity; iii) climate change, adaptation and resource efficiency; and iv) co-operative and efficient governance.

    • Belgium

      Belgian federal "sustainable city contracts" seek to strengthen the social cohesion of deprived neighbourhoods, reduce their ecological footprint and promote city attractiveness.

    • Canada

      The latest wave of federal regional development agencies includes the addition in 2009 of two more (for a total of six): the Federal Economic Development Agency for Southern Ontario and the Canada Northern Economic Development Agency.

    • Chile

      The National Rural Development Policy was approved by the City and Territorial Ministries Committees and by the president in February 2014.

    • Czech Republic

      The National Development Priorities to guide the use of European Cohesion Policy for the 2014-2020 period include: i) increasing the competitiveness of the economy (e.g. reducing the gap with the EU average); ii) developing core infrastructure; iii) improving the quality and efficiency of public administration; iv) promoting social inclusion, the fight against poverty and the health care system; v) integrated regional development.

    • Denmark

      The Ministry of Housing, Urban and Rural Affairs was established in 2011 and, among other tasks, seeks to better promote both urban and rural development, and improve the interaction between urban and rural areas.

    • Estonia

      A new National Spatial Plan "Estonia 2030+" was enacted in August 2012. The plan aims to improve the quality of the environment both in cities and in sparsely populated areas, ensuring the functioning and accessibility of the daily activity spaces, supported by multimodal mobility solutions, good external connections, wider use of renewable energy and energy-saving measures, and balanced by the vitality of the green networks.

    • Finland

      Growth agreements (focusing on competitiveness and resilience) between state and major cities defining key actions for long-standing development of city-regions have been created. Thematic scope of these growth agreements lies in competitiveness and resilience.

    • France

      A law to promote metropolitan governance was adopted in December 2013, creating new governance structures for the top three metropolitan areas (around Paris, Lyon and Aix-Marseille), as well as for 11 other urban areas of more than 400 000 inhabitants on a voluntary basis. They will be granted greater responsibilities in certain fields, such as economic development, housing, environment, roads and social action.

    • Germany

      The Joint Task for the Improvement of Regional Economic Structure (GRW) between the federal government and the regions is expected to increase in importance due to the reduction of investment subsidies in 2013.

    • Greece

      There have been increasing decentralisation efforts in recent years. The regions have acquired more powers, starting with the 1997 Kapodistrias reform of local and regional government, transforming into fully separate entities under the 2010 Kallikratis plan (Law 3852/2010; effective from 1 January 2011). Thirteen regional governors and councils are now popularly elected (for a five-year term). Their mandate is to plan and implement policies at a regional level, according to the principles of sustainable development and social cohesion, taking into account national and European policies. Still, many responsibilities remain within the central government’s secretariats and the regions rely on transfers for funding. Some metropolitan functions have been allocated to Attica and Thessaloniki (Central Macedonia) within their corresponding regions. The Kallikratis reform reduced the number of municipalities from 1 033 to 325.

    • Hungary

      The new Constitution, which came into force in January 2012, states that sectoral laws may force municipalities to merge or co-operate. The Cardinal Act of December 2011 sets a threshold of 2 000 inhabitants for local administration. Local authorities under 2 000 inhabitants have to regroup their administrative services.

    • Iceland

      An integrated development plan, Iceland 2020, which was launched in 2011, addresses social and economic development and provides a framework for regional support.

    • Ireland

      A review of the National Spatial Strategy, and an associated pause in its implementation pending the formulation of a replacement strategy.

    • Israel

      Government structure

    • Italy

      In 2013, the Italian government, through Law 255/2013, created a new agency for territorial cohesion. The agency’s mission is technical support for the use of European Union Cohesion Policy funds in Italy.

    • Japan

      Japan is encouraging reforms in local government autonomy to strengthen local governments, including through mergers. Mergers of local governments were strongly supported by the so-called merger in the Heisei era (the current period, which started in 1989), and the number of municipalities decreased from 3 232 in 1999 to 1 718 in 2014.

    • Korea

      The second revision of the Fourth Comprehensive National Territorial Plan (2011-20) proposes a new, three-layer structure for stimulating regional development potential, by dividing the country into seven "mega-regional economic zones" with priority industrial specialisations, complemented by supra-economic regions (belts) and 161 basic residential zones.

    • Luxembourg

      The Master Programme for Territorial Planning (PDAT) is the key instrument of national spatial planning. It determines the government’s general guidelines and priority objectives for the sustainable development of the living environment. An update of the PDAT is planned for 2018. The Integrated Transport and Spatial Planning Concept (IVL), developed in 2004, furthered progression towards the implementation of the essential targets set out in the PDAT and defines more precisely the polycentric urban spatial model of Luxembourg.

    • Mexico

      In 2013, the new administration created the Ministry of Agrarian, Territorial and Urban Development (SEDATU).

    • Netherlands

      The Top Sector policy, in operation since 2012, seeks to focus support on the sectors that make the most significant contribution to the Netherlands’ economic performance.

    • New Zealand

      The central government’s Regional Strategy Fund, which supported the regional economic development plan, was brought to an end in 2010.

    • Norway

      The new government’s state budget has put a greater emphasis on the business sector’s conditions for economic growth to create new and economically sustainable jobs. In particular, the new government prioritises communication infrastructure, soft infrastructure (e.g. within education) and growth-enhancing tax reductions. The new government plans to present a new White Paper on regional policy in 2017.

    • Poland

      At the end of 2013, the Ministry of Regional Development and the Ministry of Transport, Construction and Marine Economy were merged to create the Ministry of Infrastructure and Development.

    • Portugal

      The number of freguesias (parishes) has been reduced. The sub-municipal-level was reorganised by two laws, one adopted in November 2012 and the other in January 2013. The laws reduced the number of parishes by about 27%, from 4 259 entities to 3 091 as of September 2013.

    • Slovak Republic

      Government structure

    • Slovenia

      Low inter-regional disparities are partly the result of long-standing policies aimed at ensuring polycentric and balanced regional development. While the recent crisis hit Slovenia hard, its aggregate impact on labour markets has been in line with the OECD average. However, it was geographically quite concentrated: more than half of job losses (60%) occurred in only 2 of Slovenia’s 12 regions.

    • Spain

      The Commission for the Reform of Public Administrations (CORA) process was launched by the Council of Ministers on 26 October 2012. The focus is administrative streamlining, simplification of legislation and procedures, and avoiding duplication between central state and autonomous communities (AC). The CORA also proposes a code of best practices to rationalise public expenditure and increase the efficiency of public services by optimising the use of new technologies.

    • Sweden

      A pilot project in Skåne and Västra-Götaland merging counties with a directly elected regional assembly and responsibility for regional development was made permanent in 2011. In the spring of 2014, the parliament reallocated the responsibility for regional development in six more counties. From January 2015, the county councils (directly elected regional assemblies) in Jönköping, Örebro, Gävleborg, Östergötland, Jämtland and Kronoberg will gain responsibility for regional development from the county administrative boards (national government agencies at the regional level).

    • Switzerland

      The New Regional Policy (NRP) was launched in 2008. A working group called "NPR 2016+" was created in 2012 with representatives from the Confederation and cantons, to evaluate the impact of the NRP for the first programming period 2008-15 in view of the preparation of the new multi-year programme 2016-23.

    • Turkey

      The Tenth National Development Plan (2014-18) has recently been published and establishes the medium-term priorities of Turkey in terms of regional policy. Under the plan, regional development policies will contribute to national development, competitiveness and employment by increasing the productivity of regions, while addressing the basic objective of reducing regional and rural-urban disparities. Priority areas include: increasing the consistency and effectiveness of policies at the central level, creating a development environment based on local dynamics, increasing institutional capacity at the local level and accelerating rural development.

    • United Kingdom

      Since its election in 2010, the United Kingdom government has abolished the nine regional development agencies (RDAs) across England, which were created between 1998 and 2000.

    • United States

      There are efforts for greater co-ordination and integration of policies for regional development at the federal level, through White House-led councils and task forces (e.g. White House Rural Council, Partnership for Sustainable Communities, etc.).

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