Fiscal data at the regional and municipal levels is essential for effective governance. However, its limited availability, inconsistent formats, and lack of comparability across countries have historically impeded thorough analysis. To address this gap, the OECD and the EU have launched an innovative initiative that includes the Regional Government Finance Databases (REGOFI) and Municipal Government Finance Databases (MUNIFI). This initiative, titled “Strengthening Analytical Frameworks and Data on Subnational Government Finance and Public Employment,” aims to enhance the collection, analysis, and accessibility of data on subnational government finance and public employment.
The recently OECD-published report, “Going Granular with Regional and Municipal Fiscal Data” highlights key findings and lessons learned from the development of the REGOFI and MUNIFI. These databases represent the most comprehensive collection of subnational fiscal data, covering 37 countries and spanning over a decade (2010–2022). Going beyond previous OECD efforts, they provide a much deeper understanding of regional and municipal finances. For the first time, standardized and comparative data on 21 key financial indicators—such as expenditure, investment, revenue, and debt—are available in both aggregated and disaggregated forms. This unprecedented level of granularity enables detailed international comparisons and provides valuable insights into the complexities of sub-national governance.
Comprehensive Coverage
As of June 2024, the REGOFI and MUNIFI databases encompass data from 37 countries, capturing over 550 regional governments, such as states and provinces in federal systems and regions in unitary countries, as well as more than 120,000 municipal governments. While these databases exclude other subnational entities, such as counties, boroughs, or inter-municipal cooperative bodies, they represent a landmark achievement in compiling reliable, comparable data on regional and local finances.
A Milestone in Data Utility
The REGOFI and MUNIFI databases are designed to address pressing challenges in public finance and governance. They empower policymakers, researchers, and stakeholders to analyze subnational fiscal dynamics across critical areas, including health, climate change, infrastructure, and social protection. The depth and scope of these databases support more informed decision-making, fostering sustainable development and better public services at all levels of government.
Key Insights from the Data:
Trends in regional government finance in OECD and EU countries
- Expenditure Patterns: In 2021, regional government expenditure accounted for an average of 8.2% of GDP and 14.3% of total public expenditure across a sample of 25 countries with available data. Federal countries exhibited higher expenditure ratios compared to unitary states, reflecting the broader range of responsibilities typically assigned to state and provincial governments. Notable disparities in per capita expenditure were observed across countries. On average, federal countries allocated 15.6% of GDP to regional expenditures, more than three times the 4.1% of GDP allocated by unitary countries.
- Revenue Sources: In 2021, regional government revenue accounted for an average of 8.5% of GDP and 16.6% of total public revenue across 25 OECD and EU countries with available data. Similarly with expenditure, federal countries reported significantly higher revenue ratios, averaging 15.5% of GDP and 31.7% of total public revenue. In contrast, unitary countries recorded much lower averages, with regional government revenue at 4.6% of GDP and 8.2% of total public revenue. Tax revenue accounts for 32.3% of regional government income, with grants and transfers being the dominant source (45.3%). In some countries, such as France and Croatia, tax revenues exceed 70%, while others, like Denmark, Greece, and Türkiye do not receive any tax revenue.
- Debt Levels: In 2021, regional government debt averaged 9.4% of GDP and 11.2% of total public debt across 15 OECD and EU countries with available data. Significant differences in regional debt levels were observed between federal and unitary countries. In many federal countries, states and provinces are not constrained by the “golden rule,” which restricts borrowing to investment purposes. As a result, their debt levels can be substantial, reaching as high as 41.1% of GDP and 29.6% of total public debt in Canada.
Trends in municipal government finance in OECD and EU countries
- Expenditure Patterns: In 2021, municipal governments in 37 OECD and EU countries accounted for 7.5% of GDP and 13% of total public expenditure. Unitary countries outspent federal ones, with Nordic nations leading in per capita expenditure. Between 2016 and 2021, municipal expenditure ratios declined in most countries. Staff expenditure is the largest expenditure category on average (30.3% of municipal government expenditure), while General Public Services (22.7%) and education (17.6%) were the top functions, though with significant variation across countries. Municipal capital expenditure, averaging 1.1% of GDP and 20.5% of total public capital spending, showed greater variability over time.
- Revenue Sources: Municipal revenue accounted for 7.5% of GDP and 13.9% of total public revenue, on average in 2021, for the 37 OECD and EU countries with available data.Average municipal government revenue ratios to GDP show considerable variation across countries, with municipalities in Denmark, Finland, Sweden, and Austria accounting for the highest shares (above 16% of GDP). In contrast, Maltese municipalities recorded the lowest share of GDP at 0.4%, followed by municipalities in Greece and Mexico. Grants and subsidies (39.2%) and tax revenue (36.9%) are the primary sources of municipal government revenue, supplemented by other revenue streams, user charges, fees, and property income. In 13 countries from the sample, tax revenue constitutes half or more of municipal revenue, with Iceland leading at nearly 80%.
- Debt Levels: In 2021, municipal debt accounted for 5.5% of GDP and 7.8% of total public debt on average across 24 OECD and EU countries. Federal countries, led by Canada, recorded higher municipal debt ratios compared to unitary countries. The average per capita municipal debt stood at USD PPP 3,648, with 19 countries reporting below-average levels.
Between 2016 and 2021, the share of municipal debt in total public debt decreased in 17 of the 24 countries, with notable declines in Canada, Norway, Australia, and Switzerland. Conversely, Sweden saw the largest increase, reflecting varying debt dynamics across countries.
Methodological Advances and Challenges
Developing these databases involved an innovative methodology, including the creation of a standardized taxonomy for financial indicators and close collaboration with National Statistics Institutes. Workshops and consultations with stakeholders helped refine the data collection process, ensuring consistency and reliability.
Despite these advances, challenges remain, particularly in harmonizing data across countries with varying accounting standards and definitions. Nonetheless, pioneering examples, such as Estonia’s Riigiraha platform and Mexico’s EFIPEM database, demonstrate the potential of automated and AI-driven solutions to enhance data accessibility and usability.
Next Steps
The REGOFI and MUNIFI databases represent only the beginning of an ongoing effort to refine subnational fiscal data. Future directions include:
- Expanding geographical and temporal coverage.
- Integrating new technologies, such as machine learning, to streamline data analysis.
- Strengthening international collaboration to address remaining methodological inconsistencies.
Conclusion
By “going granular,” the REGOFI and MUNIFI databases empower policymakers and researchers to make informed decisions rooted in robust data. These tools set a new benchmark for transparency and accountability in subnational public finance, paving the way for more equitable and effective governance worldwide.
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The OECD and DG Regio of the European Commission have partnered on the project “Strengthening Analytical Frameworks and Data on Subnational Government Finance and Public Employment.” The findings are detailed in the report “Going Granular with Regional and Municipal Fiscal Data: OECD and EU Countries”, (OECD, 2024), published as part of the OECD Regional Development Studies series by OECD Publishing, Paris.
