Decentralisation trends in OECD countries: a comparative perspective for Ukraine

Dorothée Allain-Dupré Senior Project Manager Regional Development Policy Division OECD

shortened

5

SNGs are key economic and policy actors across the OECD

40%

63% 59%

32%

20%

Greece

New Zealand

Chile

Estonia Greece

Canada

Canada

Canada

Canada Canada

31%

60% 55%

24%

4% 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Expenditure Staffexpenditure*

Investment Tax revenue Debt***

OECD Minimum Maximum Ukraine% of general government - 2014

*: No data for Chile and Australia **: Debt OECD definition ie including, in addition to "financial debt", insurance reserves and other accounts payable. No data for Mexico, Chile and New Zealand

Degrees of decentralisation varies largely

in OECD countries

AUS

AUT

BEL

CAN

CHL

CZE

DNK

EST

FIN

FRA

DEU

GRC

HUN

ISL

IRL

ISR

ITA

JPN

KOR

LUX

MEX

NDL

NZL

NOR POL

PRT

SVK

SVN

ESP SWE

CHE

TUR

GBR

USA

OECD34

EU28

OECD25

OECD9

0%

10%

20%

30%

40%

50%

60%

70%

80%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Su

bn

ati

on

al

ex

pe

nd

itu

re

as

a s

ha

re

of

tota

l p

ub

lic

ex

pe

nd

itu

re

(%

)

Subnational expenditure as a share of GDP (%)

Subnational government expenditure as a percentage of GDP and total public expenditure (2014)

…. And around the world: 25% of total public spending i.e. 9% of GDP

AUT

BEL

BGR

HRV

CYP

CZE

DNK

EST

FIN

FRA

DEU

GRC

HUN

ISL

IRL

ITA LVA

LTU

LUX

MLT

NLD

NOR

POL

PRT

ROU

SVN SVK

ESP SWE

CHE

GBR

ARG

BRA

CHL

COL

CRI DOM

ECU SLV

GRM

HND

JAM

MEX

PRY

PER

ISR

JOR

PSE TUR ALB

ARM

AZE

GEO

KAZ

KGZ

MDA

MNE

RUS

SRB

UKR

AGO BEN

BFA

CPV

COG

GHA

GIN

KEN

MWI

MLI

MUS

MAR

NGA

UGA

SEN

ZAF

TZA

TCD

TUN

ZWE

AUS

KHM

CHN

IND

IDN

JPN

KOR

MYS

MNG

NZL

PHL THA

VNM

CAN

USA

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0% 5% 10% 15% 20% 25% 30% 35% 40%

SNG

exp

en

dit

ure

as

% o

f p

ub

lic e

xpe

nd

itu

re

SNG expenditure as % of GDP

OECD average

Global average

9%

24%

40%

17%

Wealthier countries tend to be more decentralised…

TCD GIN COG KHM MLT GRM DOM JAM AZE BEN MWI BFA CRI CYP TUN SEN MUS MLI JOR ARM PRY SLV ZWE MYS CHL HND UGA PSE KEN GRC MAR TZA THA IRL TUR ALB CPV

ECU NZL NGA KGZ GEO ISR MNE SVK PRT IDN

HUN GHA SRB BGR LTU PER ROU KAZ MNG MDA SVN EST CZE LVA GBR FRA PHL HRV MEX COL POL ISL KOR NLD IND ITA UKR NOR

JPN AUS AUT

USA VNM CHE DEU CHN

ESP ZAF BRA BEL

FIN RUS SWE

CAN

DNK

ARG

R² = 0.3555

0%

5%

10%

15%

20%

25%

30%

35%

40%

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000

SNG

exp

en

dit

ure

as

a %

of

GD

P

GDP per capital (USD PPP)

Some policy areas are more decentralised than others: education, social protection, health, public transport, housing

21.8%

20.3%

13.8%

12.5%

9.4%

8.8%

5.7%

5.4% 2.4%

% of total SNG expenditure

Defence, security andpublic order

Environmentalprotection

Recreation, culture andreligion

Housing andcommunity amenities

Health

Social protection

Economic affairs &transport

General public services

Education

Breakdown of SNG expenditure by economic function

2.6%

1.9%

1.9%

1.5%

1.5%

0.6% 0.5% 0.4% 0.3%

% of GDP

Defence, security andpublic order

Environmental protection

Recreation, culture andreligion

Housing and communityamenities

Economic affairs &transport

Health

General public services

Social protection

Education

10

What are the sources of SNG revenues? Tax revenues account for 44% of SNG revenue in the OECD

Spending is more decentralised than revenues: the risks of fiscal imbalances