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Summary of IFUL Report 7/2008

Summary

In the Nordic welfare states (Island, Norway, Sweden, Finland, Denmark), an important principle has hitherto been to allow all citizens access to the same high-quality public services – independent of whether they live in urban or rural areas. In Denmark, however, this principle is gradually being abandoned.

One outcome has been closings of schools in peripheral rural areas. This evidently contributes to exacerbate depopulation in these areas. To stop this tendency, we need new models for high-quality, cost-effective public services in remote areas as those we find in Denmark. This report introduces such a model, termed: Local centralization. This involves establishment of multifunctional centres in marginal rural areas. The overall aim is to identify advantages and problems with establishing such centres, in order to formulate policy recommendations. First, I argue that governments should actively invest in rural areas rather than practicing laissez-faire. Second, drawing on cases from the Netherlands and Denmark I suggest that public and private donors should invest in multifunctional centres in which the local school is the dynamo. This is in order to facilitate creation of both social and human capital. Ideally, such centres should contain both public services such as school and health care, enterprises as banks, and facilities for local associations as sports halls. The centres should be designed to secure both economies of scale and geographic proximity. Empirical evidence indicates that such large meeting places facilitate formation of physical and social cohesion. And that the stock of beneficial bridging social capital thus created actually contributes to attract newcomers and thus counteract depopulation.