The Hague, Netherlands 24nd April, 2014

National Territorial Review of the Netherlands

Enrique Garcilazo, David Bartolini, Isabelle Chatry

OECD Governance and Territorial Development

Above average standards of living… GDP per capita is 6th highest in the OECD

Labour productivity is higher than the OECD average

High levels of education and skills

During the past decade, the Dutch small open economy has performed well…

Challenges remain in the recovery Double dip Doubling of unemployment

• Top sector policy • Role of cities/regions • Subnational reforms

1. Chapter 1:

• Regional Development Trends in the Netherlands

2. Chapter 2 :

• Exploiting Policy Complementarities for Regional

Development the Netherlands

3. Chapter 3:

• Multi-level Governance Challenges in the

Netherlands

Outline

The Netherlands has a rich urban structure that could benefit more from agglomeration and regional Development…

Labour productivity growth and GDP per capita growth in the five largest FUAs is significantly lower than nationally and the OECD

Population in contrast , surpassed the national growth rate and was close to the OECD average rate of population growth.

There is a rich polycentric urban structure across the country…

Strengthening agglomeration benefits

• Creation a national urban policy framework

• Improving connectivity between functional urban areas Borrowed agglomeration effects

Connecting entire network

• Building regional development strategies upon functional urban areas

• Implementing effective and efficient governance mechanisms for the functional urban areas

Improving the policy framework for regional development

• There is currently:

– no national framework for regional policy and

– no explicit national urban policy framework

• Policies at the national level:

– Spatial and Infrastructure policy at the national level (SVIR)

– In terms of innovation, there has been an important change in recent years with the adoption of Top Sector Policy

• Policies at sub-national level:

– EU polices

– Provincial activities for the promotion of regional development

• Implementation a more structured and institutionalised network of stakeholders

– Horizontal and vertical coordination

– Regional ambassadors, provincial representatives, private sector

• Further involvement of provinces in the national policy strategy for infrastructure and spatial planning SVIR

• Aligning incentives from the top-sector policy to the EU smart specialisation agenda and regional cluster policy

– Exploiting policy complementarities

Improving the policy framework for regional development

There is a need to better integrate the various sectoral polices to ensure the potential complementarity gains are realised and avoid counter-productive outcomes

Getting subnational reforms right…

• A reform is needed to simplify, clarify and rebalance and decentralise further the Dutch institutional system along the idea of better governance

• The decentralisation reform reinforces the provincial role in regional development and the municipal role in social and welfare planning

• Municipalities will have to perform more task and better with less resources

• The decentralisation reform is complemented by a territorial reform aimed at reducing fragmentation

Finding the right scale for further strengthening decentralization

• In the context of decentralisation, the government should: – Take into account a medium and long time horizon for its

implementation – Provide assistance and training to municipalities in coping with

the new decentralised function – Ensure the active involvement of citizens of other local

stakeholders

• Decentralisation reform should include a broad fiscal reform. – More income and spending autonomy to subnational

governments including a tax and grant reforms

• …but the central government has a strong presence locally

• Revenue and spending autonomy is very limited

Main features of the Dutch decentralised system: a mixed nature between autonomy… and dependence

0% 20% 40% 60% 80% 100%

MexicoGreece

NetherlandsUnited Kingdom

TurkeyIreland

BelgiumHungary

LuxembourgPolandKorea

PortugalAustraliaDenmark

NorwayIsrael

SloveniaJapan

EstoniaOECD33 average

FinlandItaly

Slovak RepublicCzech Republic

FranceUnited States

CanadaAustria

New ZealandSwitzerland

GermanySweden

SpainIceland

Taxes Transfers User fees Property income Other

GreeceTurkey

N-Zealand

Ireland Lux.Portugal

Israel

Slovak Republic

HungarySlovenia

EstoniaCzech Republic

Mexico FranceKorea

PolandIcelandUnited Kingdom

Norway Italy

NetherlandsEU27

JapanAustralia Austria

OECD33United States

Germany

SwitzerlandBelgium

FinlandSpain

Sweden

Canada

Denmark

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Sub-national government tax revenue as a % of GDP

Subnational government expenditure and tax revenue as a % of GDP 2012 Categories of subnational government revenue, 2012

Source: OECD Regions at a Glance (2013) Source: OECD elaboration from OECD national accounts

• Rescaling provinces and municipalities through mergers or co-operation would improve their performance in a more decentralised context

• The strategic role of the provinces should be enhanced further to increase regional performance

Expenditure of the states/regional governments

in selected OECD countries, 2012

Getting subnational reforms right…

Thank you