Regional development

The Netherlands: Recommendations to strengthen regions

 

01/09/2010 - The Netherlands is successfully transforming the way it manages specific areas of the country. Investments in infrastructure and housing are now better coordinated and focus on strong city-regions. These place-based policies strengthen regions in the Netherlands, complement other national initiatives, and fit with the growing importance of cities as economic drivers. However, accessibility and housing remain major challenges, according to OECD’s new National place-based policies in the Netherlands.

 

 Read the Report

 

Policies to bolster the economic structure of the main regions of the Netherlands could be fine-tuned, expanded and more coherent. The policy approach, as developed in the Peaks in the Delta-programme and the Randstad urgency programme (stimulating strong clusters instead of lagging regions), is an important accomplishment and should be continued. National policies should – in line with the Randstad 2040 vision- focus even more on regional comparative advantages and stimulate synergies between the different regions. For example, the national government could create science parks in order to encourage strong economic clusters.

 

Despite an ambitious programme to improve mobility and increase infrastructure investment, particularly in the Randstad, congestion costs around 0.5% of GDP per year and remains an urgent challenge. To improve mobility in the Randstad, North Brabant and Arnhem/Nijmegen the government should should plan ahead – looking to secure financing for infrastructure that will be needed in the coming decades.

 

Simplifying road pricing schemes and applying pricing mechanisms such as parking fees could also help curb congestion. In addition, some of the temporary measures in the Crisis and Recovery Act to accelerate infrastructure projects could be made permanent.

 

The report also makes a number of recommendations aimed at reducing the housing squeeze - a persistive problem in large urban regions. Given predictions that housing-starts in the coming years will be slow in many parts of the Netherlands, the government could extend national funding beyond 2010. Rental markets could be liberalised and social housing and rental subsidies targeted to people who need it most. The market for owner/occupied homes could be reformed by lowering or abolishing the transfer tax and phasing out tax credits and subsidies for home owners.

 

Improved governance would go a long way to achieving these goals. Several laudable initiatives are working: the Randstad urgency programme and a programme minister for the Randstad; the Multi-annual Programme for Infrastructure, Spatial Development and Transport (MIRT) in 2008 increased the coherence of long-term place-based investments; Randstad 2040 presents an integrated spatial vision; and the overlap between regional-economic policy and innovation policy has been minimised over the last years.

 

At the same time, there is a need for further integration, simplification and streamlining of the different budgets and regulations for place-based policies, using the MIRT as the principal mechanism for decision-making. The national programme for the Randstad should continue and be extended to other areas, e.g. the Brainport-region and Arnhem/Nijmegen.

 

For more information, please contact: Olaf Merk; +33.1.45241660 (office) +33.6.27691893 (mobile) or e-mail: olaf.merk@oecd.org

 

 

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