Practice Advice on Democratic Institutions and Policy Process
Summary Advice: The OECD advises that when managing relations across levels of government, public actors at all levels are confronted by a series of gaps. These gaps, resulting from the fact that one level of government will depend on another – either for information, skills, resources, or competences – can exist vertically and horizontally. There are five dominant gaps that challenge multi-level governance: information, capacity, fiscal, administrative, and policy. The information gap is characterised by information asymmetries between levels of government when designing, implementing and delivering public policy. Broadly speaking, a capacity gap is created when there is a lack of human, knowledge (skill-based), or infrastructural resources available to carry out tasks, regardless of the level of government. The fiscal gap is represented by the difference between sub-national revenues and the required expenditures for sub-national authorities to meet their responsibilities. It indicates a direct dependence on higher levels of government for funding and for a fiscal capacity to meet obligations. An administrative gap arises when administrative borders do not correspond to functional economic areas at the sub-national level. And, finally, a policy gap results when ministries take purely vertical approaches to cross-sectoral policy (e.g., energy policy, water policy, youth policy, etc).
Main Points: Evident among OECD member and non-member countries is a set of multi-level governance mechanisms to help bridge the gaps (information, capacity, fiscal, administrative and policy) and improve the coherence of policy making throughout the country. These mechanisms share certain characteristics: sufficient flexibility to promote vertical and horizontal co-ordination; an ability to help build capacity; and broad applicability regardless of the country’s constitutional structure.
- Legal mechanisms and standard setting - Legal mechanisms could be considered the strongest method for promoting multi-level governance relations given that they are legally binding, and in some cases may require constitutional change, particularly in the case of federal states. They are one of the four most commonly used tools by OECD member and non-member countries to manage multi-level governance relations. This mechanism is very often used to establish fiscal resources, and to allocate competences, thus also serving as a tool to reduce overlap in responsibilities between national and subnational levels.
- Contracts - Contracts among levels of government are frequently used in multi-level governance relations to help manage interdependencies and solve some institutional weaknesses. In a contractual arrangement, parties commit either to take action or to follow the guidelines of a mutually agreed upon decision mechanism wherein decision-making rights have been transferred between parties. Contracts enjoy a degree of flexibility of use and diversity of application, permitting governments to reorganise rights and duties without requiring a constitutional or legislative change.
- Vertical and horizontal (quasi-)integration mechanisms - (Quasi-)Integration mechanisms are used vertically and horizontally to promote co-operation and build capacity. While they may be used centrally for co-ordination – for example consolidating HRM functions into one ministry or having one central unit responsible for e-government – they are more frequently employed to advance vertical and horizontal co-operation at the sub-national level. One perceived advantage to promote more integrated approaches is the possibility of building critical mass for better public policy results.
Mergers - Municipal mergers are typically promoted based on the idea that larger municipalities are often more efficient because they can benefit from economies of scale, and thus are more effective providers of public services.
Municipal Co-operation- Municipal co-operation is an alternative to mergers, especially if the goal is to build critical mass and increase efficiency and efficacy in public service delivery. These are a less politically and culturally charged option for promoting co-ordination and enhancing capacity. Thus, such partnerships may face less resistance and potentially greater political will at the local level than mergers. There are numerous examples among OECD members of policies to support municipal co-operation.
Co-ordinating bodies - Co-ordinating bodies are government or non-government groups that help promote co-operation and collaboration among levels of government. They are also a key force for building capacity and sharing good practices at the sub-national level. Ultimately, their work targets the capacity and knowledge gaps, though in some instances they may be able to address the policy gap as well. Most often, co-ordinating bodies are municipal associations, but they can also be working groups (in Canada), government agencies, or specific government offices. The latter is seen in Mexico where the Federal Commission for Better Regulation, COFEMER (Comisión Federal de Mejora Regulatoria), develops guidelines in regulatory management for municipalities, as well as provides advice and training through hands-on and distance learning courses for sub-national actors.
Ad hoc/informal meetings - Meetings comprised of representatives from various levels of government also provide an opportunity for communication and dialogue, and help build networks that are horizontal, vertical and cross-disciplinary. Among those responsible for the operational aspect of e-government, there often exists a common understanding for the need for operational collaboration and co-operation, and, in addition to formal channels, it is not uncommon that informal channels of communication be used. This is seen in Australia, Belgium and the Netherlands. In Belgium also, there is a results-based approach to such collaboration where actors meet informally and on an ad hoc basis.
Performance measurement - Indicators-based performance measurement is a critical component of multi-level governance relations and an increasing number of OECD countries have established indicator systems for assessing performance, particularly by monitoring and evaluation sub-national public service provision.
Other methods for sharing good practices - Experimentation in policy design and implementation can synthesise many of the tools explored in this report and they also serve to promote co-ordination and build capacity thanks to partnerships with the local areas concerned. Experimentation often occurs at a specific territorial level (local, regional, etc.) with an eye to its potential application in equivalent areas. Countries that perceive a potential resistance to reform may select to undertake an experimental practice supported by specific contracts, performance evaluation mechanisms, and often co-funding possibilities. In this way, they may implement a proposed policy with minimal barriers due to gaps, and a higher possibility of identifying lessons that can be shared and good practices that can be adapted to other areas.
Source: OECD (2009) "Mind the Gaps: Managing Mutual Dependence in Relations among Levels of Government" OECD Working Papers on Public Governance, No. 14, Charbit, C. and M. Michalun at http://www.oecd-ilibrary.org/docserver/download/5ks9zsgrqjg2.pdf?expires=1375028051&id=id&accname=guest&checksum=512D1725FD00ED77E8B9F4FB04FC5704 (accessed 28 July 2013).
Page Created By: Matthew Seddon on 28 July 2013. The content presented on this page is drawn directly from the source(s) cited above, and consists of direct quotations or close paraphrases. This material does not necessarily reflect the official view of the publishing organization.