This chapter reviews the main multi-level governance arrangements and challenges of Region Gotland in the context of its regional development. As a region and a municipality, Gotland has some distinct administrative advantages. At the same time, it faces challenges with respect to a clear attribution of responsibilities, optimising its ability to invest in its development priorities and public service delivery. The successful implementation of Gotland’s regional development strategy – Our Gotland 2040 – will depend on the ability of the region and the Swedish government to build on Sweden’s strategic and co‑ordination capacity, and enhance accountability.
OECD Territorial Reviews: Gotland, Sweden
OECD Territorial Reviews
4. Multi-level governance and subnational finance
Abstract
Assessment and recommendations
Assessment
Relative to other places of similar population size in Sweden (such as the municipalities of Kalmar, Östersund or Varberg), Region Gotland has significantly greater policy and administrative responsibilities. Its status as a single unit of government (Region Gotland functions both as a region and a municipality) has brought both opportunities and challenges for the island and its residents. While the regional government enjoys relative financial flexibility and benefits from easy communication between local actors in the implementation of regional projects, both the administrative capacities of the regional government staff (especially digital skills) as well as the public resources available are not always sufficient to provide services equitably throughout the territory. This is illustrated by the fact that Region Gotland is facing some challenges in meeting its goals for citizen satisfaction with public services, as some citizens still do not feel that it is easy to get in touch with the regional government or access some public services throughout the island.
Financing regional development on Gotland depends on the region’s fiscal health as well as its ability to optimise and effectively manage European Union (EU) funds. Although Region Gotland enjoys greater budgetary autonomy and flexibility than other municipalities, being a mainly agricultural and tourist island economy, it has an own-source revenue stream that currently faces limitations. Gotland also faces a higher cost of infrastructure and the provision of certain public services, with almost 80% of its spending dedicated to healthcare and education. In general, there is a limited margin to finance regional development priorities from its own-source revenues. In addition to these challenges, the island could consider increasing its capacity for managing EU (or other regional development) funds, with respect to administrative capacity but also in terms of further supporting beneficiaries.
Receiving regional development responsibilities has empowered Region Gotland but has also accentuated co‑ordination challenges with other levels of government. On the one hand, the region can today design and implement its own strategic priorities and measures for local growth and development, based on its own assessment and knowledge of regional strengths. On the other, it has become challenging to effectively implement the policies emanating from the central level. While co-ordination is improving, national strategies are not always “place-sensitive” or their implementation exceeds the capacities of the regional government. The consolidation of regional- and local-level responsibilities into one government has also generated a lack of clarity in the distribution of responsibilities between the levels of government and produced accountability issues that need to be resolved in order to further strengthen co‑ordination among regional and national agencies and improve the government-citizen relationship.
Optimising administrative and public services throughout the region will rest on increasing the government’s capacity to deliver services. Currently, managing skills shortages and gaps in the public sector and delivering quality services remain significant challenges. The region has not yet been able to meet its three service quality goals. There are a number of ways to address this, however, including further developing management capacities and digital skills, improving island-wide access to administrative or other public services, and partnering even more closely with service delivery organisations, such as the local development companies.
Recommendations
Enabling a way to better deliver public services throughout the island:
Continuously develop the regional government’s management capacities and digital skills to strengthen the efficiency of the civil service in the region. Although this action is focused on the regional government team, it would greatly benefit from joint implementation in collaboration with the national government.
Reinforce the presence of regional government administrative and other services throughout the island to ensure a more equitable service provision across Gotland. This can be achieved by creating territorial delegations or establishing a network of access points to services – mobile or stable – in strategic places and should be monitored and assessed based on Gotland residents’ levels of satisfaction with regional public services in rural areas. Its implementation will require collaboration between Region Gotland and the county administrative board (CAB).
Strengthen collaboration with local development companies to enable them to more effectively fulfil certain responsibilities left unattended by the regional government. Far from being undesirable, the presence of these companies has a positive impact on rural communities on Gotland. The implementation of a plan to strengthen this work can be done in alliance with GUBIS, the regional association of these companies.
Improving Gotland’s ability to finance its regional development priorities:
Evaluate Gotland’s regional attractiveness and complement branding efforts with concrete actions. In order to overcome Gotland’s small tax base and improve its revenue stream stability, Region Gotland could double its efforts to attract new residents and businesses on a permanent basis. It is necessary to conduct an assessment of Gotland’s current features and measure their attractiveness for specific target groups (families, students, businesses in key industries, etc.). Then, the region could look for ways to reinforce its current regional branding strategy to attract those targeted groups by offering them and communicating concrete benefits. These efforts should be led by Region Gotland in close co‑ordination with the CAB, national agencies and regional stakeholders from the third and private sectors. The strategy should be projected in the medium term and assessed based on population growth due to immigration and the development of key economic sectors, such as tourism and other desired industries.
Enhance capacities for the management of EU funds by reinforcing the skills of regional staff in the governance of EU funds, attracting skilled professionals, reaching out to experts/consultants, strengthening advisory mechanisms for beneficiaries and establishing better dialogue and knowledge exchange mechanisms with regional stakeholders. Gotland should aim to take better advantage of the availability of international funding to increase the scope of projects financed by the EU and, for this, it is key that Gotland strengthens its administrative capacities both at the government level and among regional stakeholders. To achieve this, Region Gotland must seek partners both in the national government and in other regions where the capacities exist, and contact or consult experts on the subject.
Strengthening the co-ordination environment for regional development:
Strengthen vertical co-ordination to ensure place-based and island-proof policies to better align national and regional-level development strategies, and facilitate the implementation of investment projects and strategies that involve different levels of government. Region Gotland could urge the national government to seek collaborative ways to improve dialogue platforms and create regulatory instruments of national scope in order to ensure the consideration of the specific conditions and needs of the islands and promote the creation of policies that are island-proof.
Clarify assignments among levels of government by establishing a working group that brings together Region Gotland and the different national agencies with a presence on the island. This would help to identify critical yet unclear assignments and overlapping elements, and to communicate to the national government a roadmap to solve these issues. The success of such a measure will depend on collaboration between the regional government, the CAB and national agencies in the region, and should be assessed based on the comparison of the results of the same measurement instrument applied before and after the proposed roadmap was implemented.
Enhance accountability by introducing new performance monitoring and evaluation mechanisms in order to improve transparency in the distribution of competencies and resources and strengthen the relationship between levels of government and between Region Gotland and the region’s residents. This could be done by establishing an inter‑operated reporting platform that allows all actors – public agencies, private businesses, non-profit organisations and citizens – to track who (level of government, agency) does what (responsibilities), how (mechanisms, policies, projects) and with what resources (funding and transfers). A baseline of the situation must be established a priori and it should be re‑evaluated in a period of three to five years.
Introduction
The design and implementation of effective regional development strategies require a sound multi-level governance system that ensures co-ordination between various stakeholders (national, regional, local, private, etc.) while also facilitating the emergence of place-based policy measures (OECD, 2020[1]). Multi-level governance is understood as the mutual dependence that exists among different levels of government, and the various frameworks, institutions and practices that support policy and service delivery action among them (Charbit and Michalun, 2009[2]). This chapter offers recommendations on how to improve multi-level governance and institutional arrangements on Gotland in the interest of better regional development outcomes.
As a subnational government body, Region Gotland simultaneously holds the responsibilities of a Swedish region and a municipality. Relative to other places of similar population size in Sweden (such as the municipalities of Kalmar, Östersund or Varberg), it has significantly more policy and administrative responsibilities. This brings opportunities and challenges to the island. With fewer administrative layers, it has reduced bureaucracy and facilitated policy implementation throughout the region, along with generating easy communication with regional and local stakeholders. However, the dual administrative status poses challenges to ensuring clarity about the distribution of tasks and the organisational structure of the regional government, particularly as regards its dual status as a municipality, as well as with respect to the CAB and other deconcentrated bodies. Additional challenges include ensuring equitable public service provision throughout the territory and ensuring sufficient human and financial resources to deliver on regional and municipal responsibilities.
This chapter assesses the multi-level governance system and local finances on Gotland. It offers a set of recommendations to strengthen the institutional and financial arrangements needed to effectively implement its regional development strategy and address the aforementioned challenges. In the first part, it reviews the territorial organisation of Sweden and Gotland’s position within it, with recommendations to clarify the distribution of responsibilities among levels of government. The second section considers fiscal frameworks on Gotland and offers ideas for making its revenue structure more stable. It also provides recommendations for Gotland’s reinforcement of public investment in regional development. The third section addresses strategic frameworks for regional development in Sweden and Gotland, including national and regional-level strategies, institutions and vertical co-ordination mechanisms. It also provides recommendations to strengthen the co-ordination environment on Gotland. The fourth section addresses the challenges in terms of public service provision and offers a set of recommendations to strengthen the work of the regional government. Finally, the chapter considers how performance monitoring and evaluation mechanisms can enhance accountability for regional development activities on Gotland.
Territorial organisation in Sweden and Gotland
Sweden is a unitary and decentralised country. It has a two-tier system of subnational government, with 21 counties or regions (TL3) and 290 municipalities (Table 4.1). Traditionally, the Swedish system was said to resemble an hourglass, where both the highest (central government) and lowest (municipalities) tiers of government were more influential and carried more responsibilities than the middle tier (counties/regions). This situation has evolved in recent decades, as regional governments received more decision-making power in several areas and took charge of regional development responsibilities, such as creating their own regional development strategies and implementing public transport and infrastructure policies (Box 4.1) (OECD, 2017[3]).
Table 4.1. Sweden’s territorial administrative structure
Source: OECD (2021[4]), OECD Territorial Grids, https://www.oecd.org/regional/regional-statistics/territorial-grid.pdf.
Box 4.1. Overview of Sweden’s multi-level governance framework
Sweden is a unitary and decentralised country. Its two-tier system of subnational government comprises 21 counties or regions (TL3) and 290 municipalities. The country’s multi-level governance structure has historically had strong central and municipal tiers of government and a slimmer regional tier. Over the past two decades, however, a growing number of responsibilities have been transferred to regional governments, thereby rounding out the differences among the three government tiers.
County councils are elected regional governments. Their primary responsibilities include organising health and social services for citizens. Since 1996, however, more and more county councils have also acquired additional regional development responsibilities from the central government, including regional growth policy, transport, infrastructure, culture, skills development and tourism. This process culminated in 2018 with the passage of a Swedish government bill, which extended the responsibility for managing regional development policy to county councils in all parts of the country.
County administrative boards (CABs) represent the central government at the regional level. Their administrations are led by county governors who are appointed by the central government. CABs are responsible for ensuring that decisions taken by the national government and parliament are being implemented within the county. They are also responsible for co-ordinating central government activities within the county and for regional oversight, notably monitoring whether the decisions made by county councils and municipalities are compliant with existing laws and regulations. CABs also have service responsibilities, which include tasks such as managing EU funding.
Municipal councils are the lowest level of elected government in Sweden. Municipalities vary significantly in land area and population size, as well as tax base and age structure. In 2020, for example, 52% of municipalities had between 5 000 and 20 000 inhabitants, while 42% had more than 20 000 and 8% had less than 5 000. Municipal councils are responsible for a wide range of public policy areas, including social protection, education, urban planning, healthcare (prevention), environmental protection, waste management, water and sewerage, local roads and public transport, housing, rescue services and emergencies, social services, leisure and culture.
Source: OECD (2017[3]), OECD Territorial Reviews: Sweden 2017: Monitoring Progress in Multi-level Governance and Rural Policy, https://doi.org/10.1787/9789264268883-en; OECD (forthcoming[5]), World Observatory on Subnational Government Finance and Investment: Sweden, OECD, Paris.
Gotland is the only Swedish municipality that is also considered a region. It received regional development responsibilities in 1998 and, in 2011, it changed its name from the Municipality of Gotland to Region Gotland. In 2019, Sweden extended regional development responsibilities to the remaining regions. As such, since 2020, all counties have been renamed regions (Swedish Government, 2019[6]). According to Swedish legislation, regions are tasked with leading, co‑ordinating, following up and reporting on regional development issues. This includes the development of the regional development strategy and the co‑ordination of activities for its implementation (OECD, forthcoming[5]).
Territorial administration is the responsibility of both deconcentrated and decentralised authorities. CABs are deconcentrated government authorities present in each county. They represent the national government in the county and act as a territorial co‑ordinator and monitor central government policies and strategies (Swedish Government, 2022[7]). CABs also have responsibilities such as managing certain EU funds and monitoring county developments and needs in key areas (such as infrastructure planning, energy and climate and sustainable community planning and housing) (Region Gotland, 2022[8]). They are responsible for ensuring that national-level goals and related strategies and policies are reflected in the policies and plans of their respective regions (OECD, forthcoming[5]).
Box 4.2. A brief overview of territorial administrative reform in Sweden
Until 1930, Sweden had 2 532 municipalities, of which more than 500 had fewer than 500 inhabitants. During that period, the map of local governments tended more towards partition than consolidation. In 1952, the number of rural municipalities was reduced from 2 281 to 816. However, in 1959, a Commission of Subdivision Experts established that the previous efforts were insufficient and that new larger urban/rural municipalities should be created. This reform created 282 kommunblocks (“municipal blocks”) to foster co-operation between neighbouring municipalities and to facilitate mergers on a voluntary basis later. Between 1964 and 1969, the number of municipalities dropped to 848. Voluntary amalgamations were replaced by compulsory mergers and the number of local entities continued to fall in subsequent decades. Today, it stands at 290 municipalities.
A gradual and experimental regionalisation process began in 1996 when two counties acquired regional development tasks from the central government, a policy area that was historically managed by the deconcentrated CABs. Regional development responsibilities were progressively transferred to 11 other county councils between 2011 and 2018 before a 2018 government bill extended responsibility for regional development to county councils in all parts of the country (OECD, 2017[3]). The gradualist nature of the regionalisation process has meant that while some counties, notably Skåne and Västra Götaland, have had decades to build up their capacity to manage regional development responsibilities, other counties have had less than five years to do so.
Source: Nelson, M. (1992[9]), “Municipal amalgamations and the growth of the local public sector in Sweden”, https://doi.org/10.1111/j.1467-9787.1992.tb00167.x; Lidström, A. (2018[10]), “Subnational Sweden, the national state and the EU”, https://doi.org/10.1080/13597566.2018.1500907; Region Gotland (2017[11]), Gotland in Figures, https://www.gotland.se/104323.
The responsibilities of subnational governments in Sweden are divided into mandatory and voluntary tasks. While the former is strongly regulated, regional and local governments have considerable freedom and flexibility to decide on the voluntary provision of services. Subnational governments also have considerable freedom and flexibility to decide how to provide goods and services (SNG-WOFI, 2018[12]). Region Gotland, for example, has almost 200 agreements with more than 300 contractor companies to provide some of the services for which it is responsible.
Sweden’s regions have seen their responsibilities grow over time. While originally responsible for health and social services, the role of county councils has been extended to the sphere of regional development, which includes regional growth policy, transport, infrastructure and culture (OECD, 2017[3]; forthcoming[5]). Regions have responsibilities in healthcare, regional public transport and culture. Recently, they have all acquired responsibilities for regional transport, infrastructure planning, as well as regional development. The latter is a cross-sectoral policy area that intersects with other formal regional responsibilities and sectoral policies that have regional-level implications, skills development and tourism.
Swedish municipalities are the smallest administrative unit and the closest to the citizens. The average municipal population is around 34 000 inhabitants, significantly above the OECD average of 9 700 inhabitants. Municipalities range from 9 to 19 155 km2 and from 2 450 to 923 520 inhabitants. Municipalities have a long list of responsibilities in all areas of public policy, including social protection, education, urban planning, healthcare (prevention), environmental protection, waste management, water and sewage, local roads and public transport, housing, rescue services and emergencies, social services, leisure and culture (Table 4.2).
Table 4.2. Distribution of subnational government responsibilities in Sweden
Note: Regions are responsible for sustainable regional development. The implementation of their regional development policy needs to be co‑ordinated with actions in rural policy, sustainable urban development policy, environmental policy and other sector policies relevant to regional development.
Source: SNG-WOFI (2018[12]), Country Profiles: Sweden, https://www.sng-wofi.org/country-profiles/Fiche%20SWEDEN.pdf.
Local governments in Sweden create and indirectly manage a large number of companies to provide services in areas such as transportation, storage, communications, education, health and social services, among others. In 2020, the activity of state, regional and municipally-owned companies was approximately EUR 444 billion, of which the activity of companies at the subnational level represented 43% (Statistics Sweden, 2021[13]). On Gotland, there are 8 public companies, which employ 134 people.
A region and a municipality: The unique case of Gotland
Unlike the other local and regional governments in Sweden, Gotland has both regional and municipal powers. With approximately 61 000 inhabitants, Gotland is both the smallest region and 1 of Sweden’s 40 largest municipalities.
This unique dual condition brought benefits such as certain flexibility and financial autonomy, and offers opportunities such as the possibility of deciding and implementing their own regional development strategies. On the other hand, it implies a greater administrative burden for Region Gotland, which has to take over a large number of responsibilities without always having the necessary human and financial resources to do so.
Regional administration: Structure and competencies
The regional level of government – Region Gotland – is made up of: an elected regional council, responsible for decision-making in the areas of regional responsibility; the regional executive board, appointed by the regional council and in charge of the execution and supervision of policies; and specialised committees, also appointed by the regional council and charged with advising and assisting decision-makers and the civil service responsible for policy and service implementation. These three institutions cover tasks in all categories of regional and municipal responsibilities (Table 4.3).
The CAB of Gotland represents the national government at the regional level. It is led by an appointed county governor and is responsible for monitoring and co‑ordinating the implementation of national-level strategies and policies in Region Gotland. The distribution of responsibilities in matters of regional development is not always clear between Region Gotland and the CAB. While Region Gotland is in charge of regional development, the CAB must ensure the correct implementation of national-level goals, strategies and policies in areas closely related to regional development, such as regional growth, infrastructure planning, energy and climate, and agricultural and rural development. Historically, Region Gotland and the CAB have had a fluid relationship and effective co‑operation. However, as in other parts of Sweden, since the decentralisation of regional development responsibilities to the regional government, clarity in some of the responsibilities has diminished. On Gotland, for example, this is the case with respect to energy matters, sustainable development and the co‑ordination of actors in the regional development sphere (OECD, 2021[14]).
Table 4.3. Government institutions and responsibilities on Gotland
Source: Author’s elaboration based on Region Gotland (2017[11]), Gotland in Figures, https://www.gotland.se/104323.
Municipal administration: Structure and competencies
Gotland was not always a single municipality. Before the municipal reforms that began in 1952, the island had 92 municipalities: 1 city (Visby), 1 market town (Slite) and 90 rural municipalities or parishes, many of them with fewer than 100 inhabitants. In the first wave of municipal mergers, Gotland municipalities were grouped into 13 local governments. In 1962, during the creation of the kommunblocks, Gotland was divided into three municipal blocks. Later, in the reforms of the 1970s, all entities were consolidated into a single local government, resulting in today’s municipal structure. Prior to the completion of the municipal reform, consideration was given to establishing five municipalities, corresponding to the five secondary school catchment areas on the island. While this option was favoured among smaller municipalities and the CAB, the decision was made to merge all municipalities into a single entity.
This series of territorial administrative reforms led to the gradual, and sometimes not so gradual, adjustment to tasks, with responsibility for the regional and municipal competencies outlined in Table 4.2 being merged into one entity – Region Gotland. In sum, the policy, administrative and public service responsibilities that are generally ascribed to a regional (county) council and to a municipal council, on Gotland, are consolidated into one organisation with the same executive council, i.e. Region Gotland. In addition to generating a unique territorial administrative structure in Sweden, it has also accentuated certain challenges.
To this day, conflicting opinions regarding the administrative structure on the island remain. Tensions mainly revolve around the difficulty in providing service equality across its territory. Within the government, the possibility of administrative reform to better rationalise the provision of services is being discussed and the regional council has already received citizen proposals to sub-divide Gotland, due to the fact that “the municipality is very large” and that “the countryside is affected by the prevalence of Visby” on a frequent basis (Thomsson in Hemse, 2007[15]). In the regional government however, there is support for the current administrative structure, as it is believed that, as a single municipality, Gotland has a “stronger voice to the outside world” (Helagotland, 2021[16]).
More clarity is needed regarding the assignment of responsibilities among levels of government on Gotland
There is agreement among Gotland’s different regional development actors that their roles and tasks are not clearly delineated. As discussed above, both Region Gotland and the CAB are mandated to co‑ordinate efforts between regional and national actors with regional development responsibilities, which causes overlaps between the decentralised and deconcentrated bodies. In addition, both entities have responsibility for energy and sustainable development areas, which creates accountability challenges. When it is not entirely clear which institution or level of government is responsible for each project or policy, this causes confusion among citizens and can lead to democratic deficits (Allain-Dupré, 2018[17]).
According to regional government officials, laws and strategic documents are clear in the distribution of responsibilities but the challenge lies in the instructions that the central government gives to government agencies with a presence in the regions (CAB and national agencies). There is no clear multi-level governance mechanism to implement the different regional development strategies and policies in a co‑ordinated manner. Therefore, it is still necessary to further clarify the governance mechanisms for and attribution of responsibilities in the regional development strategies, the relationship among levels of governments, the way to co‑operate between national and regional agencies and, above all, the specific instructions and tasks of each actor.
The joint work around Gotland’s regional development strategy – Our Gotland 2040 – in whose design and implementation the CAB participates as a member of the steering group, seems to have served to improve co-ordination between Region Gotland and the CAB. This is an example of how an active and permanent dialogue can serve to enhance the conditions of co-operation. Currently, there are two instances serving as effective dialogue mechanisms on Gotland. One is a co‑ordination forum between Region Gotland, the CAB, the Employment Agency, the armed forces and Uppsala University; the other is a forum that the CAB holds with all authorities on Gotland and some state-owned enterprises, and to which Region Gotland is invited. Region Gotland should make use of these instances in order to, first, collaboratively identify spaces in which lack of clarity and overlaps occur in specific tasks and, second, communicate to the Swedish government an action plan to clarify the instructions and spaces for the action of each institution. The presentation of the results of this working group could be made before representatives of the central government or in a shared instance of national scope, such as the National Forum for Sustainable Regional Growth and Attractiveness.
The work to clarify the distribution of responsibilities between Region Gotland and the national agencies with a presence on the island can be strengthened in a number of areas (Allain-Dupré, 2018[17]; 2019[18]). For example, it is somewhat problematic to clearly distinguish whether it is the region or the municipality that is responsible for delivering specific public services, as Region Gotland delivers both. In some instances, it is also still unclear who is responsible for certain areas of regional development policy, since national (CAB) and regional (Region Gotland) levels of government share responsibilities in areas such as infrastructure and planning, energy and climate, cultural environment, etc. Defining more clearly which responsibilities each actor has in each policy sector would help to strengthen accountability towards citizens.
Not only is it important to clarify who does what but it is also important to ensure that each level of government is clear on its functions in particular areas (e.g. regulations, co‑ordination, etc.) (OECD, 2019[18]; 2018[17]). Some co-ordination problems on Gotland occur between the regional government and national agencies when, after successful collaborative work in developing a roadmap for a specific project, there is little clarity on the specific instructions that each actor should follow or a governance system for the project has not been agreed (e.g. the Energy Pilot Gotland Project being implemented in collaboration with the Swedish Energy Agency) (OECD, 2021[14]).
Building and maintaining adequate vertical co-ordination mechanisms can also generate further clarity in responsibilities. Along with creating a working group mandated to analyse and communicate the main challenges in terms of distribution of responsibilities among levels of government on Gotland, the region and the national government should consider the possibility of consolidating and maintaining over time the functioning of a body of this type. The objective would be to keep an institutional structure that facilitates dialogue on these matters among the levels of government, thus reducing the time to resolve conflicts such as overlaps or lack of clarity in the implementation of regional development strategies or investment projects.
Financing regional development on Gotland
Gotland’s regional development depends on the government’s fiscal capacities and its ability to generate and use a variety of public investment financing sources, including national grants, own-source revenues and EU funds. As a region and a municipality that is also an island economy driven by tourism and micro businesses and small- and medium-sized enterprises (SMEs), Region Gotland faces some specific challenges with respect to generating own-source revenue and its spending is heavily concentrated in healthcare and education. Advancing with its attractiveness strategy and reinforcing its administrative capacity for EU (or other public investment) funds could combine to help build its own-source revenue base and generate a strong platform for optimising public investment financing for regional development.
Fiscal frameworks supporting Region Gotland
As in most countries, Sweden’s subnational governments are financed by a combination of grants and subsidies from the national government, tax revenues (shared and own-source), user charges and fees, income from other assets (e.g. property) and other revenue sources (Table 4.4). Grants and subsidies include block and earmarked grants as well as revenue from the fiscal equalisation system. At a subnational level, block grants and own-source revenues, including taxes, user charges and fees, as well as income from other assets, tend to offer regional and local authorities the greatest flexibility to fund their mandates and priorities, including regional development. In Sweden, this flexibility is reinforced by the considerable autonomy and flexibility enjoyed by subnational governments to set their tax rates. While this could result in tax competition (different regions or municipalities setting lower tax rates than their neighbours), this is limited as rates remain relatively similar throughout the country. By 2022, rates will be 32.3% on average, with an average of 20.7% at the municipal level and 11.6% at the regional level with a standard deviation of 1 and 0.3 respectively. On Gotland, there is a single local tax rate of 33.6%, relatively close to the national average (OECD, 2021[14]).
The dual region/municipality status of Gotland makes the comparison of revenue and public expenditure with other subnational governments in Sweden complex. In most cases, data on public finances on Gotland are consolidated at the municipal level, while for Sweden’s other territories, there is information for both the regional and municipal levels. However, some comparisons of Gotland’s performance can be made with that of the rest of the municipalities and regions.1
Table 4.4. Subnational government revenue in Sweden, by category
As a share of total subnational government revenue and as a share of gross domestic product (GDP)
Source: SNG-WOFI (forthcoming[19]), Country Profiles: Swede, https://www.sng-wofi.org/country-profiles/Fiche%20SWEDEN.pdf.
Gotland’s revenue base presents a mixed picture
On the revenue side, the picture on Gotland is positive but mixed. It has seen an increase in its overall revenues, benefitting from the new fiscal equalisation system, and it has a good degree of fiscal autonomy given its ability to set tax rates, the high proportion that taxes represent in the fiscal envelope and the fact that slightly over 10% of its income comes from user charges and fees and other sources. At the same time, its revenues in almost all categories are less than what general subnational revenue represents as a percentage of the total government revenue system, and its regional and local tax revenues remain lower than the national average, with the discrepancy generally increasing since 2016.
Gotland’s total revenue stream increased by 6.3% between 2019 and 2020, mainly due to a 25% increase in transfers and a 37% increase in earmarked grants from the national government (Region Gotland, 2021[20]), primarily associated with the COVID-19 pandemic and the new equalisation system launched in 2020. Despite this, in 2020, Gotland’s revenue from grants and subsidies was less than the general percentage of subnational government revenue for this category. Combined, grants and subsidies represented 23% of its total revenue. If one adds earmarked grants (an additional 10% of the total), grants and subsidies made up about 33% of Gotland’s revenue base – lower than the national average of 38.8%. At the same time, its regional and municipal tax revenues represent 54% of its total income, a higher proportion than the national average for subnational governments in Sweden (Table 4.5). While this can be positive in terms of fiscal autonomy, such dependence is significant in the case of Gotland. Local taxes are predominantly composed of personal income tax (PIT), which could pose a difficulty for generating more own-source revenue given the challenges Gotland faces in building its tax base.
Table 4.5. Gotland municipal revenue, by category
EUR (million) and as a percentage of total revenue, 2020
Source: Region Gotland (2021[20]), Årsredovisning 2020 (Annual Report), https://www.gotland.se/%C3%A5rsredovisning2020.
Sweden’s strong fiscal equalisation system benefits Gotland
Gotland benefits from Sweden’s fiscal equalisation system. As a region, Gotland receives the most money per capita from the regional equalisation system, with EUR 950 per inhabitant in 2020, 116% more than the national average of EUR 441, with the greatest amounts coming from the cost equalisation grant and the structural grant. In both categories, Gotland received 289% and 681% more per capita than the national average respectively (Table 4.6). The first corresponds to a levelling that the system makes from the calculation of the structural costs incurred by the regions. The second is intended to reinforce municipalities and regions with a small population and/or labour market difficulties (Tingvall, 2007[21]).
Table 4.6. Income per capita from regional equalisation system, Gotland vs. all regions, 2020
Source: Statistics Sweden (2021[22]), Economic Equalisation for Municipalities and Regions, Year 2005‑2021, https://www.statistikdatabasen.scb.se/pxweb/en/ssd/START__OE__OE0115/KomEkUtj/.
Compared to municipalities of a similar size, such as Falun, Norrtälje, Östersund and Trollhättan, Gotland also receives more financing from the equalisation system (Statistics Sweden, 2021[23]). While the equalisation system benefits Gotland, particularly as it compensates for areas with small populations and difficult labour market situations, it is also something of a double-edged sword. If the system undergoes further change in ways unfavourable to Gotland and/or when Gotland’s population increases or the labour market situation shifts in a direction that reduces its equalisation income, it risks losing revenue. In theory, this loss would be compensated thanks to an increase in permanent island residents and a larger or stronger enterprise base, increasing consumption and generating a positive gain in taxes, user charges and fees, and possibly other types of grants. Yet, if the increase in population or adjustments in the labour market situation do not offset a negative shift in the equalisation grant, Gotland risks a larger revenue gap.
Regional and municipal tax revenue differentials are growing compared to the national average
Between 2016 and 2020, Gotland’s average municipal and regional tax revenue increased overall. This being said, this revenue remains lower than the national municipal and regional averages, and dropped slightly from 2019 to 2020, although this may be due to the COVID-19 crisis (Figure 4.1). In addition, the gap between the national and Gotland averages, particularly in the regional average, is growing. In 2020, Gotland’s regional tax revenue was 7% lower than that of other Swedish regions. It collected an average of 5% less per capita than the national average of other regions, about 5% less per capita in municipal taxes compared to other municipalities. In both cases, the difference has increased year by year.
Figure 4.1. Municipal and regional tax revenue per capita, Gotland vs. national averages, 2016‑20
Source: Statistics Sweden (2021[24]), Income Statement for Municipal Groups, SEK per Capita, Current Prices by Region, Income Statement and Year, https://www.statistikdatabasen.scb.se/pxweb/en/ssd/START__OE__OE0107__OE0107A/ResultKcr/; Statistics Sweden (2021[25]), Income Statement for Regions, SEK/Inhabitant, Current Prices by Region, Income Statement and Year (Tax Revenues), https://www.statistikdatabasen.scb.se/pxweb/en/ssd/START__OE__OE0107__OE0107C/ResultLTing/.
While the divergence may be due to the COVID-19 pandemic and its impact on tourism, the overall difference may also be due to volatility in tax revenues generated by volatility in the tourism sector, a high proportion of secondary-home residents and difficulties increasing its permanent resident housing stock and expanding the business-base. This would affect the levels of local taxes, property taxes and business and income taxes. For example, Region Gotland’s per capita revenue from local taxes was approximately 6% less than the national average and, from property tax, it was 19% less in 2020.
As a region and municipality, Gotland faces a spending disadvantage
Region Gotland executes the same high-cost responsibilities, such as regional development, healthcare and public transport, as larger, wealthier or more populated regions, but with fewer resources, and the added responsibilities and associated costs of municipal competencies. In general terms, adding together all regional and municipal and public spending, over 80% of Region Gotland’s spending is on healthcare and education (Table 4.7).
Table 4.7. Total expenditure per capita by activity, Gotland, 2020
Source: Statistics Sweden (2021[26]), Costs and Incomes for Municipalities by Region and Activity. Year 2011‑2020, https://www.statistikdatabasen.scb.se/pxweb/en/ssd/START__OE__OE0107__OE0107B/KostnDR/.
In some critical spending areas, Regional Gotland spends more than other regions in Sweden and yet, as a municipality, it is spending less. According to 2020 figures, Region Gotland spent 9% more per capita on healthcare than other regions which, due to the size of public investment in healthcare, translates into general costs 7% higher than the national average (Statistics Sweden, 2021[27]). While Gotland benefits from collaboration with the Stockholm region in healthcare-service provision, its small population and island status continue to affect spending in the sector.
At the municipal level, Region Gotland spends below the national average in all spending areas, except elderly care. On the one hand, this lower level of spending might be due to lower spending needs. Yet, this seems unlikely given its remoteness, population density and demographic composition. On the other hand, it could also reflect underfunded mandates – meaning that Region Gotland may have insufficient resources to meet all of its spending responsibilities as a region and municipality – and thus must spread funds more thinly across spending assignments than subnational governments that are separated into two distinct entities.
Addressing Gotland’s fiscal challenges
The main challenges that Gotland faces in terms of public finance are a small tax base, decreasing tax revenues and high dependence on a sector – tourism – that can be unpredictable. The seasonality of much of Gotland’s economic activity also adds to the already high costs in infrastructure and service provision that come with being an island economy, with a relatively small population and low density. Overall, it appears that Region Gotland faces challenges in fully complying with its long list of regional and municipal responsibilities. It allocates more than the Swedish average of subnational government expenditure to healthcare, 51% vs. 26.8%, and education, 31% vs. 21.8% (Statistics Sweden, 2021[26]; OECD, 2021[28]) leaving little space for additional required spending in other areas (e.g. general services, social services, economic affairs or other areas). It is necessary, then, to find ways to strengthen the flow of fiscal income, ensure the availability of sufficient resources to provide services equitably throughout the region and ensure equitable social, economic and cultural development throughout the territory.
To meet fiscal challenges, Region Gotland needs alternatives to conventional solutions. In 2022, local tax rates on Gotland (municipal and regional combined) will be 33.6%, while the national municipal average will be 33.2% (Statistics Sweden, 2021[29]). Therefore, increasing tax rates or implementing new local taxes to increase tax revenue could be counterproductive and generate negative effects such as driving away wealthy migrants and new businesses. Also, the fiscal equalisation system works well in Sweden and has recently been modified to address some shortcomings. Gotland benefits from these mechanisms, so the option of reforming them would not be logical. Therefore, the issue is to identify ways to develop Gotland’s income and tax bases without generating counter-effects that could end up affecting these flows. One option is to continue advancing with its attractiveness initiative.
Building Gotland’s regional attractiveness can contribute to its fiscal health
Gotland is a region with great potential. With a privileged natural environment, a significant and attractive offer of tourist services, a heritage city (the Hanseatic town of Visby), key economic activities (food, agriculture and natural resources) and rich cultural diversity, Gotland is sometimes called an island paradise and is a significant tourist attraction in the middle of the Baltic Sea. For this reason, Gotland is a place of retirement and a second home for both Swedish and international families.
As part of its regional development strategy, Gotland is actively trying to build its attractiveness as a place to visit, live and work. However, a number of challenges confront its ability to do so. With regard to tourism, which plays an important role in supporting the local economy, the tourist season is concentrated in the summer months. This seasonality makes it harder to attract tourists at other times of the year. With regards to attracting permanent residents, Gotland continues to battle the perception that its labour market offers a lack of employer diversity and limited opportunities for professional development. With regards to business attractiveness, Gotland needs to do more to nurture a willingness among its micro business and SMEs to expand.
Elements such as good public transport and easy access to the region, secure and affordable electricity and water supply, high levels of Internet connection, attractive living conditions and a good environment for entrepreneurship form the basis of Gotland’s attractiveness initiative, which is embedded in its regional development strategy. The aim is to: improve accessibility; stimulate local development outside of Visby; strengthen the business community; encourage students to study on Gotland and remain in the region after completing their studies; and create favourable conditions for construction and access to housing. Doing so could have the additional benefit of strengthening the local and regional economy, including building the tax base and smoothing out any revenue (and spending) volatility.
Region Gotland’s unit for sustainable growth has been implementing a regional branding strategy since 2020 that, through a website that offers general information for visitors, prospective residents and residents, as well as communication tools for local businesses, seeks to align actions among regional stakeholders to build and communicate an attractive image of the region (Box 4.3). This strategy is on the right track to support the continued development of a strengthened regional image (Region Gotland, 2021[30]).
A key message that is highlighted by the branding strategy is that Gotland is open for business and leisure all year round, in order to break with perceptions of it as a summer-only tourism destination. In this regard, the branding strategy has also sought to promote alternative tourism experiences such as sustainable tourism, which may appeal to holidaymakers who are less sensitive to seasonality and choose their holiday destinations based on other factors. Policy makers should couple this branding strategy with new measures to reduce seasonality, such as helping businesses develop and grow attractive tourism services during the winter time. Niche regional festivals and events, often with close links to the tourism destination, (such as culinary, literary, adventure sports and music experiences – e.g. Glastonbury music festival in the United Kingdom) might be one way to attract tourists to Gotland at non-seasonal times of the year (OECD, 2020[31]). Overall, this is one of the most challenging aspects of tourism and a number of countries are grappling with the issue, including Croatia, Iceland, Malta and Slovenia.
The most prominent message that is highlighted in the branding strategy is that Gotland is a place of opportunities. While Gotland’s permanent resident population has been growing in recent years and is at a record high, the population increase has been driven by older or retired rather than working-age people, which constrains the local tax base. Part of the relative reluctance of working-age people to move to Gotland may be perception-based. Recent surveys have shown that less than half of migrants and only one in four emigrants from Gotland have a positive perception of it as a place to work, with many citing an unattractive labour market and the lack of a range of employers across sectors as key factors in this regard (Novus, 2020[32]). It is likely that this predominantly negative view by Gotlanders of the region’s labour market is shared at least to some extent by mainland Swedes.
In order to challenge this perception and encourage more working-age migration to the island, Region Gotland’s unit for sustainable growth is currently running a 12-month communication campaign, which focuses on highlighting labour market opportunities in the region across different sectors, targeting residents and prospective residents alike. In addition to improving the perception of Gotland as a place of professional opportunities through branding, policy makers should create new incentives for the arrival of businesses in new industries or industries related to those already on the island, in order to broaden labour market opportunities for prospective and current residents.
A third message that is highlighted in Gotland’s regional branding strategy is that Gotland is a good place to open and grow a business. In particular, the regional branding highlights the role of Gotland Grow in providing business support services to entrepreneurs looking to start or grow their businesses on the island. This is particularly salient to strengthening Gotland’s tax base, given that many of Gotland’s small businesses express limited willingness to expand their operations. In addition to knowledge-based support, policy makers may also consider providing incentives such as tax benefits to Gotland-based businesses that either wish to launch or expand their operations (OECD, 2021[14]).
Box 4.3. Livet på Ön: Gotland’s regional branding strategy
In 2021, the Region Gotland unit for sustainable growth launched a regional branding strategy to boost the image of the region and attract tourists and potential new residents and businesses to the island. On the Gotland.com website and through the Open Gotland mobile application, Region Gotland offers a wealth of information about the attractions of the region and the different ways to experience them, under the concept Livet på Ön (Life on the Island). In a set of information samples and real stories, the website offers information on: i) what is happening on the island; ii) how to visit the island and its surroundings; iii) tips for planning a trip to Gotland; iv) highlights of cultural life on the island (activity in rural parishes, arts, gastronomy, etc.); v) who works on the island; and vi) how to work on the island. For this, the strategy and the website are structured around a series of messages:
Gotland is a place of opportunities (main message).
Gotland is an attractive island with lots of living space (main message).
On Gotland, you can do most things and live unique experiences.
Gotland is open all year round.
Gotland is a good place to run a business.
With regard to the last bullet point, Gotland.com offers a couple of tools for businesses on the island. On the one hand, the Region Gotland unit for sustainable growth created a relay account on Instagram (@_livetpaon_), in which residents from all walks of life (including entrepreneurs) have the opportunity to highlight the life they lead on the island, including sharing information about their businesses. There is also a part of the Gotland.com website – Gotland Grow – that provides guidance to entrepreneurs interested in starting or expanding a business on the island. On the other hand, Gotland.com hosts a toolbox for local actors. This toolbox brings together information grouped into 11 categories, in which the island’s businesses can access the vision and key messages of the strategy, the core values of the desired image, the positioning strategy, a guide on how to communicate, and digital files with a regional logo in view of unifying the image of the island. Users can also create a profile on the platform to access free material (photos, videos, etc.) and participate in the development of the strategy.
Source: Region Gotland (2021[30]), Livet på Ön, https://gotland.com/, date accessed: 1 May 2022.
Along with the implementation of the actions in the regional development strategy and continually deploying the regional branding strategy, it would be important for Region Gotland to carry out a holistic assessment of the current state of Gotland’s regional attractiveness, evaluate the creation of concrete benefits schemes to incentivise newcomers and implement strategic actions to better position the key messages of the branding strategy among specific stakeholders.
For the assessment, Region Gotland could use the diagnostic tool the OECD is currently developing that helps regions and countries assess their regional profile for attracting investors, talent, visitors and foreign markets. This tool establishes 6 areas and 14 dimensions to assess the level of regional attractiveness. These areas and dimensions are: economic attractiveness (economy, innovation, labour market); visitor appeal (tourism, cultural capital); land and housing (land, housing); resident well-being (social cohesion, education, health); connectedness (digitalisation, transport); and natural environment (environment, natural capital). Each of these dimensions is made up of a set of indicators that help to quantify regional attractiveness in each specific aspect. In the digitisation dimension, for example, indicators include the share of households with high-speed Internet access and the level of fibre optic penetration in buildings in the region. The tool could help Region Gotland to evaluate its regional attractiveness and the perception that people and businesses have of the island both in other parts of Sweden and abroad.
In addition to supporting initiatives on building innovation and entrepreneurship, such an assessment could help identify whether there are sufficient incentives to attract new businesses and residents and if benefit schemes need to be adjusted, introduced or eliminated. It could also further identify how specific initiatives have promoted the region’s attractiveness – for example, to identify whether the “Optic fibre to all houses on Gotland” project contributed to regional attractiveness and, if so, how to better communicate its results. In order to strengthen attractiveness in different areas and dimensions, some potential actions are suggested in Table 4.8, using as a basis the OECD’s 14 dimensions to assess territorial attractiveness. Some of these are proposed in the previous chapters of this report.
Table 4.8. Potential actions to enrich Gotland’s regional attractiveness
Source: Author’s elaboration, based on Charbit, C. (2021[33]), “What makes a region attractive in the new global environment? How to measure and monitor”, https://www.oecd.org/regional/Presentations-regional-attractiveness.pdf.
Gotland’s regional attractiveness strategy is also in line with Sweden’s Trade and Investment Strategy and its strategic objective of increasing Sweden’s attractiveness to foreign investments, skills, talent and visitors (Government Offices of Sweden, 2019[34]). Therefore, there are potential collaboration opportunities and/or co-financing mechanisms with national agencies to implement mutually beneficial initiatives.
A robust and well-designed communication plan is a crucial aspect of the success of a regional branding strategy; it is the key to transforming the image of a region and achieving the objectives of attracting and retaining the population and businesses. Region Gotland has made notable progress with Gotland.com and the Livet på Ön concept and has developed some of the most important elements, such as a shared vision and core values, a set of key messages and alternatives for collaboration with local stakeholders. Nevertheless, it is necessary to complement these efforts with actions such as the position of key messages in domestic and foreign media, and the participation of regional representatives in business fairs and entrepreneurial circles, among others.
This series of recommendations can be grouped around the following actions:
Identify target groups and establish benefits to attract people and businesses: Identify demographic profiles (e.g. age groups, backgrounds, etc.) and strategic industries (e.g. information technologies, design, manufacturing, etc.). Define target groups and messages that resonate strongly with them. Also, evaluate the possibility of implementing fiscal or other benefits for the installation of new businesses in key industries and benefit programmes (housing benefits, scholarships, etc.) for the relocation of families, students and young entrepreneurs.
Design a communication plan with specific and concrete actions: Bring together various regional stakeholders and co-design a roadmap with objectives, actions, deadlines, a monitoring methodology and measuring indicators. Actions included in the plan must aim to promote the positive regional aspects identified in the previous phases and address the negative ones by promoting benefits.
Implement benefit schemes and communication plans and evaluate systematically: Carry out assessments to evaluate the results of the strategy, combining quantitative and qualitative data, and considering the participation of representatives of businesses and the local community, native-born and newcomers. Indicators could include: the number of new companies in the region, changes in wages over the years, job creation, purchasing power trends and consumers’ confidence, among others.
A successful example of a communication campaign to strengthen regional attractiveness is the case of Orange County in the United States and the campaign that was carried out by the Orange County Business Council (OCBC) in the early 2000s. This council, a public-private entity formed mainly by representatives of the private sector, implemented a strategy to attract new businesses to the county in 5 strategic industries, with the aim of boosting the regional economy and recovering economic activity after a crisis in the mid-1990s. Based mainly on industry-targeted communication actions, the OCBC, in collaboration with the county government, transformed the image of the county and ultimately created the conditions for a marked improvement in economic activity and the environment for doing business in the county. A key element of the strategy included the tailoring of bespoke communication messages to appeal to different industry sectors, thereby significantly boosting the local attractiveness of Orange County and stimulating local economic development (Kero, 2002[35]).
Reinforcing public investment in Gotland’s regional development
To support the implementation of its regional development strategy and associated initiatives, Region Gotland receives a general government grant. In addition, it deploys a variety of EU funds. These include funds from Interreg, HORIZON 2020 and Cohesion Policy Funds, primarily European Regional Development Funds (ERDF), European Social Funds (ESF and ESF+ in the 2021-27 programming period) and the European Agriculture Fund for Rural Development (EAFRD), using the LEADER method.2 In the 2014-21 programming period, Gotland received approximately SEK 100 million in ERDF funds and SEK 45 million in ESF. In 2014-20, the region co-financed up to 90% of ERDF financing, increasing the available funding to almost SEK 200 million, with an additional almost SEK 28 million for ESF (OECD, 2021[14]).
The region is confronted by a set of common challenges with respect to EU funds. The first is a need to grow the beneficiary pool and support beneficiary capacity in developing and implementing projects, including funding the co-financing requirement. Only a limited number of companies and organisations on the island meet the conditions to apply for EU funds. Also, there is difficulty in meeting the programme requirements, especially the co-financing criteria. While Region Gotland offers support in this area, it is not always sufficient, and potential beneficiaries have difficulties obtaining co-financing from national or international sources. This has been addressed, at least in part, through the Sustainable Gotland initiative. Funded entirely by the EU, with no associated co-financing, this programme helped attract new beneficiaries to EU funding opportunities (OECD, 2021[14]). The next programming period will indicate whether the pool of beneficiaries can continue to grow, with or without a programme like Sustainable Gotland. The regional government may need to identify other means to manage this challenge, for example by building its own reserves and a portfolio of fully-financed project possibilities, and/or working with beneficiaries and possible national or international financing sources to match needs with possibilities.
The second challenge is a need to ensure that funds can help advance the region’s objectives as articulated in the regional development strategy in a manner reflective of the region’s realities and constraints while also aligning with European programming and its requirements. In the 2021-27 period, there is a greater emphasis on thematically focused initiatives, especially those associated with the region’s smart specialisation strategy (S3). To meet the requirements, the region will likely need to sharpen its criteria for project calls, for example by ensuring a broad definition of innovation is applied to innovation-oriented projects. At the same time, it will need to ensure the calls are designed in such a way that they meet the capacities and needs of beneficiaries.
A survey to regional stakeholders carried out by Region Gotland showed that, although local beneficiaries of the EU funds are satisfied with the financial assistance provided, they also agree that more assistance is needed in: i) the application processes for programmes from EU funds; ii) the operation of the budgets; iii) reporting to the funding agencies; iv) more information on calls and applications; and v) greater knowledge about the integration of sustainability practices in project management. Through such a survey, Region Gotland is taking an active role in the pre-call phase to better understand beneficiary wants, constraints and ambitions. It may need to take additional steps to help ensure the beneficiary’s ability to submit well-prepared projects. It also may need to be even more creative and innovative in project-call design. For example, if there is a desire for beneficiaries to partner more actively with innovation hubs on the mainland or internationally, then Region Gotland may need to build its own capacity to develop the tools and design innovative project calls to advance this type of initiative.
A third challenge is a capacity within Region Gotland itself. Despite the will to work more extensively and effectively with EU funds and participate in international exchanges, the executive administrative board of Region Gotland has limited resources in terms of time and staff to work with stakeholders on the management and implementation of funds. In Region Gotland, there is no co-financing office and a group of three to five officials from the regional government offer assistance to local stakeholders among other day-to-day functions. While Region Gotland is not a managing authority for EU funds, reinforcing its administrative capacity to manage funds could help the region address the impact of these challenges and strengthen its ability to effectively absorb this form of investment financing. Accomplishing this can take time and require action in a variety of dimensions. It requires reinforcing the relationship (i.e. partnership) with stakeholders and beneficiaries and effectively advising them in the application, execution and accountability processes associated with projects financed with EU funds.
It also means looking inward at the Region Gotland’s system supporting the management of EU funds. To this end, Region Gotland could follow some of the recommendations of the OECD and European Commission (EC) in terms of capacity building for the management of EU (and other regional development) funds (OECD, 2020[36]). The analytical framework developed by the OECD to support administrative capacity for EU funds highlights the various areas that may require attention (Figure 4.2), particularly with respect to organisation, strategic planning and beneficiary and stakeholder support.
Figure 4.2. Analytical framework for building administrative capacities in the use of EU funds
Source: Adapted from OECD (2021[37]), Administrative Capacity Building Self-assessment Instrument for Managing Authorities of EU Funds under Cohesion Policy, https://www.oecd.org/regional/regionaldevelopment/ACB_Self_assessment_Instrument.pdf; OECD (2020[36]), Strengthening Governance of EU Funds under Cohesion Policy: Administrative Capacity Building Roadmaps, https://doi.org/10.1787/9b71c8d8-en.
To reinforce administrative capacities for EU funds, the OECD identified a series of actions that could be valuable, particularly when adapted to specific institutional needs and contexts (Box 4.4). Region Gotland could consider identifying its administrative capacity gaps in EU fund management with the OECD Administrative Capacity Building Self-assessment Instrument (2021[37]). For people management, it could map and identify desired competencies for effective management of EU funds and design a long-term strategy to develop these capacities through existing tools, or by developing new ones. The EC Competency Framework could support this. Additionally, the regional government might want to try out new approaches to attracting and retaining skilled candidates and employees and develop strategic workforce planning to overcome some of the human resource challenges faced in the 2014-20 programming period. For example, attracting additional, qualified civil servants may mean giving consideration to helping candidates also identify employment opportunities for their spouses.
In the area of strategic programme implementation, Region Gotland could adopt a bottom-up approach to address information and knowledge gaps among beneficiaries by establishing permanent communication and knowledge-sharing with existing and potential beneficiaries and other stakeholders in the region. Also, it could help to build beneficiary capacities by streamlining interaction processes and partnering with beneficiary-support organisations from mainland Sweden. This could also strengthen the advisory capacities of the regional staff. In addition, it may also be desirable to have resources – such as an office or a platform – dedicated to advising on the design of projects requesting EU financing. For this, it is key that the national government participates in the evaluation of the current situation and the possibility of supporting Region Gotland in such an endeavour.
Box 4.4. A selection of recommendations from the EC pilot project “Frontloading administrative capacity building for post-2020”
Five managing authorities, three of which were national and two were regional, participated in a pilot project implemented by the EC and the OECD to determine the main administrative capacity challenges faced by these authorities and potential actions to overcome these challenges. The 2020 report, Strengthening Governance of EU Funds under Cohesion Policy: Administrative Capacity Building Roadmaps, provides a series of recommendations, some of which can help Region Gotland in managing European funds and are highlighted below.
Recommendations for Challenge Area 1: People and organisational management
Develop a skilled, adaptable workforce with the right mix of competencies for effective EU funds management, by mapping and identifying the existing and desired competencies for effective EU funds management and exploring how existing tools can help to develop these skills.
Attract and recruit candidates with the right skills, by employing new tools to attract candidates beyond traditional pools and adapting both recruitment and onboarding processes.
Improve the long-term and strategic orientation to learning and development, by conducting gap analysis, broadening the mix of learning options available to public servants and aligning learning and development initiatives with a competency framework.
Develop strategic workforce planning capabilities to meet the challenges of the 2021-27 period, by strategically positioning and monitoring human resources.
Recommendations for Challenge Area 2: Strategic operational programme implementation
Address information gaps, improve knowledge-sharing and expand communication, by building a stronger bottom-up approach to information sharing with beneficiaries and ensuring regular and well-structured communication with them.
Effectively build the capacity of beneficiaries, by streamlining the process of interacting with and supporting beneficiaries, improving the frequency and quality of the guidance, promoting regular and constant information exchange, and partnering with beneficiary-support organisations.
Actively engage with a broad base of external stakeholders, by building multi-stakeholder dialogue platforms for broader and more effective stakeholder input.
Source: Adapted from OECD (2020[36]), Strengthening Governance of EU Funds under Cohesion Policy: Administrative Capacity Building Roadmaps, https://doi.org/10.1787/9b71c8d8-en.
Furthermore, Region Gotland could evaluate the scope for launching a multi-stakeholder dialogue platform to facilitate more broad-based and effective stakeholder input, including with the Swedish Agency for Economic and Regional Growth, other regions and municipalities, beneficiaries from the public and private sectors as well as civil society organisations, plus other external stakeholders such as consultants, academia, business associations (e.g. for entrepreneurs or SMEs), etc. This group could work on identifying solutions to common problems but it could also operate as a fluid network of actors who could work together to co‑ordinate efforts and overcome the obstacles presented by the need for co-financing or the lack of technical capacities, as well as to generate joint projects and/or identify appropriate funding opportunities, including those that require projects of a larger scale than currently practised on Gotland.
Strategic frameworks for regional development in Sweden and Gotland
Strategies and institutions involved in regional development
According to national legislation, Sweden’s regions have a permanent mandate to lead and co-ordinate regional development issues at the territorial level (OECD, forthcoming[5]). At the same time, however, regional development policy making in Sweden is governed and influenced by many actors and a diverse set of strategic documents in different sectors and levels of government. Sweden’s primary strategic framework for regional development is its National Strategy for Sustainable Regional Development throughout Sweden 2021-2030 (Swedish Government, 2021[38]). This strategy, published in early 2021, articulates strategic areas and priorities as guidelines for the design and implementation of regional development strategies throughout the country. It also establishes state funds with respect to regional development, and that it has to be implemented in co‑ordination with national policies such as the rural policy, the urban development policy, the climate policy action and other relevant policy areas, including the EU Common Agricultural Policy (Table 4.9).
Table 4.9. Main national-level strategies involved in regional development in Sweden
Source: Swedish Government (2021[38]), Nationell strategi för hållbar regional utveckling i hela landet 2021‑2030 [National Strategy for Sustainable Regional Development], https://www.regeringen.se/4956ea/contentassets/53af87d3b16b4f5087965691ee5fb922/nationell-strategi-for-hallbar-regional-utveckling-i-hela-landet-20212030; Swedish Government (2018[39]), En sammanhållen politik för Sveriges landsbygder (Coherent Rural Policy Bill 2018], https://www.regeringen.se/4952fb/contentassets/f7a8f90de7604a9db488f4c5585372ca/kortversion-en-sammanhallen-politik-for-sveriges-landsbygder--for-ett-sverige-som-haller-ihop; Swedish Government (2017[40]), Living Cities Strategy - Policy for Sustainable Urban Development, https://www.regeringen.se/4971fa/contentassets/b5640fd317d04929990610e1a20a5383/171823000webb.pdf; Swedish Government (2019[41]), En samlad politik för klimatet [Climate Policy Action Plan 2019], https://www.regeringen.se/49c770/contentassets/b0f74b9a2a024cfcb1ea42966963abfb/en-samlad-politik-for-klimatet---en-sammanfattning-av-regeringens-klimatpolitiska-handlingsplan.pdf.
The National Strategy for Sustainable Regional Development 2021-2030 establishes three main challenges to address: i) environmental problems and climate change; ii) accelerated demographic changes; and iii) widening territorial gaps both within Sweden and in the EU. These challenges vary throughout the country and, together with globalisation, digitalisation and other technological developments, will affect sustainable development. Furthermore, it establishes the strategic action areas that the regions should consider implementing to achieve the regional development objectives. These areas are: i) equal opportunities for housing, work and welfare throughout the country; ii) skills supply and skills development throughout the country; iii) innovation and renewal as well as entrepreneurship and enterprise; and iv) accessibility through digital communication and transport systems throughout the country (Swedish Government, 2021[38]).
In these areas of action, the national strategy details various specific sub-areas, for example: the development of high standards of quality of life with good and attractive habitats; good community planning; and good access to public and commercial services. These specific areas of action are very much aligned with the needs of Gotland. As discussed later in this chapter, Gotland will greatly benefit from advancing in ensuring attractive living conditions throughout the island year round, which would allow it to attract tourists and, above all, residents. Also, regarding accessibility through digital communication and transport systems, the national strategy establishes the specific action area of ensuring improved access to fast broadband and greater digital use. This is a significant need on Gotland and is considered a key challenge in its regional development strategy (Region Gotland, 2021[42]). The national budget is aligned with the national strategy. Regions are allocated national structural funds to invest in development projects, which are led and implemented by local and regional actors with the purpose of fulfilling various objectives that are laid out in their regional development strategies. The national strategy sets out requirements for how regional and local actors may use the funds (Box 4.5).
Box 4.5. Sweden’s National Strategy for Sustainable Regional Development 2021-2030
In early 2021, the national government published the National Strategy for Sustainable Regional Development throughout Sweden 2021-2030. This document lays the foundation for the elaboration of regional development strategies for all regions and the municipality of Gotland. Based on an analysis of the social, environmental and economic conditions of the country, it establishes three specific challenges – together with globalisation, digitalisation and other technological developments – to be addressed and four strategic areas of action.
Challenges
Environmental problems and climate change.
Demographic change.
Increased gaps both within Sweden and within the EU.
Strategic areas
Equal opportunities for housing, work and welfare throughout the country.
Skills supply and skills development throughout the country.
Innovation and renewal as well as enterprise and entrepreneurship.
Accessibility through digital communication and transport systems.
In addition to establishing these challenges and strategic areas of work, the national strategy provides that the development strategies of each region must be comprehensive and intersectoral and must contain long-term goals and priorities. In addition, they should encourage and facilitate cross-sectoral collaboration among counties and among actors at the local, regional, national and international levels. To ensure the success of these guidelines, the strategy establishes three basic requirements.
Basic requirements
Capacity for regional and local development work.
Regional considerations and co‑operation between state authorities, regions and other actors.
Learning through analysis, follow-up, evaluation and research.
Source: Swedish Government (2021[38]), Nationell strategi för hållbar regional utveckling i hela landet 2021‑2030 [National Strategy for Sustainable Regional Development], https://www.regeringen.se/4956ea/contentassets/53af87d3b16b4f5087965691ee5fb922/nationell-strategi-for-hallbar-regional-utveckling-i-hela-landet-20212030.
Our Gotland 2040: Gotland’s regional development strategy
Gotland’s regional development strategy – Our Gotland 2040 – is the main steering document for strategic development and co‑ordination for Gotland. The document was approved by the regional council in early 2021 and is supposed to be the starting point for other strategies, plans and programmes, as well as for structural programmes and investment funds of the EU. Region Gotland and government agencies, including the CAB, must contribute to its implementation. The main challenges to address are grouped into five areas: climate, social cohesion, demographic development, globalisation and digitalisation.
This strategy’s elaboration overlapped with the development of the National Strategy for Sustainable Regional Development 2021-2030 and, as such, it is very well aligned with the 2015-20 strategy; likewise its principles and strategic areas of action coincide with those established at the national level in the latest regional development strategy. Our Gotland 2040 is also closely aligned with national strategies on climate, rural and urban matters. In the climate area, the regional development strategy identifies as key challenges the reduction in greenhouse gas emissions and the need to move towards a sustainable energy supply model. In the area of social cohesion, like the National Strategy for Sustainable Regional Development 2021-2030, Our Gotland 2040 recognises the presence of significant gaps among its inhabitants, both in the area of health, levels of social participation and gender. Also, Gotland’s regional development strategy addresses demographic megatrends, especially the ageing population and the importance of taking care of rural sectors. Finally, it dedicates a significant section to the relevance of further developing the digital infrastructure and connectivity aspects on the island, both to reduce the gaps in the use of these tools, and to boost local businesses.
Table 4.10. Gotland’s regional development strategy, Our Gotland 2040
Source: Specific selection of relevant strategic areas and priorities from Region Gotland (2021[42]), Our Gotland 2040 – Regional Development Strategy for Gotland, https://www.gotland.se/110992.
The system of actors involved in the regional development of Gotland is diverse and sometimes complex
Just as there is a diverse set of strategic documents for regional development and growth, there are also several layers of actors involved in the design, implementation and monitoring of these strategies. The regions are primarily responsible for regional development tasks and they must design and co‑ordinate the implementation of their own regional development strategies. In addition, they must prioritise the distribution of allocated resources based on regional conditions and priorities. However, the map of actors involved in regional development in Sweden, and therefore Gotland, is much more complex and includes institutions at the international, national and local levels (Table 4.11).
At the international level, organisations such as the EU and the Nordic Council of Ministers have an impact. The first plays a fundamental role in defining principles for the alignment of national and regional development strategies. In order to correct structural imbalances and promote equitable living conditions throughout Europe, the EU uses documents such as the Territorial Agenda 2030, the Cohesion Policy 2021-2027 and the Common Agricultural Policy 2023-2027. On the other hand, the Nordic Council of Ministers is a space for the political co‑ordination of the Nordic region that, through the Action Plan 2021‑2024, establishes common objectives and actions for regional development in areas such as legislation, digitalisation and innovation, climate and environment, education and gender equality. The latter may be of particular importance for Gotland as it seeks, among other things, to promote municipal co-operation at the Nordic level in green planning and development (Nordic Co-operation, 2020[43]).
At the national level, according to the Regional Development Responsibility Law, government agencies that exercise regional development and growth functions in the regions must work in line with the objectives established in the regional strategies. This implies that more than 30 government institutions are involved in the development of the regions. One of the most important is the Swedish Agency for Economic and Regional Growth, which should implement initiatives that promote regional development and improve the conditions for dialogue, co‑operation and learning between the various relevant actors at the national, regional and local levels. In addition, other relevant actors are the Swedish parliament, the Swedish Health Agency, the Swedish Financial Management Agency, the Authority for Digital Administration, the National Agency for Education and other sectoral institutions (Swedish Government, 2021[38]).
Likewise, the law establishes that CABs must also promote the development of the regions and work to ensure that national goals have an impact on the region. The CABs must promote the participation of the state in regional development planning and must work in support of the achievement of the objectives of the national strategy. Among other things, CABs must promote the implementation of the United Nations 2030 Agenda and work to ensure that climate and environmental goals have an impact on the development of regional strategies. On Gotland, there are spaces for dialogue between the CAB and the regional government and there is consensus that they work well and that the co‑operative relationship is fluid and productive. However, there are still some overlaps and duplications in regional development between the Gotland government responsible for regional development and the national agencies that support implementing sectoral strategies.
Table 4.11. Main actors, roles and strategies for regional development in Sweden
The national regional development strategy recognises the importance of stakeholder participation (e.g. the private sector and civil society organisations) in regional and local development. The private sector participates in co‑operation mechanisms with the state, such as through public-private alliances for investment in infrastructure in areas such as transportation, education, culture and recreation. Civil society can play a vital role in providing public services. In the case of Gotland, the participation of civil society is of utmost importance for regional development. The island is composed of diverse communities with very marked identities, many of which stand out for having a particular desire to collaborate for community development in areas as diverse as cultural promotion, business development and public service delivery.
In the last decade, Sweden has adopted a more cross-sectoral approach in designing development policies and has strengthened the multi-level dialogue and governance aspects of national strategies that influence regional development. This in part reflects the transfer of regional development responsibilities to various county councils beginning in the late 1990s, a process which was concluded in 2018. Since the National Strategy for Sustainable Regional Growth and Attractiveness 2015-20, particular emphasis has been placed on the relationship between the different levels of government and the multiple other regional development actors or stakeholders. Thus, for example, the National Strategy for Sustainable Regional Development 2021-2030 establishes that government agencies that carry out activities in the region (ministries and central-level agencies, as well as the CAB) must take into account the development strategy designed by each region and, within its areas of activity, work to achieve the objective of regional development policy. Likewise, the law on regional development responsibility and the ordinance on regional development work establishes that the participation of authorities in regional development work must be done in collaboration with the regions and that the former must consult with the regions on issues that are relevant to regional development sustainable (Swedish Government, 2021[38]).
Gotland’s regional development strategy provides the locus for co-ordination with other actors to resolve specific island challenges
The National Strategy for Sustainable Regional Development 2021-2030 establishes general guidelines and transversal objectives for each region to design and implement its own regional development strategy. Through its national strategy, Sweden has enshrined the importance of regional development being governed both at the national and local levels with a deep territorial perspective. In other words, the potential of each geographic area is used according to its special conditions and needs, as well as to meet its own development objectives. All the strategies that influence regional development at the national level are thus very good foundations and guide the design of regional development strategies.
It should be noted, however, that national strategies do not always consider the unique conditions of islands in setting guidelines and dialogue in vertical co‑ordination mechanisms is scarce, causing difficulties for isolated territories and small governments such as Gotland’s, which must adapt fewer resources to a unique and incomparable context. These factors can also cause some sectoral policies at the national level to lack a clear and coherent “island articulation” and collide with the development objectives established at the regional level.
Gotland’s regional development strategy reflects the urgent needs and strategic priorities that are specific to its territory, while simultaneously supporting the implementation of the national strategy at the territorial level. As such, it is a vital mechanism for the vertical and horizontal co-ordination of various regional development actors. The freedom of manoeuvre that is afforded to Region Gotland to design and implement its strategy in a way that can account for specific development challenges enable the regional government to address national priorities more effectively.
For example, a national-level regional development objective that comes with specific territorial challenges on Gotland is education and the need to equip individuals and companies with better skills. Around 23% of Gotland’s population aged 25-64 have post-secondary education of 3 years or more, 1 percentage point below the national regional average (24%) and 11 points below Stockholm (Statistics Sweden, 2020[44]). In this regard, Gotland’s regional development strategy prioritises issues such as giving all youth the opportunity to complete upper secondary education and encouraging more young people to opt for tertiary education, which is not necessarily an urgent need in other regions (Statistics Sweden, 2020[44]).
Another national-level regional development policy objective presenting specific territorial challenges for Gotland is the provision of equal housing opportunities. Gotland faces a shortage of affordable housing, which is driven both by increased building costs and the high number of second homes on the island, which drive up rental costs on the island (OECD, 2021[14]). In this regard, Gotland’s regional development strategy includes a specific focus on creating better conditions for construction and housing supply, and promoting greater mobility within the local housing market.
An additional national-level regional development policy objective that faces specific implementation challenges in a Gotland context is promoting entrepreneurship and, notably, supporting the growth of Swedish companies. While Region Gotland has a large number of small businesses, it has been less successful at encouraging companies to expand (OECD, 2021[14]). In this regard, the Our Gotland 2040 strategy provides outlines with a number of levers to support business competitiveness and growth, such as increasing companies’ opportunities to reach a larger market as well as improving the conditions for starting, running and developing companies. The former is a sign of the insularity of Gotland, which sometimes prevents Gotland companies from being able to rely exclusively on the small local market (OECD, 2021[14]).
As outlined above, Gotland’s regional development strategy is a key planning instrument that can help the regional government to address its specific territorial priorities and challenges. It also serves as a key co‑ordination mechanism for ensuring the effective implementation of national strategies (such as the National Strategy for Sustainable Regional Development 2021-2030) at the regional level. However, effective co‑ordination also relies on other elements, such as a system of mechanisms to vertically manage the actors and strategies that underpin Gotland’s regional development.
Other mechanisms for vertical co-ordination
In addition to Gotland’s regional development strategy itself, there are three additional and key mechanisms that support co-ordination between Region Gotland and other actors. The Forum for Sustainable Regional Development 2022-2030 serves as a platform for the vertical and horizontal co‑ordination of efforts at both a political and technical level in matters such as national strategic priorities, the allocation of competencies and investment in transport, infrastructure and other areas of regional development (OECD, 2017[3]). The forum, which is chaired by the Secretary of State for Regional Development, brings together politicians from 21 regions and the national level, as well as other actors such as representatives from the Swedish Agency for Economic and Regional Growth, to engage in dialogue, collaboration and learning between different levels of government.
Additionally, Gotland is a member of the Swedish Association of Local Authorities and Regions (SALAR). SALAR represents and advocates for subnational governments in policy negotiations with the central government and provides a forum for Region Gotland to encourage horizontal co-ordination with both political and administrative peers. It is also a member of the council for the Stockholm-Mälar region (Mälardalsrådet), which promotes the co‑ordination of strategies and policies for transport, infrastructure, knowledge and skills development to strengthen Stockholm-Mälar’s attractiveness.
Strengthen the co-ordination environment for regional development
Sweden’s National Strategy for Sustainable Regional Development 2021-2030 sets clear guidelines and transversal objectives, which are well aligned with the goals of Our Gotland 2040. Together, national and regional strategies lay a strong foundation for vertical co-ordination, which is also well-supported by other vertical co-ordination mechanisms, such as the forum and SALAR. However, a limitation of the Swedish national strategy is that it does not appear to be island-sensitive and lack mechanisms to support its implementation at a regional level in a way that accounts for specific subnational challenges.
For example, the National Strategy for Sustainable Regional Development 2021-2030, while setting adequate general budget targets and guidelines and emphasising a territorial perspective, fails to expand on the unique reality of the Swedish islands and could incorporate elements that allow a region like Gotland to adapt the national strategy to its specific needs. While it is important for national strategies to allow regions the freedom to develop according to their specific conditions and objectives, a lack of national government support for their specific territorial needs can translate into a greater feeling of isolation and greater difficulties in achieving regional development goals.
Despite Sweden’s well-developed co‑ordination mechanisms, it can still go further in a better distribution of responsibilities to improve co-ordination and coherence among national agencies that intervene at the regional level and between these agencies and regional authorities.
Some of the co-ordination mechanisms with the national government and its agencies and deconcentrated bodies work well in terms of analysis and elaboration of general guidelines but when it comes to project implementation, there is little clarity in the procedures and forms of management. Specifically, there seems to be confusion in the instructions and concrete actions that each level of government and institution must carry out in certain policy areas. This produces overlaps of competencies between institutions and often hinders the efficient implementation of strategies and policies emanating from both the central and regional levels. Therefore, it is necessary to pay attention to the current institutional arrangements and the ways in which institutional co-ordination occurs and improve them by both better clarifying the distribution of responsibilities and strengthening communication mechanisms (OECD, 2021[14]).
Finally, there are accountability issues that need to be attended to. The administrative dividing line that normally exists between municipalities and regions does not exist in Region Gotland, which often generates confusion, not only among citizens but also among other government bodies. Added to this is the presence of the CAB and its responsibilities as a representative of the central level on the island, which often collides with the responsibilities of other institutions such as national agencies and Region Gotland itself. Thus, the unique institutional condition of Gotland and the intricate map of actors involved in its development make it difficult to clearly follow what institutions do what and with what resources. Therefore, efforts are needed to improve transparency in the distribution of responsibilities, the carrying out of actions and the implementation of policies with the aim of strengthening the levels of accountability between public institutions and towards citizens.
The following recommendations are made to address these challenges:
1. Strengthen the dialogue mechanisms between the national government and Region Gotland, so that they serve to attend to the unique conditions and needs of the island and, thus, facilitate the design and effective implementation of place-based policies.
2. Move towards a better and clearer distribution of responsibilities between levels of government to reduce overlaps of competencies and improve understanding between institutions during the implementation of development policies.
3. Create instruments to facilitate the monitoring of public projects, in order to improve the understanding of the distribution of responsibilities between public institutions and strengthen the relationship with the Gotland communities through more and better accountability.
Strengthen vertical co-ordination to ensure place-based and island-proof policies
National strategies do not always consider the unique conditions of islands in setting guidelines – nor are they meant to – but this can cause difficulties for some territories and small governments when implementing policy and initiatives to meet national objectives while striving to remain aligned with regional needs and priorities. This can also mean that some sectoral policies at the national level do not have a clear and coherent “island articulation” and may collide with the development objectives established at the regional level. To avoid this, national development strategies do not need be specific to the reality of each territory but it would be helpful to be place-sensitive in supporting their implementation at the territorial level so that, on the one hand, each territory can effectively adapt its strategies and policies to the development objectives established at the national level and, on the other, national-level agencies can clearly understand the needs of each region and inform their decisions based on a fluid dialogue with representatives of these territories.
In this regard, vertical co-ordination mechanisms are key. In the case of Gotland, mechanisms such as the co-ordination instances between Region Gotland and the CAB and, more broadly, the National Forum for Sustainable Regional Development work as the “regional lens” through which central government agencies analyse and inform sectoral decision-making processes (OECD, 2020[45]). Therefore, it is crucial that these spaces are particularly island-sensitive and effectively serve the unique needs of a territory like Gotland. Like many islands in other OECD countries – most of them also strong in the areas of tourism and agriculture – Gotland faces the challenges of diversifying its economy, improving the provision of public services in some areas of the territory, prolonging the tourism season, dealing with over-tourism and improving the quality of the experience of visiting Gotland in order to attract higher-value activities and potential new residents (OECD, 2020[1]). The formulation of national policies that affect Gotland, as well as the co‑ordination mechanisms between the national and regional levels within the island, must take these challenges into account and establish the necessary conditions for decision-making to take place in light of these specific needs, thus ensuring the emergence of place-based and island-proof policies.
The place-based policy approach consists of a set of co-ordinated policies and measures between a large number of institutional actors, which is strategically adapted to the conditions of each region (OECD, 2019[46]). Sweden has made great strides in adopting a place-based approach to regional development in the wake of the 2018 reform assigning regional development responsibilities to all regions. In recent years, it has further emphasised the relationship among actors and policy sectors, as well as arrangements that facilitate multi-level governance, which has fostered place-based regional development policies.
However, existing co‑ordination problems among institutions and levels of government suggest that it is still possible to finetune the vertical co‑ordination mechanisms and incorporate elements that facilitate the alignment between development strategies and policies with a regional impact. Along with incorporating elements that facilitate vertical co-ordination in a place-based framework, Sweden and Gotland in particular can benefit from the creation of national-scope instruments that ensure the consideration of the specific conditions and needs of islands in the elaboration of regional development policies with potential island impacts. This involves generating mechanisms and instruments that promote the creation of regional development policies and strategies that are island-proof and that contribute to correcting the neglect of national politics as regards the insular reality.
The EU has been developing instruments along these lines that can shed light on future work on the matter in Sweden and Gotland. One of them is Article 174 (ex-Article 158 TEC), which establishes the priority of reducing inequalities between regions and recognises the importance of paying special attention to regions that suffer from severe and permanent natural or demographic handicaps, including the islands (EU, 2008[47]).
There is also the recent draft report on EU islands and cohesion policy (2021/2079(INI)) which includes the considerations of Article 174, and Article 349 TFEU that establishes that the European Parliament must adopt specific measures to address the particular challenges of certain islands of the EU-27. It raises the need for a resolution of the European Parliament to direct efforts to help regional development and the reduction of inequalities, especially in regions affected by insularity. This report urges the EC to pay attention to the studies carried out by insular regions, in which the high cost of infrastructure and provision of services resulting from remoteness is highlighted and calls, among other measures, for the allocation of extra resources to help cover these higher costs in public spending at the regional level (European Parliament, 2021[48]). These efforts to make visible the special conditions of islands in Europe are leading countries in the region to adopt specific measures to address the unique challenges of islands in their national territories, which could be replicated by Sweden.
An example of measures of this kind is the Islands (Scotland) Act 2018, a bill published by the Scottish parliament that establishes a series of provisions to improve the performance of the islands in various strategic areas with a collaborative and participatory approach, through specific regulations and mechanisms. Among other things, the act requires Scottish ministries to create a National Islands Plan to address certain specific sectoral objectives in a co‑ordinated manner and sets specific requirements for national authorities, such as conducting community impact assessments, when designing and implementing policies or strategies that may have a differentiated impact on the islands (legislation.gov.uk, 2018[49]; Scottish Government, 2018[50]).
Although it is not necessary for Sweden to develop specific legislation to frame regional development on the islands, it is recommended that regulatory instruments be at least evaluated to ensure that ministries and national agencies with a territorial presence develop policies that are island-proof., in other words that they adjust to the unique conditions of the insularity, addressing specific challenges of this type of territory, establishing collaborative relationships with local actors and considering the constant participation of the local community in the preparation of actions and the evaluation of their results.
Optimising public service delivery on the island
Gotland’s regional government, unlike other regional or local governments, has a high degree of implementation power as it can administer both regional and municipal assignments with only one administrative structure. Being only one government, Region Gotland can more easily overcome or manage difficulties in co‑ordinating regional and municipal administrative and service responsibilities and implementing local policies. However, the responsibility for all subnational government competencies has also placed a heavy workload on the regional government staff, which translates into a series of challenges affecting Region Gotland’s ability to provide quality services equitably throughout the island.
First, there is limited capacity to meet the high number of responsibilities that the government must assume. Region Gotland, with a relatively small staff, undertakes a series of assignments which, in other regions, are distributed between the regional and municipal levels. Government officials, especially public servants in executive departments, often have dual roles. In addition, there is a shortage of certain skills – especially digital – among officials, which translates into difficulty for the government to design policies based on the analysis of information and evidence.
Second, the consolidation of two levels of government into a single administration for the entire island of Gotland also means that the government cannot always provide services equally throughout the island’s communities. In the past, the existence of several local governments on Gotland allowed for greater physical proximity between citizens and public and administrative services, which today does not occur uniformly throughout the territory. This is reflected in the varying levels of quality and efficiency of government processes, as well as in the levels of user satisfaction with the services provided. According to the Gotland 2020 Annual Report, the region has not yet been able to meet the three service quality goals established in its Governance Plan and Goals 2020-2023:
1. Everyone who uses Region Gotland’s services feels that it is easy to get in touch with them within the region.
2. Everyone who uses Region Gotland’s services can co-create and be treated with respect.
3. High-quality and efficient processes in operations and services are ensured through continuous improvements, digitalisation, innovation and the leap of renewal (Region Gotland, 2021[20]; 2020[51]).
These results speak of the difficulty for the government to satisfy the provision of services throughout the territory and explain, in part, the emergence of local development companies in rural areas, which cover some of the government’s responsibilities and fills a gap where the region’s government cannot and/or is not required to provide services (e.g. water and sewerage in remote rural areas).
There are a number of ways these challenges could be addressed:
1. It would be valuable to develop a culture of continuous training in digital skills through a formal training system within the regional government team.
2. It would be important to strengthen the presence of the government and the provision of public and administrative services through a network of service access nodes in strategic rural areas to facilitate access to services less than 30 minutes away from anywhere on the island.
3. Consideration should be given to promoting collaboration with local development companies in order to facilitate and consolidate their work, align their activities with regional development objectives and establish monitoring and learning mechanisms to evaluate the quality of the services provided and inform the decision-making process in the future.
Each of these is explored in more depth below.
Continuously develop regional government’s management capacities and digital skills
Among Gotland’s government officials, there appears to be a perception of vulnerability in their jobs, due to a high workload and a portfolio that often exceeds their skills and resources (OECD, 2021[14]). Coincidentally, according to the 2020 Gotland Annual Report, one of the greatest challenges for Region Gotland is managing the supply of skills for the public sector (Region Gotland, 2021[20]). Despite the fact that there are programmes to improve the skills and capabilities of civil servants within the regional government (in areas such as health and safety at work, labour law, managerial skills and leadership, etc.) and the fact that individual employees can participate in external training, there is a shortage of professional competency in various areas.
One of the most mentioned missing skills is data collection and analysis for the design and implementation of evidence-based policies. Although active work is underway both centrally and regionally based on developed competency supply plans, the administrative skills and capacities of the current Gotland government staff need to be strengthened. Given the difficulty of expanding the staff of civil servants, Region Gotland, in collaboration with the national government, could adopt a strategy to, on the one hand, develop a digital public workforce within the regional government by implementing a continuous process of formal training and, on the other, make an effort to attract and retain skilled professionals to work in the regional government.
The OECD offers a series of recommendations for the development of future skills in public servants. For this, it is necessary, first of all, to build a suitable workspace that facilitates the development of new skills among workers. This involves constantly mapping the skillset needed to keep pace with the digital revolution, effectively communicating within government the importance and benefits of developing digital skills and fostering the development of a culture of learning. Second, it is necessary to ensure the availability of the necessary digital skills and ensure diverse and multidisciplinary teams consisting of well‑trained digital and non-digital professionals that reflect a combination of skills and socio-emotional behaviours of digital government to design and provide reliable and proactive services taking into account the needs of users. Finally, to pave the way towards a digital public workforce, actions are suggested such as the implementation of attractive reward systems, investment in digital talents through the provision of training programmes and the execution of proactive recruitment strategies that promote the government as an attractive and worthy employer (Table 4.12).
Table 4.12. Actions to guide governments in developing a digital public workforce
Source: OECD (2021[52]), “The OECD Framework for digital talent and skills in the public sector”, https://doi.org/10.1787/4e7c3f58-en.
Establishing a permanent and mandatory formal system of training in digital skills can encourage public servants to deepen their skillsets and stay motivated in their work. Such a system can also reduce the dependence of the Gotland government on the capacities of external third parties (such as the analytical capacity of other municipalities and regions, from which Gotland benefits through its participation in horizontal collaboration mechanisms). An example of this type of system is the Italian initiative Digital Skills for Public Administration. This programme is an initiative promoted by the Department of Public Function to increase and consolidate the digital skills of the staff of public institutions and accompany administrations on the fundamental path towards innovation (Box 4.6). The system offers training programmes for employees and employers in a set of competency areas established in a study plan, such as data management and analysis, computer security, digital transformation and provision of online services. Through a standardised assessment system, the programme allows the identification of digital gaps between officials and institutions and, based on these gaps, offers a set of 33 free courses that cover 1 of the 3 proficiency levels in each specific skill (Dipartimento della Funzione Pubblica, 2021[53]).
Along with establishing permanent formal mechanisms for regional skills training and a work culture of permanent training and improvement of digital skills, Region Gotland needs to attract and be able to retain skilled workers. Some of the skills that are highlighted as necessary in the public sector are also skills that are sought in the private sector and, often, public administrations are not as attractive as private companies. To attract trained professionals that can help meet the challenges the island is facing, the regional government must enhance its attractiveness as an employer. This means positioning the public service as a preferred employer through the promotion of an employer brand that connects with the values, motivation and pride of the candidates in contributing to the public good (OECD, 2017[54]). But above all, effort should go hand in hand with Gotland’s overall efforts to improve its attractiveness as a place to live and work.
Box 4.6. Italy’s Digital Skills for Public Administration inititave
Within the framework of the Governance and Institutional Capacity 2014-2020 programme, the Italian government implemented the Digital Skills for Public Administration initiative. It aimed to impart a homogeneous base of digital skills to all public employees via a structured system identification of digital gaps and a training programme for both employees and institutions as a whole. Its objectives are to:
Promote the foundations of a shared base of knowledge and technological and innovation skills among public officials.
Strengthen institutional capacity for efficient public management, through training interventions in digital skills, mainly in e-learning and personalised modalities based on a structured and homogeneous survey of real training needs.
Democratically develop the digital knowledge of public employees to make the principles of digital citizenship a reality, implement e-government initiatives and implement open government actions.
Promote the mapping of competencies in the administrations of the different levels of government, also with a view to favouring more effective personnel management policies.
The initiative is based on three main components:
1. Syllabus: A document that describes the set of knowledge and skills, organised by thematic areas and proficiency levels, which characterise the minimum set of digital skills that each public employee should have in order to be able to work easily in an increasingly digital world.
2. Website: A platform that provides tools for skills verification tests and assessment of post-training learning based on the syllabus, as well as for the selection of the most appropriate training modules to meet the knowledge requirements identified; the platform also supports administrations in planning, managing and monitoring effective skills development paths in line with their organisational needs.
3. Catalogue: A system that collects training modules on the competencies areas described in the syllabus, aimed at filling the digital skills shortcomings detected during the self-test phase.
Source: Dipartimento della Funzione Pubblica (2021[53]), Competenze Digitale per la PA, https://www.competenzedigitali.gov.it/index.html; OECD (2021[52]), “The OECD Framework for digital talent and skills in the public sector”, https://doi.org/10.1787/4e7c3f58-en.
Strengthen the presence of regional government services throughout the island
The results on the quality of public services and resident satisfaction in the 2020 Gotland Annual Report show that Region Gotland is struggling to provide services equitably throughout the island (Region Gotland, 2021[20]; 2020[51]). In many cases, it is not reaching all communities in the provision of a variety of key services such as housing, water supply, sanitation and leisure. Ensuring easy access to administrative services is another challenge. In some communities, non-profit local development companies created by residents have stepped in to deliver a variety of services, ranging from water and water treatment to housing and entrepreneurial support. Although the participation of non-governmental actors is positive, a stronger government presence in different parts of the island is important, not only to ensure responsibilities are met but also to strengthen relationships of trust with citizens.
In the past, the idea of dividing the region into five municipalities has been discussed. However, there are other options. One of them is to create territorial delegations or government teams with a presence – digital or physical, depending on feasibility – in key areas of the island, dedicated to ensuring the proper functioning of regional and municipal services in each community. If taking this path, the regional government should analyse the best way to subdivide the region into functional areas that share geographic, economic and socio-cultural characteristics and that present appropriate infrastructure to facilitate the work of the delegation, mainly easy road connectivity.
Another possibility is to establish a network of mobile or permanent service points in strategic places. An example of this type of policy is the France Services programme, implemented by the French government in 2021. This network of services seeks to ensure that all users can access key administrative services in areas such as health, work, justice and taxes no more than 30 minutes from their place of residence (Box 4.7). In addition, and as illustrated by the France Services network service positions, these local centres could serve as spaces to train citizens in the use of digital tools and the Internet, as well as co-working spaces for local entrepreneurs. As there are already local development companies that offer this type of infrastructure for co-working, this could be an opportunity for Region Gotland to reinforce its partnership with these local development companies. On the one hand, the regional government could benefit from using the existing infrastructure of some local development companies and being more present in communities and, on the other, it could contribute to the sustainability of these development companies (explored further below).
Box 4.7. France Services network: My local public service
The France Services programme is a network of local one-stop-shops enabled by the French state to strengthen the presence of public services in all regions and, above all, to facilitate access to services in more remote rural areas and priority neighbourhoods. Managed by the Ministry of Territorial Cohesion and Relations with Local Authorities through the National Agency for Territorial Cohesion, the network is made up of 1 745 local one-stop-shops that bring together various administrations in their locations.
The objective of this programme is for each resident of France to be able to access a service point in less than 30 minutes from their place of residence. In addition, these service positions seek to facilitate the training of people with low digital literacy and provide access to co-working services, while strengthening the levels of digital connectivity in less populated areas or with less access to information technologies.
The France Services spaces allow users to access a series of everyday services. The public institutions that provide services at the network of one-stop-shops are: the Family Allowance Fund (CAF), the National Health Insurance Fund (social security), the employment centre, the post office, the tax services and the general public finance department (DGFIP), the Ministries of the Interior and of Justice, the National Pension Fund (CNAV), the French Agricultural Social Security Scheme (MSA). Beyond this guaranteed service base, local authorities can implement additional service offerings. The state plans new partnerships to continually enrich the service offering.
Source: French Government (2021[55]), France services: mon service public de proximité, https://www.gouvernement.fr/les-actions-du-gouvernement/services-publics-et-territoires/france-services-mon-service-public-de#Pour_en_savoir_plus.
The people of Gotland would greatly benefit from a network of service points throughout the island. From the island’s extremities, travel time to Visby can be over 1.5 hours and about 12% of Gotland’s residents have to travel 30 minutes or more to reach Visby. In order to ensure access to public services less than 30 minutes by car from each community (or parish), the regional government could consider deploying 5 to 6 service centres. Service networks could, at a minimum, imply reorganising assignments within the government or could also lead to a need for additional staff for each office position. It might want to start with one or two as pilots and, depending on their level of success, identify locations for additional centres. These networks might also benefit from a collaborative approach with the central government and national agencies represented in the region through the CAB, potentially to ensure staffing but also to open the possibility for citizens to access relevant national or county-level services as well.
As in the case of France Services, this service network could also incorporate buses specially enabled for the provision of services and facilitated access to digital technologies, which would regularly circulate through the different communities on the island. Since most Gotland residents cannot easily reach Visby to access certain services, the implementation of such a network could also target building stronger ties, more active dialogue and greater trust between communities and government, for example by establishing open hours in strategic points for government officials to talk with community representatives to better understand their concerns. If identified as a viable and attractive option, the implementation of this policy will require collaboration with the central government and national agencies represented in the region through the CAB. On the one hand, it will be important to ensure staffing and, on the other, to strengthen the image of the Gotland government as an attractive employer.
Region Gotland is already making significant progress in this direction. In 2018, the regional council adopted the service strategy “A long-term sustainable service offer on Gotland 2019-2030”, with which the regional government intends to review and adapt the geography of public services provided by Region Gotland to ensure better fulfilment of regional development objectives (Region Gotland, 2018[56]). The strategy indicates a minimum level of services that inhabitants can expect, in service areas such as healthcare, social care, culture (including libraries), leisure (including bathhouses and ice rinks) and schools.
This strategy has given rise to the Servicepunkt Hemse (Service Point Hemse) pilot project, a first service point in the town of Hemse that seeks to serve as an exploration for the subsequent creation of service points in other parts of the island (Region Gotland, 2021[57]). This project will be implemented in the spring of 2022 and seeks to ensure equitable access to quality services throughout the region. One of the notable aspects of this project is that, along with seeking to ensure better access to services, it is also aimed at strengthening the attractiveness of the region for residents, visitors and private companies. These types of initiatives go in the right direction and Region Gotland is encouraged to continue these efforts.
Strengthen collaboration with local development companies
Development companies (utvecklingsbolag) on Gotland play a key role in regional development, especially in communities outside of Visby. They are non-profit organisations dedicated to the provision of goods and services to improve living conditions in rural sectors and their purpose is to implement ideas that provide positive rural development, benefiting many and creating a vibrant countryside in Gotland. They are primarily made up of retired, enthusiastic and highly talented individuals eager to make progress in public service sectors where the public sector is not present or not required to act. The areas of intervention of these companies are very diverse. Some are dedicated to strengthening the social fabric through periodic meetings and local events or joining forces to promote services and tourist attractions during the high season. Some advocate with the regional government and CAB for regulatory changes and financial benefits, and support entrepreneurs or micro-enterprises, for example by providing a centre for exercising their activities. The largest development companies even design and implement key infrastructure in areas such as: water, irrigation and sewerage; accessible housing in the countryside; sustainability and energy conversion; solutions for education (especially pre‑school); sustainable public transport; cleaning and maintaining public spaces (Box 4.8).
Box 4.8. Non-profits play a key role in Gotland’s development: The case of Nygarn Utveckling AB
Founded in 2005 in the town of Östergarnslandet, Nygarn Utveckling AB development company is one of Gotland’s large development companies. According to company representatives, Nygarn was created to ensure that services remained available in the area (and counteract a “going to Visby” effect) and to ensure Östergarnslandet’s attractiveness as a place to live year-round. Nygarn currently works on behalf of a community of 900 permanent and temporary residents, and has carried out valuable development projects, including: the purchase of an abandoned school for the construction of a local services hub; investment in fibre optic for the area; construction of community housing buildings and other housing solutions to attract people to the countryside; restoration of the Herrvik fishing port; and is currently conducting, with funding from the Swedish Energy Agency, a feasibility study to create a shared-ownership smart energy system.
In 2015, Nygarn created the subsidiary Nyhagen VA, another non-profit organisation that is responsible for the construction of sewage networks and the provision of access to drinking water in the area. The idea of providing this service arose from the fact that the municipality does not take charge of this service in the area due to its low population density. The operational costs are covered with user charges and fees and, as it is a non-profit organisation, Nyhagen is not taxed on its revenue. This allows the company to use its income to finance other projects. However, they say more support is needed from Region Gotland and the EU.
Source: GUBIS (2021[58]), Homepage, https://gubis.se/, date accessed: 1 May 2022; Nygarn Utveckling AB (2021[59]), Homepage, https://nygarn.se/, date accessed: 3 May 2022; Nyhagen VA (2021[60]), Homepage, https://nyhagenva.se/, date accessed: 15 April 2022; and interviews during OECD missions.
Gotländska utvecklingsbolag i samverkan (GUBIS) is the association representing these organisations on Gotland. It was founded in 2011 by 3 development companies and is currently made up of 12 enterprises across the island. Counting the residents who live in the communities in which these businesses operate, the association covers 20% of Gotland’s resident population, almost half of the residents outside of Visby. GUBIS allows member companies to share lessons and learnings on development projects, facilitate contacts with authorities and financing opportunities, and participate in feasibility studies for projects in rural areas, among other things. The companies grouped in GUBIS accumulate around EUR 744 800 in capital, have a total of 1 605 shareholders and enjoy very high prestige among citizens and the government. Recently, GUBIS has helped Region Gotland in the distribution of grants for rural development initiatives for more than EUR 190 000 (Region Gotland, 2021[61]).
Region Gotland could benefit from stronger collaboration with local development companies. These organisations play a fundamental role in the development of rural localities that government-provided public services do not reach effectively, from the provision of space for local culture, small or start-up businesses and the exchange of knowledge, to the creation of housing solutions and the construction of water supply networks. Filling a void left by the government, these organisations have accumulated the necessary know-how to effectively and efficiently design and provide these services and, in many cases, they are better positioned than the government to do so.
The valuable work of local development companies on Gotland is not only a response to a government struggling to provide services in all rural areas of the island but above all a manifestation of the pride of Gotland’s inhabitants and their drive to collaborate and contribute significantly to the development of Gotland’s rural community (Box 4.9). Like many civil society organisations that co-operate with governments to develop and provide public services, Gotland’s communities and their local development companies are development actors in their own right (OECD, 2019[62]).
Box 4.9. Local pride on Gotland revolves around parishes
On Gotland, the concept of parishes (socknar) is very much alive and plays a transcendental role in the identities of the island’s inhabitants. Gotlanders are proud of their parishes and are permanently involved in their communities to help each other. On Gotland, rural community spaces and sometimes farms or schools function as gathering places and are often well-maintained and equipped to host events such as live opera streaming from New York, community dinners, choir singing and dancing with live bands. The inhabitants of Gotland acknowledge that they are proud to be parishioners and identify as important identity aspects that: i) they live outside of a city; ii) they belong to “a small collection of wonderful and ingenious people”; and iii) they live in a geographically delimited area with a church, in the countryside (Region Gotland, 2021[63]).
In this parish identity, there is also the element of wanting to help rural development. Given the age composition of Gotland, in many rural areas, there is a high percentage of retired inhabitants who find in the parish space for valuable exchange and volunteer work. However, this spirit of community participation extends to all inhabitants, of all ages. This community work varies widely and ranges from organising table tennis tournaments and game nights to collective actions to protect nature and to create local development companies to secure water supplies, develop public transportation, wind energy and the installation of fibre optics, and thus contribute to more comprehensive development.
Source: Region Gotland (2017[64]), Socknar, https://gotland.se/socknar; Region Gotland (2021[63]), Socknar och sockenbor, https://gotland.com/article/socknar-och-sockenbor/.
The Gotland government understands the importance of local development companies and is already working with them in some areas. In 2021 for example, Region Gotland collaborated with GUBIS in the distribution of grants to local development ideas in rural areas throughout the region. Recognising the experience of the local development companies grouped under GUBIS, the regional government assigned them the task of administering a special stimulus package coming from the Hela Sverige (All of Sweden) organisation (Region Gotland, 2021[65]). However, this kind of collaborative relationship can still be deepened to enhance the effectiveness of the work of these entities, ensure that their participation in the service provision map occurs within the framework of the strategies established at the regional level and that the services provided by these companies meet the standards for equitable access to services throughout the region. In addition, the local development companies in collaboration with Region Gotland could develop an action plan to ensure their sustainability over time.
Currently, these organisations are run by dynamic and proactive volunteers, often mostly retired people who have experience in specific sectors, enthusiasm for their work and a desire to improve their communities. Because many of these companies do not have salaried positions, there is a “succession question”. Who takes over when current volunteers are no longer able to contribute their time and knowledge? This is a very real concern given the ageing trend on the island, making it necessary to find ways to attract young people to these companies. Working in closer association with Region Gotland might help in this aspect, by bringing possibilities for additional human or financial resources.
To strengthen and ease collaboration with development companies, Region Gotland should:
Generate mechanisms to encourage the creation of these types of organisations and promote their consolidation, eventually reducing administrative and regulatory burdens on them.
Enable permanent financing channels for the operation of local development company organisations (general funding) and for the execution of projects or maintenance of services that are under municipal responsibility (earmarked funding).
Establish dialogue mechanisms with local development companies or associations of local development companies to, on the one hand, align the activities of these organisations with regional development objectives and, on the other, monitor results to ensure that the goods and services provided are of the same quality throughout the island.
To ensure that collaboration with local development companies is effective and sustainable over time, valuable insights can be gleaned from the lessons learned from collaboration with civil society around the world. First, it is necessary to establish a clear strategic framework for all actors, in which there is an evidence-based overarching policy, and meaningful, operational and fluid policy dialogue. It is also extremely important that the government provides effective support to these organisations, on the one hand, respecting the independence and work capacity of each local development company and, on the other, seeking mechanisms to minimise the transactional costs of collaboration. Finally, collaboration should occur within a framework of accountability and continuous learning, in which there are transparent practices for monitoring the results of both the work of these organisations and the contributions of the government, and in which these results serve as inputs for future decision-making (OECD, 2012[66])
Enhance accountability by introducing new performance monitoring and evaluation mechanisms
Given the diversity of actors involved in Gotland’s development and the lack of clarity in the distribution of responsibilities, there is a notion of limited accountability, not only among government actors but also among the island’s residents. According to government officials, citizens on Gotland are unclear as to whether government projects are carried out by the regional government, the CAB or another national agency and it is also unclear whether the funds used by businesses and local actors correspond to regional, national or EU funds. In addition to making an effort to clarify the distribution of responsibilities and, above all, the specific instructions for each institution in matters of regional development, it is necessary to improve communication between actors and citizens (OECD, 2021[14]).
In order to improve understanding between institutions and strengthen the relationship with the community, it is necessary to implement monitoring and evaluation mechanisms that allow all actors to track who (government) does what (responsibilities), how (mechanisms) and with what resources (funding and transfers). For this, it is recommended, for example, to create an interactive monitoring dashboard, in which all agencies involved in regional development on Gotland should report their projects’ details and progress. This sort of platform should enable citizens to easily follow the progress of policies and development strategies, identify the entities responsible for project implementation and track the financing flows.
The establishment of an interactive reporting platform will bring the regional government and national age groups together in an effort to enhance internal accountability and will help to clarify actions and responsibilities. For this, a clear methodology must be designed and shared by all the actors involved, establishing institutions and responsible persons, financing mechanisms, execution deadlines and ways of publishing progress reports. Attractive examples of this type of tool can be found in some of the monitoring and evaluation initiatives that some member countries of the Open Government Partnership have carried out to follow up on their action plans within the framework of this multilateral organisation (Box 4.10).
Box 4.10. Online dashboards for monitoring and evaluating open government action plans (Open Government Partnership)
The Open Government Partnership (OGP) is a multilateral organisation that promotes the principles of open government (transparency, accountability, open data and citizen participation) in its member countries. The countries that comprise it must publish periodic action plans with concrete commitments in the areas of open government and carry out permanent evaluation mechanisms, both their own and independent ones. Due to the complexity of these action plans, the multidimensional nature of their commitments and the participation of various institutional actors in their implementation, the commitments to these plans are not easy to monitor. The OGP has promoted the design of monitoring methodologies that allow both institutions and citizens to have easy and transparent access to progress reports and evaluations. When these mechanisms are solid, they not only improve the levels of accountability and involvement of civil society but they also help to ensure that policies achieve the proposed objectives and allow better oriented decision-making through the identification of challenges in the phases of implementation (OECD, 2019[67]).
A successful tool highlighted by the OGP is online dashboards for monitoring and evaluation. A number of countries around the world have notable online mechanisms for monitoring their action plans.
Australia launched a comprehensive online dashboard1 to track progress towards commitments laid out in its 2nd Open Government Action Plan 2018-2020. The plan contained eight commitments to enhance access to information, civic participation and public accountability, as well as technology and innovation for openness and accountability. The dashboard enables citizens to track progress towards each initiative, with a description of each policy action and its expected outcomes, the status of implementation and relevant institutions responsible for its implementation. Australia has recently completed a consultation process with civil society stakeholders as part of the development of its new and forthcoming Open Government Action Plan.
Chile implemented a detailed and interactive online dashboard2 to follow the 12 initiatives committed to in its 4th Open Government Action Plan 2019-2021. On its landing page, this dashboard presents each of the initiatives grouped into action areas and offers a quick look at the title of the initiative, the institution responsible for its implementation and the level of compliance to date. By accessing the details of each initiative, users can access information such as the description of the policy or action, the way in which the initiative contributes to the general objectives of the action plan, the responsible institution and person (with contact information for inquiries) and a progress report with compliance percentages for each of the specific actions included in the commitment, including a start date and a projected end date. Chile has already implemented the digital platform for monitoring the progress of its 5th Open Government Action Plan 2020-2022 and is soon to upload the first progress reports.
1. See https://ogpau.pmc.gov.au/.
Source: Open Government Partnership Australia (2022[68]), Australia’s Second Open Government National Action Plan 2018-2020, https://ogpau.pmc.gov.au/, date accessed: 1 May 2022; Gobierno de Chile (2021[69]), Porcentaje de Avance Total 4to Plan de Acción, https://www.ogp.gob.cl/panel-de-seguimiento/, date accessed: 15 April 2022; OECD (2019[67]), Budgeting and Public Expenditures in OECD Countries 2019, https://doi.org/10.1787/9789264307957-en, date accessed: 14 April 2022.
Along with establishing mechanisms for monitoring and promoting the progress of programmes and policies, it is also necessary to implement methodologies for the evaluation of these actions and measure the extent to which the objectives that are intended to be achieved are being met. Although evaluation usually goes hand in hand with monitoring as they are complementary activities, both actions fulfil different functions and follow different methodologies. While monitoring aims to track and promote continuous progress, evaluation facilitates, among other things, the control of the progress of projects’ learnings from their results to inform future decision-making. It also allows citizens to obtain valuable information to evaluate the institutions responsible for providing goods and services in their territories (OECD, 2009[70]). Therefore, it is recommended that the creation of an online interoperated dashboard on Gotland be complemented with the implementation of a performance measurement methodology.
For the implementation of a performance measurement methodology, the different levels of government with participation on Gotland must clearly identify the reasons for carrying out this type of activity (greater control, learning, transparency, accountability, etc.), what it is intended to obtain (quantitative and qualitative information on the progress of projects, level of achievement of strategic objectives, etc.) and how it is intended to be achieved (comparison of information collected with progress indicators, stakeholder surveys, etc.). Region Gotland and the national agencies with a presence in the region must agree on a set of actions based on a shared framework for the evaluation of programmes and policies.
Recommended actions for the implementation of a performance evaluation methodology are: adopt a set of strategic objectives (the development objectives contained in Our Gotland 2040 can fulfil this function); create a group of concrete outcomes to achieve the strategic objectives; establish quantitative and qualitative indicators to measure the achievement of the outcomes; implement an evaluation committee composed of, for example, independent experts, representatives of government institutions and members of the community, to carry out evaluation reports; and launch a digital platform with easily-available access to this information that allows the involvement of different stakeholders in the evaluation activities. The latter can be the same online interoperated dashboard for the aforementioned monitoring actions. Thus, together with tracking the progress of the projects and clearly visualising what each public agency is doing, regional stakeholders will be able to identify how the actions carried out on Gotland are contributing to the progress of the island in the established strategic objectives.
An example of a performance evaluation framework and methodology is the Scottish National Performance Framework and Scotland Performs website implemented in 2007. The national framework made it possible to align all levels of the Scottish government around a series of objectives (“a Scotland that is wealthier and fairer, smarter, healthier, safer and stronger, and greener”) and desired outcomes. In addition, it established a set of 50 outcome-oriented indicators to assess the effectiveness of public policies and programmes on issues such as improving residents’ perception of their neighbourhoods and reducing child deprivation, among others (OECD, 2020[45]).
The website Scotland Performs, which today is called the National Performance Framework, on the other hand serves as a space to communicate the strategy and provide citizens with access to this information. It is an interactive platform that explains the strategy, its importance, its components and how it works. It also provides information on the government’s performance in a dashboard based on 11 outcome areas (e.g. children, culture, economy, environment, etc.) and 81 indicators that are grouped into five categories depending on the level of government performance in achieving the outcomes. These categories are: i) performance improving; ii) performance maintaining; iii) performance worsening; iv) performance to be confirmed; and v) indicator in development. Together with this dashboard, the site offers the possibility of accessing detailed reports and downloading the information in open data format (Scottish Government, 2021[71]).
Both progress monitoring and performance evaluation actions on Gotland should be accompanied by a comprehensive communication campaign by Region Gotland and the CAB, and may also include in-person activities in parishes for direct communication of progress reports and evaluation results by government officials. A clear strategy to communicate objectives, outcomes and progress will enhance accountability and potentially strengthen the relationship between all levels of government and citizenship.
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Annex 4.A. Benchmarks
Annex Table 4.A.1. Benchmark islands, by surface and population
Source: Data from OECD.Stat (2021[72]), Regional Economy (database), https://stats.oecd.org/Index.aspx?DataSetCode=REGION_ECONOM.
Annex Table 4.A.2. Remote regions benchmark
Source: OECD.Stat (2021[72]), Regional Economy (database), https://stats.oecd.org/Index.aspx?DataSetCode=REGION_ECONOM.
Annex 4.B. OECD TL3 revised typology
The OECD regional database collects and publishes regional data at two different geographical levels, namely large regions (Territorial Level 2, TL2) and small regions (Territorial Level 3, TL3). Both levels encompass entire national territories. With some exceptions, TL2 regions represent the first administrative tier of subnational government (i.e. states in the United States, estados in Mexico or régions in France). TL3 regions are smaller territorial units that make up each TL2 region.
The OECD has adopted a new typology to classify administrative TL3 regions. This classification allows for measuring socio-economic differences between regions, across and within countries. It is based on the presence and access to functional urban areas (FUAs) – a concept defining cities and the urban hinterland, in other words, urban economic agglomerations.
By controlling for these regional characteristics, the typology classifies TL3 regions into two groups: metropolitan and non-metropolitan regions. Within these two groups, five different types of TL3 regions are identified. The metropolitan regions (MRs) adopt 50% of the population of the TL3 (small) region living in an FUA of at least 250 000 inhabitants as a threshold; non-metropolitan regions (NMRs) adopt a 60-minute driving time as a threshold, a measure of access to an FUA.
The methodology follows the criteria below:
Metropolitan TL3 region, if more than 50% of its population live in an FUA of at least 250 000 inhabitants. MRs are further classified into:
Large TL3 MRs, if more than 50% of its population live in an FUA of at least 1.5 million inhabitants.
TL3 MRs, if the TL3 region is not a large MR and 50% of its population live in an FUA of at least 250 000 inhabitants.
Non-metropolitan TL3 region, if less than 50% of its population live in an FUA. NMRs are further classified according to their level of access to FUAs of different sizes into:
With access to (near) a metropolitan TL3 region (NMR-M), if more than 50% of its population live within a 60-minute drive from a metropolitan area (an FUA with more than 250 000 people); or if the TL3 region contains more than 80% of the area of an FUA of at least 250 000 inhabitants.
With access to (near) a small/medium city TL3 region (NMR-S), if the TL3 region does not have access to a metropolitan area. Fifty percent of its population have access to a small or medium city (an FUA of more than 50 000 and less than 250 000 inhabitants) within a 60-minute drive; or if the TL3 region contains more than 80% of the area of a small or medium city.
Remote TL3 region, if the TL3 region is not classified as NMR-M or NMR-S, i.e. if 50% of its population do not have access to any FUA within a 60-minute drive.
The described procedure leads to more statistical consistency and interpretable categories that emphasise urban-rural linkages and the role of market access (OECD, 2020[73]).
Notes
← 1. In an attempt to facilitate comparisons between Gotland and other territories in Sweden, Statistics Sweden has estimated that 65% of Gotland’s total activity corresponds to municipal activities, while 35% corresponds to region activities. Given that for Gotland several of the income categories in national statistics databases are aggregated at the municipal level, in some of the tables in this section, the values have been calculated at 65% for comparison with the performance of other municipalities. These tables are only an estimate and are used exclusively for comparative purposes; it is recommended to read them with caution.
← 2. In Europe, the LEADER (Liasons entre actions de development rural) initiative, introduced in 1988, is based on local partnerships (private and public) designing a development project for a target area whose size is generally limited by administrative boundaries (not more than 100 000 inhabitants). The main features of the LEADER approach are the following ones: a) a bottom-up approach; b) integrated actions; c) a multi-sectoral vision; d) co-operation (local and transnational); and e) networking.