The issues | Sub-national finance | Principles | Publications
Multi-level Governance: The issues
Relations across levels of government have changed over the last two decades. Decentralisation has made local and regional governments more powerful in formulating and delivering policy thereby increasing their scope for improving the competitiveness of the regional economy and the well-being of residents.
This change from a centralised and "vertical" system, has made governance more complex by involving a wider range of stakeholders at different levels. As a result bothhorizontal and vertical relationships are increasingly important. Understanding this complex network of relationships, as well as developing effective collaboration between levels of government, is critical to enable efficient policy making and service delivery.
Multilevel Governance at the OECD
OECD work on multi level governance addresses both vertical and horizontal dimensions.
The “vertical” dimension refers to the linkages between higher and lower levels of government, including their institutional, financial, and informational aspects. Local capacity building and incentives for effectiveness of sub-national levels of government are crucial issues for improving the quality and coherence of public policy.
The "horizontal" dimension refers to co-operation arrangements between regions or between municipalities. These agreements are increasingly common as a means by which to improve the effectiveness of local public service delivery and implementation of development strategies.
A multi-level governance framework has been formulated by the OECD and has been used in several areas of work related to multi-level governance including on cities and climate change, regulatory governance, sub-national finance and water governance.
OECD Principles on Effective Public Investment
To promote good practices in the area of multi-level governance of public investment, the OECD is currently developing a set of Principles on Effective public investment: a shared responsibility across levels of government, to be adopted by the OECD Council in early 2014 as an official OECD instrument.
Background and rationale
The purpose of the OECD Principles for Effective public investment: a shared responsibility across levels of government is to help governments set priorities in these areas, overcome difficulties, and orient their efforts to improve multi-level governance of public investment.
Effective public investment is important in both good times and bad. Given that public budgets across the OECD are likely to remain tight for some time, all levels of government will have to contribute to doing better with less? This means developing both their individual and collective capacities to deliver more efficient public investment. Improving multi-level governance of public investment has the potential to improve the quality of investment choices, produce efficiency gains, improve private sector participation, and bolster accountability and results.
Read more about the OECD Principles on Effective Public Investment
Water governance is one policy area in which effective multi-level governance is vital. Managing water is a complex issue involving multiple stakeholders from all levels of government with different views and objectives. A lack of effective management of interdependencies and coordination across these stakeholders can hamper the efficient design and implementation of water policy reform.
The publication Water Governance in OECD Countries: A multi-level approach identifies common governance gaps and is a tool for policy makers to carry out self-assessments and find commonalities with other regions.
More about water governance
Water Governance in OECD Countries: A multi-level approach (2011)
Multi-level Regulatory Governance
High-quality regulation at a certain level of government can be compromised by poor regulatory policies and practices at other levels. This negatively affects business and citizens, and thereby the economy as a whole. Following certain principles and good practices for high quality regulation in a coherent way, as well as facilitating co-ordination among regulatory institutions at different levels of government can bring improvements to the regulatory system as a whole.
More on regulatory governance
Multi-level Regulatory Governance: Working paper (2009)
Investing Together: Working Effectively Across Levels of Government (2013)
This report dissects the relationships different government actors form vertically, across levels of government, and also horizontally, across both sectors and jurisdictions. Sub-national actors also need to be equipped with the right skills and resources to carry out their responsibilities and to engage with stakeholders, across the public, private and civil society sectors. This report offers a toolkit to policy makers to assess their needs for capacity development.
The ful list of publications on Multi-level governance is available here.
Permanent URL: www.oecd.org/gov/regional/multilevel