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Regional, rural and urban development

Place-Based Policies for the Future

 

Advancing the debate on the rationale for place-based policies, in which circumstances they should be used, and what type of place-based policies might be relevant in a given context.

  • Why place-based policies?

Across the OECD and EU, there are significant and persistent disparities in economic, social and environmental outcomes for people living in different regions. These challenges are amplified by megatrends, notably climate change, technological change, globalisation, and demographic change (i.e., ageing, migration, and population decline), which challenge the capacity of governments to deliver essential public goods and services. This has resulted in political calls to respond to the concerns of communities and regions, especially those that feel “left behind”.

Against this backdrop, place-based policy has seen a renewed interest, not only to addressing long-term structural transformations that require tailored interventions but also in building resilience in regions and consequently in countries. This intensifying political focus calls for a greater understanding of the purpose of place-based policies, and how to effectively design and implement them to address current macroeconomic, social, demographic, and environmental agendas.

 

  • About the expert workshops

The workshops are part of an OECD-EC project titled “Place-based Policies for the Future”. The outcomes of the workshops will stimulate discussions with stakeholders on future directions for place-based policies. The project aims to be relevant for policymakers at all levels of government. It should inform the design and implementation of policies that contribute to equitable and sustainable economic futures.

 

 Workshops

   

Workshop 1: How have place-based policies evolved to date and what are they for now?

14 April 2023  |  Agenda

Theories of regional economic development have made huge strides in recent decades. Theories that once simply predicted convergence or divergence have given way to more sophisticated concepts of the role of place in shaping a broad range of trajectories and social outcomes – encompassing issues of sustainability, human capital, innovation, agglomeration, connectivity, institutions, trust, and broader notions of capital. This new theoretical landscape is more complex: it acknowledges that regions differ not only in their economic performance, but also in the factors that are responsible for this performance and calls for place-based policies that help all types of regions use their full endogenous growth potential to drive productivity, create more and better-quality jobs, and ultimately improve people’s well-being. Despite these important theoretical advances, place-based policies are still in the making, and the concept of a “place-based approach” and its motivation deserve reflection.

Papers:

Professor Jens Suedekum: The broadening of place-based policies – from reactive cohesion towards proactive support for all regions

Professor Philip McCann: How have place-based policies evolved to date and what are they for now?

 

Workshop 2: When should place-based be used, and how should they be articulated vis-à-vis the broader policymaking framework, notably fiscal equalisation policies and sectoral investment policies?

12 May 2023  |  Agenda

Many sectoral policies do not adapt to regional specificities. Labour market policies for upskilling, for example, might depend on the characteristics of a worker, such as his or her job or income level, but are often independent of where a worker lives within a country. Yet even seemingly “place-blind” policies are spatially neutral in design but not in impact. Place-based policies can have a role to provide a degree of regional specificity to fully utilise the potential of all regions, leverage complementarities and manage trade-offs. To improve policy coherence and efficiency, it is critical to better understand the role and contribution of place-based policies within broader policymaking frameworks.

It is also essential to better understand the relationships between place-based policies and fiscal equalization policies. While place-based policy seeks to reduce inequalities across places and people by leveraging on the potential of each region, fiscal equalisation systems are primarily designed to address differences in revenue-raising capacities and spending needs across subnational governments, helping subnational governments to finance the public services that have been assigned to them. While they differ in their primary goals, place-based and fiscal equalisation policies are inherently intertwined and too often, the synergies between them are not sufficiently leveraged to improve regional development.

Papers:

Professor Albert Solé-Ollé: When should be place-based policies used, and how should they be articulated with other policy instruments?

Professor Anne Green: When should place-based policies be used and at what scale?

 

Workshop 3: Avoiding a tragedy of the commons: Public goods provision through place-based policies

9 June 2023  |  Agenda

Without proper interventions, public goods are generally under-supplied in the market due to their non-rivalrous and non-exclusionary nature. Place-based policies can facilitate the effective provision of some public goods, especially when the benefits and trade-offs straddle regional boundaries. A classic example of such a public good is the environment. Shutting down coal mines or otherwise limiting activity in carbon-intensive industries protects the climate, a public good that everyone enjoys regardless of location. Policy decisions may adversely impact the industrial base and employment opportunities where these activities are located while deteriorating local public finances that are crucial to delivering essential public goods and services. Changes in demography and pressures on national and local public finances have also created new challenges for policymakers. Utilising place-based policies to provide public goods requires determining which public goods are most relevant in the current and future context, what criteria areas should be targeted, the potential trade-offs and synergies, as well as the appropriate level for policy action. 

Papers

Professor Josefina Syssner: Place-based policy objectives and the provision of public goods in depopulating areas: equality, adaptation, and economic sustainability

Professor Felix Creutzig: Placed-Based Global Environmental Goods, Local Public Bads? Place-Based Transitions as a Key Contribution to Global Stewardship

Workshop 4: Measuring progress better: Cutting-edge approaches to monitoring and evaluating place-based policies?

7 July 2023  |  Agenda

In a constantly shifting global environment, place-based policies need to be regularly, rigorously and rapidly evaluated to assess their impact and cost-effectiveness and enable policymakers to quickly adapt and improve their approaches. Evaluating place-based policies begins with collecting relevant data at a relevant scale, which can often present challenges when data collection becomes costly and complex. Proper evaluation also depends on the use of suitable indicators built upon the data that is available and defining the correct level of geography to identify both the direct effects (e.g., additional goods or services provided) and indirect effects (e.g., induced well-being impacts, changes in productivity, job creation, environmental quality, etc.). Ideally, monitoring should be done continuously, starting before a policy intervention, and be sensitive to linkages with national policies, broader macroeconomic and regulatory frameworks. To deploy place-based policies more effectively, it is necessary to first take stock of how place-based policies have been monitored and evaluated, with an aim to learn from good practices and previous mistakes. 

Papers:

Professor Max Nathan: Things We Don't Want to Know? Monitoring and evaluating place-based policies

Professor Alessandra Faggian and Professor Giulia Urso: Cohesion and place-based policies post-emergency in the EU

Workshop 5: The governance of place-based policies now and in the future

15 September 2023  |  Agenda

Governance systems across OECD and EU countries are diverse. In particular, the forms and extent of decentralisation vary greatly from one country to another – and even within the same country. Variations exist in terms of responsibilities carried by subnational governments, local decision-making powers, and resources available to meet subnational needs, including the ability to raise own-source revenues. There are also varying degrees of upward and downward accountability and central government control. These factors contribute to the complexity of designing and implementing place-based policies. Complex multi-level governance models come with high transaction costs and are vulnerable to rent-seeking behaviours and capture by certain interests. A key issue to consider is how structures can be designed in an effective and agile way that supports quick and innovative policy action to respond to emerging intelligence and shocks at the right scale and in the right place. At the same time, there needs to be clarity and transparency in roles and accountability to citizens, alongside sustained investment in capacity and dialogue.  

Papers:

Associate Professor Sarah Giest: Policy capacity mechanisms for addressing complex, place-based sustainability challenges

Professor Andrew Beer: The governance of place-based policies now and in the future?

Workshop 6: What place-based policies for the future?

19 October 2023  |  Agenda

Governments are challenged to address both long-term megatrends and short-term shocks. Reaching the objectives of the Paris Agreement on Climate Change, for example, will require tailoring actions and investments to the needs and realities of different regions, cities, and rural areas, as mitigation and adaptation challenges and opportunities differ sharply across places. Addressing persistent territorial inequalities and demographic challenges which pose long-term risks to social cohesion is also moving up the agenda for governments at all levels. Leaving these challenges unaddressed now is likely to lead to significantly higher remedial costs in the future. Future-proofing place-based policies requires properly identifying their scope, scale, and relevance in the current and future context. Identifying which problems to solve using place-based policies, and which to leave to other policy instruments is important for defining the scope of place-based interventions. 

Papers:

Professor Amy Glasmeier: Placed-Based Development: An Inexact Science and a Possible Renewed Frontier

Previous OECD-EC seminar series

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