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Regional development is a broad term but can be seen as a general effort to reduce regional disparities by supporting (employment- and wealth-generating) economic activities in regions. In the past, regional development policy tended to try to achieve these objectives by means of large-scale infrastructure development and by attracting inward investment. Awareness of the need for a new approach is driven by observation that past policies have failed to reduce regional disparities significantly and have not been able to help individual lagging regions to catch up, despite the allocation of significant public funding. The result is under-used economic potential and weakened social cohesion.
OECD work on regional development recognises that a new approach to regional development is emerging; one that promises more effective use of public resources and significantly better policy outcomes. This involves a shift away from redistribution and subsidies for lagging regions in favour of measures to increase the competitiveness of all regions. Some key features of this new approach to regional development include 1) a strategic concept or development strategy that covers a wide range of direct and indirect factors that affect the performance of local firms; 2) a focus on endogenous assets, and less on exogenous investments and transfers; 3) an emphasis on opportunity rather than on disadvantage; 4) a collective/negotiated governance approach involving national, regional and local government plus other stakeholders, with the central government taking a less dominant role.
OECD work on regional development covers a number of inter-related fields: regional competitiveness, multi-level governance, urban and metropolitan policy and rural development. The relationship between these different dimensions of regional development are explored in specific national contexts by means of territorial reviews. Quantitative analysis is undertaken using the OECD Regional Database which contains regional statistics and indicators for OECD member countries.
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