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Unlocking the potential of the Adriatic and
Ionian Region:
the added value of multi-level governance
Joaquim Oliveira Martins, Head Regional Development Policy Division, OECD
Why does Multi-level governance generate added
value?
3
Devolution of spending at lowers level of government is a feature of development
AUS AUT
BEL
CAN
CHL
CZE
DNK
EST
EU28
FIN FRA
DEU
GRC HUN
ISL
IRL
ISR
ITA JPN
KOR
MEX
NDL
NZL
NOR
OECD25
OECD34
OECD9
POL
PRT SVK
SVN
ESP
SWE
CHE
TUR
GBR
USA
30%
40%
50%
60%
70%
80%
90%
100%
110%
120%
130%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0%
GD
P p
er
ca
pit
a a
s a
sh
ar
e o
f U
S G
DP
pe
r c
ap
ita
(%
, b
as
ed
o
n G
DP
pe
r c
ap
ita
in
US
D P
PP
)
SNG expenditure as a % of public expenditure
Subnational Governments are key policy actors across the OECD
40%
63%
50%
59%
32%
20%
Greece
New Zealand
Greece Chile
Turkey Greece
Canada
Switzerland Canada Belgium
Canada Canada
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Expenditure Staffexpenditure
Publicprocurement
Investment Tax revenue Debt
OECD average Minimum Maximum
% of general government - 2013
The dramatic effect of the crisis on Public SNG investment across the OECD
In volume, base year 2000 = 100
Change in 2013 (%)
+0,1%
-2,3%
-0,8%
+1,0%
-1,4%
+0,2%
100
105
110
115
120
125
130
135
140
145
150
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
GDP Total expenditureDirect investment Social benefitsStaff expenditure Intermediate consumption
Policies
Multi-level Governance reforms: three interconnected dimensions
Institutional:
re-organising powers, responsibilities and
resources
Public management:
re-organising administrative
processes
Territorial:
re-organising territorial structures
France Finland
Italy
New Zealand
Japan
Most OECD countries are undertaking Multilevel Governance reforms
Institutional
reforms
Fiscal reforms Territorial reform
at regional level
Territorial reform at
intermediary level
Municipal (mergers,
Metropolitan)
Australia X X State level
Austria X State level
Belgium X X Regional level Regional level
Germany X X State level State level
Spain X X + Regional level
Chile X X X
Czech republic X X
Estonia X X X
Finland X X X X
France X X X ? X
Greece X X X X
Hungary X X X
Iceland X X
Ireland X X
Italy X X X X
Japan X X ? X
Luxembourg X
Netherlands X X ? X
New Zealand X X
Norway X X X X
Poland X X ? X
Portugal X X (infra-municipal)
Sweden X X X X
Turkey X
United Kingdom X X X
• Negative impact of fragmentation can be reduced through organisations that coordinate policies in functional metro areas
– Approximately half of the productivity penalty from municipal fragmentation disappears when governance bodies exist and have powers
• Metropolitan governance bodies are common throughout the OECD, but only 18% have regulatory powers
A strong case for improving governance of functional metro areas
9
Fragmented metro governance hinders city productivity
10
Fragmented metro governance increases segregation of people
11
-.05
0
.05
.1.1
5
Ine
qu
alit
y b
etw
een
loca
l ju
risd
ictio
ns,
(C
om
po
ne
nt p
lus
resi
dua
l)
0 .2 .4 .6 .8 1
Administrative fragmentation
OECD Governance Models for rural-urban partnerships
Explicit rurban partnerships
Rennes (France)
Geelong (Australia)
Nuremberg (Germany)
Central Zone of West Pomeranian Voivodeship (Poland
BrabantStad (Netherlands)
Implicit rurban partnerships
Forlì-Cesena (Italy)
Extremadura (Spain)
Castelo Branco (Portugal)
Central Finland (Jyväskylä and Saarijärvi-Viitasaari) (Finland)
Lexington (United States)
Prague/Central Bohemia (Czech Republic)
Model 1 Model 2 Model 3 Model 4
Delegated functions No delegated functions Delegated functions No delegated functions
Rennes (France) Geelong (Australia)
Nuremberg (Germany)
Central Zone of West Pomerania Voivodeship (Poland)
BrabantStad (Netherlands)
Extremadura (Spain)
Forlì-Cesena (Italy)
Lexington (United States)
Prague (Czech Republic)
Central Finland (Jyväskylä and Saarijärvi-Viitasaari) (Finland)
Castelo Branco (Portugal)
OECD Tools
• Invest using an integrated strategy tailored to different places
• Adopt effective co-ordination instruments across levels of government
• Co-ordinate across SNGs to invest at the relevant scale
Pillar 1
Co-ordinate across governments and
policy areas
• Assess upfront long term impacts and risks
• Encourage stakeholder involvement throughout investment cycle
• Mobilise private actors and financing institutions
• Reinforce the expertise of public officials & institutions
• Focus on results and promote learning
Pillar 2
Strengthen capacities and promote policy
learning across levels of government
• Develop a fiscal framework adapted to the objectives pursued
• Require sound, transparent financial management
• Promote transparency and strategic use of procurement
• Strive for quality and consistency in regulatory systems across levels of government
Pillar 3
Ensure sound framework conditions at all levels of
government
OECD Recommendation on Effective Public Investment Across Levels of Government
14
Strengthening capacities for decision-makers: what priorities for the EUSAIR strategy?
National & subnational governments:
Coordinate across sectors: Blue Growth, Connecting the Region, Environmental Quality and Sustainable Tourism are all cross-sectoral !
…all issues involve subnational governments, civil society and private actors
Identify a set of priorities with a macro-regional/transnational dimension: Assess the needs of the Macro-Region; identify investment priorities and risks
Align existing programmes/funding with the objectives and priorities of the Strategy: institutional mapping of all programmes/projects which could be connected to the Macro-Region
Avoid duplicating but rather seek to articulate the strategy with existing programmes
Macro-regional level: Build credible governance mechanisms to develop & implement
the Strategy: stable coordinating institutions, well-identified, not multiplied
Ensure political support
Connect the strategy with existing programmes/funding
Use the Strategy as a catalyst to foster coordination and align investment priorities
Communication: focus on the value added of the Macro-Regional approach compared to traditional approaches
Learn from other Macro-Regions
Strengthening capacities for decision-makers: what priorities for the EUSAIR strategy?
17
• Practical guidance for each of the 12 Public Investment Principles
• Country profiles with data & indicators
• Recent development s and good practices in countries
• Checklist and self assessment tools
• Peer learning and capacity-building: Disseminate examples of good practices , data and indicators and help governments at all levels diagnose key challenges for investment
• Monitoring: Follow-up reforms and recent developments in this field
Implementation Toolkit:
Key objectives:
Supporting the implementation: Toolkit, Indicators and Country studies
18
Governance Indicators based on the OECD Public Investment Recommendation
19
Governance dimensions: a quantification
20
Australia
Germany
Mexico
Spain
Switzerland
United States
Chile
Czech Republic
Denmark
Estonia
Finland
France
Greece
Hungary
Italy
Korea
Netherlands
New Zealand
Norway
Poland
Portugal
Slovak Republic
Slovenia
Sweden
United Kingdom
3.5
4
4.5
5
5.5
6
6.5
7
0.80 1.00 1.20 1.40 1.60 1.80 2.00
Qu
alit
y o
f o
vera
ll in
fras
tru
ctu
re
MLCI
Composite indicator (preliminary) on the existence of multi-level coordination (MLCI)
The MLCI and the WEF Index on the quality of infrastructure
21
Objective Reviewing and assessing multi-level governance challenges likely to hamper policy outcomes in support of the objectives set out in the Macro-Region Strategy Scope: The project would involve 2 phases: (i) Step 1: a diagnosis multi-level governance frameworks in each of
the eight countries involved in the Adriatic and Ionian Region (end 2016- 2017);
(ii) Step 2: a methodology for monitoring progress in institutional and administrative capacity-building, (2017-end 2018)
Capacity building and Peer learning Identification of benchmarks in OECD countries which can benefit to the Macro-Region ; capacity building seminars
OECD support to the EU strategy for the Adriatic and Ionian Region
