Ocde

Cultivating regional development - 21/01/03

MARIO PEZZINI OECD, Head of Territorial Reviews and Governance Division Mario.Pezzini@oecd.org

CULTIVATING REGIONAL DEVELOPMENT: MAIN TRENDS AND POLICY CHALLENGES IN OECD REGIONS

I. Introduction 1. The note intents to support an on-going change of perspective in territorial policies, more focused on the competitiveness of places, than onensuring a traditional support to sectors or income re-distribution. Regional success and decline increasingly result from an uneven distribution of and capacity to valorise local collective goods. Examples among others of collective goods with a strong territorial character include robust polarisation effects in metropolitan areas, well-established inter-firms relations within clusters, andaccessibility and valorisation of natural and cultural resources so to increase the attractiveness of places and guarantee a sustainable development. Still, opportunities related with these collective goods are often unexploited and must struggle with economic, social and environmental challenges. Territorial policies should contribute to building and maintaining growth engines; facilitate individual andorganisational learning to up-grade local skills; and supporting diffusion of new technologies and innovations. But in order to do so, a paradigm-shift is required. 2. The present note a) will summarize the main trends affecting regions in OECD Member countries; b) it will focus on the comparative advantages and the obstacles to development of rural, intermediate and metropolitan regions; c) it willconclude with suggestions for designing territorial policy more capable to face the challenges of economic integration and to achieve a balance between economic growth, social cohesion and effective governance1.
1. In his statement of strategic objectives in 1996, the Secretary-General presented a new triangular paradigm for development based on the principle that a balance has to be achievedbetween economic growth, social stability and effective governance [ECSS(96)5]. In 1997, the Secretary-General highlighted the role the OECD can play in advising governments on ways to maximise the benefits of economic development, whether local, national or global, and, at the same time, to ensure that economic growth is consistent with global objectives of sustainability [C(97)180].

1DT/TDPC(2002)12 II. Main trends affecting regions across the OECD member countries 3. The first series of OECD national and regional territorial reviews2 has contributed to highlight two major “stylised facts” about territorial development3: − in OECD countries there are not only important differences among nations; territorial disparities within countries are particularly significant. Actually, incomelevels, unemployment and poverty rates differ widely across regions, more than between countries. Between 1975 and 1995, on average, regional unemployment rates differed by more than 30% from national ones, in some countries even more than 60%; − Territorial disparities are relatively persistent: while between OECD countries some convergence is taking place, at the sub-national level the long-termtrend towards convergence, if any, is a slow process4. In fact, in the large majority of countries total unemployment has decreased while regional disparities in unemployment rates have increased. 4. Regional success and decline seem to result from a different regional capacity to exploit the local financial, natural, physical, social, and human capital to facilitate local as well as foreigndirect investments. Opportunities for further development remain concentrated in certain areas, where a peculiar endowment of collective goods is available for endogenous growth. But even exogenous growth has shown to be very sensitive to local conditions. In fact, foreign direct investments have played a crucial role in the economic growth of several countries, but they have often had uneven...