Slovenia

The Law on Local Self-governance divides municipal competences into original and transferred ones. Original competences include those which are set by municipal statutes and other acts and are a standard element of local self-governance (communal utility services, local public services, etc.) and local competences of public importance set by local legislation in municipalities. Transferred competences include those which the state transfers to municipalities to perform them on behalf of the state. The state must provide the required funding.

Slovenia has in recent years achieved impressive economic performance, while maintaining a consistent concern to ensure balanced regional development, notably by allocating subsidies to lagging regions. Since EU accession, additional funding from Structural Funds has created an opportunity to invest in projects that will enhance Slovenia’s endogenous growth potential. Yet in a relatively small country with no elected regional tier of public governance, there has been increasing municipal competition for regional policy funding. Slovenia needs to avoid scattering scarce resources across large numbers of small-scale sectoral projects and diluting the overall impact of Structural Funds. It also needs to help regions undergoing structural adjustment and to build their own capacity to fuel sustainable development. This chapter starts with an overview of regional policy reforms in Slovenia. It then turns to how regional policy reforms can help improve physical infrastructure, including spatial planning, the management of Natura 2000 areas, and transport networks. Finally, it assesses how regional policy can contribute to upgrading human capital, regional innovation capacity and the business environment.

Slovenia is a small open economy experiencing strong growth since the mid- 1990s. As in many economies in transition, inequalities have been widening; nevertheless, they remain below OECD standards. Despite its small size, Slovenia’s economy is very heterogeneous with low levels of demographic and economic concentration. During the past years concentration has been rising, driven mainly by the capital region’s economic expansion. Population density and urbanisation levels remain relatively low by OECD standards, indicating the productivity benefits of agglomeration in the capital region are far from exhausted. National growth depends on the capital region, but six-non capital regions still account for the bulk of aggregate growth. All Slovenian regions but one are growing faster than the average for OECD TL3 regions. The impact of the recent crisis was quite concentrated geographically: more than half of job losses (60%) occurred in only two of Slovenia’s twelve regions. Labour productivity growth appears the key driver of regional growth closely linked to improvements in educational attainments and innovation performance.

In any analytical study conducted at sub-national level, defining the territorial unit is of prime importance, as the word region can mean very different things both within and among countries. In order to have a measure that is comparable, the OECD has developed a regional typology for classifying regions within each member country.