OECD Regional Outlook 2011

Building Resilient Regions for Stronger Economies

image of OECD Regional Outlook 2011

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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Non-market Effects on Agglomeration and their Policy Responses

Can We Overcome the Mismatch?

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.

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