Low Density Areas : Places of Opportunity Enrique Garcilazo, OECD Directorate for Public Governance and Territorial Development Open Days, Brussels, 11 th October, 2016
Outline 1. Performance low density regions Research methods, data and definitions Trends and diagnosis 2. Policy considerations 3. Framework for action
Rural Policy in OECD Regional Development Policy Committee (RDPC) WP Urban Policies WP Rural Policies WP Territorial Indicators The OECD Working Party on Rural Policy is a unique committee that discusses rural development policies at an international level.
OECD Territorial Reviews: A series of case studies of regional policy In OECD member countries : 20 National Territorial Reviews 8 Regional Territorial Reviews (NSPA) 5 Reviews on Regional Innovation Systems 23 Metropolitan Reviews 5 National Urban Policy Reviews 12 National Rural Policy Reviews Alemania, Mexico (2006) Finlandia, Holanda, Escocia (2007) China, Italia, España (2008) Quebec, Canadá (2009) Inglaterra (2010)
Thematic Reviews -- Rural Factors of regional competitiveness (1) Empirical evidence -- General trends (2) Case studies Field analysis Questionnaires, Peer reviewers, experts The new Rural Paradigm Service delivery in rural regions Promoting growth in all regions (15) Linking RE Energy to Rural Dev. (15) RURAL-URBAN Partnerships (16) Policy implications: Territorial Approach to FSN (3) Implementation Governance
Low density economies what are they? Source: Global Monitoring Report 2013, IMF/World Bank
OECD Regional Data-Base (RDB) OECD regional typology statistical definition (1994) The RDB includes regional statistics on 5 major topics: Demographic, Regional accounts, Labour, social and environmental indicators, Innovation For comparability, regions are classified in 2 levels TL2 Territorial Level 2 (337 regions) TL3 Territorial Level 3 (1708 regions) Defining rural Definition Building blocks Types OECD typology Rural communities PU, IN, PR Extended OECD typology Rural communities PU, IN, PRC, PRR FUA Grid cells FUA, and rest Recognising linkages between rural and urban Urban and rural areas have both growth potential and often complementary assets Urban and rural areas are increasingly integrated in functional regions (self-organising spaces) Integration between urban and rural areas is important for socio-economic performance
Urban and rural regions are increasingly integrated In OECD countries, 26% of population live in PR regions (297 million) 20% in rural regions close to an urban area (235 million) 6% in remote rural regions (62 million)
Convergence forces in low density regions
Convergence forces in low density regions driven primarily by rural close to cities.
Rural regions amongst the top performers Amongst top performers 54% were rural (pre-crisis): 33% rural close to cities 21% rural remote Declined to 41% (post crisis) 31% rural close to cites 9% rural remote
The Rural Paradox The majority of rural regions close to cities and rural remote are not driven by the paradox: 69% of rural close to cities and 58% of rural remote experienced both employment and productivity growth
What are the key drivers of productivity growth? Tradable activities are key for rural close to cities and remote rural A minimum level of density is key for economies of scale/scope and delivery of goods and services.
Summary of trends Low density regions display convergence trend: there is growth potential No systematic evidence of rural paradox sustainability is possible Rural close to cities particularly dynamic Tradable activities are key Agglomeration benefits can occur at different scales Demographic challenges and service provision
Contributions to aggregate growth depend on few hub regions the fat tail is equally important -- if not more -- to aggregate growth 15
Outline 1. Performance rural and urban regions Research methods, data and definitions Trends and diagnosis 2. Policy considerations 3. Framework for action
Three Types of Rural Areas Definitions can help better tailor policy responses Rural areas face different challenges, opportunities and policy responses Countries defining different types of rural regions (FI, FR, MX, SW) Context matters: different countries have different definitions
Capitalise on Rural Urban Linkages Labour market flows are key, but there are other crucial Rural- Urban interactions The spatial scale to consider depends on the purpose of the partnership The spatial scale of cooperation should be flexible
Rural Urban partnerships can help reach common development objectives
Building effective and sustainable rural-urban partnerships: a strategy Matching the appropriate scale 1. Better understanding of Rural- Urban conditions and interactions 2. Addressing territorial challenges through a functional approach Engagement including relevant stakeholder 3. Working towards a common agenda for urban and rural policy 4. Building an enabling environment for Rural-urban partnerships Learning to be more effective 5. Clarifying the partnership objectives and related measures
The main governance approaches to ruralurban partnerships
Further Policy Considerations 1. Identifying drivers in rural areas Tradables (manufacturing), renewable energy, natural resources, services, fisheries, forestry, agriculture, tourism, natural amenities Finding the niche (smart specialisation) 2. How to add value in these domains Policy focus on enabling factors: skills, accessibility, market intelligence, institutions, innovation 3. Demographic trends and forward looking policies Address long term cost enhancing efficiency in service provision (planning, ICT) Mitigation and adaptation to climate change 4. Address spatial pockets of poverty in low density areas Beyond transfers, identify bottlenecks of enabling factors, better target national. Regional and local interventions
The policy headache: isolated sectoral action may have unintended outcomes. Leaking by linking Infrastructure provision Problem: lack of connectivity Persistence of inequality 23
The policy headache: isolated sectoral action may have unintended outcomes. Brain drain with labour mobility Human capital formation Policy responses Persistence of inequality 24
Towards a Multidimensional Response Regional growth and convergence Many countries are reforming in this direction, but implementation is still difficult. At the regional scale Innovation Business environment Human capital formation Infrastructure provision -Horizontal evidence? -Policies? -Institutions? Policy responses 25
OECD Key principles for place-based policies I. Use of regional specific assets and smart specialisation (or to create absolute advantages to stimulate competition & experimentation across regions) tradables II. Create complementarities among sectoral policies at the regional (or local) level III. Use of multi-level governance mechanisms for aligning objectives & implementation
An Evolving OECD Rural Paradigm Old Paradigm New Rural Paradigm (2006) Rural Policy 3.0 Objectives Equalization and a focus on farm income Competitiveness of rural areas and expanding opportunities Increase rural competitiveness and productivity in order to enhance the social, economic and environmental well-being of rural areas Key target sectors Sector based Holistic approach to include various sectors of rural economies Low density economies with a focus on comparative and absolute advantages Main tools Subsidies for firms Investments Integrated investments and delivery of services that are adapted to the needs of rural areas and benefit from potential complementarities Key actors National governments, farmers organisations Multilevel-governance horizontal and vertical coordination Encourage vertical and horizontal coordination among governments (rural-urban and rural-rural partnerships) and bring new stakeholders into decision making (indigenous people, third sector, firms) Approach Top down Bottom-up Building capacity at the local level to encourage participation and bottom up development
Rural Policy Responses in OECD Countries Narrow vs. broad policy responses Europe: European Commission CAP pillar II (DG Agri), DGRegio (smart specialisation) and LEADER Urban rural linkages through ITI, CLLD United States: USDA and White House Rural Council Italy: Inner Area Strategy Japan: National Spatial Strategy (compact and networked), rural revitalisation (multifunctionality, 6 th industry, rural urban linkages) Chile: building synergies amongst a wide range of national ministries => national rural policy
thank you JoseEnrique.Garcilazo@oecd.org