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OECD Territorial Reviews: Netherlands 2014

image of OECD Territorial Reviews: Netherlands 2014

The Dutch economy has been traditionally very competitive among OECD countries. The global financial crisis however has brought new challenges, especially during the second shock, from 2011 onwards. The government’s recovery plan, which includes various measures such as fiscal consolidation, stimulating innovation and sub-national government reform has an important territorial dimension. This review focuses on how sub-national institutions and development can help the Netherlands meet its challenges. In the short-term, factors such as the contribution of all regions, better use of resources, and more efficient provision of goods and services can help the recovery. In the long term, improving national competitiveness will largely depend on a strong performance of the polycentric city structure, which characterises the Netherlands. The key policy areas explored in this review include: the recently created top-sector innovation policy; decentralisation; and territorial reforms such as municipal and provincial re-scaling through mergers or co-operation.

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Assessment and Recommendations

The Netherlands is a small and densely populated country with a rich urban structure. Cities and their areas of expansion beyond administrative borders (defined as functional urban area, FUAs) are key pillars of the Dutch economy hosting almost 75% of the national population. Despite having the second highest population density in the OECD, the Netherlands’ economic and demographic concentration is lower than other densely-populated countries such as Japan and Korea. Interregional inequality is also quite low in the Netherlands. These trends are mainly driven by the country’s rich and polycentric urban structure (meaning it has a number of large cities instead of one or two megacities). The five largest urban areas – Rotterdam, Amsterdam, The Hague, Utrecht and Eindhoven – host a little over one-third of the national population and contribute to the same proportion of national GDP. Medium and smaller FUAs are also important pillars of the national economy. They are spread across the entire territory, although the largest FUAs tend to be located in the west and the medium FUAs in the east of the country. Each province contains at least one FUA, and in almost all provinces FUAs are home to more than 70% of the provincial population.

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