Supporting the development of cross-border regions is a growing priority for many governments across the OECD. This reflects the fact that these regions often face significant development challenges related to their proximity to national borders, which can constrain regional economic development, impede the delivery of cross-border services and hamper the co-ordination of cross-border disaster management. This report assesses how multi-level governance arrangements can support resilient cross-border development. It starts by examining why the development of cross-border regions in the EU often lags behind non-border regions, and the multi-level governance mechanisms in place to bolster their performance. Using the five pilot regions as a basis, it then examines cross-border governance arrangements through the lens of the OECD Cross-border Governance Framework. Finally, this report includes considerations for subnational, national and international policy makers in the OECD and beyond on how they can strengthen cross-border governance frameworks, and enhance the resilience and socio-economic development of cross-border areas.
Building More Resilient Cross-border Regions
Abstract
Executive Summary
Recognising the economic potential of border areas, national and subnational governments along with the European Union (EU), have introduced regulatory, policy and financial mechanisms to facilitate cross-border co-operation. Despite these efforts, cross-border regions generally perform below non-border regions in key metrics. For instance, in 2021 GDP per capita in the EU’s border regions was 86% of the EU average (100%).
The development gaps experienced by border regions can be attributed to fundamental, often structural, barriers they face, including legislative, regulatory and territorial-administrative obstacles, as well as language and cultural differences. For instance, regulatory differences in tax, tariffs, and standards have a significant impact on businesses in cross-border regions. Firms engaged in cross-border trade face costs up to 50% higher than domestic businesses, even within the EU single market. These barriers also impede the capacity of border regions to effectively address disasters whose consequences transcend national boundaries. For instance, a lack of co-ordination among EU Member States when implementing border closures and travel restrictions during the COVID-19 pandemic, contributed to the GDP of cross-border regions dropping by twice as much as that of the EU average.
In 2017, legal and administrative barriers in the EU’s border regions were estimated to result in a loss of 3% of European GDP (EUR 458 billion), which translated to six million fewer jobs in cross-border regions. It is estimated that by addressing even 20% of the existing legal and administrative obstacles, the GDP of cross-border regions would be boosted by 2% and over one million jobs would be created. These figures underscore the urgent need to establish and strengthen governance mechanisms to support socio-economic growth, improve the delivery of public services, and enhance the quality of life in cross-border regions.
Many countries have established governance bodies to address shared challenges in cross-border regions. These bodies differ significantly in terms of their objectives, organisational structure and membership base. While some have been established to address a very specific need (e.g. to improve access to healthcare), most have a broad mandate related to fostering socio-economic growth and integration. A common challenge is that the membership base and internal governing structures often fail to fully support cross-border objectives. This is frequently due to a lack of involvement by public bodies with relevant competences to address shared border challenges.
For governance bodies to be more effective, it is essential to ensure that the right public institutions and partners for cross-border co-operation are involved and the appropriate territorial scale for action is established to address challenges shared on both sides of a border.
Cross-border governance bodies adopt varying planning and co-development methods and formats, from project-based plans to integrated, long-term strategies. Where cross-border governance bodies have adopted strategic planning documents, these often share common limitations, including a lack of clear guidance on implementation, monitoring and evaluation.
For cross-border governance bodies to deliver on their objectives, it is essential that—at a minimum—they develop an organisational strategy outlining how their organisation will contribute to broader cross-regional goals. This strategy should also define key implementing partners on both sides of the border, their roles and responsibilities, and identify the resources necessary to support effective implementation of cross-border initiatives.
Cross-border challenges (e.g. limited healthcare access and congestion) can provide a compelling case for cross-border public service delivery when supported by the free movement of goods and people and institutional frameworks enabling cross-border co-operation. However, governance bodies often find these too complex to manage, focusing instead on providing ‘softer’ services, such as networking and promotional activities. These actions foster collaboration albeit with a more limited direct impact on socio-economic development and citizen well-being.
While supporting cross-border public service delivery can support regional economic development and resident well-being, not all cross-border bodies have the capacity for such initiatives. Bodies with limited resources should start with foundational activities such as information sharing and networking, building toward more ambitious projects as capacities grow.
Funding for cross-border governance bodies is often precarious, with membership contributions usually only covering operational costs, limiting the capacity to fully achieve cross-border objectives. Often, membership contributions are not adjusted to reflect changing needs and contexts. This lack of flexibility hampers the ability of governance bodies to carry out their mandate and respond to emerging challenges and opportunities.
Clear and transparent mechanisms for establishing membership contributions are needed, along with regular review processes, to foster trust among cross-border partners, and ensure the bodies are financially viable and responsive to changing circumstances, costs and strategic goals.
While cross-border governance bodies often rely on funding and financing from international organisations and institutions (e.g. European Union, international development banks), many other funding and financing opportunities are underused. These include national and subnational grants, as well as non-governmental contributions. To build the financial resilience of cross-border governance initiatives, different measures can be considered:
National and international policy makers could reassess the eligibility criteria of untapped funding programmes to ensure that available financial resources can be better utilised to support cross-border co-operation and objectives;
Cross-border bodies should strategically explore untapped international and national grants, and co-operation with the private sector, while also boosting their technical capacity to prepare quality project proposals and absorb funding effectively.
Long-term political support for cross-border initiatives can be hard to generate and sustain. Contributing factors include a gradual loss of interest by politicians in cross-border co-operation and insufficient awareness of specific cross-border challenges among decision makers. Additionally, political churn from regular electoral cycles often leads to a loss of institutional knowledge about cross-border priorities, making it harder to sustain the long-term support needed to address them. To build and maintain durable political support, it is essential for cross-border bodies to:
Generate and disseminate evidence on cross-border challenges to subnational and national decision makers, highlighting the "costs of inaction" (i.e. economic losses, inefficiencies in public services) to stress the urgency of addressing these issues.
Emphasise the benefits of enhanced cross-border co-operation for citizen well-being (e.g. improved public services, economic growth), to generate public demand for sustained political support and action on cross-border initiatives.
