3 Brazil is among the most decentralised countries both in revenue and spending allocations Conceptual Framework
4 1- OECD Territorial Reviews Conceptual FrameworkNot limited to public finance and fiscal federalism approach(distribution of spending responsibilities, allocation of revenues, stability, etc.)How can regional development policy help building a sustainable growth process in all regions?17 National Reviews:Canada (2002)Chile (2009)Czech Republic (2004)Finland (2005)France (2006)Hungary (2001)Italy (2001)Japan (2005)Korea (2001)Luxembourg (2007)Mexico (2003)Norway (2007)Poland (2008)Portugal (2008)Switzerland (2002, 2011)Sweden (2010)Slovenia (2011)
5 3- Paradigm shift in regional policies Conceptual FrameworkTraditional Regional PoliciesNew ParadigmObjectivesBalancing economic performances by temporary compensating for disparitiesTapping under-utilised regional potential for competitivenessStrategiesSectoral approachIntegrated development projectsToolsSubsidies and state aidSoft and hard infrastructuresActorsCentral governmentDifferent levels of governmentUnit of analysisAdministrative regionsFunctional regionsRedistributing from leading to lagging regionsBuilding competitive regions bringing together actors and targeting key local assets
6 1- Concentration of population and of GDP are above OECD levels Key FactsGeographic concentration index of GDP and population (TL2), 2007Source: Calculations based on OECD Regional Database (2010) and data provided by IBGE.
7 2- Territorial disparities have decreased but remain high Key FactsTerritorial disparities have decreased since 1995 but remain high compared with OECD countriesIn catching-up economies inequality is high and it tends to rise due to the presence of growth poles…Territorial disparities in GDP per capitawithin countries, (TL2), 2007… Brazil is an exception…Gini index of inequality of GDP per capita across TL2 regions,
8 3- Most unsatisfied needs are concentrated in lagging regions Key FactsGDP per capita, access to health establishments and human development index, Brazilian TL2 regions1. The Human Development Index (HDI) is a comparative measure of life expectancy, literacy, education and standards of living for countries worldwide. Note: This map is for illustrative purposes and is without prejudice to the status of or sovereignty over any territory covered by this map.2. This map is for illustrative purposes and is without prejudice to the status of or sovereignty over any territory covered by this map.Source: Calculations based on data provided by (1) IBGE, (2) Ministério do Planejamento, Orçamento e Gestão. Estados and (3) CEPAL/ PNUD/OIT (2008) Emprego, desenvolvimento humano e trabalho decente: a experiencia brasileira recente.
9 4- There has been a process of convergence Key FactsLevel and growth of GDP per capita in TL2 Brazilian regions,A decline in disparities can be good or bad…Shifting a policy based on disparities as a goal to one fomenting growth potential in all regions…Source: Calculations based on data provided by IBGE.
10 5- Catching up has been driven mainly by advances in resource-intensive regions Key FactsGDP per capita growth and specialisation in agriculture and mining, Brazilian TL2 regionsNote: This map is for illustrative purposes and is without prejudice to the status of or sovereignty over any territory covered by this map.Source: Calculations based on data provided by IBGE.
11 1- A combination of policies is necessary Key PoliciesSustainable poverty reduction requires creating local jobs and growthComplementarities across policies are not sufficiently exploitedImprove co-ordination of policiesTarget the relevant scaleRegional development policy could reinforce the impact of social policies such as Bolsa Família
12 2- Resources for regional development are soaring, but target mainly private firms Key PoliciesSource: Sistema de Informações Geranciais dos Fundos Constitucionais de Financiamento ( ); IRPJ e IOF-Coordenação-Geral de Estudos Econômicos-Tributários – COGET/Receita Federal; Relatório de Execução Territórios da Cidadania Matriz 2008 and Relatório de Execução Plano de Execução 2009 Territories of Citizenship.
13 Regional allocation of PAC investments 3- Public investment and BNDES funds still face difficulties reaching lagging regionsKey PoliciesRegional allocation of PAC investments( , per capita)Regional allocation of lending by BNDES system(2007, per capita)Source: Relatórios Estaduais. Totals for four years,Source: BNDES website,
14 1- Brazil faces multilevel governance challenges Key ChallengesOvercoming multi-dimensional fragmentation of policies“Contracts” are the most frequently used instruments in OECD countriesMinisterial Committee for Regional Policy in Denmark; Ministries of Regional Development in Chile, Czech Republic, Poland, Slovenia or Slovak RepublicDealing with subnational governments financial and political autonomyCOAG in AustraliaBuilding institutional and administrative capacity at subnational level and increasing civil society participation“Civic coalitions” in the USAReducing information asymmetries, improving monitoring and evaluationKOSTRA in Norway
15 2- Examples of existing tools for co-ordination in Brazil Key ChallengesLawsFiscal Responsibility lawCo-ordinating institutionsCommittee for the Management of the PACConvenios (agreements) and pactsPact to reduce mother and infant mortalityRegional development agenciesSudeneSingle Registry, national census, etc.
16 Key conditions for effective regional development ConclusionsGive high visibility and long term commitmentDevelop efficient vertical and horizontal co-ordination mechanismsPromote place-based policiesInvolve local actors