Well-being in regions: Building more coherentpolicies for a better growth model

Joaquim Oliveira MartinsHead of the OECD Regional Development Policy Division

Monica BrezziHead of the Regional Analysis and Statistical Unit, OECD

Liv ivæksten

WELL-BEING IN REGIONS: BUILDING MORE COHERENT POLICIES FOR A BETTER GROWTH MODEL

Monica Brezzi and Joaquim Oliveira Martins OECD

1. Growth and inequalities: managing the trade-offs

2. Integrating the economic, social and environmental dimensions: building complementarities

3. Using regional well-being metrics for a better growth model

Outline

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1. Growth and inequalities: managing the trade-offs

18

Income inequality has increased in most OECD countries and emerging market economies

19

0,15

0,2

0,25

0,3

0,35

0,4

0,45

0,5

0,55

0,6

0,65

0,7

Mid 90s Late 2000s

Gini coefficient of disposable income (mid 90s to 2009-10)

Source: OECD Income Distribution Database

Also with large differences within countries

20

0.2

0.3

0.4

0.5

0.6

New

Zeala

nd

Slov

enia

Slov

ak R

epub

lic

Finla

nd

Hung

ary

Gree

ce

Neth

erlan

ds

Polan

d

Denm

ark

Czec

h Re

publi

c

Japa

n

Switz

erlan

d

Cana

da

Swed

en

Norw

ay

Austr

ia

Italy

Turk

ey

Austr

alia

Fran

ce

Germ

any

Israe

l

Belgi

um

Spain

Unite

d Ki

ngdo

m

Mex

ico

Chile

Unite

d St

ates

Country value              regional valuesv v

Source: OECD(2014) How’s life in your region? forthcoming

Regional values of Gini coefficient of disposable income (2010)

Until the crisis, U-shaped relation between GDP growth and income inequality in regions

21

Gini coefficient on disposable income (2010) and average annual growth of GDP per capita (2000-2007)

0.0

2.0

4.0

6.0

8.1

Aver

age

annu

al g

row

th ra

te o

f GD

P pe

r cap

ita (2

000-

2007

)

.2 .3 .4 .5 .6Gini on disposable household income

Source: OECD(2014) How’s life in your region? forthcoming Note: dots represent OECD regions

CHL, USA

Eastern EuropeSVK, CZE

Nordic Countries

Continental and Southern Europe

2. Integrating the economic, social and environmental dimensions:

building complementarities

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Complementarities need to be constructed through appropriate design

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Well-being

Economic

Green growth

Environ-ment

Social-ecology

Social

Inclusive growth

• Spatial concentration of advantages or disadvantages varies strongly and different sources of inequality can reinforce one another, locking households and communities into circumstances that make it particularly hard for them to improve their life

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DIMENSIONS CITIES RURAL AREAS

Economic + -

Environment - +

Social – public goods (health, education, etc.)

+ -

Social – community produced goods (trust, security, social connections)

- +

• Evidence shows that life satisfaction is higher in countries with a more balanced distribution of well-being outcomes among the 3 dimensions (the estimated coefficient of dispersion across the well-being dimensions is significantly negative).

…But economic, social and environmental outcomes vary largely within countries

Inclusive growth• Active labour market policies (ALMPs) can facilitate a better match of

jobs with skills, thus lowering unemployment and making a strong contribution to social equality. They are more effective when designed at the regional or local levels, since information about local conditions is crucial to success.

Green growth• Integrating land-use, transport and business infrastructure policies

can contribute to outcomes that are greener (increasing reliance on public transport), more equitable (improving access to labour markets for disadvantaged areas) and more efficient (reducing congestion and commuting times, etc.).

Social-ecology• To integrate economic and social objectives, carbon taxes could be

complemented with instruments that address both individuals and places. In fact, the fuel poverty indicator (% of households that spend more than 30% on energy) shows a link between individual (income) and places characteristics.

Place-based policies can help transforming trade-off in complementarities

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3. Using regional well-being metrics for a better growth

model

26

27

How do we measure regional well-being?

Individuals’characteristics

Place characteristicsPeople’s well‐being

People’s well‐being is composed of many dimensions

These dimensions have synergies and can reinforce each other

Including institutions, governance and citizenship

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It provides a better understanding of relevance of disparities within countries…

Life expectancy at birth, 2010 – selected countries

It can raise awareness and help target policy actions

Difference in life expectancy among OECD regions is of 15 years, almost the double than among countries (6 years).Within US is 7 years

It helps understanding how different dimensions interact

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… and what geographic scales are relevant for policy

Range in Co2 emissions among metro areas, 2008

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Important because the capacity of local governments to act can be very different

Measure well-being in Southern Denmark on 8 dimensions and compare it with 300 regions

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OECD publication How’s life in your region?

Identify 11 dimensions and indicators for OECD countries

OECD work on regional inequalities

“How’s life in your region? Measuring regional and local well-being for policy making”

(FINAL REPORT SEPTEMBER 2014)

Common framework 

to measure well‐being

Guidance for policymakers and 

citizens  to use these indicators for more effective policies to 

improve people’s lives

INTERACTIVE WEBSITE

Internationally comparable indicators in 

regions and cities

Seven case studies of regions using well‐being metrics for policy makingSOUTHERN DENMARK

1. Wide consultation on objectives and ways to meet them

2. Citizens engagement also in monitoring progress and contributing to changes

3. Coordination across levels of government, sectors and across jurisdictions

4. Institutional changes informed also from the territory

5. Open data

Using well-being metrics in policy making

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1. Sound framework that blends a focus on places with a focus on people, that could be adapted to other regions in Denmark.

2. Well-being knowledge facilitated the collaboration between region and municipalities in a context of the territorial reform of 2007

3. Efforts to engage all relevant stakeholders and promote civic participation still under way (push on open data?)

4. Accountability and political leadership – build effective mechanisms for target setting and policy monitoring

What the “Good life” initiative of Southern Denmark can teach to other regions

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www.OECDregionalwellbeing.org

Thank you!

Interactive web-tool with internationally comparable well-being indicators:

OECD How’s life in your region? (September 2014)Assessment of using well-being indicators for policy making in regions (Southern Denmark)

www.oecd.org/gov/regional-policy/how-is-life-in-your-region.htm

(June 2014)