Session Two B: World Observatory On Subnational Government Finance And Investment Key Findings, Meeting 2019
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15th Annual Meeting of the Network on Fiscal Relations Across Levels of Government, OECD, 2-3 December 2019
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Session Two B: World Observatory On Subnational Government Finance And Investment Key Findings, Meeting 2019
- 1. The World Observatory on Subnational Government Finance and Investment: key findings Annual Meeting of the OECD Network on Fiscal Relations across Levels of Government 2 December 2019 Dorothée Allain-Dupré Head of Unit Economic Analysis and Multi-level Governance Division (CFE) OECD
- 2. • A joint initiative of OECD and UCLG supported by technical and financial partners • 2 main objectives: bridging the gap in access to data Providing qualitative information on MLG frameworks • Guided by a multi-stakeholders steering committee • Launching conference in June 2019 Introduction to the World Observatory on Subnational Government Finance and Investment (SNG-WOFI)
- 3. SNG-WOFI on-line tools 3 http://www.sng-wofi.org Compare your country… Extract data from the databaseThe SNG-WOFI online platform
- 4. SNG-WOFI reports 4 4 1. Main features of the MLG framework and decentralisation reforms 2. Territorial organisation and reforms 3. Subnational government responsibilities 4. Subnational government finance Fiscal decentralisation framework SNG expenditure: economic and functional classification; Focus on direct investment SNG revenues: grants, taxes, tariffs and fees, property income. SNG fiscal rules and debt Synthesis: key findings Country profiles
- 5. Observatory country profiles: some trends in multi- level governance 5 Decentralisation policies imply a renewed role for central governments - more strategic Decentralisation also goes hand in hand with an upscale in subnational governance through municipal cooperation or mergers, new metropolitan governance mechanisms, and the strengthening of regions Subnational governance is increasingly differentiated. Asymmetric decentralisation is increasing in unitary countries, based on new motivations
- 6. In many countries, SNGs play a significant role in public policies AUT BEL DEU ESP CHE ARG AUS CAN USA BIH BRA MEX RUS ZAF MYS NGA IND ETH HRV CYP CZE DNK EST FIN FRA GRC HUN ISL IRL ITA LVA LTU LUX MLT NLD NOR POL PRT SVN SVK SWE GBR CHL PAN URY ISR JPN KOR NZL BGR ROU ALBMKD MNE SRB COL CRI DOM ECU GTM JAM PRY PER JOR TUR KAZ ARM AZE BLR BWA MUS NAM CHN THA XKO BOL SLV HND NIC PSE GEO KGZ MDA UKR UZB AGO CPV KEN MAR SWZ TUN KHM IDN MNG PHL LKA VNM TJK BEN BDI MOZ RWA SEN TZAUGA ZWE ALL 106 (UWA) FED 18 UNIT 88 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 5% 10% 15% 20% 25% 30% 35% 40% SNGexpenditureasa%ofgeneralgovernmentexpenditure SNG expenditure as a % of GDP SNG expenditure as a percentage of GDP and total public expenditure (2016) World average: 24.1% of public expenditure 8.6% of GDP Source: based on SNG-WOFI database [2016 data]
- 7. SNG spending varies greatly across geographic areas and country income groups 5 412 1 200 441 81 5 023 2 191 1 178 865 285 0 1 000 2 000 3 000 4 000 5 000 6 000 Source: based on SNG-WOFI database [2016 data] Subnational government expenditure in USD PPP per capita (2016)
- 8. At global level, wealthier countries tend to be more decentralised… 8 BDI SENBEN ZWE UGA TZA MOZRWA ETHTJK SWZKHM AGO SLV TUNHND LKA PHLCPVMARKGZPSE KEN NICNGA GEO XKO IDNMDA MNG BOLUZB UKR VNM IND JAM DOMAZE CRI MUSPRY GTMJOR MYSARMNAM BWA TURTHABIHALB MKD ECU MNE BGRSRBPER KAZROU MEX COL BLR BRA ZAF CHN RUS MLTPAN CYP URY GRCCHL NZL ISRPRTHUN SVK LTUSVN ESTLVA GBRCZE FRAHRV ISLPOL NLDKORITA JPN AUS NOR ARG AUT USA ESP CHEDEU FIN SWE BEL CAN DNK R² = 0,3442 0% 5% 10% 15% 20% 25% 30% 35% 0 10 000 20 000 30 000 40 000 50 000 60 000 70 000 Subnationalgovernmentexpenditure(%GDP) GDP per capita (USD PPP) Low income Lower middle income Upper middle income High income Linear (all) Comparing subnational government expenditure as a percentage of GDP and GDP per capita (and by income group) Source: based on SNG-WOFI database [2016 data]
- 9. SNGs spend a large share of their budget on education, economic affairs/transport, social protection and health 9 Education, 24% General public service, 19% Economic affairs (inc. Transport), 14% Social protection, 12% Health, 11% Housing and community amenities, 8% Recreation, culture and religion, 6% Environmental protection, 5% Public order and safety, 2% Defence, 0% SNG expenditure by functional areas (% of SNG expenditure) Source: based on SNG-WOFI database [2016 data]
- 10. Subnational governments are key investors, but there are important variations across countries 10 AUT BEL DEUESP CHE ARG AUS CAN USA BIH BRA MEX RUS ZAF MYS NGA IND ETH HRV CYP CZEDNK EST FIN FRA GRC HUN ISL IRL ITA LVA LTU LUX MLT NLD NOR POL PRT SVN SVK SWE GBR CHL PAN URY ISR JPN KOR NZL BGR ROU ALB MKD MNE SRB COL CRI DOM ECU GTM PRY PER JOR TUR KAZ ARM AZE BLR MUS THA XKO BOL SLV HND NIC PSE GEO KGZ MDA UKR UZB AGO CPV KEN MARTUN KHM IDN MNG PHL LKA VNM TJK BENBDI RWA SEN TZA UGA ALL 99 (UWA) FED 18 UNIT 81 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 0% 1% 2% 3% 4% 5% 6% 7% SNGinvestmentasa%ofpublicinvestment SNG investmentas a % of GDP World average: 37% of public investment 1.3% of GDP Source: based on SNG-WOFI database [2016 data] SNG investment as a percentage of GDP and public investment (2016)
- 11. The share of SNG investment in GDP remains low on world average (1.3% of GDP) and in many countries 11 SNG investment as a % of GDP by income groups and geographical areas (2016) Source: based on SNG-WOFI database [2016 data] 1,1% 1,1% 1,3% 1,5% 0,9% 1,2% 1,3% 1,5% 1,8% 0,0% 0,2% 0,4% 0,6% 0,8% 1,0% 1,2% 1,4% 1,6% 1,8% 2,0% Uppermiddleincome Lowincome Highincome Lowermiddleincome Africa Euro-Asia&Mewa Europe&NorthAmerica LatinAmerica Asia-Pacific
- 12. Grants represent more than half of subnational government revenues (51%), before taxes (33%) 12 31% 33% 42% 53% 51% 42% 9% 9% 10% 5% 5% 3% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% MLT UGA EST LTU PER ZAF NAM AUT ROU GTM TUR MWI BGR ALB CPV ARM XKO CYP PHL GRC LKA BOL MKD COL UNIT 84 POL KOR THA HUN MNG PRY NOR MNE GEO PRT SVN FED 16 JOR ISR CZE CHN BRA FRA SRB CHE SWE BIH UZB KGZ ISL TJK ZWE Tax revenue Grants & subsidies User charges & fees Property income Others revenues SNG revenue by category as a percentage of total SNG revenue World Average Source: based on SNG-WOFI database [2016 data]
- 13. SNG debt is very uneven • Data on SNG debt are difficult to collect (76 countries). • SNG debt is higher in federal countries vs unitary countries (Golden Rule) • SNG debt varies greatly across countries, geographical area and income groups Source: based on SNG-WOFI database [2016 data] AUT BEL DEU ESP CHE ARG AUS CAN USA BIH BRA RUS MYS NGA IND ZAF HRV CYP CZE DNK EST FIN FRA GRCHUN ISL IRL ITA LVA LTU LUX MLT NLD NOR POL PRT SVN SVK SWE GBR URY ISR JPN KOR NZL BGR ROU ALB MNE SRB COL CRIGTM PER TUR KAZBLR CHN THA BOLSLV HND NIC KGZ MDA UKRKEN MAR BGD IDNPHL VNM RWA SEN TZAUGA ALL 76 (UWA) FED 16 UNIT 60 0% 10% 20% 30% 40% 50% 60% 0% 10% 20% 30% 40% 50% 60% 70% Subnationalgovernmentdebtasa%ofgeneralgovernmentdebt Subnational government debt as a % of GDP World average: 7.5% of GDP and 11.5% of total public debt
Editor's Notes
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