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2019 Report World Observatory on Subnational Government Finance

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2019 Report World Observatory on Subnational Government Finance 2019 Report World Observatory on Subnational Government Finance and Investment FINANCE AND INVESTMENT AND FINANCE Key findings 2019 REPORT WORLD OBSERVATORY ON SUBNATIONAL GOVERNMENT GOVERNMENT SUBNATIONAL ON OBSERVATORY WORLD REPORT 2019 │ 1 2019 Report World Observatory on Subnational Government Finance and Investment Key Findings Launch version 2 │ General disclaimer This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of OECD member countries or those of United Cities and Local Government (UCLG). This document and any maps included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. © OECD 2019 You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgment of the source and copyright owner is given. All requests for public or commercial use and translation rights should be submitted to [email protected]. Requests for permission to photocopy portions of this material for public or commercial use shall be addressed directly to the Copyright Clearance Center (CCC) at [email protected] or the Centre français d’exploitation du droit de copie (CFC) at [email protected]. Please cite this publication as: OECD/UCLG (2019), 2019 Report of the World Observatory on Subnational Government Finance and Investment – Key Findings │ 3 Acknowledgements The World Observatory of Subnational Government Finance and Investment is a joint endeavour of the OECD Centre for Entrepreneurship, SMEs, Regions and Cities (CFE), led by Lamia Kamal-Chaoui, Director and of United Cities and Local Government (UCLG) under the direction of Emilia Saiz, Secretary General of UCLG. It has received the technical support of the United Nations Capital Development Fund (UNCDF) for the least developed countries. The project was financially supported by the the Agence Française de Développement (AFD), UNCDF, the Council of Europe Development Bank (CEB), and the “Development Partners Network on Decentralisation and Local Governance” (DeLoG). It is guided by a Steering Committee, gathering national governments, in particular members of the Regional Development Policy Committee and the Fiscal Network of the OECD, subnational governments, international organisations and networks, development banks and donors and thinks tanks. The World Observatory is a multi-stakeholder initiative whose overall goal is to increase knowledge of multi-level governance and finance by collecting and analysing standardised indicators and information. More specifically, its objectives are three-fold: ‒ Ensure standardised, reliable and transparent access to data on subnational government structure, finance and investment. ‒ Support international dialogue and decision-making on multi-level governance and subnational finance. ‒ Serve as a capacity-building tool on subnational governance and finance. The following synthesis report presents the key findings of the 2019 edition of the World Observatory on Subnational Government Finance and Investment. It is based on the country profiles prepared for the World Observatory, which present the main organisational and financial indicators for subnational governments in 121 federal and unitary countries worldwide. For a full picture of the Observatory data, country profiles and methodology, please visit the interactive web site: www.sng-wofi.org. The web site allows users to explore the database and download the data, visualise relevant indicators, and “compare their country” across key dimensions. The synthesis report was coordinated and written by Isabelle Chatry, Senior Policy Analyst, under the direction of Dorothée Allain-Dupré, head of the Decentralisation, Public Investment and Subnational Finance unit at CFE/OECD. It has benefited from valuable contributions from Dorothée Allain-Dupré, Antoine Kornprobst, Charlotte Lafitte, Louise Phung and Anna Rubin from the CFE/OECD Secretariat and from the support of François Iglesias who designed the final document. The report was reviewed by UCLG, in particular Edgardo Bilsky, Serge Allou and Luc Aldon from the UCLG World Secretariat and by Christel Alvergne and Nan Zhang from UNCDF (Chapter 8 on Least Developed Countries). 4 │ Table of contents Acknowledgements ................................................................................................................................ 3 Key facts ................................................................................................................................................. 9 The World Observatory database......................................................................................................... 9 Subnational government structure and organisation around the world ................................................ 9 Complexity and lack of clarity in the way responsibilities are assigned ........................................... 10 Subnational government spending represents one quarter of total public spending around the world .................................................................................................................................................. 10 SNG play a key role for public investment, but such investment remains low in many regions ....... 10 Subnational governments still depend largely on grants for more than half of their revenue ........... 11 Subnational government debt is limited ............................................................................................ 11 1. Country sample and methodology ................................................................................................. 12 1.1. Country sample accounts for more than 84% of the world area, population and GDP .............. 12 A large sample of countries spread over seven geographical areas ............................................... 12 19 federations and 103 unitary countries ....................................................................................... 13 Countries by income groups ........................................................................................................... 14 1.2. Summary of methodology on subnational government finance ................................................. 16 Scope of government statistics ....................................................................................................... 16 Source of fiscal data ....................................................................................................................... 17 Averages ......................................................................................................................................... 17 2. Overall trends: snapshot of multi-level governance reforms around the world ........................ 19 2.1. What is decentralisation? ............................................................................................................ 19 2.2. Overview of multi-level governance reforms around the world ................................................. 21 2.3. Measuring decentralisation ......................................................................................................... 23 3. How are subnational government structured and organised around the world?...................... 25 3.1. Federal and unitary countries ...................................................................................................... 25 3.2. Around 637 900 municipal, intermediate and regional governments identified in 2018 ............ 27 3.3. Territorial reforms can modify SNG structures in a variety of ways .......................................... 33 Municipal landscape and reforms .................................................................................................. 33 Regional reforms ............................................................................................................................ 40 4. What are subnational governments responsible for? ................................................................... 42 4.1. Overview of subnational government responsibilities ................................................................ 42 4.2. Education, social protection, general public services and health are the main areas of subnational government spending...................................................................................................... 44 Education ........................................................................................................................................ 44 Social protection ............................................................................................................................. 45 General public services .................................................................................................................. 45 Health ............................................................................................................................................. 46 Economic affairs and transport ...................................................................................................... 47 Housing and community amenities ...............................................................................................
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