OECD Territorial Reviews: Slovenia 2011

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Despite its relatively small size, Slovenia is a good illustration of the potential of regional development policy. Its internal diversity, openness and experience of rapid structural change all reinforce the need for efficient reallocation of resources, while underscoring the need to take account of the potential positive and negative externalities associated with the shifting structure of economic activity.  

With 36% of the national territory falling under Natura 2000 protection, spatial planning is particularly challenging and yet also particularly important. Given the absence of a regional tier of government and the extreme fragmentation of the municipal level of authority, Slovenia needs to develop capacity at intermediate levels, to address policy problems that are best tackled at a scale in between the local and the national. 



A Regional Approach for Development

Slovenia is a small open economy experiencing strong growth since the mid- 1990s. As in many economies in transition, inequalities have been widening; nevertheless, they remain below OECD standards. Despite its small size, Slovenia’s economy is very heterogeneous with low levels of demographic and economic concentration. During the past years concentration has been rising, driven mainly by the capital region’s economic expansion. Population density and urbanisation levels remain relatively low by OECD standards, indicating the productivity benefits of agglomeration in the capital region are far from exhausted. National growth depends on the capital region, but six-non capital regions still account for the bulk of aggregate growth. All Slovenian regions but one are growing faster than the average for OECD TL3 regions. The impact of the recent crisis was quite concentrated geographically: more than half of job losses (60%) occurred in only two of Slovenia’s twelve regions. Labour productivity growth appears the key driver of regional growth closely linked to improvements in educational attainments and innovation performance.


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