OECD Territorial Reviews: Slovenia

Send

ISBN Number:
9789264120570

Despite its relatively small size, Slovenia is a good illustration of the potential of regional development policy.

Its internal diversity, openness and experience of rapid structural change all reinforce the need for efficient reallocation of resources, while underscoring the need to take account of the potential positive and negative externalities associated with the shifting structure of economic activity.

With 36% of the national territory falling under Natura 2000 protection, spatial planning is particularly challenging and yet also particularly important. Given the absence of a regional tier of government and the extreme fragmentation of the municipal level of authority,

Slovenia needs to develop capacity at intermediate levels, to address policy problems that are best tackled at a scale in between the local and the national.

Read

Assessment and Recommendations

Read the Assessment and Recommendations

Key Facts

Slovenia’s regions have experienced strong growth since the mid-1990s. While there has been some increase in inter-regional disparities in both growth performance and levels of GDP per capita, this has been driven largely by the dynamism of the capital region. Even the worst-performing regions have been growing faster than the OECD average.
Inter-regional disparities remain relatively low by OECD standards. Nevertheless, two regions stand out as chronic under-performers, with per capita GDP levels falling further and further below the national average. Failure to improve their performance could impose significant remedial costs later on.
Concentration of population and economic activity is low.
The aggregate impact of the crisis on labour markets has been in line with the OECD average; the unemployment rate rose from 4.4% in 2008 to 5.9% in 2009. However, it was geographically quite concentrated: more than half of job losses (60%) occurred in two regions.
Thirty-six percent of Slovenia’s territory falls under Natura 2000 protection, the highest share in the EU.
Slovenia has 211 municipalities for a total population of about 2 million inhabitants. Slovenia does not have a regional tier of administration.

Key Policy Issues

How can governments make the most of public investment in a tight fiscal environment in a relatively small and fragmented country with no regional tier of government?
How can Slovenia create the capacity to address infrastructure, development and service-delivery issues that need to be tackled at a regional scale? What mechanisms can promote or strengthen inter-municipal or municipal-national co-operation to generate effective regional policies?
How can policy-makers combine effective support for endogenous regional growth with temporary assistance to regions experiencing severe difficulties?
What can be done to further integrate Slovenia’s regions in pan-European corridors and the EU Danube Strategy?

Key Recommendations

Strengthen existing regional structures and consider reducing their numbers in the medium term. Creating a new regional government tier should be considered only when there is a clear economic and institutional rationale, which is not evident in a country the size of Slovenia.
Streamline spatial planning procedures as well as administrative procedures for acquiring land and building permits at the municipal level.
Further develop intra-regional railway connections and cross-border connections in consultation with local authorities.
Conduct a rigorous cost-benefit analysis of special economic zones.
Facilitate municipal mergers and the development of new forms of inter-municipal co-operation. Simplify the legal procedures involved in transferring competences to joint bodies or companies. Provide additional financial incentives to jurisdictions that implement new types of co-operative relationships.
Revise the rules governing municipal finance to reduce the bias in favour of smaller municipalities. Alter arrangements for allocating investment funds from the state budget, including EU Cohesion Funds, so as to encourage scale economies and inter-municipal co-operation. Modify municipal revenue structure, through increasing reliance on the taxation of real property.
Strengthen capacity building and evaluation mechanisms for Regional Development Agencies, to ensure proper differentiation in the priorities across regions.
Develop further information and indicators at the national government level about regional economies, as well as municipal performance. Ensure the use of a standardised definition of functional regions in policy-making and develop further national analysis of regional specialisations.