The New Rural Paradigm:

1
The New Rural Paradigm Policies and Governance
in OECD Countries
Nicola Crosta - OECD
Sherbrooke, March 2006
2
Key issues

• challenges and opportunities
• policies
• governance

3
1) The weight of rural
4
2) Challenges how are rural areas doing ?
many boiling frogs
5
Rural per capita GDP 82 of national averages,
and declining

• reliance on low value added agriculture
• ageing population
• low density
• remoteness, geogr. barriers, low levels of
  public services
• low education levels
• low labour productivity

out-migration and decline
6
Challenges of rural regions breaking the cycle
Low population density
lack of critical mass for services and
infrastructure
outmigration (ageing)
fewer employment opportunities
lower business creation
7
3) Perspectives the rules of the game are
changing

• globalisation threats and opportunities
  (slide)
• decentralisation processes
• EU enlargement, CAP reform
• new migration trends (UK, France slide)
• increased mobility (slide)

8
Globalisation
Index 1990 100

• increases in trade and competition
• greater flows of goods, money, information and
  people
• growth in services

Source WTO
9
Perspectives the rules of the game are changing

• globalisation threats and opportunities
  (slide)
• decentralisation processes
• trade negotiations, EU enlargement, agr. policy
  reform
• new migration trends (UK, France slide)
• increased mobility (slide)

10
Opportunities new migration trends and
rural-urban linkages France increased mobility
now benefiting rural regions
UK most rural regions in a feasible urban
commuting zone Rur up 11, urb 2 (1980-2000)
11
Increasing mobility of people
Average number of miles travelled (urban and
rural people)
HOME
2
4
6
8
10
12
14
Source Future Foundation/Newspaper Society
12
fastest growing region in 1 out of 3 OECD
Countries is rural
rural not synonymous with decline
13
Drivers of rural success
Employment growth rates by sector in the 1990s
14
Rural opportunities rural not synonymous with
agriculture
As an employer
and as a source of revenue
15
Rural heterogeneity from place to place, and
over time

• diverse rural drivers industry, services etc.
• mostly endogenous development
• not necessary path dependent (see rural
  Finland)
• various unused resources land, amenities,
  energy etc.
• and strong rural-urban linkages (where does
  rural start?)
• strong reliance on innovation and knowledge
  intensive activ.

and the policies ?
16
Heterogeneity, new opportunitiesand the policies
?
The paradox of EU rural policy and of US rural
policy
17
Agriculture dominated the rural economy...
1950
Center for the Study of Rural America, FRBKC
18
but no longer. Fewer than one in four rural
counties counts agriculture as the leading source
of income.
1989
Center for the Study of Rural America, FRBKC
19
the paradox of EU rural policy, and of US rural
policy
U.S. Government farm payments
Billion dollars
Emergency Assistance
Direct Govt Payments
Forecast Source USDA
20
The limits of agricultural policy

• about 1,3 of OECD GDP, 70 is support to
  production
• modest resources for rural policy examples
• (about 1 of 2002 US Farm Bill and of Europes
  EAGGF)
• large share of RD labelled resources still
  farm-related

• Growing concerns
• inability to meet the needs of farmers
• inability to meet the needs of the wider rural
  community
• inability to meet the demand from non-rural
  communities
• budgetary pressures impact on global trade

21

• Shift concerns on effectiveness of sectoral /
  redistrib. policies

Growth, traditional regional policy and
disparities
Disparities
Focus on local unused potential
22
Basis of the new rural policy no simple recipes
23
A lot of innovationstowards a new rural paradigm.
In Europe LEADER, PITs, LSPs, Growth
Agreements, Regionen Aktiv and outside Canadian
community futures, Mexican/Czech
Microregions In the OECD area and in developing
Countries Central and South America, India,
China At nationaland local levels Tuscany,
Basque Country, Scotland, Quebec
with some common characteristics
24
The new rural paradigm
1. rural policy part of regional policy, not agr.
policy integrated vs. sectoral approach 2.
emphasis on opportunities vs. disadvantage
investments/framework vs. subsidies focus on
amenities (stewardship valorisation) 4. focus
on coherence and long-terrm 5. small,
k-intensive projects vs. large c- intensive
projects 6. knowledge and multiple actors
complex governance
25
Multiple actors
26
Sophisticated Mechanisms
27
Integrated approach complexity and risks

• 1) overcrowded institutional settings
• 3) emphasis on processes and outputs vs. outcomes
• 4) partnership fatigue and confusion,
  asymmetric capacity
• 5) who co-ordinates what?
• 6) coherence and level of integration of sect and
  reg. instruments
• 7) democratic accountability and continuity of
  rural partnerships
• 8) transaction costs and additionality

Need to address intellectual, institutional,
administrative gaps
28
Governance 3 key dimensions
Supra-national
National Regional Local

• Upper Horizontal co-ordination
• Mechanisms
• Vertical co-ordination
• Local horizontal co-ordination

29
Governance of integrated rural policy challenges

• clarify roles and responsibilities (formal or
  flexible?)
• introduce contractualisation to discipline
• resources allocation (earmarked vs. block
  grants)
• rewards and sanctions
• monitoring and evaluation
• indicators (soft and hard), rigid vs. flexible
• diffusing a culture of evaluation

At the central level
Vertically

• Target area optimal size? Hubs?
• Partnerships available frameworks / actors /
  skills.
• Strategy process? Leader? Trade-offs and best
  practices

Locally
30
Summing up

• trends the water is boilingbut opportunities
  are there
• policy limits of current policy and
• emergence of an integrated, open rural policy
• new governance, skills, timeand political
  commitment

31
The New Rural Paradigm Policies and Governance
in OECD Countries
for more information www.oecd.org
Sherbrooke, March 2006