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Fiscal equalisation and regional development policies have often been perceived as separate policy fields. As a result, little is known about their potential interactions and implications for economic growth and welfare. This working paper reviews the two policies, explores the potential for enhanced synergies between the two, and proposes a theoretical framework linking them. The latter, which has not been empirically tested yet, posits that if regional development policies are correctly designed and implemented, their success should result in a drop of income disparities. Coupled with good governance practices and a framework that clearly allocates responsibilities among levels of government, more equal jurisdictions would find it easier to provide similar levels of services with comparable tax rates across the country. Therefore, whilst correctly designed and implemented fiscal equalisation policies remain a tool to patch gaps that may occur due to the shifting variety of revenue potential and spending needs of subnational entities, the need and the size of fiscal equalisation transfers could be significantly reduced if regional development policies in place are effective. This working paper concludes with a discussion on the benefits and challenges of enhancing synergies between the two policies, opening the door for future in-depth research.

Produced as part of the OECD Global Action 'Promoting Social and Solidarity Economy Ecosystems' funded by the European Union, it explores the potential of procurement from the social and solidarity economy in creating social dividends, takes stock of global trends in social procurement among both public and private buyers, identifies challenges in access to markets for social and solidarity economy entities, and finally, provides concrete recommendations for policy makers on how to overcome them.

The COVID-19 pandemic has led to a dramatic acceleration in the diffusion of remote work. This paper contributes to understanding the phenomenon by offering the first systematic exploration of the uneven diffusion of remote jobs across Europe. Using a combination of rich individual micro-data from the European Union Labour Force Survey and regional-level characteristics, the analysis makes three contributions. First, it provides a systematic approach to measure remote work across 30 European countries. Second, it shows that cities and capital regions adapted faster to remote work than other areas of the continent. Third, it identifies and tests what factors are associated with telework uptake during the pandemic. Results show that the uneven diffusion of remote work is primarily explained by composition effects, i.e., because cities hosted more workers in occupations and sectors more amenable to working remotely.

The Future of Rural Manufacturing provides insights on the transformations that have occurred in manufacturing across rural regions in recent decades. It describes opportunities and challenges in this context, highlighting those relating to climate and demographic change and digitalisation, as well as shifting patterns in globalisation. With support from the European Commission, the project combines a wide range of both quantitative and qualitative analysis. The former examines broad trends in manufacturing performance across OECD rural (TL3) regions between 2000 and 2019, with deeper dives that draw on more granular microdata in 14 OECD countries. Case studies were conducted across 12 regions in Slovenia, Germany, Italy, and France. They comprised interviews with over 300 local, regional, and national actors across government, private sector, universities, research institutes, NGOs and non-profit community organisations. The project also benefited from foresight and futures workshops conducted in January and July 2022 with experts and policymakers across OECD countries.

This policy paper analyses the role of Korean rural regions in the country’s transition to carbon neutrality by 2050, drawing on a conference organised by the OECD in collaboration with the Ministry of Land, Infrastructure, and Transport (MOLIT) of Korea. The report outlines the emissions profile of Korea’s rural regions, compares them with other OECD countries and takes a deep dive on the three most emitting sectors: power generation, manufacturing, and transport. The paper then describes Korea’s action plan to reach carbon neutrality. It discusses the just transition challenges in rural regions, highlighting employment risks and opportunities.

Climate shocks such as extreme floods and storms, droughts and heatwaves have complex, inter-connected and far-reaching consequences across multiple policy sectors and systems. Shocks in other systems, such as financial or health crises, can, in turn, affect climate challenges. Applying a systems approach to climate change helps policymakers understand linkages between issues that are treated separately and propose cross-sectoral, multi-disciplinary solutions in cities. This paper proposes a four-pronged policy framework to disentangle the different elements of economic, social, environmental, and other systems operating in cities, maximise co-benefits and manage trade-offs across systems, and build systemic climate resilience in cities. It summarises the contribution of the Working Party on Urban Policy and the Regional Development Policy Committee to the 2021-2022 OECD Horizontal Project on 'Building Climate and Economic Resilience in the Transition to a Low-Carbon Economy'.

In the north-western corner of Germany, the Ems-Achse, a rural region, has witnessed a decade of economic growth. This growth has exacerbated labour shortages, primarily due to an aging population and the outmigration of youth. Acknowledging the potential of teleworking, regional stakeholders aim to explore its capacity to address labour gaps and attract a broader talent pool. This paper delves into three main dimensions for harnessing teleworking's potential: activating individuals who are not currently seeking employment, expanding the talent pool to include surrounding areas, and attracting workers from congested urban areas or overseas. To facilitate successful teleworking, the region can bolster its high-speed internet infrastructure, promote a culture of flexibility in management and nurture digital skills. Additionally, increasing opportunities for higher education, improving public transportation and enhancing international accessibility could help profile the Ems-Achse as an attractive hub for teleworkers.

This report addresses housing inequities through a series of analytical chapters and case studies. The cross-country chapters examine the effects of the COVID-19 pandemic on housing demand, develop a proposal for a green land value tax, evaluate the dynamics between fiscal autonomy and housing supply responsiveness, as well as explore the drivers of inter-regional migration. The case studies unravel the changes of Korea's progressive national property tax and a programme to address regional imbalances, assess the impact of the US property tax system on housing, dive into Norway's property taxation in relation to inequality, as well as survey Belgium's approaches to housing policy. With a blend of empirical data and critical analysis, the report underscores the pressing need for comprehensive strategies in addressing housing inequities. It also offers insights for policymakers and scholars, highlighting the complex balance between national and local housing policies.

This paper presents the first estimates of the OECD project 'Towards a pilot dashboard of SME greening and green entrepreneurship indicators', which is part of broader work of the OECD Committee on SMEs and Entrepreneurship (CSMEE) to support governments in making SMEs active players in the green transition. The paper first explains the rationale behind this measurement exercise, which relates to the importance of monitoring carbon emissions and energy consumption in the business sector, including SMEs, as governments strive to achieve their climate objectives. Thereafter, it gives an overview of the project methodology to produce estimates on the environmental footprint of SMEs. Finally, it presents the first estimates for the first five dashboard indicators: i) SME share of greenhouse gas emissions in the business sector; ii) SME share of energy consumption in the business sector; iii) SME greenhouse gas emissions (carbon) intensity; iv) SME energy intensity; v) SME energy price burden The paper also presents evidence on real SME electricity and gas consumption in Denmark thanks to pilot work with Statistics Denmark. A final Annex explains the project methodology in detail.