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Trends in Urbanisation and Urban Policies in OECD ...

Trends in Urbanisation and Urban Policies in OECD Countries: What Lessons for China? 1 FOREWORD This report is a joint OECD-CDRF project. It was undertaken in the context of OECD s Programme on Regional Development of the OECD Public Governance and Territorial Development Directorate, under the supervision of Joaquim Oliveira Martins, Head of the OECD Regional Competitiveness and Governance Division ( ). The report was produced at the request of Mr. Lu Mai, Secretary General of CDRF, and prepared as a background paper for the 2009-2010 Development Report of the China Development Research Foundation (CDRF) " Urbanisation in China: For a People-Centered Strategy". Ms. Ir ne Hors, Adviser to the Secretary General, CDRF, and Mr. Du Zhixin, Senior Program Officer, CDRF, put forward the original idea of the project, ensured coordination with the Chinese partners and provided useful background information.

Trends in Urbanisation and Urban Policies in OECD Countries: What Lessons for China?

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1 Trends in Urbanisation and Urban Policies in OECD Countries: What Lessons for China? 1 FOREWORD This report is a joint OECD-CDRF project. It was undertaken in the context of OECD s Programme on Regional Development of the OECD Public Governance and Territorial Development Directorate, under the supervision of Joaquim Oliveira Martins, Head of the OECD Regional Competitiveness and Governance Division ( ). The report was produced at the request of Mr. Lu Mai, Secretary General of CDRF, and prepared as a background paper for the 2009-2010 Development Report of the China Development Research Foundation (CDRF) " Urbanisation in China: For a People-Centered Strategy". Ms. Ir ne Hors, Adviser to the Secretary General, CDRF, and Mr. Du Zhixin, Senior Program Officer, CDRF, put forward the original idea of the project, ensured coordination with the Chinese partners and provided useful background information.

2 Whilst China, as a whole, is less urbanised than OECD countries, it nonetheless has the world s largest Urban population, with over 600 million Urban citizens today. Although the scale of China s Urbanisation and the growing number of metropolitan regions where this Urbanisation is concentrated are unprecedented globally, issues confronting all levels of government in managing this growth are not unique. Most OECD countries have faced a wide range of Urban management challenges, and are continuing to acquire valuable experience in doing so. This report provides a synthesis of Trends in Urbanisation and Urban Policies in OECD countries. One of the key messages for China is that a successful Urban development strategy should build upon each Urban region s endogenous attributes, not only the mortar and bricks of infrastructure, but also the knowledge and skills of workers, and the social capital needed to trigger and sustain innovation.

3 Therefore, for countries like China, it might make sense to focus on efficiency issues in the provision of public services; strategic infrastructure; human capital formation and integration; and economic growth/diversification and agglomeration strategies. The report has been produced and coordinated by Ms. Lamia Kamal-Chaoui, Head of Urban Unit, OECD s Regional Competitiveness and Governance Division, in collaboration with Javier Sanchez-Reaza, Tadashi Matsumuto, Olaf Merk, Daniel Sanchez-Serra, Mario Piacentini, Alexis Robert, Dorothee Allain-Dupr and Michael Donovan, Xiao Wang and Kasuko Ishigaki. The findings draw upon various OECD Territorial Reviews of National, Regional and Urban areas, as well as OECD synthesis reports on regional Policies , in particular Regions Matter (2009) and Competitive Cities in the Global Economy (2006).

4 The report has also benefitted from background contributions from Professor Paul Cheshire (London School of Economics), Colin Crouch (University of Warwick Business School) and Adam Ostry (Chair, OECD Working Party on Territorial Development Policy Issues in Urban Areas, and Director, Infrastructure Canada). Further enquiries about OECD Urban development programme should be addressed to Lamia Kamal-Chaoui Further enquiries about CDRF s work on Urbanisation in China should be addressed to Du Zhixin Mario Pezzini, Deputy Director, OECD Directorate for Public Governance and Territorial Development Lu Mai, Secretary General, CDRF 3 TABLE OF CONTENTS Introduction .. 7 1. Trends in Urbanisation in OECD countries .. 8 What is Urban ? .. 8 Trends in Urbanisation .. 17 Stages, pattern and drivers of 28 2.

5 Economic performance of Urban areas .. 34 3. Main factors of growth and decline .. 46 What are the main drivers of economic growth in Urban areas? .. 46 Social disparities, exclusion and poverty: the Urban paradox .. 54 Negative externalities of Urbanisation .. 56 4. Strategies and Trends in Urban Policies .. 66 Urbanisation , market forces and strategic planning .. 66 Recent Trends in Urban Policies in OECD countries .. 72 Urban areas and the new paradigm for regional development in OECD countries .. 80 5. Land policy and strategic Urban planning .. 83 Legal and technical tools for efficient land markets .. 85 Using land values for Urban infrastructure financing .. 93 Managing Urban growth .. 95 6. Building up competitive 106 Fostering competitiveness and innovation in Urban regions .. 106 Fostering city competitiveness whilst ensuring that others do not fall into neglect.

6 123 7. Problems of the social environment .. 128 Affordable housing .. 129 Integration in the labour markets .. 138 Integrated Urban development for distressed neighbourhoods .. 141 8. Climate change and environmental damage .. 145 Urban Policies to address climate change and Urban sustainability .. 146 National-local policy frameworks .. 158 Incorporating climate change into existing national, regional and Urban development frameworks .. 161 9. Innovated Urban governance .. 163 Main rationale for improving Urban governance .. 163 Horizontal co-ordination within Urban areas .. 164 Enhancing local capacity .. 168 Beyond the public sphere: involving the private sector in the supply of public goods .. 173 Effective multi-level governance .. 174 10. Sustainable Urban 180 Traditional and new funding mechanisms for cities.

7 180 Financing Urban infrastructure .. 183 Cost recovery Policies for Urban services .. 185 Experiences of OECD countries with local debt and 186 Experiences with public-private partnerships in OECD countries .. 187 Monitoring performance of local services .. 187 Conclusions and suggestions for a Chinese Urbanisation strategy .. 188 A- Contextual 189 B- Policy Approaches .. 192 C- Governance and Finance .. 202 BIBLIOGRAPHY .. 206 Tables Table 1. Urban sprawl and 30 Table 2. China s cities and towns by population size, 2005 .. 45 Table 3. National Urban Policies in a sample of OECD countries .. 73 Table 4. Old and new paradigms of regional policy .. 81 Table 5. Problem recognitions and expected policy effects of Urban growth management .. 84 Table 6. Collection and disclosure of land transaction price information.

8 89 Table 7. Public Policies for managing Urban growth and protecting open space .. 96 Table 8. Examples of industry cluster Policies in metropolitan regions .. 114 Table 9. House price-to-income ratios and floor area per person owner-occupied .. 129 Table 10. House rent-to-income ratios and floor area per person rented housing .. 130 Table 11. Housing affordability in Canada .. 130 Table 12. Key variables influencing housing affordability .. 130 Table 13. Compact city characteristics .. 149 Table 14. Main purposes of a selection of metropolitan co-operative arrangements .. 166 Table 15. Criteria for the allocation of competencies .. 170 Table 16. Autonomy in HRM at sub-national levels .. 171 Table 17. Autonomy in recruitment or in setting the average wage 171 Table 18. Examples of national Policies to support local capacity in OECD countries.

9 171 Figures Figure 1. Applying OECD regional classification in Guangdong, Zhejiang and Jiangsu provinces, China .. 13 Figure 2. Urban and rural population in the world and the OECD (1950-2030) .. 17 Figure 3. Urbanisation in OECD and non-OECD countries .. 18 Figure 4. Urban populations, 1950 2030 .. 19 Figure 5. Urbanisation and city size .. 20 Figure 6. Population growth in OECD metropolitan areas .. 21 Figure 7. Urbanisation growth in OECD countries .. 22 Figure 8. Decline in Urbanisation in OECD 23 Figure 9. Changing Urbanisation .. 24 Figure 10. Population growth in OECD regions .. 25 Figure 11. Urbanisation in OECD countries .. 26 Figure 12. Urban concentration in Europe .. 26 Figure 13. Urban concentration in Asian OECD countries .. 27 Figure 14. Urban concentration in North 27 Figure 15. Urban concentration in China .. 28 5 Figure 16.

10 Urban sprawl .. 32 Figure 17. Suburbanisation in OECD metro-regions .. 33 Figure 18. Economic concentration in Europe .. 35 Figure 19. Economic concentration in Japan and Korea .. 35 Figure 20. Urbanisation and income .. 36 Figure 21. Growing economic importance of China s 53 metropolitan regions .. 37 Figure 22. Change in metropolitan region s share of China s GDP, 1998-2004 .. 39 Figure 23. Economic performance in OECD Urban areas .. 41 Figure 24. Economic performance and city size .. 42 Figure 25. City size and economic performance .. 43 Figure 26. Factors determining per capita GDP differentials .. 47 Figure 27. Innovation and Urban areas .. 49 Figure 28. Innovation and Urbanisation .. 49 Figure 29. Innovation by city size .. 50 Figure 30. Share of metropolitan region population with university education, 2000/01 .. 51 Figure 31. Educational attainment rates in China s cities (2000).


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