Despite decades of convergence, not all regions within countries have benefited equally. In small regions (TL3), income inequalities have increased in over half of 27 OECD countries between 2000 and 2020. On average, in 2020, metropolitan regions had around 32% higher GDP per capita compared to rural, remote, and metropolitan adjacent regions. Governments need to strengthen and adapt regional development policies to tackle these gaps and enable all types of regions to reach their full potential.
Inclusion and equality in regions
Where you live matters. There are huge regional gaps in economic, social, and environmental outcomes, undermining life chances. These regional inequalities have grown in many OECD countries. Our work on inclusion and equality in regions looks at how governments support access to quality public services and infrastructure and boost competitiveness and productivity to unlock the potential of all types of regions and mitigate territorial disparities.
![A garden specialist is teaching a group of students in a vegetable plot.](/https/www.oecd.org/adobe/dynamicmedia/deliver/dm-aid--cc4a28bd-2d7d-482d-a831-50e6ba5695f7/inclusion-equality-regions.jpg?quality=80&preferwebp=true)
Key messages
Deep structural inequalities between places are stretching beyond economic outcomes, impacting well-being. Typically, metropolitan regions outperform across many areas, such as access to talent and skills, as well as services like health, education, and high-speed internet. These gaps are all connected. When public services and infrastructure are of poor quality, it is harder for lagging regions to attract and retain the people, skills and investment needed to break a vicious cycle of stagnation and decline.
Evidence is mounting on the broad-reaching costs of failing to tackle regional underperformance. These costs risk deepening geographies of discontent at a time where gaps in trust in government across regions are already large. Tackling longstanding regional inequalities and building regional resilience require better access to public services; better infrastructure to boost productivity and competition; better local skills development; better co-ordination of multi-level governance systems; and better subnational fiscal and strategic capacity.
Context
The longstanding geography of regional inequalities
Several decades of convergence between countries have not created equal opportunities for all regions within countries. Across large (TL2) regions (e.g., states, provinces, landers) within countries, regional inequalities have barely changed over the last two decades. More alarmingly, at the level of small (TL3) regions – which are better aligned to the geographies where people live and work – spatial inequalities in income have widened in many countries over the same period. Over half of 27 OECD countries with available data saw income inequalities between their small regions increase between 2000 and 2020.
![This infographic illustrates trends in regional inequalities in OECD countries over the past 20 years](/https/www.oecd.org/adobe/dynamicmedia/deliver/dm-aid--e6091b39-8f01-4b4b-b172-05c6d8204cf4/trends-regional-inequality.png?quality=80&preferwebp=true)
Urban-rural gap in access to high-speed internet
Regional inequalities are reflected in several key drivers of economic opportunity. Data from regulators in 26 OECD countries show a persistent rural-urban divide in connectivity speeds. On average, one- third of households in rural areas lack access to high-speed broadband. These digital gaps prevent some areas from leveraging new opportunities in remote working and telemedicine that could help them compensate for a lack of physical connectivity to jobs and services, and entrepreneurship and potential investments.
Source: Speed test data from Ookia (2022)
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