OECD Work on Public Governance and Territorial Development

OECD WORK ON PUBLIC GOVERNANCE AND TERRITORIAL DEVELOPMENT

2015

GOVBrochure2015.indd 1 02-Jan-2015 11:53:49 AM

OECD WORK ON PUBLIC GOVERNANCE AND TERRITORIAL DEVELOPMENT

2016

Governments are there to establish sound economic, social and political frameworks for citizens and business. After years of policies driven by the crisis, governments need to restore trust and demonstrate their capabilities as stewards of the public interest. It is a huge task to repair the social contract. The policy-making processes must become more open, inclusive and fair, and the delivery of public services must be efficient and innovative.

www.oecd.org/gov

@OECDgov

OECD Public Governance and Territorial Development Directorate

Our mission is to be the leading international source of policy solutions, data, expertise and good practice for governments and other stakeholders seeking to strengthen public policymaking in the face of unprecedented economic, social and fiscal pressures.

We strive to:

• Highlight the crucial role of public sector economics and governance for economic and social well-being.

• Promote the strategic capacity of government.

• Review the role of the state and its choice of policy instruments.

• Improve the efficiency and transparency of public service design and delivery, focusing in particular on innovation, trust and citizen engagement.

• Foster balanced, inclusive growth that maximizes the potential of cities and regions as drivers of national performance.

The Organisation for Economic Co-operation and Development (OECD) is an international body that promotes policies to improve the economic and social well-being of people around the world. It is made up of 34 member countries, a secretariat in Paris, and a committee, drawn from experts from government and other fields, for each work area covered by the organisation.

The OECD provides a forum in which governments can work together to share experiences and seek solutions to common problems. We collaborate with governments to understand what drives economic, social and environmental change. We measure productivity and global flows of trade and investment.

What is the OECD?

Given the governance failures that contributed to the financial crisis and against a background of increasing unemployment and widening inequalities, governments need to rebuild trust in public institutions. Restoring trust in the ability of government to regulate markets, manage public finances, deliver the services that citizens expect and ensure access to opportunity for citizens in all parts of the national territory is a key element of a return to sustainable and inclusive growth.

The Public Governance and Territorial Development Directorate works with governments to help them improve the quality of government. It helps national and local administrations to design and implement evidence-based and innovative policies that will strengthen public governance, enable them to respond effectively to economic and social challenges, and deliver on commitments to citizens.

The current economic and fiscal crisis makes it urgent that these broad aims are applied to a host of specific problems.

These include:

• Helping return member states to fiscal health.• Improving the quality of regulation.• Improving health outcomes for an ageing

population at a time when public budgets are under pressure.

• Enabling states to meet infrastructure needs at a time when money for capital spending is short.

Governments will for the foreseeable future have to do more and better with less. The Directorate’s role is to help them accomplish this. It

’s a

ll a

bou

t tr

ust

www.oecd.org/gov/trust-in-government.htm

OverviewWe support policy makers in both OECD member and non-member countries by providing a forum for policy dialogue and for the creation of common standards and principles. We provide policy reviews and practical recommendations targeted to the reform priorities of specific governments. Through published reports, we provide comparative international data and analysis to support innovation and reform. Our partners include government officials acting as peer reviewers of each other’s work, as well as experts from the private sector, civil society organisations and trade unions.

The work programme is decided and monitored by three committees made up of senior government officials from every OECD member country: the Public Governance, Regulatory Policy and Regional Development Policy Committees.

These Committees also draw on networks of specialised practitioners in the following areas :

• Senior Budget Officials • Public Management and Employment• Public Sector Integrity• E-Government • Senior Officials from Centres of Government• Global Network of Schools of Government• High-level Risk Forum• Economic Regulators• Regional Policy in Rural Areas• Regional Policy in Urban Areas• Regional Indicators

Networks

PublicationsWe publish our findings in key “flagship” publications such as Government at a Glance, Restoring Public Finances, Regions at a Glance and the Regional Outlook; in national and regional reviews on topics such as public governance, regulatory reform, integrity, human resources management, e-government, budgeting and regional policy; and in cross-cutting thematic reports.

Wh

at is

th

e O

ECD

?Inclusive Growth

Why public governance for inclusive growth?How can we work better together across the policy cycle?How can we shape a new vision for the public sector?

Societal well-being should be at the core of policy making. Inclusive institutions and policies, along with effective service delivery, can help bridge multiple social and economic gaps. Public governance for inclusive growth requires a whole-of-government approach throughout the policy cycle, leveraging informed decision making and giving a voice to all stakeholders.

Co-creation and co-design with citizens can be strengthened for inclusive outcomes. Our Public Governance Ministerial Meeting in Finland, 2015, examined how implementation can be leveraged through new behavioural insights and how evaluation can be upgraded for greater impact.

Our work focuses on how administrations can work together to strengthen policy performance. We aim to improve policy frameworks that maintain and build trust, and how they can improve the competence of the civil service, reinforce public values and achieve inclusive policies. We work to help governments commit to integrity, diversity and gender balance in creating public value, and how this can contribute real change throughfully implemented policies.

Inclusive G

rowth is all abou

t changing the rules so that m

ore people can contribu

te to and benefit from econom

ic growth.

www.oecd.org/gov/inclusive-growth-and-public-governance.htm

Income inequality in OECD countriesGini coefficients of income inequality, 1985 and 2013, or latest date available

1.00

1.10

1.20

1.30

1.40

1.50

1.60

2011200720052000199519901985

Bottom 10% Bottom 40% middle 50–90% Top 10%

Trends in real household incomes at the bottom, the middle and the top, OECD average, 1985 = 1.

Regional disparities in life expectancies at birth

Source: OECD Income Distribution Database

0,15

0,20

0,25

0,30

0,35

0,40

0,45

0,50

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0,15

0,20

0,25

0,30

0,35

0,40

0,45

0,50

TURGRCFRANLDBELOECD22MEXUSAISRGBRJPNNZLITAAUSCANLUXDEUHUNSWEFINNORCZEDNK

1985 2013 or latest

Increase DecreaseLittle change

Income growth for selected social groups

Source: The Governance of Inclusive Growth, OECD 2016

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76

78

80

82

84

86

Region maximum Region minimumCountry average

Num

ber o

f yea

rs

JPN

ESP

ITA

ISL

AUS

FRA

ISR

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CAN

NO

RKO

RN

LD NZL

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GBR IR

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EUG

RC

FIN

BEL

PRT

SVN

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USA

CZE PO

LES

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TUR

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Source: The Governance of Inclusive Growth, OECD 2016

Wh

at is

th

e O

ECD

?Rebuilding trust in government

How can we measure trust in government?How can we strengthen the relationship between citizens and government?How can public institutions become more “trustworthy?

The crisis strained the relationship between government and citizens, and this in turn reduces the ability of governments to act. Only around 40% of citizens in the OECD say they trust their government. Dissatisfaction with the performance of public actors and institutions has led to global street protests and huge-volume social media campaigns. These movements have questioned the notion of the state as the careful and competent steward of the public interest, heightened by serious concerns about fairness in fiscal consolidation and the sacrifices involved in structural adjustment for growth.

Trust is now recognised as a key determinant of policy effectiveness, reduced uncertainty and low transaction costs. In the current context, marked by unpredictability and tense relations among economic actors, the importance of trust in economic and social outcomes has undoubtedly increased. Citizens and businesses are less likely to support ambitious reform-minded policies in situations of low trust; similarly compliance with regulation and tax obligations can also be affected.

OECD has wide experience with analysing aspects of public trust through its work on strategic policymaking at the centre of government, risk management, public sector integrity, regulatory policy and open government.

Citizens

look to

governments

to lead

the w

ay. Withou

t strong

leadership, supported by effective policies, tru

st is easily eroded. G

ood governance means pu

tting the needs of people at the centre of policy-m

aking.

www.oecd.org/gov/trust-in-government.htm

Confidence in national government in 2014 and its change since 2007

Arranged in descending order according to percentage point change between 2007 and 2013

Correlation between confidence in national government & perception of government leadership, 2014

Correlation between confidence in national government and perception of government corruption, 2014

Source: Gallup World Poll


-40

-20

0

20

40

60

80

100

-40

-20

0

20

40

60

80

100

DEU ISR ISL

SVK

JPN

CHE

KOR

HUN

CZE

POL

GBR

NZL

NO

R

ITA

TUR

SWE

EST

OEC

D

USA

AUS

MEX

AUT

FRA

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NLD BE

L

DNK

LUX

IRL

CAN

GRC

PRT

ESP

FIN

SVN

RUS

IDN

BRA

LVA

IND

COL

ZAF

%Percentage points % in 2014 (right axis) Percentage points change since 2007 (left axis)


AUS

AUTBEL

CAN

CHL

CZE

DNK

EST

FIN

FRA

DEU

GRC

HUN

ISLIRL

ISR

ITA

JPN

KOR

LUX

MEX

NLD NZL

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POL

PRT SVKSVN ESP

SWE

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USA

R² = 0.8125

0.0

10.0

20.0

30.0

40.0

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60.0

70.0

80.0

90.0

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0

Appr

oval

of c

ount

ry le

ader

ship

Confidence in national government

OECD

AUS

AUT BEL

CAN

CHL

CZE

DNK

EST

FIN

FRA

DEU

GRC

HUN

ISL

IRL

ISR

ITA

JPN

KOR

LUX

MEX

NLD

NZLNOR

POL

PRT

SVK

SVN ESP

SWE

CHE

TURGBR

USA

R² = 0.7032

0

10

20

30

40

50

60

70

80

90

100

0 10 20 30 40 50 60 70 80 90 100

Gove

rnm

ent c

orru

ptio

n

Confidence in national government

OECD

Sound public budgets and finances

How can countries strengthen fiscal governance, combat deficits, and tackle debt sustainability issues?How can countries address rising health care costs while trying to meet their fiscal objectives?How can governments harness private expertise and financing to deliver public infrastructure services more cost effectively?

Through its network of Senior Budget Officials (SBO), GOV supports countries in sound and sustainable fiscal management through objective analysis of policies and data. The OECD promotes greater budget transparency on the part of governments, as the best way to retain crucial public support and international confidence. The OECD Network of Parliamentary Budget Officials and Independent Fiscal Institutions (PBO) contributes to transparency efforts and promotes better budget oversight.

A joint venture of the SBO and the OECD’s Health Committee, the OECD Joint Network on Fiscal Sustainability of Health Systems looks at how to rein in costs while delivering improvements in access, service quality, and capacity for innovation.

If used right, PPPs can be a cost efficient way to deliver public services and meet infrastructure demands. The 2012 Principles for Public Governance of PPPs provide road tested guidance on how to ensure that a PPP represents social returns and is the most cost efficient mode of delivery (value for money), is affordable for users and the public budget, and that any fiscal risks stemming from PPPs are managed prudently and transparently.

High expectations on the part of citizens and lim

ited fiscal space are forcing governm

ents to devise ever more inventive approaches to m

anaging public

funds and m

aintaining quality service delivery.

www.oecd.org/gov/budgeting

General government fiscal balance as a percentage of GDP (2007, 2009, 2013 & 2014)

General government debt as a percentage of GDP (2007, 2009, 2013 & 2014)

Structure of central government revenues, 2013 and 2014

Source: Government at a Glance, OECD, 2015

Source: Government at a Glance, OECD, 2015

Source: OECD National Accounts Statistics (database)

-20

-15

-10

-5

0

5

10

15

20

% 2013 2009 2007 2014

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40

80

120

160

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% 2013 2009 2007 2014

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2013

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2014

CHE BEL ITA AUS DEU JPN SWE LUX DNK CAN FIN NZL AUT ESP NLD FRA KOR POL ISR ISL IRL HUN GBR SVK PRT SVN GRC MEX EST USA CZE NOR OECDUWA

OECDWA

COL LVA

Taxes Net social contributions Grants + Other revenues

Dat

a on

gov

ern

men

t b

ud

gets

Public sector innovation

How can governments keep improving their services in the face of budget cuts?How can they use data to improve their performance?Can the public sector increase its agility and flexibility through e and m-government?

Across the OECD, the public sector faces a dilemma: how to meet increasingly diverse demands with shrinking resources. Finding better ways to do more with less is one answer. The Observatory of Public Sector Innovation collects, analyses and shares innovative practices from across the public sector, via an online interactive database.

Policy makers are seeking evidence of their performance relative to other countries, and Government at a Glance provides this, with indicators on an increasing range of subjects as diverse as e-government, human resources and freedom of information. Indicators show, for example, which countries have the largest public sectors, which government workers take the least sick leave, and which member states have the highest and lowest teachers’ salaries.

E- and m-government are crucial tools for improving the efficiency of government and its responsiveness to its citizen clients. Mobile Technologies for Responsive Governments and Connected Societies looks at how mobile internet devices can sustain public sector innovation and transform public service delivery.

The pu

blic sector represents one third to one half of the GD

P of many

countries - so identifying, isolating and dissem

inating innovation carries hu

ge potential to improve econom

ic performance.

www.oecd.org/gov/public-innovation

Businesses using the Internet to interact with public authorities by type of activity (2013)

Individuals using the Internet to interact with public authorities by type of activity (2013)

Citizens using the Internet to interact with public authorities by age group (2012)

0

10

20

30

40

50

60

70

80

90

100

25 to 34 years old 16 to 24 years old 65 to 74 years old

Source: OECD, ICT Database; and Eurostat, Information Society Statistics (database)



0

10

20

30

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100

ISL

FIN

SWE

CZE

FRA

DNK

IRL

SVN

SVK

NO

R

TUR

NZL

GBR

LUX

AUT

HUN

NLD

OEC

D

EST

PRT

POL

KOR

ITA

BEL

GRC

ESP

MEX

CHE

DEU

CAN

AUS

LVA

% Obtaining information/forms Sending filled forms

0

10

20

30

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DNK ISL

SWE

NO

R

FIN

CHE

NLD

AUS

CAN

AUT

SVK

DEU

SVN

NZL

OEC

D

FRA

EST

HUN

ESP

LUX

BEL

IRL

GBR

GRC

PRT

CZE

ISR

TUR

POL

ITA

CHL

KOR

LVA

% Obtaining information Sending filled forms

Does good government make people feel measurably better about their lives?

How can the private sector use government data to create value?

Citizens in OECD countries are calling on governments to be more open about the way they design and deliver policies, and expect their views to be taken into account when policies are designed. The OECD Guiding Principles for Open and Inclusive Policy Making are based on the conviction that open government produces happier outcomes. The eight principles include clarity, commitment and time: public consultation and active participation should be undertaken as early as possible. This will allow a greater range of policy solutions to emerge, boosting the chances of successful implementation.

Countries are moving forward with the implementation of open government policies and these efforts have resulted in an international movement, the Open Government Partnership, in which 19 OECD Member countries have commitments. The MENA-OECD Open Government Project assists the Governments of Morocco, Tunisia, Jordan and Libya in reviewing and assessing their institutions, policies and practices supporting the implementation of Open Government principles at central and local level. The project also coordinates mechanisms across levels of government and with national civil society. The project contributes to improving both Open Government policies and practices and to meeting the OGP eligibility criteria and prepare and implement the required country action plans through ad-hoc support and capacity building.

The m

ore citizens participate in their own governance, the better

governance is. Governm

ent works best w

hen it is of the people, by the people and for the people.

www.oecd.org/gov/open-government.htm

Open government

OECD OURdata Index: Open, Useful, Reusable Government Data, 2014

Central government ICT projects with a total project value greater than USD 10 million, 2014

Percentage of individuals who have taken part in an online consultation or voting

0

5

10

15

20

25

30

35

Shar

e of

citi

zens

Source: Government at a Glance, 2015

Source: Eurostat, Information Society Statistics (database)

0.0

0.1

0.2

0.3

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0.9

1.0

KOR FRA GBR AUS CAN ESP PRT NOR USA MEX FIN GRC AUT JPN NZL DEU BEL CHL DNK SVN CHE IRL ITA EST NLD SVK SWE POL TUR COL

Total score OECD

No national O

GD portal

Source: Government at a Glance, 2015

0

20

40

60

80

100

120

140

AUS CHL CZE DNK EST FIN FRA HUN ISL ITA JPN LUX MEX NLD NZL POL SVN ESP SWE CHE GBR COL LVA

Clean Government

How can citizens’ trust in government be restored?

How can political finance be reformed so that a country’s leaders can be elected fairly?

How can public procurement be made to build projects that improve people’s lives, rather than white elephants?

In some countries, citizens’ confidence in government has been battered by the crisis. In others, a belief that corruption is common has eroded trust. Without the trust of citizens and confidence of markets, governments will be unable to make the structural reforms required to tackle the continuing fiscal crisis. OECD work on Integrity in the public sector addresses these problems. It looks at how to improve the transparency and integrity of decision-making, and sets out global standards for budget transparency and safeguarding integrity in the public sector.

Past scandals have made citizens particularly concerned about political financing. OECD countries are strengthening the control of private funding in response to new risks, such as third-party financing, which offers new ways for contributors to distribute their donations and circumvent existing regulations. However, these measures are not in themselves enough to create a fully open political finance system. OECD is working to explore how countries can go further.

Public procurement has the power to boost economic growth, but also - if badly handled - to waste billions of dollars through the massive misallocation of resources. The OECD formulates Principles for Enhancing Integrity in Public Procurement, drawing from the lessons learned in country reviews. These include transparency, good management and purpose - making sure public funds are used in public procurement for the object originally intended.

Only 22%

of OEC

D cou

ntries demand the fu

ll disclosure of the identity of all donors

to political parties and candidates.

www.oecd.org/gov/ethics/

Percentage of businesses using electronic procurement systems (2013)

Introduction of lobbying regulation, 1940-2014

Legal protection of whistleblower in OECD member countries, 2014

Source: Eurostat

Source: OECD Government at a Glance, 2015

0

5

10

15

20

25

30

35

40

45

IRL

SVN

FRA

FIN

NO

R

SWE

ISL

POL

PRT

DNK

EST

AUT

SVK

CZE

LUX

GBR

NLD

GRC

BEL

DEU

HUN

ESP

ITA

LVA

% Access tender documents and specifications E-tendering (in own country)

0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010-2014

DEU

AUSCAN

POLHUNISRFRA

MEXSVNAUTITANLDCHLGBR

Protection through provisions in other law(s) :

47%

No protection : 13%

Source: OECD Government at a Glance, 2015

Regulation

Can good regulation prevent another financial and economic crisis?

Can we make regulation so good that it boosts economic growth?

How can ‘choice architecture’ improve people’s decisions without taking away their freedom?

Poor regulation is seen as one of the main causes of the credit crunch, and therefore of the continuing financial crisis. OECD Work on regulatory Policy addresses problems in regulatory systems, including the weakness of regulatory bodies, the misalignment of incentives and the lack of adequate enforcement and compliance. High-quality regulation creates certainty and promotes the rule of law, but also has important economic effects such as levelling the playing field for businesses. It has created a list of principles for good regulation - calling, for example, for consultation and impact assessments in the early stages of the policy process.

At the same time, –reducing “red tape” and excessive regulation is also important. The OECD has studied the successful administrative simplification programmes of The Netherlands and Portugal, and continues to monitor this theme actively.

There is an acute need to understand the links between good regulatory quality and sustainable growth. The GOV has organised a series of roundtables on the theme of Regulatory Reform for Growth, including the role of various actors of change across government and their unexplored potential for furthering growth, and taking stock of pro-growth regulatory measures in times of crisis.

One of the most exciting new areas in regulation is the use of behavioural economics. If done well, this can improve outcomes without using traditional command and control mechanisms, by allowing citizens and business to retain choices but gently nudging them in a particular direction. The key phrase is “choice architecture”: a structure that changes behaviour without diminishing choice.

Good regu

lation can boost investment, u

nlock productivity, prom

ote social inclusion,

and increase competitiveness. B

ad regulation can bring a cou

ntry to its knees.

www.oecd.org/gov/regulatory-policy

Stakeholder engagement in developing primary laws

Regulatory Impact Assessment for developing primary laws

Ex post evaluation for primary laws

Source: OECD Regulatory Policy Outlook 2015

0

0.5

1

1.5

2

2.5

3

3.5

4

Methodology of stakeholder engagement Systematic adoption of stakeholder engagementTransparency of stakeholder engagement Oversight and quality control of stakeholder engagement

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

Methodology of RIA Systematic adoption of RIATransparency of RIA Oversight and quality control of RIA



0

0.5

1

1.5

2

2.5

3

3.5

4

Methodology of ex post analysis Systematic adoption of ex post analysisTransparency of ex post analysis Oversight and quality control of ex post analysis

OECD average

Cities

How can national policies help “get cities right” for job-rich growth?

How can cities more effectively tackle climate change and achieve greener growth?

How can better governance of urban areas improve residents’ well-being?

Cities of all sizes are critical to economic progress. Across the globe, cities are motors of growth and innovation. Overall, they are characterised by higher levels of productivity and income and, across the OECD, productivity and wages increase with city size. While in some countries the largest cities make the biggest contribution to aggregate growth, the contribution of small and medium-sized cities is very significant. Large cities have enormous potential for job creation, innovation and green growth, as do dynamic medium-sized cities. Cities are the hubs and gateways in global networks, such as trade or transport.

However, while productivity, wages and the availability of many important amenities generally increase with city size, so do pollution, housing prices, congestion, inequality and crime. These negative effects of “agglomeration” can reduce trust and well-being. They can be substantially mitigated by national and city level policies that ensure access to jobs and employment, equal opportunities in education, decent housing, adequate healthcare, efficient transport and safe neighbourhoods.

What policies can help cities and metropolitan areas become more competitive, sustainable and inclusive over the long term? The OECD conducts in-depth analyses of national-level policies related to urban development, as well as reviews of cities and their greater metropolitan areas, to evaluate current policies and propose strategies for boosting economic growth, improving environmental performance and fostering social inclusion. Thematic research on cities covers a wide range of topics: climate change and green growth; water and cities; demographic change; metropolitan governance; rural-urban linkages; and more.

The OECD Metro Database and Metro eXplorer provide comparable international data for urban and metropolitan areas relating to GDP, CO2 emissions, sprawl, innovation and more. This unique database helps compare “apples to apples” across the OECD through measurement approach that defines cities in terms of the density of settlement and activity rather than as administrative units.

The OECD Roundtable of Mayors and Ministers is the pre-eminent international forum for policy dialogue on urban issues between local and national leaders.

The Organisation for Economic Co-operation and

By 2050 as m

uch as tw

o-thirds of the world’s popu

lation may be living in

cities.

www.oecd.org/regional/regional-policy/urbandevelopment.htm

http://measuringurban.oecd.org/#

Ratio of the population of the capital city of a country relative to the largest non-capital city

Urbanisation levels across OECD countries, 2012

Source: The Metropolitan Century, OECD, 2015

Economic growth increases with proximity to large cities



2. THE SECRETS OF SUCCESSFUL CITIES – 41

THE METROPOLITAN CENTURY © OECD 2015

cities as capitals, there are several reasons why the designation as a capital makes a city grow. First, governments are big employers that provide many well-paid jobs in the public administration. They also attract other organisations, such as newspapers and lobby groups, which also provide jobs. Of course, many of the employees will bring their families with them, which further increases the number of people who live in a city because it is the capital. In addition to those people are the people who provide services for government workers, for example in schools and restaurants. Taken together, the presence of these people partly explains why capitals are larger than comparable cities.

To some degree the size of capital cities is also due to what economists call rent seeking. Rent seeking consists of legal or illegal activities that benefit businesses or individuals without adding to the overall amount of wealth that is produced. Typical examples are the lobbying for favourable regulation or the bribing of an official to be awarded a contract at excessive prices. Even though rent seeking behaviour can be unrelated to government activities, in practice it is very common that it focuses on the government.

Figure 2.2. Ratio of the population of the capital city of a country relative to the largest non-capital city

Note: This figure shows the population of the capital city divided by the population of the largest non-capital city. Most capital cities are more than twice as large as the largest non-capital city in the country and sometimes more than six times as large. Federal countries are shown in light blue.

Source: OECD calculations.

Rent seeking is especially strong in authoritarian countries. Non-democratic regimes have relatively more resources to disburse because they do not face the checks and balances present in democracies. Because the population in the capital often forms a power base of these regimes, disbursal of rents is especially concentrated in the capital city. This attracts more people to the capital and is reflected in the data by the fact that the share of the population of a country that is living in the main city is approximately 50% larger in non-democratic countries than in democratic countries.9

In democratic countries, evidence suggests that capital cities are particularly large whenever the political system is strongly centralised. Figure 2.2 shows that unitary countries tend to have capitals that have larger relative populations than federal countries (light blue bars). While it could be that federal countries place their capitals in smaller

0

1

2

3

4

5

6

7

8

9

10

3. HOW CITIES AFFECT CITIZENS, COUNTRIES AND THE ENVIRONMENT – 97


Figure 3.12. Urbanisation levels across OECD countries, 2012

Share of population living in metropolitan areas, urban agglomerations and outside urban agglomerations.

Note: This figure depicts the share of a country’s residents that lives inside and outside of cities, separated by city size. Numbers in parentheses are the total number of cities (both metropolitan areas and small and medium-sized cities).

Source: OECD calculations based on OECD (2013b), OECD Regions at a Glance 2013, OECD Publishing, Paris, http://dx.doi.org/10.1787/reg_glance-2013-en; OECD (2014a), “Metropolitan areas”, OECD Regional Statistics (database), http://dx.doi.org/10.1787/data-00531-en (accessed 30 October 2014); and OECD (2014b) Country Statistical Profiles (database), http://dx.doi.org/10.1787/20752288 (accessed 4 November 2014).

Innovation Innovation and technological progress are generally believed to be the main drivers of

long-term economic growth.39 Innovation allows production factors, capital and labour, to be used in new and better combinations, thereby increasing output and ultimately well-being. For many countries and regions, the first priority is to adapt their production processes to the current state-of-the-art and to catch up with those areas at the technological frontier.40 But for long-term growth and prosperity, advances along the technological frontier – advances that push the limits of productivity further and further out – are paramount. While innovation can happen anywhere, it tends to be concentrated in highly urbanised areas. R&D activity, patent applications and venture capital are all highly concentrated, both within countries and even within cities.41 For innovation, size matters: larger cities – on average – patent more than smaller cities across the OECD. The link between city size and patenting activity is strikingly non-linear, with the largest cities concentrating the majority of patenting (Figure 3.14).

The high degree of concentration can have different causes. For innovation, even more than for other aspects of productivity, knowledge spillovers matter. Empirical evidence suggests a strong local component in knowledge diffusion. Knowledge

13.4%25.3%27.3%28.0%28.7%29.3%29.8%30.2%35.3%36.0%36.8%37.2%37.4%37.9%38.8%39.3%39.6%40.0%40.4%40.8%44.4%47.0%48.3%48.6%50.9%53.5%56.3%68.5%73.2%

83.1%24.3%

22.2%25.1%

11.9%21.7%

17.9%25.0%

20.3%20.9%18.8%

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16.8%9.5%

13.4%

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Luxembourg (1)Slovak Republic (8)

Norway (6)Finland (7)

Slovenia (2)Hungary (10)

Czech Republic (16)Poland (58)

Italy (74)Switzerland (10)

Denmark (4)Spain (76)

Netherlands (35)Sweden (12)

Ireland (5)Germany (109)

Portugal (13)Estonia (3)Greece (9)

France (83)United Kingdom (101)

Belgium (11)Austria (6)Chile (26)

OECD (1179)Mexico (77)

United States (262)Canada (34)

Japan (76)Korea (45)

Metropolitan areas (500 000+) Small and medium-sized urban agglomerations (50 000-500 000)Residents living outside urban agglomerations

102 – 3. HOW CITIES AFFECT CITIZENS, COUNTRIES AND THE ENVIRONMENT


Positive spillovers from cities do not stop at regional boundaries. Generally, regions closer to cities – especially larger cities – are more prosperous, and have experienced higher economic growth than regions that are more remote (Figure 3.16). While these positive spillovers decline with distance, large cities of, for example, more than 2 million inhabitants are found to have benefited the economic performance of regions as far as 200-300 kilometres away. The important factor is the actual travel time from a region to the nearest metropolitan area. A halving of that travel time in the region is associated with 0.2-0.4 percentage points higher annual GDP per capita growth.47

Rural regions also benefit from proximity to urban centres. Empirical evidence for the OECD in general, and the United States in particular, suggests that rural regions close to cities, or more urbanised regions, experienced faster population growth (Figure 3.17).48 This implies that there is not necessarily competition among neighbouring urban and rural areas but that joint growth potential exists. Formalising this partnership in a joint governing body can help harness the full benefit of the existing linkages.49

Figure 3.16. Economic growth increases with proximity to large cities

Note: Average annual per capita GDP growth rates between 1995 and 2010 controlling for country fixed effects and initial per capita GDP levels.

Source: Ahrend, R. and A. Schumann (2014), “Does regional growth depend on proximity to urban centres?”, OECD Regional Development Working Papers, No. 2014/07, OECD Publishing, Paris, http://dx.doi.org/10.1787/5jz0t7fxh7wc-en.

Finally, regions that either include large cities or are closer to them have modernised their economic structure more rapidly, as witnessed, for example, by a more rapid shift from employment in manufacturing or agriculture to the service sector.50 There is also some evidence that proximity to smaller cities has a positive effect on growth. Being within 30 minutes of a small or mid-sized urban agglomeration seems to have a positive effect, but in contrast to larger urban agglomerations, the effect of distance is not increasing beyond the 30-minute threshold.51

0.60%

0.80%

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1.60%

1.80%

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Within 45 mins. by car 45-90 mins. by car 90-180 mins. by car 180-300 mins. by car > 300 mins. by car

Ann

ual g

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Women in Government

Gender equality is necessesary for sound government .

What are the obstacles to empowering women in public life?

How can we address these challenges?

Empowering and encouraging women to participate more fully in the public sphere is essential. Gender diversity in public institutions is particularly crucial, given that these decision making bodies create the rules that affect people’s rights, behaviours and life choices Ensuring that governments reflect the diversity of the societies they represent guarantees a balanced perspective which enables an inclusive approach to policy making and service delivery.

There are major structural, legal and social barriers to women’s empowerment in public life. A lack of visibility and uneven work-life balance arrangements make it especially hard for women to be active in economic and political life. Women also face a lack of political encouragement to run for public office.

A whole-of-government approach is crucial to advancing the role of women in government. Holistic policy making will not only help bring more women in the public light, but will ensure that gender considerations are more systematically embedded in all policies. We are contributing to the worldwide effort to advance gender equality by helping to feed and stir the public policy debate and generate benchmarks that our member countries may adopt. We are strengthening our ability to identify good practices, build databases and provide opportunities for policy dialogue on the global and regional levels.

More w

omen in pu

blic leadership positions is not only a question of

fairness, but of good governance and sou

nd economics

www.oecd.org/gov/women-in-government.htm

Women in general government compared to women in the labour force (2010)

Share of central government jobs filled by women (2000 & 2010)

Source: Women, Government & Policy Making in OECD coutries, OECD, 2014

Share of central government jobs filled by women, by occupation groups (2010)WOMEN, GOVERNMENT AND POLICY MAKING IN OECD COUNTRIES: FOSTERING DIVERSITY FOR INCLUSIVE GROWTH – © OECD 2014

98 – 3. WOMEN AS PUBLIC EMPLOYEES

Women in general and central governmentWomen are often over-represented in the public sector across OECD countries (OECD

2012a). Women’s share in public sector employment has increased considerably and, in many countries, has outpaced men’s participation: between 2001 and 2010, the percentage of women as general government employees increased in each of the 21 countries responding to the OECD survey on gender in public employment.3 In 2010, women made up more than half of government employees in 16 of the 21 countries (see Figure 3.1). On average, in OECD countries in 2010, women employees accounted for 57% of general government4 employees and just over 50% of central government5 employees. This difference is mainly due to the fact that general government employees include teachers and nurses, who most often work at the subnational level of government, and which are female-dominated occupations across all OECD countries.

Nevertheless, there is a significant variation between countries. The Nordic countries, Estonia and Slovenia, where the share of women in general government is 20 percentage points higher than their share in total employment (OECD 2012a), display the largest difference. Estonia experienced the largest rise in female employment over the period 2001-2010; women accounted for three-quarters of general government employment in 2010, more than any other OECD member country. On the other hand, in Greece, Japan, the Netherlands and Turkey, women are slightly more represented in the labour force than in general government employment. According to the most recent figures, women represent only 24% and 36% of general government employees in Turkey and Greece, respectively.

In central government, in 2010, women accounted for more than 50% of the full-time central government employees in countries such as Australia, Canada, Chile, Estonia, Iceland, Ireland, Italy, New Zealand, Norway, Poland and Sweden, but still less than

Figure 3.1. Women in general government compared to women in the labour force (2010)

0102030405060708090

100

Esto

nia

Swed

en

Finl

and

Nor

way

Den

mar

k

Slov

enia

Uni

ted

King

dom

Cana

da

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Uni

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Stat

es

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n

Ger

man

y

Chile

Switz

erla

nd

Luxe

mbo

urg

Net

herla

nds

Japa

n

Gre

ece

Turk

ey

% Share of women in total labour force Share of women in general government

Note: Data for the share of women in general government is from the International Labour Organisation (ILO), LABORSTA (database). Data for the share of women in the labour force is from OECD Labour Force Statistics (database). Data for Portugal and New Zealand for women in general government was provided by national authorities. Data for Portugal is for 2011 rather than 2010. Data for Japan is for 2009 rather than 2010. Data for Canada, Chile, Finland, Greece, Poland and Switzerland are for 2008 rather than 2010. Data for Norway and Sweden is for 2007 rather than 2010. Data for Turkey is for 2006 rather than 2010. Data for the Netherlands is for 2005 rather than 2010.

Source: OECD (2013a), Government at a Glance 2013, International Labour Organisation (ILO), LABORSTA (database) and OECD Labour Force Statistics (database).

WOMEN, GOVERNMENT AND POLICY MAKING IN OECD COUNTRIES: FOSTERING DIVERSITY FOR INCLUSIVE GROWTH – © OECD 2014

3. WOMEN AS PUBLIC EMPLOYEES – 99

30% of the full-time public service workforce in Japan, the Netherlands and Switzerland6 (see Figure 3.2). These figures are generally similar to those in 2000. Chile, Iceland and Slovenia continue to employ the largest percentage of women in central government, at more than 60%, while Japan employs the smallest share (16%).

Figure 3.2. Share of central government jobs filled by women (2000 and 2010)

0102030405060708090

100

Italy

Pola

nd

Chile

Icel

and

Slov

enia

Port

ugal

New

Zea

land

Aust

ralia

Aust

ria

Cana

da

OEC

D

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ted

King

dom

Den

mar

k

Belg

ium

Esto

nia

Fran

ce

Spai

n

Swed

en

Switz

erla

nd

Luxe

mbo

urg

Nor

way

Finl

and

Net

herla

nds

Ger

man

y

% 2010 2000

Note: Data for Luxembourg, Portugal, Slovenia and Sweden is for 2011 rather than 2010. Data for France is for 2009 rather than 2010. Data for the Netherlands is in full-time equivalent. Data for Estonia, Japan and Spain are for full-time employees only.

Source: OECD (2013a), Government at a Glance 2013, based on data from OECD 2011 Survey on Gender in Public Employment.

Box 3.1. Portrait of women in public sector employment in OECD countries

• 57% of the general government workforce;

• 50% of the central government workforce;

• Concentrated in fewer occupations than men;

• More than 65% of secretarial positions;

• 27% of top managers;

• 35 % of middle managers;

• 30 % of women are working part-time;

• 80% of part-time employees:

• 54% of the women working part-time are in the professional occupational group and 36% in secretarial positions;

• Less than 1% of top managers and 5% of middle management positions are occupied by women employed part-time;

• The pay gap is less in the public sector than in total employment, which is an average of 16% across OECD countries (OECD 2011c).


WOMEN, GOVERNMENT AND POLICY MAKING IN OECD COUNTRIES: FOSTERING DIVERSITY FOR INCLUSIVE GROWTH – © OECD 2014

3. WOMEN AS PUBLIC EMPLOYEES – 101

Similarly, women in central government across OECD countries are still heavily represented in the secretarial occupational category: they hold about 65% of the secretarial positions. In Austria and Slovenia, for example, women fill approximately 90% of the secretarial positions (see Figure 3.3). This trend is consistent with traditional job segregation, where women occupy lower-grade and lower-paid jobs. Women’s higher educational attainment has led to an increase in their representation in the professional sphere in most OECD countries. Yet they still tend to cluster in several occupational categories, due to significant gender differences in the areas of fields of study. It is widely believed that the choices women and men make in fields of study strongly contribute to perpetuate gender segregation in the labour markets, with women underrepresented in the business sector and concentrated in health, welfare, educational and administrative areas of work (OECD, 2012a). However, occupational segregation increases significantly between ages 27 and 35, suggesting that the distribution of females across the occupations is not necessarily and exclusively dictated by pre-labour market choices about education and careers (UCEA, 2011). Part-time work, prevalent in jobs mostly occupied by women, and linked to family obligations and care, may also play a role in horizontal segregation.

While women are generally well represented in OECD countries’ public sector workforce, they still lag in parity in management and leadership positions. Despite some important variation between OECD countries (from less than 10% in Switzerland, to 30% in the United States (US Equal Employment Opportunity Commission, 2011), to nearly 50% in Poland), women consistently occupy less than half of public service decision-making positions, on average accounting only for 28.6% of senior managers across OECD countries.

Figure 3.3. Share of central government jobs filled by women, by occupation groups (2010)

0

20

40

60

80

100

120

Esto

nia

Slov

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Aust

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Swed

en

Port

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Nor

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Cana

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Pola

nd

New

Zea

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Den

mar

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Chile

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Uni

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King

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Italy

Finl

and

Belg

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Net

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Fran

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Ger

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Switz

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% Secretarial Positions Professionals Middle Management Top Management

Note: Data for Luxembourg, Portugal, Slovenia and Sweden is for 2011 rather than 2010. Data for France are for 2009 rather than 2010. Data for the Netherlands is in full-time equivalent. Data for Switzerland on secretarial positions also include technical positions.

Source: OECD (2013a), Government at a Glance 2013, based on data from OECD (2011), Survey on Gender in Public Employment.


Regional development

What drives growth in different types of regions?

What serves to integrate rural and urban areas in a region?

What types of governance arrangements help regions and national governments work effectively together?

Regional development policies contribute to national performance. While a few hub regions contribute significantly to OECD growth, around two-thirds of that growth comes from the vast majority of other regions. Traditionally, policy debates have focused on trade-offs, not synergies, between efficiency, environmental sustainability and equity objectives. Today, however, there is a growing awareness of the need to pursue them in a more balanced and complementary way.

Regions are therefore the “places” where policies meet people. The flagship biennial reports Regional Outlook and Regions at a Glance illustrate the latest trends in regional performance and different aspects of policies that impact regional development. The OECD has also developed public accessible statistical databases to answer the increasing demand for data at the regional level.

In addition to reviews of national regional development policies, the OECD conducts considerable research on different types of places. Cities are important generators of wealth and employment, playing a leading role in national economies and housing over two-thirds of the OECD population. However, in some cases, rural regions are growing faster than their urban counterparts. They are also strongly linked with urban areas in a wide range of rural-urban interactions for economic activity, natural resources and other ties. Reviews of rural policy in a country, along with thematic work on modern rural development approaches such as rural-urban partnerships, is part of OECD work on regional development.

Most policies are implemented by national as well as regional and local governments. In fact, over 70% of public investment in the vital infrastructure underpinning competitiveness and well-being is undertaken by sub-national governments. The OECD has developed a set of good practice principles for national and sub-national governments to work better together. Other research considers the role of different governance arrangements to implement policies as efficiently and effectively as possible.

The world is not flat for innovation activity. Some regions are technology hotspots while others need to adopt innovations created elsewhere in their local clusters. OECD studies on regions and innovation provide guidance on how to do so.

On average, 39%

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of regions.

www.oecd.org/regional/regional-policy

http://stats.oecd.org/OECDregionalstatistics/#

Cities

0

10

20

30

40

50

60

70

80

90

100

Belg

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Net

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Uni

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King

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Predominantely urban Intermediate Predominantely rural

All types of regions contribute to national GDP

Source: Regions at a Glance 2013

Some regions are more productive than others

Distribution of GDP by region type, 2010

Range in regional Gross Domestic Product per worker, 2010

868183

7378788186

75757274

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115112118

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143157

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163164163

178185

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0 50 100 150 200 250 300 350 400 450 500

Norway

Slovenia

Spain

Denmark

Austria

Finland

Belgium

Australia (TL2)

Hungary

Sweden

Greece

Estonia

Ireland

Canada (TL2)

Germany

Slovak Republic

Netherlands

Italy

Czech Republic

United States (TL2)

Japan

New Zealand

Portugal

France

Poland

Korea

Switzerland

Mexico (TL2)

Chile (TL2)

United Kingdom

%

Minim

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Maxim

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115

112

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125

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119

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6146

15116

316

416

3178185

22524

3260

326

493

0

50

100

150

200

250

300

350

400

450

500

%

Minimum value Maximum value

Source: Regions at a Glance 2013

Risk governance

How can governments ensure their responses to disaster are based on tried and tested principles rather than panic?

Should we consider corruption and cyber attacks as hazards on the same scale as natural disasters and pandemics?

What can we learn from crises that have hit OECD member countries?

Against a perception of increasingly frequent natural and man-made disasters, the High-Level Risk Forum was set up in 2011 to look at how to increase society’s resilience to global threats. The Forum, which brings together senior national policymakers, examines a broad range of potential hazards including natural disasters and pandemics, financial crises, terrorism and cyber attacks. It has produced practical tools to fight the global threat of corruption, which destroys local economies by reducing legitimate business revenues, fuelling conflict and worsening social conditions. The Forum works with the OECD’s Insurance and Private Pension Committee and the G20 on disaster risk management, including risk assessment and financing strategies.

OECD has set out Principles for Country Risk Management - policy recommendations that cover the full risk management cycle, starting with risk assessment and moving on to mitigation, crisis management and communication, and finally recovery. They are designed to inform and support country practices, to help develop systematic checklists in the public sector that will increase preparedness for major risks. OECD has also drawn up eight recommendations for Building Resilient Regions after a Natural Disaster, as part of a long-term programme of policy work following the 2009 earthquake that ravaged the Italian city of L’Aquila. The policy recommendations include fostering public participation in decision-making, and using lessons from a regional crisis to introduce reforms for the country as a whole.

The increased m

obility of goods, capital, people and information has created

“perfect storm” conditions for severe global shocks.

www.oecd.org/gov/risk

Public administration reform

How can countries in transition achieve democracy and a free-market economy?

What political and economic reforms are needed to build trust in governments?

How can countries benefit from international experience to design their own systems of governance?

An effective public administration helps to provide citizens with high quality public services.

The Support for Improvement in Governance and Management (SIGMA) programme works with 19 countries, largely non-OECD member states, to assist reforms that will support their aspirations for democracy and the rule of law.

SIGMA provides advice and support in five professional areas of public governance, as well as evidence-based reviews of progress to identify areas for further improvement:

• Civil service and public administration organisation and functioning• Policy making• Public finance and audit• Public procurement• Strategies for public administration reforms.

While facilitating international co-operation with countries, SIGMA encourages partner countries to take ownership of the implementation of reforms and to build their planning and monitoring capacities.G

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www.sigmaweb.org

A joint initiative of the OECD and the EU, principally financed by the EU.

Public Governance Reviews

How can public policy help achieve positive outcomes for citizens and businesses?

How can governments steer implementation of public policies efficiently and effectively?

The global financial crisis has sharpened the importance of efficient and effective public governance, as governments grapple with complex and interlocking public policies in an often tight fiscal environment. OECD Public Governance Reviews provide governments with a 360 degree perspective on their performance, and where this needs to be improved, to strengthen a country’s potential for sustainable and inclusive growth.

Launched in 2007, Public Governance Reviews have helped strengthen public governance and leadership and facilitate positive change in OECD member and non-member countries. The Reviews highlight interactions between key building blocks of good governance in the context of the countries’ priorities and reform plans. They can address specific sectors or policies and their governance framework.

Supported by peer reviewers and experts, based on partnerships with requesting countries and tailored to their needs, the Reviews involve all relevant actors within and outside governments. They offer strategic diagnostic and actionable recommendations, as well as capacity building and implementation support.

Good governance is key to achieve strategic pu

blic policy goals, and to boost su

stainable and equitable grow

th and well-being.

www.oecd.org/governance/reviews

Notes

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PFER

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OECD Work on Public Governance and Territorial Development