Local Economic and Employment Development Local Governance and the Drivers of Growth.

282 Pages·2005·3.267 MB·English

by  OECD

Local Governance and the Drivers of Growth
Innovation, skills, entrepreneurship and social cohesion are key drivers of growth,
and essential goals of effective economic development strategies. Each has a strong
governance component, which requires real partnership between government, business and
civil society for co-ordinating actions and adapting policies to local conditions. Improvement Local Governance
of local governance is therefore a prerequisite for optimising growth and competitiveness.
and the Drivers
But what are the best governance mechanisms to fuel the drivers of growth? What is the role
of central government in maximising their effectiveness? What specific actions must cities
carry out to become more competitive and spread prosperity? How can public services be of Growth
managed in the most effective way to support local competitiveness in the age of globalisation
and networking? How can partnerships generate more funding and deliver better results?
For this book, the OECD has brought together top world experts to translate policy lessons
into concrete recommendations that will help policy makers and practitioners make the best
governance decisions to stimulate growth.
The full text of this book is available on line via these links:
http://www.sourceoecd.org/governance/9264013296
http://www.sourceoecd.org/employment/9264013296
http://www.sourceoecd.org/industrytrade/9264013296
Those with access to all OECD books on line should use this link:
http://www.sourceoecd.org/9264013296
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ISBN 92-64-01329-6
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84 2005 04 1 P

Local Economic and Employment Development
Local Governance
and the Drivers
of Growth
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
The OECD is a unique forum where the governments of 30 democracies work
together to address the economic, social and environmental challenges of globalisation.
The OECD is also at the forefront of efforts to understand and to help governments
respond to new developments and concerns, such as corporate governance, the
information economy and the challenges of an ageing population. The Organisation
provides a setting where governments can compare policy experiences, seek answers to
common problems, identify good practice and work to co-ordinate domestic and
international policies.
The OECD member countries are: Australia, Austria, Belgium, Canada, the
Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland,
Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand,
Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey,
the United Kingdom and the United States. The Commission of the European
Communities takes part in the work of the OECD.
OECD Publishing disseminates widely the results of the Organisation’s statistics
gathering and research on economic, social and environmental issues, as well as the
conventions, guidelines and standards agreed by its members.
This work is published on the responsibility of the Secretary-General of
the OECD. The opinions expressed and arguments employed herein do not
necessarily reflect the official views of the Organisation or of the governments
of its member countries.
Publié en français sous le titre:
Titre de l’ouvrage
Sous-titre
© OECD 2005
No reproduction, copy, transmission or translation of this publication may be made without written permission.
Applications should be sent to OECD Publishing: [email protected] or by fax [phone]. Permission to photocopy a
portion of this work should be addressed to the Centre français d'exploitation du droit de copie, 20, rue des
Grands-Augustins, 75006 Paris, France ([email protected]).
FOREWORD
Foreword
I
am proud to introduce this new publication from the OECD’s Co-operative Action
Programme on Local Economic and Employment Development (LEED). It is designed to
deepen understanding of how governance mechanisms can be devised and
implemented to enhance prosperity in our localities, cities and regions.
Key growth drivers such as innovation, skills, entrepreneurship and social
cohesion are very closely linked to governance, particularly at the local level.
Government must recognise these linkages in formulating policy initiatives to promote
competitiveness and prosperity. It must co-ordinate actions, adapt them to local
conditions and involve business and civil society. Taking full account of the local
governance dimension of policy is essential if strategies to build growth and
competitiveness are to be effective.
This book offers concrete, practical guidance on how to use the tools and concepts
of governance to foster growth. It looks at ways to enhance the governance of
employment with a view to increasing opportunities for all members of society and, at
the same time, better meeting the needs of business. The reader is offered a clear
picture of what can be gained from area-based partnerships, and the various financial
instruments those partnerships can use to promote economic development. There is an
in-depth discussion of recent critical changes in public services that favour a more
effective problem-solving approach while strengthening local democracy. Insight is
provided into exactly how governance mechanisms have succeeded in making cities
more competitive, and how strategic planning instruments have been used to take
cities and regions where they want to go.
This book, part of LEED’s policy research agenda on local governance and
employment, sums up many of the Programme’s latest findings. LEED’s Directing
Committee launched this work agenda to provide guidance for policy makers on ways
to improve social, economic and employment development through the utilisation of
governance tools – i.e. in devising integrated approaches to tackle complex local
problems. LEED’s work in this area commenced in 1998 with the release of a seminal
publication on local management, and the Venice high-level conference on
decentralisation, both of which explored new frameworks for action. The issues tackled
so far in previous publications range from using decentralisation to enhance labour
market outcomes, to reformulating the role of area-based partnerships in terms of
governance outcomes, to outlining new scope for local strategies to promote
LOCAL GOVERNANCE AND THE DRIVERS OF GROWTH – ISBN 92-64-01329-6 – © OECD 2005 3
FOREWORD
competitiveness and social cohesion. Work currently under way, which will be
presented in future volumes, includes such cross-cutting issues as skills upgrading of
low-qualified workers; the integration of immigrants into the labour market; and co-
ordinating employment, skills and economic development.
Some of the best-known experts in the field have joined the OECD Secretariat to
produce the material contained in this book. Some sections were prepared for an
international conference on local development and governance held at the OECD LEED
Trento Centre for Local Development on 6-8June2005. The newly established Centre,
whose mission is to build capacity for local development in Central, Eastern and South
Eastern Europe, represents the perfect opportunity to translate policy lessons into
concrete guidance for both policy makers and practitioners. Other contributions in this
volume have been prepared within the framework of the OECD LEED Forum on
Partnerships and Local Governance, an initiative of Austria that aims to stimulate the
exchange of experience among partnerships and their members from government,
business and civil society. The Forum has proved a formidable source of insight and
policy thinking on a range of difficult governance issues. The issues discussed in
Chapter One provided the basis for a conference in St Petersburg on 21September
2005, held within the framework of the LEED project on employment, economic
development and local governance in the Baltic Sea Region.
I have no doubt that this publication will prove extremely useful to policy makers,
practitioners and researchers involved in all spheres of economic, employment and
social development throughout OECD countries, and help them make a greater
contribution to our global prosperity.
Sergio Arzeni
Director, OECD Centre for Entrepreneurship
Head, OECD LEED Programme
4 LOCAL GOVERNANCE AND THE DRIVERS OF GROWTH – ISBN 92-64-01329-6 – © OECD 2005
Acknowledgements. Sylvain Giguère, Deputy Head of the
LEED Programme, prepared and edited this book. A number
of colleagues provided invaluable help at various stages of the
project: Sheelagh Delf, Francesca Froy, Andrea-Rosalinde
Hofer, Randy Holden, Kay Olbison and Ekaterina Travkina.
The contributors to the publication are:
Scott Abrams, Open Society Institute.
Mark Considine, Centre for Public Policy, University of
Melbourne.
Randall W. Eberts, W. E. Upjohn Institute for Employment
Research.
Sylvain Giguère, OECD.
Xavier Greffe, Université de Paris I Panthéon-Sorbonne.
Fergus Murphy, LED Associates, Washington.
Michael Parkinson, European Institute for Urban Affairs,
Liverpool John Moores University.
Charles F. Sabel, Columbia Law School.

TABLE OF CONTENTS
Table of Contents
Chapter 1. The Drivers of Growth: Why Governance Matters
by Sylvain Giguère ............................................................................ 11
Governance as a source of growth .......................................................... 13
Overarching governance issues .............................................................. 20
Mechanisms to improve local governance in support
of drivers for growth ................................................................................. 22
Managing the trade-off between flexibility and accountability ......... 32
Conclusion .................................................................................................. 34
Chapter 2. The Instruments of Good Governance
by Xavier Greffe ................................................................................ 39
Introduction ............................................................................................... 40
Local development, partnerships and good governance ..................... 42
The organisational instruments of good governance........................... 47
Amending national programmes to improve local development
governance ................................................................................................. 72
Mainstreaming: the case of Central and Eastern Europe .................... 77
Chapter 3. Partnerships, Relationships and Networks: Understanding
Local Collaboration Strategies in Different Countries
by Mark Considine ............................................................................. 89
A European strategy? ................................................................................ 92
The experience of partnership ................................................................ 97
Partnership work: interactions and instruments ................................. 100
Conclusion .................................................................................................. 105
Chapter 4. Globalisation, New Public Services,
Local Democracy: What’s the Connection?
by Charles F. Sabel ............................................................................ 111
Two convergent developments ............................................................... 112
From vertical integration to iterated co-design .................................... 114
From the welfare state to service solidarity .......................................... 119
But are experimentalist organisations democratisable? ..................... 125
Chapter 5. Local Strategies in a Global Economy:
Lessons from Competitive Cities
by Michael Parkinson ........................................................................ 133
Do cities matter in a global era, and why? ............................................ 134
What’s going on? Urban trends in Europe ............................................. 138
What have national governments been doing about cities,
and with what results? ............................................................................. 143
LOCAL GOVERNANCE AND THE DRIVERS OF GROWTH – ISBN 92-64-01329-6 – © OECD 2005 7
TABLE OF CONTENTS
How do cities work with regions? ........................................................... 148
What and where are the competitive cities in Europe?........................ 151
What are the key policy messages and principles for government
and cities? ................................................................................................... 162
Chapter 6. Financing Local Economic Development: Experiences
in Europe and the United States
by Randall W. Eberts ......................................................................... 175
Introduction ............................................................................................... 176
Regional economic disparities ................................................................. 177
The role of economic development policies:
Why should government intervene? ...................................................... 178
Criteria for choosing the appropriate level of government:
Who should do what? ............................................................................... 183
The role of partnerships in designing and administering economic
development policies ................................................................................ 189
Schematic framework ............................................................................... 193
Financial tools ............................................................................................ 195
Economic development programmes to assist distressed urban
and rural areas ........................................................................................... 214
Place-based incentives ............................................................................. 219
Conclusion .................................................................................................. 222
Chapter 7. The Design and Implementation of Local Development
Strategies: the Case of Central and Eastern Europe
by Scott Abrams and Fergus Murphy ............................................... 231
Introduction ............................................................................................... 232
The strategic planning process ............................................................... 238
Developing local development strategies in Central,
East and South Eastern Europe ............................................................... 246
Conclusions ................................................................................................ 258
Annex 7.A1. Three waves of local economic development.......................... 265
Annex 7.A2. Example of Project Action Plan: Business Advice Centre ....... 266
Annex 7.A3. Example of “Vision to Projects” Matrix: The Case of Shkodra 268
Annex 7.A4. Project Prioritisation Methodology............................................. 274
Annex A. Author’s Biographical Notes .......................................................... 277
List of boxes
1.1. Area-based partnerships .......................................................................... 23
1.2. Enhanced tripartite bodies ...................................................................... 24
1.3. Regional skills alliances ........................................................................... 25
1.4. Regional strategic platforms ................................................................... 26
1.5. Empowered regional assemblies ............................................................ 27
1.6. Devolution of labour market policy ........................................................ 29
1.7. Decentralisation within the public employment service .................... 30
1.8. Delegation to the private and non-profit sectors ................................. 31
7.1. The five-stage sequence of the LED strategic planning process ........ 238
8 LOCAL GOVERNANCE AND THE DRIVERS OF GROWTH – ISBN 92-64-01329-6 – © OECD 2005