Chapter 5. Investing in “voice” to implement global agendas1
The recently adopted global agendas, notably the Sustainable Development Goals (SDGs), the Paris Agreement of COP21, Habitat III, Financing for Development and the Sendai Framework, provide a vision for common values through a global governance system. This chapter raises questions about when and how localising these agendas makes sense to ensure that policy meets people’s expectations and needs by giving them a greater “voice” in the process and implementation. The chapter considers three questions: i) Are regions and cities indeed the places where policies and people meet? ii) Do regions and cities have the right tools and capacities to localise SDGs and other targets? and iii) How can national and subnational governments work better together, using a more structured engagement with people in the process?
Introduction
The set of new global agendas in 2015 and 2016 can be celebrated in many ways. They have generated momentum and are a victory for building legitimacy in our global governance. They require us to look forward and set a vision for the future that considers the quality of life for people. Whether it is stagnant labour productivity, ageing and rising inequalities in OECD countries, or population growth and urbanisation in developing countries, all countries share the common challenge of ensuring a sustainable and inclusive future. Many of these recent global agreements are related, but they help identify where different fields of action can contribute to societal progress in multiple dimensions (Table 5.1).
At the same time, governments today face continuing and renewed challenges to demonstrate that they generate real change in people’s lives – they need to (re)build trust. People are increasingly aware of the scale of challenges such as inequalities, migration and climate change. They expect governments to listen to their concerns and to look beyond electoral timetables and bureaucratic silos to find durable solutions.
Achieving progress across the Sustainable Development Goals (SDGs) and other global targets will require governments to work across policy areas and levels of government to steer the delivery of these ambitious goals. However, this is not an easy task and the obstacles to joined-up government are well known. For example, immediate economic and social pressures often crowd out longer-term strategic policy initiatives. In addition, public budgets and accountability systems are usually aligned with departmental structures and have difficulty tracking progress and valuing outcomes that occur in multiple policy areas. But progress requires more than governments simply co-ordinating amongst themselves.
There are different elements of inclusive governance that could help increase the likelihood of success to achieve these global targets, and this chapter focuses on one in particular, “voice”. But the other elements of inclusive governance are intimately linked, such as design, delivery, and accountability (OECD, 2015a). Governments can work better in an integrated fashion if they engage with people on their needs and expectations, giving them a voice to set the agenda, but also to help achieve its aims. Giving “voice” therefore means engaging with people at all levels of government and ensuring that the process does not “leave people behind.”
The issue of localising SDGs and other agendas raises some provocative questions. More research is needed to check the assumptions and look for evidence on what works to give people a voice in ways that will meet the high expectations set on a global scale. Questions to consider include:
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Are regions and cities indeed the places where polices and people meet?
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Do regions and cities have the right tools and capacities to localise SDGs and other targets?
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How can national and subnational governments work better together, using a more structured engagement with people in the process?
Are regions and cities indeed the places where policies and people meet?
Several of these global agendas have begun to recognise the role of subnational governments as actors in the global landscape. While some seeds have been planted in prior agreements, and some agreements do not go far enough in recognising these facts, there is progress. The Sendai Framework notes explicitly the role of the “national and local level” under each of its four priorities for action. The subnational level is found front and centre in addressing disaster risks.2 The Addis Ababa Action Agenda recognises that “expenditures and investments in sustainable development are being devolved to the subnational level”3, which implies a need to strengthen local capacity. The Paris Agreement has taken steps in acknowledging the role of subnational governments. “…the importance of the engagements of all levels of government and various actors… in addressing climate change”4 is recognised. Further, “… adaptation is a global challenge faced by all with local, subnational, national, regional and international dimensions”5 and “capacity-building should be country-driven…including at the national, subnational and local levels”6.
While modest in their language on this point, the agendas nevertheless turn the spotlight on cities and other subnational governments. Cities have been the beacon of economic and social development throughout the ages, from the city-states of antiquity to the leagues of cities in the middle ages to the global cities of today. It also makes sense to turn to cities as this “metropolitan century” will see the share of the global population living in cities reach 70%. Another notable share of the rural population lives in the vicinity of cities, and that proximity offers opportunities. It should be noted that many metropolitan areas are larger than some countries, but not with the same set of policy tools at their disposal.
The achievement of SDGs and other targets will require national governments to work with regions and localities. SDG 11 has a special focus on cities, and this designation was based on significant efforts to raise awareness of the subnational role. It is nevertheless difficult to imagine the achievement of any goal without considering that national performance is the sum of its parts, and since a chain is only as strong as its weakest link, national progress depends on the ability to ensure progress everywhere, not only where it is easy. Lessons from the world’s experiences with the Millennium Development Goals (MDGs) found that success in achieving targets was uneven and that national and global averages do not necessarily ensure that the most marginalised groups are reached.
Public investments and services are critical for these goals, and people tend to trust what they see in action where they live, more so than in a national government per se. Within the OECD, while only 43% of people report confidence in their national governments, a much higher share are satisfied with local services such as police (75%) or education (69%) (Figure 5.1). There is a strong correlation between trust in local public services and trust in local public institutions.7 Therefore, it is fair to say that generally people trust more subnational institutions over national ones. A country example of higher levels of trust at lower levels of government is found in the United States, where trust in local government (72%) is higher than in regional (i.e. state) governments (62%).8
Source: Calculations using the Gallup World Poll Database.
Better subnational data in all places is a pre-requisite for tracking progress related to people’s subjective evaluation as well as actual outcomes. Indeed, differences across regions within OECD countries in terms of GDP per capita, the standard yardstick of progress, are greater than across countries (Chapter 1). While in some countries the leading region may be up to 15 times richer per person than the worst off region, generally in the OECD that figure is between 1.5 to 3.5 times richer (Figure 5.2). But what does it mean for societies when some regions have twice the GDP per capita levels of another? In some cases those differences may be offset by lower living costs or other compensating well-being factors. In other cases, these differences may simply translate into lower access to services and opportunities and thus worse outcomes for people living in those places.
Considering a broader concept of well-being orients our thinking away from simple yardsticks to consider the wider range of dimensions that constitute progress for people. Such approaches help policy action focus not simply on outputs that are the easiest to measure (new roads built) but on the outcomes for people (commuting time to jobs or exposure to air pollution). Well-being differences at the regional, city or even neighbourhood level can be quite striking. Life expectancy can be several years higher in one region of a country as compared to another (Figure 5.2). Across neighbourhoods in the same metropolitan area, such as London or Baltimore, this difference in life expectancy can be as high as 20 years or more. The OECD’s work on well-being offers a valuable tracking tool for societal progress in dimensions beyond GDP.9 It considers both material and non-material aspects of well-being, and at the subnational scale, place-based elements that influence well-being.
Note: OECD value represents the difference between the maximum and the minimum national average life expectancy among OECD countries.
Source: OECD (2016a), OECD Regions at a Glance, OECD Publishing.
Addressing different elements of well-being, when applied to regions and cities, brings to the fore a place-based dimension. Evidence shows that above and beyond individual characteristics, the unique conditions in a particular place can further add to, or detract from, well-being today and in the future (see also Chapter 1). Multidimensional living standards that combine income, health and unemployment are found to have wider disparities across OECD regions than income alone (Veneri and Murtin, 2015). In other words, when different elements of well-being are considered simultaneously, the cumulative effect can result in some places being worse off on multiple dimensions, exacerbating disparities in well-being. Furthermore, place has a notable impact on subjective measures of well-being, i.e. what people report they actually feel. Indeed, one study found that regional characteristics explain 40% of the variation of OECD residents’ self-reported life satisfaction, with individual characteristics explaining the rest of that variation (Brezzi and Diaz Ramirez, 2016). When policy approaches neglect these realities, this is done at the cost of leaving people in some regions or cities further and further behind.
This measurement agenda also calls for us to consider the appropriate regional and local scale. Statistics available at the subnational level, when they do exist, are often based on outdated realities as reflected in regional and local jurisdictional borders, sometimes set centuries ago. However, for achieving these different targets, statistics need to measure these realities. OECD work on “redefining urban” helps develop indicators at the metropolitan scale defined in a standardised way across countries (OECD, 2012). The OECD Metropolitan Database is a unique example of a tracking tool at this scale.10 Understanding the dynamics of rural areas also requires more detailed classifications to better orient national policies to the needs of, for example, rural areas that are close to cities and those that are more remote (Chapter 3). Water is another sector where the “functional” area is not dictated by an administrative boundary.
OECD work on well-being and the definition of relevant subnational scales can also be useful models for non-OECD countries seeking to track their progress towards SDGs. Even if a national statistical office has not collected the data, regions and cities can use these tools to frame subnational efforts. New data sources, including big data, allow progress to be measured on what is relevant and at the appropriate geography. The development and tracking of indicators can be used to build a constructive dialogue with residents on what matters and how to overcome roadblocks to achieving those aims, as observed in several OECD regions (OECD, 2014a). Efforts need to be made to measure the right things, at the right scale, with the right data.
Do regions and cities have the right tools and capacities to localise SDGs and other targets?
Subnational governments have a number of roles to play and advantages in doing so
Subnational governments are already on the frontlines tackling these challenges. Indeed the spending and planning decisions made by regions and cities determine to a large extent the well-being of people and the conditions for achieving different targets. Within the OECD, for example, subnational governments are responsible for 59% of public investment and a large share of many other types of expenditure (Figure 5.3). The top investment areas for these subnational governments are economic affairs (including transport) and education. They are also managing many investments for housing, water, sanitation, and other public services that underpin the SDGs and other targets (OECD, 2016a). In developing countries, while the share of total government spending by subnational governments may be lower than in OECD countries, it is nevertheless growing. However, the demands may outstrip local resources and revenue generating capacities (see Chapter 7). Many land-use decisions that influence how settlement patterns occur are also very local. In terms of reducing greenhouse gas (GHG) emissions and adapting to climate change, according to UNDP, between 50% and 80% of investments for mitigation and up to 100% of investments for adaptation take place at the subnational and local levels (UNDP, 2016).
Source: Calculations based on the Subnational government structure and finance database; https://doi.org/10.1787/05fb4b56-en.
Meeting the infrastructure gaps to fulfil these different global targets therefore requires improvements in the governance of infrastructure at all levels. Analyses by the OECD and others have shown that better governance of public investment throughout the investment lifecycle is critical. The quality of that governance can enhance growth outcomes at the national and subnational levels (OECD, 2013). It can also help achieve cost savings and greater efficiency and productivity of that infrastructure. National governments play a key role by providing the right framework conditions, but subnational governments have a critical role in choosing the right investments and at the right scale. Whether it is for new construction or ongoing maintenance (the latter being the lion’s share of public investment in OECD countries), those choices require local knowledge of needs and impact.
Cities and regions have in some places set more ambitious goals than national governments. In the area of climate change, for example, some cities have set, and outperformed, GHG emissions objectives set at the national level. The Carbon Neutral Cities Alliance (CNCA), a network of major cities such as London, Berlin and Copenhagen, is also pursuing the target to reduce their GHG emissions by 80% or more by 2050. In Copenhagen, for example, GHG emissions have decreased 31% since 2005, while its population increased 15% and the local economy grew by 18% (CNCA, 2015). Cincinnati, Ohio was the first large US city to opt for the provision of 100% sustainable electricity to its citizens and businesses, pre-dating a national plan (ICLEI, 2015). Thousands of subnational governments worldwide are active in setting targets.11 Many organisations such as R20 (Chapter 11), C40, ICLEI and CNCA, among others, have brought together regions and cities to show leadership in combating climate change.
Regional and local governments are also able to develop inspiring innovations. It is hard to be innovative in tackling these myriad challenges in the same way across all places. Cities such as Cardiff have used climate change as an opportunity to address local social issues. With its high energy costs and low income households, Cardiff was a city with a fuel poverty problem. The city launched a project to heat the city through renewable energy sources: by 2015, the city had managed to reduce household energy bills by USD 400 on average (C40, 2015). Washington, D.C. decided to purchase its power from renewable sources at a fixed rate, lower than fossil fuel power rates, for the next 20 years. This will reduce government emissions by 17% compared to 2013 and save taxpayer money through a smaller energy bill. The deal is the largest of its kind ever concluded by an American city and is expected to have a similar impact to planting 28 million trees (C40, 2015). Furthermore, it is expected to support jobs and investment in the wind energy sector. Cities and other non-national actors are inviting us to rethink our preconceptions about climate change mitigation. Some argue that the transition will yield a higher energy bill or that social challenges will remain. These initiatives show that this need not be the case, if we think smart, at the right scale and implement innovative policies.
However, there remain legitimate concerns about the quality and capabilities of all subnational governments
The quality of subnational governments is not uniform, and raises questions for their capacity to deliver in some locations. The European Quality of Government Index finds notable variation in quality across subnational governments, which can be higher in the same country than the difference across several countries. Importantly for addressing SDGs, one study shows that among European regions, 60% of the variation in the regional Human Development Index (HDI) is explained by the variation in the quality of governance (Charron, Lapuente and Dijkstra, 2012). They also find a positive and significant relationship between social trust and quality of government, although it is not clear which is the cause and which is the effect. There does not appear to be a consistent link between variations in the quality of government within a country (or generally higher levels of quality of government throughout a country) and political decentralisation. These findings raise interesting questions about when, where and how public participation in the policy process can be applied with more or less likelihood of success.
There is no clear trend regarding the prevalence or impact of corruption at subnational relative to national scale. Actions that are decentralised to subnational governments may narrow the scope for corruption by making politicians more accountable to the citizens they serve. Furthermore, the size of many procurement projects may be smaller than at national level. Alternatively, there may be greater opportunity and fewer obstacles to corruption (notably linked to procurement) at the local level compared to the national one, due to greater discretion of local politicians, weaker governance capacity at the local level, less developed local auditing functions and less visibility to the press and the public. So far, the research is inconclusive on the link between decentralisation and corruption (Shah, 2014).
A number of technical capacities such as in procurement and public-private partnerships may be difficult to ensure in all subnational governments. Institutional and workforce capacity can be particularly challenging for some subnational governments. In OECD countries, an ageing public workforce, high levels of turnover, and weakly competitive salaries, can make attracting the skills needed a challenge – precisely at a time when tasks, such as supporting innovation, addressing climate change, or engaging in more complex financial instruments, require new skills not previously held in many subnational governments. Large regions, particularly long-standing ones with significant autonomy and numbers of staff, can access a more diverse range of professional skills. The same is not necessarily true for small regions, municipalities, newly created regions, or subnational governments where the demands of decentralisation have outpaced growth in administrative capacity. Smaller subnational governments simply do not have the scale individually to develop expertise in certain aspects of public procurement or public-private partnerships.
How can national and subnational governments work better together, using a more structured engagement with people in the process?
Many of these global agendas are tackling intimately interconnected problems where the particular conditions in a place matter. The 17 SDGs and related 169 global targets are an expression of the complexities of these challenges. For example, achieving the targets on water will also have a considerable impact on the targets relating to gender in developing countries. Better planned urbanisation processes will have important implications for CO2 emissions. Improved rural development has considerable benefits for food security in rural areas (Chapter 10). Focusing on targets in a single-minded way ignores both the compounded benefits of joint action as well as the potentially perverse effects of supporting one target in a way that detracts from success in another target.
Regional, urban and rural development policy has emphasised a holistic approach to solving problems. Governments still operate in policy silos, with sectoral policies such as transport, often developed independently of the related policy areas, such as housing. The purpose of regional development policies and their adaptations in different types of urban and rural settings is to get the combination right for different circumstances. Ensuring access to quality education requires different measures in a capital city, and for different income groups within that city, as compared to a remote rural region. Regional development strategies will therefore differ across regions. OECD Territorial Reviews at cross-border, country, regional and metropolitan scale provide guidance on how to adapt those regional development strategies across different sectors to promote economic development and well-being in a holistic manner.12
National urban policies can improve the framework conditions for cities to function more efficiently. The OECD has been actively contributing to the Habitat III process, including as a co-lead with UN Habitat of the Habitat III Policy Unit 3 on national urban policies. National urban policy is a dynamic field among OECD countries as many countries are updating, or even creating for the first time, such policy frameworks (Chapter 2). More attention is being paid worldwide to the importance of such policies for urban development (Chapter 6). Indeed, national governments provide the frameworks that can help or hinder quality urbanisation that has implications for environmental performance, the productivity of firms and the quality of life for residents. OECD Urban Policy Reviews are a tool to help national governments in their quest to improve these national frameworks for a country’s system of cities.
Designing better rural development policies can help unlock the economic, social and environmental potential of these areas to contribute to national prosperity. The OECD’s 10th Rural Development Conference, held last year in Memphis (United States), issued a Chair’s statement that highlights several considerations to guide rural policy going forward (Chapter 9). Part II of this Outlook highlights the different types of rural areas and the strategies to build on their strengths and address their challenges. The lessons from these experiences of applying different elements of a “Rural Policy 3.0” will be critical for achieving the SDGs and to ensure that rural areas are not left behind. The OECD Rural Policy Reviews are designed to help countries upgrade their rural development strategies to this version 3.0.
In addition to place-based policies, national governments can organise themselves in ways that address interconnected challenges, such as through a Centre of Government. These Centres are increasingly playing a leading policy co-ordination role on complex issues. They have different ways of providing a leadership role, such as: i) integrating cross-disciplinary perspectives into policy advice; ii) leading policy co-ordination via both traditional committee architectures and more innovative and informal channels; iii) facilitating resource sharing through a closer partnership with ministries of finance; and iv) supporting experimentation and testing of new delivery systems, many of which are based on shared service models (OECD, 2014b). These Centres of Government are therefore institutions that can help steer the delivery of complex agendas, such as the SDGs, because they can bring ministries or agencies to work together on cross-cutting issues. In some cases they are more policy neutral than sectoral departments, and their convening power can bring pressure to bear on departments to adjust policies and commit resources.
Working across levels of government between national and subnational governments requires the right tools. The OECD Recommendation on Effective Public Investment across Levels of Government highlights the importance of co-ordination across policy sectors, levels of government and different territorial scales (Box 5.1). For various reasons, such as information asymmetries, inadequate funding arrangements or poor capacity, effective co-ordination is difficult, both vertically and horizontally across jurisdictions. Central-local co-ordination is the area where advanced economies tend to fare worst among 15 dimensions of institutional quality for efficient public investment management (IMF, 2015). The Implementation Toolkit for the OECD Recommendation helps countries and regions put the principles into practice, with practical recommendations on how to link planning to budgeting, develop partnerships, or pool procurement or capital funding across jurisdictions.13 Better governance at national and subnational levels is a critical backbone for achieving all of the SDGs, above and beyond Goal 16, which commits countries to build effective, accountable and inclusive institutions at all levels.
Multi-level governance is the term used to describe the relations between different levels of government, however there is also a need for a multi-level governance of public participation. The classic “ladder of participation” highlights that some forms of participation are actually not real participation, but rather are associated with education at best, and manipulation at worst (Arnstein, 1969). The ladder then progresses to include different forms of informing and consultation, but if these are available to the “haves” and ignore the “have-nots”, they fail their purpose. Moving towards the top rungs, there are opportunities for partnership, delegated power, or even citizen control in the most extreme case. More research is needed to understand how the type and scale of participation influences policy outcomes. There are several types of engagement, and different scales at which it can occur. Better tools to map this out and identify the role at each level of government are still needed.
One area where the OECD has been working in-depth on stakeholder engagement is in the field of water governance, which has a strong local dimension. The water crisis is mainly a governance crisis (Chapter 8).14 A recent report finds six guiding principles that are also relevant for other fields where stakeholder engagement is solicited (OECD, 2015b). This practical application recognises that there are costs and benefits associated with engaging stakeholders, and obstacles to overcome. But governments cannot afford to ignore their public, private and civil society stakeholders. The first step is to map all stakeholders who have a stake in the outcome, or that are likely to be affected, as well as to identify their responsibility, core motivations and interactions. A second step is to define the ultimate line of decision making, the objectives of stakeholder engagement and the expected use of inputs. A third is to allocate proper financial and human resources, and to share relevant information for result-oriented stakeholder engagement. This is followed by the need to regularly assess the process and outcomes of stakeholder engagement to learn, adjust and improve accordingly. The report suggests that these engagement processes be embedded in clear legal and policy frameworks as well as organisational structures/principles and by responsible authorities. Finally, it helps to customise the type and level of engagement to the needs and to keep the process flexible to changing circumstances.
Pillar I: Co-ordinate public investment across levels of government and policies
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Invest using an integrated strategy tailored to different places.
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Adopt effective instruments for co-ordinating across national and subnational levels of government.
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Co-ordinate horizontally among subnational governments to invest at the relevant scale.
Pillar II: Strengthen capacities for public investment and promote policy learning at all levels of government
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Assess upfront long-term impacts and risks of public investment.
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Engage with stakeholders throughout the investment cycle.
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Mobilise private actors and financing institutions to diversify sources of funding and strengthen capacities.
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Reinforce the expertise of public officials and institutions involved in public investment.
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Focus on results and promote learning from experience.
Pillar III: Ensure proper framework conditions for public investment at all levels of government
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Develop a fiscal framework adapted to the investment objectives pursued.
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Require sound and transparent financial management at all levels of government.
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Promote transparency and strategic use of public procurement at all levels of government.
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Strive for quality and consistency in regulatory systems across levels of government.
In many countries, it is youth that have been active in pushing governments to think about the environment and future generations, as they feel their voices are not heard. In fact, in several countries it is indeed younger people that have been plaintiffs in lawsuits against governments asking them to do more to address climate change. Their efforts are inspiring and make us all think about the future, and what is needed to make positive changes happen. However, the current state of affairs in OECD countries is not what it should be. Young people have limited information on how to engage with civic life, including how the political and decision-making systems work. Youth are concerned that politicians are not truly listening to their voices. There is also a lack of existing structures in place to encourage youth to participate and be engaged with civic life, such as youth parliaments, councils, and other participatory structures.15
Conclusion
Business as usual is not enough to achieve these global agendas, there is a need to invest in “voice” to engage with people for the right reasons and at the right scale. Changes may be needed to both the policies governments implement and the governance arrangements they use to do so, including governance that goes beyond government. The holistic approaches used in regional, urban and rural development offer lessons for how to better adapt the mix of policies to particular circumstances in achievement of these global goals. Progress needs to be measured at the level that matters to people, where they live and work, and considering a dashboard of indicators to capture the full picture. Localising these global targets can further help all residents to have a voice, and ensure that no region or city is left behind. But more work is needed to know how to make this all work in practice, given the varying quality of subnational governance. The OECD stands ready to support national and subnational governments in their efforts, as part of the: OECD Action Plan on the Sustainable Development Goals; OECD work on regional, urban and rural development; and OECD work on public governance more generally.
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Notes
← 1. This chapter should not be reported as representing the official views of the OECD or of its member countries. The opinions expressed and arguments employed are those of the author(s).
← 2. The role of the local level was raised in some elements of the Hyogo Framework for Action 2005-15: Building the Resilience of Nations and Communities to Disasters.
← 3. Addis Ababa Action Agenda of the Third International Conference on Financing for Development (2015), paragraph 34.
← 4. Paris Agreement within the United Nations Framework Convention on Climate Change (2015), Preamble paragraph 15.
← 5. Paris Agreement within the United Nations Framework Convention on Climate Change (2015), Article 7, paragraph 2.
← 6. Paris Agreement within the United Nations Framework Convention on Climate Change (2015), Article 11, paragraph 2.
← 7. In an analysis of OECD EU countries, the correlation between those that are satisfied with local public services (using Gallop World Poll data) and those that trust in regional or local public authorities (Eurobarometer data) had an R2 of 0.75. Data for trust in local authorities for OECD non-EU countries are not available.
← 8. Gallup (2014), see www.gallup.com/poll/176846/americans-trust-local-government-state.aspx.
← 9. OECD, https://www.oecdregionalwellbeing.org/
← 10. OECD Metropolitan eXplorer, http://measuringurban.oecd.org; OECD. https://stats.oecd.org/Index.aspx?DataSetCode=CITIES.
← 11. NAZCA, see http://climateaction.unfccc.int for more examples.
← 12. The Regional Development Policy Committee of the OECD is a premier international forum to discuss regional development policy and the accompanying governance arrangements to make them successful among peers.
← 13. OECD, www.oecd.org/effective-public-investment-toolkit/ for more details.
← 14. OECD Principles of Water Governance, www.oecd.org/governance/oecd-principles-on-water-governance.htm.
← 15. For more information, see the conclusions of the Youth Dialogue with Ministers held 27 October 2015, in Helsinki (Finland), in connection with the OECD Public Governance Ministerial Meeting held 28 October 2015.