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Social trust: An invisible glue for better urban planning

12 March 2018
by Guest author

Tamara Krawchenko, Centre for Entrepreneurship, SMEs, Regions and Cities

The reclaimed industrial waterfront area, Buiksloterham, in Amsterdam. ©City of Amsterdam

Buiksloterham is an old industrial waterfront area north of central Amsterdam. Gas and oil producer Shell used to be located here, as was an airplane factory, shipbuilder and other assorted manufacturing. But the companies have moved out, leaving an empty site with polluted soil. Amsterdam city planners took a novel approach: they opened Buiksloterham to bidders for temporary use, with the site development criteria of building structures without foundations (due to soil issues) and fixing up the area. Rather than imposing a detailed urban plan for the area, they established “rules of development”, which allowed latitude in terms of construction, but made requirements regarding mixed commercial/residential use, and the height and density of buildings.

For one innovative project, De Ceuvel opened small business offices and studio space, as well as a café, in revamped houseboats. Former squatters and artists have established cultural spaces here, attracting creative businesses like MTV, who moved its European headquarters here. The area welcomed its first residents in 2014 and approximately 3,000 homes will be developed over the coming decade, many of them self-built as part of the city’s active “do it yourself” (DIY) approach to housing.

Buiksloterham’s rehabilitation benefitted from high social trust in the Netherlands, which makes for collaborative planning and smoother redevelopment processes. It reflects the country’s history of careful water management, which has bred a culture of co-operation and consensual decision-making, involving citizens and other players. This is called the “polder model”, named after the low-lying land reclaimed using dykes and canals, without which large parts of the Netherlands would simply be under the sea. The polder model also helps explain today’s Dutch planning model in which each level of government has near-autonomous oversight of its own area of planning interest, rather than classic “top-down” decision-making.

This culture of social trust and collaboration has enabled Amsterdam to adopt more flexible approaches to land-use planning, encouraging temporary, do-it yourself and even experimental land use. The confidence that there will be opportunities along the way to negotiate and develop solutions to problems that might arise allows for inventiveness.

The degree of social trust in a society is a major factor in how well, or badly, the system works. The higher the social trust, the smoother the process is, while places where such trust is lacking have a much bumpier ride. This affects planning culture and impacts everything from day-to-day work practices to the number of appeals (and delays) which planners must deal with.

Prague’s state planning legacy

The Czech Republic is a country that has much lower levels of social trust than the Netherlands: there, trust in others lies below the OECD European average at 5.3, versus 5.8 out of 10, according to our study. Historical relations also loom large here, though not as beneficially as in the Dutch example: under the old Soviet-led regime, planning was highly intrusive. In the early days of the new parliamentary republic—the so-called “wild 1990s”—there was backlash against this intrusion. Massive privatisation of formerly public lands followed and foreign investment flooded into the city, particularly into Prague’s historic core. Corruption and opaque processes eroded trust between developers, residents and public officials, and has coloured relations between these groups to this day. As a reflection of this, recourse to appeals and litigation in the development process are common.

Prague, which is in a period of growth and investment, is trying to rebuild these relationships. At play are large-scale brownfield redevelopments of land not currently in use. Potentially, they can transform entire neighbourhoods.

Trust helps

How can cities with lower levels of social trust improve the planning process? One answer is to win more trust back. Open, transparent and meaningful public engagement is therefore critical. But as strategic or detailed land-use plans are only adopted every several years, it is important to engage local people on an ongoing basis. This needs to be done at the neighbourhood level, particularly when there are major changes happening in a community. It is also important that planning be made more responsive across the board. One thing that can help with this is for cities to regularly evaluate and report on key indicators and trends—it needs to be open to adjustment and improvement along the way, and residents and businesses should be part of this process.

To learn more about our work on the governance of land use, see:

References and links

OECD (2017), The Governance of Land Use in OECD Countries: Policy Analysis and Recommendations, OECD Publishing, Paris

OECD (2017), Land-use Planning Systems in the OECD: Country Fact Sheets, OECD Publishing, Paris.

OECD (2017), “Land-use trends, challenges and opportunities in Amsterdam”, in The Governance of Land Use in the Netherlands: The Case of Amsterdam, OECD Publishing, Paris

OECD (2017), The Governance of Land Use in the Czech Republic: The Case of Prague, OECD Publishing, Paris

Time’s up on unequal financing for women business-owners

8 March 2018
by Guest author

Clara Young, OECD Observer

©David Rooney

My mother opened a radiology and ultrasound clinic in Vancouver in the 1970s. Her business flourished for over 20 years, and is still going strong. When she and my father divorced in the 1990s, the bank called her in and said she could not be the sole owner of a home mortgage–it had previously been partially underwritten by my father. My mother was a small business-owner whose ability to pay a monthly home mortgage was being questioned. Who knows what happened when she had to acquire expensive computed tomography (CT) scanners and magnetic resonance imaging (MRI) equipment?  Her financing predicaments then would make many a woman who owns a business today shake her head in recognition.

In researching this piece, I went on the Aboriginal Women’s Business Entrepreneurship Network website and clicked on their videos on how to obtain financing. They advise women to use their own personal savings to start their businesses as well as to borrow from friends and family. Bank loans, overdrafts and credit lines are, not surprisingly, a distant third option, sometimes because women lack credit histories or are discriminated against in their credit scoring. In OECD countries, only 26% of women believe they would be given access to the necessary finance to start or grow a business, against 34% of men.

Governments can help women here. The French Fonds de garantie à l’initiative des femmes (FGIF), for instance, guarantees loans of up to €45,000 for women entrepreneurs. Microfinance loans of, typically, under €25,000 are another way to get small start-up loans to women business owners.

How about higher-risk equity financing, like angel investments and venture capital? In the US, it’s estimated that only 15% of venture capital investment went to women-owned businesses in 2014, with the number plummeting to a little over 2% in 2016. This is no surprise. Studies show that women obtain much less financing than men in traditional pitch competitions. Ireland has opted to support women-led ventures by investing in them: the Competitive Start Fund for Female Entrepreneurs invests up to €50,000 in tech or manufacturing ventures run by women in exchange for an equity stake of up to 10%. Private women-run venture capital funds, like Springboard Enterprises in the US and Rising Tide Europe, are also focusing their financing on women-owned start-ups.

For women’s businesses to expand, say, internationally, hire more people or, like my mother’s clinic, invest in new, costly technology, equity financing is needed. Says Laurence Mehaighnerie, a woman, who co-founded the Paris-based venture capital firm Citizen Capital in 2008, “I sense that women entrepreneurs feel they can do more on their own and need less money, which can mean less growth and success in the end.” Changing the business environment to make banks and investors more amenable to women entrepreneurs will allow women-run businesses not just to survive, but, thrive.

References and links

Visit the Aboriginal Women’s Business Entrepreneurship Network at

Read the OECD policy brief on women entrepreneurs at

ReadStudy: Attractive men fare best in gaining venture capital” at

Are you open?

2 March 2018
by Guest author

Alison Rygh, OECD Public Governance Directorate

©Hiroko Masuike/The New York Times-REDUX-REA

In 2016, the UK’s National Health Service (NHS) gave Google’s artificial intelligence company DeepMind access to healthcare data on 1.6 million hospital patients. The data was to be used for an app that identifies kidney problems. None of the patients had been contacted to give their explicit consent to such an arrangement, and the UK data guardian, the Information Commission, subsequently ruled that the NHS had not adequately protected the privacy of their data.

It is incidents like these that make Open Data Day, 3 March, something we should sit up and take note of. What exactly is open data, and more to the point of this article, what is open government data? Governments produce and commission huge quantities of data and information that cover the likes of maps, public transit schedules, meteorological information and much more. When government data is made publicly available it becomes open government data. In principle anyone can access, use, reuse and share the data, as long as the source of the data is properly accredited.

There are very good reasons for opening and sharing government data. For a start, it empowers citizens to evaluate public expenditure, or to improve or even get rid of certain services. The more datasets that are opened up, the better and more robust government decision-making will be. After all, decisions will be backed up by evidence and benefit from informed public participation as well. Open government datasets can also foster economic development because data, such as geo-spatial or cartographic information, can be used to improve private sector business models.

Governments that simplify their data-sharing practices and use data more openly tend to be more efficient. Take the “once only” principle, for instance. We as citizens should only have to provide the government with our personal data, such as name, address, birthdate, once, after which it is stored digitally in one central registry. It can be called up whenever we, for example, apply for government childcare assistance or subsidised housing. Not only is this more user-friendly but it allows services to be better tailored to our needs.

But efficiency isn’t everything. Democratic governments must be directed by citizens on how to use our personal data. We as citizens must decide how open or private we want our data to be. Clearly, there is a balance to strike between these safeguards and ensuring open data for better public governance. With people’s input, governments can set the boundaries in a trustworthy manner so that we can be assured that our personal data is protected or being shared ethically.

Citizens’ awareness and agreement to the government’s use of their data are therefore key. Belgium, Estonia and Spain are good role models, where each person can access their own online “citizen folder” to see if their data is being consulted or reused, and for what purpose.

The digital world clearly poses challenges for personal data, its storage and use, which may be compounded or possibly resolved by artificial intelligence (AI). What happens when governments begin to navigate personal data using algorithms, and make policy decisions based on this? The more open the better, right? These algorithms should be open and accessible so that governments can be held accountable. France is currently preparing a legislation on open algorithms with people’s rights in mind.

Click to enlarge

While Open Data Day celebrates openness and transparency for better public policymaking, and showcases the products and innovations that come from working collaboratively on open data, it’s also a day for reminding governments that we care about how they manage our personal data. A great way to become more aware of what governments are doing in regards to open data is to consult the OECD OUR Data Index which assesses governments’ efforts to implement open data in three critical areas: openness, usefulness and reusability of government data including the availability and implementation of efforts to protect and anonymise personal data before publication.

Has this open data movement made you more or less “open” with your personal data? Tell us your story by emailing us at: [email protected]!

References and links

See more on Digital Government and Open Data at

Read the OECD Recommendation on Digital Government Strategies at

Access the OECD Data Index at

Open Data Charter at

Open Data Day


La Commission Nationale de l’Informatique et des Libertés (CNIL)

Oderkirk, Jillian and  Elettra Ronchi (2017), “Governing data for better health and healthcare”, in OECD Observer No 309, Q1,

Revell, Timothy, “Google DeepMind NHS data deal was ‘legally inappropriate’”, New Scientist,

The funding crowd

23 February 2018
by Guest author

Balázs Gyimesi, OECD Observer


“Every crowd has a silver lining,” said P.T. Barnum, America’s “greatest showman”. For businesses, Barnum’s play on words is especially true: crowds are becoming something of a motherlode of funding for small and medium-sized enterprises (SMEs). With bank lending declining, smaller businesses are looking for alternative ways of financing. Thanks to the world wide web, they can now solicit funds not just from banks and professional investors, but from virtually anyone with internet access. This approach can take different forms. Besides crowdfunding (where many individual contributions–usually sourced online–make up the funding), examples include online invoice financing (where SMEs, for instance, can borrow online against unpaid invoices) and peer-to-peer lending activities (online services that match lenders with SME borrowers). Together, these funding opportunities constitute the online alternative finance market.

Click to enlarge

The volume of alternative financial instruments has generally increased in recent years. Looking at changes between 2013 and 2016, however, it is clear that the development and size of the alternative finance market varies greatly between countries. China is by far the largest market for online alternative financial instruments, expanding exponentially from US$5.6 billion in 2013 to US$243.28 billion in 2016. In comparison, the total market volume of the online alternative finance industry in the US amounted to only US$34.5 billion in 2016, despite a steep rise from US$4.4 billion in 2013. The European alternative finance market, on the other hand, has stayed well below the volume of the US and the Chinese markets, having raised US$2.1 billion in 2016 and only US$0.3 billion in 2013. The UK alternative finance industry has volumes well above that of the other EU28 countries combined, having raised over US$5.6 billion in 2016.

With rising volumes, alternative instruments increasingly complement traditional sources of financing, and this has called attention to the need for a regulatory framework for crowdfunding. In crafting regulation, however, governments should keep in mind how crucial online alternative finance is to businesses. With bank lending on the decrease, every small business needs its silver lining.

OECD (2018), Financing SMEs and Entrepreneurs 2018: An OECD Scoreboard, OECD Publishing, Paris.

Trust in parliament

1 February 2018
by Guest author

Balázs Gyimesi, OECD Observer

House of Commons of the United Kingdom ©AFP PHOTO/PRU/HO

“Sail, sail thy best, ship of democracy, […] With thee Time voyages in trust,” wrote American poet Walt Whitman in his poem “Song of democracy”. But do we trust democracy to take us in the right direction? In European countries, there is a clear relationship between how satisfied we are with democracy and how much we trust its most important institution–parliament. Believing that our elected representatives will act in our best interests is crucial to maintaining the legitimacy of democracy.

People who are more satisfied with democracy are also those who trust their assembly of elected representatives more. Switzerland and the Nordic countries, Denmark, Norway and Sweden, show the greatest satisfaction with democracy and highest level of trust in their parliament, whereas southern and eastern European countries such as Italy, Portugal and Slovenia trust their elected representatives less and are less satisfied with democracy overall.

Interestingly, Europeans trust parliament less than the legal system, and even the police, according to the European Social Survey.

But the nature of parliament is also that the voting public can keep it in check and change it completely, as elections from France and the US have demonstrated. Parliaments, in turn, know that while it is their job to discuss, contradict, argue, agree and oppose, they must do so in the public interest. Clearly, parliament can be vital in promoting better policies for better lives–the OECD Observer was launched by the Secretary-General 55 years ago in large part to inform parliaments of the organisation’s policy work. Today, with the Global Parliamentary Network, the OECD actively engages with members of parliament from around the world by providing them with analysis, data and expert opinion. It also creates a rather special space for MPs to hear about each other’s experiences and learn from them. After all, listening is fundamental to building trust. It is the wind in the sails of Walt Whitman’s democracy.

OECD (2017), How’s Life? 2017: Measuring Well-being, OECD Publishing, Paris.

OECD Global Parliamentary Network,

European Social Survey,

Flood watch on the river Seine: A return to 1910?

25 January 2018
by Guest author

Charles Baubion, OECD Directorate for Public Governance, and Clara Young, OECD Insights

©Laurent Kalfala/AFP

It has been a wet winter in Paris and the River Seine is rising fast: 2 cm, or about an inch, every hour. This will bring the Seine to a little over six metres, as measured by the Austerlitz monitoring station or, as Parisians will tell you, up to the thighs of the Le Zouave statue on the Pont de l’Alma (our photo). That’s how high it got in 2016. Already, several major roadways along the river banks have been flooded over, while the city authorities are issuing warnings, not just in Paris, but in several French cities. How bad can it get?

The 2016 flood caused more than €1billion worth of insured damage, two deaths, and severe disruptions to the transport system. Well over 17,000 people were forced to leave their homes. While upper parts of the river catchment suffered significant damage, Paris itself was spared.  If the water had gone 25 cm or 10 inches higher, it would have been a large-scale crisis, authorities said. There is no room for complacency, and even if the peak this time is officially expected to be reached in the next few days, everyone is monitoring the rainfall closely.

Before 2016, floods in Paris occurred on average every 20 years. The Seine has not significantly overflown since 1955, the high-water mark being the great flood of 1910. At 8.6 m on the Austerlitz scale, the river turned Paris into Venice that winter. In its 2014 Review of Risk Management Policies: Resilience to Major Floods in the Seine Basin, the OECD estimated that a flood of the same magnitude today would cost France between €3 and €30 billion.

The OECD made 14 recommendations on how the Paris region could boost flood resilience and emergency preparedness in the review. More than half of these have been put in place says the follow-up report, released this week, but a better integration of flood risks into urban policies is still being held up by governance and financing difficulties.

Decentralisation and the consolidation of greater Paris into the Grand Paris Metropolitan Authority can open up co-operation on flood management in new administrative structures. The Grand Paris Metropolitan Authority should work closely with local authorities in the Seine basin to define a global, long-term flood strategy for the region.

A flood-resilience framework would give coherence to initiatives such as a charter to design resilient neighbourhoods and a serious rethink of areas within the flood plain that are currently earmarked for densification. Priority could be given to upgrading protective dykes and quay walls along the river as well as critical infrastructure vulnerable to flooding. It could spur storm preparedness for businesses, even small ones, so that they can keep going even as the waters rise. Examples from the reconstruction of a resilient New Orleans after Hurricane Katrina, or New York after Sandy, could inspire Paris to build up its own resilience before disaster hits.

All of this requires money of course and this week’s report finds that available flood prevention funding is still not enough. For the past 20 years, there has been talk of developing flood water storage–marshlands and an artificial lake–at La Bassée, upstream from Paris. It would be able to take in 55 million cubic metres of water but costs an estimated €600 million. To fund this and other flood resilience projects, the government needs to develop a more ambitious, long-term and holistic strategy co-ordinated with anybody who benefits from flood protection, whether it be network operators, enterprises or local authorities. Even individual citizens in what is one of the richest regions in Europe could do their part by paying a flood prevention tax. Local authorities could explore cutting-edge financial mechanisms to fund initiatives, such as green bonds.

In 2024, Paris will host the Olympic Games. With its ambition to produce 55% less carbon emissions than the 2012 London Olympics, Paris hopes to stage the greenest games in history. If it manages to incorporate flood risk into its planning now, the Olympic Games will be high and dry.

References and links

For further information, please contact Charles Baubion, Risk Management Policy Analyst at the OECD.

Read the report at

Read the press release “Further improvements needed to manage major flood risk in Paris and Seine basin” at

OECD (2014), Seine Basin, Île-de-France, 2014: Resilience to Major Floods, OECD Publishing, Paris.

Read “Small Business Storm Preparedness” at   523d9e21e4b0019d4f5b07e9/1379769889160/RedHookStormPreparednessPlan.pdf

Read “What if Paris flooded” in the OECD Observer at


Green budgeting can spur governments to improve our planet’s bottom line

19 January 2018
by Guest author

Ronnie Downes, OECD Budgeting & Public Expenditures Division

©Charlotte Moreau

Ever hear of triple-bottom line accounting? This is what businesses use to go beyond the usual financial balance sheet to ensure their accounts reflect environmentally and socially responsible profits and loss. Shareholders and clients increasingly want companies to be clean and responsible in their business practices, to such an extent that it can affect their stock value.

But what about government? Shouldn’t public finances also follow such quality criteria so that we can hold our politicians to account and ensure our tax money is taking care of the environment?

In our view, budgeting is not a “neutral” reporting exercise, but one of the most effective ways of making sure that public money is put to work properly, and that policies are actually helping governments to achieve important goals, like fighting climate change and cutting pollution, for instance.

“Green budgeting” aims to use the budget–taxes, spending and policy co-ordination–to assess and promote the alignment that is essential to meet environmental goals. For example, green budgeting shows financial outlays that have positive climate change impacts, and highlights tax policy choices that must be confronted as fuel is “decarbonised”­, whittling away a major source of government revenues.

Many large private corporations employ the triple-line accounting championed by the likes of the Global Reporting Initiative, an independent organisation, to measure overall company performance according to not only traditional profit and loss, but social responsibility to people, and environmental performance as well. But the public sector has been slow to do the same. This will have to change. The climate change targets we have set in the Paris Agreement, Aichi Biodiversity Targets and the United Nations’ Sustainable Development Goals require that governments know what portion of their budgets is moving their countries towards reaching these targets and what portion is hindering it, and to craft their policies accordingly.

With the backing of France and Mexico, OECD Secretary-General Angel Gurría announced the green budgeting initiative at the One Planet Summit in Paris in December 2017, along with a call for meaningful carbon pricing.

French president Emmanuel Macron welcomed the initiative enthusiastically: “We are launching the “Paris Collaborative on Green Budgeting” within the framework of our zero-emission objective,” he said at the global climate financing summit. “Analysis of the budgets of OECD countries furthers transparency, and I thank Angel Gurría for his contribution to this framework. The work of the OECD will enable budget presentations launched by a group of pilot countries. Obviously, we will be contributing with presentations that show how the budget each year is distributed according to climate objectives.”

The OECD has brought together a cross-disciplinary group of environmental, tax, budget and fiscal affairs experts who will partner with countries to help them assess and improve their budgets and fiscal policies for climate resilience. Among other things, green accounting looks at how subsidies that are harmful to biodiversity or which push the planet’s carbon emissions output compare with resources the government puts in these two areas. The Collaborative will analyse how coherent fiscal policies are with developing low-emissions, sustainable strategies. And, taking inspiration from the OECD’s work on “gender budgeting”­­, which determines how budgets impact gender equality, it will promote environmentally-sensible budgeting.

The OECD will work with countries to set a new global agenda for green budgeting with agreed-upon definitions, and common methods, guidelines and tools to bring about sustainable public finance flows. Tools include those that track the impacts of decarbonisation and carbon pricing on fossil fuel use and tax revenues in each country, and voluntary “green budget statements” to show the environmental credentials of the annual budget.

Companies adhere to triple-line accounting because it shows the true cost of doing business. Likewise, by knowing the environmental costs and benefits incurred in serving its citizens thanks to green budgeting, governments will be better able to raise the planet’s bottom line.

References and further reading


OECD (2017) Investing in Climate, Investing in Growth,

OECD (2015) Recommendation of the Council on Budgetary Governance,

OECD (2016), Effective Carbon Rates: Pricing CO2 through Taxes and Emissions Trading Systems, OECD Publishing, Paris,

For more on the Global Reporting Initiative today, see and read Massie Robert Kinloch (2001), “Reporting on sustainability: A global initiative”, OECD Observer No 226/227, Summer,