Développement économique et création locale d’emplois (LEED)

Decentralisation and New Forms of Governance



This project follows the work agenda of the LEED Programme on employment and governance . This study programme was launched with the publication on Local Management for More Effective Employment Policies in 1998, which identified a relationship between the effectiveness of labour market policies and local governance, defined as the sum of policy co-ordination, adaptation to local conditions and participation of civil society and the private sector in policy design and implementation. Local Management also identified two tools to improve local governance - decentralisation and partnership -, which have been the subject of subsequent work (Decentralising Employment Policy: New Trends and Challenges, 1999;  Local Partnerships for Better Governance, 2001 ).

A high-level conference was held in Venice in April 1998 on the decentralisation of the public employment service and the local management of employment policies. Ministers and policymakers at national, regional and local level discussed the lessons from decentralisation, some recent innovations such as asymmetrical devolution in Canada, Italy and Spain, and other institutional developments. Participants identified problems of accountability and flexibility in policy management and concluded that, while it can be considered as a step in the right direction, decentralisation is not a necessary nor a sufficient condition to improving governance. The conclusions and recommendations of the Venice conference were published in the OECD book Decentralising Employment Policy: New Trends and Challenges.


Throughout OECD countries, attempts are being made to better co-ordinate labour market policy with economic development strategies and social inclusion initiatives. Co-ordinating policies, along with adapting policies to local conditions and involving civil society and the private sector in policy making, is the way forward to improve local governance and achieve better outcomes in terms of employment, social cohesion and sustainable development.

Decentralisation can best be viewed as a tool to improve local governance, as it brings decision-making closer to where problems and individuals are. Decentralisation raises a number of challenges, however, both in terms of the degree of flexibility in policy management that it can yield in practice and of the capacity to guarantee public accountability. Recent reforms show that greater flexibility through decentralisation may be associated with a multiplication of intermediaries, blurring lines of responsibility and weaknesses in monitoring and reporting.

Moreover, it sometimes proves difficult to agree on an accountability framework politically acceptable to the various government levels concerned. Additional efforts may need to be deployed to successfully connect labour market authorities at regional level and actors involved in economic development and social inclusion activities at local level. Partner relationships are often established across levels and between the public, private and civil-society sectors. New forms of governance are being experimented.

A conference

The Ministry of Labour and Social Affairs of Poland proposed to host a follow-up conference, entitled "Decentralisation of Employment Policy and New Forms of Governance: Tackling the Challenge of Accountability". The European Commission, Directorate-general for Employment and Social Affairs, co-financed the event. This conference took place in Warsaw, 27-28 March 2003. The conclusions and recommendations have been compiled in an OECD book entitled: Managing Decentralisation: A New Role for Labour Market Policy (2003)

The conference explored the issues of accountability and flexibility and evaluated the potential for decentralisation and other forms of governance to enhance capacities in better integrating policies and improving their effectiveness. It drew on the lessons from the decentralisation experience in OECD countries and on the results of the OECD Study on Local Partnerships .

The conference provided a unique opportunity to:

  • Illustrate through case studies what the benefits of decentralisation are in terms of additional flexibility in local management of labour market programmes.
  • Present and discuss the experience of OECD countries in tackling the trade-off between flexibility and accountability.
  • Discuss the opportunities and limitations of other forms of governance.

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