What works for Rural Areas? Is Rural Policy 3.0 the answer?

Detailed analysis of what works in rural policy, why it is important, and trends in rural areas in other countries is always welcome.

The OECD has recently published its Regional Outlook 2016 with the subheading ’Productive Regions for Inclusive Societies’ which focuses on the untapped potential in regions and a structural and ‘place based’ approach to regional policy. It builds on previous editions of its Regional Outlook and on other regional development analyses including ‘Regions Matter’  , ‘How Regions Grow’   and ‘Promoting Growth in all Regions’.

This year’s OECD Regional Outlook 2016 has a special focus on ‘Rural Areas-places of opportunity’. oecd-coverAs rural areas are facing significant challenges it is useful to read analysis of trends in other countries, to review proposed policy solutions and to think about how they might be adapted to our own context in the Western Region and Ireland.

The analysis of trends is comprehensive and interesting. The chapter on ‘Understanding rural economies’ provides detailed comparisons of rural areas and a three part typology of rural areas. The results serve as a reminder of how many of the issues faced by the rural Western Region are similar to those in other OECD rural regions.

It considers the definition of “rural” and discusses the characteristics of low-density economies and examines trends in rural regions, including those in productivity, gross domestic product, employment, and demographic change, using an OECD typology that classifies rural regions according to their proximity to cities.

Key messages from this chapter are as follows:

  • Rural regions are diverse and highly influenced by their specific natural environments. Their development path is substantially different from the standard urban model. Certain rural regions in OECD countries have been highly successful in terms of economic performance and quality of life. Other rural regions have been less successful. The success or weakness of rural regions is considerably more affected by changes in economic conditions than in urban areas.


  • Rural regions employ different development models adapted to reflect specific features of having a low density of population and economic activity. This variability calls for a typology of different definitions of rural, such as: i) rural areas inside functional urban areas; ii) rural areas adjacent to functional urban areas; and iii) rural areas that are far from functional urban areas, i.e. “remote”.


  • There are different development patterns observed depending on the type of rural region. Rural regions close to cities are more dynamic than rural remote regions and also more resilient, displaying an economic performance similar to urban regions.


  • Productivity growth in rural regions in the pre-crisis period was mostly accompanied by employment growth. Among those rural regions that experienced positive productivity growth in the period 2000-07, two-thirds also recorded positive employment growth. Since the crisis this pattern has been difficult to maintain.


  • Remote rural regions are particularly vulnerable to global shocks. Following the financial crisis, their average productivity has declined, yet this average hides the fact that some remote rural regions continued to perform well during and after the financial crisis.

Following on from this analysis is a chapter on Rural Policy 3.0 which argues that a key objective of rural policy should be to increase rural competitiveness and productivity in order to enhance the social, economic and environmental well-being of rural areas. Within this approach it suggests policies should focus on enhancing competitive advantages in rural communities and should draw on integrated investments and the delivery of services that are adapted to the needs of different types of rural areas. It describes a partnership-driven approach that builds capacity at the local level to encourage participation and bottom-up development.

Key messages from this chapter are:

  • A key objective of rural policy should be to increase rural competitiveness and productivity in order to enhance the social, economic and environmental well-being of rural areas. This in turn will increase the contribution of rural regions to national performance.


  • Rural communities will not excel in all areas. They should focus on enhancing economic opportunities based on their competitive advantages, given their location, natural endowments, human capital and connectivity to other places.


  • Public policies should focus less on providing subsidies, and more on integrated investments and public services that are geared to local needs. Such policies – territorial and sectoral – are most effective where they are co-ordinated and aligned along similar goals and objectives.


  • Rural governments and other actors have much to gain from collaboration with one another. From procurement to service delivery and economic development, the pooling of resources and ideas across communities has a much greater impact than stand-alone actions. Such arrangements may take the form of: i) rural-rural partnerships; ii) rural-urban partnerships; or iii) government with non-profit or business partnerships.


  • Strong community capacity is needed to understand local dynamics in rural areas and act on them. Implementing public policies that strengthen the capability of community actors is critical to fostering the success and resilience of rural areas.


  • Effective rural policy recognises that development opportunities and constraints in rural regions are different than those in urban ones, and can vary across the types of rural regions. Rural policies are thus distinct from, but complementary to, urban development approaches.

For those who have been following OECD work on regional and rural policy, there is some discussion of the movement from the ‘New Rural Paradigm’ developed in 2006 to the amended and updated Rural Policy 3.0 which is about implementing the New Rural Paradigm.


While such policy analysis is interesting at an academic level and the typology of rural areas is worthwhile, there is less practical detail on how good rural policy can be developed. Clearly there are differences among OECD members and also among OECD regions, but for those hoping to develop rural policy it would be useful to have a focus on the choices facing policy makers and more practical detail on policy types.

Rural Policy 3.0 suggests that it is important to invest rather than subsidise, to include private sector rather than just public sector, to have an integrated policy approach rather than just bottom up or top down, and to use a place based approach recognising differences rather than one size fits all.  All of these are of course inarguable but questions about how to integrate them into a cohesive rural policy remain.

  • What are the best ways to deliver services?
  • How can we enhance the competitive advantage of rural areas?
  • At what scale of place should policy operate to make the most of place potential and yet allow for manageable policy?
  • How can we include the private sector and communities in a meaningful way?
  • How can we implement some of these ideas in Ireland where most public spending is controlled at national level?   ?

When developing rural policy in Ireland we need to consider the approach outlined in Rural Policy 3.0, but also to develop it so that our strategy for rural areas has practical focus on helping rural areas to achieve their potential.


Helen McHenry