This chapter examines recent developments in Slovenia’s regional development policy. It focuses on how to reinforce Slovenia’s multi-level governance system so that it can deliver its forthcoming national regional development strategy more effectively. Insights into international practices in regional-level planning and programming, cross-sectoral and multi-level co-ordination, strategy implementation and monitoring and evaluation are incorporated into the analysis. The chapter ends with recommendations to help Slovenia’s policymakers leverage multi-level governance arrangements in four main areas: territorial administration, resource capacity, government co-ordination and performance measurement.
Building More Competitive Regions in Slovenia
Abstract
Enhancing multi-level governance to support regional development in Slovenia
The forthcoming national regional development strategy can serve as an umbrella framework to help guide sectoral policy aims that are achieved through regional-level programmes and projects. Sectoral and territorial action for regional development is fragmented across ministries, regional bodies and Slovenia’s 212 municipalities. A national regional development strategy can create new opportunities to bring different sectors together to build competitiveness, reduce pressure off of Ljubljana and close regional inequality gaps.
Slovenia should continue to promote relevant policy and service delivery, as well as subnational public investment, at a larger territorial scale to manage the impact of fragmentation and limited resources. At the municipal level, inter-municipal co-operation arrangements could be expanded further, while alternative measures and incentives to promote municipal mergers could be considered. At the regional level, while establishing a full regional tier of government is not recommended, strengthening the planning and implementation capacity of the 12 existing development regions, for example through formal contracts or agreements, is a viable alternative.
Reinforcing subnational public investment capacity is necessary to ensure the implementation of the upcoming national regional development strategy. Slovenia’s subnational governments are responsible for 37.3% of total public investment, below the OECD average of 55.1%. Boosting investment capacity can mean optimising national and subnational funding channels, for example through a competitive national-level fund for territorial development, and enhancing municipal capacity through own-source revenues or block grants to support additional investment in local (development) needs.
Slovenia’s regional development agencies (RDAs) are well placed to advance their region’s development by leading strategic planning efforts, designing and implementing territorial projects in development regions, and working to assist other actors within the regional ecosystem. However, they face resource constraints. While one option is to streamline their activities, doing so can limit their ability to act as true regional development partners for national, regional and local authorities. Another option is ensuring that RDA staff capabilities and RDA resources are commensurate with their mandates and the expectations placed upon them.
Actively reinforcing horizontal and vertical co-ordination mechanisms to support the design and implementation of strategies and policies could help all levels of government meet regional development aims. Regional development activities are scattered across 19 line ministries, with few mechanisms or incentives to promote cross-sectoral co-ordination and strategic coherence. A clear co-ordination mandate for regional development and stronger institutional mechanisms, such as standards or guidelines for incorporating regional needs in national planning exercises, should be considered. Multi-level dialogue could also be expanded and reinforced.
Generating more robust performance measurement practices will allow more systematic monitoring, evaluation and reporting on sector strategies and programmes, as well as regional attractiveness. Strengthening data collection, promoting a culture of evaluation and learning, and building human resource capacity – including among RDAs – to identify and use regional development indicators could help build a shared understanding of how performance measurement can generate more effective policies and services.
Multi-level governance1 is a cornerstone of regional development (OECD, 2023[1]). No level of government can work alone to effectively design and deliver policies and services that will support a region’s growth. These are responsibilities shared by national, regional and local levels of government, involving diverse policy sectors and actors in a relationship of mutual dependence. When leveraging regional development policy to reduce territorial inequalities and bolster competitiveness in different regions, policymakers should consider the multi-level governance system – i.e. the actors, institutions, frameworks and practices that support decision making and implementation – underpinning the regional development process.
Slovenia’s multi-level governance system has been evolving over time. There is a legislative framework in place to help mobilise actors and institutions, and support place-based regional development activity at different levels of government. Moreover, planned reforms, such as amendments to the Law on the Promotion of Balanced Regional Development and the design of the forthcoming national regional development strategy, create new opportunities to reinforce the coherence and impact of regional development policy in Slovenia. Such opportunities include providing a roadmap for joint action that can guide national and subnational actors. Slovenia also has clear territorial development aims. These include reducing regional inequalities, ensuring a just net-zero transition and building competitiveness throughout the territory, lifting pressure off of Ljubljana (see Chapter 1). Developing and implementing Slovenia’s future national regional development strategy is an opportunity to advance these goals clearly and measurably. It can also serve to bridge sectoral and territorial perspectives, while ensuring that bottom-up and top-down approaches work together to advance regional development priorities (OECD, 2020[2]). This, in turn, may limit policy fragmentation and promote greater policy coherence, by setting clear parameters and priorities for regional development. Until now, line ministries have had little guidance or incentive to consider the territorially specific impacts of their sectoral policies and programmes, and to ensure that actions and resources for territorial development are better aligned. Finally, a strategy of this type can become the framework for national and subnational action that supports more efficient use of limited funding for public investment.
At the national level, the government is committed to developing and approving a long-term national regional development strategy, as more than 20 OECD Member countries have already done, according to a 2024 OECD survey (OECD, unpublished[3]). Such a strategy provides an important opportunity to steer the territorial interventions of both national and subnational actors. The national regional development strategy can, for example, be useful in helping line ministries identify how their sectors can – or are expected to – contribute to regional development. It can also highlight how regional-level interventions in their sectors can help them meet their sectoral aims.
Moreover, the national regional development strategy can guide the development of subnational-level regional development programmes. The preparation and drafting of these programmes, led by Slovenia’s RDAs on behalf of each development region, involves extensive consultation with regional businesses, municipalities and citizens, to help identify the development region’s distinctive territorial challenges and priorities (OECD, 2024[4]). Their design, therefore, represents an important, bottom-up process that allows subnational actors to identify – and ultimately address – the specific needs of their own regions. The national regional development strategy can further support this process, by encouraging subnational actors to take greater account of national priorities for territorial development.
In general, however, the national regional development strategy would benefit from stronger multi-level governance arrangements to better support its implementation. Today, these arrangements are highly dispersed – across line ministries, strategic documents and subnational actors, particularly municipalities and RDAs. Aspects of territorial administration, resource capacity, government co-ordination and performance measurement will need to be addressed for Slovenia to meet its territorial aims. The government’s commitment to a national regional development strategy is a large step in this direction. This chapter examines these aspects in turn, considering what they mean for regional development and the forthcoming strategy. It also provides a series of recommendations to reinforce Slovenia’s multi-level governance arrangements in order to optimise the strategy’s success. Achieving the aims of the forthcoming strategy will require reinforced multi-level dialogue mechanisms and a stronger regional development mandate – particularly for cross-sectoral co-ordination – at the national level. It will also require boosting the investment capacity of municipalities, and strengthening regional capacity to implement strategies and policies in support of regional development.
Slovenian national and subnational authorities are confronted with a need to manage a high degree of territorial fragmentation. Slovenia has seen its number of municipalities grow since independence, although the pattern appears to have stabilised in recent years (OECD/UCLG, 2022[5]). Between 1994 and 2017, the number of Slovenian municipalities rose from 63 to 212 (as of September 2025), following successful referendums held in the proposed new territories (Pevcin, 2018[6]; Brajnik and Lavtar, 2021[7]). More than half of these 212 municipalities have fewer than 5 000 inhabitants. Researchers have pointed to several possible contributing factors to explain this trend towards territorial fragmentation, including the chance for smaller and poorer local communities to receive funds through the fiscal equalisation mechanism by splitting off from their old territorial units, as well as cultural factors and local identity (Brajnik and Lavtar, 2021[7]). However, there is no evidence that newly formed municipalities are more economically developed overall. Moreover, a third are less developed than their mother municipality (Brajnik and Lavtar, 2021[7]).
The legislative framework governing the establishment of new municipal units was another contributing factor to municipal fragmentation in Slovenia. Prior to 2010, the Law on Local Self-Government mandated that proposed municipalities should have a minimum of 5 000 inhabitants but allowed exceptions for a minimum of 2 000 inhabitants where territorial, ethnic, historical or economic considerations were in play (Brajnik and Lavtar, 2021[7]). However, a 2010 amendment to the Law on Local Self-Government abolished these exceptions and required all proposed municipalities to have at least 5 000 inhabitants. This has helped slow the pace of territorial fragmentation (Brajnik and Lavtar, 2021[7]; Official Gazette of Slovenia, 2024[8]).
Slovenia’s municipalities are responsible for development within their administrative boundaries, together with a large range of other administrative and service tasks.2 However, larger-scale development needs (e.g. infrastructure, transport), as well as costly or complex public services (e.g. utilities) are often more appropriately – and efficiently – addressed at a regional level, thanks to economies of scale. Given Slovenia’s territorial fragmentation and the tight fiscal reality of its municipalities, investing at a regional scale is fundamental for ensuring that the objectives of the national regional development strategy can be achieved (OECD/UCLG, 2022[5]). While this is most obviously the case for infrastructure, transport, public service and digitalisation investments, it can also be relevant for innovation, small and medium-sized enterprises (SMEs), and skill development in support of labour markets.
There are a variety of paths to address this question of scale at both the municipal and regional levels. These include inter-municipal co-operation and municipal mergers at the local level, and regionalisation through a formal regional government tier or planning regions at the regional level. Both paths have their advantages and disadvantages, and they are not mutually exclusive. The Slovenian Government has already been pursuing several of these approaches. Some adjustments to existing arrangements could help better position subnational authorities to build the territorial scale required to achieve their regional development ambitions.
Inter-municipal co-operation
Inter-municipal co-operation is one way to help municipalities overcome the limitations of scale that can hinder their ability to efficiently invest in local and regional development. For example, it can help municipalities consolidate resources, streamline operations and spread fixed costs over a larger population base, reducing overall expenditure while improving service quality and reliability (OECD, forthcoming[9]). Beyond cost efficiency, inter-municipal co-operation offers municipalities the flexibility to tailor co-operation to their specific needs, including by scaling up, scaling down or even terminating co-operative agreements, depending on evolving service demand, financial constraints or strategic priorities (OECD, forthcoming[9]).
The principle of inter-municipal co-operation was defined in Slovenia’s Law on Local Self-Government as early as 1993. The law states that municipalities may co-operate with one another on local issues, pool their resources and establish different types of joint bodies (e.g. joint management bodies, joint managing authorities of public companies) or public agencies (Official Gazette of Slovenia, 2024[8]). Financial incentives for certain types of inter-municipal co-operation have been provided by the government since 2005 (OECD, 2025[10]). The Financing of Municipalities Law provides financial incentives for voluntary joint municipal administration by reimbursing 30-55% of a joint management body’s staff costs (Official Gazette of Slovenia, 2025[11]).
Since 2017, 11 types of joint services have been eligible for co-funding: municipal inspection, municipal police, legal services, municipal attorneys, internal audit, budget accounting, environmental protection, spatial planning, civil protection, fire protection and traffic management (OECD/UCLG, 2022[12]; OECD, 2025[10]). Financial incentives have driven a significant uptake in joint municipal administration in Slovenia, with the number of joint management bodies rising from 2 in 2005 to 51 in 2019 (OECD/UCLG, 2022[5]). Moreover, 202 out of 212 municipalities were involved in at least one joint management body in 2019 (OECD/UCLG, 2022[5]).
Other common forms of inter-municipal co-operation in Slovenia occur through public companies or public agencies, which can be established by municipalities to deliver public services on a collaborative basis. In the Osrednjeslovenska development region, which includes Ljubljana and 24 surrounding municipalities, 11 municipal companies jointly provide services such as waste management, heating and energy provision, and public transport (Danielewicz, 2024[13]). To ensure equal representation, each municipality holds equal levels of founding shares in joint bodies, and each municipality or mayor has one vote in the joint body (Council of Europe, 2018[14]).
Overall, Slovenia has made impressive progress in promoting inter-municipal co-operation in recent years. The strong uptake of arrangements such as joint management bodies demonstrates how, when supported by proper incentives, municipalities can and do come together to co-operate. Continued support for inter-municipal co-operation will remain a crucial policy lever for overcoming limitations of scale, improving service delivery, and enhancing municipalities’ collective capacity to invest in local and regional development. Going forward, developing more standardised local-level data on the cost, quality and accessibility of municipal services could help local governments assess more effectively where further inter-municipal co-operation may be needed. The performance measurement section of this chapter discusses subnational-level data availability and accessibility challenges in Slovenia in greater detail.
Municipal mergers
In recent decades, many OECD countries have successfully managed territorial fragmentation by merging municipalities, often despite initial political and local resistance. The approaches adopted have been either mandatory, as in Denmark, Greece and Turkey, or voluntary, as in Finland, France and Estonia (Sila and Maisonneuve, 2021[15]).
Municipal mergers have never taken place in Slovenia (OECD, 2024[4]), despite legislation permitting them. Although no additional municipalities have been created since 2017, Slovenia still has more small municipal units in terms of population than many other EU Member States. As of 2024, 50% of Slovenian municipalities had fewer than 5 000 inhabitants, compared to 38% of municipalities on average within the OECD (OECD, 2025[16]). There are advantages – and disadvantages – to smaller territorial units. On the one hand, smaller municipalities can support closer relationships between citizens and elected officials, which can reinforce the perception of a more direct and responsive local democracy. On the other hand, territorial fragmentation can increase the costs of public investment and service delivery in smaller municipalities (Sila and Maisonneuve, 2021[15]). Evidence suggests that smaller municipalities typically face a loss of economies of scale, which is particularly pronounced when delivering capital-intensive public or administrative services. This reflects the fact that smaller municipalities often have more limited financial and human resource capacity than their larger peers (Sila and Maisonneuve, 2021[15]). For instance, it can be harder for small municipalities, given their limited budgets, to mobilise sufficient resources to attract and pay staff to undertake more complex investment and procurement projects. This, in turn, can contribute to a lower number and quality of local and regional development projects overall (Sila and Maisonneuve, 2021[15]).
Slovenia has sought to encourage municipal mergers by providing financial incentives for voluntary amalgamation (Official Gazette of Slovenia, 2025[11]). When two or more neighbouring municipalities merge, the new municipality receives additional state-budget funds for three fiscal years, starting in the year after the merger. These additional funds are calculated based on the eligible expenditure of the merging municipalities in the first year, and the eligible expenditure of the new municipality in the following two years. If two municipalities merge, the new municipality receives an extra 1.5% of eligible funds. If more than two municipalities merge, the extra amount is 3% (Official Gazette of Slovenia, 2025[11]). These incentives do not appear to have been sufficient to encourage any meaningful territorial consolidation, given that no municipal mergers have taken place to date (OECD, 2024[4]).
The Slovenian Government may wish to consider alternative measures to promote mergers and help bolster the capacity of all municipalities to support local and regional investment. One option would be to introduce legislation requiring mergers of all municipalities below a certain population threshold (e.g. 5 000 inhabitants, the minimum size for a municipal unit per the Law on Local Self-Government, although this is not applied in practice) (Official Gazette of Slovenia, 2023[17]). However, this would require a legislative change which would be unlikely to garner sufficient political support, given the unpopularity of mandatory mergers (OECD, 2024[4]).
An alternative approach – and one that is consistent with Slovenia’s principle of safeguarding citizen choice in territorial organisation – would be to adjust the mix of incentives for voluntary mergers. Some European countries, such as Estonia and Ukraine, have offered generous time-limited financial incentives to encourage municipalities to merge (Box 3.1).
Between 1995 and 2014, several successive governments made attempts to reform the Estonian subnational government structure, notably by reducing the number of municipalities through voluntary municipal mergers, but without major success. In 2015, after many rounds of consultations and discussions, the preparations for a comprehensive reform were started. As a result, the Administrative Reform Act was accepted by the parliament (Riigikogu) in 2016.
Under the provisions of the law, the national government paid increased merger grants to municipalities that opted for a voluntary merger in 2016. The rate of the grant for municipalities with the minimum population size was EUR 100 per resident, instead of the more typical EUR 50. The minimum merger grant sum was EUR 300 000 and was capped at EUR 800 000 for each merging municipality, as opposed to the standard EUR 150 000 grant, capped at EUR 400 000. As a one-time bonus, municipalities that either had at least 11 000 residents or incorporated an entire county as a result of a merger would receive an additional EUR 500 000.
The one-time financial incentives were highly successful in encouraging additional municipal amalgamation. As a result, 160 local governments (roughly 80% of the total 213) decided to merge voluntarily.
Sources: (Noorkõiv, 2021[18]; OECD, 2022[19]).
Other European countries have used financial inducements for municipal amalgamation, combined with negative financial incentives for municipalities that choose not to merge (OECD, 2022[20]). In France, following previous failed attempts to encourage municipal mergers, a 2015 law introduced substantial financial incentives for small municipalities that amalgamated, while simultaneously reducing inter-governmental transfers to non-merging municipalities. The reform led to a significant drop in the number of municipalities (1 700 fewer municipalities) by 2019 (Sila and Maisonneuve, 2021[15]). Slovenia could consider a similar approach, whereby stronger financial incentives for voluntary mergers – particularly targeting smaller municipalities – are coupled with gradual reductions in transfers to municipalities below a defined population threshold, helping to shift the calculus of local communities in favour of territorial consolidation.
Regionalisation based on regional-level governments
Regionalisation reforms are a higher-tier approach to building territorial scale. Decentralised regions (i.e. elected regional governments) are the most widespread form of regional governance in the OECD and the European Union (OECD, 2022[21]). These governments are legal entities with their own budget, assets, administration and decision-making power.
Prospective regionalisation reforms have been the subject of debate in Slovenia, as the country’s constitution provides for the establishment of self-governing regions. In 2008, a draft bill that would have created 13 self-governing regions was rejected by referendum, although voter turnout was low (OECD/UCLG, 2022[5]). In 2011, a new bill that would have created six self-governing regions was abandoned, owing to disagreements regarding the size, competencies and financing of the regions. Most recently, in 2022, the National Council recommended providing additional autonomy, responsibilities and funding to a new, elective middle tier of government, but the bill was later withdrawn by the president owing to a lack of political support (Dolenjski List, 2023[22]).
The economic and institutional rationale for creating a new administrative layer of government has not yet been clearly demonstrated in a country of Slovenia’s size (OECD, 2025[23]). The 2011 OECD Territorial Review of Slovenia recommended not establishing self-governing regions in the country (OECD, 2011[24]). As of 2026, the OECD’s position on this issue had not changed. While most OECD Member countries have either an intermediate or regional/state level of government (or both), the OECD’s territorially smallest members have neither (with the exception of Denmark and the Slovak Republic) (OECD, 2011[24]; OECD, 2025[25]). Small size does not, however, negate the need to work regionally, particularly given the heterogeneity of development challenges facing Slovenian regions. OECD Member countries have taken a range of approaches to regional governance (Box 3.2).
A regional tier in a country’s territorial administrative structure can take one of a number of forms – ranging from planning regions without administrative status – as in Costa Rica, Lithuania and Slovenia – to regions with legislative powers, as in Australia or Mexico. Each is imbued with different powers and responsibilities. In certain countries, regional-level governance arrangements may combine decentralised and deconcentrated bodies – i.e. those representing the national government in the regions (as in France). They can also include RDAs, which support the design and implementation of regional development policies “on the ground” (e.g. in the Czech Republic, Switzerland or Slovenia) (Figure 3.1).
The exact choice of model, and the set of actors called upon to support it, reflect differences in the population size, administrative-territorial organisation and political dynamics of countries. Regardless of the model adopted, it is critical that certain actors be equipped with sufficient authority, resources and incentives to lead the implementation of territorial development initiatives at a regional scale. Without this, regional development priorities are unlikely to be achieved in full.
Source: (OECD, 2022[21]).
Regionalisation based on planning regions
A final way of addressing the question of investment at a larger scale is through planning regions, which can also be responsible for regional development. Slovenia currently has 12 development regions – territorial units established by the national level. While development regions have no administrative powers, each region’s regional council (also called “council of mayors”), regional development council (composed of non-governmental organisations [NGOs], local business leaders and local government representatives) and RDA are collectively responsible for supporting the design and implementation of regional development policy in their territory. For instance, they each play a role in developing and approving regional development programmes (OECD, 2022[21]). Furthermore, regional councils and the Ministry for Cohesion and Regional Development (MCRD) sign regional development agreements establishing investment needs and priorities. The regional development agreements serve as a legal basis for the allocation of EU funds to each development region, according to Cohesion Policy priorities. Structurally, this subnational governance arrangement appears to work for Slovenia. It represents an important platform for implementing the forthcoming national regional development strategy, especially in terms of meeting its goals in a way that also satisfies regional and local needs.
Using contracts to reinforce the role of development regions
The structure adopted by Slovenia could be further reinforced through the use of national-regional contracts that are explicitly associated with ministerial support and funds. When established among different tiers of government, contracts are generally used for one of three reasons (Charbit and Romano, 2017[26]). First, they can be used to empower subnational governments by helping them develop new capacities and gain greater autonomy in dealing with regional development policies. Second, they can be used to delegate the implementation of specific tasks to a capable subnational government. Delegation often rests on the assumption that in some cases, regional and local actors are better positioned to implement national policies at the local level, given their particular knowledge of local needs. Third, national-regional contracts are used to share policies. Namely, they set the framework for central and subnational governments to co-operate in order to fulfil competencies that are either overlapping or not fully addressed (e.g. new domains in environmental policies) (Annex 3.A). Contracts can support information sharing and mutual understanding while also reducing transactional costs.
Slovenia could more actively use formal contracts and agreements – particularly with respect to empowerment and sharing – to guide regional development, both at the regional and local levels. At the regional level, an agreement between the MCRD and/or other ministries with each regional council could support the design and implementation of regional development programmes that channel investment to priority development areas aligned with the national regional development strategy and reflective of territorial needs.
Iceland’s approach to regional contracts might be particularly relevant to Slovenia and its regional councils in several ways (Box 3.3). Slovenia could use a similar agreement process, for example between specific ministries (e.g. MCRD; Ministry of Economy, Tourism and Sport; Ministry of the Environment, Climate and Energy; Ministry of Transport) and the most relevant regional bodies (e.g. regional councils, regional associations of local authorities, or possibly RDAs), to develop and fund (at least in part) action plans focused on achieving regional-level priorities that also align with national strategic objectives.
Iceland’s regional plans of action are five-year agreements developed for each of the country’s eight statistical regions. Introduced in 2012, they are the primary legal tool through which municipalities co-operate regionally and co-ordinate development priorities. The plans guide investments in priority areas related to regional development, cultural initiatives and social progress. These include projects designed to strengthen local communities, support economic diversification and enhance quality of life across Iceland’s regions.
Ministries contribute to funding the implementation of the regional plans of action, and the plans have become a mechanism for connecting national policy goals with local action. The regional plans of action started with two participating ministries, the Ministry of Infrastructure and the Ministry of Culture, Innovation and Higher Education, both of which contribute funding to implement the plans. As time went on, the Ministry of Environment, Energy and Climate also decided to participate, recognising the value of the regional plans of action as a bridge between national and local governments, and a way to meet national objectives at the regional level. There is an expectation that the Ministry of Industries will take on a direct role in the agreements in the near future.
Over time, the plans have strengthened the regions’ ability to develop and implement a shared strategic vision. At the end of the first five-year period, for example, an independent report on the results of the action plans reported that “the regional associations are now well-equipped to take on increased responsibility and manage additional funding.”
It is important to recall that instruments such as multi-level agreements do not have to be applied all at once. One possibility is for the government to consider experimenting, or piloting, this type of agreement with a small set of development regions. This would allow monitoring of progress, giving all actors time to learn and adjust the process, and then adapting it if necessary. After a specified period of experimentation, and with a clear understanding of the results, the government could decide to roll out the approach out more widely.
Successfully implementing the national regional development strategy, as well as the European Union’s National Regional Partnership Plans for the 2028-2034 programming period, will depend significantly on the financial and human resources available. As the design of the strategy advances, policymakers in Slovenia may wish to consider how to optimise the funding and financing mix to best support the investment necessary for its implementation. This includes reinforcing investment capacity among Slovenia’s subnational governments. In 2023, subnational governments in OECD Member countries were responsible for 55% of public investment (48% in unitary countries) on average. In Slovenia, subnational governments were responsible for 37.3% of total public investment – significantly less than either the OECD (55.1%) or the EU (54.9%) averages (Figure 3.2). When considering local government investment alone as a percentage of total public investment, Slovenia’s share (37.3%) was also below the OECD average (44.2%) (OECD, 2025[29]).
Source: (OECD, 2025[29]).
Regional development policymakers may also wish to consider bolstering the funding available for institutions such as RDAs, which support the implementation of regional development activities at the subnational level. Likewise, they may wish to take steps to strengthen the institutional and administrative capacity of different actors involved in regional development efforts. Doing so could contribute to fully operationalising the strategy.
Funding for regional development in Slovenia: Balancing the mix of funding mechanisms
In the 2014-2020 programming period, Cohesion Policy funding accounted for 28.2% of total public investment in Slovenia (equivalent to 1.14% of gross domestic product [GDP]) (European Commission, 2024[30]) (European Commission, 2021[31]). However, as in many EU Member States, regional development in Slovenia is predominantly funded through EU Cohesion Policy funds, particularly at the subnational level. Other large EU funds supporting Slovenia’s regional development are the Recovery and Resilience Facility funds.3 Slovenia also actively participates in centralised EU calls for proposals (e.g. Horizon Europe). National-level funding for regional development can come from at least two sources. One is line ministries, including the MCRD. Another is the Slovenian Regional Development Fund, a public financial fund for municipal and private-sector actors. Local authorities can also invest in regional development through own-source resources, through borrowing, or through public-private partnerships (PPPs). The challenge confronting Slovenia as it prepares to fund its regional development objectives and priorities is working towards a better balance between investment funding with Cohesion Policy funds and investment funding through other sources (OECD, 2024[4]).
Cohesion Policy funds
A strong reliance on Cohesion Policy funds to advance regional development aims at the subnational level is not unique to Slovenia, but it does come with several sets of implications to be considered. One such set has to do with the potential impact on funding territorial needs and/or limiting territorial inequalities. On the one hand, places whose territorial needs, priorities or capacities do not align with Cohesion Policy objectives or eligibility criteria may remain underfunded. On the other hand, regional and local actors are encouraged to seek funding for projects based on their alignment with Cohesion Policy priorities, rather their identified territorial needs and objectives. For example, interviews revealed that local actors sometimes pursue projects in specific areas – such as digitalisation – because such topics align with EU objectives and are a source of project funding (OECD, 2024[4]). Incentives to “follow the money” risk contributing to misalignments between investment decisions and regional development needs.
Another set of implications relates to access to funding. The administrative processes associated with Cohesion Policy and other EU funds can often be quite complex. Tapping into them requires a degree of capacity that some potential beneficiaries – such as micro and small enterprises or smaller public administrations – do not have. This may be particularly important in Slovenia, where SMEs accounted for 99.8% of all enterprises in 2023 (Republic of Slovenia, 2024[32]). Complexity and administrative burdens can dissuade these possible beneficiaries from using Cohesion Policy or other EU funds (OECD, 2020[33]; OECD, 2025[34]) – potentially restricting the pool of beneficiaries and creating the possibility that only well-capacitated beneficiaries (i.e. larger municipalities, RDAs, large companies, better-resourced SMEs, NGOs) receive funding. The result could be that funds concentrate in certain areas, reinforcing rather than reducing territorial inequalities.
The last set of implications stem from Cohesion Policy itself. The total value of Cohesion Policy funds (i.e. EU plus national co-financing contributions) received by a country varies from period to period. In Slovenia, this value declined from EUR 5.6 billion in the 2014-2020 period to EUR 4.5 billion in the 2021-2027 period (European Commission, 2025[35]). If this downward trend continues in the 2028-2034 period, there will evidently be less EU funding available. Furthermore, the enlargement of potential investment areas during what remains of the 2021-20274 programme, and the announced shift to an allocation structure based on National and Regional Partnership Plans in 2028-2034, could lead to adjusted criteria that change the types of investments eligible for EU funds (European Commission, 2025[36]).
As long as Cohesion Policy funds remain available, Slovenia will be able to use them to fund programmes and projects that support both EU and Slovenian regional development objectives. This is entirely logical, given that the aim of Cohesion Policy – to reduce territorial inequalities in Europe and between European regions – mirrors that of the national regional development strategy (to reduce territorial inequalities in Slovenia). However, the government may wish to shore up any Cohesion Policy funding gaps in specific investment areas by further mobilising other national and subnational funding sources. This becomes increasingly important if Cohesion Policy funding levels decrease in future periods (OECD, 2025[37]; European Commission, 2025[38]).
Optimising national level funds for investment in regional development
Given the implications associated with a large reliance on Cohesion Policy funding outlined above, it will be important for Slovenia to begin working towards either mobilising additional funds for investment from existing sources or expanding the mix of funding sources for regional development. To ensure that funding needs are well identified and optimally channelled, it can be valuable to determine the complementarities and gaps between EU funding sources and national and subnational regional development priorities. This could be done, for example, as part of a multi-stakeholder consultation process for the forthcoming action plan supporting the implementation of the national regional development strategy. Once the investment goals are mapped and the potential for EU funding opportunities to support them properly considered, it will be easier to identify the level of non-EU investment funding necessary and the alternative funding mechanisms available. Slovenia could consider a number of potential mechanisms at the national level.
The first option – line ministry investment – is possibly the most traditional. Funds from line ministry budgets, including the MCRD, can be invested in regions by the relevant ministry as part of its own programming (OECD, 2024[4]). Ministries can also provide grants for subnational investments that serve to advance sectoral objectives at a regional or local level (OECD, 2024[4]). Increasing investment by line ministries, without increasing budgets, could be achieved by channelling a portion of their existing budgets into a specific ministerial budget line for funding projects that clearly contribute to regional development objectives. In other words, the ministerial budget remains the same, but there is a clear stipulation on spending to support regional development. The stipulation for that specific budget line could guide funds to be allocated to projects that are relevant to line ministries’ own sectors and included in regional development programmes, provided these are consistent with national, regional and local priorities. Such an approach could help all levels of government integrate regional development objectives more systematically into sectoral policies and programmes, rather than considering them as secondary.
A second possibility is for the government to establish and then allocate resources through a (competitive) fund for territorial development. Funds could then be allocated to municipal governments (or regional councils) for investment in regional-level projects. These projects could be put forward by the RDAs or by a group of municipalities. The objective is for the funds to be invested in large-scale, multi-municipal projects. Alternatively, funds could be allocated through a national-regional contractual agreement, as in France. They could also be allocated on a competitive basis, with clear eligibility criteria rewarding multiple party, or fully regional projects that advance the national strategy and subnational level priorities. Consideration may be given to earmarking a percentage of the fund’s resources to projects for the regions most in need. Various OECD Member countries, including Chile, France, Korea, New Zealand and the United Kingdom, have established national territorial development funds (Box 3.4). How these funds are resourced can depend on the country. In Chile, funding comes directly from the national government, whereas it comes from multiple sources in France. Some countries legally require that a percentage of GDP be set aside to sustain the fund. Slovenia could use such a fund to allocate investment resources to eligible regional development projects that align with national and subnational priorities.
A variety of OECD Member countries have a dedicated fund for territorial development to encourage subnational governments to design and implement projects aligned with national, regional and local development objectives. These funds can be applicable to all territories or target specific areas, as in Korea, and be allocated at the discretion of the national or subnational levels.
National Regional Development Fund, Chile
Chile’s National Regional Development Fund (Fondo Nacional de Desarrollo Regional) is the primary mechanism for funding territorial development and is managed by the Undersecretary for Regional and Administrative Development (Subsecretaría de Desarrollo Regional y Administratívo). It was created in 1974 to support subnational public investment for regional development and ensure territorial compensation. Funds are distributed to Chile’s regions according to socio-economic and territorial characteristics, and can also be allocated for emergency situations. Regional governments receive an envelope of funds which they then attribute to selected projects presented by municipalities and municipal corporations.
National Fund for Planning and Territorial Development, France
Established by law in 1995, France’s National Fund for Planning and Territorial Development (Fonds National d’Aménagement et de Développement du Territoire) was created to support projects contributing to local economic development, urban and rural planning, transportation, cultural heritage preservation, social inclusion and environmental protection. The initiative receives funding from the French national government, regional authorities and EU Cohesion Policy funds, and can help regions meet obligations established in national-regional contracts – e.g. Contrats de plan État-Région (CPER) 2021-2027 and Contrats de plan interrégionaux (CPIER). The fund focuses on projects relating to engineering, promoting employment and increasing territorial attractiveness, as well as supporting innovative or experimental actions in planning sustainable development and territorial cohesion. Funds are distributed based on eligibility criteria and annually established use and distribution rules. Potential beneficiaries include natural or legal persons under private law (e.g. associations, firms, trade unions) and public bodies (e.g. local authorities, public interest groups).
Account for Developing Underdeveloped Areas, Korea
Korea’s Regional Development Assistance Act allows provincial governors and heads of cities and counties to establish a special account for developing underdeveloped areas. These accounts are composed of funds transferred from the national general account, government subsidies, individual and corporate donations and other revenues. Funds from the account can be used to conduct ex ante analysis of regional development project plans, provide subsidies or loans to underdeveloped areas, or for other matters according to municipal ordinances.
Regional Infrastructure Fund, New Zealand
In New Zealand, the national government allocates funds for regional development projects through the Regional Infrastructure Fund. Significantly, it aims to boost regional growth and productivity outside of metropolitan areas. Auckland, Wellington and Christchurch, New Zealand’s three largest cities, are not eligible for the fund. Regional and local councils can apply for competitively awarded project funding that aligns with their region’s strategic priorities.
Shared Prosperity Fund, United Kingdom
In the United Kingdom, the Shared Prosperity Fund replaced EU funds for regional development post-Brexit. In an innovation compared to the EU system, conditional funding is distributed directly to lead local authorities (i.e. Combined Mayoral Authorities and the Greater London Authority). These local authorities are afforded a wide berth of flexibility to design and implement investment plans that meet their local needs and objectives, as long as these plans are consistent with the fund’s three investment priorities: (i) business support; (ii) communities and place; and (iii) people and skills.
A third option would be to work closely with the existing Slovenian Regional Development Fund. This publicly owned fund grants long-term loans at preferential interest rates to municipalities, NGOs and private-sector actors (e.g. entrepreneurs, co-operatives, farmers and agricultural holdings). In addition to subsidised loans, it offers loan guarantees, equity products, capital investments and pre-financing. Finally, the fund is a certifying authority for cross-border projects. At the end of 2024, the fund had an outstanding guarantee volume of about EUR 125 000 (OECD, 2025[10]). Working with the Fund to identify ways it can further increase its impact – potentially through an expanded mandate or additional resources, could be a third way to boost regional development funding for local and private sector actors (OECD, 2024[45]).
Strengthening municipal capacity to invest in regional – and local – development
Stronger public investment capacity by municipalities would also contribute to meeting regional and local development aims. Yet municipal capacity to finance public investment appears tight in Slovenia. Subnational public investment as a percentage of total public investment in Slovenia is rather low at 37.3%, compared to the OECD average for public investment by local governments alone (44.2%) and the overall OECD (55.1%) and EU (54.9%) averages for subnational governments (OECD, 2025[25]). Building local investment capacity, which can help diversify and target funding sources for investing in regional and local development, will partly depend on increasing municipal financial autonomy, for example through stronger municipal own-source revenue generation (Box 3.5). It could also mean building capacity to manage other types of investment funding, including borrowing on capital markets and entering into PPPs.
The Local Autonomy Index measures seven dimensions of local autonomy.5 One of these is financial autonomy, which is composed of three elements:
Financial self-reliance looks at the share of revenues that subnational governments derive through own-source revenues. Locally levied taxes, as well as user charges and fees, provide subnational governments with vital resources which – ideally – can be channelled towards projects that address important local priorities.
Fiscal autonomy considers the extent to which subnational governments can set the base and rate of different taxes – which, depending on the tax-sharing arrangements and own-source revenues, could also help fund their development priorities.
Borrowing autonomy considers the rules under which subnational governments can take on debt to finance capital projects.
Of the 57 countries in the Local Authority Index, Slovenia’s mean Local Autonomy score for 2015-2020 was 53.20 out of 100 points, roughly on par with the overall mean of 57.16.6 However, when considering financial autonomy,7 Slovenia scored 29.76 points, significantly lower than the 2015-2020 overall mean of 53.48. Among EU Member States, this places it on a par with Hungary (also at 29.76), with only Latvia scoring lower (15.48) (European Commission, 2022[46]). In all three components of the Local Autonomy Index’ financial autonomy indicator, Slovenia’s municipal performance is muted, scoring well below the country average for each. Given this limited level of financial autonomy, creating new opportunities for municipalities to generate revenue could strengthen their ability to invest in their local and regional development needs. For example, municipal revenues could be diversified through new fiscal decentralisation arrangements, such as devolving current national taxes or considering new, locally levied taxes.
Source: (European Commission, 2022[46]).
Slovenia’s municipal funding system ensures that municipalities receive the revenue needed to provide core public services, including during times of crisis, when income tax revenues may decrease significantly (OECD, 2025[10]). The majority of this revenue – 77.4% – comes from grants and transfers from the national government,8 significantly higher than the OECD (39.7%) and EU (46.0%) averages (OECD, 2025[25]).9 According to the OECD method of classification, taxes represent 5.2% of Slovenian municipal revenue –significantly lower than the OECD (43.3%) and EU (39.9%) averages. Own-source revenues – i.e. income generated and kept by the municipality itself – are most often generated through taxes, user charges and fees. A large share of municipal own-source revenue comes from building land use (4.7% of subnational revenue) and property tax (91.5%), together with user charges and fees (OECD, 2025[25]). In this latter category, Slovenia performs strongly, with 15.6% of municipal revenues derived from other local taxes, tariffs and fees,10 compared to the OECD (13.7%) and EU (10.7%) averages (OECD, 2025[25]). Overall, however, actual own-source revenue appears limited among Slovenia’s municipalities, affecting their ability to determine when, how and how much to invest in order to realise their unique territorial development priorities.
Slovenian local governments have borrowing rights, another way of financing their capital expenditures. Borrowing typically targets specific areas (such as “soft” investment European projects and some infrastructure, including water, sewage and housing) and requires prior consent from the Ministry of Finance (OECD/UCLG, 2022[12]). Municipal borrowing reached 2.7% of GDP in 2023, compared to 1.5% in 2010. While this is on par with or higher than some of the benchmark countries, it is lower than OECD (21.5%) and EU (11.4%) averages. It is also lower than the average for OECD local governments alone (5.1%) (OECD, 2025[25]).
To reinforce the investment capacity of its municipalities, Slovenia could consider helping them build their financial autonomy. One way to this end would be to consider devolving some existing environmental taxes and fees to local authorities. Of the EU countries, Slovenia had the fourth-highest share of environmental taxes as a percentage of GDP in 2022 (2.9%, compared to an EU average of 2%) and the sixth-highest share of environmental taxes in total tax revenue (7.6%, compared to an EU average of 4.9%) (Srdelić, 2024[47]). While Slovenia’s direct and indirect environmental taxes target transport, energy production and pollution,11 the government might also wish to consider local taxes or fees on landfill use, on the environmental damage caused by businesses, or on the sale of disposable plastic products, for example. Italy and Sweden have adopted new taxes on the sale of disposable plastic products, which support local government budgets (Normattiva, 2023[48]) (OECD, 2024[49]). Expanding the revenue-generating power of municipalities could help them further diversify their revenue stream while advancing environmental and green transition policy aims. Any adjustments to Slovenia’s subnational taxes, however, require a careful and detailed assessment of how any changes to the tax system would affect the financial/fiscal capacity of individuals and firms.
Subnational PPPs are another pathway for Slovenia’s municipalities to finance investment. Local authorities are more likely to use PPPs for specific sectors or services, such as waste and water management and kindergartens. To promote the use of PPPs at the subnational level, Slovenia’s Ministry of Finance created a council of experts to advise municipalities on negotiating and implementing PPPs (OECD/UCLG, 2022[12]). Under the right conditions, PPPs can enable subnational governments to leverage private-sector expertise, innovation and resources to deliver projects more efficiently and effectively. This can be particularly beneficial for infrastructure projects that require significant upfront investment, such as transportation networks, energy systems and medical centres. Ordinarily, however, only larger cities have the fiscal and institutional capacities necessary to make PPPs work, and several partnerships have been entered into by the Municipality of Ljubljana (Municipality of Ljubljana, n.d.[50]). This means that PPPs are generally not appropriate for small local governments. They are typically also not appropriate for small projects, where value for money can be limited and commercial viability is questionable (OECD, 2024[49]). Some countries, such as the United Kingdom, manage this challenge by bundling PPPs or involving multiple levels of government in order to encourage economies of scale (Box 3.6).
In the United Kingdom, strategic partnering models have included the Local Improvement Finance Trust scheme, which aggregates smaller health projects into larger schemes undertaken via a joint venture involving the central government (Partnerships for Health), the local health body and a private partner. A similar model was put in place for schools. The Building Schools for the Future programme similarly involved aggregating school projects via a joint venture (a local education partnership) that brought together the central government (Partnerships for Schools), the local authority and a private partner to develop and deliver school projects via private-finance initiatives (PFIs) or traditional design-build contracts.
At the local level, multi-authority procurement has involved different local authorities either jointly procuring an asset and separately contracting for services, or jointly procuring both the asset and services. Such joint procurement was encouraged by the central government and the local government association as a way to increase procurement efficiency.
Source: (OECD, 2018[51]).
Exploring opportunities to bundle subnational PPPs could be valuable in Slovenia due to the high level of territorial fragmentation. If there are capacity concerns, the government could offer support and guidance to ensure that subnational governments are well-informed regarding the potential benefits and risks of PPPs, as well as the relevant legal and regulatory provisions. Latvia has developed a PPP risk-sharing tool for local authorities highlighting 16 types of investment risks across different infrastructure projects. Local officials can identify specific risks; the tool generates corresponding advice and a template for contracts (OECD, unpublished[52]). The government could also build the capacity of subnational authorities to administer PPPs and deliver investment projects effectively while managing risks. This could include providing information and training to local governments on how to assess the value-added of PPPs, how to manage partnerships with the private sector, and how to establish a transparent system that can track the use of public funding of PPPs and ensure their effectiveness.
Realistically, however, without strict control mechanisms, PPPs can lead to regulatory capture, conflicts of interest and corruption, potentially resulting in long-term impacts on governments’ fiscal capacity and trust in government. In sum, PPPs – especially at the subnational level – should be used only when they can produce greater value for money than would be provided by the delivery of public services or investment through traditional means. In practice, this means that they should primarily be directed towards large-scale projects in priority infrastructure sectors (OECD, 2022[20]).
Building subnational capacity to access and manage investment resources
Implementing the national regional development strategy will not only depend on EU investment resources but on the ability of subnational actors in the public, private and not-for-profit sectors to identify, access and manage these and other investment resources efficiently. This includes using investment programming and support mechanisms established at the EU level (e.g. integrated territorial investments, community-led local development initiatives, Interreg programmes); sectoral initiatives at the national level; and regional development programmes and regional development agreements at the regional and local levels. In Slovenia, municipalities, the private and not-for-profit sectors, and RDAs are all important beneficiaries of investment resources (OECD, 2024[4]). Yet the small size of many of Slovenia’s municipalities and businesses – almost all firms are classified as SMEs (Republic of Slovenia, 2024[32]) – could mean limited administrative capacity to access, compete for and implement investment funds. This is another reason why addressing municipal fragmentation and creating fiscal space is fundamental. Ensuring that Slovenian subnational institutions have sufficient resources and capacity to design, implement and co-finance development initiatives is a necessary pre-condition for effectively managing EU funds and meeting strategic objectives.
Recent work by the OECD on building the administrative capacity of managing authorities and beneficiaries of EU Cohesion Policy funding found a series of persistent institutional capacity gaps (OECD, 2025[34]) (OECD, 2020[33]). These include internal limitations on technical and planning expertise, as well as human and financial resource challenges. The OECD analysis found that beneficiaries who reported a lack of technical expertise (e.g. in financial management, public procurement, data analysis) were more likely to perceive EU project implementation as challenging. The link between this gap and implementation challenges suggests a need to further strengthen beneficiaries’ technical capacity. Underlying weaknesses in financial and human resources among subnational public beneficiaries (Figure 3.3) could also stem from structural factors, such as restricted fiscal autonomy or difficulty in attracting and retaining skilled staff (OECD, 2025[34]). A perceived shortage of thematic expertise (e.g. in social innovation and green transition), together with administrative burden and procedural complexity, were additional capacity constraints. About 84% of surveyed subnational public beneficiaries cited the challenge of lacking thematic expertise, while administrative complexity – pertinent to all – was a particularly pressing issue for non-public beneficiaries (OECD, 2025[34]).
% of survey beneficiaries who reported having the following experts/resources in their organisations to design and implement EU-funded projects
Note: Total respondents = 1 058. National public (88). Subnational public (555). Non-public (private, civil society organisation, universities, etc.) (415).
Source: (OECD, 2025[34]).
The OECD survey did not include Slovenian beneficiaries, and an in-depth analysis of beneficiary capacity in Slovenia is outside of the scope of this report. Nevertheless, insights from the study can be valuable for building beneficiary capacity in Slovenia – particularly when absorption capacity for Cohesion Policy funds is either low or concentrated at the very end of the programming period, as appears to be the case in many EU Member States, including Slovenia12 (European Commission, 2025[53]). Mapping subnational beneficiary capacity gaps in Slovenia and addressing these through targeted policy interventions will be critical. The OECD’s Managing Authority Toolkit for Beneficiary Capacity Building under Cohesion Policy can be of some assistance (OECD, 2025[54]). Such interventions could include investing in building subnational fiscal capacity by encouraging continuous training, upskilling programmes and experience sharing in investment topics related to Cohesion Policy (OECD, 2023[1]; OECD, 2025[34]). In addition, filling these institutional capacity gaps requires incremental and long-term effort with commitment from all levels of government and the public-sector workforce to continually develop their skills (OECD, 2023[1]; OECD, 2025[34]).
Strengthening the role of RDAs to advance national and subnational regional development goals
OECD Member countries are increasingly relying on RDAs to contribute to the design and implementation of national and regional development programmes, and support the co-ordination of public investment for regional development (OECD, 2019[55]). One advantage of RDAs is their ability to proactively implement a regional development and investment agenda “on the ground”. In Ireland or the Netherlands, for example, RDAs invest mainly in innovative and fast-growing regional companies (Dutch Government, 2025[56]). Another advantage is their ability to foster greater understanding and stronger working relationships among governmental and non-governmental actors. They can also help generate international ties and expand markets for businesses of all sizes (OECD, 2016[57]). There is no standard form or service set for RDAs, and they differ based on country and need. Overall, however, they have strong potential for advancing national and subnational regional development goals, and can help co-ordinate development activity from the bottom up (Box 3.7).
RDAs perform diverse functions. They can serve as networks to organise national interventions for regional development within a decentralised context, or to help national and subnational actors join up policy initiatives or actions across sectors in a same region. They can also help entrepreneurs and SMEs promote innovation, develop clusters and attract investment, while acting as a one-stop-shop for firms to obtain information on programmes and support in accessing project funding. Many RDAs also support territorial strategic planning, either through direct responsibility for such plans or by supporting the development of more specialised plans, such as sectoral strategies or territorial promotion strategies. Finally, they can work with regional partners to advance development objectives.
Canadian RDAs (Canada)
The seven Canadian RDAs are part of the government’s Innovation and Skills Plan, and help address economic challenges in Canada’s provinces. Their work includes building on regional and local economic assets and strengths; supporting business growth, productivity and innovation; helping SMEs effectively compete globally; and ensuring that regional growth strategies eliminate regional gaps and align with federal government objectives.
Centres for Economic Development, Transport and the Environment (ELY Centres, Finland)
Finland’s 15 ELY Centres are a form of cross-sectoral, decentralised national action to support regional competitiveness, well-being and sustainable development. They cover a range of issues, from business and industry support (i.e. labour force and skills), transport and infrastructure, to the environment and natural resources.
Enterprise Ireland (Ireland)
Enterprise Ireland is a government entity with responsibility for developing and growing Irish enterprise globally. It works with regions to build business scale, innovate and expand their reach, as well as navigate trade disruptions and diversify exports. It is also dedicated to promoting balanced regional development, ensuring growth and investment throughout the country. Specific Enterprise Ireland activities include making direct investments in early-stage Irish companies and working with Irish businesses to support skill development and bolster firms’ entry into international export markets.
Sources: (OECD, 2020[2]; Enterprise Ireland, 2025[58]).
Slovenia’s RDAs are an important resource for the national government, local authorities, local and regional firms, and other regional development stakeholders. They carry out strategic planning-related tasks, such as supporting the design, monitoring and evaluation of regional development programmes (Official Gazette of Slovenia, 2023[17]). They also design and implement territorial projects in development regions and work to assist other actors within the regional ecosystem, such as municipalities and the private sector, with their own territorial initiatives (OECD, 2024[4]). Furthermore, they provide certain market-based services, such as consulting and advisory services for private-sector clients, complementing the work of national and/or regional innovation agencies (OECD, 2024[4]). Strengthening the effectiveness of RDAs goes hand-in-hand with the regionalisation approach adopted by Slovenia. Doing so, however, would mean addressing the resource constraints they face.
Providing additional financial sustainability for RDAs
Slovenia’s RDAs would benefit from an increased ability to allocate sufficient resources to their full range of regional development responsibilities. In response to an OECD project questionnaire, all but one of the surveyed RDAs identified a lack of financial resources as a leading challenge to fulfilling their tasks and responsibilities (OECD, 2024[45]). As of 2024, over half (56%) of RDA revenues, on average, came from responding to EU Cohesion Policy project calls, which, logically, are earmarked for implementing relevant projects. This is not at all atypical for EU countries, where RDAs often rely significantly on EU funding to support their initiatives, especially in research and innovation (OECD, unpublished[59]). Yet given the regional governance model being pursued, ensuring that such resources can be secured should be a priority, particularly if RDAs are expected to play a leading role in advancing territorial development efforts at a regional scale.
RDAs’ access to and experience with EU funds generates a significant amount of internal capacity to implement territorial development projects in their regions. It also provides RDAs with a high level of expertise in navigating competitive EU funding mechanisms. This benefits other regional actors when RDAs can help them access and manage EU funds more effectively (OECD, 2024[4]). Furthermore, given their experience in designing and implementing EU-funded projects, RDAs are ideally positioned to help link national strategic objectives with EU funding opportunities while taking a place-based, regionally driven approach. This is also of direct value to supporting the implementation of the national regional development strategy.
The heavy focus of RDAs on securing and maintaining EU project funding for their own operations, however, risks limiting their ability to focus on other essential regional development tasks. For example, their human resources’ capacity to work with smaller municipalities or private-sector entities could be constrained (Government of Slovenia, 2024[60]). This is particularly important as smaller municipalities and non-public beneficiaries may lack the thematic expertise or knowledge of EU calls; they may also have limited strategic capacity to design high-quality EU project proposals, or administrative capacity to take on complex or burdensome application and management processes (OECD, 2025[37]). Over time, this carries a that RDAs will no longer be able to contribute to the development needs and priorities of potential public- and private-sector beneficiaries because they are too busy with their own projects.
Boosting the financial sustainability of its RDAs may be crucial to the success of the regional model in place and to channelling public investment to achieve the aims of the national regional development strategy. Currently, RDAs are responsible for any combination (generally all) of the following: developing and co-ordinating regional development programmes, providing market-based services, engaging in EU projects (from responding to project calls, to managing and implementing projects) and advising local authorities, firms and other stakeholders accessing EU funds. In light of resource constraints, this mandate could be streamlined to cover only co-ordination and planning for regional development. However, this is too limiting and will not permit RDAs to act as true regional development partners for the government, the regional development councils or the municipalities. The current approach is one wherein RDAs undertake general development tasks, as set out in the Law on the Promotion of Balanced Regional Development, and then undertake additional ones based on their capacity and the needs of the region (Official Gazette of Slovenia, 2015[61]). This seems a reasonable approach if the objective is broad-spectrum development assistance for actors in the regional, local, public, private and third sectors. However, RDA resources must be commensurate with both their mandates and the expectations placed on them.
One option with respect to resources would be to encourage RDAs to supplement their operational budgets through greater revenue generation from market-based services. In 2024, all but one of Slovenia’s RDAs derived a portion of their revenues from market-based activities, with the share of market-based revenues ranging from 0% (RDA Savinjska) to 34% (RDA Jugovzhodna) (OECD, 2025[62]). The majority of RDAs, however, derive less than 10% of their revenues from market-based services (OECD, 2025[62]).
Bolstering market-based revenues could be done by expanding outreach to prospective private clients to raise awareness of existing paid services, or diversifying RDA service offerings to meet emerging business needs. However, any such expansion would need to be preceded by a careful market assessment, to determine whether there is sufficient demand to justify the allocation of human and financial resources towards delivering these paid services, as well as the RDAs’ actual capacity to do so. Moreover, a broader challenge is the possibility that providing market-based services will detract from RDAs’ core mandate of performing regional development tasks in the broader public interest (OECD, 2025[10]). For example, if market-based services were prioritised, a greater share of RDAs’ activities would risk being shaped by clients’ ability to pay, rather than by the specific development needs of beneficiaries within regions.
An alternative approach to bolstering the financial sustainability of RDAs would be to encourage municipalities to provide additional financial contributions. While this could help increase operational budgets and support additional staffing needs, it would also come with similar distributional drawbacks. For example, as some smaller municipalities face tighter budget constraints than large municipalities, it is unlikely that all municipalities would be able to make equal additional financial contributions (OECD, 2025[37]). There is therefore a possibility that the bulk of new RDA funding would be provided by larger municipalities and/or municipalities with greater financial autonomy. The associated risk is that any additional RDA resources become primarily allocated to support beneficiaries in higher-contributing municipalities, potentially overlooking the specific needs of other territories (OECD, 2025[37]). One way of avoiding this risk may be to enter into a formal contract or agreement with all municipalities in a region regarding the equitable allocation of additional funds.
An additional option to strengthen the financial sustainability of RDAs would be for the national government to provide additional funding to support their operations, either directly from the national budget or through a dedicated grant. When compared with the other options, this would have the significant benefit of providing RDAs with leeway to support any regional beneficiaries with specific territorial needs, rather than only those that have spare financial resources to pay for additional services or projects. This, in turn, would enhance their credibility in fulfilling their public-service mission of providing technical support to the whole region, as mandated by legislation (Official Gazette of Slovenia, 2023[17]).
The success and longevity of Slovenia’s forthcoming national regional development strategy will depend to a large degree on the institutional arrangements supporting its design and implementation. Some of these arrangements are firmly in place, particularly with respect to legislation, which not only establishes the structure and responsibilities of territorial administrations, but also creates the legal basis for regional development policies and programmes (Annex 3.B). Importantly, the legislative structure also establishes the principle of cross-sectoral and multi-level co-ordination of regional development policy. Despite this, at the national level, regional development activity is fragmented across line ministries, which can create overlap or duplication, as well as competition for scarce resources. This fragmentation and need for effective co-ordination is also highlighted in Slovenia’s EU Cohesion Policy programme. While the Slovenian Cohesion Policy fund is concentrated in one programme, it covers 30 objectives and 227 different interventions. This places Slovenia at the far end of national programmes across the European Union in terms of number of specific objectives with respect to the total funding available and calls for a significant amount of cross-sectoral, cross-government co-ordination in terms of programming and implementation (OECD, 2025[34]). At the subnational level, opportunities for the subnational voice to be clearly heard appear restrained. In light of this, there is also room to reinforce inter-ministerial and multi-level co-ordination mechanisms for regional development. Doing so could help reduce the policy fragmentation that currently characterises regional development in Slovenia.
Building regional development co-ordination at the national level
Beyond a strong legislative foundation for regional development, governments also rely on a variety of mechanisms to co-ordinate inter-institutional relations, policy priorities, actions and resources. At the national level, these can range from “harder” arrangements – such as laws and regulations, standards and inter-ministerial agreements – to “softer” ones, such as inter-ministerial co-ordination or other dialogue bodies (OECD, 2020[2]). Regardless of their type, a mix of these arrangements is essential for ensuring coherent action among line ministries that contribute to regional development.
Regional development in Slovenia faces difficulties with cross-sectoral co-ordination, which can affect policy alignment and outcomes. First, line ministries with sectoral activities supporting regional development (e.g. economy, education, environment, transport) primarily focus on their sectors and national sectoral objectives. A mechanism to encourage these ministries to consider the territorially specific impact of sectoral policies and programmes appears to be lacking (OECD, 2024[4]). This can lead to a “place-blind” rather than place-based approach to regional development. A place-blind approach is problematic in Slovenia, because despite the country’s small population and territorial size, regions face markedly different development challenges that require tailored, place-based policy responses (Chapter 2).
Second – and significantly for the forthcoming national regional development strategy – there appears to be difficulty in ensuring alignment between a cross-sectoral strategy, such as Slovenia 2030 (the country’s national development strategy) and sectoral strategies. Despite the legal requirement for all strategic documents to align with Slovenia 2030, actual alignment is inconsistent. For example, Slovenia 2030 and the National Energy and Climate Plan (developed after Slovenia 2030) put forward different objectives relating to the reduction of greenhouse gas emissions by 2030. There exists no clarification on how the energy and climate strategy relates to, complements or supersedes the earlier publication (Government of Slovenia, 2017[63]; Ministry of the Environment, Climate and Energy, 2020[64]). Further, while Slovenia’s Research and Innovation Strategy 2030 references Slovenia 2030, it does so only once, and without specifying how its proposed objectives and measures link to the national goals and metrics (Government of Slovenia, 2017[63]; Ministry of the Economy, Tourism and Sport, 2022[65]).
To a large degree, the success of the forthcoming national regional development strategy will depend on improved co-ordination – and ideally co-operation – among Slovenian ministries. This could better ensure that sectoral policies and programmes are consistent with the national regional development aims, are coherent with each other in their regional development interventions, and are designed and delivered by applying a regional lens. To do so, Slovenia will need to strengthen co-ordination arrangements for regional development across the government. This includes revisiting the co-ordination structures and mix of co-ordination mechanisms, as well as the incentive structures for ministries to work together in meeting territorial aims. This section addresses each of these issues in turn.
Providing a clear mandate for the co-ordination of regional development policy across government
Slovenian legislation supporting regional development clearly assigns responsibility for regional development to the MCRD, including formulating regional development policies, reaching regional development agreements with municipalities and supporting the work of RDAs (Official Gazette of Slovenia, 2023[17]). Unfortunately, it does not clearly assign responsibility for the co-ordination of regional development across sectors, despite its being a multi-sector endeavour. The policies and programmes of Slovenia’s other 18 line ministries will most likely have a regional impact, for example in infrastructure provision, healthcare, education and innovation services (OECD, 2024[4]). The lack of a clear mandate for a single actor to lead the national-level co-ordination of regional development limits the ability to ensure that the aims and actions of sector ministries align with the forthcoming national regional development strategy and its goals. This can present a challenge to the strategy’s implementation, as well as to other sectoral policies and initiatives supporting it.
A fully empowered steward for regional development could help ensure that Slovenia successfully delivers on the objectives of the national regional development strategy. A steward’s role is to supervise and manage all the elements placed in its care, guiding and co-ordinating – not directing and controlling – the other actors (OECD, 2011[66]). This does not mean that line ministries are no longer responsible for the regional impact of their policies or programmes, or that they are no longer responsible for developing policies and programmes with a regional dimension. What it does mean is that a specific national-level actor is identified to help them better realise their objectives at a territorial scale, ensure coherent action, support cross-sector collaboration, and ideally serve as a bridge between national sectoral interests and subnational development needs. It is important that such an actor have cabinet (political) support and a formally recognised mandate (ideally with statutory underpinnings) to co-ordinate all the actors. Without such stewardship, policy complementarities can be lost, policy coherence limited, and resources not optimised. This challenge is particularly important given that current co-operation between the MCRD and other line ministries on regional development issues is often limited, with individual ministries operating in siloes (Government of Slovenia, 2024[67]).
The Government of Slovenia could consider at least two possibilities to address the question of stewardship in regional development matters. The first would be to establish a high-level political body responsible for co-ordinating national-level regional development priorities overall. The body could be a council for regional development and competitiveness, chaired by the Prime Minister or a Deputy Prime Minister, with the Minster for Regional Development as a vice-chair, and populated with a short list of ministers whose portfolios most actively contribute to regional development, including through the National Regional Partnership Plan for 2028-2034. Other ministers could be invited on an ad hoc basis. In addition, the council could – and should – consult with other stakeholders (e.g. RDA directors, chambers of commerce, municipal associations).
The council could focus on guiding the overall direction of regional development, and overseeing the design and implementation of the national regional development strategy and its supporting policies. It could also guide resourcing for regional development, and ensure that the regional-level operations and investments of line ministries are coherent and aligned. This would help reduce policy fragmentation and provide a forum to ensure that different policy sectors are systematically considering their regional impact, and that regional considerations are incorporated into national-level strategic planning and budgeting. Such a body could be supported by an inter-ministerial working group entrusted with overseeing the implementation of the council’s decisions. Working group representatives could, for example, be the relevant state secretaries from the line ministries populating the council.
Another possibility is to bestow a co-ordination mandate on a single institution or actor (rather than a council as identified above). This actor could be the Prime Minister’s Office or a dedicated line ministry, like the MCRD. There are trade-offs involved in each of these options (Box 3.8). While co-ordination led by the Prime Minister’s Office can help elevate the status of regional development, co-ordination by a dedicated line ministry can ensure that territorial interventions across the government are better informed by regional expertise and relationships with subnational actors. Given Slovenia’s history of institutional churn, where ministries are frequently reorganised following changes in government, one approach could be to assign formal legal responsibility for co-ordinating regional development policy across government to the Prime Minister’s Office. The Prime Minister’s Office could then delegate this mandate to the institution designated as responsible for regional development (e.g. the MCRD) as a matter of practice, given its specialised expertise and in-depth knowledge of regional development issues.
OECD Member countries have adopted two common approaches to cross-ministerial co-ordination, each with different trade-offs.
In some countries, the Prime Minister’s Office plays an important role in promoting the regional development agenda across government and ensuring policy coherence. In the United Kingdom for example, the Cabinet Office (which supports the delivery of the prime minister’s agenda) is given formal authority to help ensure that cross-departmental initiatives and resources align with regional development goals. The benefit of this approach is that the regional development agenda can gain greater prominence across government when it is attached to the prime minister’s own political capital. At the same time, the Prime Minister’s Office may lack the specific policy expertise to guide substantive regional development interventions.
In other countries, such as France, a dedicated line ministry with regional development responsibilities is responsible for the inter-governmental co-ordination of regional development. While this approach can help ensure that policy delivery across government is better informed by regional expertise and relationships with subnational actors, the co-ordinating line ministry may sometimes lack the political clout to steer ministries to a unified territorial purpose.
Source: Based on (OECD, 2017[68]; McKee, Pope and Coggins, 2023[69]; French Government, 2025[70]).
Slovenia may wish to consider both mechanisms. First, it could establish a high-level political council as the political body focused on ensuring that regional development objectives are met in a manner that is place-based and consistent with the aims of the national regional development strategy, and promoting strategic investment decisions that also optimise resources. Second, it could confer to a single institution the mandate for day-to-day co-ordination of regional development policy and programming among line ministries. This institution would work with the council, any associated working group, and other national and subnational regional development actors to ensure that council decisions and the national regional development strategy are being implemented.
Ensuring appropriate institutional mechanisms for the national co-ordination of regional development
Meeting the objectives set forth in Slovenia’s forthcoming national regional development strategy will also require strengthening institutional mechanisms to co-ordinate national-level strategies, policies and programmes supporting territorial development (OECD, 2025[23]). This will be important to help ensure that sectoral policies, programmes and public investments are aligned with and mutually supportive of shared regional development objectives, rather than fragmented across competing or misaligned sectoral priorities.
According to the legislation, strategic plans prepared by Slovenian line ministries in the field of regional development are meant to be consistent in their objectives and priorities (Official Gazette of Slovenia, 2025[71]). As noted, however, ensuring cross-sectoral alignment between line ministerial strategies remains a significant challenge across government (OECD, 2024[4]). Moreover, the institutional mechanisms to ensure that these documents reflect cross-sectoral priorities – such as regional development – are limited.
The strategic planning teams in each ministry comprise one means to help align priorities. These teams support the design of a wide range of sectoral programming documents and should play a strong role in ensuring the necessary cross-sectoral coherence. However, government officials report that limited guidance exists on how strategic planning teams are meant to reflect cross-sectoral priorities, such as regional development (OECD, 2024[4]).
Creating a set of standards or guidelines on how regional development should be addressed in strategic planning exercises is one option that could help overcome the real or perceived lack of guidance. In OECD countries such as Mexico, for example, a dedicated line ministry develops online resources to help both national and subnational policymakers ensure that cross-cutting issues, such as regional development, are systematically taken into account in programming documents across government (Box 3.9).
Mexico’s federal planning law mandates the formulation of development programmes at various government levels. All of these must align with the overarching National Development Plan, which spans a six-year term coinciding with the presidential administration. The plan sets the country’s long-term objectives, strategies and priorities across economic, social, cultural and environmental spheres. Specifically, it requires the development of various programmes, as follows:
Institutional programmes are developed by each of the national-level public bodies. They highlight organisational improvements and specific actions each public body will undertake to contribute to national objectives.
Sectoral programmes are developed by various sectors of the public administration (e.g. health, education, energy). They outline the objectives, strategies and actions to be undertaken within these specific sectors.
Special programmes focus on specific thematic areas or target particular social, economic or environmental issues that cannot be addressed by individual public bodies and instead require cross-sectoral collaboration.
Regional programmes address the development needs and priorities of specific geographic areas (that go beyond the administrative boundaries of federal states) within the country.
In 2019, the Ministry of Finance and Public Funds organised a series of meetings for the planning staff of Mexico’s national-level public bodies to guide them through the programme-design process. The meetings included workshops on how to integrate various cross-cutting priorities (e.g. sustainable development, equality and non-discrimination, territorial development, interculturality, gender, the natural environment) into all institutional, sectoral, special and regional programmes.
With the support of different national government bodies and international organisations, the Ministry of Finance and Public Funds also created a website that enables policymakers to access supporting material on the different cross-cutting issues and how to integrate them into the different national-level planning instruments. This material includes factsheets on a series of key economic, social, environmental and governance indicators (e.g. education, healthcare, insecurity) that reveal relevant development gaps across population groups and regions, and are meant to be used to help design the diagnostic for each programme.
Source: (OECD, 2024[49]).
In Slovenia, the MCRD could be encouraged to develop similar guidance to help strategic planning teams better understand how to reflect the priorities of the national regional development strategy in their own sector strategies, and ensure that a place-sensitive lens is applied to sector programming and implementation.
In tandem, if the MCRD receives a mandate to co-ordinate regional development among line ministries (as discussed in the previous section), strategic planning teams in line ministries could be required to share relevant strategy and programming documents with the MCRD. The aim would be to ensure that sectoral objectives and priorities align with – or at a minimum are complementary to – those contained in the national regional development strategy. In addition to verifying the alignment of these documents with the government’s regional development priorities, the MCRD could also provide guidance on how to apply a stronger place-based lens. For instance, the MCRD could draw on the evidence-based diagnostic being developed for the national regional development strategy to identify sector-specific territorial needs in each region and work with line ministries to determine how sectoral programming documents can support such specificities. This could help promote a place-sensitive approach across policy areas and enhance the policy coherence of national-level regional development activities.
Croatia has taken a similar approach, through its Law on the System of Strategic Planning and Development Management (OECD, 2024[49]). The law establishes a network of strategic planning co-ordinators in each line ministry, who regularly report to the Ministry for Regional Development and EU Funds – the co-ordinating ministry for regional development – on the design, implementation, monitoring and evaluation of strategic planning documents. The Ministry for Regional Development and EU Funds, in turn, provides structured feedback to strategic planning co-ordinators, in order to ensure policy coherence for regional development across government (OECD, 2024[49]).
Using explicit agreements for inter-ministerial co-operation in regional development is another option to help generate greater co-ordination among Slovenia’s line ministries. The MCRD could enter into formal agreements or contractual arrangements with other ministries to establish how they will work towards achieving the aims set out in the national regional development strategy. In France, agreements among ministries serve as precursors to the CPER (“State-Region planning contracts”, see the discussion in the next section) which define regional investment projects carried out by the government, subnational authorities and other actors. As part of the development of these CPER, ministries enter into agreements that give shape to the national government’s regional strategy, which sets out how the national strategy will be adapted to reach region’s specific context. This stage, led by a prefect representing the central government at the regional level, serves as a pre-contractual phase before the actual negotiation of the CPER (OECD, 2007[72]; Charbit and Romano, 2017[26]).
Expanding avenues for multi-level dialogue for regional development
Effective co-ordination of regional development among a country’s different levels of government is also needed to achieve territorial development objectives and address unique regional and local needs. In Slovenia, the Working Group on Local Self-government and “regional managers” are two institutional mechanisms supporting multi-level dialogue and exchange (OECD, 2024[4]). In addition, regular meetings are held between the MCRD and RDAs on various topics related to regional development (OECD, 2025[23]). In practice, co-ordination on regional development issues between different levels of government remains limited, like the resources available to support it. Expanding the spectrum of co-ordination mechanisms employed would be valuable; the right mix will greatly depend on need and institutional culture.
Strengthening the Working Group on Local Self-government
Slovenia’s main multi-level dialogue body is the ad hoc Working Group on Local Self-government. This working group was established by the MCRD and the Ministry of Public Administration, which alternate in convening and chairing its meetings. Its purpose is to help align objectives and priorities among national and subnational levels of government, and to identify and address territorial challenges (OECD, 2024[4]). The working group is composed of state secretaries and other representatives from the MCRD and the Ministry of Public Administration, as well as representatives from the three municipal associations (Association of Municipalities, Community of Municipalities and Association of Urban Municipalities). Line ministries responsible for policy areas that also contribute to regional development (e.g. the ministries of economy, tourism and sport; environment, climate and energy; national resources and spatial planning; and agriculture) are not part of the working group (Government of Slovenia, 2024[73]), which can significantly impede its role in promoting multi-level co-ordination.
The lack of diverse representation limits the ability of national actors to highlight their priorities and work with the subnational level on identifying how to meet these priorities based on regional needs, capacities and realities. It also limits the ability of subnational actors to communicate and discuss regional or community development challenges and priorities with the line ministry (or ministries) responsible for developing relevant policies and programmes, who are best positioned to discuss their concerns. In such instances, subnational actors either need to depend on the MCRD or the Ministry of Public Administration to communicate their message to colleagues in other ministries, or they need to have a separate conversation with representatives of the relevant line ministries – which may or may not be within their capacity (OECD, 2024[4]). This, in turn, can have two consequences. First, it can increase the possibility of place-blind policymaking – i.e. policy that does not meet the territorially differentiated needs of Slovenian communities – in certain sectors. Second, it can generate or expand policy gaps – i.e. incoherence between subnational policy needs and national policy initiatives.
At the subnational level, participation by the three municipal associations represents the voice of local authorities within the multi-level dialogue and exchange (Government of Slovenia, 2024[73]). As regards the voice of development regions, however, no actor is present to provide an explicitly regional perspective. This creates a risk that discussions centred on territorial issues may have an excessively local focus, ignoring wider regional needs (OECD, 2024[4]).
To make the most out of what the working group has to offer, adjusting its composition may be useful. In particular, the working group could include ministers and/or state secretaries from line ministries whose sectors actively contribute to regional development, as well as representatives from all RDAs and municipal associations. Line ministry participation could be regular or ad hoc, based on the agenda and topic(s) for discussion. This could help better ensure that territorial development issues identified by subnational actors are being considered by different line ministries. It would also enable sectoral perspectives on regional development to be shared with the subnational level.
The inclusion of regional representatives (such as RDAs) who have unique knowledge of territorial challenges and needs at a regional scale would help ensure that regional perspectives – in addition to local perspectives, via the municipal associations – are being shared regularly with representatives from a wide range of relevant line ministries. This could complement the regular meetings that are already being held between the MCRD and RDAs on various topics related to regional development (OECD, 2025[23]). For example, it could enable RDAs to discuss place-specific barriers to their regions’ international competitiveness with other relevant line ministries (e.g. the Ministry of Economic Development and Technology; the Ministry of Labour, Family, Social Affairs and Equal Opportunities; and the Ministry of Infrastructure). These line ministries would then be able to consider these barriers when developing relevant sectoral policies and programmes.
A further challenge in vertical co-ordination is the limited set of arrangements to ensure that territorial development issues are not only discussed, but also resolved in an effective and timely manner (OECD, 2024[4]). For instance, the current working group provides a forum for initial discussion on regional or local development issues. However, it could be supported by more technical “sub-working groups” discussing specific technical questions related to the design and implementation of the regional development strategy, or sectoral policies to be considered in detail by public actors, the private sector and experts. The activities of the working group could also be supported by a secretariat function allowing public actors to track progress on agreed actions to support regional development.
The government could strengthen the working group’s role in bridging any policy gaps that might arise, particularly with respect to implementing the upcoming national regional development strategy. First, technical sub-working groups, composed of line ministerial representatives, RDAs and municipal associations, as well as other relevant non-governmental actors (e.g. academic experts, representatives from the Chamber of Commerce and Industry of Slovenia, private-sector actors), could be established to support the working group’s activities. They could for instance collaboratively assess technical questions, such as how to improve the design of regional development funding mechanisms, or the monitoring and evaluation of regional development policy. Findings from technical sub-working groups could then be shared at the meetings of the working group, contributing to the evidence basis for decision making. Second, the MCRD, given its responsibility for regional development, could be responsible for securing the participation of relevant line ministries in meetings, recording meeting outcomes, and following up with relevant actors to ensure implementation. Taken together, these steps could help ensure that multi-level dialogue on regional needs is being translated into concrete actions that benefit local communities.
OECD Member countries, such as Poland and Sweden, have developed strong dialogue bodies with a range of national and subnational actors to support the design and implementation of regional development policies, programmes and investments (Box 3.10).
Poland and the Joint Central Government and Local Government Committee
Poland’s Joint Central Government and Local Government Committee supports co-ordination, consultation and negotiation among levels of government. It is composed of the minister responsible for public administration and 11 representatives appointed by the prime minister, together with representatives of national organisations of local government units (e.g. regions, counties, cities, metropolitan areas). National and local-level representatives work together in 11 “problem teams” and 3 thematic working groups, supported by expert analysis.
Key tasks performed by the committee include:
developing a common position between national and local governments on subnational-level economic and social priorities
conducting reviews and assessments of the legal and financial conditions underpinning local government
analysing information about draft legal acts, documents and government programmes regarding local government issues, in particular, the expected financial consequences
giving opinions on draft legislation, strategic and other government programming documents that affect local governments.
Sweden and the Forum for Sustainable Regional Development 2022-2030
In Sweden, it is the job of regional development policymakers to convince other ministries that they should apply their “territorial lenses” when planning and designing sectoral policies. The Forum for Sustainable Regional Development 2022-2030 is one important co-ordination platform supporting this objective. It is positioned to support the implementation of the National Strategy for Sustainable Regional Development throughout Sweden 2021-2030. The Ministry of Rural Affairs and Infrastructure, which manages regional development, is responsible for organising the forum.
The forum is divided into two groups: one that promotes dialogue between national and regional-level politicians, and one that fosters dialogue among national and regional-level civil servants. There are about 50 regular participants at the political level, who convene 4 times per year. Additional participants, such as ministers, state secretaries and directors within state agencies, can be invited on an ad hoc basis, depending on the agenda. The civil servant meeting, which brings together regional-level civil servants at the director level, occurs three times a year.
Source: (OECD, 2025[28]).
Making the most of ”regional managers”
Slovenia’s 12 “regional managers” (one for each development region) are an additional multi-level co-ordination mechanism. The regional managers sit within the MCRD and function as contact points between the ministry and their development region. They relay information, assist with the co-ordination of regional development policy implementation and accumulate expertise on the challenges specifically affecting their region of responsibility. They also help monitor the implementation of regional development agreements and programmes (OECD, 2024[4]).
In principle, the role and expertise of regional managers should leave them well-placed to support regular downward communication from line ministries to regions and local governments about sectoral issues with a territorial dimension (i.e. changes to laws, regulations, policies, programmes or funding opportunities). They should also be useful in facilitating upward communication, particularly by conveying information about subnational needs and priorities to line ministries.
In practice, however, the effectiveness of regional managers in performing these tasks is limited by resource capacity. Typically, while regional managers are considered to have good knowledge of and relations with RDAs and municipal associations, they also have other responsibilities within the MCRD (OECD, 2024[4]). As such, they are unable to allocate sufficient time to providing the information and guidance needed to support subnational actors within their region. Interviews suggested that, although ‘regional managers’ are willing to devote greater attention to supporting subnational actors, their existing workload does not permit this in practice (OECD, 2024[4]). One way to build resource capacity for the regional managers is to adjust their tasks and responsibilities. It would be ideal to have 12 full time regional managers; however, this may not be possible owing to staff and budget limitations.
There is scope in Slovenia to strengthen monitoring, evaluation and reporting processes, to better understand how and when regional development objectives are met (Box 3.11). At the national level, greater consistency is needed in monitoring and reporting on sectoral strategies and programmes, to ensure progress towards territorial development objectives can be systematically tracked across government (OECD, 2025[74]). The current evaluation of projects and programmes is typically tied to EU requirements, rather than serving as a holistic assessment of their effect on regional development outcomes (OECD, 2025[74]). At the subnational level, certain indicator gaps in the monitoring frameworks of regional development programmes undermine their ability to measure progress. Moreover, evaluation tends to be carried out irregularly (OECD, 2024[45]). At both the national and subnational levels, there is room to use performance data more systematically to inform policy learning and future decision-making (OECD, 2024[45]).
Monitoring and evaluation are distinct but complementary processes, and are fundamental contributors to policy learning.
Monitoring involves the systematic collection of performance data to assess the progress and achievement of objectives against set targets. It helps identify and address implementation bottlenecks.
Evaluation involves a structured and objective assessment of the design, implementation and/or results of an ongoing or completed policy intervention. It helps understand what is or is not working, and why.
Policy learning comes with regular, transparent, accessible and easy-to-understand reporting on the results of monitoring and evaluation processes to actors involved in implementation. It supports policy learning – which can be used to strengthen performance – and also generates greater accountability for results.
Source: (OECD, 2024[49]).
In the context of the forthcoming national regional development strategy, gaps in performance measurement could undermine policymakers’ ability to assess the effectiveness of policy interventions, learn from what does or does not work, and improve their territorial development performance. This section considers each of these issues in turn, as well as the operational challenges hindering them.
Gaps in performance measurement processes in Slovenia
Monitoring, evaluation and reporting processes in Slovenia have room for improvement. At the national level, external contractors prepared a monitoring report for the 2018-2022 period that assessed progress towards Slovenia’s previous national regional development objectives, based on a range of territorial development indicators (Government of Slovenia, 2023[75]). However, line ministries themselves do not systematically report on the implementation of their sectoral strategies and programmes (OECD, 2025[74]). Given that territorial development is inherently cross-sectoral, the absence of consistent monitoring across line ministries risks creating blind spots which could undermine the ability of the national government to assess comprehensively the progress made towards its regional development priorities.
At the subnational level, gaps in monitoring processes are also notable. RDAs produce annual monitoring reports to track progress on the implementation of regional development programmes, as well as specific projects (OECD, 2024[4]). At the same time, the monitoring frameworks of regional development programmes are often not sufficiently comprehensive to track progress towards their territorial objectives. For example, the Primorsko-Notranjska regional development programme (RDP) identifies “creating an inclusive and attractive region” as a strategic priority. However, this objective is only supported by a single performance indicator – the “risk of social exclusion” index (Government of Slovenia, 2022[76]). While useful, this indicator does not capture the dimension of the objective related to regional attractiveness. Complementary indicators that help capture different aspects of regional attractiveness (i.e. cultural or visitor appeal, economic attractiveness, resident well-being) would be needed to ensure more holistic performance tracking (OECD, 2025[77]).
With regard to national-level evaluation processes in Slovenia, only large-scale regional programmes and projects are typically subject to rigorous and comprehensive scrutiny. Such projects are most often implemented through EU funding programmes (particularly Cohesion Policy funds), and evaluation focuses on the project’s outcomes. In these cases, the projects are subject to regular updates and post-implementation evaluation as a condition of support, as well as well-developed cost-benefit analysis methodologies – particularly for large-scale infrastructure projects (OECD, 2024[4]). What is missing in Slovenia’s performance measurement system is monitoring and evaluating the impact of regional development initiatives on a set of regional development objectives, whether set nationally or for each sector. In particular, it is important to evaluate which regional initiatives are contributing to the achievement of regional development objectives, and to understand the reasons for their success or failure in doing so. Such evaluation will also be foundational to understanding the success of the forthcoming strategy. At the subnational level, some project evaluations are carried out by RDAs. However, these activities are often ad hoc (OECD, 2024[4]).
A final performance measurement challenge confronting public actors in Slovenia relates to how the results are being used. At the national level, for example, previous performance data are rarely considered as an input to identify implementation bottlenecks, understand the reasons behind policy failures and ensure these can be addressed in the future. This shortcoming is mirrored at the subnational level. Even when evaluations are conducted, they are seldom used to inform future project design or improve implementation practices (OECD, 2024[45]). The following sub-sections consider how improving subnational data collection and management, and enhancing human resource capacity for performance measurement in Slovenia can help address these issues.
Strengthening subnational data collection and management for regional development
The dearth of subnational-level data is a major obstacle inhibiting the ability of Slovenia’s line ministries, municipalities and RDAs to identify their regional development priorities and carry out monitoring and evaluation tasks. A variety of indicators concerning development are available at the corresponding subnational levels and used in reporting, including some indicators in the Regional Innovation Strategy and indicators pertaining to the shares of foreign direct investment. However, other indicators that are relevant for measuring territorial development performance, including a number of indicators related to innovation, the green transition and mining, are not broken down by region or municipality (OECD, 2024[4]). A lack of territorially disaggregated investment data undermines the ability of national and subnational actors to assess how capital inflows are being distributed among regions over time and understand the implications of this distribution for regional economic development (OECD, 2024[4]).
Ensuring that progress towards the objectives of the national regional development strategy and regional development programmes can be comprehensively tracked will involve plugging these and other subnational-level data gaps. To do this, the MCRD and the Statistical Office of Slovenia could consider first mapping the existing data situation to identify what exists, what is useful (or being used), and what is missing. This could be done by convening periodic meetings (e.g. annually) with line ministries, RDAs and municipal associations to: (i) identify their respective data needs; and (ii) explore practical approaches for collecting, processing and sharing the relevant data. Based on the outcomes of these consultations, the government could then consider whether there is merit in investing in the development of new, relevant datasets. In several OECD countries, including Canada and the Netherlands, public actors have adopted a partnership approach to expanding the production of regional and local statistics (OECD, 2024[49]). In Canada, Statistics Canada regularly collaborates with the Federation of Canadian Municipalities to help fill municipal data gaps (Box 3.12).
Statistics Canada regularly collaborates with the Federation of Canadian Municipalities, a local government association, to improve the availability and accessibility of subnational data. On the one hand, Statistics Canada periodically consults with the Federation of Canadian Municipalities to identify subnational data gaps related to local economic development and well-being, which it then works to address. On the other, Statistics Canada shares relevant information with the Federation of Canadian Municipalities about existing local datasets to improve local governments’ awareness of these data.
Source: (Statistics Canada, n.d.[78]).
Data accessibility is a further obstacle to performance measurement for regional development in Slovenia, as indicated by approximately half of RDAs responding to an OECD survey (OECD, 2024[45]). Several factors contribute to this challenge. One is the limited public access to certain regional data collected by government. For customised breakdowns, such as statistics at levels below the development regions, payment may be required – including by RDAs – which undermines the ability to monitor and evaluate regional development programmes, or benchmark the performance of different territories (OECD, 2024[4]). Even EU-funded project data, which may be located within the development region represented by an RDA, are not automatically provided to RDAs (European Commission, Directorate-General for Economic and Financial Affairs, 2023[79]). Moreover, data at the regional level are not easily accessible for non-technical users. For example, there is no centrally co-ordinated process for the distribution of regional indicators, or online database containing typical indicators that are likely to be relevant to regional analysis (OECD, 2024[4]). Finally, there is limited guidance from ministries on how to request and access existing data (OECD, 2024[4]).
Ensuring the regional development policy can be monitored and evaluated effectively will require all public actors responsible for its implementation to have greater access to territorial development datasets. The government can consider different options in this regard. As an initial step, it could ensure that RDAs can access all national-level databases with territorial development indicators at no cost. This is critical to strengthen the monitoring and evaluation of regional development programmes. It will also be fundamental to tracking progress in meeting the aims set out in the national regional development strategy, whose success ultimately depends on the effective implementation of those programmes.
Second, Slovenia should consider investing in developing a single, unified and publicly accessible data portal, where public actors can easily access and download various categories of regional and local data. Several OECD Member countries have developed centralised subnational data portals to support the work of regional development actors in relation to strategic planning, service delivery, and monitoring and evaluation. For instance, Norway’s KOSTRA portal provides a wide range of comparable regional and local-level data, including on population size, subnational financial health and service-delivery performance (Statistics Norway, 2025[80]). Sweden’s Kolada portal includes easily accessible and comparable subnational data for over 6 000 key performance indicators (Box 3.13).
In Norway and Sweden, territorial development data portals are used to aid performance measurement. They also support the benchmarking of subnational governments against their peers.
KOSTRA portal, Norway
Norway’s KOSTRA portal is used for performance monitoring and benchmarking at the subnational level. It provides regularly updated input and output indicators on subnational public services and finances, integrating data from local government accounts, service statistics and population statistics. The portal covers indicators related to production, service coverage, needs, quality and efficiency.
Its user-friendly online platform makes this information easily accessible, enabling detailed comparisons of subnational government performance. KOSTRA data are widely used by municipalities, as well as by the media and academic researchers, to assess subnational government effectiveness and inform public debate.
Kolada portal, Sweden
Kolada is a free and publicly available database developed and maintained by the Council for the Promotion of Municipal Analyses, a non-profit organisation supported by the Government of Sweden and the Swedish Association of Local Authorities and Regions. It serves as a comprehensive repository of over 6 000 key performance indicators related to various aspects of regional and local-level performance. The primary aim of Kolada is to support analysis, comparisons and follow-up activities in municipalities and regions, facilitating data-driven decision-making processes.
Kolada’s data are primarily based on official statistics. In addition to data on population, budgets and economic development, it offers extensive insights into the cost, scope and quality of different types of public services within regions and municipalities. Its user-friendly interface allows users to access a range of analytical and visualisation tools, including tables, maps and diagrams, in order to support evidence-based decision making, monitoring and evaluation.
In Slovenia’s case, developing a territorial data portal would offer several benefits. In particular, it would reduce the time spent by policymakers on identifying relevant performance data, by consolidating datasets that are currently dispersed across different public websites into a single, central hub. This would improve efficiency in gathering the evidence needed to monitor and evaluate regional development performance, freeing up additional time to focus on other tasks (such as project implementation). This is particularly relevant in the current context, given that monitoring and evaluation tasks consume a disproportionate share of policymakers’ time (OECD, 2024[4]). Moreover, developing a user-friendly interface that allows non-technical users to easily access and compare data would further simplify the process of performance benchmarking of regions and municipalities in different policy areas. In turn, this evidence base could support more targeted, territorially aligned and responsive policy interventions by all levels of government.
At the same time, it is important to recognise when developing a territorial data portal that managing a very large amount of performance indicators can result in a substantial amount of work for policymakers (OECD, 2024[4]). The challenge therefore lies in balancing human resource constraints in performance measurement with the requirement for comprehensiveness and accountability. For Slovenia, the priority when developing a territorial data portal should be to focus on a concise set of easily measurable performance indicators that enable clear tracking of progress against well-defined regional development objectives.
Building human resource capacity for performance measurement in Slovenia
Human resource capacity gaps at the national and subnational levels also frustrate policymakers’ ability to conduct monitoring and evaluation tasks in Slovenia. A particular challenge reported by line ministries is their insufficient ability to evaluate plans and programmes that are technically and methodologically sound, and use the results in a way that supports decision-making processes (OECD, 2024[45]; OECD, 2024[4]). Skill gaps have often resulted in line ministries calling on outside expertise to support their performance measurement activities. However, resorting to outside expertise for such activities is not always possible.
At the subnational level, RDAs also report significant human resource capacity challenges related to monitoring and evaluation. Nearly half of RDAs (46%) reported that they lacked the necessary human resources and expertise to develop and monitor regional development indicators and/or undertake monitoring and evaluation exercises (OECD, 2024[45]). Key skill gaps include challenges in developing measurable targets that are matched with the strategic and operational objectives of their RDPs, and a lack of experience in applying monitoring and evaluation data to support policy learning.
Slovenia could strengthen human resource capacity for monitoring and evaluation in a variety of ways. An initial step could be to develop practical, action-oriented methodological guidelines to steer performance measurement. Such guidelines could serve as a reference tool to guide both national and subnational monitoring and evaluation activities in Slovenia, including those related to regional development. In particular, they could set minimum standards to ensure such exercises are both technically robust (i.e. using sound data collection and rigorous analytical methods) and well-governed (i.e. conducted in a way that is both independent and able to support an effective use of results to ensure policy learning and impact in decision-making processes) (OECD, 2024[49]). By setting clear expectations for practitioners, guidelines would help build a shared understanding of what constitutes effective performance measurement, reduce inconsistencies in current approaches, and help embed monitoring and evaluation practices more deeply within Slovenia’s public administration. A number of OECD countries have developed clear methodological guidelines to demystify monitoring and evaluation. In the United Kingdom, for example, HM Treasury provides guidance in the form of action-oriented booklets, including the Green, Magenta and Aqua books (Box 3.14).
In the United Kingdom, HM Treasury publishes a number of resources that aim to provide comprehensive, practical guidance to all policymakers on different strands of monitoring and evaluation.
The Green Book offers guidance on the appraisal and evaluation of policies, programmes and projects. It also provides established cross-governmental definitions of monitoring and evaluation, and comprehensive guidelines for the design and use of monitoring and evaluation activities before, during and after implementation.
The Magenta Book provides guidance on evaluation methods. It includes material on the evolving approaches and methods used in evaluation, and emphasises the value of evaluation in generating evidence for the design, implementation and review stages of the public-policy cycle.
The Aqua Book focuses on the development of transparent, objective and evidence-based appraisal, evaluation and design of proposals to inform public decision making.
In Slovenia, guidelines could be developed through a dedicated task force led by the MCRD, composed of representatives from line ministries with previous experience in conducting monitoring and/or evaluation, representatives from RDAs and other actors with familiarity with Slovenia’s performance measurement challenges. This task force could meet periodically, initially to collaboratively draft the guidelines. International monitoring and evaluation practitioners could also be invited to provide feedback on the draft guidelines and suggest areas for refinement. The MCRD could incorporate their feedback into a revised draft, which could be presented to the task force for approval.
In tandem with developing methodological guidelines, the government could organise targeted trainings to strengthen the monitoring and evaluation capacity of national and subnational officials in areas where they may lack relevant knowledge or skills. This would likely involve conducting an assessment of training needs to identify specific gaps in the technical or analytical competencies of relevant national and subnational actors with regard to monitoring and evaluation. This assessment could involve disseminating a short questionnaire to staff responsible for performance measurement, as well as a review of recent monitoring and evaluation activities to identify where support is most needed. Based on the results of the needs assessment, tailored training opportunities could be developed and delivered through in-person capacity-building workshops or peer-to-peer learning opportunities.
Furthermore, capacity-building plans could be developed to identify which actors could be mobilised to deliver practical training sessions, and which actors should receive these training sessions. It would be ideal if the sessions drew on real-life examples and case studies from Slovenia and other OECD countries. Furthermore, the capacity-building plans could identify possible partnerships with academic institutions or international organisations with recognised expertise in public-sector monitoring and evaluation. For example, experts from the University of Ljubljana’s School of Public Administration, which provides courses on the evaluation of public policies and programmes, could be mobilised to provide training (University of Ljubljana, n.d.[84]). In addition, peer-to-peer learning opportunities could be organised between Slovenian RDAs and RDAs in other European countries, with initial contacts brokered through the European Association of Development Agencies.
An additional capacity-building step that could enhance the ability of national and subnational actors to use monitoring and evaluation results effectively would be to establish performance dialogues. Performance dialogues are institutionalised fora where evidence is systematically reviewed to support learning and guide decision-making. They typically involve periodic structured meetings between different public actors, such as line ministries, RDAs and other implementing bodies, to assess progress towards strategic objectives, identify implementation challenges and determine the necessary adjustments.
In the context of the forthcoming national regional development strategy, annual performance dialogues could be convened between the MCRD and line ministries, as well as between the MCRD and RDAs. These meetings would provide a space for public actors to exchange on progress towards the implementation of their respective plans and programmes, assess territorial-level outcomes, and identify any implementation challenges and resource constraints. Such exchanges would facilitate timely problem-solving and adaptive responses, helping to ensure that regional development efforts across and among levels of government remain on course.
This chapter has laid out ways in which the Government of Slovenia has been working to better support place-based regional development efforts at different levels of government. Particular achievements include the government’s commitment to developing a national regional development strategy which can help address policy fragmentation, and steps towards addressing the challenge of territorial fragmentation (e.g. promoting successful inter-municipal co-operation arrangements and options for regional-level activity).
At the same time, the chapter identifies several areas where policymakers could further enhance Slovenia’s regional development governance. One of these is strengthening subnational capacity to plan and invest in regional development, including by considering adjustments to Slovenia’s territorial-development funding mix and reinforcing the capacity of RDAs to lead implementation efforts at a regional scale.
It will also be important to ensure a stronger mandate – and appropriate institutional mechanisms – to address gaps in existing multi-level governance arrangements that have led to policy fragmentation, and to ensure more effectively the co-ordination of regional development policy across and among levels of government. Finally, improvements to performance measurement, particularly in terms of data availability and accessibility, and human resource capacity, will be essential to ensure that national and subnational-level regional development objectives are achieved in full.
To overcome territorial fragmentation and help subnational authorities build the scale required for effective territorial policy, service and investment action, Slovenia could:
Develop standardised local-level data on the cost, quality and accessibility of municipal services: this will help local governments better assess their inter-municipal co-operation needs.
Consider adjusting the mix of incentives for municipal mergers: for instance, it could offer one-time merger bonuses or introduce negative financial incentives for non-amalgamation.
Reinforce the role of the existing development regions: this could include experimenting with national-regional contracts, backed by national-level funding, to channel territorial investment to priority development areas matching both national and regional needs.
To ensure sufficient resources to fund the national regional development strategy, Slovenia could:
Map complementarities and gaps between EU funding sources and national and subnational regional development priorities: this is important to determine the level of the public investment that is not available through EU programming but will be required to achieve the strategy’s objectives.
Address any EU funding gaps in specific investment areas for territorial development by mobilising alternative national and subnational funding sources. Options could include:
requiring line ministries to channel a portion of their existing budgets to fund investment projects that clearly support regional development objectives
allocating additional national-level resources through a government-established fund for territorial development that provides municipal governments with competitively allocated funds for project proposals with a clear regional impact
strengthening the regional investment capacity of municipal governments by increasing their financial autonomy (e.g. by devolving specific national taxes to the subnational level).
To strengthen the effectiveness of RDAs in advancing national and subnational regional development objectives, and planning and implementing place-based development objectives, Slovenia could:
Explore and identify practical options to enhance the financial sustainability of RDAs, for example by:
encouraging greater revenue generation from market-based services among RDAs, including by undertaking a market assessment to identify potential demand for market-based services (i.e. what types of services, and by whom); expanding outreach to prospective private- and third-sector clients; raising awareness of existing paid services; and developing new services to meet upcoming business needs
identifying sources of additional (operating) funding from the national government, for example through national-level grants or a dedicated national territorial development fund, if established
increasing subnational-level funding (i.e. from municipalities), attributing additional operating funds – particularly those from individual municipalities – through a formal agreement to ensure equitable distribution of RDA support across the territory and avoid favouritism or conflicts of interest.
To improve regional development co-ordination at the national level, Slovenia could:
Establish a high-level political body responsible for guiding and co-ordinating regional development priorities and resources across government.
This could be a council for regional development and competitiveness, chaired by the Prime Minister or a Deputy Prime Minister with the Minister for Regional Development as a Vice-Chair, and populated with a limited number of ministers whose portfolios are directly implicated in meeting the objectives of the national regional development strategy and the National Regional Partnership Plan for 2028-2034.
A working group of state secretaries from line ministries could be permanently represented on and support the council. Other stakeholders (e.g. RDA directors, chambers of commerce, municipal associations) could be consulted regularly by the working group and invited on an ad hoc basis.
Assign a clear mandate for a single national-level actor (e.g. Prime Minister’s Office, MCRD) to co-ordinate the day-to-day aspects of regional development across government.
Strengthen institutional mechanisms for the co-ordination of regional development across government, including by:
creating a set of guidelines on how strategic planning teams within line ministries should reflect cross-sectoral priorities, such as regional development, in their own sector programming documents
requiring strategic planning co-ordinators in each line ministry to report to, and receive structured feedback from, the co-ordinating ministry for regional development on how to align sectoral strategies with the national regional development strategy
developing formal agreements or contractual arrangements between the MCRD and other line ministries which set out how they will work to achieve the aims of the national regional development strategy.
To enhance multi-level co-ordination of regional development, Slovenia could:
Adjust the composition and operation of the Working Group on Local Self-government to help align regional priorities among levels of government and better address territorial challenges, including by:
ensuring the participation of ministers and/or state secretaries from line ministries whose sectors contribute to regional development, as well as RDAs
creating technical “sub-working groups” composed of actors from the public and private sectors, as well as experts, who could consider specific technical questions related to the design and implementation of the regional development strategy or sector policies
establishing a secretariat function within the MCRD to help public actors track progress on agreed actions to support regional development.
To improve the quality of regional development monitoring and evaluation, Slovenia could:
Increase subnational data availability on key topics (e.g. innovation, green transition, mining). This can be done by ensuring that municipal governments and RDAs are being systematically consulted by the MCRD and the Statistical Office of Slovenia in order to identify and address regional data needs.
Improve the accessibility of subnational data, including by:
ensuring that RDAs can access all existing national-level databases with territorial development indicators at no cost
investing in the development of a single, unified and publicly accessible territorial data portal where policymakers can easily access and compare subnational indicators.
Strengthen the capacity of national and subnational policymakers to conduct monitoring and evaluation tasks, and use monitoring and evaluation results effectively, including by:
developing practical, action-oriented methodological guidelines that can guide monitoring and evaluation activities across and among levels of government
organising targeted trainings to strengthen the monitoring and evaluation capacity of national and subnational officials in pre-identified areas where they may lack relevant knowledge or skills (to be identified through an assessment of training needs)
setting up performance dialogues between the MCRD and line ministries on the one hand, and the MCRD and RDAs on the other, to ensure monitoring and evaluation results are systematically discussed and can support policy learning.
The section below provides a detailed description of different types of contracts used in OECD Member countries to support regional development, with examples of how contracts can be used to empower subnational entities, delegate new competencies or share policy responsibilities.
England’s “devolution deals” are cross-government arrangements between national and subnational governments involving the devolution of powers and resources, previously controlled at the national level, to city regions and metropolitan areas. Most deals include the establishment of a mayoral combined authority, which groups multiple local authorities in wider areas which jointly negotiate the devolution of powers with the national government. The deals have been characterised as “menus with specials”, since several powers, programmes and budgets have been made available to most areas, but each deal also contains unique elements. Powers and funding that have been most commonly devolved have included transport (e.g. bus franchising), local roads, business-support services, adult education, and land and housing. Most deals also transfer some revenue-raising powers to the subnational level, such as business rates and a council tax precept.
Such deals have been ongoing since the mid-2010s, when the first devolution deal was agreed between the national government and the Greater Manchester Combined Authority in November 2014. By July 2024, 22 devolution deals had been agreed upon to advance more balanced economic growth, promote better and more integrated public services, and enhance public engagement and accountability. During that time, the deals themselves also evolved, reflecting changes in government and shifting priorities, from health, employment and business to brownfield housing, net zero, heating and digital connectivity. In July 2025, a new English Devolution and Community Empowerment Bill was introduced to establish a more consistent and simpler model of devolution, signalling a further shift of powers from the central government level to local authorities (House of Commons Library, 2024[85]).
France’s state-region and inter-regional state-region contracts for river and mountain areas serve as “laboratories” for co-ordinating regional development. These contracts are a national/regional mechanism to support the implementation of regional development plans, by consolidating funding for structural projects that support coherent territorial action and advance a region’s strategic vision for its development. Both CPERs and CPIERs follow EU Cohesion Policy programming periods. Each generation of contracts is based on a series of guiding principles also linked to national aims (e.g. investing in ecological, digital and demographic transitions at a territorial level).
The agreements are signed by the Prime Minister and the presidents of the regional councils. Funding is provided by the national government – EUR 20 billion as a minimum commitment for 2021-2027, matched by EUR 20 billion from the regions. There is also a project co-financing component, including by local authorities. Over successive generations of the CPERs, regions have strengthened their role in interacting with subregional entities (i.e. territorial departments and municipalities) by negotiating the next round of CPERs. Through the CPERs, regions invest in new areas of competence, gaining experience in specific areas before they are allocated to them by law. Policy consistency at the regional level has also improved (Charbit and Romano, 2017[26]) (Government of France, 2023[86]).
Slovenia’s legislative framework for multi-level governance establishes the country’s only subnational tier – municipalities – and sets clear parameters regarding municipal size, functions, budget and service responsibilities. The framework has evolved with time as the system has matured and needs have shifted.
Slovenia’s legislative framework supporting multi-level governance has several strengths, particularly in relation to regional development. First, Slovenia has enshrined regional development in its legislative texts. The Law on the Promotion of Balanced Regional Development creates a legal basis for the design and implementation of national and subnational-level regional development policies and programmes. It also stipulates that a combination of bottom-up and top-down approaches to regional development should prevail (Official Gazette of Slovenia, 2015[61]). This legislative set-up allows both national and subnational actors to tailor interventions to the distinct needs and challenges of different areas.
Second, the law identifies the different actors responsible for the design and implementation of regional development policy, along with their tasks and responsibilities. For instance, it mandates that a specific ministry be designated as responsible for leading regional development policy at the national level. Under the existing government structure, the responsible ministry is the MCRD (Government of Slovenia, 2023[87]) (OECD, 2025[23]). At the subnational level, the responsibility is shared among RDAs and decision-making bodies, namely, the regional development councils and regional councils. By clearly defining responsibilities, the law helps limit the duplication, overlap and co-ordination challenges that national and subnational actors may face during the design and implementation of regional development tasks.
Third, the law establishes the principle that regional development policy should be co-ordinated across and among levels of government to be effective. Slovenia 2030 (the country’s national development strategy), national-level sectoral strategies and subnational-level RDPs must all be coherent with one another (Official Gazette of Slovenia, 2015[61]). This is important for aligning regional development efforts around common goals and promoting a more efficient allocation of public resources.
Finally, other legislation establishes how national and subnational actors should organise their strategic planning activities to promote regional development (Official Gazette of Slovenia, 2015[61]) (Official Gazette of Slovenia, 2025[71]). For instance, the 2012 Regulation on Regional Development Programmes provides high-level guidance on the contents of RDPs, as well as how they should be co-ordinated, monitored, evaluated and reported upon (Official Gazette of Slovenia, 2015[61]). Such guidance helps ensure that the documents are well-structured, have clear objectives that are aligned with national priorities, and include monitoring and evaluation mechanisms to track performance.
Overall, the above-mentioned laws provide an important legislative foundation for multi-level governance and regional development in Slovenia. Clear legal mandates specifying how different actors and processes should support regional development, and delineating their roles and responsibilities, are an important pre-condition to avoid duplication of action, promote a better use of resources and foster accountability for co-ordinated territorial action.
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← 1. Multi-level governance refers to the institutional and financial interactions among and across levels of government and a broad range of non-governmental stakeholders, including private actors and citizens, when designing and implementing public policies with a subnational impact. This interaction is characterised by a mutual dependence among levels of government which runs vertically (among different levels of government) and horizontally (across the same level of government), and in a networked manner with non-governmental stakeholders.
← 2. Municipal responsibilities associated with local development include local roads, public transport, economic development, tourism, infrastructure for trade and industry, utilities, spatial planning, primary health care, and secondary and vocational education (OECD/UCLG, 2022[5]).
← 3. Slovenia’s Recovery and Resilience Facility envelope was EUR 2.2 billion (EU and national financing combined) for 2021-2026 (European Commission, n.d.[92]).
← 4. In addition to the already established objectives of Cohesion Policy (e.g. a smarter Europe, a greener Europe) in the second semester of the 2021-2027 programming period, countries can further use funds to support competitiveness and decarbonisation, defence and eastern border regions, affordable housing, and water resilience and energy transition.
← 5. The Local Autonomy Index measures local autonomy – an important feature in decentralised systems – according to seven broad dimensions: legal autonomy, policy scope, political discretion, financial autonomy, organisational autonomy, non-interference and access (ability to influence political decisions on a higher level).
← 6. Slovenia is immediately preceded by Albania (53.68) and followed by Latvia (51.91). A score of 100 would mean full autonomy.
← 7. Financial autonomy is a composite measure of fiscal autonomy, borrowing autonomy, the financial transfer system and financial self-reliance.
← 8. The OECD categorises subnational government revenue by type: taxes, grants and subsidies, tariffs and fees, property income and social contributions. The 77.4% of municipal budget financing in Slovenia represents the total for grants and subsidies, based on 2023 data – the most recent data available (OECD, 2025[25]).
← 9. The OECD and other international organisations classify tax revenue collected through a tax-sharing arrangement as a current grant when an amount is collected by one government (e.g. a local government) for and on behalf of another government (e.g. a national government), which has the authority to impose the tax, as well as set and vary its rate. In such cases, the local government is acting as an agent for the national government, and the tax is reassigned. Any amount retained by the collecting government as a collection charge should be treated as a payment for a service. Any other amount retained by the collecting government, for example under a tax-sharing arrangement, should be treated as a current grant. If the collecting government was delegated the authority to set and vary the rate, then the amount collected should be treated as tax revenue of that government, as Slovenian municipalities do not have authority to set or vary the rate of personal income tax in their territories. Thus, based on the international standard, the OECD does not consider personal income tax collected in Slovenia as own-source revenue (International Monetary Fund, 2014[93]) (Blöchliger, H and O. Petzold, 2009[95]; OECD, 2023[91]). The application of this international definition leads to a disparity in municipal income reporting between international organisations such as the OECD and the IMF, and Slovenia’s Ministry of Finance, which indicates that personal income tax alone accounted for 50.2% of municipal budget revenues in 2024.
← 10. These can include taxes on watercrafts, real estate transfers, inheritance and gifts, games winnings, other taxes that may be determined by law (e.g. tourist taxes, environmental taxes, administrative taxes and fees), contributions and additional payments from citizens for the implementation of certain programmes, self-contribution, and capital income and donations.
← 11. For example, motor vehicle taxes, excise duties on energy products, carbon dioxide taxes and taxes on waste pollution.
← 12. At the start of the fourth quarter of 2025, Slovenia’s absorption of EU Cohesion Policy funds was 25.6% of total available funds (total cost), with 4.8% of these already spent (European Commission, 2025[53]).