Reports

This paper investigates the role of fiscal federalism in driving ecological transition, a key challenge in the United Nations’ Sustainable Development Goals agenda. The ecological transition seeks a sustainable society that prioritises natural resource preservation and reduces environmental impacts. The study investigates the link between fiscal federalism institutions and ecological transition policies, focusing on regional and local governments’ role in implementing environmental goals. Despite subnational governments’ commitment to green objectives, comprehensive plan implementation has been limited due to local governments’ incentive schemes and capacity constraints. The paper examines the potential of fiscal federalism institutions, such as fiscal rules, transfers and capacity-building programs, to support ecological transition policies. The research emphasises engaging regional and local governments in the green agenda and highlights the need for tailored approaches in multi-level fiscal governance to effectively achieve environmental goals. By investigating fiscal federalism’s potential contribution to ecological transition, the paper offers valuable insights for policymakers addressing environmental challenges through a multi-level governance approach.

On 6 February 2023, two large earthquakes with magnitudes of 7.6 and 7.7 hit central and southern Türkiye and northern Syria resulting in widespread damage and fatalities in the region and leaving 3.3 million displaced. This note – prepared for a workshop to support the affected city of Gaziantep in March 2023 - provides an overview of the affected regions, and key issues and recommendations to support the recovery, based on international experience. It highlights that a plan should be made to support displaced residents for an extended period, identify high-risk families, train the workforce needed for the reconstruction effort, strengthen governance processes to protect recovery funds, coordinate reconstruction efforts across levels of government and with international donors, and engage communities in ambitious plans to improve infrastructure going forward.

This paper maps 'who does what' across levels of government in OECD countries in relation to active labour market policies (ALMPs), with a focus on the role of subnational governments. It highlights recent reforms in the multi-level governance of ALMPs in a number of countries, and shows that in about two out of five OECD countries, subnational governments have some type of formal competences for delivering ALMPs. It also shows other ways subnational governments are commonly involved in such policies. This includes delivering their own labour market programmes, often targeted to those farthest from the labour market or facing multiple barriers to employment. Finally, it considers some of the benefits and drawbacks of more decentralised approaches to ALMPs and offers some general principles for managing these trade-offs across different types of governance systems.

Governments at all levels are looking for new and innovative ways to include individuals in vulnerable situations such as youth, migrants, persons with disabilities and families facing multiple challenges, in the labour market and in society more generally. This paper explores integration of employment services with other services (e.g. social, health and housing) at the local level as one promising way for governments to provide more effective support that is holistic and person-centred and be more efficient in public spending. The paper analyses different forms of local service integration, the possible benefits, and the particular roles subnational governments can play in service integration reforms – ranging from national public employment service-led reforms to more locally driven reforms. The paper also analyses the barriers to service integration and proposes future work to strengthen local service integration.

Cities across the world have been battling a housing crisis in recent decades, with many residents increasingly struggling to find affordable homes, and broader issues arising around tackling homelessness, improving housing quality, and harnessing the role of housing in climate change mitigation. This housing crisis has been exacerbated by the cost-of-living crisis that saw inflation reach record highs in 2022. City mayors can take critical action through their powers over housing, land use, and infrastructure. This paper highlights the systemic issues underlying the housing crisis in cities, and offers inspiring examples of how cities in OECD countries and beyond have been addressing these challenges. It aims to inform the 6th Meeting of OECD Champion Mayors for Inclusive Growth and drive positive change towards more affordable cities and homes for all.

Expanding on the findings of Brick by Brick: Better Housing Policies, this second volume delves into key trends shaping housing policies in the post-COVID-19 era. The first chapter provides an overview and discusses the need to monitor the pandemic's impacts on housing affordability, address the energy crisis through low-carbon housing initiatives, maintain financial resilience amid fluctuating housing cycles, and facilitate the reshaping of housing markets in response to remote work and environmental concerns. The second chapter focuses on the decarbonisation of the housing sector. It recommends a mix of carbon pricing, energy-efficiency certification and regulation, and subsidies to meet net-zero targets while accounting for housing market specificities. The chapter also calls for deploying complementary policies to limit adverse impacts on low-income households. The third chapter examines housing finance, focusing on the tension between supporting mortgage borrowing and promoting financial resilience. It also discusses the rise of non-bank real estate finance and the potential for mortgage finance to support housing decarbonisation. The fourth chapter explores how the new work-life balance, enabled by the rise of remote work, is reshaping housing demand and proposes a set of tailored urban policies to address this shift. Overall, the report provides a comprehensive blueprint for housing policies in the post-pandemic world.

As a European Green Capital 2023, Tallinn has a unique momentum to set the foundations for its transition from a linear to a circular economy. The newly created Circular Economy Department in the city administration is a signal of this transformation. The city conceives the circular economy as a means to advance environmental goals while generating opportunities for job creation and stimulating innovation through a systems approach. This report summarises the findings from a 20-month policy dialogue between the OECD, the city of Tallinn and stakeholders from public, private and non-profit sectors. It provides the main components of existing circular economy initiatives promoted in Estonia and in the city of Tallinn, key challenges and policy recommendations to help the city develop its long-term vision on the circular economy, setting targets for the future.

This report provides a global assessment and outlook on wildfire risk in the context of climate change. It discusses the drivers behind the growing incidence of extreme wildfires and the attribution effect of climate change. It outlines the environmental, social and economic impacts of wildfires by illustrating the losses and costs observed during recent extreme wildfire events. Building on this, the report presents the findings of a cross-country comparative analysis of how countries’ policies and practices have evolved in recent years in light of observed and projected changes in wildfire risk. The analysis draws on in-depth case studies conducted in Australia, Costa Rica, Greece, Portugal and the United States. The report underlines the urgent need for governments to scale up climate change adaptation efforts to limit future wildfire costs.

The COVID-19 pandemic has led to a significant shift in the way people work, with an increasing number of individuals opting to work from home. Fewer commutes allow people to live further away from the city centre, where jobs typically concentrate. Against this background, this paper tests the hypothesis of a shift in housing demand away from the city centre towards the suburbs using a novel granular house price data set covering 16 OECD countries. The results indicate a flattening of the house price gradients in most large urban areas with profound consequences for housing policies and the city of the future.