The central concern of this OECD Regional Outlook is to understand how regional policies can contribute to aggregate performance, in terms not only of economic growth, but of a broader development agenda as well, integrating equity and environmental objectives. Building stronger, fairer and cleaner OECD regions is a particularly salient issue in the wake of the recent crisis, as OECD policy makers seek to sustain a still uncertain recovery against a backdrop of fiscal consolidation and, in many economies, limited room for manoeuvre in monetary policy. It also highlights the dangers of overlooking the regional dimension, particularly in the field of public finance. Sub-national governments’ success in managing public investment is likely to be a key factor in determining the strength of the recovery in many places. At the same time, the impact of the crisis on sub-national public budgets represents an often under-appreciated challenge to fiscal health and economic performance in some countries.

The OECD Regional Outlook was co-ordinated and supervised by Joaquim Oliveira Martins. It was prepared by the Regional Development Policy Division of the Directorate for Public Governance and Territorial Development, and received inputs from Dorothée Allain-Dupré, Monica Brezzi, Claire Charbit, Jose-Enrique Garcilazo, Lamia Kamal-Chaoui, Soo-Jin Kim, Karen Maguire, Joaquim Oliveira Martins, Adam Ostry, Mario Piacentini, William Tompson, Raffaele Trapasso and Camila Vammalle. The OECD Local Economic and Employment Development Programme (LEED) prepared the section on local labour-market policies. Statistical support was provided by Vicente Ruiz and Daniel Sanchez-Serra. Julie Harris edited the report and Jeanette Duboys prepared it for publication.

On behalf of the OECD Territorial Development Policy Committee, it is my honour and privilege to introduce to you the first-ever OECD Regional Outlook. The production of such a volume is a remarkable undertaking, made possible by the close co-operation of member countries and the hard work of OECD staff.

In the wake of the global economic crisis, policy makers are keenly aware of the need for innovative policy and governance “toolkits” to generate new sources of growth, while enhancing social inclusion and environmental sustainability, as expressed in the OECD’s stronger, cleaner and fairer agenda or the EU 2020 goals of a smart, inclusive and sustainable economy. Traditionally, policy debates have tended to focus on trade-offs between these three objectives, often overlooking potential synergies and interdependencies between them. Today, there is a growing awareness of the need to pursue these three objectives in a more balanced and complementary way.