Presentation on promoting integrated development at the XIV All-Russian Forum "Strategic Planning in the Regions and Cities of Russia", 19-20 October 2015, St Petersburg,, Russian Federation, by William Tompson, Senior Counsellor, OECD Regional Development Policy Division.
St Petersburg, 19 October 2015
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Promoting integrated development in the context of demographic change
1. PROMOTING INTEGRATED
DEVELOPMENT IN A CONTEXT OF
DEMOGRAPHIC CHANGE
XIV All-Russian Forum
«Strategic Planning in the Regions and Cities of Russia»
St Petersburg, 20 October 2015
Bill Tompson, Senior Counsellor & Deputy Head
Regional Development Policy Division
william.tompson@oecd.org
2. • The population pyramid is increasing
inverted.
• The age structure of the early stages of the
demographic transition was uniquely
favourable for economic growth.
• It coincided with important productivity-
enhancing changes in economy and society.
• Productivity growth grows more difficult
even as it becomes more important.
The demographic dividend is past
20 Oct 2015 XIV All-Russian Forum, St Petersburg 2
3. • Concentration continues but in the context of
slow or negative population growth.
• Many rural areas are losing population.
• Rural areas tend to age faster than cities.
• Concentration offers productivity benefits but
at a cost in terms of key rural functions.
• Technology offers new opportunities for well-
connected rural areas with good amenities.
Changing settlement patterns generate
increasing challenges
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4. New patterns
of territorial
organization
Economic
development /
structural changes
Improved ICT and
transport
Mass diffusion of
cars
Increased
urbanisation
Larger
functional
regions
Increased
integration of places
before more
independent
Larger
distances daily
travelled by
individuals
New concept of
cities and rural
areas
20 Oct 2015 XIV All-Russian Forum, St Petersburg 4
Beyond urban rural divide: Territorial
transformations in the last decades
Growth spill-overs
extend further
5. Rural and urban areas are interconnected through different linkages
(commuting, provision of amenities, transportation, economic
transactions etc.)
The way these linkages are governed has an impact on the economic
development and people’s wellbeing both in urban and rural
communities
Better understanding of interdependencies (unit of analysis = self-
contained space of relationship, functional region)
Design governance solutions to facilitate an integrated approach
that improves the outcome of the rural-urban partnerships
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Why are we interested in urban-rural
partnerships?
6. Category of benefit
observed
Example of benefit
Production of public
goods (or “club” goods)
Higher external visibility and attractiveness
Exploiting local productive linkages (e.g. agro-industry) and economic
complementarities
Easier access to natural resources (incl. renewable energies)
Strengthen territorial identity and social capital
Achieve higher economies
of scale
Network economies (e.g. overcoming limits of small-size business
environments)
Higher political power, financial resources and better dialogue with other
government levels
Improving quality, access or economic viability of services’ provision
Capacity building Improving local government capacity to carry out tasks
Account for negative
externalities
Coordinating land use policy (e.g. sprawl issues)
Limiting zero-sum competition among municipalities (e.g. tax competition)
Overcoming coordination
failures
Setting and aligning priorities for economic development
Improving local knowledge through social learning and information sharing
Rurban partnership can help reaching
development objectives
6
7. a) Overcoming institutional fragmentation
Potential conflicts with other existing government levels
Different political and economic weight of different partners
b) Reforms and stability
Combining efficiency with legitimacy
Financial sustainability and incentive dependency
c) Balancing transaction costs and human resources costs
d) Accountability towards citizens
Galvanise actors towards clear, relevant and measurable objectives
Data challenge
Lessons learned
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Challenges to adopt a functional
approach to policy making
8. • The formation and the effectiveness of the partnership is affected by
some main “enabling” and “hindering” factors.
• Main enabling factors:
• Clearly defined objectives
• High awareness of interdependence between urban and rural areas
• Democratic participation
• Leadership
• Main hindering factors:
• Regulatory and political barriers
• Lack of trust and social capital
• Policy fragmentation
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When do rurban partnerships work?
9. GOVERNANCE
STRUCTURE
ADVANTAGES DISADVANTAGES
Intentional with
delegated functions
More unified rural-urban action; greater
access to resources; influence on
national/ regional policy makers
Less flexibility; threat to local autonomy;
less citizen and private sector
engagement.
Intentional with no
delegated functions
Same as above but also more scope for
citizen, academia and private sector
participation.
Fewer resources (e.g. funding) and
implementation instruments; Potential
for discord between urban-rural
stakeholders.
Unintentional with
delegated functions
Facilitates a bottom-up process of rural-
urban collaboration; can promote a
territorial approach on rural-urban
issues (multiple purpose)
Indirect management of rural-urban
issues (and more complex); Needs
legitimacy, good evidence and
comprehension of rural-urban issues.
Unintentional with no
delegated functions
Maintains local autonomy; can address
challenges on a service by service basis;
can bring in relevant stakeholders as
needed.
Fewer resources; No one voice: no region-
wide coordination; more opportunities for
sectoral vs. integrated rural-urban
strategies
Advantages and disadvantages of the
different governance models
9
10. National levels of government could:
1) promote institutional and functional integration between urban and
rural areas;
2) overcome fragmentation among different sectoral policies;
3) encourage territories to self-determine their integrated strategies and
projects around flexible functional geographies;
4) set a framework for a better dialogue among levels of government; and
5) establish platforms to share experiences and good practices of rural-
urban partnership.
Sub-national levels of government could:
1) help in setting strategic orientation (and coordinate with local levels);
2) facilitate co-operation between public and private actors; and
3) monitor the progress of rural-urban partnership.
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A strategy to build effective and
sustainable rurban partnerships
OECD population projections suggest that at least six OECD countries will have populations more than 10% below their peak by mid-century and twelve will have elderly dependency ratios (elderly/working-age population) in excess of 50%.
In addition to the presence of spatial externalities, several territorial transformations occurred that should be taken into account. More specifically, there have been processes of territorial integration.
Exogenous and endogenous forces (listed on the left side of the slide) have reduced the cost of remoteness and cities and territories have become a “regional” phenomenon. Connected with urban expansion, the amount of space considered by individuals for their daily activities has dramatically enlarged. People travel longer distances than in the past and all economic interactions take place on a wider spatial dimension. These changes have also transformed the concepts of urban and rural areas. The differences are now more subtle and they are not based anymore on economic functions (e.g. agriculture vs.. manufacturing and services).
There has been also a process of polarization of population in larger functional areas made by an economic core and an integrated hinterland.
Rural and Urban areas are increasingly interconnected through a broad set of linkages. This interdependences can affect well being and economic performances of urban and rural areas
The interdependences between urban and rural areas can be caught by the concept of functional region (territories that emerge as self-contained spaces of relationships between urban and rural areas, which do not correspond with administrative regions)
Many OECD countries are experiencing innovative forms of governing urban-rural relationships through partnerships between urban and rural areas, in order to deal with several issues of policy (economic strategy, service provision, spatial planning, etc.)
These partnerships allow the constraints imposed by local administrative boundaries to be overcome through an integrated approach for economic development
There is currently much attention at analysing what governance approaches these partnerships can take and what are the characteristics that make them bringing about benefits to both rural and urban territories
Potential risks and bad outcomes:
Transaction costs
Additional administrative boundaries
Risks of focusing on output rather than of outcome and actual needs of territories
Risks of unbalanced distribution of benefits among partners
The governance of these interactions should take into account several issues (coordination gaps):
different actors (public/private)
different levels of government
different incentives to cooperate (need to align objectives)
financial sustainability of the partnership
Intentional with delegated functions:
Advantages: Can directly manage rural and urban issues --more unified rural-urban action; can speak on behalf of the region; facilitates more local influence with national/ regional policy makers; greater access to resources; more implementation mechanisms; more organisational support e.g. resources (financial, physical).
Disadvantage: less flexibility; threat to local autonomy; less citizen and private sector engagement.
Intentional with no delegated functions:
Advantages: Can directly manage rural and urban issues --more unified rural-urban action; can manage a wide range of functions; more local influence with national/regional policy makers; can improve access to national and regional funds; greater flexibility e.g. more scope for citizen, academia and private sector participation. Disadvantages: fewer resources (e.g. funding); less implementation instruments; potential for discord e.g. dominant versus subordinate relationship between urban-rural stakeholders.
All government levels have specific but complementary roles. National government can set the institutional framework and give the impetus, regions propose strategic orientations and ensure capacity support, and local institutions foster inter-municipal co-operation and promote the engagement of different stakeholders.
Ensure accessibility to services, jobs and amenities and ensure institutional dialogue within functionally integrated spaces.
Many OECD countries design and implement policy with a ‘silo approach’, which hinders policy coordination and, in turn, the effectiveness of policy itself. Trying to integrate or coordinate different policy areas would lead to a higher functional integration between urban and rural areas, exploiting sectoral complementarities and increasing the effectiveness of place-tailored responses to their different territorial challenges.
This would allow for a better institutional and strategic response to specific regional challenges. Local stakeholders should be put in the condition of co-operate beyond the constraints imposed by traditional administrative boundaries and with a strong horizontal and vertical coordination in order to avoid institutional conflicts.
In particular, it is important to align national and regional strategies to the projects and plans devised locally.
This includes promoting visibility of rural-urban co-operation projects, favouring research on the topic, building networks of scholars and practitioners and organising events for the dissemination of knowledge and experiences acquired nationally and internationally.
Regions can provide the vision for the territory and facilitate rural-urban partnership. They can listen to the specific needs of territories.
Engaging the private sector can help to find resources, co-design programs and gain business acumen.
Monitoring activities should be based on few but clear indicators that accounts for short, medium and long term change. The indicators should be few and clear, but they should be defined ex ante and agreed by the different stakeholders. However, the extent of monitoring activities should be related with the scope and the objectives of the partnership. Smaller co-operation requires lighter monitoring. Being able to measure success in early stages on the basis of agreed indicators can clearly support self enforcement of cooperative approaches for the future. Early identification of difficulties is also a powerful tool for revising existing arrangements in a flexible way.