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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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Executive summary

The Netherlands is a small and densely populated country with a rich urban structure. Cities and in particular functional urban areas are key pillars of the Dutch economy hosting almost 75% of the national population. The structure of cities comprises a rich and very polycentric urban structure in the Netherlands. This is a key strength for the Netherlands given that OECD countries with more polycentric urban systems are found to have higher per capita GDP. Nevertheless agglomeration benefits are lower than in OECD member countries. Similarly, in the 5 largest functional urban areas in the Netherlands (i.e. Amsterdam, Rotterdam, The Hague, Utrecht and Eindhoven) the agglomeration benefits and labour productivity growth are lower than across OECD FUAs of similar size. Nonetheless the largest FUAs are attracting population at a similar rate as comparable FUAs in the OECD. Therefore there is need to ensure that the growth in population transforms into agglomeration benefits.

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