4. Implementing the Rural Well-being Policy Framework: Guidelines and the institutional picture of OECD countries
This chapter covers the third dimension of the Rural Well-being Policy Framework, the engagement of governments, businesses and people to implement rural polices. The chapter starts with an overview of the multi-level governance approach for a coherent and co-ordinated implementation of rural policy. It analyses horizontal and vertical co-ordination strategies as well as urban-rural partnerships to attain policy complementarities and effective policy implementation. The second and final section of the chapter outlines the mechanisms for multi-stakeholder engagement, including civil society, private sector and third sector.
Achieving the three policy objectives (economic, social and environment) of the Rural Well-being Policy Framework requires implementation mechanisms that effectively engage different levels of governments, people and business.
Policy interventions that target administrative boundaries or economic sectors in silos miss opportunities to unlock synergies and meet broad policy objectives for rural regions and countries. Recovery from external shocks, such as the 2008 Global Financial Crisis or the 2020 COVID-19 crisis, will require effective multi-level governance and stakeholder co-ordination as identified in the OECD Principles on Rural Policy adopted in 2019 by the Regional Development Policy Committee.
To effectively deliver rural well-being, horizontal co-ordination is needed between traditional ministries in charge of rural development (e.g. agriculture) with other ministries responsible for enablers of development (innovation, services, roads). Horizontal co-ordination across levels of government involves an approach in which policy makers mainstream rural issues across all policies (also called rural proofing) to ensure rural needs are taking into account. While a sound rural proofing is a necessary approach to reviewing new policy initiatives through a rural lens, it is not sufficient for efficient co-ordination. Thus, governments also need to ensure policy complementarities among different policy strategies. Other important aspects to take into account for successful co-ordination among governments include:
Identifying the right scale of intervention by adapting policies and governance to functional geographies. According to the 2018-19 OECD institutional survey, for most OECD countries (80% of surveyed countries), the rural definition for policy making recognises the heterogeneity of rural regions. About 51% of surveyed OECD countries consider at least 3 types of “rural” areas (mixed rural/urban areas, rural regions close to cities and remote rural regions).
Setting a clear leadership role for policy co-ordination on rural issues to better integrate national rural policies, promoting synergies and upgrading the concept of rural development within the country. The 2018-19 OECD institutional survey on rural policy outlines how OECD countries are improving co-ordination and setting leadership on rural policy:
To overcome a sectoral bias and siloed policy making, many OECD countries have established an inter-ministerial committee or body to define rural development policies. Most OECD countries (85% or 29 out of 34 surveyed countries) have established an inter-ministerial committee in the form of advisory councils, platforms, networks or presidential committees.
While OECD countries tend to have more than 1 ministry in charge of rural development, in most cases (62% or 21 out of the 34 surveyed countries), the lead ministry on rural policy is explicitly related to agriculture.
Strengthening inter-municipal co-operation arrangements between regions or municipalities. For this, a number of OECD countries have established institutionalised municipal co-ordinating bodies at the regional level or voluntary inter-municipal co-operation mechanisms. Other countries have developed inter-municipal development agencies to support municipal governments in improving the business environment and well-being locally.
Promoting rural-urban partnerships to take advantage of functional links. These links include economic and demographic linkages, delivery of public services, exchange of amenities and environmental interactions. Some strategies to overcome challenges for this regional collaboration include:
Focus on integrated territorial strategies that address the outcomes and actual needs of residents rather than simply focusing on outputs.
Ensure objectives are clearly defined.
Improve understanding of interdependencies and leadership.
Improving vertical coordination between higher and lower levels of government, including their institutional, financial and informational aspects. In many OECD countries, a first step of co-ordination is through the development of the national development plans. Other mechanisms can include contracts between levels of government (even at international level), national level regional development agencies, national representatives in regions, co-funding agreements and consultation or regional forums.
Multi-stakeholder engagement and a “bottom-up” approach is a key ingredient to ensure sustainability and local ownership of rural policies. As globalisation deepens and the gaps between rural and other regions expand, rural regions increasingly feel that their needs are being overlooked by national policy making. New technologies, fiscal consolidation efforts, socio-political changes, declining levels of trust and the COVID-19 crisis have increased the demand for government transparency, accountability, and attention to the mechanisms through which governments can move beyond a “provider role” towards a “partnering relationship” with citizens and the private sector.
Involving local actors in policy design and implementation requires recognising a different vision of development from rural regions and in turn adapting the strategies to include citizens, the private sector and civil society in the policy making process. It involves supporting community-led initiatives and strengthening rural leadership to build capacity for effective involvement of local communities as partners in the multi-level governance process.
Countries and regions have adopted different approaches to engaging local actors varying from basic communication, full-co-production and co-delivery of policies. These engagement strategies include:
Citizen’s engagement: Participative and open budgeting, co-production of social service delivery, fora or policy summits.
Private sector engagement: Public-private partnerships and platforms for dialogue.
Collaboration with high education institutions: Partnerships to co-produce regional and local plans, programmes to support skills of public staff and support the local innovation strategy.
Achieving the three policy objectives (economic, social and environment) of the Rural Well-being Policy Framework requires implementation mechanisms that effectively engage different levels of governments, people and business in order to increase the well-being across all types of rural regions. Rural development extends across a wide range of policy areas and involves a variety of actors, which makes it impossible for a complete separation of policy responsibilities and outcomes across levels of government. Policy interventions that target administrative boundaries or an economic sector in silos miss opportunities to unlock synergies and meet broad policy objectives for rural regions and countries. Thus, promoting a better co-ordination across levels of government, different types of regions and stakeholders is fundamental to attain sustainable and effective policy outcomes.
The active engagement of citizens, businesses and third sector (education institutions and non-profit organisations) within policy making is a key ingredient to ensure sustainability and local ownership of rural policies. Greater involvement of local actors in policy design and implementation leads to a more transparent, inclusive, legitimate and accountable policy making process, which in turn strengthens trust in government and in the policy interventions. Such multi-stakeholder engagement has increasingly gained relevance since new technologies, fiscal consolidation efforts and socio-political changes are pressing governments to become partners rather than providers in policy implementation.
This chapter covers the third dimension of the Rural Well-being Policy Framework: the implementation of rural policies through the engagement of different levels of government and local actors. The chapter finds that an effective policy implementation requires a coherent and co-ordinated approach that promotes multi-level governance co-operation and engagement between different types of regions and local actors. Integrating different sectoral policies across all levels of government with a bottom-up approach is recognised as a cornerstone to unlock policy complementarities and attain sustainable outcomes in policy implementation.
Based on the 2018-19 OECD institutional survey on rural policy, the chapter outlines that most OECD countries have in fact embraced an integrated and complementary policy approach for rural development by relying on national rural policies and co-ordination mechanisms across ministries or inter-ministerial bodies. Likewise, OECD countries have adopted implementation instruments beyond subsidies, including contracts and agreements with local communities. The chapter also finds that a large majority of OECD countries have made efforts to identify the right scale for rural policy intervention by recognising the diversity of rural areas for policy purposes.
The chapter starts with an overview of the multi-level governance approach for a coherent and co-ordinated implementation of rural policy. It analyses horizontal and vertical co-ordination strategies as well as urban-rural partnerships to attain policy complementarities and effective policy implementation. The second and final section of the chapter outlines the mechanisms for multi-stakeholder engagement, including civil society, the private sector and the third sector.
As many policy areas, rural policy is cross-cutting by nature and involves a variety of governmental and non-governmental actors. According to the OECD Principles on Rural Policy, rural policy is defined as “all policy initiatives designed to promote opportunities and deliver integrated solutions to economic, social and environmental problems in rural places through the valorisation of resources, promotion of their recreational, ecological and cultural heritage, as well as through improving manufacturing activities and public service delivery in close co-operation with subnational authorities, while actively involving civil society and the private sector” (OECD, 2019[1]).
Addressing the interdependencies of rural policy and attaining the sustainability of policy outcomes require the adoption of multi-level governance mechanisms with strong multi-stakeholder engagement. This approach draws from OECD experience on rural and regional policy and the guidelines set by the Principles on Rural Policy (OECD, 2019[1]).
Multi-level governance involves co-ordination among national, regional and local institutions. A multi-level governance framework encourages different levels of government to engage in vertical (across different levels of government), horizontal (among the same levels of government) or networked co-operation in order to design and implement better policies (OECD, 2010[2]). It acknowledges that regions and localities are in many cases the ones responsible for much of the service delivery and public investment, which determines economic growth and people’s well-being. Furthermore, since rural communities tend to have a smaller population than their urban peers, rural regions are less likely to have significant levels of representation at the national level (OECD, 2016[3]). The multi-level governance approach thus aims to address the former challenges and leverage on the relevance of local governments to ensure a sound policy implementation by translating national policy design and implementation at the local level, promoting bottom-up solutions and increasing national policy effectiveness.
Multi-level governance mechanisms need to take into account the institutional differences across countries. OECD country experiences show that there is no universal consensus on the optimal structure of multi-level governance. OECD countries have a diverse institutional landscape and structure of subnational governance. It is therefore key to understand and manage the relationships and the mutual dependence across levels of governments efficiently in each country, by identifying and properly addressing the different multi-level governance challenges and gaps (Box 4.1).
With 37 countries in May 2020, the OECD gathers 9 federal and quasi-federal countries and 27 unitary countries. The majority of countries (19) have 2 administrative levels of subnational government (state/regions and municipalities), 10 countries have only 1 administrative subnational level (municipalities), while 8 countries have 3 administrative levels (state/regions, intermediary governments and municipalities). Instruments used to promote regional development in different regions should thus reflect country specificities and adapt to different contexts. A number of institutional characteristics, including the degree of decentralisation and autonomy, would influence the decision of how rural policy will be delivered. Sweden’s highly decentralised approach is one example of a multi-level governance system that accounts for rural policy needs by providing room for dialogue and compromise (OECD, 2017[4]).
Complete separation of policy responsibilities and outcomes across levels of government is impossible to reach. The relationships among levels of government are characterised by a mutual dependence: vertical (across different levels of government), horizontal (among the same level of government) and networked. Governments must therefore bridge a series of vertical and horizontal “gaps”.
These gaps include, in particular, the fiscal capacity of governments to meet obligations and information asymmetries between levels of government. Other major challenges include gaps in administrative responsibility (when administrative borders do not correspond to functional economic and social areas), gaps in policy design (when line ministries take purely vertical approaches to cross-sectoral regulation that can require co-design of implementation at the local level) and finally a lack of human or infrastructure resources to deliver services and design strategies. Countries may experience these gaps to a greater or lesser degree but given the mutual dependence that arises from decentralisation and the network-like dynamics of multi-level governance, countries are likely to face them simultaneously.
OECD member and partner countries are increasingly developing and using a wide variety of mechanisms to help bridge these gaps and improve the coherence of multi-level policy making. These mechanisms may be either “binding” (such as legal mechanisms) or “soft” (such as platforms for discussion), and must be sufficiently flexible to allow for territorially specific policies. Involvement of subnational governments in policy making takes time but medium- to long-term benefits should outweigh the costs of co-ordination
Source: OECD (2017[5]), Multi-level Governance Reforms: Overview of OECD Country Experiences, https://dx.doi.org/10.1787/9789264272866-en.
Horizontal co-ordination
Horizontal co-ordination across levels of government involves an approach in which policy makers review all policies to ensure people across the country, including those in rural regions, receive equitable treatment (Shortall and Alston, 2016[6]). It means applying a rural mainstreaming to all policies (also known as rural proofing) by deliberately reviewing new policy initiatives through a rural lens. The overall goal of rural proofing is to ensure and monitor that all domestic policies and the different institutions and sectors take into account rural circumstances and particularities. Rural proofing arrangements are normally based on ex ante ministerial assessment and review of rural development coherence done by each government body or on ex post regional assessment evaluation of different ministries’ policy decisions on rural regions. For example, the United Kingdom (UK) has adopted a policy of rural mainstreaming and rural proofing to keep the needs of rural regions at the forefront (Box 4.2). Other countries, including Canada, Finland and New Zealand, have implemented their own forms of rural proofing. In 2016, the European Union (EU) also committed to rural proofing its policies.
Rural proofing as a policy strategy is not without challenges. Taking a rural lens to sectoral or national policies may be challenging due to the difficulties in the ability of any single department to influence the behaviour of another department. Furthermore, this approach is not fully effective if there is no co-ordination and integration among the sectoral policies that were rural proofed. Conducting separately rural proofing, for instance, on transport and housing policies, without integration among them, will create inefficiencies on policy implementation and even undesirable outcomes (e.g. housing developments without transport connections). A lack of policy co-ordination leads to missing opportunities on investment and policy complementarities.
In the UK, rural proofing is integral to the policy making cycle. In England, 9.8 million people (19% of the population) live in rural areas. Virtually all policies impact upon rural communities. Rural proofing helps achieve good economic, environmental and social solutions that contribute to growth. Rural proofing is a commitment by the government to ensure that domestic policies take account of rural circumstances and needs. It is a mandatory part of the policy process, which means as policies are developed, policy makers should:
Consider whether their policy is likely to have a different impact in rural areas, because of particular circumstances or needs.
Make a proper assessment of those impacts, if they are likely to be significant.
Adjust the policy where appropriate, with solutions to meet rural needs and circumstances.
The point of encouraging early assessments of expected, or likely, impacts in rural areas is a critical factor for rural mainstreaming. This type of prior assessment of policy goes well beyond a mere audit. It is about making the right evidence on rural dynamics available to the key decision-makers in a timely fashion so as to enable the introduction of corrective measures. Rural proofing applies to all policies, programmes and initiatives and it applies to both the design and delivery stage. The Department for Environment, Food & Rural Affairs (DEFRA) Rural Communities Policy Unit (RCPU) has been established as the centre of rural expertise within government and is able to advise policy makers on the likelihood and possible scale of rural impacts and suggest actions that might be taken to mitigate these. The RCPU can provide up-to-date information on rural areas and key rural stakeholders. At the same time, DEFRA has developed a suite of local-level rural proofing materials, to guide and help local decision-makers to “rural proof” local policies and practices.
Source: OECD (2011[7]), OECD Rural Policy Reviews: England, United Kingdom 2011, https://doi.org/10.1787/9789264094444-en.
Such an approach to policy complementarities among different levels of government is set to bring a more efficient and sustainable result to the implementation. It involves co-ordinating different sectoral and political interests towards a single goal for rural development (Box 4.3). A cornerstone of these complementarities is the focus on integrated investments and delivering services and programmes that are adapted to and meet the needs of rural communities. Integrated investments have the potential to reap the benefits of complementarities when they are adapted to the different types of rural regions (Table 4.1).
The concept of policy complementarity refers to the mutually reinforcing impact of different actions on a given policy outcome. Policies can be complementary because they support the achievement of a given target from different angles. This has been an important idea in terms of how to integrate and sequence structural reforms. This concept can be applied to regional development issues, for example:
Increased broadband Internet access in rural regions should proceed along with policies that focus on the accessibility and diffusion of these services to the population.
Changes in land use zoning in cities induce shifts in mobility patterns, which requires co-ordination with transport planning and infrastructure improvements.
Investments in innovation and business ecosystems increase demand for skills within local labour markets and, therefore, complementary local initiatives to attract talent and develop human capital are needed.
In effect, governments should frame interventions in infrastructure, human capital and innovation capacity within common policy packages that are complementary to sectoral approaches as well. This is particularly important when dealing with complexities associated with Indigenous economic development at the local and regional levels. Policies need to be integrated horizontally, through management arrangements and development plans amongst different sectors, services and agencies within a given level of government. It also requires that policies are vertically integrated, from the national to the local level of government, and that interventions are territorially integrated and consider the interrelationships and interdependencies between different territories.
Source: OECD (2016[8]), OECD Regional Outlook 2016: Productive Regions for Inclusive Societies, https://dx.doi.org/10.1787/9789264260245-en.
Implementing at the right scale
A first step to implement rural policy is identifying the right scale of intervention by adapting policies and governance to functional geographies (OECD, 2019[1]). In line with the Principles on Rural Policy 1 and 2 (Box 4.4), sound implementation of rural policy involves developing a clear definition of rural areas to effectively target rural people and businesses as well as unlock complementarities with other regions. As Chapter 3 outlined, rural or low-density economies are different from urban economies, across various dimensions including the physical distance from markets, the costs in terms of connectivity to transport people and goods and the prominence of specific natural endowments for the local economy. The implementation of rural policies thus needs to match the scale of rural economies (e.g. local labour markets, food chains, environmental services and amenities), based on current and future needs of the areas, and ensure effective government mechanisms at the relevant scale to realise rural policy objectives.
Principle 1. Maximise the potential of all rural places, by:
Leveraging the unique assets of each rural area to adapt and respond to emerging megatrends (digitalisation, globalisation and trade, climate change, population ageing, and urbanisation).
Adapting policy responses to different types of rural regions including those close to cities and rural remote regions.
Principle 2. Organise policies and governance at the relevant geographic scale by:
Implementing rural policies at different scales that match with functional relationships (e.g. local labour markets, food chains, environmental services and amenities) based on current and future needs.
Ensuring that there are effective government mechanisms at the relevant scale to realise rural policy objectives.
Encouraging the efficient and effective provision of public services and infrastructure (e.g. shared services, integrated service delivery, e-services) in order to maintain quality and accessibility, address market failures and respond to emerging needs, especially in underserved rural communities.
Source: OECD (2019[1]), OECD Principles on Rural Policy, http://www.oecd.org/cfe/regional--policy/Principles%20on%20Rural%20Policy%20Brochure%202019_Final.pdf.
In most OECD countries, the rural definition for policy making purposes has recognised the heterogeneity of rural areas. According to the 2018-19 OECD institutional survey (Annex 4.A), 51% of OECD countries consider at least 3 types of rural areas for policy design and delivery: mixed rural/urban (i.e. rural inside functional urban areas), rural close to cities and remote rural. A second group of countries consider 2 types of rural (23%), often mixed rural/urban and remote rural, while 20% consider only 1 type of rural, mainly mixed rural/urban (Figure 4.1). The standardisation of criteria when defining the rural dimension is of vital importance in order to be able to benchmark policy outcomes in rural places. While many countries have defined rural based on population density and accessibility, in line with the OECD rural definition (see Box 2.3 in Chapter 2), many countries have included particular criteria in their definitions, including economic activity or distance to services (i.e. Australia, Israel and Italy).
Note: The three categories refer to: mixed rural/urban areas, rural areas close to cities or remote rural areas. Self-reported answers to the question: “Please mark with an “X” if the rural definition for policy making considers the following rural area: mixed rural/urban areas, rural areas close to cities and remote rural areas”. Selection of multiple categories was allowed.
National coherence and leadership on rural policy needs to avoid a sectoral approach
National rural policies are an instrumental tool to attain such co-ordination among actors and pool resources and capabilities across entities to collectively accomplish what no individual actor can achieve independently. Effective rural policies involve the engagement of a broad array of actors and multi-level governance mechanisms.
Given the cross-cutting nature of rural development, most OECD countries (89%) have put in place a national rural policy. OECD countries have this national policy defined by law or in a strategic policy document. The timeframe to renew this policy varies from every year to four or more years. The competent bodies for defining national rural policy are distributed differently across countries. This body in charge of rural development tends to be the same and often follows a concerted effort. For example, in Chile, the National Rural Development Policy is set by the Ministry of Agriculture, while in Sweden, the body in charge is the Swedish Agency for Economic and Regional Growth. Finland offers a long tradition of policy coherence through a National Rural Programme (Box 4.5).
The National Rural Policy Programme is the main instrument to provide coherence to the different sectoral policies oriented towards rural areas in Finland. It is drawn up by the Rural Policy Committee, an institution that brings together nine ministries, other public organisations and federations, as well as research centres and private stakeholders. The National Rural Policy Programme includes strategic guidelines and specific practical measures for different sectors and for different entities of the government. Under the leadership of the Rural Policy Committee, which also promotes the implementation of the measures, the programme has been shaped by many different stakeholder organisations.
The National Rural Policy Programme is divided into two parts: the Plan of Action of the Rural Policy Committee and the Special Programme or the Report of the Government. The Plan of Action of the Rural Policy Committee contains proposals to be undertaken by a wide number of actors. The separate Special Rural Policy Programme is drawn up on the basis of the Plan of Action, and only contains decisions and proposals within the competency of the government. For example, the Fourth Rural Policy Programme (2005-08) entitled “Viable Countryside – Our Joint Responsibility” included 133 proposals. Based on it, a Special Rural Policy Programme was prepared for its political support for 2005-06 consisting of 52 government decisions. This system has contributed to the allocation of responsibilities, information sharing and linking the planning and implementation stages.
The programme is revised about every four years and contains both a strategic perspective and concrete proposals with explicit references to those responsible for implementing them. The Rural Policy Committee carries forward the proposals of the programme through negotiations, projects, theme group work and by influencing various processes.
These documents have been central in providing rural policy with a policy framework. Ministries need to report twice a year the actions undertaken in line with the proposals/decisions contained in the Rural Policy Programme/Special Programme. Additionally, the continuation of these programmes over a time frame of more than two decades (there have been five National Rural Policy Programmes, 1991-96, 1996-2000, 2001-04, 2005-08 and 2009-13) has contributed to providing a long-term vision to rural policy. Finally, the distinction of two programmes, one within the government domain (the Special Rural Policy Programme) and one broader where a number of other organisations are involved, contributes to the allocation of responsibilities, decision-making, information sharing and linking the planning and implementation stages.
Key strengths of the process are: i) the involvement of civil society and academia in the preparation as providers of local and technical knowledge, reducing a critical knowledge gap that many central governments have in targeting the priorities of rural policy; ii) the ownership of the programme by the different government and non-government actors involved, resulting from a long process of multi-arena negotiation and aligning the actions of all key stakeholders; iii) clarity in the allocation roles and responsibilities within the government; and iv) the annual or biannual monitoring and evaluation process on how the proposals/decisions have been put forward.
Source: OECD (2014[9]), OECD Rural Policy Reviews: Chile 2014, https://doi.org/10.1787/9789264222892-en.
A clear leadership role on rural issues is key to better integrate national rural policies, promote synergies and upgrade the concept of rural development within the country. The appropriate place that rural policy should occupy within the “government” is an open and long-standing debate in OECD countries (OECD, 2014[9]). As the Ministry of Agriculture is traditionally the body interacting with rural regions in OECD countries, countries have often created a department in charge of rural development within this ministry. Yet, the solution where the Ministry of Agriculture is the only one in charge of rural development is often second best as the inter-sectoral aspect of rural development is significantly limited when only within one sectoral ministry. Further, this ministry tends to have strong incentives to revert to traditional methods given that agricultural interests are generally better organised than rural development interest. In EU countries, the institutional arrangements of EU funds often play a determining role in the lead selection of the lead ministry (Box 4.6).
While OECD countries tend to have more than one ministry in charge of rural development, in most cases (62%; 21 out of the 34 surveyed countries), the lead ministry on rural policy is related explicitly to agriculture. Yet, in an increasing number of countries (24%), the lead ministry on rural policy is not directly associated with agriculture or rural development (Figure 4.2). It includes the Ministry of Enterprise and Innovation (Sweden) or the Ministry of Industry, Business and Financial Affairs (Denmark). In the remaining countries (18%), the lead ministry deals with regional development or rural affairs.
Note: Others refer to Federal Ministry for Sustainability and Tourism (Austria), Ministry of Industry, Business and Financial Affairs (Denmark), Ministry of Transport and Local Government (Iceland), Ministry of Local Government and Modernisation (Norway), Ministry of Enterprise and Innovation (Sweden), State Secretariat for Economic Affairs (Switzerland) and Presidency of Strategy and Budget (Turkey).
Self-reported answers to the question: “What are the lead ministry(ies) and other co-ordination bodies in charge of rural development” mention most important first.
The place that rural policy should occupy within the “government” is an open debate. In many OECD countries, the Ministry of Agriculture has traditionally been the lead ministry in charge of rural development. In some cases, this leadership happened naturally as the ministry had the first contact with rural actors. However, there are also external factors that play a determining role in defining the lead ministry.
This is the case of EU member countries which have to cope with external funding streams and rules that influence the decision of where to locate rural development policies. The two main streams of EU funds are the Common Agricultural Policy (CAP) and (Regional) Structural Funds. Since rural development funds have emerged from the CAP (the so-called “second pillar”) and not from regional funds (although many countries, including Finland, have used structural funds for rural development), the most obvious place for rural development policies within EU countries’ government structures has tended to be the Ministry of Agriculture, in charge of administering CAP funds.
Nevertheless, several countries have sought to break the inertia by creating a new body with expanded scope and explicit jurisdiction over rural development policies or by assigning this jurisdiction to another ministry. An example of the first case is the UK, where the same central authority, DEFRA, embodies wider responsibilities over a broader set of areas, including the environment, food and rural affairs. A number of EU countries have also created a broad-based inter-ministerial committee to deal with rural development. It brings together nine ministries, other public organisations and federations, as well as research centres and private stakeholders.
Source: OECD (2014[9]), OECD Rural Policy Reviews: Chile 2014, https://doi.org/10.1787/9789264222892-en.
To overcome a sectoral bias and a silo policy making approach, many OECD countries have established an inter-ministerial committee or body to define rural development policies. Most OECD countries (85% -29 out of 34 surveyed countries) have established an inter-ministerial committee in the form of advisory councils, platforms, networks or presidential committees. An inter-ministerial committee of rural development has the advantage of being able to gather a broad set of actors, including the relevant ministries, public agencies, representatives from the territories and the regions. It could also have a flexible and adaptable organisation, working in different commissions. In the OECD, many countries (20 out of the 29 countries) have more than one inter-ministerial body dealing with themes that involve rural issues. For example, South Korea created in 2003 the Presidential Committee on National Balanced Development which gathers different ministries representatives to establish and co-ordinate regional development policies.
Likewise, not all OECD countries target a single policy objective for rural development. On average, 53% of OECD countries prioritise economy over other matters for rural development policies, while 13% define environmental matters as the main priority for rural policies. A smaller proportion of countries (7%) place social matter as the main priority (Figure 4.3). A number of countries apply the same degree of priority to economy and social matter (13%).
Note: Self-reported responses from country delegates to the question: “Please grade from 1 to 10 the importance rural development policies in your country assign to economic, social and environmental areas”. The sum of the 3 areas must be equal to 10.
While the rural policy approach has moved beyond a sectoral focus, most OECD countries still classify agriculture as the most important strategic sector for rural policy. According to the 2018-19 OECD institutional survey on rural policy, agriculture was ranked as an extremely/very relevant strategic sector by a majority of countries, 27 out of the 34 countries that answered this question. Yet, strategic areas such as innovation and quality of life are also highly relevant for OECD countries. Innovation support was ranked as extremely important by 22 out of the 34 countries, while quality of life by 20 countries. Other strategic themes that were ranked as highly relevant are service delivery (19), land use (18) and support to the private sector (18) (Figure 4.4).
Note: Self-reported responses from country delegate to the question: “How important are the following objectives in your country’s rural development policy? Grade from 1 to 5, where 1 is not important and 5 is very important”. Other objectives include cultural and rural identity, rural tourism and access to credit. Countries could grade a number of sectors with the same value.
Boosting co-ordination among regions and municipalities
Horizontal co-ordination also refers to co-operation arrangements between regions or between municipalities. These agreements are increasingly common as a means by which to improve the effectiveness of local public service delivery and implementation of development strategies. Co-ordination across jurisdictions, both at the municipal and regional levels, is crucial to being in the right position to take advantage of spill-overs and to increasing efficiency through economies of scale. The small scale of public investment projects that regions or municipalities can often undertake can result in low returns and, as a result, prevent the local definition of infrastructure projects (OECD, 2014[10]). To bridge this gap, formal mechanisms of collaboration allow municipalities and regions to identify the relevant functional scale of infrastructure investments. Overcoming jurisdictional barriers requires the capacity to see and execute opportunities while gathering the necessary political support.
A better co-ordination among municipalities can contribute to addressing some of the structural challenges rural regions face (Chapter 3). Rural governments, particularly in remote rural regions, tend to lack staff capacity and have fragmented access to information on business needs and labour skills. It can pose challenges for municipalities to become strong partners to support the development of the local market. Furthermore, a larger co-ordination among municipalities to expand the local offer of products and services can help attain economies of scale and retain locally the benefits of economic operations. To strengthen inter-municipal co-ordination, OECD countries have established institutionalised municipal co-ordinating bodies at the regional level or voluntary inter-municipal co-operation mechanisms (i.e. voluntary federations of local authorities to work together on particular services or municipal associations) (Box 4.7).
In Chile, municipal associations have existed since 1993 with the creation of the Chilean Municipal Association (Asociación Chilena de Municipalidades, AChM), which at that time grouped together 96% of Chilean municipalities. Its mission was the political and technical representation of municipalities at the national level. The AChM also has regional representations including all municipalities within each region. Thanks to the stimulus provided by the AChM and SUBDERE, other associations emerged for specific activities such as the co-management of services. The associations that have emerged group municipalities with similar issues and with clear and specific objectives. As of today, it is possible to identify four types of municipal associations:
National associations: They represent municipalities politically at the national level. The main association is the AChM, grouping the vast majority of Chilean municipalities; it is the most important and widely recognised association in the country. The Association of Chilean Municipalities (Asociación de Municipalidades de Chile, AMUCH), created in 2013, is also a national association, grouping around 40 municipalities with similar political affiliation.
Regional associations: The AChM has regional representations which correspond to the associations of all municipalities within the region. The degree of development and autonomy of each of these regional associations varies among regions.
Territorial associations: These associations group neighbouring municipalities with a common project. The vast majority of these associations form out of a common political will. In general, municipalities that form an association share a common identity in terms of culture or economic activities.
Thematic associations: They bring together municipalities to address a specific, common issue (tourism, mining activities and productive development) or solve common problems such as waste management or the purchase of health material.
Source: OECD (2017[11]), Gaps and Governance Standards of Public Infrastructure in Chile: Infrastructure Governance Review, https://dx.doi.org/10.1787/9789264278875-en.
Other countries have developed inter-municipal development agencies to support municipal governments in attracting business environment and well-being locally. Many OECD rural municipalities have developed their own type of development agencies to provide services to businesses and promote investment in the local market. However, stand-alone municipal agencies, especially in remote rural regions, tend to face staff shortage and in some cases create competitive business environments among neighbouring municipalities due to a lack of co-ordination in conducting development policies (skill and business attraction). Against this backdrop, some OECD regions have developed inter-municipal agencies or centralise the co-ordination within the regional government with the aim of integrating common strategic municipal tasks under a single body with the capacity to hire skilled staff, find synergies among municipal strategies and support local businesses with advice. Finland is an example where inter-municipal development agencies, such as Business Joensuu Ltd. in North Karelia, help implement strategic policies across municipalities (Box 4.8).
At the beginning of the 21st century, smaller municipalities in North Karelia decided to set up a joint development agency to address some pressing challenges in the local market, including scarcity of resources, lack of special knowledge to handle business advisory services and competition between neighbouring municipalities.
The municipalities negotiated, on the city board level and with all municipalities around the capital of the region (Joensuu), the creation a functional body, called Josek, organised on the level of the region around Joensuu.
In 2018, two municipalities decided to reduce the number of services acquired from Josek and developed inhouse business advisory services (retaining access to project development and facilitation services). This led to a reform in the development agency and the creation of Business Joensuu.
Business Joensuu provides services to start-ups and foreign investors interested in the region and supports the internationalisation of local companies. In addition, Business Joensuu produces an operating environment for different industries by creating the best conditions for companies to operate in the Joensuu region.
The company is governed by a board of directors that is selected by the following institutions:
Joensuu City Council.
The University of Eastern Finland.
Joensuu University Support Foundation.
The North Karelia Educational Council Group Riveria.
In 2019, representatives from the above-mentioned institutions plus representatives from the National Coalition Party and private companies (Outokummun Metalli Oy, Blancco Oy) formed the board of directors.
Business Joensuu services include:
Business growth and development.
New businesses, businesses and internationalisation.
Placement and attraction, marketing.
Space, community and event services for the science park.
Overall, the company managed 25 programmes focused on different sectors including export capacity in the region (ExportGrowth), the bioeconomy sector (Digital Forest Vitality), business digitalisation (Joensuu Smartcity, digital training) and entrepreneurship (women entrepreneurship). It is also involved in two active EU programmes to support the mining sector (REMIX and MIREU).
The services are typically 1-3 year-long customer-oriented development projects. They are initiated by designated industry-responsible experts who are responsible for promoting the business environment of their businesses, starting with the business needs of their companies.
Source: OECD (2019[12]), OECD Mining Regions and Cities Case Study: Outokumpu and North Karelia, Finland, https://dx.doi.org/10.1787/cd72611b-en.
Vertical co-ordination among the national and subnational government levels
Vertical co-ordination refers to the linkages between the higher and lower levels of government, including their institutional, financial and informational aspects. Local capacity building and incentives for the effectiveness of subnational levels of government are crucial issues for improving the quality and coherence of public policy (OECD, 2017[5]). In countries where the national government plays a prominent role in the delivery of public policy and services, the states need to reach the central government with a unified voice.
Mechanisms to support vertical co-ordination
Institutional mechanisms to ensure better co-ordination among national and local policies vary among countries. While the instrument can vary among countries, a common goal should ultimately be influencing stakeholders in the multi-level governance relationship towards more effective sharing of information and objectives. In many OECD countries, a first step of co-ordination is through the development of national development plans or national plans for regional development. Other instruments can include contracts between levels of government, national-level regional development agencies, national representatives in regions, co-funding agreements or consultation fora (Charbit and Romano, 2017[13]).
National platforms or regional fora at the national level where subnational government representatives meet are useful to strengthen co-ordination and propose a common project to national government (Box 4.9).
In order to ensure that various levels of government take a more co-ordinated approach to regional development and public investment, many OECD countries use vertical and horizontal co-ordination platforms. These can include institutional mechanisms, co-financing arrangements, formalised consultation of subnational governments and platforms for regular intergovernmental dialogue. Practices in Australia, the Netherlands, New Zealand, Portugal and the UK provide relevant examples.
Infrastructure Australia (IA) was established in 2008 by Australia’s federal government to co-ordinate investments of national importance with Australian states and territories. IA advises the national government on investment priorities in the transport, communication, energy and water sectors, and helps states identify infrastructure projects that align with national priorities. IA assesses individual state or territory applications for funding under the Building Australia Fund, which is the country’s main mechanism for financing critical infrastructure projects.
In the Netherlands, the various levels of government establish their own vision documents: the SVIR at the national level, the Provincial Structural Vision (provincial level) and zoning plans (municipal level). These documents serve as input to “area agendas”, which help all levels of government discuss and align their questions and projects in the physical domain (i.e. housing, industry, public transport, environment). Within the multi-year investment programme (MIRT), each region has its own, collective area agenda, containing the co-ordinated vision, goals and projects of the various government levels in the specific MIRT region. Aligning the visions of each level of government in an MIRT area leads to better solutions and ultimately greater effectiveness. While formal discussions take place multiple times per year, decision-making on the content of area agendas occurs at an annual meeting at the political level (BO MIRT), with the outcome discussed in parliament. Likewise, a new National Strategy on Spatial Planning and the Environment provides a sustainable perspective for the living environment with an approach of consultation with local stakeholders and with the shared responsibility of all levels of government.
New Zealand’s Government Policy Statement establishes high-level priorities for transport investment, which are then implemented through the New Zealand Transport Agency (NZTA) in collaboration with subnational governments. NZTA officials work with each local authority to determine co-funding arrangements for the maintenance and renewal of the country’s regional and local roads (approximately 90% of all roads). Vertical co-ordination is largely confined to investment in Auckland. Auckland Council’s special plan sets out long-term priorities for public investment and is designed to guide the investment decisions of central and local government, particularly in transport and also in social infrastructure (e.g. schools and hospitals).
Portugal’s Comissão de Coordenação e Desenvolvimiento Regional (CCDR) was created in 1979 for planning. Currently, CCDR activities cover: spatial planning; promoting strategic and integrated regional development planning; monitoring the design and implementation of deconcentrated policies; and providing an opinion on the national government’s public investment expenditure programme (PIDDAC) at the regional level. Under the EU Cohesion Policy, each region was requested to draft its own Regional Strategy 2020 under the direction of the CCDR in order to improve collaboration among the CCDR, municipalities and the regional directorates of various ministries operating in the regions.
Source: Adapted from OECD (2016[8]), OECD Regional Outlook 2016: Productive Regions for Inclusive Societies, https://doi.org/10.1787/9789264260245-en.
Financial incentives for co-ordination, including co-financing arrangements, can also mobilise municipalities to collaborate around concrete projects. For example, in France, the central government provides a basic grant plus an “inter-municipality grant” to encourage municipalities to constitute “public establishment for inter-municipal co-operation” (EPCI), a body that assumes limited, specialised and exclusive powers transferred to them by member communes (OECD, 2014[14]).
Contracts are also frequently used for regional development policy in OECD countries (Box 4.10). Contracts can potentially ensure that national-level policy decisions and regional priorities contribute coherently to common development targets. Contracts, referred to as arrangements, reorganise the rights and duties of governments, beyond those established in the constitution (Charbit and Romano, 2017[13]). Previous OECD surveys show that 23 out of 30 OECD surveyed countries use contracts as tools for vertical co-ordination (Charbit and Romano, 2017[13]). Contracts are especially effective in rural communities where they can be established without requiring formal restructuring or changes to the constitution and as short-term agreements, such as to run a new development project, whereby a small municipality may become more involved in national processes.
Barkly Regional Deal, Australia
The Australian Government delivered the country’s first Regional Deal in the Barkly region, Northern Territory. The region’s main town is Tennant Creek and is ranked as the second-largest local government area in Australia. Signed on 13 April 2019, the Barkly Regional Deal is a AUD 78.4 million, a 10-year commitment between the Australian government, the Northern Territory Government and the Barkly Regional Council to support productivity and liveability in the Barkly region.
The Barkly Regional Deal comprises 28 initiatives identified through an extensive 6-month consultation process which included close engagement with local Aboriginal stakeholders and representatives across the Barkly region, and other key industry stakeholders. Taken together, the initiatives are inter-dependent and respond to 3 community priority areas – economic development, social development, and culture and place-making, with the Australian government contributing AUD 45.4 million towards a range of these measures.
The Barkly Regional Deal will target investment decisions to accelerate regional economic development and strengthen the resilience of the region to respond to future shifts in the economy. This will include diversifying the industry and employment composition of the region and building the knowledge, skills and capability of the local workforce. The Barkly Regional Deal has set high the need for improving outcomes for Aboriginal people, helping to build sustainable, intergenerational wealth in Aboriginal communities. These initiatives will strengthen the Barkly region as a great place to live, work, invest and visit. The effectiveness of the Barkly Regional Deal will be measured as of the 10-year life of the deal, with a series of reviews scheduled throughout its implementation phase and an independent evaluation.
Contracts in France
State-region planning contracts (Contrat de plan État-région – CPER) have been in operation since 1982 and are important tools in regional policy in terms of planning, governance and co-ordination. They are characterised by their broad thematic coverage and cross-sectoral nature, with a territorial approach being applied across diverse policy fields including industrial, environmental and rural issues. The President of the Regional Council and Prefect, as the representative of the central government and different ministries, draft the contract. The co-financing of interventions is seen as an important co-ordination mechanism.
Planning Contracts 2007-13 and 2014-20: A New Generation of State-Region Contracts was introduced in 2007 alongside the EU Structural Funds programmes, in order to increase the links between French and EU regional policies. For the first period 2007-13, there are three priorities: i) the promotion of territorial competitiveness and attractiveness; ii) the environmental dimension of sustainable development; and iii) social and territorial cohesion. For the second period 2014-20, the priorities include: i) higher education; ii) research and innovation; iii) national coverage with high-speed broadband and development of the uses of digital technologies; iv) innovation, promising niches and the factory of the future; v) multimodal mobility; (vi) environmental and energy transition. Moreover, as employment, as a priority for the government, will be treated as a cross-cutting issue in the contracts.
The new contracts have demonstrated an emphasis on sustainable development. To reinforce the joint France-EU alignment, they have the same duration as the EU operational programmes and are based on joint territorial analysis and integrated systems for monitoring. As with the Structural Funds, regions can decide to release funding 18 months after project approval if no commitment has been made.
Contracts in Chile
Programming agreements (Convenios de Programación, CPs) in Chile are formal binding agreements between one or more regional governments and one or more national ministries, detailing measures and procedures to be undertaken in projects of common interest over a specified period of time. These agreements can also include other public or private national, regional or local institutions. The subscription of an agreement implies an allocation of their already approved budget to be spent through these agreements.
Formally, the steps for signing a CP include: i) identification of projects; ii) signing of a protocol of purpose that initiates negotiations between the parties and defines the objectives, areas of intervention and resources that each institution will contribute; iii) deciding on investments that will be included in the agreement with the technical recommendation; iv) drafting the programming agreement and negotiation (technical); and v) presentation of the agreement to the Regional Council for approval and signature. After the approval and execution of the agreement, there is a formal monitoring and evaluation stage in which a technical team made up of representatives from all parties involved is supposed to monitor its execution. Projects are carried out using the resources of both line ministries and regional governments (grants from the National Fund for Regional Development).
These agreements offer a useful legal framework for co-ordinating regional and national priorities and responsibilities. So far, they have mostly been used for shared planning and financing of large infrastructure projects.
Source: OECD (2017[5]), Multi-level Governance Reforms: Overview of OECD Country Experiences, https://dx.doi.org/10.1787/9789264272866-en.
There is no one mechanism better than another, while co-ordination between levels of government remains the most important feature to implement sound rural policies. In the OECD, a majority of countries (42%) use both deconcentrated national agencies1 and autonomous regional agencies2 to deliver rural policy at the regional level (Figure 4.5). Some OECD countries (29%) deliver rural policy solely through deconcentrated national agencies (e.g. Finland, Germany, Ireland), while a smaller number of countries (15%) rely on autonomous regional agencies (e.g. Australia, France, South Korea). A small group of countries (14%) use other types of structure including a whole-of-government approach (Canada), devolution of implementation to regions and municipalities (e.g. Mexico) or implementation directly from the national level (e.g. Latvia, Luxembourg).
Note: Self-reported answers to the question: “Please mark with an “X” the type of institution (s) in charge of rural development policy at the regional and/or local level. Options available: Deconcentrated national agency, Autonomous regional agency or other”. Multiple choices were allowed.
Investing in rural policy under a fiscal consolidation context
The recovery process from the 2020 COVID-19 crisis adds increased pressure to improve co-ordination among different levels of governments to implement the rural policy. During the crisis, governments have raised public spending in order to strengthen the health system and support people and businesses with grants and subsidies. As a result, governments might face further pressure to enhance the management of public investments in a context of tight public budgets, which will make the efficiency of the public investment a cornerstone of the recovery from the crisis.
Fiscal consolidation efforts to come out from the crisis will require governments to improve the management of regional development policies and particularly public investment, to efficiently deliver services in rural regions, and attain substantial savings and enhanced productivity. Improving management of public investments will be also important to attract and mobilise private investment into rural regions. Evidence suggests that institutional quality and governance processes affect the expected returns on public investment and the capacity to leverage private investment (OECD, 2016[3]). To this end, the OECD principles on public investment provide guidance to boost the efficiency of subnational public investments and overcome major challenges linked to investments across levels of governments (Box 4.11).
Financial tools to deliver rural policy in OECD countries varies largely depending on the type of country and government structure. Different mechanisms can serve multiple and complementary objectives, which ultimately requires countries to adopt a suitable combination of different mechanisms to improve how the public budget is spent and invested. Tools to finance rural policy include grants and financial instruments such as loans or co-funding methods (Box 4.12). When it comes to grants, governments leverage contracts and conditions attached to aid transfers that enable the alignment of priorities and encourage parties to co-operate (OECD, 2018[15]). Grants or subsidies are normally provided by supranational or national-level to subnational governments without obligation of repayment. Financial incentives include loans, public equity and venture capital, and credit guarantees (OECD, 2018[15]). They can involve challenges in contract design to ensure adaptation to contextual characteristics.
While countries traditionally relied on direct subsidies as the main mechanism to implement rural policies, an increasing number deliver rural policy through dedicated grant programmes or loans on specific matters. All OECD countries surveyed in the 2018-19 OECD institutional survey reported the use of grant programmes to implement rural development policy. Some countries (10) complement such grant programmes with contracts and agreements with local communities. EU countries highlighted EU-specific instruments including CAP and LEADER as mechanisms of rural policy implementation. Frame conditions such as legislation and regulations are also relevant tools to implement policies.
The OECD instrument groups 12 principles under 3 pillars: co-ordination, capacities and framework conditions.
Pillar 1: Co-ordinate across governments and policy areas
1. Invest using an integrated strategy tailored to different places.
2. Adopt effective co-ordination instruments across levels of government.
3. Co-ordinate across subnational governments to invest at the relevant scale.
Pillar 2: Strengthen capacities and promote policy learning across levels of government
4. Assess upfront long-term impacts and risks.
5. Encourage stakeholder involvement throughout the investment cycle.
6. Mobilise private actors and financing institutions.
7. Reinforce the expertise of public officials and institutions.
8. Focus on results and promote learning.
Pillar 3: Ensure sound framework conditions at all levels of government
9. Develop a fiscal framework adapted to the objectives pursued.
10. Require sound, transparent financial management.
11. Promote transparency and strategic use of procurement.
12. Strive for quality and consistency in regulatory systems across levels of government.
Source: OECD (2014[16]), Effective Public Investment Across Levels of Government Toolkit, www.oecd.org/effective-public-investment-toolkit.
From a policy design perspective, financial instruments are an alternative and complementary delivery mechanism to grants. Both instruments can be used to address gaps in access to finance. When deciding over grants or financial instruments to finance projects, it is key to answer which delivery mechanism will be most effective and efficient to achieve policy objectives.
In practical terms, financial instruments can be used to finance investments that generate income or save costs, enabling the initial support to be repaid. This means that where public intervention is justified by the need for public goods, repayable support is unlikely to be well suited. There is some consensus in the advantages of financial instruments over grants in three dimensions:
Sustainability: Financial instruments appear to be more sustainable than grants because funds need to be repaid, creating a legacy to invest.
Project quality: Projects financed through financial instruments seem to have greater quality as private sector appraisals enhances due diligence and repayment obligation encourages project managers to focus on results. There might be also a psychological dimension as both investee and investor share the risk.
Cost-effectiveness: Financial instruments can make more cost-effective use of public funds partly because funds may be recycled, but also because of their potential to attract private funds.
Other important benefits of financial instruments are the decrease in grant dependency, the promotion of an “entrepreneurial culture” and stronger support towards market development (niche). Yet, to encourage and make their use more efficient is important to articulate policies linked to grants and financial instruments.
In general, financial instruments are not attractive when grants are available for the same purposes. Financial instruments play an important role in limiting grant dependency, provided that financial instruments and grants are appropriately dovetailed. To optimise their use, it is crucial a comprehensive strategy that complements the use of financial instruments and grants and ensures advice and support through technical assistance, training, audits.
Source: OECD (2018[15]), Rethinking Regional Development Policy-making, https://doi.org/10.1787/9789264293014-en; Wishlade, F. and R. Michie (2017[17]), “Financial instruments in practice: uptake and limitations”, Background paper prepared for the seminar “When to use financial instruments” held 28 June 2017, OECD Headquarters, Paris.
Rural-urban partnerships
Cities and rural regions are highly interconnected through systems of governance, infrastructure, economic transactions and other linkages. Rural-urban partnerships take advantage of functional links by connecting a territory which shares value chains, labour markets or natural resources. Although economic linkages are often the basis of these partnerships, demographic linkages, delivery of public services, exchange of amenities, environmental goods, and other governance interactions also drive the need for rural-urban interaction (Table 4.2). Linkages allow regions to collaborate on territorial branding, service delivery, environmental protection and other issues (OECD, 2014[10]). Such partnerships acknowledge the interdependency and mutual interests of rural regions and cities. Furthermore, as mentioned in Chapter 2, rural-urban interactions are not encompassed within administrative boundaries but occurred throughout a rural-urban continuum. Environmental, demographic and economic interactions, for instance, go beyond administrative boundaries.
Developing rural-urban partnerships can take on varying degrees of formality and openness. Most urban-rural interactions are shaped by physical proximity. Yet, despite the importance of physical proximity, other types of urban-rural interactions have ubiquitous rather than contiguous impacts. This type of relationship has been referred to as “organised proximity” and may include economic relationships between firms, tourism and other flows related to exchange in amenities (e.g. recreation), as well as some specific forms of institutional collaboration. Formal policy strategies to promote rural-urban partnerships can also use contracts among regions. This is the case of France where “reciprocity contracts” allow cities and surrounding rural regions partner on common areas of concern such as employment, the environment and local services (European Network for Rural Development, 2018[19]). Despite the type of co-operation, as stated in the third Principle on Rural Policy, governments should support interdependencies and co-operation between urban and rural areas by leveraging their spatial continuity and functional relationships, carrying out joint strategies and fostering win-win rural-urban partnerships (2019[1]).
Just as the types of territory are recognised by common characteristics (large cities are focal points of economic innovation and growth while remote communities are sector-specific areas) so are the linkages established across them (Table 4.3). Regional linkages are not always predictable but can be defined according to a spatial and functional dimension. Policies and funds supporting rural-urban partnerships tend to focus on metropolitan regions and sub-regional centres, excluding partnerships and resources for strengthening linkages of small- and medium-sized cities and their linkages to rural surroundings (Carriazo et al., 2015[20]). The OECD has differentiated the spatial dimension of these links following three different categories of regions (OECD, 2013[18]):
Linkages around metropolitan regions. As Chapter 2 depicted, (large) metropolitan regions are composed of urban cores that gather diverse and dynamic economic activity pulling in increasingly firms and workers. The influence of the urban engine often extends across the region and beyond the labour commuting distance. Rural regions close to these urban poles may house those who commute to the central core. Rural dwellers in these regions can access a range of services and economic opportunities provided in cities. At the same time, rural regions provide larger living spaces and good quality environment. The interaction, in this case, include co-ordination on mass transport systems or placed-based housing and environmental policies that take into account the negative externalities of proximity to a large urban region (increased housing prices and pollution). One of the most frequently noted factors driving co-operation was the improvement of the transport network, which allows urban boundaries to expand functionally and offers greater accessibility to both metropolitan and rural regions (OECD, 2013[18]).
Linkages around small and medium-sized cities. These cities are still producing the bulk of services for surrounding rural communities, yet the economy is spatially diffused. Cities and rural regions are less clearly separated, and often strongly linked with one another in terms of food production, transport and environmental ecosystems. Rural regions close or with small/medium cities act as semi-autonomous growth poles but depend on urban centres for specialised services or for accessing larger markets. The development potential and attractiveness of these networks has been associated with their accessibility to urban cores, their capacity to provide skilled labour for specialised industrial clusters, and their cultural dynamism (especially small cities with university campuses). A frequent issue inspiring co-operation is a desire to operate at a larger scale, to attract business and investment, but also to enhance administrative capacity and political relevance (OECD, 2013[18]).
Linkages in remote rural regions. These areas have a lower population density and are far away from urban centres. As their regional economy tends to rely on natural resource actives, small-size cities act as market and logistic points (i.e. access to input, airport, ports) and sources of labour or specialised services. Rural-urban co-operation also helps rural communities retain the benefits of the exploitation of resources and improve the capacity of administration. Since the ownership of resources, main competencies and strategic management are often located in urban areas, the co-operation around shared benefit arrangement in extractive activities is a potential for rural-urban co-operation.
Co-ordination on land use governance is often a relevant matter that requires close collaboration among rural and urban areas. The OECD’s work on the governance of land use has further profiled these linkages with a focus on land management including how proximate rural and urban communities work to address such issues as traffic congestion, growing suburbanisation, the loss of high-quality agricultural soil and demands for new types of infrastructure (e.g. renewable energy installations).
Partnerships can also come with potential risks. Rural-urban linkages without policy intervention do not necessarily lead to better development outcomes. While the urban-rural linages are seen as a way of reducing spatial inequality, there is no evidence to suggest that increased connections between different types of territories can lead by its own to a better distribution of resources and a more equitable outcome. Rural-urban partnerships without policy intervention can also lead to negative externalities, including rapid urbanisation, deterioration of environmental amenities (natural parks or clean air in rural regions) and increased transaction costs. An unbalanced distribution of benefits among partners can also damage the effectiveness of such partnerships.
The role of policies is thus key to shape the strength of these linkages and their effect on local well-being and spatial inequalities. The OECD (2013[18]) identified a number of factors that can facilitate and hinder rural-urban partnerships (Box 4.13). To overcome imbalances, regions should focus on integrated territorial strategies, which address the outcomes and actual needs of residents rather than simply focusing on outputs. Clearly defined objectives, a solid understanding of interdependencies and leadership can help facilitate lasting co-operation between rural and urban regional partners.
The design and support for rural-urban partnerships from different levels of governments is also crucial for the sustainability of these linkages across diverse types of territory. Achieving the balance of these interactions needs then governance mechanisms that incorporate the vision from different actors, from the national, regional and local levels. Therefore, the rural-urban linkages should materialise at three different levels of policy: i) supranational levels; ii) the national level (i.e. within national rural policy); and iii) the regional and local levels (i.e. within regional and municipal development plans).
When rural-urban partnerships are effective, they can extend the reach of any single organisation or agency and support the broader territorial agenda. Based on a series of cases studies, the OECD identified the main factors that can hinder or facilitate rural-urban partnerships. While these factors do not represent a comprehensive list, they can provide insight into what makes for more effective rural-urban partnerships.
Factors that facilitate rural-urban partnership
An understanding of the interdependence of rural and urban areas. Acknowledging how the rural and urban areas are connected in the territory is the core ingredient of a rural-urban partnership. To co-operate effectively, mutual understanding should also be generated through common projects and goals.
Mutual understanding of the need to act in concert to address a critical problem. Mutual understanding leads to a shared vision for partnership. Efforts should focus on facilitating that both urban and rural actors realise that working together is the appropriate solution.
Clearly defined objectives. Rural-urban partnerships must have a clear purpose. This must be responsive to local needs and incorporate the needs of both the rural and urban areas.
Representational membership and democratic participation. Effective rural-urban partnerships need to involve the right decision-makers, in order to reflect the interests of the territory.
Leadership. Without strong leaders working collaboratively towards a common goal, the process of formation and advocacy can grind to a halt and piecemeal efforts can become the norm.
Factors that hinder rural-urban partnership
Regulatory and political barriers. The institutional framework can sometimes constrain rural-urban partnerships. Inflexible regulatory frameworks or with no mechanism or incentives for co-operation can undermine a rural-urban partnership.
Lack of trust/social capital. A lack of social capital is important but is more likely to slow rather than stall the emergence of a rural-urban partnership.
Space blind policies. National policies on services delivery or economic growth with no differentiation between urban and rural economies work against integrating rural and urban.
Low incentive to collaborate/lack of buy-in. Much of the work of the partnership members involves making a small financial investment or incentive to attract private and non-agency commitments and resources.
Source: OECD (2013[18]), Rural-Urban Partnerships: An Integrated Approach to Economic Development, https://dx.doi.org/10.1787/9789264204812-en.
Crafting effective policies requires decision-makers to listen and respond to the needs of their constituencies. With the deepening of globalisation, rural regions increasingly feel that their requirements are overlooked in policy making (Jetten, Mols and Selvanathan, 2020[21]; Cramer, 2016[22]). Protests such as those of the “gilet jaunes” in France or the causes behind the Brexit vote in the UK are prominent examples of rural people demanding more visibility in policies made at the national level (Jetten, Mols and Selvanathan, 2020[21]; Dijkstra, Poelman and Rodríguez-Pose, 2019[23]). New technologies, fiscal consolidation efforts, socio-political changes and declining levels of trust have increased attention on the mechanisms through which governments can not only become more transparent and accountable but also move beyond a provider role towards a partnering relationship with citizens and the private sector (Box 4.14). Evidence suggests that government efforts to widening opportunities for citizen participation into policy making represent an important strategy for improving trust in public institutions and policies (OECD, 2016[3]).
The notion of participation has evolved over recent years towards the concept of engagement. Participation typically refers to the involvement of individuals and groups in designing, implementing and evaluating a project or plan. Engagement goes beyond procedures and methods to consult, inform and partner and targets the whole set of relevant stakeholders, including the private sector. As a result, concepts, such as co-creation and co-production, have emerged to describe the systematic pursuit of continuous co-operation between government agencies and stakeholders in a manner that defines again the roles and relationship between governments and citizens.
Today, engagement with broader constituencies is identified as an important factor in determining whether institutions and policies will be effective and enduring, in particular from the point of view of bringing new forms of participatory problem-solving to address societal demands. The concept of inclusive policy making through stakeholder engagement largely overlaps with that of open government, defined as “the transparency of government actions, the accessibility of government services and information and the responsiveness of government to new ideas, demands and needs” (OECD, 2005[24]). As a result, openness and inclusion represent two pillars to deliver better policy outcomes not only for, but with, citizens. Today, inclusive policy making through stakeholder engagement is set to enhance government accountability, broaden citizens’ influence on decisions and build civic capacity.
Source: OECD (2016[3]), The Governance of Inclusive Growth, https://dx.doi.org/10.1787/9789264257993-en.
The new philosophy of the Rural Well-being Policy Framework acknowledges that rural communities are well equipped to identify their local development opportunities and closely support and complement national policies and strategies. A “bottom-up” approach for rural policy allows rural dwellers to decide and collaborate to implement their own development future. For this, the policy making process needs to incorporate aspects of well-being that communities prioritise, following their local needs, connection to the national agenda and cultural singularity. Policy design and implementation should ultimately recognise a different vision of development from rural regions, involve the communities and support their capacity and leadership to ensure they fully participate in the multi-level governance process. This section will thus explore the mechanisms for governments to further engage citizens, the private sector and third sector (education institutions) in policy making design and process.
Engaging citizens in rural policy
Citizen engagement in policy making provides significant benefits to policy design and delivery (OECD, 2018[25]). It can improve the quality of laws and services by incorporating knowledge and feedback from the actors who will be the most impacted in rural regions. Rural dwellers not only have better knowledge of local conditions but also the capacity to adapt policies to the context. In addition, the participation and involvement of citizens are associated with higher levels of policy compliance and an important driver of legitimacy and trust in the government. Research has found that public interest groups report higher satisfaction with the policy outcome the more they participate in, which ultimately can unlock opportunities of direct and representative democratic practices (OECD, 2017[26]). In many cases, the public works with the government in designing a future vision for their place or for a specific policy/project design and implementation.
Countries and regions have adopted different approaches to public engagement. Modalities of engagement vary from basic communication – the weakest form of engagement – to full-co-production and co-delivery of policies with a balanced share of power among stakeholders (OECD, 2016[27]). Although not all policies allow for a full engagement, when strategic decisions of long-term policies are taken, citizens should be engaged at every stage of the policy process and not be considered solely as agents of implementation. Beyond the different approaches, a sound engagement process should bring legitimacy to the final plan. The approaches to engage citizens in policy design and implementation include:
Participative and open budgeting where citizens can propose projects to be implemented, vote among several proposed projects or prioritise investments. One example of this mechanism occurs in Paris, where the city – since 2014 – gives its citizens the opportunity to decide on the use of 5% of its investment budget (2014-20) and propose projects that would then be voted on (OECD, 2016[3]).
Co-production of social service delivery. In the water sector, for instance, many utilities rely on governance or advisory boards, where stakeholders have a say in strategic orientations or in which different actors take collective decisions. For example, the public water utility in Grenoble, France, has over the last 20 years engaged with consumer associations when deciding on water tariffs (OECD, 2016[3]).
Many OECD regions have also established fora or policy summits where citizens can propose and define policy priorities and strategies (Box 4.15). Some of these platforms combine elected officials, businesses, social partners and other relevant stakeholders (universities), which contribute to promoting regional development strategies and oversee implementation.
The Baltic Urban Laboratory is a European initiative example based on the concept of people-private-public partnerships (4P), involving a wide variety of projects in Nordic countries.
Within this framework, a project for the inclusion of citizens in deciding on climate change adaptation options, entitled “Citizens vote on climate change adaptation options in Kalundborg”, was carried out in 2011. Kalundborg is a municipality located on the island of Sjælland in Denmark and home to 20 000 inhabitants. Its coastline, lowlands and sensitive areas with delta characteristics are threatened by the impacts of climate change. Sea level rise and changes in rainfall, as well as infrastructure and water quality, are the main risks associated with climate change. The municipality of Kalundborg, together with the Danish Board of Technology (DBT), organised a citizens’ summit where 350 local citizens discussed how Kalundborg should adapt to a future with a warmer climate.
Before the summit, citizens were given relevant information material and presented with the pros and cons of the different adaptation options obtained through a scenario workshop. The methodology used for the workshop was to present to local stakeholders the implications of the possible flooding of the Kalundborg area. On this basis, they developed different solutions to the challenges in a scenario workshop. Finally, citizens debated and voted on these options.
As a result, two-thirds voted in favour of phasing out the current land use – mostly farmland – to become wetlands, rather than building dykes. In terms of the period for action, the vast majority of citizens (90%) requested that the municipality act now and develop long-term plans based on climate change scenarios. Thanks to the participatory nature of the decision-making process, local politicians were able to make broader decisions taking into account a broader view of local interests.
Source: Interreg Central Baltic (2012[28]), “Citizens vote on climate change adaptation options in Kalundborg”, https://www.balticurbanlab.eu/goodpractices/citizens-vote-climate-change-adaptation-options-kalundborg.
Local governments in rural regions can benefit from a closer relationship with their citizens to implement public policy. Local governments in rural regions might find greater opportunities to engage with the population as rural communities tend to have stronger social ties than in large metropolitan areas. At the local scale, the tools to engage citizens may for example involve methods with greater face-to-face interaction or be focused on very specific policy concerns (OECD, 2016[3]). Citizen engagement in a rural area should account for how people perceive and interact with the world. In some OECD rural regions, close interaction with Indigenous Peoples is crucial to improve legitimacy and trust in the strategic projects (Box 4.16). Overall, rural dwellers are an important source of information about their region, including how space should be used, how to better design public services or even economic opportunities for development.
There are approximately 38 million Indigenous People across OECD member countries. Indigenous Peoples are concentrated mainly in rural regions as compared to non-Indigenous populations. Significant challenges still exist in how Indigenous Peoples participate in decision-making, leading to mismatches between the needs of Indigenous communities and the services and programmes they receive.
An integral element of countries’ moving towards a people-centred rural approach is making greater use of local knowledge through partnerships and engagement with Indigenous Peoples. This also supports the United Nations Declaration on the Rights of Indigenous Peoples, which includes a statement that states shall co-operate in good faith with Indigenous Peoples before adopting and implementing measures that may affect them.
Processes with low degrees of participation, such as information or consultation, bear the danger of trust erosion and consultation fatigue as there is no obligation to consider views in the final outcome. High levels of engagement, such as providing Indigenous Peoples with the opportunity to make decisions in the policy making process, including the definition of the problem, the development of policies, as well as implementation and evaluation of outcomes, have been assessed as successful.
New Zealand, for instance, has introduced laws that require engagement. The Resource Management Act of 1991 (No. 69) and the Local Government Act (2002) set out obligations for councils to ensure Māori are included in local government decision-making and have processes for participation in place. While processes remain uneven between councils and the level of engagement remains subject to political discretion, good practice examples have been observed regarding co-management and joint-entities.
Overall, governments can create opportunities for meaningful participation in government decision-making for Indigenous Peoples by:
Establishing protocols and obligations for engagement of Indigenous Peoples across the policy cycle (definition of the problem, the development of policies as well as the implementation and evaluation of outcomes).
Addressing the asymmetries of power in engagement processes and strengthening the capacity of Indigenous leaders and organisations to participate in decision-making about development.
Developing cross-cultural competencies within public institutions at all levels.
Supporting the recruitment and progression of Indigenous staff in public institutions.
Source: OECD (2019[29]), Linking Indigenous Communities with Regional Development, https://doi.org/10.1787/3203c082-en.
Supporting community-led initiatives is also a vector to strengthen and complement the implementation of rural policies. The strong community networks in rural regions offer opportunities for self-organisation that enable the adaptability and resiliency to structural changes. Local initiatives are increasingly advocated by all levels of government as one remedy to global economic restructuring and local decline. In times of crisis, as in the COVID-19 pandemic, rural communities can quickly mobilise their local networks and co-operative structures to face the effects of the economic shocks. For example, during the confinement periods of the COVID-19 pandemic, rural communities established car-sharing models and community fleets to transport medical workers and elderly population (i.e. Belgium, France and Italy). Some of the local initiatives that emerged to address specific challenges can in turn be adopted by policy makers as official policies. Policies can indeed support successful community-based development projects by enhancing the community’s active participation and co-ordination.
Digitalisation is an increasingly common tool to engage public and private stakeholders in policy making and implementation. ICT and the widespread use of information technologies, social media and open data in the society provide opportunities for governments to develop new methods of co-operation and to create public value through inclusive and more informed policy making processes, fostering thus user-driven service design and delivery. For example, in the context of social discontent in France in 2019 (“gilets jaunes” strikes), the French government developed a digital platform to collect opinions and recommendations from the population. The platform collected around 1.9 million comments online, which were classified in themes and available to the citizens through open data mechanisms. In Colombia, the Ministry of Information Technology and Communications established the Centre for Digital Public Innovation, aiming to strengthen the public innovation ecosystem to solve complex problems within the public administration (OECD, 2018[25]). The innovation centre provides training courses to increase government capacity, a laboratory for solutions to public challenges, a knowledge agency for research and a collaboration platform to support community and partnerships.
Engaging the private sector and universities in rural policy
Increasing collaboration with the private sector is of great importance for policy implementation. The magnitude of the needs and the tight fiscal context for governments requires mobilisation and partnerships with private sources. Governments can leverage private sector engagement to enhance government capacity by benefitting from risk transfer, private sector incentives, know-how and innovation (OECD, 2018[30]). How private sector engagement occurs needs to be informed by clear criteria for partnership that consider responsible business conduct, due diligence procedures and consideration of economic, social and environmental impacts.
Public-private partnerships (PPPs) are relevant to meet local demand for better and sufficient infrastructure. Public sources of funding are insufficient to cover the investment needs in regions (OECD, 2018[30]). However, PPPs are not risk-free. Maximising the benefits and minimising the downsides of PPPs requires substantial public sector capacity, in particular at the subnational government level. The decision to partner with the private sector should be rooted in the analysis of whether and how the private sector is best placed to help realise specific development results (OECD, 2016[31]). Across OECD countries, most (83%) reported that between 0% and 5% of public sector infrastructure investment had been made through PPPs (OECD, 2019[32]). Subnational level governments have pursued PPPs to develop a wide variety of infrastructure on water, roads and telecommunications (Box 4.17). The OECD has developed a number of recommendations to improve the governance and implementation of PPPs for infrastructure at the subnational level (Box 4.18).
In Poland, the partnership between the French company SAUR and the municipality of Gdańsk makes for a good example of a PPP. Indeed, a PPP was set up due to the high investment required both for the water supply and the collection and treatment of wastewater from the neighbouring cities of Gdańsk and Sopot (OECD, 2008[33]). By 2007, more than 1 300 km of the water supply network and almost 1 100 km of sewerage had been installed in both cities. The resulting PPP is a 30-year contract, owned 51% by Saur and 49% by the city of Gdańsk, supplying water to 500 000 people (SAUR, 2020[34]).
In 2010, the ISO:2005 certification formalised the quality of the water distributed in Gandsk. SAUR- Gdańsk has thus become a valuable key player in Poland for the management of water services.
Source: SAUR (2020[34]), “Water supply and wastewater treatment services in Poland”, http://www.saur.com/en/the-group/international/saur-worldwide/poland/.
The OECD (2018[30]) identified a number of recommendations to maximise the benefits and minimise the downsides of PPPs at the subnational level:
Legal and policy framework
Create a flexible and inclusive statutory framework that supports private sector participation.
Create PPP-specific legal arrangements with rigorous project selection and review.
Establish clear and transparent PPP review requirements, based on value for money, affordability, but also provisions for debt review, independent audits and official findings of public interest.
Ensure coherence of laws and regulations across levels of government and subnational jurisdictions.
Strengthen the sustainability and credibility of contracts so that they do not fall apart with new political pressures.
Financial and budgetary arrangements
PPP proposals must demonstrate superior predicted outcomes compared to traditional public procurement alternatives.
Minimise accounting incentives to move projects “off the budget”.
Use standard ex ante evaluation instruments.
Adopt third-party scrutiny and approval prior to tender and/or before contract signature.
Look to the involvement of private actors to offer more than just financing for projects, but also a way to strengthen capacities of governments at all levels.
PPP-supporting tools
Establish subnational PPP units in line ministries or at an arm’s length from government.
Provide standardised documents and examples of contracts adapted to different sectors, to dilute preparation costs and better support subnational governments in the preparation of PPPs.
Higher levels of government may opt for advisory rather than mandatory guidance in order to minimise the risk that standardisation constrains flexibility and innovation at the subnational level.
Develop or strengthen performance indicator systems for PPP design and implementation.
Create peer-to-peer knowledge exchange platforms for subnational governments as well as mechanisms for inter-municipal and regional co-ordination.
Establish national observatories/platforms to collect data and advise cities and regions in their choices to follow PPP performance.
Collect data on subnational PPPs more systematically to fill the data gaps.
Source: OECD (2018[30]), Subnational Public-Private Partnerships: Meeting Infrastructure Challenges, https://doi.org/10.1787/9789264304864-en.
Governments have involved the private sector in the phase of design and long-term strategy for regional policy. Platforms for dialogue with national and regional governments and the private and third sectors are mechanisms to materialise this collaboration. For example, Sweden’s National Strategy for Sustainable Regional Growth and Attractiveness 2015-20 aims to facilitate and maintain a continuous dialogue among a wide and diverse array of public sector bodies with the third and private sectors, via the Forum on Sustainable Regional Growth and Attractiveness. The emphasis of the present policy is to give more power to the regions to stimulate regional growth, taking into account the priorities of the private sector as well as municipality realities (OECD, 2017[4]).
Collaboration with high education institutions can enhance local governance capacity and regional development. While universities’ missions and operations become more outward-oriented and cosmopolitan, there is also a shift towards more local and subnational engagement, described as “service” or “third task” work. Higher education institutions in rural regions are cultural/research hubs that provide tangible and intangible services, including improved identity, place-based attachment and skills for local needs (OECD, 2020[35]). Municipal governments tend to lack the skill capacity to benefit from innovation partnerships, due to staff shortage and lack of appropriate skills. Thus, local governments can benefit from an improved partnership with higher education institutions to strengthen policy capacity and delivery. In remote rural regions, these intuitions can be effective partners to move forward local innovation strategies (Box 4.19).
The Academy for Smart Specialisation in Värmland, Sweden
The Academy for Smart Specialisation is a result of a collaboration that originated in an OECD project over ten years ago about universities’ role in regional development. This initiative is a continuation of the agreement of intention that was made for the period 2010-14 when ten new professorships were instituted at Karlstad University. This project also involves research co-operation and will go on until the year 2020.
The academy aims to utilise research for the benefit of industry, the county administration, the county council and the municipalities in Värmland, and to strengthen the research environments in the region. High-quality research is expected to attract more external funding to the university.
The six areas of specialisation identified by Värmland’s research and innovation strategy are the foundation of the Academy for Smart Specialisation. Karlstad University and the region of Värmland will run the academy jointly for the purpose of serving as a meeting place for researchers, companies, financiers and entrepreneurs. By linking research innovation and education, the academy will prepare Karlstad University students for employment to drive the industrial development in the six prioritised areas in Värmland.
Source: Karlstad University (2020[36]), Academy for Smart Specialisation, https://www.kau.se/en/external-relations/research-and-innovation-collaboration/research-collaboration/academy-smart.
Engagement of citizens and the private sector does not necessarily need to be a separate process. Both types of co-operation are expected to influence the same planning process. An integrated frame of collaboration with different types of actors can lead to positive synergies in policy outcome. Triple- and four-helix partnerships are increasingly common around OECD regions. These partnerships tend to be set up to move forward innovation policies by involving firms, governments, civil society and (in the case of the four-helix approach), higher education institutions. This type of partnership should follow a demand-led approach of projects from the private sector (involving different levels of firms). The innovation system in Brainport, the Netherlands, is an example of creating this partnership to spur innovation through collaborative work among stakeholders (Box 4.20).
The case of Brainport Development in Eindhoven (Netherlands)
The Brainport Eindhoven region is the industrial high-tech heart of the Netherlands, covering Eindhoven and 20 surrounding municipalities, and is part of the South East-Netherlands (ZON) region. Industrial activity in the region ranges from the manufacturing of complex machines and systems to semiconductor industry, embedded systems for automotive and advanced medical systems and design.
Innovation in the region was previously based on closed organisational forums and mainly driven by Philips. The company’s loss of international competitiveness drove it to establish the first knowledge campus and transitioned from a closed model of innovation into an open model by stimulating strong involvement of the private sector.
The innovation system of Brainport is to a great extent “business-driven”, powered by entrepreneurial leadership and strong collaboration between industry, knowledge institutes and the government in the triple-helix and ample participative involvement of civic society.
Besides collaboration in the triple helix, its governance depends on how the national, regional and local governments co-operate and interact, and how Brainport connects to and collaborates with other regions (domestically and internationally). The most important innovation policy instrument, both in funding size and in popularity, is the national WBSO scheme for corporate tax deduction of R&D expenditures.
The project management approach consists of a large number of bottom-up initiatives with external project owners. Brainport Development invites firms or knowledge institutes involved to take ownership of initiatives and projects that are being carried out.
Brainport Development was declared the Intelligent Community of the Year 2011 out of more than 400 participants and won the Eurocities Award in 2010 in the “co-operation” category, for co-operation among companies, knowledge institutions and the government.
Source: OECD (2013[37]), Innovation-driven Growth in Regions: The Role of Smart Specialisation, https://www.oecd.org/innovation/inno/smart-specialisation.pdf.
Achieving the three policy objectives (economy, society and environment) identified by the Rural Well-being Policy Framework requires implementation mechanisms that effectively engage all actors at the national and local levels. It requires supporting co-ordination across different levels of government, different types of regions (urban and rural) and stakeholders. The sustainability and efficiency of a policy are highly dependent on the degree of support from citizens and the private sector. While not all policies require the same level of integration with citizens and the private sector, a continuous effort to involve these actors in the policy decision-making process would enhance the legitimacy of and trust in the government.
Addressing the interdependencies of rural policy and attaining the sustainability of policy outcomes require the adoption of multi-level governance mechanisms with strong multi-stakeholder engagement. This approach draws from OECD experience on rural and regional policy and the guidelines set by the OECD Principles on Rural Policy, adopted in 2019 by the OECD Regional Development Policy Committee.
Multi-level governance co-ordination is crucial to address the cross-cutting nature of rural regions. It includes horizontal (across level of governments) and vertical (among levels of governments) co-ordination. Multi-level government mechanisms involve a number of policy approaches and strategies to attain an effective policy implementation. This includes:
Horizontal co-ordination to support rural proofing (deliberately reviewing new policy initiatives through a rural lens) and ensure policy complementarities (co-ordination among sectoral policies). A sound policy implementation involves:
Identifying the right scale of intervention by recognising the heterogeneity of rural areas.
Attaining policy coherence at the national level with clear leadership on rural policies. This can be done through national rural policies and an inter-ministerial committee or body to define rural development policies.
Horizontal co-operation arrangements between regions or between municipalities. This co-ordination can address local governments’ challenges, including lack of staff capacity, fragmented access to information on business needs and labour skills, and difficulties to attain economies of scale on service delivery. This co-operation can be done through institutionalised municipal co-ordinating bodies or independent agencies at the regional level or voluntary inter-municipal co-operation mechanisms.
Promoting rural-urban partnerships that bring benefits to rural and urban regions. This collaboration takes advantage of functional links by connecting a territory which shares, among others, value chains, labour markets and/or natural resources. While economic linkages are often the basis of these partnerships, demographic linkages, delivery of public services, exchange of amenities, environmental interactions also drive the need for rural-urban collaboration. The type of rural-urban interaction varies with the type of rural area. Some strategies to overcome challenges for this regional collaboration include:
Focus on integrated territorial strategies, which address the outcomes and actual needs of residents rather than simply focusing on outputs.
Clearly defined objectives.
A solid understanding of interdependencies and leadership.
Improving vertical co-ordination between higher and lower levels of government, including their institutional, financial and informational aspects. In many OECD countries, a first step of co-ordination is through the development of the national development plans. Other mechanisms can include contracts between levels of government (even at international level), national level regional development agencies, national representatives in regions, co-funding agreements and consultation or regional forums.
Governments can rely on a number of tools to achieve policy co-ordination and involvement of local actors:
Common mechanisms to engage citizens in policy design and implementation include participative and open budgeting, co-production of social service delivery fora and policy summits.
When it comes to private sector engagement, public-private partnerships and platforms for dialogue are relevant tools to meet local demand for services and materialise projects.
Collaboration with higher education institutions can be promoted to enhance local governance capacity and regional development.
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The OECD conducted an institutional survey between July 2018 and August 2019 amongst delegates of the OECD Working Party on Rural Policy. It served as the basis to build the country notes on rural policy that complement this report. The survey aimed to identify the institutional structure, the delivery mechanisms and priorities on rural development policy across OECD countries. The survey was answered in full or partially by 34 countries. It acknowledged that the OECD institutional landscape is diverse in the type of government structures (federal and unitary countries), subnational governance systems and mechanisms for policy delivery. The responses also stressed the relevance of subnational governments to ensure policies are adapted to country needs and effectively reach people and businesses. The main findings of the survey are:
Overall, rural policy in OECD countries is conducted throughout different ministries and the majority of countries have an inter-ministerial committee/body to co-ordinate this policy.
While in most OECD countries, the Ministry of Agriculture is the lead ministry/institution for rural policy, in many OECD countries, the lead ministry for rural policy has a mandate beyond agriculture, including environmental protection, regional economy or tourism.
Most OECD countries implement rural policy through dedicated grant programmes, which are in many cases combined with contracts with local governments.
The definition of rural areas in most OECD countries acknowledges different types of rural areas. In some countries, the definition of rural varies among institutions and policy programmes.
Most OECD countries have a national rural policy defined by law or a strategic policy document. National rural policies are rarely explicit and are normally updated with the change of government.
In terms of priorities, rural development policies in most OECD countries assign greater importance to economic areas, followed by environmental and social matters.
Agriculture, innovation and well-being are the most important objectives in rural policies across OECD countries. Yet, service delivery and support to private sector rank high in the policy agenda.
Notes
← 1. Centrally-led agencies located in regions and able to plan their actions and collaborate amongst themselves; with the state continuing to lay down guidelines, mitigate resource inequalities and evaluate their performance.
← 2. Agencies with a differentiated governance structure and independent authority for management, decision-making and policy implementation.
