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Steering

the Metropolis
Metropolitan Governance for Sustainable Urban Development

Editors
David Gmez-lvarez Robin Rajack Eduardo Lpez-Moreno Gabriel Lanfranchi
David Gmez-lvarez
Coordinator

David Gmez-lvarez
Robin Rajack
Eduardo Lpez-Moreno
Gabriel Lanfranchi
Editors

Deborah Gonzalez Canada


Assistant editor

Sheila Mahoney and Alexis Arthur


Proofreaders

Alfonso Avalos
Graphic editorial designer

Melissa Amezcua
Managing editor

Inter-American
Development Bank

polticas pblicas
public policies

polticas pblicas
public policies
Cataloging-in-Publication data provided by the
Inter-American Development Bank
Felipe Herrera Library

Steering the metropolis: metropolitan governance for sustainable urban development /


David Gomez-Alvarez, Robin Rajack, Eduardo Lopez-Moreno, Gabriel Lanfranchi.

p. cm.
Includes bibliographic references.
978-1-59782-310-4 (Paperback)
978-1-59782-311-1 (PDF)

1. Metropolitan government. 2. Sustainable urban development-Government policy. I. Gomez-lvarez, David, 1972-,


editor. II. Rajack, Robin, editor. III. Lpez-Moreno, Eduardo, editor. IV. Lanfranchi, Gabriel, editor. V. Inter-American
Development Bank. Housing and Urban Development Division.

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Table of contents
Acknowledgements .................................................................................................9
David Gmez-lvarez (Transversal), Robin Rajack (Inter-American Development
Bank), Eduardo Lpez-Moreno (UN-Habitat), and Gabriel Lanfranchi (CIPPEC)

Foreword ................................................................................................................11
Dr. Joan Clos, Executive Director, UN-Habitat 11
Juan Pablo Bonilla, Sector Manager, Climate Change and Sustainable 12
Development, Inter-American Development Bank

CAF-Development Bank of Latin America 13


Itzcatl Tonatiuh Bravo Padilla, M.A. President of the University of Guadalajara 14
Reza Pourvaziry, Global Advocate of UN-Habitat, 15
President of International City Leaders and the international secretariat of
City Prosperity Initiative for Metropolitan Cities

Prologue ................................................................................................................16
Bruce Katz, Brookings Institution 16

Introduction ...........................................................................................................20
David Gmez-lvarez (Transversal), Robin Rajack (Inter-American Development
Bank), and Eduardo Lpez-Moreno (UN-Habitat)

Section 1. Theoretical perspectives on metropolitan governance..................... 49


1.1 Why Metropolitan Governance Matters and How to Achieve It.......51
Rudiger Ahrend (OECD), Soo Jin Kim (OECD), Alexander C. Lembcke (OECD) and
Abel Schumann (OECD)

1.2 Institutions for Metropolitan Governance: Lessons for


Nations and Stakeholders .............................................................61
Eugnie L. Birch (Penn Institute; General Assembly of Partners of the World Urban
Campaign)

1.3 Metropolitan Governance: The New Normal for Improved


Quality of Life .............................................................................73
Mats Andersson (Independent Consultant)

1.4 Dilemmas: Multilevel Government, Network Governance and


Policy Co-production ....................................................................86
Joan Subirats (Autonomous University of Barcelona)

3
1.5 Political Economy in the Global North and South: Connecting,
Financing, Ruling ..........................................................................98
Pedro B. Ortiz (World Bank), and Marco Kamiya (UN-Habitat)

1.6 The Rise of a New Discipline to Manage Metropolitan


Urban Systems.................................................................................113
Gabriel Lanfranchi (CIPPEC), and Antonella Contin (Universityof Politecnico
di Milano)

1.7 Collaborative Governance: Improving Sustainability of Development


in Metropolises............................................................................123
Brian Roberts (University of Canberra), and John Abbott (John Abbott Planning)

1.8 Mega-city Region Governance and Urban Planning.......................140


Jiang Xu (University of Hong Kong), and Anthony Yeh (University of Hong Kong)

Section 2. Sectoral approaches to metropolitan governance ................................ 155


2.1 Metropolitan Governance and the Urban Economy........................157
Michael A. Cohen (Milano School of International Affairs, Management, and Urban Policy)

2.2 Metropolitan Governance for Land Use: Current Practices and


Alternative Approaches ..............................................................163
Cynthia Goytia (Torcuato Di Tella University)

2.3 Developing Metropolitan Finance in the Broader Fiscal and


Institutional Context .......................................................................174
Paul Smoke (NYU Wagner Graduate School of Public Service)

2.4 Measuring and Monitoring Metropolitan Governance....................186


Patricia McCarney (University of Toronto)

2.5 Steering the Metropolises to Shared Prosperity: The City


Prosperity Initiative.......................................................................195
Eduardo Lpez-Moreno (UN-Habitat), and Regina Orvaanos Murgua (UN-Habitat)

2.6 Climate Governance in Metropolitan Regions ...............................209


Harriet Bulkeley (Durham University), and Andres Luque-Ayala (Durham University)

2.7 Metropolitan Governance for Urban Climate Resilience................218


Ayesha Dinshaw (World Resources Institute), Brittany Giroux Lane (Open
Government Partnership), and Katerina Elias-Trostmann (World Resources Institute)

2.8 Metropolitan Governance for Sustainable Mobility........................225


Christopher Zegras (Massachusetts Institute of Technology)
Section 3. Building metropolitan governance: lessons and good practices ......... 241
3.1 Greater Cairo: Dominant National Authorities and
Fragmented Responsibilities ........................................................243
David Sims (Urban specialist)

3.2 Metropolitan Governance in South Africa: eThekwini City Council ..254


Purshottama Sivanarain Reddy (University of Kwazulu)

3.3 Political Stability, Metropolitan Governance, and


Transformation in Lagos.................................................................263
Femi Olokesusi (Independent Consultant), and Samuel Danjuma
Wapwera (Univeristy of Jos)

3.4 Bogot: Cities System and Territorial Organization...................... 273


Carlos Crdoba Martnez (Central Region of Colombia), and
Jorge Ivn Gonzlez (National University of Colombia)

3.5 Advancing Metropolitan Governance in Buenos Aires ..................280


Francisca M. Rojas (Inter-American Development Bank)

3.6 Guadalajara, Mexicos Metropolitan Governance Laboratory........290


Karina Blanco-Ochoa (Specialist in Development Policy), Efrn Osorio-Lara (UN
Habitat), and David Gmez-lvarez (University of Guadalajara, Mexico)

3.7 Metropolitan Reform in Mexico City: Some Key Ideas..................299


Alfonso Iracheta, Colegio Mexiquense

3.8 Governing the Metropolis: New York and the Metropolitan Region...308
Thomas K. Wright (Regional Plan Association)

3.9 Replacing Sprawl with Compact, Sustainable Regional


Development in Portland, Oregon ..................................................314
Robert Liberty (Urban Sustainability Accelerator)

3.10 Recent Trajectory and Perspectives in Greater So Paulo............. 323


Jeroen Klink (Universidade Federal do ABC)

3.11 Toronto: Metropolitan Transformation and


the Governance of Sustainability .....................................................332
Gabriel Eidelman (University of Toronto), Martin Horak (University of Western
Ontario), and Richard Stren (Unviersity of Toronto, Global Cities Institute)

5
3.12 Beijing-Tianjin-Hebei: Regional Governance Under a Highly
Centralized Political System .........................................................341
Yan Tang (Tsinghua University), Dong Yang (Tsinghua University), Kai Chen
(Tsinghua University), and He Zhu (Tsinghua University)

3.13 Governance in Indian Metropolises:Delhi .........................................351


Debolina Kundu (National Institute of Urban Affairs, India)

3.14 Metropolitan Governance as a Strategy to Resolve


the Mumbai Conundrum ..................................................................360
Abhay Pethe (University of Mumbai), Sahil Gandhi (Tata Institute of Social
Sciences), and Vaidehi Tandel (IDFC Institute, Mumbai)

3.15 Seoul: Vertical and Horizontal Governance .....................................370


Myounggu Kang (University of Seoul)

3.16 Changing Governance of Urban Redevelopment in Shanghai ........381


Jie Chen, Shanghai (University of Finance and Economics) and Zhumin Xu
(University of Hong Kong)

3.17 The Negotiated City: London Governance for


a Sustainable World City ..................................................................391
Greg Clark (Specialist), Tim Moonen (The Business of Cities), and Jonathan,
Couturier (The Business of Cities)

3.18 Grand Paris, Metropolitan Governance By Design?........................405


Nicholas Buchoud (Grand Paris Alliance for Metropolitan Development)

3.19 Efficient as a Prerequisite for Sustainable Regional Governance:


Joining Forces in Stuttgart Region ................................................414
Thomas Kiwitt (Verband Region Stuttgart), and Dorothee Lang (Verband Region Stuttgart)

Metropolitanism: Final Remarks on Steering the Metropolis ........................423


By David Gmez-lvarez and Gabriel Lanfranchi

List of Contributors .............................................................................................433

6 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


Inter-American
Development Bank
7
Acknowledgments
David Gmez-lvarez (Transversal), Robin Rajack (Inter-American Development Bank),
Eduardo Lpez-Moreno (UN-Habitat), and Gabriel Lanfranchi (CIPPEC)

This publication, like many of its kind, is the result of Director; Elkin Velzquez, UN-Habitat representative
a long process and the collaboration of many people. for Latin America; Erik Vitrup, former UN-Habitat
It is important for us to take a moment to recognize representative in Mexico; and Efrn Osorio, UN-
each and every contributors effort and talent. Habitat officialkey to promoting both the Forum
The Steering the Metropolis project was born out and the bookdeserve special recognition.
of the preparations for the International Metropolitan We also want to thank CAF, the Development
Governance Forum that took place in November 2015 Bank of Latin America, particularly Emil Rodriguez
in Guadalajara, Mexico. The event brought together Garabot, Executive to the Institutional Development
over a hundred renowned specialists, and remains a Office. Our gratitude goes to CIPPEC, the Argentinian
reference for metropolitan discussions worldwide. At think tank that supports and makes the online open
the time, many panelists agreed to write a chapter for a book project possible, and to International City
joint publication. Those became the first steps for the Leaders from Canada for their contribution to final-
book project. Though it is not possible to name each izing the publication. We also want to thank SPURS,
of the 64 book authors here, we want to acknowledge the Special Program on Urban and Regional Studies at
the quality of their work and their patience with the MIT, for the interest in this project, particularly Bish
editorial processes as a whole. Sanyal, SPURSs director.
The Inter-American Development Bank con- The peer review process was carried out by Victor
tributed greatly to this book. Firstly, we would Vergara, World Bank specialist in urban and metropol-
like to acknowledge the Special Program for itan studies, whom until recently led the World Banks
Institutional Development (SPID), managed by Metropolitan Governance program. We thank him for
the IADB, which provided significant financial his exceptional contribution revising the manuscript.
support for the editorial process. Helpful guidance In addition, we want to thank CONACYT, the
was provided by Tatiana Gallego Lizon, Division National Science and Technology Council, for making
Chief for Housing and Urban Development, Allen the International Forum possible in the first place,
Blackman, Economics Principal Advisor, Climate and in particular Enrique Cabrero. Also the Jalisco
Change and Sustainable Development, and Rita State Government, in Mexico, for their support in
Funaro, Publications Senior Specialist, in the Banks organizing the Forum. We are particularly grateful
Research group. Constructive feedback on various to UdeG, University of Guadalajara, for supporting
parts of this publication was also provided by Osmel the final steps and printing the book. We appreciate
Enrique Manzano, Fabiano Rodrigues Bastos, Marta Tonatiuh Bravo Padilla, UdeGs President, as well as
Ruiz Arranz, Michael Donovan and Nora Libertun to Ernesto Villaruel Alvarado, UdeGs advisor to the
de Duren. On the production side, Emilia Aragn President, for their valuable support and commitment.
Rocha, Cristina Caldern Restrepo and Mildred We also want to thank Policy Lab Mexico, particularly
Rivera also played important roles. Ana Cecilia de Alba Gonzalez, Executive Director,
We also want to show our appreciation to UN- and Gerardo Farah, Adjunct Director, for their insti-
Habitat for supporting the Forum and for believing tutional and financial support. Our gratitude goes to
in the book and its potential to become a global refer- Transversal think tank in Mexico as well, particularly
ence on the subject. Joan Clos, UN-Habitat Executive to the Executive Director, Alberto Sandoval Uribe

9
and Research Director, Oliver Meza Canales, for facil-
itating the International Conference on Metropolitan
Governance, as well as in reviewing the design and
contents of the book.
Finally, we wish to acknowledge the good work of
the editorial team. First, we want to thank Deborah
Gonzalez Canada, assistant editor to Steering the
Metropolis, who coordinated the last stages of the
editorial work and greatly contributed to writing the
introduction and final remarks. Her dedication and
professional capacity as editor have been critical to
the book quality. We also want to express our grati-
tude to our proofreaders, Alexis Arthur and Sheila M.
Mahoney, for their thorough review of the book chap-
ters. Likewise, we are thankful to Melissa Amezcua,
managing editor responsible for the first stages of the
book and for acting as a liaison with the numerous
authors. We wish to acknowledge Alfonso Avalos as
well, our graphic editorial designer, for his creative
and detailed-oriented work that allowed us to publish
a book in line with international standards. One final
expression of gratitude goes to Karina Blanco Ochoa
and Luis Ramirez Barreda, for their contribution to
reviewing and translating parts of the book.
Foreword
Dr. Joan Clos, Executive Director, UN-Habitat

Steering the Metropolis is an enriching in-depth com- needs of the people and to solve the political architec-
parative analysis of metropolitan governance ture for effective metropolitan governance.
worldwide that comes at a crucial moment of the The book presents a rigorous analysis of the most
implementation process of the New Urban Agenda, pressing challenges of metropolitan governance and
the outcome document of Habitat III, adopted in policy measures to address them, constituting an in-
Quito (Ecuador). valuable and innovative tool for subnational (regional/
Habitat III consolidated the vision of urbaniza- provincial) and local governments in their efforts in
tion as a strategic issue for sustainable development. achieving sustainable urban development.
This new vision builds on the transformative power of By examining these complex issues surrounding
urbanization as an endogenous source of prosperity metropolitan governance, Steering the Metropolis serves
and growth and of how urbanization contributes to as an authoritative study on urban governance devel-
the national economy and to generating employment. oped by senior renowned experts on the science and
Indeed, metropolises have become key actors in this art of urbanization.
process as true engines of innovation, economic
growth and development.
However, urbanization is taking place at a very
rapid speed and many national, metropolitan and
local governments can no longer control the process.
In many cases, metropolitan and local governments
have not been given the means to address these chal-
lenges, paving the way for dysfunctional problems of
the metropolis. If the challenges of our metropolises
are not steered and governed properly, urbanization
could become in a serious strategic risk for humanity,
deepening the existing social inequalities, poverty, in-
security, and lack of efficient transport systems among
other problems.
In fact, metropolitan governance tends to be a
politically contested issue that intrudes into existing
governance models, between the layer of subnational
and local levels. As cities are growing and metropoli-
tan areas are getting more complex, there is an emerg-
ing need to find a specific solution to the governance
of that reality.
This process tends to conflict with the existing
government structures. In many places of the world it
ends in lack of action, postponement and protracted
political negotiations between the different levels of
power. Attention is therefore required to serve the

11
Foreword
Juan Pablo Bonilla, Sector Manager, Climate Change and Sustainable Development, Inter-American Development Bank

While metropolitan development is expanding the size governance and degree of subsidiarity; the stage of
of labor and consumer markets in many cities, it is urbanization; and the sector in question.
creating new demands for the effective management This book, developed in conjunction with several
of basic services, mobility, investment, social interac- of our partners and sister institutions, complements
tion and a shared environment. In Latin America and our ongoing efforts to provide guidance to our
the Caribbean these challenges are especially acute government counterparts in the region. To catalyze
because of the rapidly increasing urbanization levels innovation and change, our new Housing and Urban
in the latter half of the twentieth century and weak Development Division, under the Climate Change
productivity growth. and Sustainable Development Sector, has recently
Coming shortly after the formal launch of the launched the Cities Lab which, together with the
Sustainable Development Goals and the New Urban Network of Cities and our policy research teams,
Agenda, and amid a growing understanding of the will support metropolitan leaders experimentation
critical role that urban centers will need to play if they and exchange of experiences and best practices. We
are to be achieved, the book Steering the Metropolis: expect this book to be a key ingredient in such lateral
Metropolitan Governance for Sustainable Urban exchanges and help these leaders improve the quality
Development offers an organized set of reflections of life in our cities.
of many of the worlds leading urban scholars and
practitioners on urban governance. The book adds
significant value to the existing literature by organiz-
ing reflections on three distinct but interconnected
aspects of metropolitan governance: elaboration of
core concepts and rationales; dedicated discourses
on sectoral applications of those core concepts; and
case study illustrations of actual attempts to bring
those concepts and sectoral applications to bear on
the metropolitan space taking into account complex
political, administrative and demographic factors.
Since the turn of the century, we at the Inter-
American Development Bank have been helping
governments in the Latin America and Caribbean re-
gion confront the implications of this new reality. We
have been doing so through innovative urban lending
operations that incentivize coordinated metropolitan
planning and implementation, technical cooperation
and research. While some progress has been achieved,
much remains to be done, particularly in devising
and implementing the appropriate governance ar-
rangements, which may vary according to contextual
factors. Such factors include the prevailing form of

12 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


Foreword
CAF-Development Bank of Latin America

The transformations of productive structures that are, more than a financial institution, an instrument
took place after the so-called post-Fordist period have of regional integration present in 17 countries of
exerted a determining influence on the morphology Latin America and the Caribbean, Spain and Portugal.
of the territory on a global scale. New urban agglom- Most of the projects we support from our different
eration models respond to logics differently from pre- departments and vice-presidencies have direct impact
vious configurations. Current processes of territorial on a metropolitan scale (real estate development proj-
metropolization are much more complex in terms of ects, transportation and environmental infrastructures,
heterogeneity than the polarity between center and etc.); however, we promote through them a model of
periphery that existed in previous decades. sustainable development that seeks to improve the
These new metropolitan configurations introduce quality of life of Latin Americans.
us to an undefined governmental modality that is From the institutional point of view, CAFs
moving political power away from traditional sources, Corporate Direction of Institutional Development
and fitting together diverse urban centers, landscapes works together with local, subnational and national
of dispersion, infrastructures, equipment, and terri- governments to improve of their capacities to deal
torial discontinuities, chained by the interaction be- with territorial and administrative decentralization
tween economic, environmental, and cultural policies. processes, paying special attention to training their
The organization of these intermediate-scale pieces human capital through our capacity building programs,
represents an important legal and administrative chal- designed to build stronger inter-institutional coordina-
lenge for tackling the negative effects of externalities tion, shared leadership, and multi-sector governance.
on a global system that, until now, has been promoting Over the last 16 years, we have created a potential net-
competitiveness over collaboration. work of more than 60,000 participants composed of
It is well known that the states of emerging econo- young high-level executives from business and inno-
mies find it difficult to effectively participate as part of vation sectors, public officials, leaders of civil society
a network of global competitiveness as they struggle organizations and senior officials from Latin America.
to sustain effective national policies; at the same time, Steering the Metropolis comes in time to further re-
local governments of these countriesin spite of spond to this urgent call. It is compelling information
the advances in the decentralization processesdo that will help us to better understand the logic behind
not have the state capacities to coordinate integral this contemporary phenomenon, providing us a com-
urban development, particularly in Latin America prehensive theoretical approach and a set of good
which, according to the UN-Habitat report, registers practices required to better manage technical, social
the highest rates of urbanization and simultaneously and political aspects of Metropolitan Governance.
the highest levels of social inequality and violence in Without a doubt, it is a great opportunity to democ-
the world. This paradox raises two questions: How to ratize dispersed knowledge worldwide, as it gathers
govern this territorial complexity from an inclusive together most relevant documentation from global
local perspective? Is the scope of metropolitan areas experts and international practitioners; and particu-
the new space of opportunity to promote sustainable larly for us, it is a reminder of our commitment to
development of emerging economies? the cohesion of the systems of cities of our Member
We at CAF-Development Bank of Latin America States, as the main drivers of shared human and eco-
are interested in the answers to these questions as we nomic development.

13
Foreword
Itzcatl Tonatiuh Bravo Padilla, M.A., President of the University of Guadalajara

Cities have been transformed into key economic el- require collaboration schemes that warranty long-term
ements of global networks. They are no longer seen actions, involvement of different stakeholders and
as human settlements that only provide basic needs decentralization of processes.
to their inhabitants. Instead, urbanization, as seen in Despite urbanization externalities of overcrowd-
the second half of 20th century, has created a com- ing, congestion, pollution and crime, cities and
plex network of economic functions, societies and metropolises nowadays are increasingly seen as the
territories. In this context, the need for metropolitan national economic power generators and the places
governance is emerging. However, there is still little for social interaction, innovation and development.
experience in the development of this field of theory The dilemma is how to make the city a catalyst for
and practice, as some authors have stated. innovation and economic development, and, at the
The International Metropolitan Governance same time, how to guarantee sustainable growth.
Forum held in the City of Guadalajara in 2015 The University of Guadalajara, whose mandate
brought together a large number of specialists inter- and mission is to support innovation and knowledge
ested in a new way of governing big cities. It is an creation for the betterment of society, is pleased to
interest that has also guided the discussion at other support this relevant work, which explores new di-
international forums, such as the recent third World rections to organize and govern the metropolis in a
Forum on Human Settlements and Habitat III, which sustainable way for the generations to come.
gave rise to the New Urban Agenda.
The present work, Steering the Metropolis, pro-
vides a deep insight into metropolitan governance,
coordination and planning approaches in order to
better understand the political constraints of tradi-
tional governance structures along with the challenges
involving different government functions and levels.
It encompasses an enriched discussion in over thirty
essays regarding this new discipline, provided by top
scholars and practitioners worldwide.
This international perspective provides a set of
tools particularly relevant for developing countries,
which experience greater difficulties due to the current
conditions of rapid urbanization, population growth
and inequality; conditions that are reproduced in
most Latin American metropolises. In Mexico, the
metropolitan approach is often analyzed by describing
the constraints and limitations to create multilevel
governance or new local structures. The metropolis
can no longer be understood simply as an aggregate
of spatially continuous territories as seen in the past
four decades; metropolises are complex areas that

14 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


Foreword
Reza Pourvaziry, Global Advocate of UN-Habitat, President of International City Leaders and the international
secretariat of City Prosperity Initiative for Metropolitan Cities

Sustainable urban development is a key and funda- of development, understand them, and to take steps
mental concept that will be realized in interaction to fulfill those plans considering the real resources
with other cities experiences, cities that have dif- of the cities.
ferent dimensions, performances, and approaches. The New Urban Agenda is a basic document of
Different parts of this fact are formed as a result of the United Nations Human Settlements Program
successes and failures of urban management systems. (UN-Habitat) and has been specially formulated by
Various methods that exist for solving urban this organization. This is an applied program which
issues and have been developed by urban man- can be realized in metropolises if the managers of
agers as a result of their efforts combined with those cities can formulate exact executive plans for
global knowledge of urban management must be performing it. It is essential that an interactive re-
exchanged and shared between urban authorities. lation should be formed between the book Steering
Understanding complex dimensions of urban is- the Metropolis and The New Urban Agenda so that
sues does not become possible without focusing this document can be used as a basis for designing
on existing solutions. The uniformity of lifestyles action plans for metropolises. Besides, from a stra-
in the world that is the consequence of uniform tegic point of view it will be required to develop
and consistent use of technologies and tools and the structured network of researchers associated
is further enhanced by being addressed by the with Steering the Metropolis so that they can build
virtual networks, the media, and the global village capacities to define metropolitan issues within the
have caused the metropolitan issues to be mainly frameworks of a structured plan with the support
common across the cities. of UN-Habitat.
Problems associated with infrastructures, public On the other hand, the global foundation
transportation networks, quality of air and other International City Leaders, as the international sec-
biological resources among other major problems retariat of City Prosperity Initiative for Metropolitan
of metropolises have nearly the same structures Cities (CPI-MC), developed and transformed into a
and patterns in different cities. Therefore, in order study platform for urban managers.
to reduce urban issues, save costs, and improve the The World Assembly of Islamic Cities acknowl-
quality of life, fundamental research about managing edges this valuable scientific endeavor and express-
and steering the metropolises is required. Steering the es its readiness to convey the scientific content
Metropolis is one of the most significant attempts to of this research to Middle East metropolises. It
gain support from other metropolises. is necessary to translate this set of research and
It is assumed that the pace of urbanization based submit them to urban managers and researchers
on the circumstances of the contemporary world on urban issues, and to undertake similar measures
and the advancement of technology has been be- with a special focus on diverse civil sphere of the
yond all expectations. Developing urbanization is an Islamic cities. It is hoped that such international
introduction to the formation of metropolises and interactions can pave the way for the improvement
megapolises. Managing the quality of life of these of content and functions of urban managerial
large populations needs special planning. Such plan- methods and to increase the quality of residence
ning should take into account all diverse dimensions in cities significantly.

15
Prologue
Bruce Katz, Brookings Institution

It may be overstated that our current moment feels and delivered in rapidly urbanizing metropolitan ar-
like one of great change, but todays economic and eas where governance is dispersed and divided while
political dynamics seem to be ushering in a transition incentives for sustainable practices are opaque at best.
from an era of nation-states to one of city-statesan Without improved governance structures and better
era in which globally connected metropolitan areas coordination across municipal boundaries, growing
are the key unit of the economy. At the same time megacities are liable to repeat many mistakes of the
that city power is rising, so too are a suite of super- recent past and, as a global community, we will fail to
sized challengesfrom climate change, to industrial realize a lower-carbon future.
transition, to economic inequalitywhich demand Any study of metropolitan governance and devel-
new models of local governance and a fundamental opment benefits from the perspective of the United
reframing and re-focusing of the leadership class in Statesperhaps the first modern metropolitan
cities. We need to better understand what local and nation. By the 1950s, from east coast to west, devel-
metropolitan governance is and what powers those opment patterns and governance in the country varied
leaders have. This collection of essays, the product of wildlyfrom older, European-style cities surround-
more than two years of work by dozens of the worlds ed by small, fragmented municipal fiefdoms in the
top scholars, provides a roadmap for understanding Northeast, to sprawling Sun Belt cities in the south
these big questions. whose municipal boundaries expanded along with
It could not come at a better time. Local gover- their population. Through the second half of the 20th
nance and problem-solving is being reinvented in century, the urban form continued to evolve, with the
real time, creating what I call a New Localism, in building of the Federal Highway System, an accelera-
places that not only deploy the formal and informal tion of suburban sprawl fueled by white flight, and a
powers of government but also create and steward continued fragmentation of regional governance and
new multi-sector networks to advance inclusive, identity. For a long time, the only constant in regional
sustainable, and innovative growth. The practice of governance was strife and distrust between cities and
networked regional governance has run far ahead of their suburbs.
the scholarship, but many of the benefits are clear: Today, at the beginning of a truly urban century,
merging public accountability with private sector city and metropolitan leaders in the United States are
expertise; breaking down silos between traditional working to disentangle themselves from this legacy.
government bureaucracies and across municipal Population and employment is beginning to collapse
boundaries, and creating a leadership constituency back into the urban core, leading to hot downtown
that is focused on long-term outcomes, rather than real estate markets and chilling demand for exurban
election-cycle victories. office parks and housing developments. Small sub-
Todays great challenges require this type of urban municipalities who relied on buoyant housing
governance. Take, for example, climate change, one markets for tax revenue are scaling back services and
of the most existential issues facing major cities. facing hard facts about the fiscal sustainability of these
Sustainable physical development is a critical tool micro-governments. At the same time, transformative
for both decelerating and mitigating the impact of infrastructure projects and policies critical to regional
a changing climate and rising seas. Yet, most major competitiveness stretch across artificial municipal
infrastructure and development projects are designed boundaries, requiring coordination and cooperation

16 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


of multiple actors to solve challenges such as traffic checks and balances on any central governing party,
congestion and pollution. To respond to these new mitigating a third unfortunately prevalent threat: cor-
dynamics, places are repairing their fragmented gov- ruption. And, in the worst cases, responsibilities are
ernance working toward a new regionalism. shifted down to the local level without concomitant in-
And yet, urbanization (and metropolitanization) creases in fiscal power or any formal legal framework.
of a scale and pace that dwarfs that of America Yet, despite these challenges, governing at the
has been a dominant trend in developing countries metropolitan scale offers benefits beyond its cost
around the world for decades now. And even as especially in the realm of sustainable development.
Latin America is approaching the ceiling of its own With policy at the regional level delivered by cross-dis-
urbanization, many parts of Africa and Asia are still ciplinary networks of actorslocal government, but
in the midst of a massive migration. As a UN report also private sector innovators, civic organizations, and
released in advance of Habitat III observed, over research institutionsmetropolitan areas are more
500 cities around the world have now crossed the flexible and nimble than national governments, and
threshold of one million residents, often growing thus more able to experiment and solve complex
well beyond established municipal boundaries and problems. As the third section of this publication
the legal authorities of local governments. illustrates, innovations in governance and policy that
The question as these counties urbanize at such a are tested and proven in one region can quickly be
rapid pace is two-fold: How can they build cities that adapted and tailored for other areas.
dont repeat the mistakes of the past that are pros-
perous, sustainable, and inclusive? And, within these What Will It Take to Make
complicated and expansive settlements, what forms of
governance can incentivize sustainable growth while
this Happen?
also offering the capacity to enable it?
These were difficult questions 50 years ago; they First, we need continued culture change that elevates
have only grown more complex in the years since as the role of urban policy and metropolitan governance.
city responsibilities have grown. Many of the most The inclusion of cities within the UNs sustainable
pressing economic and social challenges we face are development goal is clearly encouraging, as was the
coming to ground in cities themselves: economic presence of urban and metropolitan leaders at the
inequality and technological upheaval, environmental UNs 2015 Climate Change Conference in Paris. Still,
degradation and unsustainable development, energy while bringing the urban agenda to international at-
and climate pressures; demographic change and social tention is critical, so too is developing a shared urban
unrest. These dynamics require a problem-solving agenda within a given metropolitan area. More un-
apparatus beyond the capabilities of national govern- derstanding is needed broadly about the importance
ments alone; metropolitan governance can provide of metropolitan governance and the mechanisms to
the solution. make it most effective.
Metropolitan governance itself is not without its The invention of this effective metropolitan gov-
own hurdles. Regional leaders must resist parochial- ernance will only happen with innovation and experi-
ismunderstanding that collaboration with neighbors mentation. Higher levels of government must enable
is imperative at a time when competition is global, not this through supportive devolution and consolidation
local. The limits of municipal capacity within govern- policies (such as those underway in the U.K., France,
ment demand a broader conception of governance, or Chile) and by relaxing regulations that encourage
one which includes the private and civic sectors as competition rather than cooperation at the regional
co-stewards of the metropolitan agenda. This type level. Local governments must set aside parochial-
of networked, distributed governance can provide ism in favor of collaborative governance. Ultimately,

17
innovations outside of the public sector will be nec-
essary toonew institutions that coordinate develop-
ment goals across sectors and municipal boundaries;
and new intermediaries that bridge the capacity gap
within government to implement new development
technologies or techniques.
Finally, these models must be replicated and scaled
throughout the world. While formal political struc-
tures differ across countries, many solutions can be
scaled, such as new financial instruments that allow
cities to fund sustainable projects with limited resourc-
es or new institutional designs that offer metropolitan
coordination without formal consolidation.
As I have stated, much of the practice of metropol-
itan governance has run far ahead of its scholarship.
Most local leaders I meet are pragmatic and motivated
problem solvers, who are constantly experimenting
with new ways of getting things done. This volume
offers an opportunity to reflect on what works and
what does not. The papers within contain our best un-
derstanding of the why and the how of metropolitan
governance. As a series of case studies from across the
world, they should be viewed not just a list of static
best-practice but rather as a set of solutions that can
be adapted and tailored to individual metropolitan sys-
tems. Metropolitan governance is an iterative, messy,
and practical exercise, not an academic one. My great-
est hope for any work of scholarship such as this one
is that it inspires and informs action on the ground
and remains, as the editors wisely encourage, a living
document that catalogs the never-ending invention of
evolution of local governance systems.

18 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


Inter-American
Development Bank
19
Introduction
David Gmez-lvarez (Transversal), Robin Rajack (Inter-American Development Bank), and
Eduardo Lpez-Moreno (UN-Habitat)

There is a growing (and exciting) debate around how Urbanization is environmentally sustainable when its
to govern metropolitan areas. Metropolitan issues are growth is based in responsible consumerism, when it does
complex, since they refer to themes of sustainability, not degrade the environment or deplete the natural re-
prosperity, equity, and quality of life, and in many cases sources, when surrounding ecosystems are preserved, and
they involve issues of both domestic and transnational when green areas and biodiversity corridors are planned
development. Discussing a metropolitan area can involve for and included in the urban mesh. In order to reach
national, regional, and local scales, as well as urban and higher sustainability levels, cities and their governments
rural spaces (EU, 2013). Metropolitan governance can be need to become aware of how much they depend on
strongly conditioned by com- the natural environment and
petition, conflict, and fragmen- the resources it provides, of
tation, and at the same time be Metropolitan governance the externalities that urban
a testimony of cooperation, lifestyle produces, and of the
is determined by the nature of the
collaboration, and concerted collective responsibility that
arrangements (Feiock, 2004). governance structures with relation urban settlers have toward the
Such complexity is one of the preservation and enhancement
to the levels of fragmentation or
factors that led to the crafting of the natural environment.
of Steering the Metropolis, a proj- consolidation, the degree and level The following pages
ect that commenced in 2015, summarize the main topics
of control over urban functions,
and a debate that remains and arguments in the book
open. The other is the mo- and the degree of formality in order to help the reader
mentum that the Sustainable navigate the material, which
or informality in the coordination
Development Goals and the consists of 37 chapters. We
New Urban Agenda created for of metropolitan area units. hope this introduction offers
discussing urban and metro- you a glimpse of the books
politan issues. richness, allowing you to ap-
The Sustainable Development Goals explicitly preciate the many layers to be uncovered. The book
acknowledge the importance of subnational gov- is structured in three sections followed by a chapter
ernments in achieving the 2030 Agenda. One of the with final remarks. Section 1 contains foundational
17 SDGs, Global Goal number 11, seeks to make contributions on the transversal topic of metropolitan
cities and human settlements inclusive, safe, resilient, governance, mainly the underlying rationales for met-
and sustainable. Global sustainable development ropolitan coordination and the challenges to achieving
requires urban sustainable development, particular- it. Section 2 deepens the discussion by addressing sec-
ly now that the majority of the human population toral themes such as mobility, land planning, environ-
lives in urban areas. The book Steering the Metropolis mental concerns, and economic production, as well
has been written with the SDGs in mind, under as cross-cutting topics of metropolitan governance
the premise that metropolitan governance is key to finance, and monitoring and evaluation. If Section
achieving Goal 11 and others. 1 offers an entry point to the topic of metropolitan
* We thank Deborah Gonzalez Canada, who provided insight and assistance in reviewing this chapter.

20 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


governance as a whole, Section 2 analyzes its parts, to such governance structures, notably Roberts and
help researchers and practitioners arrive at their own Abbott, Xu and Yeh, and Lanfranchi and Contin.
understanding and synthesis. Section 3 tests the ideas Section 1 concludes by presenting the main factors
and theoretical positions against the practice, with cas- that contribute to more effective and sustained met-
es from Africa, America, Asia, and Europe. The final ropolitan governance arrangements, primarily covered
remarks, far from concluding, highlight provocative by Andersson in Chapter 1.3 and by Ahrend, Kim,
thoughts of Steering the Metropolis, and invites readers Lembcke, et al. in Chapter 1.1.
to think about a future agenda for metropolitan theory
and practice. Urbanization Trends and the Metropolitan
Phenomenon
Section 1. Theoretical Perspectives on
There are no unique, universal definitions as to what
Metropolitan Governance are metropolitan areas, global metropolises, metropol-
itan regions, and so on. Definitions vary in the liter-
A distinctive feature of urbanization in the past 50 ature and, through this publication, the use of these
years is the expansion of urban populations beyond concepts varies across authors, cases, and contexts.
what was earlier conceived as the city limit. This has Regardless of the name and definition, the phenom-
rendered traditional municipal boundaries, and by ena is that the functional areas of cities continue to
extension, traditional governing structures and institu- transcend their political boundaries, with labor, ser-
tions, outdated (UN-Habitat, vice, and financial markets,
2008). The response to this as well as physical extensions
ongoing change, which results Urbanization is a transformative of cities, spreading across the
in metropolitan areas, has not jurisdictional territories of
force, and large metropolises are
been clear. Some metropol- several municipalities. Even
itan areas have attempted to the engines of the transformation. intermediate cities have spill-
tackle this by adopting more over effects of population
complex forms of organized growth into adjacent areas.
multi-level governance, while others still have quite The subsequent dominant urban development pattern
fragmented administrative units with limited forms of is a multitude of small administrative unitsmunic-
coordination. ipalities, communes, and districts, among others
This section discusses the conceptual underpin- comprising a larger physical agglomeration that is
nings of metro governance, analyzing why political, the metropolitan area. According to the UN-Habitat
technical, and administrative arrangements at this Global Sample of Cities (200 cities), more than 90
level of government are needed. It also expounds percent of cities with more than 100,000 inhabitants
on the benefits and the added value of metropolitan are composed of two or more administrative units, in
authorities and the social and economic impacts they some cases up to 30 or 40 administrative units. More
produce. Metropolitan governance models are diverse often than not, they are loosely coordinated, managed,
and complex, and the contributions in Section 1 pres- or governed.
ent both complementary and competing arguments Urbanization is a transformative force, and large
about the rationale, development patterns, capacities, metropolises are the engines of the transformation.
and experiences of these models. As a recent OECD study revealed, metropolises
Despite the need for, and importance of, metro tend to be more efficient and productive than cit-
governance structures, several authors also discuss ies (OECD, 2015), largely due to the economies
the major constraints or challenges for achieving of scale they generate. This is corroborated by the

21
UN-Habitat City Prosperity Initiative analysis, which At the same time, Ahrend et al. acknowledge
shows a moderate correlation between productivity that no specific model of metropolitan governance
and city size in Colombia and Mexico, with larger is necessarily better or more efficient than another.
agglomerations being more productive than smaller They suggest an incremental experimentation with
ones (Lpez-Moreno, and Orvaanos, Chapter 2.5). a selection of a few pilot experiences, as opposed to
In general, metropolises are engines of innovation, a one-shot uniform model. These authors highlight
economic growth, and development, and magnets for that many metropolitan governance arrangements
immigration and social and economic diversity (EU, will not be easily transferable and must be tailored to
2011). Still, Xu and Yeh (Chapter 1.8) argue that more local contexts.
theoretical and practical work is needed to explain the According to Birch (Chapter 1.2), however, there is
performance of regions and metropolises and the a need for what some have labeled a new global bar-
form they articulate with other levels of government gain and a new social contract to define the details of
for better results. these new arrangements for managing metropolitan
Metropolitan areas are both affected by the urbanization forms. Birch points out that, in order to
phenomenon of global transformation, while at the make urban places productive, a political, multi-tier,
same time they strongly influence it. Xu and Yeh de- multi-stakeholder governance mechanism must be
velop this idea, stressing that mega-city regions are built. According to Xu and Yeh (Chapter 1.8), this
not only competitive nodes of global capitalism but mechanism is essential to reconstruct the regulatory
they also contribute to reconstituting state spaces. power of the state. Xu and Yeh believe that metro-
Metropolitan areas are not only the interface be- politan governance structures are reinterpreting the
tween the global space and cities, but in many cases geographies of state space under transition, creating
they are also the interface between nation-states and new spatial strategies that are more democratic, open,
regions, as Ortiz and Kamiya point out in Chapter and selective, and responding to dynamic processes
1.5. Ortiz and Kamiya note that the galvanizing of co-production.
power of proximity, density, economies of scale, In Chapter 1.4, Subirats picks up on the notion
and agglomeration of metropolises contributes to of co-production and suggests that there is a need to
major national decision-making on infrastructure accept and promote the politicization of metropolitan
provision and economic development, playing a governance in order to advance from hierarchical,
fundamental political role in the governance of logical, segmented, technocratic, and traditional or-
cities and nations. ganizations to structures and reticular (networked)
Section 1 authors conceptualize metropolitan relations. Andersson (Chapter 1.3) notes that regional
areas and metropolitan governance, with each po- and metropolitan development is a new normal that
sition enriching the next. requires common issues to create a need for cooper-
According to Ahrend et al. (Chapter 1.1), many ation among local governments. Finally, Lanfranchi
attempts to reduce administrative fragmentation and Contin (Chapter 1.6) pursue this idea, calling
have fallen short of creating administrative cohe- for a new metropolitan discipline that can handle
sion and territorial coherence, with a large number the metropolitan phenomenon differently based on
of local governments having the power to veto an integrated vision of the various disciplines at the
metropolitan projects. Governance, in the conven- territorial scale.
tional sense, is sometimes reduced to governance The diversity of practices and examples of
bodies that are not able to make binding decisions metropolitan governance models and the complex-
and depend on the political willingness of actors. ity of issues are still a challenge for clear taxonomy.
Large metropolitan areas call for a mechanism to Operative terms such as management, collaboration,
govern them in a coherent fashion. and smart growth are often presented as substitutes

22 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


for metropolitan governance, not dealing directly approaches to planning, managing, and developing
with the fundamental notions of powers, hidden metropolitan areas in both developed and developing
interests, and conflicts that are essential components economies. Many metropolises, regions, and cities are
of governance mechanisms (Pieterse, 2015). Even engaged in some form of lower order cooperation
Section 1 contributors refer to forms of metropolitan that obstructs the pathway to sustainability. From the
governance using diverse terms, such as supra-urban strategic planning perspective of regions, Xu and Yeh
systems, confederate associations, collaborative gover- note that metro governments are encouraged as mech-
nance mechanisms, inter-dependent bodies, functional anisms of economic development policy and political
urban areas (as opposed to administrative borders), devices through which the state attempts to regain
functional regional spaces, structure of networks, control over their territory. These authors believe that
governance of flows, functional thinking areas, and metropolitan areas are needed as new institutional
polycentric responsibility architecture, among others. spaces, and they can represent significant strategic
Some basic consensus, however, is possible and sites in the performance of regulation. Finally, from
the following ideas are widely accepted. First, met- a political economy point of view, Ortiz and Kamiya
ropolitan governance is determined by the nature of (Chapter 1.5) point out that metropolitan management
the governance structures with relation to the levels and governance represent a framework for economics,
of fragmentation or consolidation, the degree and planning, and financing, and a new approach to recon-
level of control over urban functions, and the degree figure states and cities at the international and national
of formality or informality levels. These authors pursue
in the coordination of met- their analysis in noting that
Although competition among
ropolitan area units. Second, metro structures with clear
public and private sectors cities is common, proponents rules and governance in-
have a role to play in the frastructure are needed to
of collaborative metropolitan
formation and functioning steer between unacceptable
of these models and the legal governance argue that such social inequity and unsustain-
status of the metropolitan able economic inefficiency.
competition is inefficient.
area (Xu and Yeh, Chapter Finally, from a broader devel-
1.8). Third, there is real need opment perspective, Ahrend
to include social and political participation in the gov- et al. (Chapter 1.1) point out that the wellbeing and
ernance structures (Subirats, Chapter 1.4). economic prosperity of nations is largely determined
by their metro areas.
The Importance of Metropolitan The benefits of a better-structured governance
Governance mechanism with a clear status are patent. The authors
of this section repeatedly highlight the following
Metropolitan governance matters a great deal more advantages:
than one might think (OECD, 2015). It impedes or Metropolitan governance is better positioned
facilitates the sustainable development of regions, as to use strategic spatial planning and the man-
expounded by Roberts and Abbott in Chapter 1.7 and agement of the urban development process to
by Birch in Chapter 1.2. promote a sustainable compact form (Gwyndaf,
Various authors of this section present comple- 1999). Ahrend et al. estimate that up to 60 percent
mentary positions concerning the importance of met- of metro areas functions focus on different forms
ropolitan governance. Roberts and Abbott advocate of spatial and land use planning activities. According
for further elaborated forms of collaborative gov- to the authors, planning at the metropolitan level en-
ernance as a critical factor for enhanced sustainable courages more efficient land use, which can result in

23
the reducing urban sprawl and a concomitant increase vision with the appropriate supra-municipal structures
in densities. The empirical evidence provided by their can enhance agglomeration economies and produce
study is supported by other successful examples, higher multiplier effects over the economy and the
such as Manchester, Melbourne, and Toronto, which productivity of the region.
prove that, despite inherent tensions involved in the Metropolitan governments have a crucial role
governance of these metropolises, it is still possible in promoting equity and social cohesion. Metro
to translate metropolitan visions into local imple- areas are more efficient and productive than admin-
mentation with better coordination at different scales istratively defined cities, but they are not necessarily
(Gwyndaf, 1999). more equitable. Many metropolises perform below the
Metropolitan governance can better integrate national average in sectors such as income, productiv-
the entire public transport system in conjunction ity, skills, and employment (Ortiz, 2016). Many others
with planning and land uses. In Chapter 1.8, Xu exhibit significant intra-metropolitan inequalities that
and Yeh cite transportation as the most salient task are reflected in access to public goods, services, and
for metropolitan governance, representing up to 70 opportunities, as documented by the UN-Habitat City
percent of work of OECD metro governance bodies, Prosperity Initiative (Lpez-Moreno and Orvaanos,
as reported in a recent study (OECD, 2015). The effi- Chapter 2.5). Most studies on the performance of
cient integration of metropolitan public transport can metropolitan areas place emphasize the ability of
increase connectivity at the sub-city level, enhance co- metro structures to achieve economies of scale and
herence across transit modes, improve infrastructure agglomeration and to reduce negative externalities, but
provisioninducing new urban developmentsand in general, fewer references are made to their ability to
influence the operation of the system. Frankfurt, reduce inequality and cope with tensions and conflict.
Copenhagen, Berlin, and Hong Kong are some of the In Chapter 1.5, Ortiz and Kamiya note that economic
successful multimodal metro transport solutions that efficiency and social equity are in permanent struggle,
have adequately adapted to the urban form of the city and the role of metro governance is to address and
and contributed to the regions economic buoyancy. reduce this dichotomy, although this does not always
The urban economy and access to jobs are strongly happen. For Ortiz and Kamiya, metropolitan manage-
connected to efficient forms of metro governance ment must therefore steer between unacceptable social
and efficient transport systems, as the UN-Habitat inequity and unsustainable economic inefficiency.
report on sustainable urban mobility demonstrated Metropolitan governance can improve the finan-
(UN-Habitat, 2013). cial base and render a more efficient tax system.
Effective metropolitan governance has direct In most cases, municipalities belonging to the same
effects on productivity. Ahrend et al. provide com- metropolitan area exhibit differences in the structure
pelling evidence that the increase in population is of revenue and expenditures, fiscal disparities, degree
associated with productivity gains to a certain limit. of financial autonomy, difficulties in planning and
However, an OECD study (2015) showed that an financing important investments, and serious impedi-
increase in the number of municipalities is negatively ments in terms of revenue and tax-base sharing. Ortiz
correlated with productivity. Effective metropolitan and Kamiya underscore the fact that certain areas
structures are said to be key in amplifying productivity of knowledge, such as metropolitan finance, are still
and/or limiting productivity loss due to municipality exploratory fields. The lack of metropolitan finance
fragmentation. This opinion is shared by Andersson arrangements among different layers of government
(Chapter 1.3), who points to a need to broaden and makes it difficult to mobilize adequate investments for
deepen the understanding of productivity of the urban metropolitan infrastructure development and public
economy in order to address economic development goods. For Ortiz and Kamiya, it is clear that finan-
on the metropolitan scale. A forceful metropolitan cial constraints and fiscal crisis perpetuate poverty,

24 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


inequality, and social exclusion in lagging munici- governance arrangements on a metropolitan scale
palities and areas of the metropolises. More success tends to create fragmentation of service delivery and
stories, and the evaluation of their performance, are other forms of inefficiencies, such as environmen-
needed in areas such as metropolitan financial coor- tal sub-optimization and under-utilization of land.
dination, better use of incentives for inter-municipal Roberts and Abbott (Chapter 1.7) note that important
cooperation and governance, well-defined fiscal redis- metropolitan problems, such as traffic congestion, air
tribution mechanisms, and innovative forms to diver- and water pollution, and access to resources, are also
sify and expand the tax portfolio. Relevant examples largely attributed to the lack of integrated metropol-
are provided in Section 3 of this book. itan responses. It is apparent to these scholars that
Section 1 authors also referred to other benefits existing administrative structures cannot fully cope
brought about by metropolitan structures. Birch with the challenges connected to economic and social
(Chapter 1.2) elaborates on the role of metropolises realities in agglomerations, an argument clearly made
serving as a stabilization tool after an internal conflict by Ahrend et al.
among local authorities and stakeholders. Xu and As Xu and Yeh (Chapter 1.8) point out, the
Yeh (Chapter 1.8) link metropolitan governance with changing political and economic landscapes of these
economic resilience, and Andersson (Chapter 1.3) distinctive spatial formations do not only create or
with the notion of health risks and risk management. exacerbate negative externalities if they are poorly
Subirats (Chapter 1.4) points to the phenomenon managed, but also result in strategically valuable
of social segmentation and development opportunities
urban segregation and the being missed in areas such as
increase in forms of urban The constitution of an efficient transport, open space preser-
insecurity and violence that vation, quality of life, and eq-
metropolitan structures can metro government is not only uitable growth, among oth-
better address. The widening a technical decision, it is, ers. Moreover, as explained
gap in accessibility to social by Andersson in Chapter
and community services, and fundamentally, a political one. 1.3, the spatial mismatch of
the goal to use service de- economic integration and
livery as part of equalizing political fragmentation im-
programs over the metro area are also referred to by pedes commerce, reduces efficiency, and encourages
Roberts and Abbott (Chapter 1.7). wasteful competition.
Contributors to this section repeatedly highlighted
Challenges to Effective Metropolitan major challenges in the constitution of more coordi-
Governance nated and effective mechanisms of governance. In an
attempt to organize the authors thoughts, we identi-
Contributors to Section 1 clearly expound the prob- fied four types of challenges.
lems associated with poor administration and gover- Political resistance, institutional problems, and
nance of metropolitan areas. Ahrend et al. (Chapter related legal factors. Authors of this section are
1.1) observe that urbanization problems such as in unanimous accord that a significant obstacle to
uncontrolled suburban growth and sprawl, excessive creating metropolitan governance systems is resis-
low-density urbanization, environmental problems, tance from other levels of government, including the
and sometimes depletion of biodiversity and agri- national government, provinces, and regions, as well
cultural land result to a large extent from a lack of as the municipalities themselves. No existing level of
supra-municipal management. Andersson (Chapter government is likely to gracefully hand over power to a
1.3) highlights that the lack of formal or informal new metropolitan authority that could become a rival

25
center of power, point out Ahrend et al. in Chapter is necessary to better articulate the will of different
1.1, particularly in cases where metropolitan authori- actors, looking for scenarios with greater capacity for
ties were created by the central government. effective decision-making and governance in order to
In addition, several studies have shown that local address the challenges of coordination and problems
governments tend to compete more than cooperate of management. Lanfranchi and Contin (Chapter
among themselves, particularly those with fragmented 1.6) call for more effective forms of negotiation and
metropolitan structures (Shirley, 2002; UN-Habitat, participation techniques that require a metropolitanist,
2008). Although competition among cities is common, a different kind of professional profile, to deal with
proponents of collaborative metropolitan governance conflict and disagreement through new mediation
argue that such competition is inefficient. techniques.
Territorial mismatch and sectoral fragmentation. Funding problems and structural financial limita-
Institutions, territory, and administrative demarcations tions.Metropolitan areas lack stable revenue sources
do not coincide in most metropolitan areas. Usually not only to meet day-to-day demands and needs, but
metro governments do not cover the whole agglom- also to address long-term problems. With lack of
eration, leaving out municipalities that are the fastest fiscal powers, structural problems in raising financial
growing areas or those facing serious development resources, and legal and institutional difficulties in
challenges. Data and information about the metropolis making good use of their assets, metropolitan govern-
are often produced at a lower or higher administrative ments are chronically poor. This is a common theme
level, making it difficult to produce policies and plans throughout this section. Ahrend et al. (Chapter 1.1)
based on evidence for the entire metro area. A study note that internal differences in revenues, expenditure
on metropolitan governance in Europe, for instance, needs, and investment capacities are further aggravat-
found that with the increasing metropolitanization of ed by legal and institutional constraints to dealing with
the territory, any created structure quickly becomes ob- territorial disparities.
solete and few metropolitan governments possess the Birch (Chapter 1.2) believes that metropolises have
mechanisms to expand the perimeter of action (Toms, not yet developed a set of principles and governance
2015). The mismatch between economic integration institutions responsive to the pace and trajectory of
and political fragmentation is highlighted by Andersson 21st century urbanization. In relation to that, the next
(Chapter 1.3) and Xu and Yeh (Chapter 1.8), with the paragraphs indicate some ideas for efficient metropol-
latter authors calling for strategic visioning that encom- itan governance.
passes entire regions.
Absent or limited public participation. Social and Elements of Success for Efficient
political participation is often poor at the metropolitan Metropolitan Governance
level. In Chapter 1.4, Subirats notes the remarkable
obsolescence of the mechanisms of representation The constitution of an efficient metro government
and decision-making that have been used in govern- is not only a technical decision, it is, fundamentally, a
ing big cities. In the same vein, Birch (Chapter 1.2) political one. Without political legitimacy, decisions and
observes that many stakeholders have self-referential actions would not be accepted, particularly by local au-
histories, lack experience (and/or perhaps interest) in thorities. Everyone involved in the process needs to see
participation, and experience difficulties in agreeing clear advantages in bringing together the institutional
on the priorities or urgency of the work that emerges system with the economic and social development of
in collective discussions. The lack of public partici- cities in a territory. Lefebvres (2011) critical review of
pation is exacerbated by the fact that most metropol- metropolitan governments and governance in Western
itan governance bodies do not comprise members countries concludes that effective metro governance
directly elected by the people. Subirats argues that it entails the modernization of the institutional structure

26 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


of the territory with a powerful, autonomous, and le- governments to ordinary people through enhanced
gitimate (political) unit. mutual engagement. Along these lines, Subirats
Various authors in Section 1 believe that an incre- (Chapter 1.4) refers to the alternative of cooperative
mental approach to the constitution of metropolitan and social economy and the need to innovate, looking
governments is needed, starting with low-risk exam- for new forms of democratic decision-making and
ples that can mature over time to a more compre- participation. Ahrend et al. (Chapter 1.1), in turn,
hensive system of governance (see references to the advocate for the strong participation of the private
project-to-policy approach in Section 3 of this book sector. In addition to the voice of the local mayor,
as well, particularly in Chapter 3.5). Still others believe the business community can play a powerful role in
that full-fledged structures are to be defined and im- initiating a metropolitan reform.
plemented at once. Birch claims that an effective metropolitan gover-
Several authors in this section put forward specific nance system includes the presence of state and non-
proposals and road maps to constitute a metropolitan state participants with well-established collaboration
government. Based on their views, this final part of the mechanisms to design and implement policies. Subirats,
Section 1 summary lays out some of the key elements referencing Slacks work on managing the coordination
for successful, efficient metropolitan governance. of metropolitan areas (Slack, 2007), points in the same
In the discussion of national urban policy and in- direction. Subirats emphasizes the need to articulate
tergovernmental scales, Birch the will of different actors
(Chapter 1.2) contends that (public, private, and not-for-
a national urban policy to Governing the metropolis profit) in search of scenarios
promote institutional coordi- embodies some of our greatest with a greater capacity for
nation can define a stronger government and decisional
role for metropolitan govern- societal challenges: cooperation, effectiveness.
ments. She recommends pro- coordination, financial mobilization With respect to finance,
viding robust links between Andersson devotes the fi-
different territorial scales, in and prioritization, strategic nal part of Chapter 1.3 to
such a way that metropolises planning, and redistribution. proposing five strategies to
can have a function of con- enable effective metropolitan
trol and intermediation. governance, highlighting the
Leadership and multi-stakeholder participation, need for reliable sources of metropolitan financing, a
as addressed by Ortiz and Kamiya (Chapter 1.5), are position that is shared by Ahrend et al. (Chapter 1.1).
fundamental conditions to achieve the convergence These authors note that whichever financial schemes
of political forces dispersed across the metropoli- are adopted, metro governments need well-established
tan political economy. Ortiz and Kamiya note that and secure sources of income, potentially offering in-
strong metropolitan leaders can promote a sustained, centives and compensation to encourage metropolitan
comprehensive vision of regional development, re- compromise. This topic is further explored in Section
defining a new form of inclusive public action. Both 2 and in Section 3 where some successful practices to
Ortiz and Kamiya, and Birch note that metropolitan address metropolitan finance are presented.
governments must use a variety of participatory Finally, monitoring and evaluation can be an
channels and other inclusive tools to engage civil element of success for metropolitan governance.
society, resident associations, and local communities Comprehensive assessments produce benchmarks
in decision-making and implementation. A different and help define targets against which policies and
matrix of dialog is needed to ensure peer discussions practices can be measured, enabling metropolitan
of all institutions and actors in order to bring metro authorities to monitor progress and evaluate change.

27
These and other approaches are further analyzed in
Serviced Land and Housing, Including
Section 2 and summarized in the next subsection of
Transportation Infrastructure
this introduction. In this section of the book, the theme of serviced land
and housing, including transportation infrastructure,
Section 2. Sectoral Approaches to is primarily covered in the two chapters by Goytia
(Chapter 2.2) and Zegras (Chapter 2.8), as well as par-
Metropolitan Governance tially in the chapter by Lpez-Moreno and Orvaanos
(Chapter 2.5). The common thread is emphasis on the
Governing the metropolis embodies some of our potential gains from metropolitan-wide coordination
greatest societal challenges: cooperation, coordina- of land use regulation and the linkage between the
tion, financial mobilization and prioritization, strate- location of built development, especially housing, and
gic planning, and redistribution. While these are fa- connective infrastructure. Implicit in the perspective
miliar conceptual tasks at the national and state level of most contributing authors on this theme is advo-
in federal countries, at the metropolitan level there cacy for compact urban form and/or for improved
is a need to reconcile these pursuits with a discrete accessibility (see Zegras, Chapter 2.8).
and contiguous physical territory. In the metropolitan Goytia argues from several distinct perspectives.
territory, this reconcilia- First, and perhaps most
tion is primarily pursued fundamentally, like Lpez-
not at the conceptual level Getting their governance right Moreno and Orvaanos,
but by producing and pro- she contends that a failure
viding tangible goods and is of critical importance given that to coordinate land use reg-
services in three areas: cities and metropolitan areas are ulation in the metropolitan
serviced land and housing, area runs the risk of un-
including transportation responsible for approximately three- dermining the formation
infrastructure; economic quarters of global greenhouse gas of agglomeration econo-
production; and environ- mies associated with the
mental services and exter- emissions from final energy use. co-location and interaction
nalities. Section 2 of this of firms (Glaeser, 1998).
book includes chapters Indeed, as Cohen points
that examine each of these three sets of goods and out in Chapter 2.1, urban density is a proxy for a set of
services on the metropolitan scale. It also addresses necessary urban services and interactions that make cit-
the cross-cutting dimensions of finance and moni- ies attractive places to live and work (Buckley, Kallergis,
toring and evaluation. and Wainer, 2015) and therefore leveraging land use
In looking at each of these sets of public goods regulation and planning to achieve optimal density
and services, the emphasis is on the specific rationale while maximizing productivity and employment ought
and to some extent on existing mechanisms for coor- to be a metropolitan policy priority.
dination and management. Among the rationales or Given that such benefits are at the heart of our
incentives for a cooperative approach are economies understanding of what makes cities the productive
of scale; competitive advantage of one part of a engines of growth and magnets for population and
metropolitan area over another to produce particular innovation, this is a critically important line of analysis.
goods and services; reducing negative externalities; At its essence is the notion that within a metropolis,
maximizing the welfare of those who live or work in inter-jurisdictional competition to attract investments
the metropolitan area; and bolstering of fiscal strength can create perverse incentives associated with a race to
and autonomy. the bottom whereby, in pursuit of an advantage over

28 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


the competition, some municipalities relax aspects of Some studies (e.g., Altshuler, Morrill, Wolman, et al.,
their land use regulatory regimes. The critique is that 1999) have asserted that adequate coordination facil-
this is being carried out with little regard for the bene- itates timely and more cost-effective infrastructure
fits of achieving agglomeration economies in strategic investment and planning for large-scale metropolitan
parts of the metropolis to produce or provide specific urban development and found that metropolises
products or services, and as a result harms the overall with more fragmented land use planning governance
competitiveness of the metropolis. Moreover, the are more likely to have less dense suburban develop-
resulting variability in regulatory provisions for land ment, in addition to favoring decentralized, dispersed
use and construction creates a less than predictable in- development and sprawl (e.g., Altshuler et al., 1999;
vestment framework thereby adding to the transaction Burchfield, Overman, Puga, et al., 2006). Goytia
costs of doing business in that metropolis. At the core contends that this observed inefficient pattern of
of an effective metropolitan method is a coordinated expansion in the global south is largely a result of
approach to land use and construction regulation administrative fragmentation and uncoordinated
in which the focus on productivity associated with land use governance across metropolises.
strategic co-location of complimentary firms and While Goytias resulting call for a more coordinat-
the advantage of presenting a common real-property ed approach to land use allocation in order to reduce
investment interface are never lost. future sprawl seems reasonable, the extent of causality
The chapters by Goytia and by Lpez-Moreno that can be attributed to the governance arrangements
and Orvaanos also raise alarms over the inefficient has not been empirically verified. Instead, the same
pattern of spatial expansion that characterizes both study led by UN-Habitat found that less than half
the past and future trajectory of metropolitan phys- of cities expansion areas between 1990 and 2015
ical growth. They cite a recent body of empirical were formally planned, leaving open this question of
evidence demonstrating that, in the cities of less causality. Inefficient urban expansion in the global
developed countries, urban extension increased on south has been occurring first and foremost in a gov-
average by a factor of 3.5 between 1990 and 2015, ernance context of limited influence at the municipal
while urban population growth doubled over the same level over formal land use planning and construction
period (UN-Habitat, New York University, and Lincoln regulation. It is not obvious that stronger coordination
Institute of Land Policy, 2016). The resultas cited by among these municipal planning arrangements would
Lpez-Moreno and Orvaanosis that urban sprawl have created greater land use efficiencies on the met-
and suburbanization is becoming more prevalent across ropolitan scale in the absence of more fundamental
all regions and residential densities are drastically declin- restructuring in the approach to urban planning and
ing. Goytia contends that this is spatially inefficient as land use regulation.
a high ratio of land consumption to population growth Uncoordinated urban land use and construction regu-
increases the amount of undeveloped land converted lation across a metropolis also has adverse environmental
to urban development, thereby increasing the per capita sustainability impacts. As Goytia points out, consequen-
cost to provide basic services and other hard infrastruc- tial environmental functions such as watershed and flood
ture. Low-density development also compromises the management require supra-municipal coordination as
cost-efficiency and viability of providing public trans- their land use footprint does not typically coincide with
portation, especially mass transit options. municipal boundaries. Therefore, associated land use
Referencing the same UN-Habitat led study actions in one municipality can create positive or negative
(2016), Goytia (Chapter 2.2) notes that, globally, impacts in others. Further, sprawling suburban develop-
since 2000, there has been a significant gap in the ment and deficient metropolitan land use governance
amount of land allocated to arterial roads within the inevitably takes more land out of its potential as a pro-
newly built expansion areas of most metropolises. vider of environmental services and necessitates higher

29
dependence on private vehicle usage for transportation, planning infrastructure and services for public and
which exacerbates production of greenhouse gases. private transport, roads and rails, passengers, and
In Chapter 2.8, Zegras picks up on this latter freight;
theme of sustainable metropolitan mobility, which he managing and regulating infrastructure and services,
had previously defined as maintaining the capability including parking, traffic, operating, and infrastruc-
to provide non-declining accessibility in time (Zegras, ture concessions, and licensing;
2011). Referencing the classic urban economy theo- designing, financing, investing in, and sometimes
ries of von Thnen and Heinrich (1966) and Alonso constructing and operating infrastructure and ser-
(1964), he reminds readers that within a metropolis, vices; and
people, firms, and other institutions interact with their collaborating with relevant authorities in related sec-
land use and mobility sub-systems, creating accessibil- tors, including land use planning and development,
ity to the daily requirements to survive and thrive. He environmental protection, public health, and safety.
argues that the generalized transport costs (e.g., time
and money) dictate the shape of the curve (willingness He notes that while technical barriers in these aspects
to pay for proximity) and the end of the built-up of metropolitan transportation governance have largely
zone (e.g., urban area boundary). For a monocentric been overcome, political barriers remain.
city, a mobility improvement vis--vis the central busi-
ness district will lower the land value of the district,
flatten the slope of the bid-rent curve, and extend Economic Production
the built-up area boundarya significant feature of
metropolitan management as earlier discussed. Zegras The theme of metropolitan governance and eco-
contends that mobility is actually a key functional nomic production is primarily covered in Chapter
metric to define the boundaries of a metropolis. In 2.1 by Cohen and partially by Lpez-Moreno and
support, he cites evidence from the European Union Orvaanos (Chapter 2.5), although other contributors
where, metropolitan areas (functional urban areas) are to this section inevitably touch on this important
defined based on the extent of a commuting zone, topic. For example, in Chapter 2.4, McCarney points
and from the United States, where the spatial scope out that metropolises represent the coincidence of
of metropolitan statistical areas is determined by the major markets, including those for labor, real estate,
degree of local jurisdictions social and economic finance and business, and services. She makes the
integration as measured by commuting ties based on point that such economic clout demands sound gover-
an employment interchange measure. nance arrangements to facilitate their roles as sites for
Zegras also addresses the governance dimension of economic production, agglomeration, and proximity,
urban mobility, identifying four salient factors: the scale and as staging grounds for connections to the global
and scope of the mobility problem, the nature of the economy. Indeed, the aforementioned OECD study
infrastructure and services, disciplinary and technocratic found that for a given population size, a metropolitan
differences, and the need to balance potential scale-relat- area with twice the number of municipalities is associ-
ed benefits versus localized preferences related to juris- ated with around 6 percent lower productivity (OECD,
dictional sorting. Using evidence from the United States, 2015). However, this effect is mitigated by almost half
Portugal, the European Union, Mexico, and Canada, he if a governance body exists at the metropolitan level.
draws attention to the influence of a nations historical This global economy is dynamic. In Chapter 2.1,
and political approach to decentralization in determining Cohen emphasizes that potential and comparative
metropolitan governance capabilities and realistic models. advantage are only realized in such an environment
He identifies the constituent elements of metropolitan if metropolises are able to adapt. He notes that the
transportation governance as: industrial structure of a metropolitan area produces

30 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


a specific level and distribution of salaries and that productivity and city size in Mexico. In general, they
macroeconomic policies such as import substitution find that larger Mexican agglomerations are more
in the 1950s have direct effects on the formation and productive than smaller ones as evidenced by average
level of income and productivity of metropolitan CPI productivity ratings of 48 and 43 points, respec-
areas. A fundamental question that he asks is wheth- tively. They point out that this is consistent with the
er the industrial structures of developing countries economic literature on the importance of the spatial
metropolises are sufficiently responsive, or whether concentration of the factors of production, residen-
new urban residents can only find jobs in the infor- tial densities, and economies of agglomeration as key
mal sector. factors for productivity and economic growth. And
Cohen notes that technology and the way in which they note that the finding also resonates with those
capital and labor are dynamically combined in the pro- of other CPI studies, such as those in 23 Colombian
duction process determines the levels of productivity metropolises (see Chapter 3.4 on Bogot, and UN-
and associated job creation (Anas and Lee, 1989). He Habitat, FINDETER, APC, SDDE, and CAF, 2015).
goes further by contending that productive employ- The correlation also aligns with those reported in the
ment also relies on the existence of public goods such OECDs recent Metropolitan Century Report (2015)
as infrastructure, a clean environment, public space, where for the most part OECDcountries experience
and an institutional regulatory their highest labor produc-
framework, most of which in tivity in metropolitan areas
turn depends on the capacity A fundamental monitoring and with populations greater than
to generate own-source public evaluation question is whether 5 million.
revenue. Although they may
be an exception, in Chapter observed outcomes on the
2.5 Lpez-Moreno and metropolitan scale are the result Environmental Services
Orvaanos appear to contra- and Externalities
dict this assertion. Within met- of the prevailing form of
ropolitan Guadalajara, Mexico, metropolitan governance. The third major theme in
the productivity sub-index Section 2 of the book is met-
of the UN-Habitats City ropolitan governance in the
Prosperity Initiative (CPI) was highest in the municipali- context of environmental services and associated
ty of El Salto, home to an important industrial corridor externalities. In contemporary debates, this is usually
specializing in the electronic and automotive industries framed around the phenomenon of climate change, as
but whose ratings for the other CPI sub-components of is the case with the chapters by Bulkeley and Luque-
infrastructure, quality of life, equity and inclusion, envi- Ayala (Chapter 2.6), and Dinshaw, Giroux Lane, and
ronmental sustainability, and governance and legislation Elias-Trostmann (Chapter 2.7). As pointed out in the
were so poor that the municipalitys overall CPI rating earlier discussion on serviced land and housing, in-
was the lowest in the metropolis. Perhaps out of implicit cluding transportation infrastructure, and as noted by
recognition of such statistical differences, Cohen con- McCarney in Chapter 2.4, metropolitan environmental
cludes by calling for a wider definition of metropolitan resources and infrastructure typically spread across mu-
productivity that includes both the positive and negative nicipal boundaries. As a result, their effective protection
externalities that firms and sectors generate at the city and management requires a coordinated approach to
and metropolitan levels, not dissimilar to the approach overcome sub-optimal outcomes resulting from admin-
adopted by Hseih and Moretti (2015). istrative fragmentation.
In Chapter 2.5, Lpez-Moreno and Orvaanos Getting their governance right is of critical im-
observe only a moderate correlation between portance given that cities and metropolitan areas are

31
responsible for approximately three-quarters of global Bulkeley and Luque-Ayala note that the transnation-
greenhouse gas emissions from final energy use (IPCC, al organization of cities is creating a horizontal form of
2014) and are disproportionately vulnerable to climate climate governance with internationally standardized
impacts due to their concentration of risks in terms reporting on progress that is helping cities gain room
of lives, cultural heritage, infrastructure, built envi- for political maneuvering in pursuit of domestic targets.
ronment, and the economy. As Bulkeley and Luque- They also recognize that partnerships with the private
Ayala point out, the urban scale focuses attention on sector and civil society both within and outside of
large- and small-scale metropolitan infrastructure the city are likewise emboldening city responses to
systems, positioning urban networks of energy, water, climate change even when national momentum may
waste, transport, information and communications be slower than desired. However, they are careful to
technology, and others as potential sites of interven- warn that metropolitan governance via partnerships
tion for effective climate responses, even if most of can be exclusive and omit direct participation of the
those efforts to date have been measures to support poor and other marginalized groups, raising questions
a reduction in greenhouse gases primarily through of legitimacy and transparency in decision-making, as
enhanced energy efficiency. discussed in Section 1. In a similar vein, in Chapter
As tempting as it may be to view climate change and 2.7, Dinshaw et al. contend that resilience planning
managing environmental risks in predominantly techno- at the metropolitan level needs to be the result of the
logical and hazard terms, both Bulkeley and Luque-Ayala scaling up local level planning. They note that the typ-
and Dinshaw et al. stress the importance of political, ical practice of scaling down to the local level. Plans
socioeconomic, equity, and governance lenses. As the conceived at a higher level often overlook community
former note, policy development such as decarboniza- participation, community-driven data or assets, capac-
tion or resilience action plans needs to be fully cognizant ities, and present vulnerabilities (Von Aalst, Cannon,
of how such policies are limited by prevailing social and and Burton, 2008). They describe Quito, Ecuador, with
material realities of the city (Lovell, Bulkeley, and Owens, its Panel on Climate Change and the Climate Change
2009). Among those realities are the perceived fairness of Metropolitan Committee, as a model of this kind of
how specific risks, vulnerabilities, and mitigation targets intra- and inter-institutional articulation.
are distributed across the metropolitan space. Dinshaw More generally, Dinshaw et al. acknowledge the
et al. illustrate this point through the story of the rede- challenge of determining who has the authority and
velopment of New Orleans after hurricane Katrina. In the incentive to implement metropolitan resilience
that case, an initial plan to convert badly flooded neigh- plans and ensure their effectiveness. In citing the
borhoods into parks and green spaces for ecological relatively positive experience with PlaNYC in New
functions and storm water management had to be aban- York City, they note that most metropolitan areas
doned due the disproportionate displacement it would do not have a powerful coordinating agency such as
have created for predominantly black and lower-income that citys Mayors Office of Long-Term Planning
familiesthe reality and implications of which were not and Sustainability and, therefore, to effectively co-
immediately apparent due to participation defects in the ordinate resilience may need to develop a consor-
planning process. tium or create such an agencynot a simple task
In terms of the political dimension of metropolitan in resource and capacity-constrained environments
climate management, Bulkeley and Luque-Ayala note of the global south.
that metropolitan authorities are not responding to cli- Appropriately governing environmental issues and
mate change in isolation or solely through internal pres- the two other thematic areasserviced land and hous-
sures. They observe that instead transnational networks, ing and economic productionalso requires adequate
partnerships, and innovation and experimentation are the finance mechanisms and the constructive feedback
hallmarks of their responses to climate change. that strong monitoring and evaluation systems allow.

32 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


Metropolitan Finance
Urban Renewal Mission in India (being replaced
All expressions of metropolitan governance require by a Smart Cities program) and the Municipal
finance. As Cohen points out in Chapter 2.1, unreli- Development Fund in the Philippines approximate
able sources of public revenue and a financial system such a focus. He also observes that when it comes to
that does not routinely permit long-term finance are borrowing, the access of subnational governments
major constraints to meeting investment needs. Still, of the global south to capital markets lags behind
on a global scale, subnational governments reportedly those in wealthier countries. Further, using public
account for nearly two-thirds of public infrastructure or quasi-public municipal development banks or
spending (Martinez-Vazquez and Timofeev, 2012). funds to bridge this gap has been handicapped by
Smoke (Chapter 2.3) addresses this topic of finance capacity issues and politicization. He briefly surveys
directly, although there are also references in Zegras related experiences such as taxable and tax-free mu-
contribution (Chapter 2.8). nicipal bonds (with and without guarantees), pooled
Smoke reviews the key elements of intergovern- financing, grants, loans, and co-financing in countries
mental and local finance systems, while arguing that such as India, Mexico, the Philippines, and South
the historic under-performance of reforms is largely Africa. And as for own-source revenues, such as
due to an overly technical approach at the expense property taxes and user fees, he acknowledges the
of due consideration of the larger institutional and scope for improvement in their administration, a
political economy framework point also made by Cohen
in which urban finance op- Focus must be on structures, in Chapter 2.1 where read-
erates. He reminds readers ers are reminded that local
of the core fiscal decen- interactions of those structures, taxes account for only 2.3
tralization principles, most and innovative arrangements that percent of GDP in develop-
notably, the finance follows ing countries compared to
function principle and con- create new forms of metropolitan 6.4 percent in industrialized
tends that ambiguity in local governance. countries (Bird and Bahl,
government powers and 2008).
mandate can result in gaps Smoke acknowledges
and redundancies in service delivery, complicating the complexity of metropolitan finance reform,
mobilization and allocation of resources and asso- including technical and capacity issues, and the need
ciated accountability. He asserts that, due to their to establish or modify structures and processes of
larger economies and revenue bases, metropolitan local administration and governance, including ac-
governments are better positioned to handle great- countabilities. As noted earlier, Smoke emphasizes
er empowerment than other subnational entities. political economy realities such as metropolitan
Moreover, he notes that proponents of a more governments being kept weak if their leadership
holistic empowering of local governmentsespe- is not well aligned with the national government
cially metropolitan governmentsas autonomous or the risk of metropolitan governments being
entities with a general mandate to provide for the undermined by influential actors and associated
overall welfare of their constituents, favor the dis- corruption. He concludes by noting some common
cretion it allows to customize planning and budget- reforms, such as using objective allocation formulas
ing (Romeo, 2013). tied to specific national goals while being careful
In terms of sources of finance, Smoke highlights not to undermine own-source revenue collection ef-
the limited documentation of major transfers from forts and performance-based transfers (Steffensen,
central governments dedicated to metropolitan areas, 2010), all the while stressing the importance of
although programs such as the Jawaharlal Nehru credible implementation strategies. Consistent

33
with the premise of performance-based transfers, (Chapter 2.8) and Cohen (Chapter 2.1) also express
in Chapter 2.1, Cohen advocates for urban finance some views on the topic.
to embrace a regulatory function in its structure to McCarney (Chapter 2.4) lays the foundation by
incentivize firms to produce positive externalities noting the heightened contemporary relevance of
and multipliers while minimizing negative ones. data-driven management and evidence-based policy-
While in Chapter 2.3 Smoke focuses primarily on making in todays large urban infrastructure deficits,
concepts and principles, in his contribution, Zegras fiscal space limitations, and climate-related challenges,
(Chapter 2.8) critiques some specific metropolitan which are occurring in a governance environment
finance arrangements in the field of transportation, where accountability and transparency is increasingly
citing examples primarily from Europe and the United demanded. She navigates readers through the chal-
States. In particular, he notes the fate of Metropolitan lenges of scarce and uneven data, often collected
Transportation Authorities in Portugal, which lacked through different methodologies and under different
adequate administrative and financial authority and definitions of what constitutes the physical extent of
were dominated by central government influence, and a metropolis. This is a point that Zegras also laments
whose responsibilities were eventually subsumed into in Chapter 2.8 in relation to concepts and indicators
the respective metropolitan governments (Assembleia such as sustainable mobility and congestion.
da Repblica, 2015). With regard to the experience McCarney then asserts that the International
of the United States, he briefly surveys the role of Standard on City Indicators, ISO 37120, that was
incentives from state and/ developed using the Global
or national government, in- Citizen engagement and City Indicators Facility, rep-
cluding through federal con- resents a fundamental shift
participation is important for
ditional grants-in-aid and the when it comes to city data as
emergence of Metropolitan metropolitan governance, not only the indicators allow cities and
Special Districts, which were citizens to evaluate municipal
as an ethical commitment but also
created to address specific performance and progress
area-wide service problems for economic reasons. in standardized terms. ISO
related to the cross-bound- 37120 comprises 100 indica-
ary benefits associated with highways or public tors of a citys social, economic, and environmental
transportation and often given special financing ca- performance with published definitions and meth-
pabilities (Zimmer, 1974). He also traces the birth of odologies. As these data points are then analyzed and
Metropolitan Planning Organizations primarily for reported in the same way, comparative lessons can be
metropolitan transportation planning, the scope of drawn from other local and global cities. Municipal
which has expanded over the years but whose per- indicators can be aggregated to formulate metropol-
formance has depended on the design and practical itan-scale indicators. McCarney cites examples from
implementation of governance structures. cities across multiple continents that were among the
20 cities that formed part of the first-year pilot, where
Metropolitan Monitoring and Evaluation results have been incorporated into city planning and
policymaking and have facilitated collaboration be-
Metropolitan monitoring and evaluation is a common tween levels of government and different departments.
theme in this section of the book. While Chapter 2.4 Since the ISO indicators are hosted on an online
by McCarney is entirely devoted to the topic, various open data platform, an argument is also made that it
monitoring instruments are explicitly discussed in the is serving to improve transparency, reduce corruption,
chapters by Lpez-Moreno and Orvaanos (Chapter and enhance public services through more effective
2.5) and Dinshaw et al. (Chapter 2.7). Both Zegras oversight (Janssen, Charalabidis, and Zuiderwijk, 2012)

34 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


and may ultimately lead to greater metropolitan com- across five adaptation functions: assessment, prioriti-
petitiveness if effects observed by Fikru (2013) for zation, coordination, information management, and
companies are replicated on the metropolitan scale. climate risk management. They contend that the frame-
In Chapter 2.5, Lpez-Moreno and Orvaanos work can be usefully adapted to the metropolitan scale
describe another metropolitan assessment tool, the because it was developed to function across complex
CPI, developed by UN-Habitat. The CPI goes a step landscapes with multiple agencies creating data and
further than individual indicators by creating an index plans, necessitating coordination and streamlining. They
comprising six components of prosperity: productiv- purport that the conduct of metropolitan level assess-
ity, infrastructure, quality of life, equity and inclusion, ments could lead to more implementable metropolitan
environmental sustainability, and governance and legis- resilience plans while acknowledging it is not obvious
lation. Implemented in over 300 cities since 2014, and which agency would typically conduct such assessments.
comprising both aggregate and component scores for It is not clear whether the data to perform the assess-
both the metropolis and its constituent administrative ment on a metropolitan scale is readily available.
units, the authors argue out that by including standard Finally, a fundamental monitoring and evaluation
deviation analysis, the CPI gives insight into internal question is whether observed outcomes on the met-
disparities within a metropolis. This is potentially valu- ropolitan scale are the result of the prevailing form
able information in relation to environmental services of metropolitan governance. A secondary question is
and associated externalities. The authors also note that whether metropolitan governance coordination is equally
analysis of the data facilitates an understanding of the important in metropolises of widely varying population
potential consequences of contemplated actions under and sizes as well as in metropolises composed of rela-
one dimension on the overall prosperity score as well tively few versus many municipal administrative units.
as on performance in other individual dimensions of Only Zegras (Chapter 2.8) directly addresses this line of
prosperity. And like the ISO standard for city indicators inquiry. He notes that answering the question of whether
described by McCarney, the CPI now features in the governance matters requires some ability to measure
development and implementation of national urban performance across different governance structures. An
policies in places such as Colombia and is facilitating intermediate question that he attempts to answer from
local and international benchmarking and comparisons. prior work is which factors give rise to inter-municipal
In an analysis of the metropolitan scene in Mexico, collaboration. In that study (Rayle and Zegras, 2013), ad
Lpez-Moreno and Orvaanos find little correlation hoc inter-municipal collaboration in relation to land use
between the different dimensions of prosperity on and mobility in Lisbon and Porto, Portugal, was found to
one hand and the size of a metropolis on the other. be facilitated by positive incentives (e.g., money), flexibili-
Only productivity showed a positive correlation and ty in the institutional system, the presence of an external
the relatively modest size of this correlation led the au- catalyst, existing networks, and specific organizational
thors to question whether large Mexican metropolises characteristics. The authors found that nearly all of these
are sufficiently leveraging the potential advantages of factors must be present for collaboration to occur.
their network effects and production scales. Indeed,
the need for the metropolitan economy and produc- Section 3. Building Metropolitan
tivity to be streamlined into diagnostics, assessments,
monitoring, and development discourse at all levels is
Governance: Lessons and Good
a salient point in Cohens Chapter 2.1. Practices
In the more specialized context of climate change,
Dinshaw et al. (Chapter 2.7) describe another assess- The third section of this book comprises a broad
ment tool, the National Adaptive Capacity Framework, compilation of metropolitan cases from almost all
which evaluates the performance of national institutions continents: Africa, America, Asia, and Europe. As

35
Main Takeaways from Metropolitan
occurs with most large compilations of cases, those
Case Studies
included in this volume are the result of both selection
and accessibility based on the criteria of representa- The first realization is that we do not have a unique
tiveness and diversity. All 19 metropolitan cities have working definition of metropolis, let alone of met-
both unique and similar features that, from an ag- ropolitan governance for the nineteen 19 cases. In
gregated perspective, contribute to a better empirical fact, most chapters in Section 3 do not provide a
understanding of metropolitan governance. working definition of their own metropolis nor do
Despite the fact that the metropolitan cities includ- they explicitly specify their ideal form of metropolitan
ed are not in-depth case studies, they are structurally governance. That is something to be mindful of when
consistent. All cases focus on the metropolitan gover- making comparisons. Despite the common usage of
nance framework, processes, and outcomes, but from the term metropolitan, the nature of the metropoli-
different angles and entry points. They share common tan cases varies significantly. Shanghai, for instance,
content: general diagnostics, local context, map of is a single municipality, while Greater New York
stakeholders, and identification of key challenges. This comprises three states (New York, New Jersey, and
consistency makes some comparative analysis feasible. Connecticut) and more than 700 towns and counties.
The broader question is whether we can extrap- The 2.4 million inhabitants of Portlands Metropolitan
olate from one case to another. We believe we can, Area in the United States seem like a small village next
as long as we take metropolises as complex systems to the approximately 100 million people living in the
and avoid simplistic, formulaic thinking. If we do use Beijing-Tianjin-Hebei Metropolitan Region. Some
the complexity paradigm, then our focus must be metropolitan areas or regions are solely urban built-up
on structures, interactions of those structures, and areas (that is, urbanized), while others are territories
innovative arrangements that create new forms of that include peri-urban, suburban, and rural areas,
metropolitan governance. What are the interactions such as Lagos, eThekwini-Durban, Mumbai, or Delhi.
between, say, local authorities with decentralized re- Not all metropolitan areas result from the aggrega-
sponsibilities and metropolitan authorities? In what tion of local governments polygons. Some conurbations
way do structures change when national legislation can be seen and studied as integrated labor markets,
enables subnational governments to collaborate and, like Greater London, or as functional urban areas, like
at the same time, when incentives make them compete Greater New York, while others lack the infrastructure
for resources? How do vertical, top-down decisions to be considered properly integrated. Furthermore, in
from upper levels of government co-exist with more some cases, significant sectors of their populations are
horizontal, bottom-up initiatives and participation in severely marginalized and the practice of integration is
metropolitan contexts? The cases tackle such ques- highly questionable. Thus, the idea of the metropolis has
tions and in so doing analyze the intersection between significantly different connotations from one context to
metropolitan governance schemes, their challenges, another, even within the same country.
and good practices. The second takeaway is that there are common facili-
What can we learn from the innovative metropol- tators for metropolitan coordination and governance and
itan governance of Portland, Oregon, in the United their absence tends to be highlighted as an obstacle or
States (Chapter 3.9)? How about the lessons from barrier. Some of these facilitators are: legal recognition
the massive, vertical relocation processes in Shanghai of metropolitan governance in national legislation, the
(China) detailed in Chapter 3.16? By engaging with project-to-policy approach, shared partisanship among
the chapters in Section 3, we hope our readers will governments and key stakeholders, and the existence of
learn from the experiences of others. The following a culture of publicprivate partnership, among others.
paragraphs present some of our main takeaways, and The recognition of metropolitan governance in
later we introduce each metropolitan case. the national constitution is highlighted as a positive

36 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


influence in promoting more effective metropolitan Whether shared partisanship is a facilitator of or
governance in So Paulo (Chapter 3.10), Stuttgart an obstacle to metropolitan governance is more con-
(Chapter 3.19), and eThekwini-Durban (Chapter 3.2). troversial. Chapter 3.9 highlights that Portland Metro
Conversely, the chapters on Toronto (Chapter 3.11), representatives are non-partisan, a condition that has
Guadalajara (Chapter 3.6), and Mexico Citys (Chapter contributed to achieving good metropolitan gover-
3.7) acknowledge the problems created by the lack or nance according to the author, Liberty. However, in the
deficient recognition of metropolitan realities in their case of Toronto (Chapter 3.11), the lack of partisanship
respective national constitutions. is seen as an obstacle by Eidelman, Horak, and Stren:
The project-to-policy approach is explained in Canada lacks the intergovernmental partisan ties that
Chapter 3.5 about the Buenos Aires. This approach facilitate the coordination of urban policies in many
suggests that motivating local actors to collaborate other advanced industrial democracies. Furthermore,
on tangible projects to solve well-defined problems is shared partisanship or political alliances are mentioned
a first step to building trust and might lead to more as crucial for collaboration in the cases of Greater New
stable collaborative arrangements for metropolitan York (Chapter 3.8), Greater London (3.17), Mexico
governance and policy. The national legal recognition City (3.7), Buenos Aires Metropolitan Area (3.4), and
and the project-to-policy approach might appear to Mumbai metropolitan area. Political closeness or alien-
contradict one another in terms of what should be ation does not work the same way in every country;
done first, but that is not necessarily the case. While while in some cases it has a positive effect on metro-
recognizing metropolitan politan governance, in others
layers of government in the it does not.
constitution can grant le- Defining not only the role of Another issue to consider
gitimacy and incentives to the government, but also the is that mayors and local au-
effectively organize the col- thorities may see their peers
laboration of local govern- responsibility of the real estate as competitors for power and
ments, the project-to-policy sector in urban development financial resources, which
approach is about learning could undermine collabora-
by doing and some form of tion. Authors in Section 1 also
capacity building. In other words, municipalities might stressed this point of friction. In theory, local compe-
have the legal mandate to coordinate efforts but do tition should have the effect of increasing provision
not do so because the mayors are unwilling to sit at of public services to attract investments and human
the negotiation table with each other. resources to each local government (Tiebout, 1956).
Many of the chapters in this section mention However, in practice, this model does not always work
examples of metropolitan or inter-municipal cooper- as Tiebout (1956) conceived it: competition can also un-
ation accelerated by joint transit, waste, or green/blue dermine collaboration, a necessary condition for met-
infrastructure projects. Several decades ago, the Port ropolitan coordination and governance. The structure
Authority of New York and New Jersey effectively unit- of incentivesfiscal, economic, and politicalare key
ed the two urban centers, while recently the Metro proj- factors for collaboration and, therefore, for governance.
ect did the same for local governments in Grand Paris. Finally, examples of metropolitan collaboration
Other examples include the Jubilee Line Extension in carried out by publicprivate partnerships can be found
London and the incipient extension of Metrobus lines across different chapters: Grand Paris, London, Lagos,
(bus rapid transit) in the Buenos Aires Metropolitan Greater New York, So Paulo, Shanghai, and Stuttgart.
Area. Chapter 3.15 on Seoul, for instance, provides a Insufficient resources and limited institutional capacities
detailed account of how waste and water management of local governments make publicprivate partnerships
projects have improved regional governance. a common arrangement for metropolitan development.

37
The third lesson is how important citizen engage- conflicts (Buenos Aires, Lagos, So Paulo, Bogot, and
ment and participation is in metropolitan governance, Seoul) or the apartheid struggle in South Africa (Durban-
not only as an ethical commitment but also for eThekwini). Some metropolises suffered particularly
economic reasons. In cities like Portland, Toronto, during the Second World War (Tokyo, Paris, London, and
London, and Stuttgart, participation of citizens and Stuttgart), while others are in countries that went through
civil organizations are central, but the chapters about independence processes in the 20th century (Mumbai,
Shanghai and Seoul show that they are stronger cases Delhi, and Lagos). Although the historical perspective is
in favor of participation as an efficient way to deal not the focus of this book, and metropolitan governance
with metropolitan issues. However, in other cases in is a relatively new phenomenon, the political trajectories
Section 3, this aspect of governance is not addressed of countries explain the institutional framework that
at all. From an open government perspective, civic shapes metropolitan regimes, as mentioned in Section 1.
collaboration is a key dimension of governance, par- An interesting observation, however, is the non-linearity
ticularly at the local level where citizens involvement of the metro governance maturity process, with some
is motivated by proximity and the potential for direct cases making steady progress and others losing momen-
impact (Open Government Partnership, 2016). tum and capacity to evolve.
It is worth noting that not all the cases are similar
in terms of democratic culture, a key variable in gover- Brief Introduction to the Metropolitan
nance schemes. If we look at the past 100 years, only a Case Studies
few cities in Section 3 had a context of uninterrupted
democracies while they became the metropolises they are The cases in Section 3 are organized by continent
today (Toronto, New York, Portland, Mexico City, and (Africa, America, Asia, and Europe, in that order)
Guadalajara). Some cases are relatively new democracies, and alphabetically within each subgroup by the main
as the democratic processes in some countries have citys short name (not by the name of the metropolitan
been severely disrupted by dictatorships and/or armed area), which is the most common reference.

Map of the Cases in Section 3

Greater London
Greater Toronto Area UK Verband Region Beijing-Tianjin-Hebei
Greater Portland Canada Stuttgart Metro Region
USA Germany China
Mtropole du National Capital
Grand Paris Territory of Delhi Seoul Capital Area
New York Metro Area France India Korea
USA
Guadalajara Metro Area Greater Cairo
Mexico Valley of Mexico Metro Area Egypt Shanghai Municipality
Mexico China
Mumbai Metro Region
India
Greater Bogot Lagos Metro Area
Colombia Nigeria

Greater So Paulo
Brazil eThekwini Metro Municipality
South AFrica
Buenos Aires Metro Area
Argentina

38 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


Chapter 3.1 on Cairo is the first case and the only city and tax base will ensure the fair and equitable dis-
Arab metropolitan area in the book. The agglomera- tribution of resources, financial and otherwise, in the
tion has 20 million inhabitantsalmost one-quarter municipal area. The constitution also impels munic-
of the entire populationand generates 44 percent of ipalities to develop. They have a mandate to respond
the countrys GDP. In this chapter, Sims explicit ob- to the socioeconomic challenges of their communities.
jective is to present Cairo as a cautionary tale for other This chapter explains how eThekwini aimed to be a
countries lacking metropolitan governance in a con- learning city and how procurement policies fostered
text of political centralization and institutional frag- the use of local resources, mainly from disadvantaged
mentation. On one hand, the management of Greater communities. Reddy, the author, highlights that, in
Cairo is fragmented across a wide range of central over two decades of local democracy, the metropolis
authorities, with little participation of local govern- has been able to improve equity in political participa-
ments and no participation of the civil society in the tion. Yet a significant challenge remains, as poverty
governance architecture. On the other hand, informal levels in the eThekwini Metropolitan Area are higher
areas of the metropoliswhich host two-thirds of than in any other South African metropolis. Other
Greater Cairos populationare places with certain challenges include fragmented and uneven service
levels of social capital and community cohesion de- delivery by the government, climate change, and a
spite the lack of infrastructure, appropriate services, combination of unemployment and low literacy.
or quality public transport to In Chapter 3.3, Olokesusi
reach the job market. Urban and Wapwera address how
sprawl has dominated in the Issues like fog haze, water the city of Lagos has grown
past decades, with a mis- shortages, and environmental dramatically in recent de-
placed faith that low-density, cades, going from approxi-
sprawling, car-oriented new pollution know no political mately half a million people
towns operating under top- boundaries, just like the flow of in the late 1960s to over 17
down would quickly create million today. Similar to oth-
jobs [and] absorb the increas- material, information, er cases in this book, some
ing metropolitan population. and population. of Lag os g reatest chal-
The result, as explained by lenges include, but are not
Sims, is a dichotomic land- limited to, climate change
scape: unsustainable desert hinterlands capturing adaptation and mitigation, as well as pollution and
investments and the attention of the government and poverty alleviation toward a more inclusive and eq-
the rest, where almost everyone lives, being ignored uitable metropolis. Those challenges are being faced
by the metropolitan government. by a state (regional) government that aims to trans-
Chapter 3.2 is in the opposite extreme of the form Lagos into Africas model mega-city against the
African continent. The eThekwini Metropolitan backdrop of some projections that Lagos could be
Area is a highly diverse South African region that the largest city on the planet by 2040.
includes the city of Durban. This metropolitan area, Lagos is an example of internally generated rev-
created in 2000 comprises urban, peri-urban, and enue for metropolitan governance, which Olokesusi
rural land, almost evenly split, and a mix of racial and and Wapwera claim is the result of thinking outside
cultural diversity. It has almost 4 million inhabitants. the box after national government funding became
Unlike other cases around the world, South Africas less accessible. Metropolitan funding comes from land,
constitution provides the legal basis for metropolitan personal, and business taxes, value added tax, market
governance. The principle of the law is One city, and motor park fees, parking fees, and fines, among
one tax basean inclusive, integrated metropolitan other sources. The chapter also underscores the

39
role of multi-stakeholder partnerships and strategic experience with other metropolitan areas in Argentina,
investments, such as a bus rapid transit scheme and she proposes a projects-to-policy approach to create
light rails, and the improvement of waste management legitimate metropolitan coordination. According to
and canopy cover. Rojas, the political conjuncture is encouraging as
Chapter 3.4 is the first on the American continent. the national government, the capital (Buenos Aires
Crdoba and Gonzlez analyze territorial planning Autonomous City), the adjacent province of Buenos
in Colombia in terms of current dichotomies and Aires, and a third of the metropolitan municipalities in
tensions, with a focus on Bogot. The first tension the province are now governed by the same political
is centralization versus devolution. Colombia has a coalition. She argues that two critical issues stand out
highly centralized government scheme that reduces for their potential to be addressed through a proj-
the capacity for autonomous decisions in territorial ect-to-policy approach: transit and parks. In addition
entities such as Bogot. The second tension is agency. to that, Rojas mentions other sectors for which met-
Should local territorial planning be carried out by the ropolitan coordination is progressing but still facing
32 Colombian departments or should it be a respon- several challenges, such as waste management, health
sibility of the 1,101 municipalities? At present, territo- services, risk management, and socio-environmental
rial planning is carried out by departments or ad hoc issues regarding heavily polluted watersheds.
zoning. If the departments continue to be in charge, The following two cases are concerned with
their capacity to plan must be strengthened, including Mexican metropolises: Guadalajara and Mexico
funding. The other option is to follow a planning City (Chapters 3.6 and 3.7). The two conurbations
model of a system of cities, which distinguishes two have differences worth mentioning. While the
types of urban areas: urban agglomerations (with Metropolitan Area of the Valley of Mexico includes
several local governments) and uni-nodal cities. The over 20 million people and 79 different jurisdictions,
system of cities model would also consider the flows belonging to three different state governments,
within urban agglomerations, between urban and Guadalajara has only 5 million inhabitants in nine
rural areas, and among cities. It would imply that, in- municipalities of the same state. Despite the differ-
stead of managing six disconnected agglomerations, ences in scale, the two chapters share a concern for
for example, policies would address an urban-region- the lack of a national metropolitan legal framework
al continuum and take advantage of the proximity in Mexico, and the authors agree that the faculties of
economies. The authors found that in Colombia association and collaboration among the municipali-
living conditions in agglomerations are better than ties and the state governments, recognized in Article
in uni-nodal cities and far better than in rural areas. 115 of the constitution, have not been sufficient
They also found that there are several inequalities to to guarantee adequate metropolitan governance in
be addressed within the different sub-regions of a Mexico. However, national urban legislation was
single urban agglomeration like Bogot, a phenom- passed in 2016, opening the door for improved met-
enon they refer to as lack of convergence. Thus, ropolitan coordination mechanisms and modalities.
they conclude that public policy should enhance In Chapter 3.6, Blanco, Osorio, and Gmez-lvarez
the intrinsic benefits of agglomerations and should present a plausible path to manage conurbations in
explicitly target convergence. Mexico. Guadalajara Metropolitan Area, the second
Chapter 3.5 on the Buenos Aires Metropolitan largest city in Mexico, has a tripartite system of metro-
Area (BAMA) sheds light on both the multidimen- politan coordination formed by three main metropolitan
sional complexities of BAMA and the current op- coordination entities: the Metropolitan Coordination
portunities for advancing metropolitan governance. Commission (integrated by the State Governor and the
In the chapter, Rojas presents an overview of ex- nine mayors), the Metropolitan Planning Institute, and the
isting metropolitan arrangements and, based on her Citizen Metropolitan Council. The metropolitanization

40 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


process has been subject to state legislation, the most the institutions have remained stagnant. Wright ex-
recent and significant being the 2011 Law on Metropolitan plains that in the beginning, those institutions were
Coordination. Metropolitan development is also facilitated not linked to political cycles because they were given
by inter-municipal, sectoral institutions for transpor- semi-autonomous governance structures and the abil-
tation, and water and sanitation, while a metropolitan ity to self-finance their investments. Additionally, they
security agency has recently been created. Finally, in 2016 were seen as professional and modern.
Guadalajara launched its metropolitan territorial plan, However, since the 1950s, the metropolitan in-
which for the first time has a metropolitan perspective stitutions became increasingly negatively influenced
for land use and regulation. The authors claim that by politics, resulting in inefficient projects and poor
Guadalajaras unique institutional setting and innovative coordination. Wrights biggest critique is that there
planning instruments constitute, in practice, a metropol- is no federal, state, county, or municipal agency tasked
itan governance laboratory in the country. with thinking about the wellbeing of the wholebuilt
In Chapter 3.7, Iracheta highlights the urgency environment, infrastructure, and natural systems
of achieving metropolitan coordination, arguing and there is no single vision for the region. The
that all major metropolises in the country have been three states (New York, New Jersey, and Connecticut)
sprawling in an unsustainable and inefficient way. compete for business and funding, rather than collab-
Between 1980 and 2010, the orating to create synergies,
urban population expand- which results in a lack of pol-
ed two-fold whereas urban Rather than avoiding tension, icy coordination. The chapter
areas expanded eight-fold, provides concrete examples
metropolitan governance should
with negative implications of current and future issues,
in terms of social exclusion, ensure open communication and such as the lack of capaci-
low quality of public ser- ty at JFK and Newark air-
include the conflicts in constructive
vices, transit congestion, and ports and the collapse of the
environmental externalities. discussions about processes transport options to cross
Iracheta urges for reforms the Hudson River. Another
and procedures.
that align spatial planning, problem is that land use is
metropolitan mobility, and governed at the municipal
social housing policies, and for defining not only the level, so in the New York metropolitan area, close to
role of the government, but also the responsibility 600 cities create their own local plans, often in direct
of the real estate sector in urban development. The conflict with neighboring cities.
author remains hopeful for future metropolitan The next Chapter (3.9) narrates a different story in
governance in Mexico in light of the creation of a another U.S. metropolis. The Metropolitan Area of
National Sustainable Land Institute in late 2016, as Portland, with over 2.4 million inhabitants, is one of
well as the recognition of metropolises in the General the most sustainable cities in North America. It has
Law on Human Settlements and Urban Development (2016). also recently been recognized as the second fastest
The New York metropolitan area presents a case growing metropolitan economy (Redden, 2015) and
of historical decline in metropolitan governance, ac- best-performing one in the United States (Winkler,
cording to Wright (Chapter 3.8). Institutions created 2016). The chapter focuses on what makes this met-
roughly a century ago continue to govern Greater ropolitan area function the way it does, distinguishing
New York without adequate adaptation to the present those characteristics that could be replicated else-
time, such as The Port Authority of New York and where from those that are unique to this case. Among
New Jersey and the Tri-Borough Bridge and Tunnel those unique characteristics, according to the author,
Authority. The region has grown and changed, yet Liberty, the state of Oregon has an unusually rigorous

41
land use planning system and both the state legislation is a prerequisite to achieve state and municipal coor-
and metropolitan government focus on sustainability. dination, at least in current political scenarios.
As a consequence, [the] Metro has been effective In Chapter 3.11, Eidelman, Horak, and Stren
in reshaping regional growth patterns in ways that refer to Toronto, a city within the Greater Golden
vary dramatically from the standard pattern of de- Horseshoe, the largest and most economically im-
velopment for urban areas in the United States, that portant city-region in Canada. It is a significant case
is, reducing sprawl and promoting compact growth. for this book for two reasons: it was the first urban
Another important aspect is that Metrothe authority area in North America to adopt a two-tier metro-
of Metropolitan Portlandis governed by an elected politan system, and it is one of the most ethno-cul-
president representing the entire metropolitan area turally diverse city-regions in the world, with nearly
and a council of six members elected from districts half of the population in the Greater Toronto Area
of equal population. Those district boundaries do not being foreign-born. This case is particularly inter-
correspond to local government boundaries, which esting from the perspective of under-representation
gives the council a metropolitan perspective, not a of groups and minority dynamics in metropolitan
political one. In addition, the Metro representatives governance, a key dimension in multicultural so-
are non-partisan positions, and the staff has been rec- cieties. The chapter focuses on the three main so-
ognized nationwide for its competency in addressing cio-environmental challenges of Greater Toronto:
metropolitan issues. dealing with social polarization and integrating new
Chapter 3.10 reflects on immigrants and low-income
recent changes in Brazilian residents into the fabric of
metropolitan governance, Grand Paris owes its success city life, controlling urban
paying close attention to the sprawl in the outer suburbs,
to continuous conflicting
case of Greater So Paulo. and effectively planning
Klink critically reviews the cooperation. and funding regional transit.
governance heritage of the Additional, overarching chal-
dictatorship era, fiscal crisis, lenges relate to metropolitan
and the 1990s restructuring reforms. The last of governance constraints: strong provincial control,
these, particularly in So Paulo, led to publicprivate high dependence on local revenues, and weak inter-
partnerships, innovative bottom-up experimentation, governmental political integration. According to the
and participatory governance among municipali- authors, improving governance requires creating or
ties. Klink later analyzes the current expectations modifying incentive structures for intergovernmen-
regarding the Federal Statute of the Metropolis, which tal relations rather than changing the metropolitan
was approved in January 2015. The author considers government architecture.
that strengthening institutions and building technical In Chapter 3.12, Tang, Yang, Chen, et al. present
capacity are necessary but insufficient conditions to the complexities of the Beijing-Tianjin-Hebei
improve metropolitan governance: leadership and Metropolitan Region (BTH region), which com-
political will are required to improve the city. After a prises 10 local governments and a population greater
description of recent planning processes in Greater than 100 million inhabitants, the most populated
So Paulo, Klink highlights that further efforts need mega-city region in the world. As a city-region, this
to be made to achieve political consensus among case is one of only a few in Section 3 in which the
different government levels and civil society, and focus is on a series of economically linked metrop-
to devise clear sources of finance for metropolitan olises rather than a single metropolis. In other words,
planning and management. The case of So Paulo the BTH region is a hybrid example of regional and
seems to reinforce the notion that political alignment metropolitan governance.

42 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


The case explains the historical evolution of containing a computer or laptop with internet
regional cooperation as well as the strategic role that access is nearly two times higher than the average.
each sub-region currently plays. The authors argue Delhi has also achieved a steady decline in the un-
that the traditional vertical bureaucracy mechanism employment rate and people living below the pov-
formed during the planned economy period is still erty line. However, the Gini coefficient indicates a
the main administrative approach in China. Thus, the rising trend in inequality in this metropolis.
central government resolves regional issues in a highly The Mumbai Metropolitan Region, on the other
centralized, top-down manner. hand, comprises the districts of Mumbai and Mumbai
Issues like fog, haze, water shortages, and envi- Suburban (together Greater Mumbai), as well as parts
ronmental pollution know nothing about political of the Thane, Raigad, and Palghar districts. The chapter
boundaries, just like the flow of material, information, examines the Mumbai metropolitan area in terms of
and population. Improving regional collaboration polycentric governance, a perspective that conceives
is required, for which the chapter proposes future the city as comprising several development nodes. This
scenarios and policy recommendations, noting power fruitful analysis could be replicated in other metropolis-
imbalances should be taken into account (since out of es in the world in order to understand the conundrums
the 10 local governments, two are more powerful than that arise due to the nature of the governance system.
the rest, that is, Beijing and Tianjin). The development Authors Pethe, Gandhi, and Tandel suggest reforming
of this region, together with Pearl River Delta and the present system in the Mumbai Metropolitan Region
Yangtze River Delta, will determine Chinas metro- to a two-tier set-up with clearly delineated functions
politan development. between local and metropolitan levels.
Section 3 of the book contains two metropolitan In Chapter 3.15, Kang provides a historical ac-
cases in India: in Chapter 3.13, Kundu considers count of Seouls metropolitan governance through
Delhi, and in Chapter 3.14, Pethe, Gandhi, and concrete examples of how waste and water manage-
Tandel look at the Mumbai Metropolitan Region. ment have evolved regionally. Seoul Metropolitan
Among 52 metropolitan areas in India, these two Area is located in Sudokwon, the Capital Region,
are the largest: Mumbai with 22 million inhabitants along with the Incheon and Gyeonggi provinces.
and Delhi with over 18 million. Despite the demo- Together they constitute a metropolitan region rath-
graphic significance of these metropolises, met- er than a single metropolis, similar to the Beijing-
ropolitan governance is far from well-functioning. Tianjin-Hebei Metropolitan Region. Seouls met-
Both chapters critique the lack of coordination of ropolitan region has 23 million inhabitants, almost
metropolitan government entities fragmented half of South Koreas population. This is why the
structures that hinder strategic metropolitan plan- author insists that the development of this region
ningand the difficulties in devolution of power has been a matter of national importance, requir-
to local governments. ing the involvement of the national government
There are peculiarities of Delhi and Mumbai in planning and implementation. From the 1960s
metropolitan areas worth noting. In terms of orga- to the 1990s, South Korea experienced a time of
nization, the National Capital Territory of Delhi is rapid industrialization and urbanization in which
at the same time a city and a union territory, with economic growth was led vertically by the central
special political and administrative status in India. government. After the countrys population became
In terms of economy, Delhi has outperformed middle-income and the decentralization processes
other Indian metropolises on several issues. Delhi started in the 1990s, vertical governance changed
has better accessibility to basic infrastructure on and incorporated horizontal governance structures,
average and greater monthly per capita income than with greater participation (and collaboration) from
metropolitan India, and the share of households municipalities and local residents. This process was

43
not free of conflict. The author argues that, rather residents, a door-to-door household survey, a com-
than avoiding tension, metropolitan governance pensation and resettlement plan crafted with resi-
should ensure open communication and include dents feedback, and a pre-established consensus rate,
the conflicts in constructive discussions about which means that the redevelopment project could
processes and procedures. The detailed examples only proceed after receiving 90 percent approval
of waste and water management in the chapter from the affected residents. Going through these
provide several good examples of how to identi- processes allowed the planners to obtain a majority
fy conflict and address it in a way that facilitates consensus with less money drained by conflicts be-
sustainable development. The research on water fore the relocation plans moved on. An important
quality improvement in the Paldang Reservoir, for question is whether relocation processes would work
instance, suggests that conservation, restoration, similarly in socio-cultural contexts different than
and economic growth can co-exist. China. In other words, we must consider how repli-
Unlike Chapter 3.12 on the Beijing-Tianjin-Hebei cable is the Shanghai experience in other countries?
Metropolitan Region, in Chapter 3.16, the focus is on Metropolitan change in Europe is represented in
a single Chinese municipality: Shanghai, one of the the book by three cases: Greater London, Grand
largest single-jurisdiction cities in the world. Leaving Paris, and Verband Region Stuttgart. The history
aside the metropolitan coordination of Yangtze River of Greater Londons governance is the main topic
Delta Metropolitan Region, the Shanghai chapter will of Chapter 3.17, by Clark, Moonen, and Couturier.
probably amaze readers due of the scale of change The chapter provides an interesting example of the
to which it refers: a transformation directly linked to search for a power balance among the boroughs,
massive urban redevelopment. The data analysis car- Londons mayor, and the central government. It
ried out by authors Chen and Xu implies that roughly narrates four cycles in London governance that have
one in four (permanent) households in Shanghai consolidated the citys nascent system of negotiated
experienced forced relocation. The relocation pro- consensus. The first cycle began with the abolition
cess, thoroughly described in their chapter, led to an of the Greater London Council, followed by no
improvement in the average quality of residential citywide government. In the second cycle, a nation-
housing stock. In the past three decades, the share al office was created to govern London. The third
of modern-style housing (villa, condo, and apartment) cycle consisted of the creation of the GLA-Mayor
has increased from 33 percent in 1978 to 94 percent model and the organization Transport for London.
in 2014, while the share of low-quality old housing In this era, it became possible to achieve unity: the
(lanes and shanties) dropped from 65 percent in 1978 GLA and the mayor negotiated on Londons behalf
to under 3 percent in 2014. These changes took with all tiers of government and businesses to se-
place in a context of socioeconomic transformation. cure the resources to manage Londons continued
The chapter highlights that, from 1980 to 2010, the growth. The final cycle is seen by Clark, Moonen,
per capita income of the registered population in and Couturier as a mature two-tier system, in which
Shanghai Municipality increased over 44-fold. the local governments show austerity.
The Shanghai case argues that large-scale reloca- The GLA-Mayor model has been successful in
tion processes are more efficient in terms of time at least five areas: securing central governments
and money when they are participative. It is import- backing of Londons global roles, improving edu-
ant to note that more participation in Shanghai was cation and transport, creating and implementing a
possible after to the adoption of a 2011 Chinese strategy of strategies regarding space management
regulation for to improve the urban redevelopment to improve housing density and transport-oriented
processes in the country. Being participative, in this development, and contributing to the growth of
context, included a consultation stage with affected London by improving its global reputation. Despite

44 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


this mature metropolitan governance and success need to find the right balance between formal (or
stories, challenges remain. Housing demand, dis- legal) metropolitan integration and project-led met-
placement of low-income populations and social ropolitan development by design built on years of
exclusion, and the need for investment in mobility pragmatic inter-municipal cooperation.
options and greater sustainability are only some of Chapter 3.19, the final chapter of Section 3, nar-
them. In addition, one key issue to be resolved is rates the evolution of the Verband Region Stuttgart,
the dependence on central government fundingas in Germany, a region that comprises 176 local
much of two-thirds of borough and GLA expendi- governments and 2.7 million inhabitants. Against
tures still come from central government. the backdrop of the crisis that originated metro-
Bochouds account of Grand Paris history in politan governance at the beginning of 1990s to
Chapter 3.18 includes a commentary on the major the present, Stuttgart represents a shining example
debates that were instrumental to re-imagining the of societal, environmental, economic, and political
metropolitan area of the French capital. The article integration. It is interesting how Verband Region
explores symbolic and factual motivations to push Stuttgart and its regional assembly have faced one
forward the Grand Paris agenda, suggesting crises that of the major concerns that existed at the moment
are instead opportunities. In the face of the drama of its inception. Local governments were worried
of France losing its status as a global leader, argues about losing autonomy under the new metropolitan
Bochoud, Grand Paris has emerged as a project to scheme. However, the Verband Region Stuttgart
reboot the countrys capital. For the author, Grand was designed with a joined forces approach to take
Paris highlights that metropolis governance is about charge of functions that go beyond local authorities
understanding and managing complex urban ecosys- boundaries and their specific responsibilities, name-
tems (with innovation) more than about delineating ly land use planning, mobility, and economic devel-
new boundaries and forcing the creation of new insti- opment. Finally, another aspect from the regional
tutions. The case of Grand Paris also proves what can assembly worth noting is the importance granted to
be achieved thanks to publicprivate co-production of informing the general public and fostering public
projects and to the durable involvement of civil soci- participation. Participation efforts included special
ety. Grand Paris owes its success first to continuous measures, such as involving young people. This
conflicting cooperation and second to professionals has helped create awareness around metropolitan
and politicians who acted as champions of metropol- issues and, according to authors Kiwitt and Lang,
itan integration. plays a part in markedly improving the quality of
In that context, there is still room to improve the planning.
metropolitan governance. Grand Paris was built The 19 cases selected in Section 3 constitute a
on the assumption that bigger meant stronger, diverse sample of the different institutional, organi-
but several big players, namely the Paris City Hall, zational, and procedural settings shaping metropol-
Ile de Frances regional government, the national itan governance around the world. While each case
government, and the newly created Mtropole du is unique, there are some similarities that facilitate
Grand Paris, compete for the metropolitan lead. comparisons. From the cases presented, it is clear that
The Mtropole du Grand Paris (the Grand Paris there is no single superior metropolitan governance
government body) has limited human resources model, nor one institutional arrangement to best gov-
and is not yet working as a comprehensive, lasting ern metropolises, as mentioned in Section 1. Although
institution with room to maneuver. Thus, Bochoud each one is a story in itself, when read together, the
thinks Grand Paris must get smarter about human case study approach produces a broader narrative of
capital. Going back to the lessons mentioned at the how metropolises are steering their way toward sus-
beginning of Section 3, Grand Paris showcases the tainable urban development.

45
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47
Section 1
Theoretical perspectives on metropolitan governance
1.1 Why Metropolitan Governance Matters and
How to Achieve It
Rudiger Ahrend (OECD), Soo Jin Kim (OECD), Alexander C. Lembcke (OECD),
and Abel Schumann (OECD)

Abstract

When thinking about bustling metropolitan areas like Berlin, London, New York, Paris, or Tokyo,
governance is unlikely to be the first issue that comes to mind. But metropolitan governance mat-
ters a great deal more than most of us might think. Put simply, a lack of effective metropolitan gov-
ernance structures has large economic costs and strong negative effects on the quality of life in cities.
In this chapter, we explain why governance matters and quantify its impact. In doing so, we introduce
the Organisation for Economic Co-operation (OECD) Metropolitan Governance Survey, which pro-
vides a representative overview of different governance approaches across 275 OECD metropolitan
areas. We argue that most countries prospects for wellbeing and economic prosperity are in large part
determined by their metro areas, implying that effective metropolitan governance has country-wide
importance. Understanding what constitutes good governance arrangements for metropolitan areas
is only the first step. It is equally important to know how to get there or, in other words, how to ini-
tiate and carry through a successful reform process that is supported by all stakeholders. We identify
key factors to overcome gridlock and implement reforms that are long lasting and effective. Among
them are leadership by the national government, buy-in by municipal governments, and support from
the business sector and civil society.

When urban dwellers take stock of what matters in of a multi-year research project on trends in urban
their daily lives, metropolitan governance is unlikely to areas and urban governance (OECD, 2015a, 2015b).
appear high on anyones list. Metropolitan governance is The reports build on the OECD Metropolitan
not flashy and it rarely makes for front-page news (and Governance Survey, a new dataset that quantifies
when it does, it is usually for the wrong reasons) but governance arrangements across OECD metropol-
nonetheless it contributes significantly to the success itan areas, empirical research that links economic
and attractiveness of urban areas. outcomes to governance arrangements, and in-depth
This chapter argues that metropolitan gover- case studies that allow for greater insight into the ex-
nance matters for the daily lives of urban dwellers periences and practices of governing cities (Ahrend,
and has measurable effects on their productivity and Gamper, and Schumann, 2014).
wellbeing. The chapter then continues to answer the
natural follow-up question: If metropolitan gover- Why Metropolitan Governance
nance matters, how can it be introduced? Both parts
of the chapter build on a substantial body of work
Matters
that the Regional Development Policy Division of
the OECD has assembled in the past. It builds on Governance greatly affects how well metropolitan
Territorial and Metropolitan Reviews that focus on areas function. How do we know? Even if differenc-
particular regions and cities and on the final reports es in human capital levels, economic structure, and

Section 1: Theoretical perspectives on metropolitan governance 51


agglomeration benefits are taken into account, large The OECD Metropolitan Database defines
differences in productivity levels between a countrys functional urban areas across the OECD on the
metro areas remain. Governance arrangementsor basis of a common method that relies on settlement
the lack thereofcan explain an important part of patterns and commuting flows, rather than adminis-
these differences. trative borders (OECD, 2012). Not one of the 275
Metropolitan areas are in general more produc- OECD metropolitan areasfunctional urban areas
tive than smaller urban agglomerations and rural with populations in excess of 500,000is governed
areas. Partly, this is due to higher human capital by a single local government. The metropolitan area
levels. The larger a metropolitan area, the higher of Paris, which consists of 1,375 municipalities,
the average education and talent of its residents, might be an extreme case: More than 200 metro
which is in turn reflected in higher productivity areas contain more than 10 local governments,
levels. Another reason arises from agglomeration over 60 of which incorporate more than 100 mu-
benefits, or positive externalities associated with nicipalities within their boundaries. Figure 1 shows
metropolitan size. In line with the literature review the fragmentation of the metropolitan areas of
by Combes, Duranton, and Gobillon (2011), OECD Berlin and Madrid. The urban core of the metro
estimates suggest that agglomeration benefits are areas, defined as the contiguously built-up surface
responsible for an increase in residents productivity area and depicted in dark blue, are surrounded by
of between 2 and 5 percent as the population of a a large number of administratively independent
city doubles (OECD 2015a). smaller municipalities that are closely connected to
So why does metropolitan governance matter? the urban core through commuting.
Large urban agglomerations are characterized by A large number of municipalities in metro-
manifold spatial connections and interdependen- politan areas can complicate policy coordination
cies that are often not reflected in the way they are among local governments. A potential solution to
governed. In most OECD countries, municipal this coordination problem could be the amalgama-
borders are based on historical locations of towns tion of municipalities within a metropolitan area.
and villages. Put differently, these administrative Many countries have successfully reduced admin-
structures cannot fully cope with the challenges istrative fragmentation but rarely are these policies
connected to economic and social realities in large focused on creating administrative cohesion in
urban agglomerations. large metro areas.
Figure 1. Municipalities within the Metropolitan Areas of Berlin and Madrid

Source: Authors elaborations based on OECD (2012).

52 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


An alternative to the amalgamation of munici- for coordinated policiesprevails in determining
palities is the creation of an organization dedicated a metropolitan areas fortunes is ultimately an em-
to the coordination of policies in metropolitan ar- pirical question.
eas: a metropolitan governance body. Metropolitan Ahrend et al. (2014) estimate the impact of ad-
governance bodies are defined as organizations that ministrative fragmentation and the presence of met-
cover the core and surrounding commuting zones ropolitan authorities on productivity in five OECD
of metropolitan areas and are dedicated to coordi- countries. Using observations for more than 2 mil-
nating policies that are of direct and predominant lion individuals from Germany, Mexico, Spain, the
relevance to the metropolitan areas. They have local United Kingdom, and the United States, they esti-
and potentially regional governments as members mate productivity differences across 430 functional
or have themselves the status of regional govern- urban areas. The estimates use wages as a proxy for
ment. They can be distinguished from sectoral individual productivity and account for the direct
authorities and special purpose bodies through the impact of individual characteristics, such as educa-
breadth of their field of work. In contrast to most tion, age, gender, occupation, and part-time work.
sectoral authorities, they work on more than one Figure 2 plots the productivity differentials for the
major policy area. 430 functional urban areas against the number of
The OECD Metropolitan Governance Survey local governments per capita, standardized for each
has collected the first systematic overview of such country to have zero mean and unit variance. A
metropolitan authorities across the OECD. The clear negative association emerges: Administrative
findings are described by Ahrend, Gamper, and fragmentation is associated with lower productivity.
Schumann (2014) and in OECD (2015b). The effect is robust in multivariate regressions that
take agglomeration benefits and control for city
Metropolitan Governance aggregate skill level, industrial structure, and capital
city or port city status into account.
Reduces Cost of Administrative
Fragmentation Figure 2. Cost of Administrative Fragmentation

Germany Mexico Spain United Kingdom United States


0.4
Charles Tiebout (1956) famously argues that more
0.3
administrative fragmentationa larger number of
Productivity differential, 2017

0.2
local governmentsis associated with a greater set
0.1
of choices over public service provisions and their
0
costs. Increased choice and competitive pressure
-0.1
among local governments improves the quality of
-0.2
local public services, which in turn may increase
-0.3
productivity in municipalities and ultimately the -0.4
metropolitan area. But Tiebouts argument fails in -2 -1 0 1 2 3 4 5 6
Local governments per inhabitant (standardised)
respect of policies that require coherence across
the whole metro area and generate externalities Source: Ahrend, Farchy, Kaplanis, et al. (2014).
across administrative boundaries. For example,
the planning of infrastructure provision is more In their quantitative analysis, Ahrend et al. (2014)
complex if a large number of local governments find that the descriptive evidence understates the
have the power to veto individual projects. Which true penalty of fragmentation. Why? Metropolitan
of the two forcesthe positive impact from com- authorities have the potential to alleviate the cost
petition among local administrations or the need of administrative fragmentation. Focusing on the

Section 1: Theoretical perspectives on metropolitan governance 53


140 metropolitan areas in the aforementioned five al., 2011) found that, on average, a doubling in
countries and using the information collected in the a countrys per capita GDP lowers density in its
OECD Metropolitan Governance Survey results in cities by 40 percent. In other words, it increases
two striking findings. First, doubling the number of land consumption by a factor of 1.7. Metropolitan
local governments within a metro area reduces pro- governance arrangements therefore seem to pay
ductivity by 6 percent, thus in more extreme cases a double dividend: they increase prosperity, while
possibly eradicating the gains from agglomeration limiting sprawl, one of the key externalities that is
benefits. Second, the presence of a metropolitan typically associated with greater wealth.
governance body reduces this penalty, on average, by
Figure 3. Agglomeration benefits in Mexico
half. This shows how better policy coordination can
have direct effects on productivity and hence GDP. 0.4
Puerto Vallarta
The existence of metropolitan authorities cap- 0.3 Tijuana
Ensenada
tures one aspect of good governance in metropol- Mexicali
0.2 La Paz Benito Jurez Monterrey
Len Guadalajara
itan areas but misses others, such as stakeholder Quertaro
0.1
involvement, nor the effectiveness of governance Torren
0 San Luis Potos
arrangements. For example, the metropolitan area Toluca Mexico City
Puebla
of the Valle de Mxico has a governance body but -0.1
Mrida
the productivity benefits to the city remain below -0.2
Tlaxcala
Tuxtla Gutirrez
Xalapa
the potential of a metropolitan area of its size -0.3 Crdoba
San Cristobal de las casas
(Figure 3). A recent OECD Metropolitan Review -0.4 Tapachula

finds significant potential to improve governance 50,000 200,000 800,000 3,200,000 12,800,000

arrangements (OECD, 2015c): Challenges with


Source: Ahrend, Farchy, Kaplanis, et al. (2014).
the quality of governance and the lack of a metro- Note: This estimate is based on a regression that controls for country fixed-
effects. It refers to the 200006 period, the only period for which relevant data
politan vision detract from agglomeration benefits is available.
and resident wellbeing. Thus, the total impact of
effective governance arrangements on economic The relationship between urban wealth and sprawl
performance is likely to be larger than the estimate by also highlights that governance arrangements in suc-
Ahrend et al. (2014). The levers that distinguish suc- cessful metropolitan areas need to adapt to changing
cessful from unsuccessful governance arrangements commuting zones. For example, more people choose
remain a pressing research question. Given the vari- to live and work in the city or increases in residents in-
ety of institutional, formal, and informal framework comes lead to demand for larger and less dense housing,
conditions across metropolitan areas, effective levers leading to suburbanization.
are, however, likely to be similarly varied. Metropolitan areas without governance bodies also
The impact of better metropolitan governance have, on average, higher levels of air pollution as mea-
is not limited to economic productivity. Metro areas sured by the amount of particulate matters in the air
with a metropolitan authority have experienced an (PM2.5), controlling for population size and country
increase in population density in built-up districts, fixed effects. It is probable that this is the result of more
whereas those without a metropolitan authority efficient transport policies in combination with better
have shown greater urban sprawl (Figure 4). land-use planning, both of which are central fields of
This result is particularly striking as increased work for most governance bodies.
prosperity in cities is typically associated with the The positive impact of good governance is not lim-
sprawling development of a metropolitan area. In a ited to environmental factors. The OECD Metropolitan
global sample of 120 cities, a study by the Lincoln Governance Survey found that the share of residents
Institute of Land Policy (Angel, Parent, Civco, et who are satisfied with the public transport system in

54 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


their cities is 14 percentage points higher if a transport How to Achieve Metropolitan
authority exists. This is likely at least partly due to the Governance
better integration of public transport in these cities.
Given how much metropolitan governance matters,
Figure 4. Governance for Compact Development
the question is how can an effective governance sys-
Change in population density of built-up areas tem be introduced and adapted?
0.8
0.6 There is a wide diversity of metropolitan gov-
0.4 ernance bodies throughout OECD countries.
0.2
Approximately two-thirds of the 275 OECD met-
0
-0.2 ropolitan areas have some form of metropolitan
-0.4 authority. Metropolitan authorities vary in terms of
-0.6
-0.8
legal status, composition, power, budget, and staff.
-1 Institutionally speaking, four main types of metropoli-
-1.2 tan governance bodies can be observed across OECD
With Metropolitan Without Metropolitan
-1.4 Governance Body Governance Body
countries, ranging from the lightest to the most
stringent types. Among the OECD metropolitan
Source: Ahrend et al. (2014).
areas that have set up a metropolitan governance body,
In order to integrate the entire public transport more than half are using informal/soft coordination
system, transport authorities need to be supported arrangements (52 percent), which emerge from volun-
by local governments and have responsibility for tary collaboration among municipalities and have no
all modes of public transport in a metropolitan formal powers. About one-quarter of these areas have
area except for long-distance transport. In partic- established inter-municipal authorities (24 percent),
ular, they need the power to influence where and which focus on jointly providing one or more public
how frequently transport lines operate. If they are services. Supra-municipal authorities (16 percent) can
not operating the actual transport provision itself, also be introduced as a new layer above municipal-
they also need the power to regulate subcontrac- ities. In the rarest case, some cities are upgraded to
tors with respect to fares and other characteristics a special status of metropolitan cities (8 percent).
of transport provision. Transport authorities with A size factor is at play. The larger the population of
these powers exist in many OECD countries but the metropolitan area, the more stringent its type of
are especially common in Germany, where every metropolitan governance arrangement.
large urban agglomeration is covered by one trans- Regarding competencies, three fields of work still
port authority. emerge as clear priorities for most metropolitan au-
These findings indicate that dedicated metro- thorities (Figure 5): regional economic development
politan authorities improve economic outcomes (dealt with by more than 80 percent of metropolitan
and the quality of life in metropolitan areas. They authorities), transport (over 70 percent), and spatial/
also correspond to the anecdotal experience of land-use planning (over 60 percent). The predomi-
policymakers and the conclusions from a large nance of these three policy fields is not surprising as
number of case studies conducted by the OECD. they are often mentioned by practitioners as the areas
Together with these insights, the new findings from in which municipalities most need coordination.
the OECD Metropolitan Governance Survey make No specific model of metropolitan governance is
a strong case that well-designed metropolitan au- necessarily better or more efficient than another.
thorities are important for a countrys prospects as However, OECD experience suggests that metropol-
they can improve the productivity and the quality itan governance reforms tend to be more effective
of life of its metropolitan areas. when they go beyond purely institutional changes and

Section 1: Theoretical perspectives on metropolitan governance 55


aim to build a long-term process of cooperation. The governance reforms. These steps are summarized in
creation of a metropolitan authority does not, in itself, Table 1 and briefly discussed below.
guarantee better policy coordination. And once such
Figure 5. Major Fields of Work for Metropolitan
a metropolitan authority is established, given that so-
Governance Bodies in OECD Countries
cioeconomic dynamics evolve continuously, even once
well-functioning governance structures may eventually 90%
need to be adapted over time. Reforms that attempt to 80%
70%
replicate a specific type of metropolitan governance 60%
50%
arrangement can therefore be risky. Most metropolitan 40%
30%
governance arrangements are not entirely transferable 20%
10%
as such and need to be tailored to the considerable 0%
variety of local contexts.

ing

on

e p re

on

ism

y
sa
en

erg
tio

u
isi

isi
po
pm

nn

eis

ur
rta

En
ov

rov
dis

To
pla

dl
po
elo

pr
The process of designing, implementing, and

an
ste
ns

al
ev

ter

rag
ati
Tra

re
Wa
ld

Wa

ltu
Sp

we
na
sustaining a metropolitan governance reform matters

Cu
gio

Se
Re
at least as much as the choice of the model itself.
Five key steps can help guide effective metropolitan Source: OECD (2015b).

Table 1. Five Key Steps that Guide Effective Metropolitan Governance Reform

Concrete How they can be achieved Examples in OECD countries


steps
Motivate Leverage projects of common Opening of a bridge between Copenhagen (Denmark) and
collaboration interest. Such projects may Malm (Sweden) in 2000 triggered growing integration between
by identifying naturally cross administrative the two cities across the Danish-Swedish border.
concrete borders (e.g., infrastructure Barcelona (Spain) accompanied preparations for the 1992
metropolitan investment projects or high- Olympics with a process of metropolitan strategic planning that
projects profile joint events). was sustained after the Olympics and led to the creation of a
metropolitan authority in 2011.
Build A strong voice that advocates for The leadership of mayors played a major role in fostering
metropolitan governance reform is required to metropolitan governance reforms in London (United Kingdom)
ownership initiate and maintain momentum. and Lyon (France).
among key The voice can come from a local Following a 2002 summit of business and community leaders
stakeholders mayor, the private sector, or in Toronto (Canada), a senior partner of the Boston Consulting
another part of society. Group (David Pecaut) created and led a 40-member steering
committee that produced the 2003 report Enough Talk:
An Action Plan for the Toronto Region, which raised the
governments awareness of the economic and social decline of
Toronto and provided a roadmap for issues where there was a
clear consensus that action was needed and quick progress could
be made.
Tailor reliable Revenues can be raised from The directly elected metropolitan authority of Stuttgart
sources of own sources (taxes and user fees) (Germany)Stuttgart VRSreceives its budget from its
metropolitan within the metropolitan area, constituent municipalities, the Federal State (Land) in which it is
financing through transfers from higher located, and the federal government.
tiers of government, or by local The directly elected metropolitan council in Portland (United
capital finance. Diversification of States)Portland Metroraises the majority of its funds from
sources can help reduce financing user fees and property taxes, and only a relatively small percentage
uncertainty. through federal and municipal subsidies.

56 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


Concrete How they can be achieved Examples in OECD countries
steps
Design Engage those who feel The central government of the United Kingdom offered to
incentives and threatened by the reform and devolve powers to cities over transport, infrastructure, business
compensation offer compensation for their development, education, and planning issues through negotiated
for anticipated losses. and tailored City Deals. These deals require cities to put in place
metropolitan strong governance arrangements (e.g., through an elected mayor
compromises or a stronger community of existing local authorities).
Implement Seek independent expertise and In Australia, the central government appointed an independent
a long-term feedback to evaluate and improve Metropolitan Local Government Review Panel in June 2011 to
process of reform options and results. examine the social, economic, and environmental challenges
metropolitan facing Perth over the next 50 years. Following release of the
monitoring report and public discussion, the state government announced its
and evaluation proposal for new local government boundaries for metropolitan
Perth in July 2013.

Source: Authors elaborations based on OECD(2015b).

Identifying Concrete Metropolitan Projects planning, starting from the core city and gradually
enlarging it to the metropolitan scale through the
Tangible projects on key public services can help rally involvement of sectoral inter-municipal authorities.
forces at the initial stage and progressively lead to setting The process was sustained after the Olympics and
a bigger picture. Examples of metropolitan projects can culminated in the creation of a new metropolitan
typically be found in large-scale infrastructure invest- authority in 2011.
ment initiatives that exceed the financial and managerial Another example is France. The nominations of
capacity of individual municipalities (such as high-speed Lille and Marseille as the European Capital of Culture
rail projects) or major flagship events (including a bid for in 2004 and 2013, respectively, helped foster new
the Olympic Games). This spark for a new metropolitan forms of cooperation among municipalities and with
dynamic, however, needs to be sustained over time in civil society, which laid the groundwork for broader
order for a greater level of metropolitan integration to metropolitan integration.
materialize. For example, both Athens and Barcelona
hosted the Olympic Games but they underwent diver-
gent patterns of metropolitan governance. Build Sense of Metropolitan Ownership
In Athens, a spatial plan with an explicit met- among Key Stakeholders
ropolitan scale was adopted in 1985 together with
the creation of the Organisation for the Planning Metropolitan governance reforms need one (or more)
and Environmental Protection of Athens. The strong advocate(s) as the engine of the process. A rele-
selection of Athens in 1997 as the host city of the vant personality or institution often plays a pivotal role
2004 Olympics led to an unprecedented wave of in steering change and creating or maintaining momen-
infrastructure and urban investments across the en- tum for reform. For example, the strong political will of
tire metropolitan area. However, the metropolitan mayors was a key determinant of successful reform in
spatial plan was soon bypassed to accommodate and Barcelona, London, and Lyon. Beyond municipalities,
accelerate Olympic projects and, 10 years later, the the national government, intermediate levels of gov-
debate on the metropolitan governance of Athens ernment, the private sector, civil society, and universities
has not led to any substantial results. need to actively engage in the reform process. Central
In contrast, Barcelona accompanied Olympic governments can play a decisive role in launching or
preparations with an iterative process of strategic facilitating metropolitan reforms.

Section 1: Theoretical perspectives on metropolitan governance 57


In federal countries, the national government may ini- Last but certainly not least, citizens and civil society
tiate a broad orientation toward metropolitan approaches organizations need to be brought on board and em-
and let state governments take over specific metropolitan powered at the very beginning of the reform process.
areas in their own territory. In contrast, a wider diversi-
ty of approaches exists among unitary countries. The
central government may be keen on maintaining tight Identify and Secure Reliable Sources of
control over the largest metropolitan areas, especially in Financing
the case of large capital regions. In Korea, before 1995,
the mayor of Seoul was appointed by the President Pressure for metropolitan reforms frequently stems
of the Republic. In the United Kingdom, prior to the from municipal finance bottlenecks. Metropolitan
establishment of the Greater London Authority, the gov- areas are typically scarred by wide internal disparities
ernment ran a specific Government Office for London in revenue-raising potential, expenditure needs, and
to oversee investment programs and financial transfers investment capacity. Metropolitan reforms cannot be
for the area. However, given the growing awareness of conceived in isolation from an in-depth debate on how
the contribution that large metropolitan areas make to a the new governance structure can help respond to the
countrys overall growth and wellbeing, the central gov- financial needs of the metropolitan region and how to
ernment can also play a prominent role in the enactment match the new governance structures responsibilities
of metropolitan governance arrangements. In Italy, for with corresponding financial resources.
example, after two decades of institutional gridlock, the Securing an appropriate stream of funding helps
government proposed a new law on metropolitan cities avoid unfunded mandates and facilitates effective
in 2014, which was implemented throughout 2015. collaboration. How to share the burden of public
Besides central governments, intermediate levels services fairly across the metropolitan area (typ-
such as the states in federal countries or the provinces ically between the core city and its periphery in
and regions in unitary countriesneed to be engaged in many European metropolitan areas) tends to be a
the reform process. This is no easy task, as the existing controversial issue. Intra-metropolitan equalization
level of government is unlikely to gracefully hand over schemes can be implemented to address negative
power to a new metropolitan authority that could be- externalities of urban sprawl and compensate for
come a rival center of powerall the more so if such inequalities in tax bases. Such schemes may include
metropolitan authorities were created by the central redistributive grants and tax base sharing. Besides
government on a top-down basis. The search for greater formal intra-metropolitan equalization schemes,
metropolitan autonomy can, in that case, trigger strong metropolitan finance reforms also need to consider
antagonism from upper-tier governments if the latter more effective ways to finance growing needs for in-
do not perceive positive-sum gains from the reform. In frastructure and services, while accounting for spill-
the Netherlands, the complex relationship between the over effects and responding to pressing new urban
city-regions and the provinces led to the governments challenges (e.g., ageing, migration, social cohesion,
recent decision to abolish city-regions, up-scale munic- and climate change).
ipalities, and strengthen the provinces. Property tax often constitutes a particularly
Another part of society that needs to underwrite the critical source of revenue for metropolitan areas.
reform is the private sector. The business community Metropolitan finance reforms may provide the
can play a powerful role in initiating a metropolitan opportunity to diversify the tax portfolio beyond
reform dynamic by raising awareness and organizing property taxes. User fees are widely seen as the most
itself at a metropolitan scale. Examples from OECD appropriate source of revenue for metropolitan
countries include strong involvement from large firms areas to finance operating and maintaining infra-
in Chicago, Toronto, Marseille, and London. structure. User fees can be particularly important in

58 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


large metropolitan areas because they can encourage Implement Long-Term Process of
more efficient land use. When marginal cost prices Monitoring and Evaluation
are charged, consumers who are far away from ex-
isting services, and hence more costly to serve, will Solid background research and scrutiny from unbiased
pay more, while those closer will pay less. Another experts creates and sustains credibility for reform by
way to finance metropolitan infrastructure while strengthening the evidence base. Independent expertise
discouraging sprawl is to tap land-based sources of and research capacity are required to demonstrate the
revenues. This can be done through development need for change and the desirability of the proposed
charges, which should be differentiated by location solutions to key stakeholders, and to analyze and weigh
to reflect the real costs (e.g., higher costs for areas different options.
located further away from major existing facilities). Australia offers rich experience in terms of ap-
Metropolitan areas can also charge for estimated pointing an independent panel of experts to conduct
land-value increments and windfall gains for the an extensive review of local and metropolitan gov-
private sector that arise from new public infra- ernment reforms. In Perth, a wide-ranging process
structure investment under the form of betterment of public consultation led to a concrete proposal
levies, which can then be used to finance sustainable for new boundaries. In Turin, the experience of the
transport infrastructure. Development charges are Metropolitan Conference followed by the Metropolitan
generally considered less complicated to administer Table illustrated a strong attempt to propose dialogue at
and typically more efficient than other methods of the metropolitan level with the support of the province
growth controls (e.g., zoning, regulations, and out- and the region between 2000 and 2010. Independent
right growth limitations). expertise was also provided at the regional level.
Strong, reliable instruments to monitor and evaluate
reform contribute to continuous improvement. In this
Design Incentives, Compensation to context, tools need to be put in place to ensure ongoing
Encourage Metropolitan Compromises feedback. In Canada, Toronto has set up mechanisms
to gather feedback on metropolitan issues from citi-
Communicating the long-term gains of reforms and zens and other stakeholders on a regular basis. Since
the costs of non-reform is critical. Stakeholders need its diagnostic report (2003), the Toronto City Summit
to be made aware and convinced of the negative ef- Alliance has convened all three levels of government
fects of maintaining the status quo on their interests in with business, labor, academic, and non-profit sectors
the short and long term. There must be a clear strategy for a Greater Toronto Summit every four years to drive
to identify and manage the expectations of different collective action on pressing issues such as transport,
constituencies. energy, and socio-economic inclusion.
OECD experience suggests that cooperation Finally, building in some degree of flexibility in the
among municipalities works best on a voluntary basis timeframe, sequencing, and speed of metropolitan
with incentives from the top, but also when a strategy governance reforms helps put in place a steady process
is elaborated to engage those who feel threatened by of metropolitan learning. Metropolitan governance
the reform and secure their buy-in (in some cases this reforms can sometimes take the form of incremental
may mean providing compensation for anticipated experimentation with a selection of a few pilot
losses). Recent examples of such incentives include experiences, as opposed to a one-shot uniform model.
the City Deals in the United Kingdom, under which Ensuring visibility in the short and long term, and the
the government is granting a range of new powers possibility of revisiting the arrangement after a given
to cities that commit to strengthening collaborative period, leaves enough room for trial and error as well
governance in their area. as midway adjustments to monitor progress.

Section 1: Theoretical perspectives on metropolitan governance 59


References
Ahrend, R., Farchy, E., Kaplanis, I., Lembcke, A. C.(2014).
(OECD Regional Development Working Paper
No. 2014/05). Retrieved from http://www.oecd-
ilibrary.org/urban-rural-and-regional-development/
what-makes-cities-more-productive-evidence-on-
the-role-of-urban-governance-from-five-oecd-
countries_5jz432cf2d8p-en
Ahrend, R., Gamper, C., and Schumann, A. (2014).
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org/urban-rural-and-regional-development/the-oecd-
metropolitan-governance-survey_5jz43zldh08p-en
Angel, S., Parent, J., Civco, D.L., and Blei, A. M. (2011).
Making Room for a Planet of Cities. Cambridge, MA:
Lincoln Institute of Land Policy.
Combes, P.P., Duranton, G., and Gobillon, L. (2011). The
identification of agglomeration economies, pp.25366.
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redefining-urban_9789264174108-en
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Urbanisation and its Consequences. Paris: OECD.
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rural-and-regional-development/the-metropolitan-
century_9789264228733-en
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city_9789264226500-en
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Mxico, Mexico. Paris: OECD. Retrieved from http://
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mexico_9789264245174-en
Tiebout, C.M. (1956). A pure theory of local expenditures,
pp.41624.

60 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


1.2 Institutions for Metropolitan Governance:
Lessons for Nations and Stakeholders
Eugnie L. Birch (Penn Institute; General Assembly of Partners of the World Urban Campaign)

Abstract

Metropolitan governance is a critically important vehicle to implement global agreements on disaster


risk reduction, financing for development, sustainable development, climate change, and urbaniza-
tion that have recently been approved by United Nations Member States. Within a subsidiarity frame-
work, governance can provide an equitable and efficient means to deliver services essential to leav-
ing no one behind, ensuring inclusive economies, and supporting environmental sustainability. This
chapter explores the theories and practices of metropolitan governance, outlining the requirements
of successful metropolitan governance structures and their differing forms based on the findings of
scholars, experts, and practitioners. It traces its inclusion in the New Urban Agenda, the outcome of
the Conference on Housing and Sustainable Development (Habitat III), which argues that well-gov-
erned urban areas can be engines of sustainability. This stance is confirmed by evidence-based re-
search which holds that Member States and their multi-party stakeholder partners must tailor such
arrangements to local contexts.

In the past two years, United Nations Member States making cities and human settlements inclusive, safe,
have forged several agreements related to disaster risk, resilient, and sustainable (Goal 11) as well as delivering
development financing, sustainable development, cli- results on 16 other goals, including eradicating poverty,
mate change, and urbanization. They generally agree on hunger, ill health, polluted water and water bodies,
major three goals, stated specifically in the New Urban ineffective sanitation, inadequate infrastructure, and
Agenda, which was approved by the General Assembly unemployment. These feats can only be achieved if
on December 16, 2016. These goals are to leave no one the physical places are well governed, as called for in
behind, ensure inclusive economies, and support envi- the New Urban Agenda. The authoritative Maruxa
ronmental sustainability. As Member States translate Cardama (2015) captured this point, writing: With
these agreements aspirations into tangible projects, the inclusion of SDG11 in the 2030 Agenda for
many observers advise them to focus their efforts on Sustainable Development, the international commu-
urban areas, arguing that a good portion of the eco- nity is recognizing that urban development, with its
nomic, social, and environmental issues in question are power to trigger transformative change, can and must
rooted in local conditions (Global Task Force, 2016). be at the forefront of human development. Moreover,
Moreover, a stance of employing cities as the since the 17SDGs constitute an indivisible and inte-
common link has strong logic as the first three grated framework, the international community is also
global agreements (risk, sustainability, and climate) acknowledging that the achievement of SDG11 can
offer goals and targets toward the objectives of the accelerate the pace for achieving the other SDGs
agreements, while the New Urban Agenda, through and vice-versa.
its detailed implementation plan provides means and This chapter explores such an approach, concen-
opportunities to achieve them. The 2030 Agenda trating on metropolitan governance, a key institutional
for Sustainable Development, for example, calls for advance, as an implementation vehicle. First it explores

Section 1: Theoretical perspectives on metropolitan governance 61


urban areas as engines of sustainability; second, connectivitycontending that these factors allow for
making urban places productive through multi-tiered, a place to be productive by taking advantage of the
multi-stakeholder governance; third, translating theory benefits of agglomeration (OECD, 2015b, pp.4650).
into practice; and finally, metropolitan governance and Moreover, they point to excess governmental adminis-
the New Urban Agenda. trative fragmentation as a barrier to achieving prosperi-
tyfor each doubling of the number of municipalities
Urban Areas as Engines per 100,000 inhabitants within a metropolitan area,
labour productivity in the metropolitan area decreases
of Sustainability by 56 percent (OECD, 2015b, p.56). Applying the
City Prosperity Index to more than 200 cities worldwide
In support of the assertion that well-governed urban has confirmed the importance of large, consolidated (as
areas (cities and their economically and socially linked opposed to small, fragmented) urban places. It provides
peripheries) are critical to achieving the goals of mul- evidence that city size matters more than any other fac-
tiple global agreements, observers cite population data tor (Moreno, 2017).
(urban areas currently constitute more than half of the Increasingly, these observers are calling for robust
worlds population and will likely constitute two-thirds or urban governance systems based on functional boundar-
more by 2050), economic strength (urban areas produce ies, not fragmented administrative boundaries. They see
7080 percent of the worlds GDP), and environmental metropolitan governance as the most effective approach
conditions (urban areas produce 7080 percent of the to achieving the UN goals cited earlier (OECD, 2015b,
globes greenhouse gases). In fact, some go so far as to p.56; World Bank, 2015a). Here, they argue that the spill-
claim, Our struggle for sustainability will be won or lost over effects of urbanization have created new service
in cities (UN, 2012) and In the decades to come, the areas encompassing the core and peripheral cities and
city, not the state, will decide stability and development settlements. They note that without coordinated service
(Muggah, 2015). deliveryespecially for regional planning, transporta-
McKinsey Global Institute researchers underline tion, and ecosystem protectionurban areas simply
these contentions when noting that 600 cities are the cannot exhibit their traditional strengths as engines of
source of 60 percent of global GDP, yet they have prosperity (Glaeser and Joshi-Ghani, 2013; World Bank,
nothing to say about the remaining cities of this size 2015a). A recent study, Africas Cities, Opening Doors
(more than 3,000) that are not serving as engines of to the World, further details this position by calling out
prosperity (Dobbs et al., 2011; Angel, Blei, Parent, et al., three additional barriers to productivity: the misalloca-
2016). Thus, a compelling question is how to address the tion of capital (low expectations and absence of plan-
critical issue of urban areas growing at breakneck speed ning), institutional constraints (ineffective and restrictive
in Asia and Africa that are not experiencing the expected regulation, corruption), and ineffective property rights
increases in productivity (Fay and Opal, 2000; Arouri, systems (lack of legal clarity, absence of registration
Youssef, Cuong, et al., 2014). systems, official maps) (World Bank, 2017, pp.11828).
Many attribute the phenomenon of urbanization According to multiple observers, making urban places
without economic growth to the absence of enabling productivea key feature contributing to sustainabili-
conditions and governance institutions suited to rapid tycalls for creating an environment where the three
or hyper-urbanization (Smoke, 2013; OECD, 2015a,b). essential characteristics of agglomeration can arise and
They cite empirical work demonstrating that well-gov- thrive regardless of the level of economic development:
erned urban areas with sizeable populations connected thick labor (numerous workers of varying skills), thick
to their surroundings are more prosperouspro- markets for specialized service providers (numerous
ductivity increases 25 percent for each doubling geographically proximate intermediate service provid-
of sizeproductivity increases by 12 percent with ers), and knowledge spillovers (skilled workers in close

62 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


Figure 1. Urban Development in Bangalore
proximity for face-to-face contact) (Moretti, 2015,
and Atlanta
p.117). Growing these features involves developing the
capacity to make investments in the key areas of hard and Bengaluru (Bangalore), India
soft infrastructure, as well as quality of life features rang-
ing from safety to public space. In turn, this process calls
for effective multi-tiered, multi-stakeholder governance
systems guided by subsidiarity (variously called decentral-
ization, devolution, or deconcentration),1 placing legal,
administrative, and financial responsibilities at a level
appropriate for the performance of a specified function
(Bahl, Linn, and Wetzel, 2015, p.4; OECD, 2015a, p.11).
In application, subsidiarity assumes more than one
tier of government, each with legally established rights
and obligations. For example, national governments
(either federal or unitary) provide the overall enabling
GHSL built-up Year
environment through standard-setting constitutions and Admin 3 1990 2000 2015
associated laws that in the discussion of urbanization
encompass such issues as property rights and contracts, Atlanta, USA
labor market conditions, trade and tax policies, individual
rights (e.g., free speech and assembly), and provisions for
administrative and financial decentralization. Further,
national governments invest in connective infrastruc-
ture to strengthen the country as a whole (e.g., ports,
highways, and railways) and address issues too large
for individual subnational governments to handle (e.g.,
slums and housing) (World Bank, 2009; Yusuf, 2013;
UN-Habitat, 2014; OECD, 2016).
In Figure 1, overlaying GHSL data that illustrates
actual settlement patterns with administrative bound-
aries illustrates several issues related to subnational
governance. Urban development in Bangalore, India, GHSL built-up Year
and Atlanta, United States, crosses several administrative Admin 3 1990 2000 2015

boundaries.
Source: Chandan Dueskar, World Bank.

1 Each term has a specific derivation and meaning. Subsidiarity


has its origins in Catholic teachings, which use it as an organiz- Productivity through Multi-Tiered, Multi-
ing principle that matters ought to be handled by the smallest,
lowest, or least centralized competent authority. Political deci- Stakeholder Governance
sions should be taken at a local level if possible, rather than by
a central authority. Decentralisation is usually referred to as the
transfer of powers from central government to lower levels in Regional government efforts focus on territorial cohe-
a political-administrative and territorial hierarchy. This official sion (e.g., ruralurban synergies), integration of core and
power transfer can take two main forms. Administrative decen-
tralisation, also known as deconcentration, refers to a transfer peripheral areas, and management of regional scale sys-
to lower-level central government authorities, or to other local
authorities who are upwardly accountable to the central gov-
tems (e.g., ecosystem services, transport, multi-jurisdic-
ernment In contrast, political, or democratic, decentralization tional land planning) (World Bank, 2009; de Mira, 2014).
refers to the transfer of authority to representative and down-
wardly accountable actors, such as elected local governments
Municipal governments provide property-based services
(Yuliani, 2004).

Section 1: Theoretical perspectives on metropolitan governance 63


(e.g., land use, and solid and sanitary waste disposal) and While the various parties agree that national
implement social programs (e.g., education and health) governments have three key purposes (providing
(Slack, 2007; Sud and Yimaz, 2013). Neighborhood or security [freedom from violence], growth [promo-
sub-municipal organizations and other networks form tion of prosperity], and equity [fair treatment of
the basis of non-state or citizen participation to support all]), they also recognize that government alone
multi-stakeholder involvement in multi-tiered gover- cannot address todays complex affairs and associ-
nance, an activity that flows to varying degrees through ated problems, especially urban growth dynamics.
all levels of government (WBGU, 2016; Ecological Instead, they argue, multiple stakeholders arranged
Sequestration Trust, 2016; Sud and Yimaz, 2013; UN- in nested or polycentric institutions, must share
Habitat, 2014). In todays parlance, defining the details of and develop solutions, a belief likely influenced by
these arrangements to manage urbanization forms what scholars such as Elinor Ostrom, whose views on
some have labeled a new global bargain and a new the complexity of governance for common goods
social contract (Ecological Sequestration Trust, 2016, eloquently described in her Nobel Prize acceptance
p.10) or a new normative compass with a polycentric speech are applicable more generally (World Bank,
responsibility architecture (WBGU, 2016, pp.213). 2017; Ostrom, 2009).3 This thinking is the basis of
Over time, ideas for multi-tiered governance sys- the evolving support for multi-tiered, multi-stake-
tems have evolved around many themes (e.g., water holder metropolitan governance.
and food security), not just urbanization. This evolution Adopting such a world view requires a realistic
reflects reactions to changing values brought on by a appreciation of the benefits and costs, pros and
combination of factors, including the spreading effects cons of multi-tiered, multi-stakeholder metropolitan
of globalization and concomitant enhanced commu-
nications (OECD, 2015b; Bahl, 2013, p.3); reformist 3 Ostroms (2009) discussion of the governance of common pool
resources has broader applications to the governance of the
efforts of such global institutions as development banks public goods and duties (broadly defined) of cities. She correctly
observed: Contemporary research on the outcomes of diverse
and philanthropies that insist on structural changes in institutional arrangements for governing common-pool resourc-
governmental practices as conditions of their contri- es (cPrs) and public goods at multiple scales builds on classical
economic theory while developing new theory to explain phe-
butions (Woods, 2014); and a general rejection of Neo nomena that do not fit in a dichotomous world of the market
Liberal/Modernist or Westphalian views promoting and the state. Scholars are slowly shifting from positing simple
systems to using more complex frameworks, theories, and mod-
expert-driven, top-down, nation-led, free marketbased els to understand the diversity of puzzles and problems facing
decision-making (Harvey, 2007; Engelke, 2015).2 humans interacting in contemporary societies. The humans we
study have complex motivational structures and establish diverse
private-for-profit, governmental, and community institutional ar-
rangements that operate at multiple scales to generate productive
and innovative as well as destructive and perverse outcomes (p.
2 Harvey (2007) defines neo-liberalism as a theory of political 408). She goes on to reflect on the polycentric characteristics of
economic practices that proposes that human wellbeing can such governance structures, the existence of rules, boundaries,
best be advanced by liberating individual entrepreneurial free- the necessity of trust and free communications. Ostrom concludes
doms and skills within an institutional framework characterized with observations that are useful in thinking about subsidiarity
by strong private property rights, free markets, and free trade. and the respective roles for different actors (governmental and
The role of the state is to create and preserve an institutional non-governmental) in solving public policy issues. The most
framework appropriate to such practices. The state has to guar- important lesson, for public policy analysis derived from the intel-
antee, for example, the quality and integrity of money. It must lectual journey I have outlined here is that humans have a more
also set up those military, defence [sic], police, and legal struc- complex motivational structure and more capability to solve social
tures and functions required to secure private property rights dilemmas than posited in earlier rational-choice theory. Designing
and to guarantee, by force if need be, the proper functioning of institutions to force (or nudge) entirely self-interested individuals
markets. Furthermore, if markets do not exist (in areas such as to achieve better outcomes has been the major goal posited by
land, water, education, health care, social security, or environ- policy analysts for governments to accomplish for much of the
mental pollution) then they must be created, by state action if past half century. Extensive empirical research leads me to argue
necessary. But beyond these tasks the state should not venture. that instead, a core goal of public policy should be to facilitate the
State interventions in markets (once created) must be kept to development of institutions that bring out the best in humans. We
a bare minimum because, according to the theory, the state need to ask how diverse polycentric institutions help or hinder the
cannot possibly possess enough information to second-guess innovativeness, learning, adapting, trustworthiness, levels of co-
market signals (prices) and because powerful interest groups operation of participants, and the achievement of more effective,
will inevitably distort and bias state interventions (particularly equitable, and sustainable outcomes at multiple scales (Ostrom,
in democracies) for their own benefit. 2009, p.435).

64 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


governance in promoting sustainable development expressed in a commonly accepted vision or plan,
writ large. Among the benefits are developing buy in, with its leaders having the capacity to translate it into
cooperation, and collaboration among the parties who strong implementation programs. Such a plan has
will be subject of and partners in implementing key the following elements (OECD, 2015b, p.58; Sud and
policy measures, and attracting more resources and Yilmaz, 2013):
capabilities for respective national efforts. Challenges Its geographical scope encompasses the core or
to this approach revolve around the length of time central city and a large part of the surrounding
and methods involved in developing a common urbanized area.
understanding of the power of collective action. It has legally recognized leaders that are either
Many stakeholders have self-referential histories, lack elected or appointed.
experience (and/or perhaps interest) in participation Its mission is to address more than one metropolitan
requiring compromise, and may not agree with the concern (i.e., it is differentiated from what may be la-
priorities or urgency of the work that emerges in col- beled a special district created to deliver one service).
lective discussions (Salaman, 2000). It is fiscally stable with a regular source of revenue
Nonetheless, agreement on the key components and control of its budget.
of an effective metropolitan governance system is Its workings are transparent, open to citizen input,
emerging. It encompasses three big ideas: and fully accountable to the public.
1. A metropolitan governance system that in- It is flexible and thus able to adjust its practices to
cludes state and non-state participants, their changing circumstances.
collaboration on designing and implementing
policies related to the smooth operation of the These characteristics recognize the need to attri-
geographic area, their alignment with formal bute specific governmental responsibilities efficiently,
and informal rules and practices, and their equitably, and transparently on a metropolitan level ac-
possession of specified powers and financial companied with the power to exercise them in a legally
capabilities (World Bank, 2017; Smoke, 2013). recognized way with economic and political authority.
2. It addresses four questions: The rationale for supporting metropolitan gover-
a. Who should be involved in the decision-mak- nance derives from broad principles of efficiency and
ing about the allocation of land, public equity. Much scholarship on the topic comes from
goods, and service delivery? the United States where the nations decentralized
b. What scales should governance operate? government structure, including the devolution of
c. What are the respective roles of public, land use, education, and specific taxing privileges at
private, and non-governmental stakeholders subnational governmental levels (states, counties, and
(non-market and market) in their allocation? municipalities), has led to extreme fragmentation with-
d. How should social, economic, and environ- in census-defined metropolitan areas (e.g., the Chicago
mental goals be balanced? metropolitan area has 1,550 local governments).
3. It has many forms (from collaborative agree- Scholars debate the pros and cons of local govern-
ments to independent metropolitan structures); ment fragmentation versus consolidation through
no one model is best; and its design is related metropolitan governance, querying the optimal size
to the national and local historical, cultural, of the government unit related to several factors.
and political contexts of a given place (Sud and They look at political outcomes: local government
Yilmaz, 2013; Stack, 2007; Bahl, 2013; Smoke, can allow hands-on democracy with ample opportu-
2013; OECD, 2015a) nities for citizen participation and accountability while
Agreement on the essential qualities of a well-func- consolidation can lead to bureaucratic congestion
tioning metropolitan governance system is usually and unresponsiveness. They contrast economic costs:

Section 1: Theoretical perspectives on metropolitan governance 65


fragmentation can lead to expensive duplication services like public transportation (Stack, 2007; Bahl,
and misalignment of public services while con- 2013). Recently, observers have added another quality:
solidation can provide economies of scale for key the ability to serve as a stabilization tool after an inter-
services like education, transportation, solid waste nal conflict (Edwards and Yilmaz, 2016).
collection, water, and sanitation. They examine the Further, as nations work through their commit-
social impact: fragmentation can lead to economic ments to several global agreements, they will likely
(as well as racial) segregation as rich citizens can conclude, as they have in the New Urban Agenda (paras
afford to gravitate to exclusionary places with high 89, 90, 95, 96, 114, 117, 115, 117, 118, 138, 159, and
levels services, leaving their poorer neighbors be- 160) that metropolitan governance is desirable but the
hind in under-serviced places while consolidation exact details of its form need to be locally determined.
can facilitate the equitable distribution of services The story is complicated when regarding the variety
and can provide an overall higher quality of life. of forms of governments (e.g., unitary versus federal)
They consider environmental effects: fragmenta- and their histories (e.g., colonial heritage, tribal or ethnic
tion can contribute to sprawl and development of traditions) among the worlds nearly 200 nations. For
vulnerable land while consolidation can contain example, federal arrangements tend to devolve power
growth and/or preserve vulnerable land. Finally, to lower levels more easily than unitary ones, however
they observe that fragmentation can form barriers they likely favor states or provinces over municipal or
among localities that have too much independence local levels (Smoke, 2013, p.62).
or too many conflicting views that prevent them Thus, while enabling the formation of metropol-
from forging collaborative agreements that might itan governance is filled with possibilities, developing
lead to consolidation (any form of metropolitan its structure is a balancing act between the desire for
governance) to address proven economic and social efficiency, local autonomy, accountability, and in the
costs (Hendricks and Shi, 2015; Boschken, 2017; end, power among different political parties and/or
Gomez-Reino and Martinez-Vasquez, 2014). multi-party stakeholders (Bahl, Linn, and Wetzel, 2013,
Studies of governmental structures around the p.5; Stake, 2007, p.5). Analysts have isolated several
globe confirm that the key public policy tradeoff common questions, the answers to which will determine
between local fragmentation and metropolitan gov- the shape (and effectiveness) of any metropolitan gov-
ernance is between the welfare gains expected from ernance arrangement:
smaller governments (better placed to match expen- Under what rubrics and what functions will central
diture allocation to local preferences) and economies governments permit metropolitan governance?
of scale (or associated lower average costs) expected Currently, among the national governments that
from the delivery of services at larger jurisdictional specify constitutional provisions, they rarely de-
sizes (Gomez-Reino and Martinez-Vasquez, 2014, tail the specifics, although some nations develop
p.5). Beyond these trade-offs relative to political, eco- clarifying legislation related to administrative and
nomic, and social benefits, metropolitan governance financial powers. (Smoke, 2013, p.65)
can have other effects, as documented worldwide. It What will be the nature of the designated financial
can result in reduced externalities (negative spillover practices? Currently, among the nations allowing
effects of local decisions on neighboring jurisdictions) metropolitan governance, the structures vary
and add more connectedness throughout its area while widely depending on whether the subnational
addressing such area-wide problems as traffic conges- government has the power to raise own-source
tion, violence, and pollution. It can contribute to the revenues (e.g., taxes and fees), whether the higher
protection of common pool resources (e.g., ecosys- level government has provisions for tax sharing,
tems) while reducing excess land consumption that, in and whether the subnational government enjoys a
turn, supports the provision of resource-conserving secure stream of intergovernmental transfers and/

66 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


or has the capacity for local borrowing from private
Though many new experiments emerging in this
and public sector sources. (Smoke, 2013, pp.6773)
fast-moving field were not captured by this report, the
How will national governments organize units
study underlines the fact that few full-fledged metro-
within the metropolitan area (horizontal arrange-
politan governance systems exist, outlines a research
ments)? Structures range from a single municipal
agenda for their evaluation, and enumerates a number
government that offers a full range of services
of lessons to be explored in the future development of
over a large urban area that may or may not have
such arrangements. In addition to emphasizing the need
subunits with specified functions, or voluntary
to understand context and the realization that political
cooperation on topics of mutual agreement among
considerations often shape metropolitan governance
the several subnational parties. (Stack, 2007; Bahl,
structures, the study offers three warnings. First, pursue
2013; Andersson, 2012)
only those activities that provide gains (or make a differ-
Do central governments offer differential treat-
ence) to the area. Second, engage stakeholders early. And,
ment to metropolitan governments versus all local
third, balance efficiency and equity, and ensure voice and
governments? How do they coordinate service de-
accountability, taking into consideration the capacities of
livery? How do they oversee or regulate metropol-
participants at all levels (Andersson, 2012, p.14). Others
itan government actions (vertical arrangements)?
warn that capacity building at all levels is essential in or-
(Bahl, Linn, and Wetzel, 2013, p.56).
der to forge effective metropolitan governance (Sud and
Yimaz, 2013, p.111). Notably, most theorists cite regional
Translating Theory into Practice planning and land use, transportation, and ecosystem
protection as the most salient tasks for metropolitan
To illustrate the variety of metropolitan governance governance (Yusuf, 2013; OECD, 2015a).
systems currently in existence, a World Bank study While in the past 20 years, governance specialists have
cataloged 10 types of arrangements illustrated by developed theoretical foundations based on empirical
21 examples from around the world, ranging from studies of the limited number of current metropolitan
Cape Town to Abidjan to Nairobi to Shanghai to Sao governance efforts, they have not yet developed a set
Paolo and Madrid, Toronto, London, and Marseille of principles for metropolitan governance institutions
(Andersson, 2012). The study outlines their founding responsive to the pace and trajectory of 21st century
dates, missions, functions, and political and financial urbanization. This gap is especially vexing in light of
powers, demonstrating several emerging forms. the many directives in the New Urban Agenda calling
Sao Paolos metropolitan regional government, for for metropolitan governance, a topic discussed below.
example, evolved from a regional transportation However, other similarly engaged, multi-level govern-
system consisting of metro/urban transport and mental and stakeholder communitiesespecially those
regional trains dating from the 1960s. Under the dealing with issues related to waterwho have translated
most recent iteration of its functions defined in their practices into theory and applied the theory back to
2011, it now encompasses 59 municipalities and has practice, are slightly more advanced and thus may provide
jurisdiction over transportation, housing, sanitation, a template for managing urbanization.
and the environment. The Cape Town municipal Water systems and metropolitan areas share many
metropolitan government dates from 1996, after the qualities. First, they each deal with material itemswater
fall of apartheid. It too has changed with subsequent and land/public goods/serviceswhose allocation is
amendments such that it now encompasses 61 frequently contested politically. Second, they are complex,
municipalities, has a single tax base, and faces a huge encompassing more than one inter-related subsystem
challenge in providing services in the areas widespread that calls for attention and coordination. Third, they
informal settlements while maintaining services in the touch or affect multiple stakeholders in the public, pri-
formal sectors. vate, and non-governmental sectors across geographic

Section 1: Theoretical perspectives on metropolitan governance 67


regions. Fourth, over time, their growth and development
have resulted in fragmented institutional arrangements 4. Ensure responsible authorities have the
and a misallocation of roles and responsibilities due to capacity to meet the complexity of water
gaps in policy guidance attributed to the absence or obso- challenges and have the set of competencies
lescence of workable legal frameworks, financial support, required to carry out their duties.
and/or long-term planning. 5. Produce, update, and share timely, consistent,
Interest in water security dates from the 1970s with comparable, and policy-relevant water and
the convening of the first and only UN-wide confer- water-related data and information to guide,
ence on water (about the same time at the Habitat I assess, and improve water policy.
conference in 1976). It took off as an international 6. Ensure that governance arrangements help
movement such that by the mid-1990s, two major mobilize water finance and allocate financial
global advocacy groups emerged (the Global Water resources in an efficient, transparent, and
Partnership and the World Water Council) along with timely manner.
the commencement of the every three year, 30,000-at- 7. Ensure that sound water management regula-
tendee World Water Forum. Soon multilateral groups tory frameworks are effectively implemented
took up the issue more systematically. By 2003, the and enforced in pursuit of the public interest.
United Nations coordinated its water-related programs 8. Promote the adoption and implementation
in UN Water, an inter-agency mechanism that publishes of innovative water governance practices
the UN World Water Development Report annually. across responsible authorities, levels of gov-
The OECD began its water governance initiative ernment, and relevant stakeholders.
shortly thereafter. Within this broad and growing arena, 9. Mainstream integrity and transparency prac-
stakeholders have worked on a number of policy issues, tices across water policies, water institutions,
of which governance has been a longstanding focus. and water governance frameworks for greater
Leading a six-year study and extensive consultations accountability and trust in decision-making.
within the World Water Forum and beyond, the OECD 10. Promote stakeholder engagement for in-
issued Principles on Water Governance (Box 1). formed and outcome-oriented contributions
to water policy design and implementation.
Box 1. OECD Principles on Water Governance 11. Encourage water governance frameworks
that help manage trade-offs across water
1. Clearly allocate and distinguish roles and re- users, rural and urban areas, and generations.
sponsibilities for water policymaking, policy 12. Promote regular monitoring and evaluation
implementation, operational management of water policy and governance where appro-
and regulation, and foster coordination priate, share the results with the public, and
across these responsible authorities. make adjustments as needed.
2. Manage water at the appropriate level(s)
within integrated basin governance systems Source: OECD 2015c.

to reflect local conditions, and foster co-ordi-


nation between the different levels. These principles have a familiar ring for metro-
3. Encourage policy coherence through effec- politan governance advocates. They recognize that
tive cross-sectoral co-ordination, especially governance is both bottom-up and top-down, tai-
between policies for water and the environ- lored to specific contextspolitical and economic
ment, health, energy, agriculture, industry, conditions and level of developmentand exercised
spatial planning, and land use. through networks or nested institutions (national,
regional, and local). The principles cover policy

68 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


coherence, subsidiarity, knowledge-sharing, finance, Development, published after the thematic conference,
and regulatory frameworks (Woodhouse and Muller, assert that todays governmental arrangements are
2017, p.237). In the next two years, the OECD will not fit for purpose. The document argues that, in
be dispersing these principles among public and pri- the face of the expansion of metropolitan areas
vate decision-makers (OECD, 2016a). Adapting the that are reshaping the urban landscape and raising
principles for metropolitan governance could assist new challenges, governmental frameworks from
member states in developing strategies to establish the national to the municipal level are unequipped to
metropolitan governance systems cited in the Quito meet the responsibilities of planning and managing
Implementation Plan section of the New Urban sustainable urban development. In particular, current
Agenda. Notably, these principles are aspirational rath- municipal governments lack jurisdictional power over
er than operational in that they do not deal directly the existing and soon to be enlarged urbanized areas,
with the highly detailed issues of managing conflicts, have limited financial resources, and experience gaps in
an area where much more work is needed. administrative capacity (UN General Assembly, 2016c,
p.2). The solution lies in reforming the frameworks
Metropolitan Governance and the to go beyond sectoral policies and consider cooper-
ation between different spheres of government and
New Urban Agenda non-state actors, fostering a balanced distribution of
powers, capacities, and resources including the revision
The New Urban Agenda is the product of two streams of legislative, regulatory, and fiscal frameworks (UN
of inputs: first, the Habitat III Regional and Thematic General Assembly, 2016a, p.2). In particular, strong
Conferences, one of which focused on metropolitan metropolitan governance is a key component of new
areas (see UN-Habitat, 2015), and second, the Habitat urban governance (UN General Assembly, 2016c, p.2).
III Policy Unit papers, three of which focus on urban In detailing metropolitan governance, Policy Unit 4
governance, national urban policy, and municipal experts call for strategic spatial planning that observes
finance (see http://habitat3.org/documents). These functional rather than administrative boundaries. They
inputs reflect the views of civil society (conferences) point to transportation as an example of a service
and experts (policy papers) on these matters. A close ex- to be delivered at the metropolitan scale. While they
amination reveals the origin of their recommendations note that any arrangements must be tailored to fit the
in the theoretical concepts described above and their respective context of a placesoft partnerships to
consequent presence in the Quito Implementation collaboration agreements to supra-municipal struc-
Plan section of the New Urban Agenda. turesthey insist that adequate power to manage and
The Declaration of the Habitat III Thematic finance metropolitan issues is the critical requirement
Conference on Metropolitan Areas, held in Montreal and offer a detailed roadmap for achieving it (UN
in October 2015, laid the foundation for recognizing General Assembly, 2016a, pp.15, 26).
the importance of larger than city geographies (i.e., Habitat III Policy Unit 5, Municipal Finance and
metropolitan areas), which are composed of one Local Fiscal Systems, reinforces the need for metro-
or more central cities with high population densities politan governance to deliver transportation, housing,
and large job pools, encompass a large labour pool sanitation and water, and environment efficiently and
within which most of the members of the population equitably. It cites such examples as the Mtropole du
live and work, and need a new type of governance Grand Paris and So Paolo Metropolitan Region (UN
that incorporates the full geography (UN General General Assembly, 2016b, pp.35, 62).
Assembly, 2016). Consequently, the Quito Implementation Plan
The recommendations of the Habitat III Policy highlights metropolitan governance in the three sub-
Unit 4 in Urban Governance, Capacity and Institutional sections: establishing the legal framework, planning and

Section 1: Theoretical perspectives on metropolitan governance 69


managing spatial urban development, and the means of implementation plans as they deploy and possibly
implementation. In particular, it has 12 direct references reform their efforts. As the governance theoreticians
to metropolitan governance (paras 89, 90, 95, 96, 114, whose work is reviewed here have repeatedly ob-
117, 115, 117, 118, 138, 159, and 160). served, the choice to support multi-tier, multi-stake-
The subsection on building a legal framework calls holder governance will be political. The emergence of
for systems based on principles of subsidiarity and strong non-state platforms during the preparatory pro-
decentralization. It emphasizes the use of functional cess for Habitat IIIthe Global Task Force of Local
geographic areas as the basis of effective governance. and Regional Governments and the General Assembly
In association with this idea, it underlines the need for of Partners composed of 16 partner groupsoffers
the legal delineation of administrative responsibilities new pathways for advocacy, dialogue, and cooperative
and stable financing mechanisms. inputs into the creation of new arrangements. These
The highly descriptive subsection on planning groups are currently devising their strategies but are
and managing urban spatial development emphasizes cognizant of key milestones around which to organize,
specific urban forms largely sustained by metropol- including the World Urban Forum (2018), related im-
itan governance. It envisions connected, compact, plementation meetings (e.g., the High Level Political
dense polycentric settlements that accommodate Forum for Sustainable Development Goals), and the
growth through planned urban extensions designed mandated, quadrennial reporting for the New Urban
to eliminate sprawl and protect natural resources. It Agenda. These institutions will likely contribute to the
presses for metropolitan plans and inter-municipal evolving governance structures over time, helping
cooperation to deliver integrated transport systems forge forms of metropolitan governance that blend
for passengers and trade, affordable housing, and bottom-up with top-down arrangements.
other basic services. In reference to administra-
tive and fiscal powers, it uses the terms horizontal Conclusion
(within regions) and vertical (between the national
and subnational governments) to describe desired Promoting inclusion, productivity, and environmental
governance arrangements. sustainability undergirds the UN global agreements
Finally, the means of implementation subsection related to resilience, development financing, sustain-
refers to a range of mechanisms, from data collection able development, climate change, and urbanization.
to knowledge sharing to capacity building to mobiliza- Focusing implementation of these pacts on urban
tion of financial resources, and to accountability and areas will likely have an enormous impact due to the
corruption prevention to be focused on subnational size of their populations, GDP production, and pres-
governments. It also makes several references to a ence of greenhouse gasses. This chapter focused on
metropolitan government whose role in overseeing how to translate the recommendations pertaining to
functional areas undertakes measures to ensure bal- governance of the New Urban Agenda into policy and
anced territorial development and adaptation and miti- programs, especially those related to managing and
gation programs for climate change (paras 90 and 144) planning urban spatial development on the ground.
and to work undertaken by allocating administrative A significant implementation challenge is the inability
tasks to enhance productivity and the delivery of pub- of traditional governance systems for urban areas to
lic services (paras 96 and 156). This section highlights meet the demands posed by the pace and trajectory
transportation as a specifically relevant service to be of contemporary urbanization, much less address the
provided by metropolitan governance (paras 115117) larger global initiatives. This inability is based on admin-
(UN General Assembly, 2016). istrative, rather than functional, boundaries combined
Clearly, the New Urban Agenda is a roadmap with a lack of legal responsibilities and stable revenue
designed to guide member states in tailoring their sources for subnational governments.

70 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


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72 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


1.3 Metropolitan Governance: The New Normal
for Improved Quality of Life
Mats Andersson (Independent Consultant)

Abstract

With continued urbanization around the world and settlements becoming more interdependent, metro-
politan areas are becoming The New Normal. This chapter highlights common issues creating a need
for cooperation among local governments and what the benefits of joint initiatives in a metropolitan
area can be. Approaches are described for how to define an appropriate boundary of a metropolitan
area. Metropolitan governance arrangements that are applied around the world are then classified,
and their advantages and disadvantages detailed. The chapter concludes by outlining key factors that
contribute to effective metropolitan governance.

A significant question is What is the problem? any formal or informal governance arrangements at
Many cities have over time become more interde- the metropolitan level tends to create fragmentation
pendent with their surrounding settlements and of service delivery (inefficiencies), free ridership by
rural areas, constituting a single economy and labor some jurisdictions (due to spillovers), environmental
market, a community with common interests, a sub-optimization, and underutilization of land that
metropolitan (metro) area or region. Transport and potentially has higher value from a regional perspec-
communications advances tend to extend functional tive. Properly functioning metro areas are important
economic areas over time. The economic and other around the world, including in developing countries
links between the core and the periphery can become where urban growth is most rapid and institutional
so close that one part cannot succeed without the structures are often weaker.
other. Urban growth changes the character of an area, Urban governance is critical in shaping both the
while political boundaries tend to be fairly stable. This physical and social character of a metropolitan area.
mismatch of socioeconomic integration and political The planning, finance, and management of a city
fragmentation creates a need for collaboration among has an impact on the quantity and quality of local
local governments to, for example, facilitate com- public services and the efficiency with which they
merce, seize opportunities for efficiency, and prevent are delivered. It determines whether costs are shared
wasteful competition. throughout the metropolitan area in a fair way or
Many people live in one local jurisdiction and work not. Governance also affects the ability of residents
in another, requiring coordinated transit. Clogged to access their local government and engage in its
storm drains in one area may cause health risks or decision-making, and the extent to which local gov-
flooding in another. Large differences may exist in ernments are accountable to citizens and responsive to
the tax base among the local jurisdictions, creating their needs. Good urban governance structures ensure
significant differences in service provision. Therefore, that policymakers have the necessary information,
inter-municipal arrangements are necessary to address powers, and incentives to make good decisions.
some developments at the metropolitan level, mean- Demarcation of a metropolitan area is usually done
ing local governments need to act jointly to most by determining:
effectively meet some of their local needs. Lack of a contiguous built-up area;

Section 1: Theoretical perspectives on metropolitan governance 73


an area based on distance from the center (by ki-
road should be built. Transport and land use planning
lometers or travelling time); or
are often the responsibilities of different departments in
an area based on functional relations (a commut-
a municipality and sometimes of different levels of gov-
ing area, a functional economic or business area,
ernment. These planning functions need to be integrat-
or a public services area).
ed to ensure that residential areas are not built without
basic public services being provided and that a transit
However, it is important to recognize that not system can count on sufficient population density to
all services need to be managed at the metropolitan be efficient. Another example is solid waste collection,
level. Only services that fulfill the following to be which, though it may be most effectively addressed at a
metropolitan: local level, disposal of municipal and hazardous waste
benefit from economies of scale (e.g., some utility usually needs coordinated arrangements with one or
services); more joint facilities for cost-effectiveness. Another
address externalities or spillovers (e.g., environ- common issue that requires metropolitan-wide planning
mental protection); and management is flooding. Rivers and catchment
require harmonization among the local jurisdic- areas often cut across municipal boundaries, requiring
tions (e.g., crime prevention); or coordinated storm water management systems.
have area-wide benefits in other ways (e.g., tour- When more than one entity or level of govern-
ism promotion). ment is involved in delivering a particular service (not
an uncommon situation), it is critical to have a clear
Services that mainly provide local benefits should and stable assignment of expenditure responsibilities
be the responsibility of the respective municipality, among them, and a mechanism to coordinate service
such as local roads, street lighting, firefighting, parks, provision and to resolve any conflict.
libraries, and local markets.

What Are the Opportunities? Local Economic Development on a


Metropolitan Scale
Urban growth and increased population density put
stress on public infrastructure and the provision of Urban service provision needs to be placed into the
related services. Solutions depend not only on adequate broader framework of the metropolitan economy and
financial resources but also on the governance structure employment generation. Employment generates in-
for such services. A metropolitan arrangement is often come and possibilities for households to improve their
needed to coordinate the delivery of such essential ser- conditions, for firms to invest, and for government to
vices as transportation, water, and waste management scale up public service delivery. It is widely recognized
across a metro area. For example, when built up areas that urbanization, and the related process of economic
are located sufficiently close to allow integration of agglomeration, is driving economic growth. Urban
utility networks, some services or functions may benefit employment and productivity are paramount to im-
from economies of scale. The arrangement also needs prove welfare.
to ensure that land use planning is done in conjunction Metropolitan is an economic concept as much
with the infrastructure planning, both to ensure local as an institutional one (see Chapter 2.1, Metropolitan
effectiveness and to address region-wide issues such as Governance and Urban Economy, for more detail).
significant disparities among municipalities. For exam- There is a need to broaden and deepen understand-
ple, to build a road that crosses municipal boundaries ing of the productivity of the urban economy and
requires a coordinating mechanism among the munici- address economic development on a metropolitan
palities and area wide planning to determine where the scale. Tourism is a good example. Rather than local

74 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


governments in a metropolitan area competing for respect jurisdictional boundaries, so coordination and/
tourists, it tends to be more productive to jointly or an area-wide service unit is needed. Harmonization
promote the entire metropolis as a destination, with a of policies on these topics across the metro area is
variety of attractions. In other words, the goal is not helpful. In terms of financing, a fragmented local
only get the tourists to come, but to get them to stay government structure in a metropolitan area is often
longer. Further, their spending should benefit all parts highly dependent on intergovernmental transfers or
of the metropolis independent of where in the area on spending by higher tier governments, particularly in
they visit or stay. developing countries with limited local revenue sources.
A recent study of five Organisation for Economic Metropolitan-wide governance arrangements, on the
Co-operation and Development (OECD) countries other hand, allow spillovers for many public services
(Germany, Mexico, Spain, United Kingdom, and the to be internalized and related services to be addressed
United States) found that cities with a fragmented by metro-level agencies. (Bahl, Linn, and Wetzel, 2013)
governance structure (measured by the number of
municipalities in the metropolitan area) tend to have
lower levels of productivity (Ahrend, Farchy, Kaplanis, Other Joint Initiatives
et al., 2014). An area with a similar population size
but twice the number of municipalities has 6 percent Many other subjects can be addressed for joint bene-
lower productivity. Possible reasons for this are that fits among local governments, albeit possibly with less
fragmentation can negatively impact transportation impact compared to those mentioned above. Some
investment and land use planning, increasing con- examples are joint procurement to save on costs (e.g.,
gestion and reducing a citys overall attractiveness. anything from light bulbs to fire trucks), joint training
Fragmentation can also impede growth because firms programs for staff, establishing a metropolitan research
may have to face overlapping business and envi- institute, and marketing (branding) the area. Other
ronmental regulations, increasing the cost of doing common topics for cooperation are water resource pro-
business. According to the study, the impact of frag- tection (to safeguard the water supply and water quality
mentation on productivity is less (2.53 percent) when across a metro area), larger sports facilities (requiring
there is a metropolitan governance body. See Chapter land and large financing), joint lobbying for the location
2.5, Steering Metropolises to Shared Prosperity: The of a national facility in the area, or attracting a major
City Prosperity Initiative, for a more detailed discus- event (e.g., a conference or sports event).
sion of this topic. A permanent coordination unit can be a catalyst
for joint initiatives and can address a variety of sub-
jects through studies and other preparatory work, as
Environmental Sustainability and Security per the request of an executive committee. Such a
committee should ideally have representatives of the
Air and waterway pollution transcend jurisdictional local governments, the private sector, and community
boundaries. If a central city, for example, is particularly organizations. Many such light governance structures
congested with high levels of air pollution, the trou- exist in Latin America, often called a mancomunidad
bled city may need to solve what is a joint or regional or association. This may evolve into a more compre-
problem without a fair contribution from its neighbors hensive coordination entity for a metropolitan area,
who benefit from the positive effects of the agglomer- such as in San Salvador, El Salvador.
ation (the free ridership issue). Cost sharing questions The Consejo de Alcaldes del rea Metropolitana de San
may also emerge if water or air pollution is caused by Salvador (Council of Mayors of the Metropolitan Area
industry in one area, resulting in health risks across the of San Salvador) was established in July 1987 after a
whole metro area. As for police services, crime does not strong earthquake in 1986. This was a united approach

Section 1: Theoretical perspectives on metropolitan governance 75


by 14 local governments (across two provinces) to through the expansion of various separate settlements
tackle reconstruction of a metropolitan area of about that at some point from an integrated, interdependent
600 square kilometers. The Council initially created metropolitan area. It is the interaction (functional rela-
an Oficina de Planificacion del Area Metropolitana de tions) between people, businesses, and other entities in
San Salvador (Office of Planning of the Metropolitan different locations that is the core of the agglomeration
Area of San Salvador) in 1988, a technical advisory concept. However, it is often difficult to measure func-
entity charged with analyzing and proposing solutions tional relations; therefore most demarcation approaches
to develop the area. The Office also functions as the use spatial proxies. It is usually not critical to determine
executive secretariat of the Council. With the approval the exact boundaries of what is considered an agglom-
of a law in 1993, the Office was charged with regulating eration (a coherent economic and social system), but
urban land use and approving building permits across it needs to be a reasonable reflection of the reality to
the area. In 1994, the Council reformed the statutes of guide policymaking and calculate impacts of policy
the Office, making it a separate legal entity, an admin- decisions, particularly if the boundaries will determine
istratively and financially autonomous municipal insti- significant financial allocations.
tution. The Council appoints the Executive Director The metropolitan boundary should facilitate in-
of the Office, and its administration is overseen by the tegrated planning, coordinated service delivery, and
General Coordinator and Executive Committee of the general area development. Although the focus may
Council. The Office is fully funded by user charges be on delineating the current metropolitan area, a
for services they provide in the area (mainly issuing longer term perspective should be applied to guide
building permits). The Council is particularly credited policymaking and investment decisions. The boundary
for achieving improved land use patterns and service should include areas of anticipated future urbanization
equity in the area. The Council is now an autonomous and, in most cases, reflect projected population growth
institution with the objective of facilitating inclusive over 20 or 30 years. The boundary can be adjusted
social, economic, and territorial development of the every 10 years or so if needed, depending on the rate
Metropolitan Area of San Salvador. It has commissions of change in the region. The following are commonly
on institutional development, territorial management, used demarcation approaches:
local economic development, environment and health, Contiguous built-up area.
and social cohesion. It has served as the coordination Area based on distance from the center (by kilo-
mechanism for various projects in the area, most no- meters or travelling time).
tably on public safety and solid waste management. Area based on functional relations (e.g., commut-
In 2015 a Consejo de Desarrollo Metropolitano ing area, functional economic or business area, or
(Metropolitan Development Council) was established public services area).
within the Council framework to propose public in-
vestment projects for metropolitan development and Contiguous built-up area: Built-up areas may cross
be the body focused on collaboration with the national administrative boundaries, meaning that a person may
government. (World Bank, 2016) not know when they leave one jurisdiction and enter
another. Satellite imagery or population density maps
What Is the Definition of a can help define a built-up area. Land use may also need
to be considered to qualify for inclusion in the built-up
Metropolitan Area? area, for example if an industrial complex or an air-
port should be included or not. This spatial closeness
(Note this section draws on Buijs, 2015.) encourages increased economic interaction. It tends
Spatially, a metropolitan area may be formed either: (i) to require integrated transport services and facilitates
through outbound growth of a city over time; or (ii) integration of utility network services (for economies

76 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


of scale). This demarcation approach is particularly to define a commuting area than to measure the degree
useful when there is a clear boundary between the of business interaction (i.e., business-to-business and
built-up (urban) area and adjacent rural areas and business-to consumer interactions) for which a more
when non-contiguous settlements are at large distance qualitative assessment is needed, using interviews or
from the urbanrural boundary. In some cases though questionnaires. This should include questions about,
(e.g., in intensive agricultural areas), the economic in- for example, the degree of internet interaction be-
teractions between the urban and rural areas may be tween the areas, and relations between production
very strong and warrant inclusion of a large section facilities and headquarters, between agricultural areas
of the rural area in the defined metropolitan area (the and food processing industries. Public services rela-
functional economic area). On the other hand, if the tions may also be a component of the assessment.
contiguous built-up area is within a central city only, These can be of great variety, such as attending high-
which also has large rural areas within its boundary, er-level education, using health facilities, interacting
there may not be any agglomeration development with government agencies, among others. Thresholds
potential beyond the city itself. can be set for key service interactions to guide the
Area based on distance from the center: A prag- definition of the metropolitan area boundary.
matic definition of a metropolitan area is the distance
from the center, either in kilometers (usually a radius
of 30-40 kilometers, resulting in a simple circle) or in Coordination May Be Needed
travelling time (e.g., one hour). The latter approach at Different Levels
tends to create less of a circle and rather reflect an area
driven by the structure of the road or rail network. In The purpose of metropolitan public policies should
cases where more than one center exists within the drive the spatial scale at which coordination and coher-
circle, it may be most effective to first determine the ence is aimed. For example, the optimal area for urban
major sub-centers within the circle and then add sec- transport policies is usually not the same as for solid
ondary areas around these (e.g., with a 10 kilometer ra- waste collection and disposal. The most appropriate
dius or within a 15-minute travel time). The boundary area for economic development initiatives may be larger
of the metropolitan area would then be the combined than the current commuting area. As indicated above,
area of the initial and the sub-center circles. A radius some approximations may be required to define a met-
approach may not be useful when socioeconomic ropolitan area. For most purposes, a small boundary
interactions are between settlements along a corridor. variance may not make a difference. If the main pur-
Area based on functional relations: A common pose is to consolidate the utility network, the contiguous
proxy for functional relations between areas is to built-up area will likely in any case be the important
determine the number of daily commuters between scale for cost effectiveness. A case where a fairly exact
them, usually focusing on commuting to/from the definition is important for residents (if their area on the
center of the metropolitan area. Daily commuting outskirts of the demarcation is included or not) is when
tends to be a better measure of strong functional only settlements or areas within the delimitation will be
relations than, for example, weekly or monthly trans- eligible to receive certain funding or other benefits or it
port, which may be common for students, wholesal- would impact the definition of electoral areas.
ers, hospital visits, among others. A common rule of San Jose, Costa Rica: The concept of a metropolitan
thumb is that if at least 10 percent of the working area around San Jose can be viewed on three different
population in a settlement or rural area commutes scales. First, there are four main municipalities in the
daily to the center, the settlement or area is considered San Jose area: San Jose, Alajuela, Heredia, and Cartago.
part of the metropolitan area. Functional relations Each of them can be considered a local metropol-
tend to decline with distance. It is often much easier itan area, essentially coinciding with the respective

Section 1: Theoretical perspectives on metropolitan governance 77


local government jurisdiction. Most businesses are solution because of local and national differences.
local, limiting the number of commuters to San Jose. Some institutional arrangements are established
Second, the Metropolitan Area of San Jose is defined bottom up (i.e., through initiatives and agreements
as an area of 14 municipalities, within which daily among the local governments in the area) and some
economic interactions occur. It has a population of top down (i.e., by a provincial, state, or national gov-
about 2.4 million, which is more than 50 percent of ernment). While the system of local administration
the population of the country. Last, the Gran Area has a significant impact on the efficiency and equity
Metropolitana, also called Valle Central, an area of about of a regional economy, it also affects the residents
2,000 square kilometers, comprises 31 municipalities access to their governments, the degree of public
(total population of about 3 million), many with participation in decision-making, and the accountabil-
extensive semi-urban and rural areas. An integrated ity and responsiveness of the respective government
transport network is critical for this larger economy. entity. The optimal design of a government structure
The Netherlands: The Randstad agglomeration depends on which of these criteria are most import-
or conurbation (an extensive urban area with sev- ant. Economies of scale, externalities (spillovers),
eral cities and towns, each with a separate identity) and equity lend themselves to large governance units
is an area of about 10,000 square kilometers, with over an entire metropolitan area; the criteria of local
approximately 8 million inhabitants. There are four responsiveness, accessibility, and accountability point
individual agglomerations: Amsterdam, The Hague, toward smaller units. The challenge is to find the right
Rotterdam, and Utrecht, with overlapping spheres balance between these criteria, which may be differ-
of interaction. Amsterdam is the most important of ent in different metro areas. In addition, if political
the four agglomerations based on size and economic fragmentation reflects ethnic or cultural diversity, it
power. It has a population of about 3 million and may need to be maintained and respected to ensure
covers an area of 2,0004,000 square kilometers (de- responsive governance. In most cases, political factors
pending on the demarcation method used). Overlaps determine the choice of governance structure, and
are particularly large between the agglomerations of the arrangements often evolve from one approach to
Amsterdam and Utrecht and between Rotterdam and another over time (Slack, 2007).
The Hague. Therefore, the Randstad conurbation Metropolitan governance arrangements applied
may be considered to consist of two rather than four around the world can be classified as:
agglomerations, with different scales used for different Inter-municipal cooperation arrangement (light
purposes in planning and policy discussions. structures)
Metropolitan/regional authority (special purpose
Deciding on a Metropolitan district)
Metropolitan government
Governance Arrangement Regional government (as part of a national gover-
nance structure)
(For details regarding this section, see Andersson, 2015.) Consolidated local government (through amalga-
As described above, metropolitan areas are character- mation or land annexation)
ized by strong interdependencies (social, economic,
environmental, and administrative) and externalities These categories are described below with city
(spillovers) across local jurisdictions. Many problems examples and indication of key advantages and dis-
transcend municipal boundaries and solutions there- advantages. It is important to note, however, that
fore require coordination among the municipalities or effective governance tends to depend more on how
by a higher level entity or government. International an arrangement is implemented than on the choice of
experience has shown that there is no one-size-fits-all arrangement per se.

78 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


Inter-municipal Cooperation Arrangement Metropolitan/Regional Authority (Special
(Light Structures) Purpose District)

Many cities in Latin America have inter-municipal coop- Examples of a metropolitan or regional authority in-
eration arrangements and the framework is very com- clude Vancouver, So Paulo, Buenos Aires, and Manila.
mon in the United States. These arrangements may take This structure is also common in France and the United
the form of, for example, committees, working groups, States. A regional authority is an independent legal entity;
or consultative platforms, or more permanent associ- conceptually a voluntary organization established by the
ations, mancomunidad, consortiums, or metropolitan member local governments for planning and/or service
councils. They can be focused on a specific issue, topic, delivery to make better use of their public resources. Two
or investment project, or on more broad-based and or more local governments may associate in this way to
ongoing collaboration. A local government would join achieve economies of scale. For example, for a transport
such an arrangement if it benefits their constituents network or to jointly operate a waste disposal facility.
compared with acting independently. Such city-to-city arrangements are called special purpose
Brazil has a separate legal framework for consor- associations or districts in the United States. France has
tiums. This framework (enshrined by law in 2005) various legal provisions and incentives encouraging in-
encourages the formation of consortiums, which in ter-municipal cooperation. Separate legal frameworks for
some cases can become entities similar to regional au- such arrangements exist in other countries as well (e.g.,
thorities. The Metropolitan Council of Governments Poland and Italy). The approach serves as an administra-
(COG) represents a bottom-up, voluntary approach, tive integration, with member governments represented
common in the United States that is usually a council on a governing board or council. Metropolitan author-
with limited independent decision-making authority ities, sometimes established as utility companies, can
so as not to undermine the accountability of each usually levy user charges for the services provided or are
individual member local government. It is so fre- funded by the member local governments. Some regional
quently applied that a few national associations of authorities have been given more extensive taxing pow-
COG exist.1 While COG policies are set by the local ers (e.g., the multi-sector authority in Vancouver). The
governments through a board of directors, most Metropolitan Manila Development Authority is under
COG decisions tend to require endorsement by the the supervision of the president of the country, who
respective local government councils. The common appoints its chairman. Metropolitan authorities can be
goals of the member local governments are usually distinguished in terms why they were created:
reflected in the name of the committees that are es- For planning purposes only or for planning as well
tablished. Targets and indicators are set to measure as service delivery
progress and to judge the region as a whole rather For a single sector (e.g., public transport or water
than assess individual jurisdictions. supply) or for multiple sectors
Advantages: A flexible approach where limited With advisory authority only or with full deci-
inter-dependencies exist among local jurisdictions or sion-making powers for the sector(s) (or making
stronger arrangements are constrained by politics. decisions that need to be ratified by each local
Disadvantages: Sometimes limited in scope and government council)
commitment for longer term needs. Often with With a council being appointed or indirectly elect-
an advisory role only and rarely with much own- ed by the member local governments or directly
source revenue. elected by the residents of the area.

1 For example, the National Association of Regional Councils and Advantages: Permanent focal point for metropol-
the Association of Metropolitan Planning Organizations. See
www.abag.ca.gov/abag/other_gov/rcg.html, which includes
itan level planning and/or service delivery. Specialized,
links to all COGs in the United States.

Section 1: Theoretical perspectives on metropolitan governance 79


metropolitan-level resources. Can provide flexibility if (requires strong representation or advisory arrange-
members can join and exit easily. If corporatized (as a ments). Second-level metropolitan governmentsand
utility company), it may facilitate a transition to a pub- regional authoritiescarry a risk that access by resi-
licprivate partnership arrangement, if appropriate. dents will be negatively affected and thereby account-
Disadvantages: Requires significant institutional ability weakened due to the more diverse and complex
capacity and resources to be effective. Risk of limited institutional structure. Therefore, in these cases, it is
impact if its role is advisory only. Accountability may particularly important to make it clear to the residents
be weakened if responsibilities are unclear to residents. who is responsible for what. Authority should coin-
The effectiveness of service delivery tends to depend cide with representation and finance should follow
on its authority to levy user charges (tariffs), collect function (expenditure responsibilities). Any entity es-
contributions from local governments, apply precept tablished to coordinate or provide services to a metro
powers, or have earmarked transfers or taxing power. area should ideally be represented by, and accountable
to, the corresponding entire jurisdiction and receive
corresponding resources.
Metropolitan Government Metropolitan governance reforms have rarely
emerged from local government efforts only. A na-
Examples of a metropolitan government include di- tional or provincial government has usually initiated a
rectly elected metropolitan governments (e.g. London, change by either imposing or encouraging it (OECD,
Quito, Seoul, and Stuttgart) and those appointed by a 2006). Although a metropolitan arrangement can be
higher-tier authority (e.g., MinneapolisSt. Paul). The established by a higher-tier government, experience
responsibilities for regional coordination and some shows that such institutions will often be weak unless
service delivery functions may be vested with a sep- they are supported by the local governments in the
arate local (metropolitan) government. Such a local area (Slack, 2007).
government would not necessarily be hierarchically
above the other local governments in the area in terms
of reporting relationships, but of equal rank and legal Regional Government (as Part of a National
status. The level of authority ranges: Governance Structure)
No authority over other local governments (e.g.,
Dar es Salaam) Examples of regional governments include Madrid, and
Limited authority (e.g., Seoul and London) the states in Mexico, India, and Australia. If no adequate
Substantial authority (e.g., second-tier municipal local arrangement exists for coordination and critical
governments in China), in which case they are of- area-wide service delivery, an existing (or new) regional
ten funded by transfers from a national or regional government has sometimes been charged with these
governments functions. In a Unitary State, as an extension (de-con-
centration) of the national government; in a Federal
Advantages: A permanent government structure State, as the regional (state) level of government. For
for certain metro functions. Specialized metropol- example, in Australia and India, many functions that are
itan-level resources. Effectiveness tends to depend usually considered local (municipal) functions are car-
on whether it has mainly planning functions or also ried out by the regional governments. In Australia, the
some service delivery functions, and the degree of state governments are responsible for public transport.
authority it has over the other local governments in The state governments in Mexico tend to address met-
the metro area. ropolitan coordination due to weak municipal capacity
Disadvantages: Risk of limited connection with, and the socioeconomic significance of the larger cities
and engagement by, the local governments in the area in the respective state. Some metropolitan arrangements

80 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


have first been created with mainly local representation, Advantages: Facilitates metropolitan-level coor-
but later replaced or adjusted to a regional government dination and addresses equalization and harmoniza-
under direct control of the national government (e.g., tion of services within the area (one tax base). Local
Abidjan, Cote dIvoire). administrative offices and sectoral arrangements
Advantages: A permanent structure for cer- (e.g., authorities or utility companies) may still be
tain metropolitan functions. May have specialized needed.
metropolitan-level resources. Usually resources are Disadvantages: With a larger jurisdiction, residents
secured from the higher-tier government. access to their local government may be affected and
Disadvantages: Metropolitan coordination may thereby local accountability weakened. While cost
not be a high priority among all its functions. Risk savings usually occur through economies of scale,
of limited connection with, and engagement by, the harmonization of services and salary levels across
local governments in the area. Accountability may be a new, larger local government may be standardized
weakened if responsibilities are unclear to residents. based on the local government with the highest level,
and thereby result in higher costs (Slack, 2007; the case
of Toronto). One-time transition costs also need to
Consolidated Local Government be taken into account.
(Amalgamation or Annexation of Land)
UrbanRural Coordination May Be
Examples of a consolidated local government include
large municipalities in South Africa and China, as well
Needed Beyond Metro Area
as partly Istanbul, Toronto, and Auckland. Annexation
of land or amalgamation of local governments can Many metropolitan areas include significant rural areas
sometimes be effective in achieving efficiency and (e.g., surrounding a core urban area or areas between
equity in public service delivery, and reducing insti- urban nodes) with strong functional linkages. For ex-
tutional fragmentation. Yet it tends to be politically ample, a central urban area may be the main market for
controversial, usually requiring the active involvement local agricultural products or tourism attractions that are
of a national or regional government. Few amalgama- located in the rural areas, with all amenities in terms of
tions have achieved coverage of an entire metropolitan hotels, restaurants, in a central city. In such case, some
area, usually because of the local political dynamics. revenue sharing scheme may be appropriate among
The exceptions are eight municipalities in South Africa the local jurisdictions involved. Strong urbanrural
defined as metropolitan municipalities, where their dependencies may even go beyond the metropolitan
boundaries essentially cover the area where people live area as defined above. They may be based more on
and work. Most municipalities in China (e.g., Beijing and natural resource and environmental management than
Shanghai) also cover their metropolitan areas. However, economic agglomeration. Changing agriculture or water
they are second-tier local governments (as discussed use practices may be essential to protect critical water
above). In 2014, Istanbuls jurisdiction was almost sources for the drinking water supply in the urban areas.
tripled by including areas previously governed by the If so, cities need to provide sufficient incentives for
central government. Amalgamations have sometimes farmers, possibly even payments for changed practices
been part of national reforms. For example, in 2007, and water-related services, or provide non-financial
Denmark reduced the number of its municipalities compensation such as water transfers or conservation
from 271 to 98. In 2014, Turkey reduced the number of schemes that are mutually beneficial for both parties.
municipalities from 3,225 to 1,395. In The Netherlands, Two examples follow.
reorganizations during the past 60 years have halved the In the province of Forli-Cesena in Italy, water
number of municipalities. resources are managed through a partnership of urban

Section 1: Theoretical perspectives on metropolitan governance 81


and rural municipalities and the chambers of com- which the committee is appointed. As long as local
merce in three provinces. Municipalities where the governments are allowed, on a voluntary basis, to
water sources are located share in the revenue from carry out joint projects or initiatives and organize
providing water in the area. In addition, investments themselves accordingly, in many cases no further
in natural and cultural heritage preservation are made legal provisions are required. It is not uncommon
in the rural areas to promote tourism. The urban mu- though, that lack of legal or regulatory provisions
nicipalities benefit from the availability of clean water is claimed as reason for not actively pursuing in-
and being a gateway to the high-value landscape that ter-jurisdictional cooperation. This is often more
attracts tourists. used as an excuse for inaction than reflecting the
The watershed management program of New reality. For more comprehensive arrangements (e.g.,
York City in the United States is another example a metropolitan authority or a separate metropoli-
of a successful ruralurban partnership. Almost all tan-level government), further, more specific legal
water for the city comes from the watershed north provisions are required. In Mexico, the constitution
of the city, mostly rural areas with small towns and prohibits the establishment of a level of govern-
vacation homes. A memorandum of understanding ment between the state and local government levels.
was signed in 1997 by New York City, communities
in the watershed, the U.S. Environmental Protection
Agency, the New York State government, and en- Who Is Responsible for What
vironmental organizations, with the dual goals of
protecting water quality for the generations to come An entity being considered or established to coordinate
and preserving the economic vitality of watershed policies, activities, or service delivery functions for an
communities. The program provides landowners area should be represented by, and be accountable to,
with annual payments in exchange for maintaining the residents of that area and receive corresponding re-
the land in a natural state. It recognizes the inter- sources and authority. It is important to communicate to
est of New York residents in conserving its water stakeholders through transparent and clear information
quality long term, and at the same time the ability who is responsible for what and how funding is allocat-
of the farmers in the area to be able to maintain ed and spent. In cases of appointing members of an en-
and improve their livelihood while implementing an tity, establishing a channel for complaints and ensuring
adequate environmental program. free press are particularly important for accountability.
A governance structure may include multiple entities,
Enabling Effective Metropolitan such the local government, one or more inter-municipal
or metropolitan-level coordination bodies, a regional
Governance government, and national government units. Division
of functions, authority, and expenditure responsibilities
A basic provision in national legislation to facilitate need to be unambiguous (easy to understand) and not
cooperation between local governments is that overlap, particularly if any new committee, authority,
local governments may carry out joint projects or or level of government is introduced. This is not only
initiatives. Most countries have such provisions, important for the entities directly involved, but also for
albeit phrased differently. For example, a local gov- the public at large to know who to hold accountable for
ernment council can agree with one or more other what. Introducing a second-level metropolitan govern-
councils to appoint a committee for any project ment, or one or more regional authorities, carries a risk
or initiative that they are jointly interested in and that residents access will be negatively affected, and
can delegate to such committee any functions of thereby accountability weakened or unclear because of
the council related to the project or initiative for the more diverse and complex institutional structure.

82 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


Local pressure: Facilitating engagement by civil
Foster Win-Win Partnerships and
society and the local private sector on develop-
Teamwork
mental matters may trigger demands for actions at
the metropolitan level (e.g., through their associa-
A common challenge to inter-jurisdictional coordina-
tions or the local media).
tion is achieving consensus among the local govern-
ments, which are often of different sizes and capacities, At an early stage of a metropolitan reform pro-
characterized by different degrees of parochialism, cess, emphasis can be on identifying a few initial met-
and may have divergent interests and agendas. Political ropolitan initiatives with high probability of success
inhibitors tend to be either: to build trust and momentum. Low-risk examples
the reluctance of local officials to give up direct to start with could be joint procurement to save on
power/control/influence over matters related to cost, joint training programs for staff, establishing a
their constituency (their voters); or metropolitan research institute, or marketing (brand-
views, priorities, or tactics driven by a political party. ing) the area.

To be effective, any metropolitan governance


arrangement needs to have the support and com- Ensure Support of Higher Level
mitment of all (or at least most) local governments Government(s)
involved. They and their constituencies are the ones
most directly affected. Successful partnerships have Cooperation among municipalities works best on a
similarities with effective teamwork, particularly when voluntary basis. However, in many cases the national
a bottom up approach is applied, which requires: or a regional government has been instrumental in
a common objective (a clear understanding of the promoting (or even forcing) collaboration on certain
benefits of cooperation); priority subjects for a metropolitan area, through
mutual trust (which has to be earned over time); and pressure, persuasion, or incentives. Higher level
that different views and opinions are considered governments may exert political influence over local
a strength rather than a weakness to arrive at the governments and/or create incentives for local collab-
most effective solutions acceptable to all. oration by stipulating conditions for access to certain
funding. For example:
A strong advocate (champion) often plays a pivotal that a metropolitan body exist or be established,
role in steering change and creating or maintaining with representation of the local governments (for
momentum for active cooperation. broad coordination or for a particular sector);
A case needs to be made for collaboration and that a metropolitan-level plan exist or be devel-
joint efforts in each particular case. Depending on the oped (broad or sector specific);
situation, the following approaches can be applied: that harmonization of certain local policies or
Clear financial/economic case: A rationale for a rules be achieved among the local governments
joint initiative shown in unambiguous financial or to obtain matching grants for a public service
economic terms is hard to argue against. function; or
A matter of fairness (or negotiation): When one that all local governments in the region contribute
jurisdiction is a victim of the actions by another funds for an infrastructure project (e.g., according
jurisdiction (e.g., due to water or air pollution), to a formula) to obtain a grant or loan from the
reason and fairness need to apply for mitigation higher level government.
or compensation. In such case, a bi-lateral ne-
gotiation may be sufficient rather than a broader In the United States, for many years, to obtain
collaborative arrangement. grant funding from the federal government for

Section 1: Theoretical perspectives on metropolitan governance 83


transport and wastewater infrastructure, local gov- Brazil provides many examples of active incor-
ernments had to create a metropolitan planning or- poration of civil society and the private sector. For
ganization and funding requests had to be supported example, the current arrangement in Belo Horizonte
by a regional plan for the respective sector. In the is based on:
European Union, many regional planning councils a Metropolitan Convention;
were created following the availability of EU regional a Metropolitan Development Deliberative Council;
economic development grants (OECD, 2006). Other and
incentives for regional coordination have been creat- a Metropolitan Regional Development Agency.
ed through intergovernmental systems such as the J.
Nehru National Urban Renewal Mission program in A Metropolitan Conference is held every two
India, or simply through political influence/pressure years as a forum for participation of the organized
(e.g., in the Netherlands for the Randstad concept). civil society. The Metropolitan Convention is the
Although cooperation among local governments may decision-making body for planning guidelines (with
be encouraged by such incentivesor even demand- a qualified quorum it can veto decisions by the
edinternational experience shows that no gover- Deliberative Council). The Agency is the technical
nance arrangements become effective or sustained and executive arm of the system (Metropolis, 2014).
unless the local governments involved are actively The So Paulo ABC Region (Agncia de Desen-
supporting the arrangements. In addition, incentives volvimento Econmico do Grande ABC) is an
may or may not create true and lasting metropolitan inter-municipal consortium with the active engage-
governance. When the incentives stall, the metropoli- ment of business and civil society. It is a flexible,
tan arrangements risk fading away. pragmatic approach for regional problem solving
and economic development, but it is not a govern-
ment structure. Seven municipalities created the
Facilitate Engagement by Civil Society and consortium in 1990 to focus primarily on topics
the Private Sector that had spillover effects across municipal bound-
aries. The purpose was to promote the economic
Beyond municipalities, and the national and regional development of the region through consensus
governments, the private sector, civil society, and and to implement innovative public policies. This
universities need to be actively engaged in a metro- forged a regional identity and helped local leaders
politan reform process. Public debates, roundtables, and politicians address economic decline through a
town hall meetings, media coverage, etc. can help number of initiatives. Although the engagement of
highlight specific needs for inter-municipal cooper- concerned mayors weakened in the mid-1990s, the
ation and create common goals and constituencies. local community undertook several initiatives, in-
A metropolitan identity and participatory processes cluding creating a Forum for Issues of Citizenship,
are key for ensuring adequate civic engagement in an umbrella non-governmental organization with
decision-making and monitoring their implementa- more than 100 members focusing on regional issues.
tion. Jen Nelles (2012) argues that civic engagement A Chamber of the Greater ABC Region was creat-
and leadership at the regional scale can be important ed in 1997 as a forum for strategic planning, with
catalysts to metropolitan cooperation. The extent the participation of civil society, the public sector,
to which the actors hold a shared image of the me- and local businesses and labor unions. A Regional
tropolis and engage at that scale strongly influences Development Agency was created in 1998 with
the degree to which local authorities will be willing a board of directors composed of private sector
and able to coordinate policies for the collective members (controlling 51 percent) and the inter-mu-
development of the region. nicipal Consortium (49 percent).

84 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


Conclusion Ahrend, R., Farchy, E., Kaplanis, I., and Lembcke, A.
(2014). OECD Regional Development Working Paper.
Paris: OECD Publishing.
With continued urbanization around the world and Bahl, R., Linn, J., and Wetzel, D. (eds). (2013). Cambridge,
settlements becoming more interdependent, metro- MA: Lincoln Institute of Land Policy.
politan areas are becoming the New Normal. Many Buijs, S. (2015). Discussion Paper.
Metropolis. (2014). Comparative Study on Metropolitan
such areas do not have well-established governance
Governance. Retrieved from http://www.metropolis.
arrangements for coordinating actions at this scale. org/initiatives/comparative-study-metropolitan-gov-
While cooperation among local governments may be ernance
encouraged by financial incentives from a regional or Nelles, J. (2012). Oxford: Routledge.
national government, international experience shows OECD. (2006). Paris: OECD Publishing.
that no governance arrangement becomes effective . (2015). Paris: OECD Publishing.
Slack, E. (2007). Washington, DC: World Bank.
unless it has active support from the local govern-
Slack, E., and Chattopadhyay, R. (eds). (2013). Oxford:
ments involved (Slack, 2013). Oxford University Press
The overriding objective of a metropolitan ap- World Bank. (2016). Washington, DC: World Bank.
proach for local governments is to cooperate on certain
topics, initiatives, or services for mutual benefit (while
competing on other services and activities in terms of
quality and cost-effectiveness). In defining a gover-
nance structure, the potential for efficiencies through
economies of scale and the need to address spillovers
and disparities need to be weighed against the impact
on residents access to their government and its respon-
siveness and accountability. Any mechanism for joint
action needs to have sufficient, reliable revenue sources
to fulfill its assigned functions on a sustainable basis.
There is no one structure that is appropriate for all
metropolitan areas. The most appropriate governance
structure depends on the national and local context
(including the legal framework, local government
responsibilities, particular issues and opportunities
for the area, and institutional capacity and tradition).
Metropolitan arrangements normally result from both
top-down and bottom-up initiatives.Both horizontal
and vertical coordination (multilevel governance) is
needed. Institutional and financial arrangements may
need to evolve over time as requirements and circum-
stances change.

References
Andersson, M. (2014). Metropolitan governance and
finance. In C. Farvaque and M. Kopanyi (eds).
Washington, DC: World Bank.
. (2015). (Discussion Paper). Eschborn: Deutsche
Gesellschaft fr Internationale Zusammenarbeit (GIZ).

Section 1: Theoretical perspectives on metropolitan governance 85


1.4 Dilemmas: Multilevel Government, Network
Governance, and Policy Co-production
Joan Subirats (Autonomous University of Barcelona)

Abstract

Major transformations are currently affecting expanding metropolitan areas, from social and techno-
logical changes to reformulations of government systems. As Peter Hall has argued, economic, cul-
tural, and informational globalization seemingly flattens the world. Yet, at the same time, we are
seeing the emergence of particular configurations, such as large cities and metropolitan areas, that are
concentrating resources and creating opportunities while also giving rise to new problems. This chap-
ter seeks to respond to the challenges these transformations pose in terms of governance structures,
emphasizing a horizontal framework of shared and distributed knowledge, and network governance
linking different actors by common interests and relationships in contemporary metropolises, leading
to schemes of co-production and development of public policy.

The metropolitan debate surrounding Habitat III in this time of change (Slack, 2007). On the other
the United Nations Conference on Housing and hand, a large number of city inhabitants do not have
Sustainable Urban Developmentshould consider access to allegedly established participation channels
the profound transformation that affects all vital in their respective political systems. In several studies,
spheres of citizens worldwide. In this changing sce- strong connections have been found between low-in-
nario, the bigger cities are assuming a new prominent come levels and deficiencies in education or in life
role. There are discussions around the urban revolu- expectancy (Wilkinson and Pickett, 2010; Marmott,
tion (Katz-Bradley, 2013) or the need for mayors to 2005). In addition, those same sectors tend to have
intervene more directly in global governance (Barber, significantly lower voter abstention rates (Wood,
2013). The significance of metropolises is growing, 2002). Furthermore, recently it has been demonstrated
both as nodes of innovation and as coordination cen- that internet use and coverage are also lower in these
ters for different capacities and resources. neighborhoods or urban enclaves (Mobile World
As stated in the Issue Papers on Urban Governance Capital Barcelona, 2016).
(UN-Habitat, 2015), which served as a guideline for There is a growing contradiction between spaces
the October 2016 debate in Quito, we are witnessing that concentrate the greatest capacity for innovation,
the combination of rapid urbanization and a rise in creativity, and value generation, and the remarkable
the significance of cities, while at the same time, rep- inequality that exists both in the territory and in the
resentation and decision-making mechanisms used in opportunities to participate in decision-making and
large cities are becoming obsolete. On one hand, it democratic representation systems. The aforemen-
is assumed that we need to better articulate the will tioned issue paper (UN-Habitat, 2015) argues that
of different actors (public, private, and third sector) governing without the citizens has become nearly im-
in order to achieve greater governance capacity and possible (p. 19), something that would be demanded
decision-making efficiency and to address coordina- by an urban agenda capable of facing the challenges of
tion challenges and shortfalls, as well as management this disruptive time of change. For political decisions,
fragmentation problems that metropolises encounter we need new participation and citizen engagement

86 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


channels and, to create them, we must pay attention the limits that lie behind a conception of urban poli-
to the renewed debate on these issues, incorporating cies that is strictly urban, exclusively institutional, and
new practices of bottom-up and outside-in political narrowly local.
participation, the purpose of which is to find common It is known that local public policies have been
interests to solve collective problems. shaped around economic development, land man-
Instead, informal sectors are growing, tax evasion agement, and service provision to people, and that
and tax avoidance are increasing, and cases of cor- only later the transversal dimension of environmental
ruption related to urbanization and real estate issues sustainability was added. In all these areas, the trans-
is proliferating in cities. The conclusion is that urban formations have been and continue to be both intense
governments and politics are, at the moment, part of and rapid. The problem for this clearly expanding policy
the problem rather than part of the solution. If we agenda is its dependence on the local government, a
do not change urban government and governance sphere characterized by the scarcity of resources and
systems, we will not be able to effectively and effi- the peripheral position in the multilevel government
ciently improve the collective living conditions of the scheme. Therefore, it is necessary to reinforce and re-
majority of the worlds population now living in cities. think urban and metropolitan policies as a framework
In this chapter, we outline the need to build networks for comprehensive actions. These actions have to be
and trust, while at the same time recognizing that planned and implemented at the local level, integrating
conflicts are both inevitable and capable of generating multiple mechanisms of multilevel intervention, look-
innovation, if they do not become entrenched. ing for complex sustainability dynamics, in line with
In this context, we want to contribute reflections what is now called urban resilience (Coaffee, 2010; Batty
and proposals to enrich the general New Urban Agenda and Cole, 2010). All of this is further enhanced by the
debate and the more specific discussion around met- evident impacts that the ongoing technological trans-
ropolitan governance at Habitat III. We would like to formation generates in the daily lives of people and or-
take advantage of the great potential for change and ganizations, and by the perspective of their application
transformation that cities and metropolises have today. in urban management (Fernndez, 2014; Goodspeed,
The significance of metropolises in peoples lives is 2015; Caragliou, Del Bo, and Nijkamp, 2009).
currently not well connected with their decision-mak- Cities are not outside the great digital revolution.
ing and governance capabilities. We must overcome the On the contrary, they are often key nodes in a pro-
traditional approach to government issues we are used cess that has been described as the turn of an era
tothe debate around competencies and hierarchies (Baumann, 2012; Subirats, 2011). It is not surprising
between government levelsin order to experiment that, given the impossibility of continuing with pol-
with and develop new approaches regarding network itics as usual in the local and metropolitan scenario,
governance and co-production of urban policies for debates on new issues arise. Topics of debate include
the (now inescapable) metropolitan areas. urban resilience (Ahern, 2011), spatial justice (Sotan,
2010), cooperatives and the social economy (Cattani,
Conceptual Aspects: Coraggio, and Laville, 2009), potentialities of smart
cities (Hollands, 2015; Kitchin, 2014; Nam and Pardo,
The Competencies Debate 2011), the concept of the commons (Gidwani and
Baviskar, 2011; Foster and Iaione, 2016) or, more
What should be the competencies of cities? How do generally, the need for innovation and new democrat-
we manage urban areas and institutional arrangements ic participation and decision-making mechanisms.
when the boundaries of management and politics do Thus, urban agendas have become more plural and
not (always) match? In recent research on Spanish urban complex, and in turn urban policies have assumed a
realities, Iglesias, Mart, Subirats, et al. (2012) observed much greater scope and have become interwoven in

Section 1: Theoretical perspectives on metropolitan governance 87


recent years. Urbanism is no longer enough to tackle common projects. We have also made progress in
urban problems. Without a strategy of urban policies agreeing on the need to reinforce the advantages of
and a clear public direction, and without social en- decentralization with strategies for control and redis-
gagement, local and metropolitan governments may tribution. Later in this chapter, how all this affects
see their dynamics subjected by internal or external metropolitan governance schemes is explained.
agents that end up dictating projects and establishing
their own pace. There is a clear imbalance between From Hierarchical to Relational and
the significant role of metropolises and their govern-
ments in shaping the living conditions of their citizens,
Contractual Schemes
and on the other side, the limited capacity of these
governments to significantly influence decisions that Institutions and public administrations have been built
affect citizens. Those decisions are taken in spheres of considering the logic of competence and hierarchical
government in which neither the local governments government structures. The governance of metropolis-
nor the citizens are present. es, on the other hand, has mainly been created based on
Metropolises need to increase their capabilities and the need to address issues unresolved by the aggregative
therefore their sphere of decision-making and power. configuration of cities. Metropolitan governance often
Logically, this must be accompanied by regional mech- resulted in a lack of clear competence delimitation and
anisms that address issues of coordination, redistribu- a certain authority deficit. In our opinion, the deficits of
tion, and control, which have always been present in metropolitan governance will not (only) be solved with
decentralization debates. Indeed, the tension between more formalization and more hierarchical structures.
social citizenship and federal or decentralized forms Organizational hierarchies and clear compe-
of power is not new (Marshall, 1950). The promise of tence boundaries are effective and efficient when
citizenship that ensures equal status for all members faced with stable and clearly established problems.
of a community, and access to social services and ben- However, they tend to be dysfunctional when faced
efits on equal terms throughout the territory (whether with complex, changing, multidisciplinary, transversal
living in a metropolis or not) may conflict with the issues. In fact, the evolution of economic, social, and
capacity of self-government implied in a real process technological environments has been moving toward
of political decentralization (Banting, 2006). In the network structures as an elaborate response to com-
end, the problem is how to balance equity and diversity plexity. Instead of the functional specialization of
(Watts, 1999), which is an issue both in the nation-me- each element, what is required is the coordination
tropolis relationship and between the metropolis and between different governmental levels, different
decentralized units. This chapter addresses how to face administrative departments, and different public and
these issues, starting from the undoubted advantages private actors. In order to avoid stagnation due to
of decentralization in current environments, charac- the excessive complexity, it is essential to have the
terized by great complexity, hierarchical government positive effect of incorporating the political actors
crisis, and the need to rely on the energy and resources themselves into the processes. From this point of
from all actors involved. view, citizens participation is not (just) something
There are no formulas to get from good intentions to be claimed as ethically or morally desirable,
and innovative discourses to specific administrative but rather as an essential element for an effective
practices with the same level of innovation. There and efficient system (see the literature on wicked
seems to be an agreement on moving from hierarchi- problems, including Weber and Khademian, 2008;
cal, segmented, and technocratic schemes to reticular Head, 2008; Brugu, Canal, and Paya, 2015). In spite
and relational structures. This is important if we want of the plurality of interests that they all manifest,
to facilitate the interaction of different actors across the presence in decision-making dynamics of those

88 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


directly interested in the outcome can anchor the When talking about the modernization of admin-
continuation of objectives between organizations istrative structures, efficiency and competence tend
and government agencies, and ensure reliable im- to be emphasized. If we agree that metropolitan gov-
plementation processes. Otherwise, those different ernments need to begin by accepting the complexity
organizations and government agencies tend to not paradigm, it is therefore necessary to devise a strategy
share logics and objectives. to govern such complexity. This means combining the
Although it may seem contradictory to the culture will of efficiency with the needs posed by complexity;
that has permeated public organizations for years, in other words, generating trust, cooperation, shared
technocratic ideas of processes must be diminished knowledge, and exchange between public and private
and instead their politicization accepted and enhanced. actors in the metropolitan scenario. It has become
Politicization means integrating diverse and plural increasingly clear that, without the incorporation of
views from different actors as well as the inevitable equity and redistribution as efficiency components
conflicts of interest and discussing the distribu- of organizations, global urban outcomes may end up
tion of costs and benefits implied in each decision. being worse (Warner and Heffetz, 2002; Pastor, 2000).
Therefore, it is not a matter of trying to re-rationalize
organizations with complex operations, but rather to Simultaneous Centralization and
accept the need for new concepts and parameters to
be incorporated in public policy development and
Decentralization
implementation. It is about accepting complexity as a
framework, rather than as a problem. There seems to be no doubt regarding the need to
It will be important to promote trust as a new decentralize in situations of increasing complexity to
management factor. When working with interde- better address problems. Network organization and
pendence of actors and network organizations, management can be seen as an intense process of
any decision-making scenario and management of decentralization. It is helpful to consider, as suggested
(metropolitan) public issues needs to maintain the before, some complementary and simultaneous dy-
interconnection between its different components. namics of centralization. We should not lose control
In this context, the traditional logic of authority and and internal consistency when implementing decisions,
hierarchy will be insufficient. Trust is key and trust two imperative aspects in public policy development.
does not spontaneously emerge among actors with The construction of shared objectives is elemental,
different interests and points of view. It must be built consistency depends on it, and this requires control
and nourished. and evaluation. That is the best way to create decen-
The same occurs with the capacity to govern these tralization schemes that allow for flexible adaptation to
network structures. It is necessary to mediate, articu- changing conditions. On the other hand, decentralizing
late, and maintain the tension generated by common implies granting differentiated growth and development
shared projects (in this case, the good governance of conditions to realities that are heterogeneous to begin
the metropolis). Rational management, as understood with. In this scenario, it is of utmost importance to
by the top-down logic, is not capable of being effec- keep centralized schemes that allow for redistribution
tive in a reticular environment, such as the complex initiatives in order to compensate those heterogeneous
interactions of a metropolis. Yet it is not enough to starting points.
claim that other forms of management are necessary. The recent Latin American experience on decen-
Organizational spaces to facilitate mediation should be tralization is contradictory. Municipal decentralization,
created, promoting more open roles and management privatization, and targeted social policies occurred in
strategies that are more likely to generate negotiation the region together with liberal economic reforms and
and joint decision-making scenarios. reductions in government spending for years. While

Section 1: Theoretical perspectives on metropolitan governance 89


several measures have been significantly opposed, common goals, willingly or not. Therefore, it becomes
we understand that decentralization generated a less even more important to improve agreement dynamics
negative debate. Decentralization was driven more by and to honor commitments.
the desire to improve policy efficiency than by the will Some experiences in France and Spain (Gaudin,
to incorporate citizen participation and engagement. 1999; Brugu and Gallego, 2003) demonstrate that
The results of decentralization have been conditioned contractual dynamics can work. The contract pro-
by the complete dependence of local governments on grams, if accompanied by significant economic incen-
national support and funding (Clemente, 2003). tives and sufficient (but not suffocating) monitoring
It is important to understand that no matter how systems, can be useful for complex environments such
much we decentralize policies, the main concern of as metropolitan areas. They allow for both strategy and
citizens does not change: the existence of an eco- autonomy simultaneously. In other words, contractual
nomic model that, if it remains uncontrolled, leads dynamics are instruments to implement the challenge
to precarious work, unemployment, and the loss of of centralizing and decentralizing at the same time.
sovereignty. On the other hand, Latin America pres-
ents diverse cases of centralization and fragmentation Horizontal and Vertical Cooperation
in metropolitan governments. Examples go from
low fragmentation in Quito to high fragmentation Governance of complex environments such as met-
in Buenos Aires institutional arrangements (32 ropolitan areas involves generating horizontal and
municipalities, the provincial government, and the vertical cooperation among actors. It is not so much
autonomous city of Buenos Aires), as well as the less about creating a city, but rather about co-creating with
polarized case of Santiago de Chile (34 municipalities the city. This concept requires rethinking already ur-
and three provinces). banized spaces, dignifying public spaces, and involving
Here we propose some ideas that seek to balance citizens and other actors already present in the territory,
decentralization and centralization. Centralization co-producing the city and co-generating urban and
should not involve unnecessary rigidities, but rather metropolitan policies. The macro perspective no longer
focus on strategic management and on mechanisms makes sense. It is necessary to reconnect spaces, avoid
for control and evaluation. This kind of centraliza- segregation, build trust, and share goals. These are op-
tion can promote and strengthen decentralization. erations that require simultaneity, a plurality of actors,
Whenever more autonomy exists on the periphery and different ways of acting, all capable of cooperating
of an organization, more innovation can be expected and communicating with each other to achieve a collec-
after stimulating creativity and adapting to changing tively defined objective (see the experience of the ABC
phenomena. If this is well directed by central govern- Region of So Paulo in Klink, 2002, p.19). Networks
ment schemes, the benefits for all become clear. and trust need to be built where previously there was
The contractual dynamic seems to be the one that indifference and competition, without hindering the
better adapts to the management relationship of stra- recognition of conflicts that are both inevitable and
tegic centralizationdecentralized autonomy. The capable of generating innovationif they dont be-
contractual framework assumes a balance between come entrenched.
the parts involved: it presents an agreement between It is necessary to discuss territorial cooperation;
the parts that are not subject to hierarchy and thus that is, cooperation among municipalities, leaving
allows the objectives and monitoring mechanisms to aside fragmentation and Balkanization (or hostility).
be outlined and established strategically, while guar- Hierarchically forcing cooperation is not recommend-
anteeing the autonomy of the parts involved. As the ed, as it poses a threat to notions of identity and sense
option of not accepting the contract is unlikely to of belonging. Instead, cooperation should be incen-
be granted, we are talking about building trust and tivized with contract programs and financial aid. This

90 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


is particularly important in metropolitan areas, where administration is the most convenient. However, the
institutional fragmentation often prevents adequately size and strength of a metropolitan authority would be
addressing common problems. seen as a threat by regional, state, or federal powers. If
Vertical cooperation between different levels of the goal is to develop highly technical programs, the
government is also very important. The principle of administrative logic seems to be the most appropriate,
subsidiarity (ambiguously used in Europe) indicates which may help making it a viable option, not a threat.
that it is better to approach problems from proximity Another alternativeone that is less contested by other
from the local levelbut sufficient resources must powersis to place the emphasis on external objec-
be available to make this possible. The contractual tives, created from a consortium of interests, with the
dynamic is also useful here, always bearing in mind participation of non-institutional agents, rather than on
the characteristics previously outlined. the construction of power.
Finally, horizontal cooperation needs to be consid- If the objective is to balance the strategic functions
ered; that is, the necessary coordination between sec- of metropolitan policies, then what is needed are
toral policies at a local level. The typically functional metropolitan institutions with political capacity and
representation of reality clashes with the need to act strength. In that case, the best option is a metropoli-
in an integral way in the case of metropolitan social tan government that makes decisions, chooses paths
problems, as complex and multi-factoral issues do not to follow, harmonizes elementsgoverns. Such a
easily allow for policy fragmentation. This is the most metropolitan government does not have to be a con-
complex form of cooperation. Previously we referred ventional government. To provide services and fulfill
to cooperation within the same policy (territorial pol- other necessary functions for the entire metropolis,
icies or from a vertical or multilevel perspective). In what is needed are the capacities, spaces, and dynamics
this case, we seek a type of cooperation that collides of metropolitan governance.
with many years of administrative and professional Here, conventional government refers to some key
specialization. Experience tells us that the best way to elements: representativeness, hierarchy, and bureaucra-
move forward is not using a hierarchical or normative cy. Representativeness means a form of government
approach, but through good practices and projects based on a liberal-representative democracy. Hierarchy
that have been developed from the territory, in prox- means the state is the only public decision-maker that
imity. For this reason, it is useful to create inter-sec- makes and executes decisions with a hierarchical logic
toral steering committees and project teams that are that is reproduced both at an organizational level (in-
able to combine perspectives and knowledge fields. ternally, the state is organized with vertical dynamics)
and at a relational level (the state interacts vertically
Metropolitan Government or with all actors, particularly with economic and social
elites). A bureaucracy is public administration organized
Metropolitan Administration? through a hierarchical structure, characterized by a
series of explicit and regularized procedures, a division
What should be the role of institutionalized metro- of responsibilities, and a specialization of work. In this
politan governance? Latin America lacks a tradition framework, both the administration and public policies
of metropolitan governments, with few exceptions are structured on the basis of stagnant and disconnect-
(e.g., Quito). There are no unique formulas, nor is ed departments, without transversal administration ca-
it helpful to theoretically speak about metropolitan pabilities and without the capacity to diagnose complex
power or metropolitan government without first ad- problems and propose integral answers.
dressing the needs that such an initiative would try to Note that we are at the beginning of the 21st
solve. If the goal is to avoid problems of competence century, facing a new society that is more heteroge-
between institutions, it would seem that a metropolitan neous, diverse, and individualized, with more complex

Section 1: Theoretical perspectives on metropolitan governance 91


problems. Universal and homogeneous policies, Political participation experiences are based on
designed and implemented only by the state, cannot collaboration between actors and/or citizens who
provide answers for this new reality. During recent share common interests and are based on values such
decades, global social and economic changes have as cooperation and access as opposed to the liberal
shaped a new society that requires new policies and principles of competition and ownership. To define
new forms of government. Traditional forms of these participatory practices, several authors are using
government, therefore, have a serious problem with the concept of social innovation (Moulaert, 2013;
functionality in the face of this new and changing Subirats, 2014), which the European Commission
scenario. In addition to the inability of governments defines as new ideas (products, services, and models)
to respond effectively to new problems, there is also that simultaneously meet social needs (more effectively
a legitimacy crisis. than alternatives) and create new social relationships
In this context, public administrations increasingly or collaborations (Social Innovation Exchange, 2010,
promoted citizen participation during the years prior p. 18). In general terms, social innovation refers to
to the current economic and financial crisis. However, citizen-based cooperative processes and practices with
the quantitative increase in participation was accom- a strong public service character that improve on pre-
panied by critiques: the quality of these experiences vious solutions to social problems.
and their capacity to improve legitimacy and reinforce The following characteristics identify these new
administrative action efficiency have been questioned dynamics of bottom-up political participation:
(Pars, 2009). New forms of governance have not Democratic radicalism: Inspired by a model of
replaced traditional forms of governance. Bureaucracy democracy based on respect for diversity and
has persisted to this day, as have universalist policies. managing the common based on the aggregation
The paradigm of governance has been shaping admin- of collective interests, without being captured by
istrations at different levels and of different political the views of dominant sectorsthe state and
orientation. At the same time, governance has taken a the market.
variety of forms, including within a single administra- Collaboration: New forms of political participa-
tion. Thus, depending on the administration, the time, tion that avoid hierarchies and have a horizontal
and the policy in question, governments have acted and shared character. However, the most charac-
with traditional practices or practices of governance teristic factor is that they are structured around
and, in the latter case, the participatory nature of the the collaboration between citizens who share
governance networks implemented have also been concerns, visions, and objectives. Thus, we no
extremely varied. We therefore conclude that different longer speak of actors with particular interests
participatory governance forms have complemented that establish among themselves more hierarchical
pre-existing forms of traditional government, but in or horizontal relations, but of actors and citizens
unequal ways. who interact and collaborate with each other be-
As outlined in the introduction to this chapter, we cause they have a common goal.
are witnessing a major renewal of the debate on the Connectivity: The reduction (or elimination) of
importance of citizen participation. Bottom-up and intermediary structures is an essential character-
outside-in political participation practices seek to find istic of new forms of bottom-up participation.
common interests to respond to collective problems. Traditional forms of organization have become
Sometimes these practices try to influence conven- expendable. Instead it is the citizen body that,
tional processes of public policymaking. Other times, despite its differences, may have common in-
practices of implementing democracy have taken a terests in a specific moment. Consequently, the
self-management or self-government approach to key factor is the capacity of those citizens to
problem solving. connect, even if it is circumstantial or episodic.

92 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


The internet is the platform that makes it possi-
and respond to the characteristics of a more diverse
ble, considering the character of immediacy or
and fragmented society that is experimenting with
eventuality in the organization. In fact, instead of
new forms of social organization.
organizations, we should talk about clusters of in-
ternet users, informally articulated around certain
nodes or people that serve as reference. Another Perspective in the Digital Age
Political pressure and implementation: The new
How can metropolises take advantage of social and
forms of bottom-up political participation are
technological change to deal with their governance
based on a certain vision of the worldshared
and urban policy problems? How can technologically
concerns and objectivesand, consequently, look
mediated democratic systems be used to conceive pub-
to have an impact on the public sphere. That is
lic policies differently (Edwards, 2006; Subirats, 2012;
why many of these practices of political participa-
Dente and Subirats 2014)? How can we take advantage
tion seek to put political pressure on the state and
of new distributed and shared production dynamics in
influence the political agenda and public policies.
the intervention of public power (Long, 2002)? Can
At the same time, however, some of these expe-
open government and new ways of using the potential
riences have a clear implementation goal, looking
of open data be discussed (Ramrez-Alujas, 2011, 2012;
to contribute or generate their own solutions to
Janssen, Charalabidis, and Zuiderwijk, 2012)? There
collective problems (on which governments have
are a number of elements necessary to at least partially
difficulty acting). Therefore, they open spaces or
answer these questions. First, we need to understand
create opportunities for co-production.
that digital change allows for the creation of meaningful
Glocalization: Many of the experiences of
spaces, different from the logic of the market and the
bottom-up social innovation combine the local
organization of states and other government spheres.
scale with the global scale. Thus, we find local
The digital transformation has given new dimensions to
initiatives whose purpose is to manage the conse-
the space of the common, understood as the collective
quences of global problems, initiatives that seek
capacity to face common problems, with or without
to change the scope and influence higher realms,
institutions involved. This is no novelty. The work of
and/or initiatives created in different territories
Ostrom (2000) academically and theoretically voices a
that come together or that are recreated without
set of practices that have allowed communities, over
considering the spatial organization of public
the centuries, to maintain their common goods in a
administrations.
sustainable and organized way. Ostrom has collected
The emergence of these new forms of political a multiplicity of practices to govern the common and
participation occurs at a time when public policies are has systematized and ordered their institutional rules.
characterized by a strong privatization tendency (re- In the field of public policy, incorporating these
ducing the role of the state) and by logic of austerity. ideas in the design, decision-making, and implemen-
The approach is based on reducing public spending tation of policies is leading to the concept of co-pro-
and affecting the social character of public policies, duction of policies and public services. Moreover, it is
which are losing their redistributive capacity. It seems leading to collaborative innovation, going beyond the
clear that, in parallel to the multiplication and diver- logic often focused on the technocratic and efficient
sification of the ways of doing politics, the relations e-government, which sees citizens as customers to
between public administrations and the citizenship serve, not people with the capacity to design, decide,
are changing. Other forms of citizen engagement in and implement jointly (Koer and Fuller, 2011; Linders,
public affairs, of political participation, and of collec- 2012; Srensen and Torfing, 2012).
tive action emerge. Some of these forms of political The concept of digital era governance (Margetts
participation are well known, others are innovative and Dunleavy, 2013) departs from the idea in the New

Section 1: Theoretical perspectives on metropolitan governance 93


Public Management approach that it is better and Strykowski, 2015). One of the key elements in this
more efficient to generate competition (thus, looking change of perspective is considering citizens co-par-
to incorporate market logic into the functioning of the ticipants in a framework of reciprocity and interde-
public sector). The tendency to disaggregate adminis- pendence, not hierarchy.
trative structures, generate partnerships, or seek qua- This idea of co-production of services was already
si-market formulas responded to this criterion, as well present in Elinor Ostroms work (1996). She stated
as the notion of generating incentives to improve in that new strategies could be established in a relation-
an environment in which the formulas to increase pro- ship that could exist between the regular producer
ductivity were not present. The digital era governance (such as street-level police officers, social workers, or
approach argues that, in the new digital scene, it is of- health workers) and their clients, who wanted to be
ten better to share or collaborate than to compete. In transformed by the service into safer, better-educated
addition, it argues that value creation means more than or healthier persons (quoted in Brandsen and Pestoff,
strictly monetary value. Some evidence demonstrates 2006, p. 496). From this perspective, the position of
the limits of the New Public Management approach, citizens is markedly different from the position of
after enough years of experimentation (Dunleavy and clients. Therefore, the consideration is the relationship
Margetts, 2013). This leads to the opportunity or need between citizens and their needs, how it will evolve,
for approaches that generate reintegration of services, and to what extent citizens can find satisfying answers
more holistic visions of public service, and a more to their problems. Or, whether citizens will continue
substantive and less instrumental use of digitalization. to demand services from the public sectors, even at
Metropolises are especially propitious areas to the cost of maintaining a position of subordination,
experiment in this new frame. What in the traditional passivity, and non-intervening capacity. Logically, this
conception were problems (the lack of coordination, greater capacity for innovation, intervention, and
dispersion, the lack of clear responsibility in the deci- co-production of services by citizens and their own
sions and management processes), in the digital world organizations should be accompanied by a structural
are constitutive elements of its horizontal framework, change of power and formatsrepresentative institu-
constantly connected and with unpredictable out- tions and social dynamics (Moulaert, 2013).
comes. If we are entering an era in which innovation
capacity resides on the best possible combination of Conclusion
social initiative and low-cost technological availability,
how can we take advantage of this combination to Metropolitan areas are presented to us as territorial
rethink public policies and the provision of services? enclaves in which very different social and economic
In general, both policies and services have been networks coexist. The larger the area, the more people
thought of in a hierarchical way, from a segmented, it concentrates, and the fewer the strong bonds between
competence mindset, and considering citizens as ob- them. Yet it also provides greater amounts of different
jects of attention rather than as subjects of decision. lifestyles and projects. There are fewer (shared) identi-
Every change dynamic that characterizes the digital era ties, but more opportunities. The construction of what
is based on recognizing that it is more effective and is metropolitan cannot be formed without considering
useful to rely on the capacity of collective innovation the lack of sense of belonging that its scale poses.
than on the concentration of decisions based on di- In this sense, a metropolis is a large conglom-
agnostics, alternatives, and solutions from a group of erate of people and groups that interact with and
technicians and experts, no matter how well qualified depend on each other to a greater or lesser extent.
they may be. It is from this conviction that the idea Increasingly, there is an agreement that good quality
of co-production of public policies and services has of life and satisfactory civic coexistence does not de-
been shaped (Baser, 2012; Scherer, Wimmer, and pend on a strong and sovereign authority, but rather

94 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


on everyone feeling responsible for what happens in The leadership capacity of metropolitan govern-
the community. Each member acts based on his or ments will derive from their role in projecting and ex-
her own resources and availabilities, without diffusing tending a model of community to other actors, agents,
their own specific responsibilities. Interdependence, and people present in the same area. Our hypothesis
continuity, and a lack of a sovereign authority able to is that there will be less room for projects that do not
decide for everyone at all times, are the characteristics express a certain political vision. That is to say, that it
that usually define a network. A network of actors in will be necessary to debate about values and about the
a metropolitan area might end up being responsible, degree of social inclusion that one wants to achieve
in one way or another, by action or omission, for the or to reach compromises on serious issues within the
dynamics that are occurring. local community and in relation to the position of a
Cities, and even more, metropolises, make us certain metropolis in the world. The metropolises that
feel more complex. In cities, you learn to live with do not have the capacity to debate and determine their
strangers, with people different from you. Dense me- future and the great themes of collective coexistence
tropolises make relationships and exchanges possible will see how the market and other agents decide for
without great costs in terms of mobility or resources. them. And then, the public space will be seen as
This density also has certain disadvantages, such as the something residual and collective interests as a reality
greater use of collective spaces or its disappearance, subjected to the pressures of the strongest.
the problems generated by a mobility still based on pri- Political and local leadership are important, but so is
vate cars, greater pollution, and the potential erosion the capacity of citizens to assume collective responsibil-
of (pacific) coexistence. That is why it is important to ities. And it is also significant to strengthen the technical
maintain a healthy tension or balance between density and administrative capacities at the local or territorial lev-
and civic-collective responsibility of public spaces, as els to make them capable of dealing with the complexity
well as to invest in public transportation. of pending tasks. Technological change, which implies re-
Relations between local communities and their inforcing the possibilities of shared knowledge and new
representative institutions should be based on the forms of mobilization and social action, should also be
principles of collective co-responsibility and citizen a major concern for metropolitan governance dynamics.
participation, with less talk of government and more The challenge is how to combine competitiveness,
of governance capacity. The government of me- governability, and social inclusion at the same time.
tropolises cannot be considered a public institutions It seems that, so far, the emphasis has been placed
problem only. It has to be seen as a collective concern, on the competitiveness of a metropolis, and that the
in which hierarchical rules are no longer useful, and in other aspects have been conditioned to it. The result
which coordination and co-responsibility mechanisms has been an increase in social gaps and inequality. If
must be established with the social actors present in the emphasis were placed on the metropolis govern-
the community. Only in this way can the complexity ability, political stability would be prioritized, followed
of future challenges be collectively assumed. by competitiveness and economic adjustment. If we
A new way of governing metropolises and a new way approach the problem from the perspective of human
of understanding collective governance capacities involve development in metropolitan areas (from inclusion),
different understandings of local democracy. Though we also then determine the type of competitiveness
representative mechanisms continue to be central to local to be achieved and the form of governance appropri-
authorities legitimacy, it is becoming increasingly clear ate to that objective. We understand there will be no
that we need to develop new forms of citizen participa- human development without democratic deepening or
tion and engagement. Those new forms should strive for without the consolidation of development capacities
meaningful decisions for the community, bringing people that articulate economic and environmental sustain-
closer to the complexity of public decisions. ability with inclusion.

Section 1: Theoretical perspectives on metropolitan governance 95


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Section 1: Theoretical perspectives on metropolitan governance 97


1.5 Political Economy in the Global North and
South: Connecting, Financing, and Ruling
Pedro B. Ortiz (World Bank) and Marco Kamiya (UN-Habitat)

Abstract

The metropolis is an unprecedented phenomenon of global transformation, yet we still have no dis-
cipline of practice to deal with it. Areas of knowledge such as metropolitan finance, supply chains,
transport integration, land management, and infrastructure provision are still exploratory fields. Na-
tional governments must focus and adapt the new political economy that the metropolis demands.
This paper defines and analyzes the complexity of metropolitan structures, describing the differenc-
es between metropolises in developed and developing countries, and the connectivity and production
links that integrate them. It looks at metropolitan political management and governance as a frame-
work for economics, planning, and financing, both in formal and informal contexts, and discusses this
new approach in relation to states and cities at the international and national levels.

Metropolises today are the predominant connection York, and London as the ultimate metropolises where
between cities and the global economy. Supply chains, finance and production hubs integrated. Later, Pedro
economic hubs, and production platforms are linked Ortiz (2013) described the need to plan for the me-
globally through cities. Metropolises are also the ma- tropolis and its limits within nation-states marked by
jor axes that connect cities, countries, and rural areas. the tension between productivity and equity. Today,
They influence major national decisions concerning academic output on metropolises and megacities is
infrastructure deployment and economic develop- deeper and more analytical in a moment in which
ment and play a fundamental political and economic metropolises are the norm rather than the exception.
role in the governance of cities and nations. The The world is clearly moving toward metropolitan
worlds roughly 20 metropolises are also a base for economies (see Table 1), but nation-states are still in
multinational corporations and providers of finance, control and will be the predominant force for the next
business environments, and the infrastructure that few decades in a world that requires trade, urbanrural
connects them. policies, social mandates, and nationwide planning.
As early as 1995, Kenichi Ohmae (1995), a McK- This chapter focuses on the major axes that define the
insey & Corp. partner, predicted the end of nation political economy of the metropolisconnections,
states and the emergence of mega-economies or finance, and economicsand the new rules that
regions. More recently, Parag Khana (2016) described govern them.
a world in which connectivity led by supply chains A well-known quote from Bismarck says, Politics
was the rule rather than the exception, configuring an is the art of the possible. Political economy tries to
almost stateless world. address the dichotomy between economic and social
The realities and politics of the so-called met- objectives to make them as compatible as possible and
ro-optimists, however, are more complex. Saskia Sas- avoid the breaking down of the system. Disruptions
sen (1995) defined the emergence of the metropolis, could result from the failure to coordinate efficiency
focusing on three global cities in her classic study. and equity. Metropolitan management must there-
The Global City (Sassen, 1995) analyzed Tokyo, New fore steer between unacceptable social inequity and

98 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development


unsustainable economic inefficiency. Economics aims capacities beyond those of many nation-states. We
to be a science, but political economics is not. could define the current era, starting in the late 20th
Economics is the science that analyzes the compo- century, as the Age of the Metropolis.
nents of a productive process. In metropolitan terms, In achieving efficiency, numerous techniques are
economic policies attempt to maximize the output used to quantify the output of a specific set of pro-
given a limited amount of resources. When applied to ductive inputs. Techniques are used to time and scale
metropolises, economic policies develop a set of tech- the inputs to maximize the output. On the social side,
nical mechanisms to (i) calculate the return on a com- many indicators allow equitable access to social facil-
bination of resources and (ii) improve productivity. ities to be calculated and shared, and such indicators
Political economy, instead, is the art of achieving help us reach a progressive distribution of consump-
the most desirable objective through an analytical tion. However, there are no techniques or indicators
approach situated within a specific sociopolitical con- available to locate equilibrium between efficiency and
text that could allow, or endanger, the efficiency of equity, despite the many efforts to develop taxation
the result. Political economy tries to make the output formulas to frame this dichotomy.
as efficient as possible given a set of social (political) Above all, it is important to understand that there
circumstances. The objective of political economy is can be no equity without growth, and no growth
efficacy rather than efficiency. without equity. The political programs that prioritize
Economies of scale apply directly to metropolises, growth as the forerunner of equity generally do not
which is why metropolises are more efficient than understand that if sharing is postponed for a long
simple cities and why they are becoming increasingly time, the whole system breaks and growth is disrupted,
powerful. Metropolises are now reaching competitive if not halted altogether.
Table 1. Ranking of Nations and Metropolises by GDP, 2014

Rank Country or Metro Area GDP Total Population GDP per Capita
(PPP, US$B) (PPP, US$)
1 China $18,017.1 1,364,270,000 $13,206.4
2 United States $17,419.0 318,857,056 $54,629.5
3 India $7,384.1 1,295,291,543 $5,700.7
4 Japan $4,655.5 127,131,800 $36,619.4
5 Germany $3,757.1 80,970,732 $46,400.6
6 Russian Federation $3,358.6 143,819,569 $23,352.6
7 Brazil $3,275.2 206,077,898 $15,893.2
8 Indonesia $2,676.1 254,454,778 $10,517.0
9 France $2,604.2 66,217,509 $39,327.9
10 United Kingdom $2,597.4 64,559,135 $40,233.2
11 Mexico $2,171.0 125,385,833 $17,314.7
12 Italy $2,155.8 60,789,140 $35,462.8
13 Korea, Rep. $1,683.9 50,423,955 $33,394.8
14 Tokyo (Japan) $1,616.8 37,027,800 $43,664.3
15 Saudi Arabia $1,606.4 30,886,545 $52,010.2
16 Canada $1,601.8 35,543,658 $45,065.7
17 Spain $1,562.9 46,476,032 $33,628.9
18 Turkey $1,502.5 75,932,348 $19,787.7
19 New York (USA) $1,403.5 20,073,930 $69,914.7
20 Iran, Islamic Rep. $1,352.1 78,143,644 $17,302.6

Section 1: Theoretical perspectives on metropolitan governance 99


Rank Country or Metro Area GDP Total Population GDP per Capita
(PPP, US$B) (PPP, US$)
21 Australia $1,077.9 23,470,118 $45,925.5
22 Thailand $1,065.7 67,725,979 $15,735.1
23 Nigeria $1,049.1 177,475,986 $5,911.2
24 Poland $960.2 38,011,735 $25,261.6
25 Egypt, Arab Rep. $943.5 89,579,670 $10,532.9
26 Pakistan $890.3 185,044,286 $4,811.4
27 Los Angeles (USA) $860.5 13,220,970 $65,082.4
28 Seoul-Incheon (South Korea) $845.9 24,622,600 $34,354.9
29 London (UK) $835.7 14,620,400 $57,157.0
30 Netherlands $813.8 16,865,008 $48,253.3
31 Malaysia $766.6 29,901,997 $25,638.6
32 Paris (France) $715.1 12,492,500 $57,240.7
33 South Africa $704.7 54,001,953 $13,049.3
34 Philippines $690.9 99,138,690 $6,969.0
35 Osaka-Kobe (Japan) $671.3 18,697,800 $35,902.4
36 Colombia $638.4 47,791,393 $13,357.1
37 United Arab Emirates $614.9 9,086,139 $67,674.1
38 Shanghai (China) $594.0 24,683,400 $24,065.0
39 Chicago (USA) $563.2 9,568,133 $58,860.8
40 Moscow (Russia) $553.3 12,080,400 $45,803.0
41 Algeria $552.6 38,934,334 $14,193.4
42 Iraq $524.2 34,812,326 $15,057.1
43 Vietnam $510.7 90,728,900 $5,629.0
44 Beijing (China) $506.1 21,639,100 $23,389.9
45 Bangladesh $496.8 159,077,513 $3,122.7
46 Belgium $487.8 11,231,213 $43,434.7
47 Switzerland $487.5 8,188,102 $59,539.8
48 Kln- Dsseldorf (Germany) $485.2 11,618,400 $41,762.9
49 Houston (USA) $483.2 6,448,841 $74,925.7
50 Washington (USA) $442.2 6,056,296 $73,016.9

Source: Prepared with data from Brookings Institution (Cities) and the World Bank (GDP). Retrieved from
http://www.brookings.edu/research/reports2/2015/01/22-global-metro-monitor, http://data.worldbank.org/data-catalog/world-development-indicators
Note: Many cities are located among the 100 largest economies of the world. Because of this, cities such as Tokyo, New York, and Seoul are considered nation-states.

Physical Strata Helps Well managed, the physical realm can mitigate
socioeconomic frictions. One example is breaking
A key component is at play in this dichotomy be- the center-periphery antagonism, which fosters the
tween growth and equity: the physical substrata, a marginalization of peripheral social groups. Adopt-
substantial component when dealing with territorial ing a polycentric approach to metropolises allows
structures, as with metropolises. The physical sub- demand to control the land market and provides
strata includes both the natural environment and a plurality of locations for social access to public
the urban construct and layout (UN-Habitat, 2015). facilities.

100 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
The metropolis is an aggregate of cities and neigh- impossible. Political economy balances those con-
borhoods. The territorial build-up of a metropolis flicting private interests and tries to come out with
therefore depends on an efficient layout of the con- a feasible proposal for land allocation decisions and
nections among them. This point was described by Ja- provision of infrastructure.
cobs in her classic, The Death and Life of Great American The economy of the metropolis is an essential
Cities (1961), in which she described the conditions for component. The forces that shape the efficiency of
vibrant and productive cities as available public space, a metropolitan economy (e.g., labor, capital, entrepre-
mixed communities, a number of intersections, and so neurship, and productivity) are now global, not local.
on. Recently, De Nadai (2016) quantified these condi- They must be dealt with in a way quite similar to a
tions in Italy using cell phone data, while UN-Habitat, national economic policy rather than a localized urban
the Lincoln Institute, and New York University (2016) economic policy.
have been working on a global sample of 200 cities
to create a dataset using quantitative and qualitative Metropolitan Governance
aspects of urban expansion from 1990 to 2015.
Zooming out, the efficiency of the metropolis is The economic power and the social complexity of
based on two components: relative location and in- metropolises align themselves rather more with the
frastructure investments. Relative location concerns management of nation-states than of cities. Metrop-
territorial components, since the functions and uses olises follow this rule even if they do not have an
of land must be efficiently located to minimize costs established government.
and provide fluid mobility and accessibility through- In all cultures, city government is a (formal or
out the metropolis. Infrastructure investments must informal) unitary system. This has been true in
be of an appropriate level and adequacy. Urban and Europe since Roman times. In complex hierarchical
metropolitan space is created by the infrastructure that systems such as the Roman Empire or the indige-
provides potential for its use. As noted by Lefebvre nous Germanic and Anglo-Saxon tribal systems, the
(1974), Space does not exist; it is created. basic unit of territorial coexistence was the village,
A good location is the one that is related to this the town, and the city. A single institution deals
infrastructure. It is reflected in the value of the land with the issues that require joint or cooperative
and the added value generated by the impact of the management.
infrastructure on the potential uses of that land. A metropolitan governance system is much more
Added value is mostly a condensation of the positive complex. It involves many municipalities, tiers, min-
externalities of the public (or private) investment in istries, and departments of the national government
infrastructure on the potential (economic) use of (e.g., transport, housing, finance, public administra-
that land. The infrastructure provides the locations tion, health, and education). It also typically involves
effectiveness. Time is also relevant. If the availability multiple utility agencies, either public, private, both,
of the infrastructure is not timed well (typically due to or mixed. Each of these organizations has their own
financial concerns), a good location is useless. Politics framework of purposes and competences provided
therefore enters the timing game. by the law, and none of those involved in metropol-
The metropolitan physical structure, location, itan management can impose on any other beyond
and infrastructurein other words, land use and the limits established by the law.
transportare the base. This is what a metropolitan The management of a metropolis is not based on
government must provide. The interests of land orders provided from the upper tier of a unitary sys-
and inherited inefficient locations, historically based tem, it is based on a peer dialogue among all the insti-
in shortsighted land policy approaches, often make tutions and organizations within the limits established.
the pursuit of this objective very difficult, if not The law outlines the distribution of responsibilities

Section 1: Theoretical perspectives on metropolitan governance 101


and competences among them. A metropolitan man- illustrative. The Confederate States of America (the
agement structure is neither based on a unitary hier- government of the South during the U.S. Civil War)
archical pyramid (the top-down Aristotelian potestas) and the European Union are closer examples.
nor on a centripetal (center versus periphery) model Federation: In a federal system, sovereignty is at
of imposed decisions. Metropolitan management the center but management is not just decentralized,
structure is based on a matrix of dialogues (Figure 1) it is also devolved. The various tiers of government
among the actors and stakeholders involved. have their own independent designation systems and
are accountable to their population, not to the central
Figure 1. Metropolitan Governance:
unitary power that has appointed them. Germany and
A Matrix of Dialogues
the United States are current examples.
City Hierarchical/Orbital Governance Metropolitan Matrix Governance Metropolises have developed as complex supra-ur-
Citizens/Municipality Dialogue Inter/administrative Dialogue
ban systems composed of multiple cities or urban
units. They have the management complexity of mod-
ern nation-states. They have the productive capacity
and the socioeconomic complexity of nation-states.
Their management requirements have less to do with
simple urban structures than with the typical concerns
of nation-states. As an example of metropolitan effi-
ciency, the ones that are in fact nation-states, such as
Singapore, perform so well that they are often bench-
marked as examples of the way to go forward.
The need for a new urban dimension, the metro-
Source: Authors elaboration, retrieved from www.pedrobortiz.com. politan one, has been felt since the second half of
the 20th century. There have been many attempts
to build some metropolitan coordination among
National Governments Taxonomy cities involved in various forms of metropolitan
phenomena.
National governments, in contrast to single municipal- Within the confederate approach there is an incre-
ities, have developed from more diverse alternatives. mental process that can be simplified into four stages:
Models range from the centralized unitary system of 1. Round Table: The first stage of coordination
a military conquest to the cooperative coordination involves meeting and revealing to the group what
of city leagues, such as the Greek Delian, Achaean, each member is doing. Sharing information per-
or Hellenic leagues, to the Germanic Hanseatic league. mits learning from each other, facilitating good
With time, the complexity of organization has evolved results by benchmarking and, most importantly,
into such solutions as federations. detecting where conflicts or inconsistencies might
Unitary: In a unitary system, power before de- appear. This could lead to alternative methods to
centralization is instituted in a single central power. address the conflicts or inconsistencies by either
Sovereignty stands at the center. Most countries work negotiation or confrontation.
this way. France is a good example. In France, the head 2. Parallel Projects: Out of those round tables and
of a department is the prefect, who is appointed by the their attendant cross-insemination of ideas and
national president and is accountable to him or her. experiences, some of the administrations involved
Confederate: In a confederate system, sovereignty may eventually replicate each other and develop
stands at the level of member states or cities. The similar projects. Such parallel projects are not in-
German Hanse and the Greek Hellenic systems are tegrated into the single management.

102 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
3. Common Projects: Once confidence has been
and the Vatican) often presented as metropolitan
developed over many years of stages 1 and 2,
successes, the unitary system is mainly used at the
some of the administrations may decide to under-
national level.
take common projects. Planning is done together
There are many ways to achieve national unity.
but implementation is still run independent-
Usually violence is involved, with the unitary system
ly. Some economy-of-scale benefits could be
at some moment in history being imposed by either
achieved by such common initiatives.
war or revolution. It is therefore to some extent an im-
4. Management Agency: When the complexity
posed system. Even when legitimized by a democratic
of a project requires strong technical skills
constitution, it nevertheless has a top-down approach
and continuous maintenance management,
and is sometimes contested when it fails to respond
a common project might be provided with a
to bottom-up community concerns.
management agency. Cross-boundary transport
National unitary systems can be deaf to metro-
projects, such as in Washington, D.C., are an
politan needs. They tend to focus on national issues
example of this stage.
and take a limited interest in metropolitan ones. These
issues are difficult, conflictive, and expensive to solve
These stages of confederation building take time: (e.g., Bogot transport). This is so even when the
five to ten years each at least. Some arrangements nev- capital metropolis produces more than 60 percent of
er go beyond a certain stage when the confidence has the national GDP (e.g., Manila, Cairo, and Buenos
not been built to allow for further development. Most Aires) and the whole country is at stake if the capital
important, it must be understood that the process of metropolis does not work.
confederation has a limit: where none of the adminis- On some occasions, metropolises benefit from a
trations involved, or the politicians in charge of these decentralization framework. A local agency is insti-
administrations, is willing to transfer sovereignty from tuted and a CEO appointed by the central govern-
their administration to the agency. ment, such as in Madrid during the 1970s. Decentral-
Confederations do not readily develop into feder- ization is as democratic as the central government.
ations or unitary systems. The Hanseatic League im- Even a legitimately democratic government does
ploded when confronted from the outside. The Hel- not necessarily represent the specific inhabitants of
lenic League was taken over by the Athenian Empire the metropolis. It represents the inhabitants of the
and the Confederate States of America terminated unitary state (e.g., the role of Minister for Kampala,
with the end of the U.S. Civil War. Europe, as it is, is Uganda). Eventually, the metropolitan population
a confederation. A unitary monetary system requires will require accountability of these appointees. They
a federal fiscal and economic policy. The absence of will be summoned to be accountable to the metro-
such has created many of the troubles Europe is ex- politan population, not to the national president.
periencing. A constitutional attempt was made a few Devolution would then be the next step in establish-
years ago, but it failed. Europe in 2016 is struggling ing real metropolitan governance.
with centrifugal forces such as England and Greece. Decentralization must not be mistaken with
devolution. In a metropolitan devolution process,
A National Unitary System, the accountability of the metropolitan appointees
is transferred from the central government to the
Decentralization, and Devolution citizens of the metropolis. The head of the met-
ropolitan agency is accountable to the electorate.
At the other extreme of governmental mechanisms, Once their offices have devolved, metropolitan
we have the unitary system. With the exception executives become elected governmental officials.
of Singapore and some other cities (e.g., Monaco The central government cannot remove them

Section 1: Theoretical perspectives on metropolitan governance 103


without the convergence of exceptional and spe- nation is doomed. It will not be able to compete
cific circumstances, to be established by law at the in a globalized world.
constitutional level. Metropolises also must be able to provide ade-
A process of metropolitan devolution can be quate frameworks to develop the political economy
established in unitary states. There are, however, necessary for governances equity objective. That is
two difficulties. First, no politician wants to lose why the governmental system is an essential piece of
areas of power and control. National governments the metropolitan political economy.
do not like to lose part of their capacity to manage
the metropolis, which represents a large portion of Metropolitan Economics and
national population and possibly even a greater share
of national GDP. Politicians by nature accumulate
Political Economy
power, they do not let it erode. Second, if the pres-
ident of the metropolitan government represents The productive system of a metropolis is a system
an opposition party, presiding over more than 50 where all parts are interrelated, even though some
percent of the national GDP might encourage him of its components may be discontinuous in spatial
or her to imagine the national presidency as the next terms. Many metropolises do not see the need to act
rung to climb. This person would become the polit- on the system in a consistent and comprehensive way.
ical enemy of the national president, as occurred in Economies of metropolises are often dealt with in
Buenos Aires. No politician wants to breed enemies a disjointed way, assuming they are dealt with at all.
out of power resignation. Metropolitan economies are often as important and
All this is unfortunate enough. On one hand, it is powerful as national economies and they must be
impossible to build a metropolitan government level dealt with at a similar level of concern and with similar
out of a confederate approach. Such adverse circum- policy management capacities.
stances are a pity, as it would be possible to build that The projects approached for common devel-
level from unitary decentralization and devolution. opment by cities in metropolises are mainly green
Some would argue that metropolitan governments or gray infrastructure projects. This is because,
are not necessary, and that a confederation or de- among the five components of metropolitan struc-
centralization framework would be quite enough. tures (environment, transport, housing, productive
Political economy, however, would point otherwise, activities, and social facilities), environment and
arguing that many challenges and problems of me- transport are continuous systems; the other three
tropolises are neither municipal nor national. If they are discontinuous.
are specifically metropolitan problems, they must be There is a tendency to think that continuous sys-
addressed at the metropolitan level, and for such they tems require more coordination than discontinuous
need the instrument of a metropolitan institution to ones. That is why municipalities feel a greater need to
address them, achieved through either decentraliza- have a consistent metropolitan policy when dealing
tion or devolution. with green and gray infrastructure, unlike when deal-
In a globalized world, in a competitive environ- ing with housing, productive, or social policies. The
ment where metropolises are more competitive and need for coordination is more difficult to perceive for
economically productive than nations, and where the discontinuous components and comes about only
the wealth of nations depends on the efficiency in more complex stages of metropolitan evolution,
of their metropolises, there is little room for sub- most frequently in decentralized or devolved systems.
optimal solutions. Metropolises must be provided Beyond technical capacity, the major problem for
with the most effective system of governance to coordination is isolation between professionals who deal
be able to maximize their economy. If not, the with the economic policies of metropolises and those

104 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
who deal with physical policies. If there is no metropol- the socioeconomic priorities for the future of a spe-
itan institution to foster collaboration, coordination, and cific metropolis. It does so based on the metropoliss
dialogue, isolation becomes chronic and coordination problems, risks, weaknesses, and potential. The trans-
takes place only, if ever, at the academic level. versal approach to metropolitan strategic planning
Physical planners approach location in terms of a could result in identifying priority projects. Trans-
separation of conflictive functions (e.g. polluting industry versal projects that require a physical dimension and
and residential areas) and as driven by traffic patterns of promote a strategic vision for the metropolis beyond
accessibility or congestion. Very little attention is typical- the tactical.
ly given to economic needs because planners lack such The socioeconomic strategic plan then feeds a
skills and information, and the system, either academic or physical structural plan. Note that a structural plan
administrative, rarely provides for it. Urban economists that addresses the overall general physical strategies of
will, on the other hand, bypass physical management the metropolis should not be confused with a detailed
and address their arguments to top politicians and deci- municipal regulatory plan. The structural plan must
sion-makers. They will encourage policies and projects be designed at the metropolitan level, which requires
unrelated to a physical context that is difficult to grasp instruments different from those used at the municipal
and appreciate. Governance specialists, focus on institu- level. Such a misunderstanding is the most common
tional settings. They rarely understand the physical needs mistake made by professionals who deal with metro-
of the metropolis and so produce proposals based on politan planning, most of whom come from an urban
benchmarking approaches that replicate well-functioning planning background. They create so-called metropol-
institutions. This approach, providing a tool unrelated to itan plans that are impossible to implement because
the task, might leave you with the institutional dilemma they misunderstand the biology of the metropolis.
of a screw in one hand and a hammer in the other. Such plans eventually become decorative elements in
Unfortunately, institutions from places that have administrative offices.
problems in socioeconomic contexts unrelated to the A structural plan deals with the main projects that
metropolis in question are hardly going to perform as have a transversal metropolitan implication. Such
they did in the native city. If officials from Kampala projects are meant to affect the overall structure of
are urged to adopt a governance mechanism during a the metropolis to increase both the efficiency and
field trip to see the transport system of Stockholm, equity of the metropolitan system. Sustainability is
that mechanism must be contextualized or else this obviously the substrata of the physical policies that
becomes an exercise of science fiction. Governance must integrate the five previously mentioned metro-
is the tool to implement a proposal or a project. If politan components: green and gray infrastructure
the project was not selected and developed by the city (i.e., environment and transport), housing, productive
leader, the tool chosen will probably be inefficient or activities, and social facilities.
redundant for the purpose.
Metropolitan Urban Economy
Political Economy: Strategic and
Urban economy emphasizes city layout to improve
Structural Planning productivity. Components are rooted into supply
chains, activities, and procedures that facilitate integra-
Integrating economic, social, and physical approaches tion of production with time and efficiency. Several
into the metropolis can be done through strategic factors contribute to this, including fixed capital and
planning. The physical environment is the backdrop spatial layout.
against which economic and social planning take place. Fixed capital is essential because metropolises
Strategic planning is the instrument that establishes must accumulate fixed capital as a multiplier of labor

Section 1: Theoretical perspectives on metropolitan governance 105


productivity. There are three components of metro- well-performing metropolises. Each metropolis has
politan fixed capital: its own underlying structure. Cultural and spatial
1. Location: It must be integrated into a territorial contrasts require different optimal equilibriums.
model that allows resilience, sustainability, and Transfer of internationally trendy templates should
flexibility. be restrained. The share should be established by the
2. Typology: It must respond to the potential needs of priorities and appreciation of local consumers and
the metropolitan economys strategic development. the electorate.
3. Timing: It must be prioritized and timed because Congestion is the nightmare monster of the
no one wants to finance infrastructure that is not metropolis. Congestion can bring a metropolis to
yet necessary. gridlock. Often size is seen as the cause, but more
important are the attributes of urban expansion lay-
Fixed capital is not enough, and yet it could outs. In this framework, the subsequent argument
also be too much. Some metropolises have already is that metropolitan growth should be contained.
achieved their actual limits of capital accumulation This is a moral approach, not technical, as an ethic
and therefore need to tame the complexity of their of small is beautiful can be discerned. Technically,
accumulated capital. Only a few metropolises have however, a congestion threshold is reached when
reached this level: Paris, London, New York, and the marginal return on the accumulation curve
Tokyo are the clearest examples. becomes negative. In traffic terms, that would be
Some of the effects of fixed capital can be when the cost of one additional car on the road
achieved less expensively by running capital and man- reducing the general speed (a negative externality)
agement. We see traffic management as an alternative becomes greater than the benefit of accessibility
to building expensive and environmentally degrading provided for by that additional car. Congestion, and
infrastructure. The analysis of intermodal and overall not only in terms of vehicular traffic, can diminish
efficiency can be approached with multiple econo- a metropoliss competitiveness. Non-congested
metric techniques. competitors then take advantage of this weakness
This capacity for management governance is what in global markets.
we call intangible fixed capital. Investment is neces- Nevertheless, economies of scale show that the
sary in human and social resources, and resources larger you are, the more efficient you are likely to
related to entrepreneurial capacity. Metropolises be. Better mobility should increase productivity.
with more social and human capital can recuperate According to Prudhomme and Lee (1999), the elas-
quicker and better after disasters than those with ticity of commuting speeds and labor productivity is
less. One could compare the aftermath of the 2010 around +0.30, which means that increasing speed by
earthquakes in Haiti and Chile as an example. Not 10 percent increases productivity by 3 percent. The
that they need to be tested by disaster to analyze larger the metropolis, however, the more specialized
results, these metropolises perform better in any the labor force typically becomes. Such specializa-
circumstance. tion requires adequate education and immigration
We should distinguish between the social and pro- appeal. Larger metropolises typically enjoy larger
ductive facilities of tangible fixed capital. No labor marginal returns on fixed capital. The congestion
force can be improved without health or education limit must not be reached, meaning there needs to
facilities. Even cultural and leisure facilities are essen- be a way to push back the congestion threshold. As
tial to keep a labor force balanced and competitive. Alain Bertaud (2016) said, Mobility explains the
The share and prioritization, however, is impossible link between city size and productivity.
to approach by standardized quantitative means. No Size and congestion are relatedthey are part
comparative standard analysis is available among of the same equationwhich is why, instead size

106 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
being the factor to limit, congestion should be The essential economic question is: Would the
targeted. The limit on a metropoliss size is the investment (fixed capital or management) neces-
capacity of its collective intelligence to manage sary to raise the congestion threshold compensate
congestion. The components of collective intelli- for the benefits of increased capacity? If not, the
gence are not only the capacity of the governance investment should not be undertaken. This is as
system to respond (i.e., social capital and accumu- simple and as complex as a costbenefit analysis.
lated social and human resources integrated into If the project is intelligent enough and has under-
institutional frameworks), it is also the economic stood the metropoliss DNA, the outcome will be
capacity to enable and facilitate the necessary in- positive. The issue will then be how to accommo-
vestments (see Figure 2). date the discrepancy between those who pay for the
On the other side, and as mentioned before, the investment and those who benefit from it. Should
attributes of the layout of urban expansions are the investment be public, private, both, or neither?
a significant determinant of congestion in cities.
UN-Habitat, New York University, and the Lin- Metropolitan Finance: A Key
coln Institute (2016) found that, especially in less
developed countries, the cause of congestion is un-
Condition
planned and disorderly growth taking place in defi-
ance of municipal plans or regulations. Congestion Metropolitan financing in the context of devolution
is strictly correlated with the share of land that is and fiscal arrangements often involves various levels
allocated to streets, main streets, and arterial roads. of government and comprises two classes: (i) reve-
If not enough land is allocated for this purpose, a nues, expenditures, and services, and (ii) infrastructure.
serious number of bottlenecks is created, and the Concerning revenues, expenditures, and services,
economies of scale cannot be achieved as desired, the funding responsibilities and the inter-govern-
and described before. An optimum value for street mental fiscal arrangements should be coordinated,
allocation should be 30 percent, but in Dhaka, clear, and efficient. Three levels are generally in-
Bangladesh, for example, the share of built-up area volved. The state/province level typically provides
allocated to streets is just 12 percent. major health and education facilities, inter-urban
trains, and roads. The cross-local level (e.g., boards
Figure 2. Metropolitan Psychology, Infrastructure,
and authorities) typically provides large health and
and Management
education facilities, metro public transport, water
Infrastructure investment (the right ones!) and management supply and waste water, solid waste disposal, and
Efciency metro ring roads and freeways. The local level typ-
Efciency improvement ically provides local health and education facilities,
solid waste collection, and local roads. Table 2
positive affect

shows a general metropolitan finance arrangement


among different layers of government.
Congestion Collapse Size Providing infrastructure also involves layers of
stimulation intensity government with different objectives and interests.
negative affect

In general, national and regional highways, water


supply, major networks, drainage, and energy are
provided by the central government, whereas a local
The Wundt Curve: Inverted U relationship between stimulation and affect government may have an urgent need for rural roads
to provide access to local wholesale markets in addi-
Note: Presented at the International Urban Development Association (INTA)
33rd Congress, 2009.
tion to major highways.

Section 1: Theoretical perspectives on metropolitan governance 107


Table 2. General Metropolitan Finance Arrangements

Govt Level Sectors Revenue Sources for Collection Systems** Systems to Maximize
Capex Opex Yield* Net Revenue***
State/ Health, General User Rarely Health Transparent bidding for
province/ inter-urban trains, taxes (e.g., fees, fully cost cards, smart concessions, suppliers,
regions bulk electricity income and taxes recoverable, grid, water and use rights
generation, water VAT, bonds, but relatively auctions
management, project loans) easy to police
etc. payment
Metro-level Education, Shares of User With the Integrated GIS-based property tax
cross lg (city metro rail, general taxes, charges, exception of ticketing, monitoring, automated
regions, water supply and property tax CSO water supply, smart billing, and other IT
boards, etc.) sanitation, etc. levies, bonds, transfer rarely cost metering systems to maximize
project loans revenue recoverable, yield. Crowd sourcing
but more of service issues and
difficult to responses.
police access
Development Area or corridor Property User Commercial Eminent Land banking and
area or transport and taxes, project charges, basis: domain, performance-based bids
corridor urban renewal loans CSO corporation area-
authorities transfer should be in based tax
revenue surplus surcharges
Local Solid waste Property User Rarely cost Cost GIS-based property
local roads, taxes, project charges, recoverable, recovery tax monitoring,
parks, loans, limited CSO but more pricing automated billing, and
etc. bonds, transfer difficult to other IT systems to
transfers revenue police access maximize yield. Crowd
sourcing of service
issues and responses.
Land banking and
performance-based
bids.

Source: Linfield, Kamiya, and Eguino (in press).


Notes: *Collection yield refers to how much of the tax/fee due do they actually collect. **Systems refers to best practice and technology supports available to
maximize efficiency of use and yield. ***System upgrades to minimize leakage in collection and maximize transparency and accountability.

The point is that investment serves everybody and As a result, the necessary investments are not imple-
becomes a public good, contributing to the general mented and the metropolis reaches a point of ineffi-
population and economy, not just the individuals who ciency as saturation and congestion limit its output.
are directly affected. Benefits are thus indivisible. The Diseconomies of scale occur as a result of management
public sector pays, but there are three tiers to the me- inefficiency. If the benefits of the investment are divis-
tropolis: ible (e.g., a toll bridge), the private sector can take care
1. The local (confederate) that does not have the re- of it. The requirement is that demand must be able
sources to pay. to respond to the supply cost. If an equilibrium point
2. The national (unitary) that lacks the political will between supply and demand can be reached, there is
and resists as much as possible until metropolitan no problem for private involvement. This assumes that
congestion becomes a national issue with negative the public sector has the skills and the will to set up the
political impacts. main lines for the projects (complex terms of reference)
3. The metropolitan (federal) that either does not ex- and the concessionary rights in the correct way. This is
ist or lacks the financial capacity (not devolved yet) not, however, always the case. Spurious interests in the
to address these needs. political economy may be playing in the shadows.

108 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
Figure 3. Infrastructure Growth Model: The Steel/ make good use of all their assets, controlled or
Concrete Age uncontrolled, and harness them to use in the de-
velopment struggle.
The problem with taxation is that you cannot
Paris
Singapore tax uncontrolled activities. The controlled sector in
Madrid many of these developing metropolises is as little as
Tananarive
Bogot 20 percent. It is difficult to pay for infrastructure by
Kabul
taxing just that 20 percent of all those who would
benefit from it. The informal sector must be taxed
to produce full-fledged development. This can be
Need Build Trame
implemented only through indirect taxation, but
1850 1990 Paris
1950 2020? Madrid
that would jeopardize fiscal equity policies. The
1870 ........ Prague equilibrium must be balanced with expenditure
INTA 33th Congress Conclusions 2009 policies, targeting insolvent demand, and social col-
lective consumptionsocial alternatives to unleash
Note: Presented at the International Urban Development Association (INTA) market mechanisms.
33rd Congress, 2009.
Informal metropolitan economies must develop
In terms of investment, and in the theoretical indirect taxation systems on public goods to accu-
framework of a liberal free-market environment, if mulate their required fixed capital, but such taxation
an investment produces benefits, it does not need does not necessarily relate to the direct usage of
to be undertaken by the public sector. The public the required good. In such cases, the private sector
sector should concentrate on investments that have could undertake the investment. In other cases, the
a general interest (social or economic) and that must taxation should involve divisible private goods and
be made at a lossan indivisible loss. The way to provide for the financing of indivisible public goods
finance an indivisible good that must be financed (e.g. taxing petrol to build and service a public
by the public sector is through taxation. transport line).
There is a major difference between the me- Another source of financing is land value capture,
tropolises of developed and developing countries. which has the effect of public investments on the value
Developed metropolises do all right. They reside in of land. Value capture allows for further public invest-
99 percent formal economies that developed mostly ments and starts a spin-off effect, providing additional
in the 19th century. They have reached a level of revenue for further investment. There are two possible
infrastructure provision and finance capacity where approaches to land value capture: ex-post and ex-ante.
the challenge is taming the system rather than fur- Either the added value is recuperated after (post) it has
thering hardware development. been produced or before (ante) it is produced. Ex-post
Developing metropolises have a different retrieval works through taxation, direct or indirect.
problem. In emerging metropolises, most of the Such is the case in consolidated urban areas (e.g., a
economy is informal (as much as 80 percent), and new underground station). The owners already have
these shadow economies affect urban develop- development rights, with only the increased value of
ment (uncontrolled and slums), social provision development rights available to be taxed, and only after
(informal networks and families), and even gov- the development occurs. It could be 30 years until the
ernance (mafias). owner decides to redevelop; therefore, ex-post is long
The four uncontrolled elements are economic, and has limited potential. Ex-ante retrieval requires the
urban, social, and governance. These metropolises capacity to negotiation and alternative projects and can
cannot grow to their full potential as they cannot be monetized as soon as an agreement is reached.

Section 1: Theoretical perspectives on metropolitan governance 109


In developed metropolises, land value capture planswith regional and local development. All of
is easier because of existing registration and cadas- this must represent sound population projections, re-
tral systems, legal frameworks (adequate planning alistic financial capacity, and adequate business plans.
and land management laws), and management in- One potential instrument to guide master plans
struments (land management agencies). With this and integrate the different tiers of metropolitan
approach, up to 80 percent of the generated value government is a national urban policy. Such a
can be retrieved. The public foundation Arpegio in policy must be rooted in clear aims and synergies
Madrid is one example. In developing metropolises, among national, regional, metropolitan, and local
registered and unregistered areas coexist. Inefficient infrastructure. A national urban policy also must
or inexistent land management systems and unclear consider its effects on productivity, and therefore
property rights, landowners, and assets make land understand the existing value chains (productive
value capture more difficult. sectors) in terms of the constraints on those value
In the political economy of metropolises, if there chains by supply chains (the logistics needed to
is not a finalist approach to special taxation, income produce). Both value chains and supply chains
will be diverted by politicians to more intentionally are essential to integrate urban planning into ur-
political interests. Income will not be used for the gen- ban economy. Note that in terms of productivity
eral interest, but for all those legitimate and illegitimate and urbanization, Southeast Asian countries have
interests that conform to political decisions, prioritiz- been very successful despite often lacking a for-
ing electoral, clientelist, lobbyist, party, and personal mal national urban policy. This indicates that it
interests. Infrastructure allocation and services are also is not a legalistic process, but rather the practical
subject to such interests. This is the shadow side of application of planning and economic principles
political economy. It is difficult to deal with, but must (UN-Habitat, 2014).
be tackled to strengthen the collective intelligence of In terms of policy, in a context of weak gover-
the metropolis. nance and broad informality, the capacity for eco-
nomic management is severely limited. This is not yet
Planning and Navigating the an appropriate context for a federalized metropolis.
It seems that even cultural agreement on this neces-
Political Economy sity has not yet been reached.
Discussions still wander around the different
The planning tools and management mechanisms of forms of confederation and alternatives with a
emerging metropolises must be completely different combination of multiple components. If there are
from the ones of developed metropolises. They five sectors, five administrative tiers, five stake-
must be designed to respond to local circumstances, holder groups, five management systems, and five
which is where the mechanisms of 99 percent of financing alternatives, there are already a million al-
the formal developed metropolises were devised. In ternative governance possibilities. To choose among
developing metropolises with large informal sectors, a million possibilities is not the way to approach
master plans are drafted and approved as in formal constructing a metropolitan governance system.
metropolises, but they are never implemented. The decision-making process must be pared down
Once failed, they are revised, redrafted, and re-ap- to essential decisions. There will always be time
proved, and fail again. These master plans need to afterwards to calibrate.
be contextualized, which requires understanding the Metropolitan managers have two types of tools:
governance capacity of the public sector, involving carrots and sticks.
multiple stakeholders to incorporate the actors, The stick is limited to a context of inadequate
and integrating infrastructurethe core of master governance. To develop the stick, much more is

110 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
required than just legislative paperwork. A legal accountability to avoid opaque deviations, and the
framework, approving laws and regulations, is rel- ethics. When this capacity is in place in developing
atively cheap and easy; the hard part is implemen- economies, the size of the metropolis can drive the
tation. The stick requires civil servants in numbers development of more complex financial instru-
and with skills sufficient to meet the challenge. ments, such as bonds and loans from commercial
Then it requires autoritas to implement; potestas is not banks and international markets. Development
enough. Credibility and spotless behavior grants the banks are also working on lending and financial
legitimacy for implementation. This set of require- instruments for metropolises and subnational gov-
ments is not easy to achieve, and administrators ernments in developing contexts.
can be overrun by circumstances and overruled by National urban policies and regional and national
judiciary decisions. plans must be integrated to increase their efficiency.
The carrot has two types of incentives: exemp- When national urban policies achieve sufficient
tions and subsidies. Administrative exemptions sophistication, in which urban form and layout is
and direct subsidies, when managed in an informal shown with direct effects on productivity and eco-
framework and inefficient administration, can be- nomic growth, then central governments and devel-
come an inducement to inconsistent implementa- opment banks will pay more attention.
tion, favoritism, and corruption. Indirect subsidies
are the remaining solution. There are many ways The Next Years
to influence the economy through complementary
targeted services, facilities, and infrastructure (e.g., Metropolitan economies will expand and multiply.
free infrastructure provision, accessibility and pub- Global connectivity will progressively link mega-cit-
lic transport, provision of serviced land, productive ies to the global economy. This process requires
facilities as logistic centers, outsourced services and appropriate governance and sufficient technical
advisory services, export facilities, and commercial capacity of governments and citizens. Metropolitan
support). The options are unlimited, but they re- leaders will face stronger demand in a world where
quire money. more is required from metropolitan and global cit-
To produce any kind of indirect subsidy, fi- ies. But as the world marches toward the New Urban
nance is required for fixed capital investment and Agenda with global sustainable development goals
running costs alike. Finance comes via indirect (Goal 9 is related to infrastructure and Goal 11 to
taxation or national transfers. Land value capture urbanization), the entry points for finance, planning,
can play an important role. Ex-ante catchment governance are open.
value initiatives can be developed to grow capital. Metropolises are at square one. Governance,
Up to 67 percent of added value generated can social and human resources, and collective in-
be recuperated. Ex-post options can reach only telligence are imperatives. Most of all, what is
40 percent at most. Returns can be reinvested in unavoidable is the strategic capacity to generate
social and economic projects. Since this is using the metropolitan project with enough leadership
metropolitan wealth and endogenous sources of to achieve the convergence of all these forces,
revenue, land value capture can create a virtuous which are dispersed in the actual scenario of the
circle for the political economy. metropolitan political economy. Two models are
To spur finance, more governance instru- possible, the federalist nation-state oriented as
ments are required. These include an adequate a financial and productive hub, and the national
legal framework to enforce planning decisions, a champions supported by the central states, in
legal economic framework for a privatepublic which relative autonomy is traded for more in-
collaboration setting, skills to implement it all, vestment.

Section 1: Theoretical perspectives on metropolitan governance 111


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torical-examples/

112 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
1.6 The Rise of a New Discipline to Manage
Metropolitan Urban Systems
Gabriel Lanfranchi (CIPPEC) and Antonella Contin (University of Politecnico di Milano)

Abstract

Todays cities are facing a moment of both maximum growth and maximum vulnerability at the same
time as increasing inequality and climate change. At this pace, many cities will become metropolises
by the end of the century. Governance mechanisms need to be created that ensure integral solutions
for the quality of life of future generations. However, decision-makers are organized in a sectoral
way and territories are subdivided into multiple jurisdictions and levels of government. In order to
migrate toward good metropolitan governance, it is necessary to train a new generation of leaders in
understanding metropolitan issues and create a sense of belonging for people in a metropolis. A new
metropolitan discipline able to synthesize the knowledge required to operate in this environment
is imperative.

Most people know that the world has recently become the metropolitan territory is fragmented and in
urban, but few of us are aware that in the next 15 years many jurisdictions is linked to different levels of
we will build as much urbanized area as in the entire government. Metropolitan governance has several
history of humanity. Cities have become the most makers and in most cases cities suffer a deficit
prolific centers of innovation and wealth creation, in appropriate institutions or instruments, which
but also highly productive in terms of greenhouse gas causes unbalanced growth, with consequences for
emissions and very vulnerable due to climate change. efficiency, equality, and environmental sustainability.
The great challenges for the cities of this century will The metropolitan dimension poses significant
be inequality and climate resilience. In large cities, it challenges in terms of strategic visions, governance,
is difficult to solve these problems at the local level and management.
without improving metropolitan governance, as Planning at the metropolitan level requires dealing
neither flood nor migration respects jurisdictional with some of the values at the local level and being
boundaries between municipalities. able to work with different contexts like the compact
city, agricultural areas, infrastructure, watersheds, and
The Crisis of Previous Metropolitan open spaces. It also requires that actors acknowledge
and use an innovative, design-oriented perspective and
Approaches a wide array of urban tools. The metropolitan scale also
challenges traditional urban governance, as it questions
In large urban agglomerations the system city not only the right scale for dealing with increasingly
is fragmented and the metropolitan area is built complex metropolitan issues (e.g., the environment,
by many actors. Sectoral visions prevail instead of mobility, mass housing, and food chains), but also
integral development approaches. Water and sanitation the sense and appropriateness of any given spatial
management, transport, waste management, and domain, rethinking and making flexible institutional
housing policies are just examples of institutional arrangements. Metropolitan actions, governance, and
fragmentation in urban development. Besides, management should implicate different stakeholders,

Section 1: Theoretical perspectives on metropolitan governance 113


according to the issue in question, and also go beyond based on an integrated vision of the various disciplines
existing administrative boundaries. on a territorial scale. Second, they need to ask how
We are facing the emergence of massive growth they can present tools that can shape and re-shape the
and an expansion of cities as never seen before, which metropolis. The answers are a discipline that could
poses environmental and socioeconomic challenges generate applied knowledge to improve awareness of
that planners should be able to address through inno- metropolitan challenges by bridging the gap between
vative methodologies. The complexity of metropolitan theory and practice.
cities needs to be addressed through new ways of The specificity of the metropolitan discipline could
sharing knowledge and experience between the many be its field of action, where the starting point is at a
actors involved, in particular, academics, policymakers, higher scale than the local problems. This is a political
and non-governmental organizations. approach where we believe all possible impacts should
For these reasons it is necessary to create a be analyzed. It begins with the effects corresponding
disciplined approach for a high quality of life in to the local scale, related to the citizen; followed by
todays metropolises. It should be a priority to educate those that belong at the regional scale, focusing on the
city leaders to better understand the complexity of great infrastructures and competitiveness; and those
cities and identify meaningful practices to manage related to the national scale, where the performance of
the large urban scale. Practical experience will affect the metropolitan areas directly affects gross domestic
analyses, taking into consideration the environment, product. The transnational scale should also be con-
community, wealth, governance, and culture. It is sidered, where the great metropolises have economic,
important that stakeholders seek to understand the political, and climatic impacts many times higher than
metropolitan question from a holistic stand point, those of entire nations.
in opposition to more traditional methods with a To reach the desired political consensus that will
vision that derives from the sectoral perspective in transform metropolises into system-cities that are
which local governments are organized: economic more efficient and equal, it is necessary to increase
development, social development, urban planning, the level of awareness of the political leaders
and government. and civil servants of the extreme fragility of the
There are several reasons that have prevented an territory. This should be done urgently, there is no
integral view from prevailing over a sectoral one. The time to waste, but it should be planned. To attain
organization of public administration into silos, with this ambitious objective it is indispensable for a new
budgets that are limited to specific functions, and metropolitan discipline to take shape; a discipline
with ministers and secretaries belonging to the same that can deal with the problem of bigness.
government politically competing for a position in the
future, have hindered, in many cases, collaboration Reasons for a New Discipline
between peers. From a professional stand point,
approaches coming from diverse disciplines also This work does not aim to discuss whether the current
limit integration, as experts are not always capable structure of the departments of urban studies at
of looking outside the box or willing to leave their the universities need to be reorganized under new
comfort zone. categories or research areas. Nor does it intend to
discuss if the path to developing a new discipline is
A Scale Issue through postgraduate or graduate courses, or even the
order in which they should be taken. These kinds of
What questions do metropolitan experts have to con- arguments, of administrative order, distract from the
sider? First, they need to ask how to define a discipline real objective and should be addressed at a time when
that can handle the metropolitan phenomenon and is the debate is more mature. We wish to focus instead

114 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
on the pressing need to create a new disciplinary Some basic differences are worth mentioning. What
corpus, organizing a body of knowledge that would appears at first sight is the matter of scale. As Pedro
allow the development of a specific practice that is Ortiz (2014) clearly shows, the architect develops
increasingly necessary. his capabilities in a scale of 1:50, dealing with the
There is growing demand for professionals human scale. The urban designer works at a scale
capable of understanding the complexity of of 1:500, defining the spaces of man in relation to
metropolitan dynamics. But it is still unclear what his neighborhood, the scale of the public space.
kind of knowledge is needed or where and how While the urban planner works at a scale of 1:5,000,
these professionals should be trained. Metropolitan the municipality, where master plans are defined,
management requires a body of knowledge that those that have the capability of being approved
might be considered generalist, because it includes by a municipal council and carried out by the
aspects of other disciplines, but at the same time is executive power. In the metropolis, the natural scale
specific because action is focused on the best possible is 1:50,000, where huge infrastructures and flows
management of metropolitan urban systems. define the systems, where power is fragmented
An analogy that can help us understand the in multiple public and private actors, and the
reason for the search of a discipline in metropolitan municipal boundaries lose sense, but there is still a
governance is what happened in architecture or powerful bond with the territory, its shape, and its
urbanism in European countries. Architecture was culture. The regional planner, with a bias toward
a branch of fine arts that included knowledge of the economic sciences, has a better understanding
engineering. The rising demand for large-scale of the economic flows than an urban planner, but
architectural services coming from the industrial does not necessarily consider the spatial and cultural
middle class shaped it into an academic discipline features of the territory.
that included knowledge of humanities and exact Metropolitan management implies governance
sciences. The university validated its professional of the territory on a greater scale than the local one,
competence for construction and, in some cases, for but mostly it demands the capacity to understand
urban planning. the metropolitan complexity related to the need
Urban planning was also the result of a social for scale integration, the management of many
demand during the industrial revolution. Mass variables, and/or actors, as well as the integration
migration from the country to the cities caused the of sectors. Lack of integration between the
collapse of the system with regards to hygiene and administrative boundaries of municipalities must
health, and generated a movement that understood be assumed, since most of them were conceived
the need to modernize water and sanitation systems. before the 20th century and later overgrown
This systemic viewpoint on urban matters coincided by the urban system during the mid-1950s and
with the increasing interest in urban management 1960s with the proliferation of urban freeways.
and the emergence of urban instruments capable The fragmentation of public power in multiple
of governing the growth process. Later on, through municipalities and in diverse levels of administration,
interchange in international workshops and seminars, in addition to the lobbying capacity of the large
a new kind of specialist appeareda generalist in private sector companies and the activism of
management and city planning: the urban planner. the social organizations that lack proper juridical
A similar process is taking place with the need administrative tools, demand development strategies
to manage great metropolitan areas. But there is for governance of the metropolitan territory. It is in
a difference between the knowledge of an urban this field where knowledge interconnects: ecology,
planner or those of a regional planner from those geography, architecture, urbanism, engineering,
required of an expert in metropolitan management. economic development, sociology, anthropology,

Section 1: Theoretical perspectives on metropolitan governance 115


and political science, among others, come together. implies. All of them, or the vast majority, had to learn
This gathering of knowledge is the fertile soil that by doing. This lack of preparation brings learning
gives rise to metropolitanism, which means know- costs that impact management performance. This
how capable of giving a comprehensive (not sectoral) knowledge gap can be filled by academia, which
response to the problems related to managing large must prepare itself to train leaders who can promote
metropolitan areas. and develop metropolitan management for the
Metropolitan governance is the key to economic metropolitan century.
and social development of future generations. A
recent study by the Organisation for Economic Modeling the Metropolitan Discipline
Co-operation and Development, OECD, (2015)
showed a direct correlation between metropolitan
of Practice
fragmentation and economic performance that may
lead to losses of around 6 percent of the GDP of a Once the importance of this role was established, and
metropolis. If coordination mechanisms are in place, the concrete and increasing demand for this kind of
this loss can be reduced up to 50 percent. In countries professional profile had increased, it was crucial to
where a high portion of the GDP is produced in understand what capacities a metropolitanist would
their metropolis(es), the effect of good metropolitan be expected to have in order to understand which
governance would have an impact on the national disciplines could contribute to forming a specific
economy. This is the case of Buenos Aires, which academic corpus. For that purpose, in 2015, at the
represents 50 percent of the national GDP, where Metro Lab initiative at the Massachusetts Institute of
savings for 2016 would represent around US$9 billion Technology, we started working with peer-learning
per year, or a quarter of the federal reserves. methods that allowed for a practical and conceptual
Neither inequality, especially in terms of access exchange between academics, practitioners, and
to public services or housing, nor the effects of students. As a result of the collaborative work in these
climate change, such as drought or flood, take into workshops and seminars, we achieved a number of
consideration municipal boundaries. Therefore, results that are worth sharing.
effective responses to address them cannot come We should star t by admitting that both
from local governments on their own. There must metropolitan knowledge and its object of study are
be an articulation between national, state, and local fragmented. Many disciplines are required to define
governments, together with a high commitment from an analytic framework. Precisely this lack of a specific
academia, civil society, and the private sector in order discipline prevents us from obtaining the necessary
to face these challenges on a metropolitan scale. tools. But the presence of diverse knowledge in an
Many countries have started to become aware orderly way, together with the practical experience of
of these issues and have formed different types of experts in metropolitan management, allows us to co-
metropolitan management entities. According to a create the method that could define, in the words of
recent study by CIPPEC (2016), in Latin America and Pedro Ortiz (2015), the metropolitan genome. For
the Caribbean, 50 percent of metropolitan areas with these reasons, peer learning is the appropriate path
more than 1 million inhabitants have developed some to sharing knowledge and moving toward the new
type of metropolitan organization. These entities discipline. The Metro Lab initiative might be defined
require professionals who are able to understand as action learning for human resource development.
metropolitan complexity in all of its dimensions. During the initial phase, we performed a gap
However, when civil servants are recruited for these analysis. This method was applied to enhance
entities, the great majority lack adequate training to the process in the private sector with the aim
face the challenges that metropolitan management of identifying which elements of a chain can be

116 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
improved. In an iterative way, the three levels of the the workforce are also knowledge gaps that arise at
matrixdimensions, components, and metro gaps the metropolitan level.
were defined with the participants. Dimensions were The approaches that take into consideration the
initially organized in a sectoral way (economy, society, institutional dimension commonly used to analyze
physical, and institutional) and, with debate, they the municipality are insufficient to understand
evolved toward another type of classification that the metropolis. It is the concept of metropolitan
allowed for interaction between social, economic, governance and not government that should be used
morphological, and organizational issues and all of in this case. There are legitimacy gaps in many cases
their components. The main components of each as the metropolitan matter is not always accounted
dimension led us to the metro gaps, where a flaw or for in national constitutions. The legal framework, the
knowledge gap became apparent when an intervention institutional framework, and metropolitan management
was made on the metropolitan scale. systems, such as planning and tax revenue, do not
We examined the object-metropolis by analyzing its have the level of transparency or innovation required
dimensions. The metropolitan environment includes to give the answers that would allow the sustainable
not only the morphology of the territory or its natural development of the territory.
systems, or the green infrastructure system (parks, Finally, the cultural aspect shows the lack of an
rivers, wetlands) and the gray infrastructure system appropriate theory that would allow for an adequate
(freeways, trains, ports, centralist) that define the explanation of the phenomenon. At the academic-
urban artifact, or the urban metabolism that analyzes operative level there is also a lack of a discipline to
the resource flows, but also the interpretation the summarize the required knowledge to improve the
metropolitan inhabitant makes of the environment: management of the metropolis. From the standpoint
the metroscape, which is the mental construction of of the practice, we found gaps in the methods that are
the territory. In this way, disciplines such as geography, usually borrowed from other disciplines, as well as in the
ecology, engineering, landscape architecture, and experience of professionals dedicated to metropolitan
anthropology, among others, come together at the management. The history and tradition of a metropolis
same level of analysis, changing the traditional silos- were also identified as gaps and, as it is a relatively new
oriented approach. phenomenon, there are few who identify as inhabitants
Community life that takes place within the of a metropolis, the historic-emotional tie with the
metropolis should be studied at the level of social neighborhood or the reference city.
cohesion with reference to respect for diversity and The five dimensions of the matrix (Table 1)
tolerance. The generated social capital, measured in allow us to outline the type of knowledge required,
terms of empowerment and agency capacity, which linked to environmental management, community
the metropolitan community has been able to develop, strengthening, wealth generation, governance of
is key. The matter of metropolitan citizenship is complex systems, and the cultural dimension,
another significant issue to be taken in consideration which includes as a gap the same discipline that
as, with some exceptions, the metropolis is a territory we are proposing. These dimensions are trans-
that lacks representatives chosen by its inhabitants in disciplinary and contribute to the comprehensive
terms of a system city. analysis of the territory. The 15 components
The third analytical dimension considers the promote the understanding of the focus and
capacity of the metropolitan object to create wealth. type of discipline that can serve as a knowledge
Understood as a system, issues related to efficiency source. The list of metro gaps helps us grasp what
and competitiveness become evident. Nevertheless, kind of know-how a metropolitanist requires in
other matters such as access to urban land, the managing the metropolis. There is no need to
strength of its firms, or the skills and education of train an expert in all subjects, but they must be a

Section 1: Theoretical perspectives on metropolitan governance 117


generalist with enough of an understanding to allow decision-makers for comprehensive metropolitan
them to maintain a fluid dialogue with technicians, management.
negotiate with stakeholders, and advocate before the
Table 1. Metro Gaps Matrix, 2017

Dimension Component Metro Gap


Environment Natural ecosystems Social responsibility
Urban metabolism accountability
Metropolitan infrastructure Structure
Equality
Metroscape Metro place-making system
Mental map
Community Social cohesion Respect
Tolerance
Social capital Empowerment
Agency
Citizenship Incentives
Trust
Wealth Assets Access to land
Efficiency
Wealth creators Workforce market

Job distribution
Human capital Education
Wealth distribution
Governance Legal framework Legitimacy
Appropriateness
Institutional framework Coordination
Integration
Management and systems Innovation
Transparency
Culture Academia Theory
Discipline
Professional praxis Methodology
Expertise
Identity History
Tradition

Source: Created by the participants of MIT Metro Lab initiative courses 201617.

There are two types of skills that a metropo- assessment, urban metabolism, complex systems
litanist must develop. Hard skills related to the management, transportation and mobility modelling
knowledge of methods of environmental impact techniques, urban and ter ritorial planning,

118 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
economic development, human development, Theories and Models
law, metropolitan architecture, and data science.
Deep understanding of these skills will remain Every discipline should create its own history of theory
the field of specialists, yet the metropolitan expert as well as its models. Not so much to self-legitimize but
should be able to grasp the basics in order to because the history of a discipline is where answers to
enable constructive interactions with a wide range its deepest questions can be found, it is where original
of specialists in each of these matters and guide hypotheses emerge giving sense to the theory. Expanding
them toward an integral approach. In a field where on this concept, the origin of the metropolitan discipline
government is not imposed, but governance is could be found during the beginning of the industrial
needed, soft skills such as negotiation, leadership, city. Nowadays, new matters related to the speed and
participation techniques, capacity to build alliances, the impact of changes should be considered. Migration
capacity for innovation and communication, and and climate change have made traditional planning tools
conflict resolution mechanisms are essential for a obsolete. If the worldwide urban territory is to double in
metropolitanist. 15 years, we cannot manage growth in the same way as we
The paths that will lead to constructing the did before. We are facing great challenges related to food
discipline are still uncertain, although we are production, the logistics of natural resources regarding
convinced that the gap is evident and it will only be urban consumption, air pollution, and waterways that,
a matter of time and maturation for it to take the because of their magnitude, are nothing like those of the
corresponding form. It is clear, however, that the Industrial Revolution.
theory needs to be developed, which in the words New tools must be created, tools that can promote
of MIT Professor Lawrence Susskind is a theory a new understanding of the territory, allowing for
of practice, a theory that comes from looking at integration that could contribute to the creation
practice and learning from it. As is the case of the of mind maps to define the problem and find an
discipline of negotiation, metropolitan management appropriate solution. The Metro-Matrix (Ortiz,
must learn from the trade, casuistry, and gaps that 2014) or the Urban DNA (Lanfranchi, 2016) are just
must be overcome in everyday management. Co- two examples of using interpretative maps as tools
creation is surely the way to address this challenge, to read metropolises, that are able to analyze the
and peer learning methods would be the best channels impact of metropolitan projects on the territory. The
for academics and practitioners to collaboratively interpretative maps of impact scenarios are a cultural
develop this new chapter of knowledge on natural project. They are interpretative maps of scenarios
resource and human settlement management. In that work on all scales (Pollak, 2006) and they reveal
order to perform a different function from sectoral the meaning and role of each element of the territory
approaches, metropolitan planners must learn to in relation to any scale. These maps identify the
provide evidence of the benefits of new approaches. structural quality of the metropolitan field of action
Scenario planning is key. The sum of sectoral (its settlement principles) that will also structure its
solutions would not equal the impact of holistic images (which the same maps represent).
interventions on the metropolitan scale. Governance This is why the role of a trained metropolitan
models as we know them today need to evolve in expert as a crosscutting coordinator is crucial. The
order to produce an impact. The task of training new figure in the field would have access to more
and increasing awareness of decision-makers is than a single disciplinary competence. Their role
challenging but not unattainable if the appropriate would be to generate consensus that today is linked
methods and evidence are brought into play. All the to sustainability issues. The metropolitan expert would
above-mentioned tasks should be constructed under obtain a better understanding of the complexity of
the framework on the new discipline. metropolitan cities and their main task would be to

Section 1: Theoretical perspectives on metropolitan governance 119


transfer, communicate, and guide metropolitan leaders inhabitant. New tools for citizen participation at
toward decisions that ensure the future of humanity. the metropolitan level need to be created, and these
This model calls for peer-learning methods to ensure should be adapted to the revolution already changing
the synthesis of the complexity. Likewise it requires their way of understanding and living in the city.
transnational visions able to contribute complementary A large metropolis is not a simple place in which to
points of view from a cultural perspective. The object live and it can be difficult to discover its hidden assets. To
metropolis may vary according to its location on the detect, learn, and show the importance of informality as
map, but there are always a series of features that appear a source of resilience and adaptability, new information
in whichever country they are in. In these coincidences technologies are changing the way we plan and design
the genome comes up again, leading us toward on the architectural, urban, and metropolitan scales by
questions similar to those that fed our hypothesis. giving access to information through interactive digital
There is no need to exclude the specific approach environments. The whole new media environment
of sectoralists to reach a more integral approach to the creates a communication mood through different display
territory. The viewpoints are complementary and need codes: new virtual design tools and new meanings derived
each other. We should recognize that a new generation from figures and image integration and narrative texts
of urban specialists on metropolitan issues is appearing (Contin, 2014).
on the six continents. Though it is true that the debate As support to the metropolitan disciplineas far
has been going for some time without the integral view as tools are concerneda hub platform could allow
prevailing over the sectoral one, the current context a metropolitan knowledge web-based community to
has changed. New technologies and immense social be created. In fact, all the activities developed during
and environmental risks are compelling the cities to peer-to-peer training programs could be supported by
overcome this context and work in an integral way. an IT platform able to manage and publish spatial data
The imperative of todays conjuncture forces local as interactive, interpretative maps. A dynamic platform
heads of government to put aside political interests and like this (a hub) could deploy a spatial, scalable data
work with their peers in a new way of organizing and infrastructure that would allow users to process or edit
distributing public resources in the territory. spatial data. It would present the geospatial outcomes
of metropolitan projects as interactive maps. The use
The Role on Communications of technology solutions is in line with the 2011 agenda
for the modernization of Europes higher education
Technology in the Metropolitan Arena systems and is a key policy issue for multilateral agencies
(e.g., World Bank, UN-Habitat). The new problems
Academia needs to learn to communicate the way in the world is facing, in particular the metropolitan issue,
which the local scale, the metropolitan scale, and the call for urgent actions. We believe that information and
global scale meet. The current transformations are communication technologies play a very important role,
being accompanied by new technologies that have having become crucial in educating future policy and
given the inhabitants of the metropolis a new sense decision-makers as well as in the projects they carry out.
of belonging, one that transcends municipal borders
and that makes them reflexive individuals with desires Research Innovation and Education:
and expectations that the city could not meet before.
Usually, the metropolitan scale is handled by the
A Cultural Change
legal, economic, and social disciplines studying the
governance of relations between the jurisdictions Research, innovation, and education are synergetic
that integrate the metropolitan dimension. These pillars to practice the metropolitan discipline.
dimensions were too abstract for the average According to Alfonso Fuggetta (2012), research is

120 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
the process through which we advance knowledge, Our field of action, therefore, is the metropolitan
shed light on unknown phenomena, imagine new scale of the city. Large metropolises are growing.
worlds, invent new technologies, and discover Sometimes the old heart of the city is disregarded
new laws or principles. Innovation is the process and transformed into a symbolical mediatora
through which we apply our knowledge to improve physical object able to bridge between different times
the quality of life, enhance the competitiveness and cultures, dealing with the symbolical level and
of companies and economic institutions, and cultural values. New settlements have become grand
create new opportunities for citizens promoting in scale and filled with neglected spaces where the
and enriching their social experiences. According informal sector is growing, and we should produce
to Fuggettas arguments, research and innovation a new interpretative educational project for the
are intrinsically distinct processes and therefore development of a metropolitan architecture. The
require different methods, skills, and funding fast urban growth that occurs mainly in developing
mechanisms. Innovation needs the knowledge, countries with high levels of informality and
breakthroughs, and ideas developed by research. At growing demands for an improved quality of
the same time, innovation produces experiences, life from its inhabitants make the fields of urban
feedback, and challenges that enrich the research design, metropolitan architecture, and metropolitan
process. management a place of huge potential for job
Higher education should be at the center of prospects. The need for professionals in this sector
the debate when we discuss metropolitan training will be growing in both the public and private sectors.
programs. A new form of transnational education Although specific degrees, such as architecture,
driven by academia is needed to promote a new infrastructure, energy, economy, sociology, and law,
teaching method based on learning by sharing. among others, provide specializations in their own
Academia has a very important role to play, having field of knowledge, it is insufficient training for
become vital in educating future policy- and an integrated, interdisciplinary approach that new
decision-makers. dimension of the city requires.
In all disciplines, the relationship between The proposed interdisciplinary approach aims
parameters and variables blends and is urged by a to establish:
series of operations: synthesis, understanding, and a technique;
mediation. Nowadays, a researcher-professor is an interdisciplinary project;
much more than a facilitator or a mediator in the an international culture; and
learning process. They are more of an academic a shared ethics.
figure that connects their ideas and beliefs with
those of the other participants in a hermeneutical This is an intensive interdisciplinary project
way. The problem of un-translatetability between made possible through collaborative environments,
disciplines will continue to exist and shows the aimed toward university teachers in partnership
limits within which we are used to moving because with public administrations, and open to the public.
of our belonging to other hermetic disciplines. It is both a cultural and a practical interdisciplinary
Metropolitan narrative tends to synthesize the training process about development issues of the
experience of diverse disciplines because they meet metropolitan city that takes advantage of new
in the metropolitan object of study contributing technologies and is reinforced by the inter-scale,
to the creation of a shared vision. The design shared relationship between economic, social,
of methods and tools come together with the ecological, and institutional issues. History will tell if
construction of an art of giving shape and at the it is only a matter of time, though we already know
same time of reforming the metropolis. there is no time to lose.

Section 1: Theoretical perspectives on metropolitan governance 121


References
Fuggetta, A. (2012). 3 + 1 Challenges for the future of
universities. Journal of Systems and Software, 85, 241724.
Lanfranchi, G. (2016). ADN urbano. Buenos Aires:
CIPPEC.
Lanfranchi, G., and Bidart, M. (2016). Gobernanza
metropolitana en Amrica Latina y el Caribe. Buenos
Aires: CIPPEC.
OECD. (2015). The Metropolitan century: Understanding
urbanisation and its consequences. Paris: OECD.
Ortiz, P. (2014). The art of shaping the metropolis. New
York, NY: McGraw Hill.
Pollak, L. (2007). Constructed ground: questions of scale.
In C. Waldheim (ed), The landscape urbanism reader
(pp.12639). New York, NY: Princeton Architectural
Press.
UN-Habitat. (2015). The City Prosperity Initiative: 2015 Global
City Report. Nairobi: UN-Habitat.

122 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
1.7 Collaborative Governance: Improving
Sustainability of Development in Metropolises
Brian Roberts (University of Canberra) and John Abbott (John Abbott Planning)

Abstract

Governance is a significant factor impeding or facilitating the sustainable development of metropolitan


regions. This chapter explores collaborative, or network, governance as a way to overcome institutional,
operational, and political obstacles to integrated planning, development, and financing of metropolitan
regions. It puts forward 10 principles of collaborative governance, argues the need to change from
hierarchical, competitive governance models to more collaborative decision-making, and explains the
advantages of this change. It supports the need to build collaborative capital in metropolitan regions
by broadening inclusiveness and transparency in the planning and operations about decision-making.
The chapter outlines a framework and strategy to introduce collaborative governance arrangements as
a way of transforming urban governance functions and practices in metropolitan regions in support
of sustainable development outcomes.

The development of metropolitan regions is an highest population density at 44,100 people per
evolutionary process starting with the spillover of square kilometer (Demographia 2016). By 2025,
population growth from a historic central city into the number of metropolitan regions is projected
adjacent local government areas and beyond. As a to reach more than 570 (United Nations, 2014);
result, the dominant, global metropolitan development approximately 450 of which will have populations
pattern and administration process are one of mass between 1 million and 5 million.
and disjointed urban sprawl, with metropolitan The population growth rates and proportion of
governance arrangements sometimes comprising people living in urban regions are growing rapidly. In
dozens of separately administered but loosely 2015, around 1.6 billion people, almost 38 percent of
federated systems of cities and municipalities. Local the worlds urban population, lived in metropolitan
governments often have different political orientations regions (UCLG, 2016). By 2025, this is expected to
and policies, as each competes fiercely for investment, rise to 2.2 billion, or 48 percent of the global urban
jobs, political influence, and economic dominance. population. The population of metropolitan regions
There is little regional cohesion in terms of urban between 1 million and 5 million is projected to grow
governance, and cooperation between them occurs almost 3 percent annually between 2015 and 2025,
on an as-needed basis. with the fastest growth rates occurring in Asian
Globally, there are over 500 urban regions metropolitan regions. This expansion will continue
with populations of more than 1 million people to put enormous pressure on the development of
(Demographia 2016). Some of these are very large. metropolitan regions, especially on local governments
Tokyo/Yokohama is the worlds largest metropolitan in their efforts to provide basic infrastructure, shelter,
region, with a population of 37.75 million, while New and community services.
York is the largest in area at 11,642 square kilometers. The challenges facing the development and
The median density of the New York metropolis is management of metropolitan regions, globally, are
1,800 people per square kilometer. Dhaka has the significant but they also offer opportunities for

Section 1: Theoretical perspectives on metropolitan governance 123


social and political transformation through improved government departments, and geographic units.
governance (Xu and Yeh, 2011). These issues vary These clustered and networked models of governance
enormously between countries and within regions. cut across traditional dichotomies of sector line
Many are well documented in extensive studies of and hierarchical governance, which have tended to
land use, infrastructure, transport, and social services. separate government from markets and civil society.
However, central to these problems in the quest for Governing and managing metropolitan regions
sustainable development of metropolitan regions is has become a major hurdle to sustainable urban
the issue of governance. Governance is the action development. Social change, including the evolution
or manner of governing a state, organization and of the information age and the network society
refers to all of the processes of governing, whether (Castells and Cardoso, 1995), provides a new context
undertaken by a government, market or network, for planning and development (Albrechts and
whether over a family, tribe, formal or informal Mandelbaum, 2005) and raises new challenges
organization or territory and whether through the and opportunities to govern metropolitan regions.
laws, norms, power or language (Bevir, 2013, p.13). This chapter argues the need for a new model of
Very few metropolitan regions in the world can metropolitan governance based on collaborative
be said to have well-managed urban development approaches. Collaborative governance encompasses
and governance systems. The labyrinth of urban greater engagement and networking arrangements
development and administration frameworks that between government institutions, business, and civil
make up metropolitan regions results in a form of society to achieve more open and improved decision-
urbanization that is neither sustainable nor attractive. making (Levi-Faur, 2012).
The patterns of metropolitan development are leading Collaborative governance is a further step in
to rising levels of congestion, increasing commuting the evolution of inclusiveness in public decision-
times, and rising transaction costs for business and making and the development of the sharing economy
government (Brown and Potoski, 2003). There is (Economist, 2013). It can help to reduce costs and
also a widening gap in accessibility to social and time delays to business and government, encourage
community services. more sustainable use of capital and resources, and
The model of metropolitan governance used foster collaborative competition within and between
for almost a century was founded on a hierarchy of cities. Collaborative governance involves more than
decision-making structures and processes. Recent institutional arrangements and can cover such things
trends toward greater devolution, decentralization, as planning, financial arrangements, infrastructure
and delegation to local governments are changing provision, information and data, and shared service
these processes and having a significant impact delivery arrangements between levels of government,
on the decision-making, institutional cultures and corporations, businesses, and community groups.
operations, civic engagement, information sharing, This chapter explores why governments and
and trust in governance. However, there are new other organizations collaborate. It introduces the
cross-cutting issues, such as climate change, equity model of collaborative governance and explains
and accessibility to services, education, employment, briefly why and how such an approach could improve
and housing at a metropolitan level that are best dealt the sustainability of development in metropolitan
with in a holistic and systematic way. Key stakeholders, regions. Some examples of successful collaborative
at varying levels of responsibility, need to come metropolitan governance initiatives are discussed.
together to plan and manage the use of resources so Ten principles of collaborative governance for
that both regional and local interests are met. This metropolitan regions are outlined, followed by a
calls for new hybrid institutional arrangements and discussion on how to introduce more collaborative
forums that cut across the boundaries of sectors, approaches into planning and managing metropolitan

124 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
regions. The principles include establishing and and uncertainty and has been described as a com-
resourcing forums for collaboration to address plex adaptive system (Innes and Booher, 1999).
complex problems and opportunities; developing Governments and other organizations are challenged
collaborative capital and a culture of collaboration by increasingly complex tasks and problems that
across sectors and at all levels within a metropolitan involve unfamiliar organizations and actors that they
region; and cities engaging in city-to-city partnerships cannot control and whose behavior they cant predict
and alliances to improve their management, com- (Koppenjan and Klijn, 2004). This creates uncertainty
petitiveness, and sustainable development. for governments, organizations, and actors and has to
be addressed.
What Is Collaborative Governance? Interdependence of roles: We live in a world
in which governments and other organizations share
Government is the formal system of administration power and have overlapping roles and responsibilities
and laws by which a country or urban community to act on public challenges (Bryson, Crosby, and Stone,
is managed. Governance is a broader concept that 2006). This interdependence requires organizations to
has emerged in recent decades. It incorporates the collaborate.
roles played by governments but also includes the Efficiency and effectiveness: When gover-
roles played by the private/business sector and the nments have acted unilaterally to try to solve complex
community in initiating and managing change in problems, they have often been inefficient and
society (Pierre and Peters, 2000; Rhodes, 1996). ineffective. In modern societies like the United
Governance involves formal and informal States, there has been long-standing criticism of the
institutions and groups in society and networks of effectiveness of government when it acts on its own
actors rather than hierarchies. However, it may not that has been based on facts and ideologies about the
be well coordinated, and government structures and need for small government (Bryson, et al., 2006).
decision-making may still play a major role in ratifying Responsiveness to community views: Gover-
the outputs of governance processes. nments are often accused of being unaware of
The word collaboration first came into use in or unresponsive to local community needs and
the 1800s following industrialization and as more views, which leads to calls for more community
complex organizations emerged in society (Wanna, consultation and engagement, particularly in urban
2008). In the 1900s, some governments collaborated planning. Wanna (2008) argues that governments
in service delivery or infrastructure projects, but have a political obligation to be responsive to
many jurisdictions were reluctant to collaborate with community needs. Many governments, particularly
each other or with the community, believing that local governments, are becoming more proactive
they had been elected to govern and being unwilling and are trying to develop shared goals and under-
to share information, plans, or power with others. standing of problems across the community and to
By the turn of the 2000s, in developed countries build coalitions of support for particular actions
like Australia, governments were becoming more (Wanna, 2008).
active collaborators and had redefined themselves Globalization: Globalization reflects the increa-
as facilitators who relied on a host of other actors to sing networks and connections between countries,
deliver effective outcomes (Wanna, 2008). organizations, and individuals around the globe
There are many reasons why governments and arising from trade and economic links, travel,
other organizations collaborate with each other and information technology, and environmental issues and
with the community. problems. This has required governments to engage
Social complexity and uncertainty: The in international dialogue and action to manage these
network society is characterized by complexity issues (Wanna, 2008).

Section 1: Theoretical perspectives on metropolitan governance 125


Bryson, et al. (2006) summed up all of these drivers variables within collaborative governance approaches
of collaboration between governments and other and processes that facilitate reaching agreement and
groups as follows: People who want to tackle tough achieving creative and effective outputs and social
social problems and achieve beneficial community outcomes.
outcomes are beginning to understand that multiple Ansell and Gash (2008) reviewed the existing
sectors of a democratic societybusiness, non-profits literature and over 130 examples of practice to define
and philanthropies, the media, the community, and collaborative governance and identify the critical variables
governmentmust collaborate to deal effectively and for successful collaboration. They say collaborative
humanely with the challenges (p.44). governance is
Sharing economy: The sharing economy is an A governing arrangement where one or more public agencies
umbrella term with a range of meanings (PWC, 2015). It directly engage non-state stakeholders in a collective decision-
is related to economic and social activity involving open making process that is formal, consensus-oriented, and
information systems, much of it online transactions, deliberative and that aims to make or implement public
that help to reduce transactional costs to government, policy or manage public programs or assets (p.544).
business, societies, and individuals. The massive growth
of ABNB, Uber, and the like have challenged the Ansell and Gash (2008) further identified four
traditional operations of markets, the use of resources, broad variables that affect successful collaborative
and information. Social media is fundamentally changing governance outcomes: (i) starting conditions, (ii)
governance arrangements and policy development, facilitative leadership, (iii) institutional design, and (iv)
making public institutions more open, accountable, and the collaborative process. The latter process includes
transparent in the way they do business. the sub-variables commitment to process, face-to-face
dialogue, and trust-building.
What Is Collaborative Governance? Emerson, Nabatchi, and Balogh (2012) used a
similar approach and reviewed an even broader range
New forms of collaboration between governments, the of conceptual frameworks, research findings, and
private sector, and the community have been evolving practice-based knowledge to develop an integrative
over the past few decades. Practical approaches to framework for collaborative governance. They define
collaboration have developed in a number of social collaborative governance as follows:
contexts, including public administration, catchment The processes and structures of public policy decision
groups and watershed councils, community health making and management that engage people constructively
partnerships, environmental management, and com- across the boundaries of public agencies, levels of
munity and urban planning (Ansell and Gash, 2008; government, and/or the public, private and civic spheres
Margerum, 2011). to carry out a public purpose that could not otherwise be
Collaborative approaches are not always easy or accomplished (pp. 1-2).
successful. Some of the weaknesses and disadvantages
that arise include: failure to achieve political or govern- The framework developed by Emerson, et al.
ment buy-in to problems and proposed solutions; unclear (2012) is dynamic and consists of nested sets of
or blurred responsibility for implementation of actions; components (Figure 1) and a longer list of key
and long timeframes to reach agreement and consensus variables and factors (Table 1). This definition
about solutions, policies, and actions (Wanna, 2008). and framework is used in this chapter and allows
Research on collaborative governance approaches for interactions and feedback through time as the
has focused on two main areas (Emerson, Nabatchi, Collaborative Dynamic produces Actions and
and Balogh, 2012): the meaning of the term colla- Outputs and the Outcomes of these change the
borative governance and identifying the key factors or System Context (see Figure 1).

126 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
Figure 1. An Integrative Framework for Governance and communications consultants
Collaborative Governance Twyfords see collaborative governance as a way of
System Context working with diverse stakeholders to create enduring
solutions to our most complex issues, problems, and
Collaborative Governance Regime
dilemmas (Twyford, Waters, Hardy, et al., 2012, p.27).
Collaborative Dynamics They view it as a problem-solving process with a
Drivers Actions Outcomes
Capacity for Joint Action
Principied Engagement
and series of stages, each involving forms of collaboration
Outputs
Shared Motivation (Figure 2). This collaborative process aims to build
relationships and trust among stakeholders and to build
institutional capacity for actions and implementation
leading to enduring solutions.
Source: Based on Emerson et al., 2012.

Table 1. Key Variables and Factors in Collaborative Governance

Context and Drivers Collaborative Governance Regime (CGR) Outcomes


System Drivers Collaborative Dynamics Joint Outputs Impacts and
Context and Actions Adaptation
Resource Leadership Principled Shared Capacity for Endorsements Changes
conditions Incentives to Engagement Motivation Joint Action Enacting to the
Policy and legal collaborate Quality Trust Institutional policy and law collaborative
frameworks Interdependence interactions Understanding arrangements Obtaining dynamics
Prior failures Uncertainty Discovery Legitimacy and procedures resources Changes to
Power relations Definition Shared Leadership Building the CGR
Networks Deliberation commitment Knowledge works Changes to
Levels of trust Determination Resources Management the System
Socio- practice Context
economic Enforcing
context compliance

Source: Based on Emerson et al., 2012.

Figure 2. Twyfords Collaborative Governance Model

SOLUTION

Co-deliver
actions

Co-create
solution
INCREASING CAPACITY
INCREASING TRUST

Co-desing
process

Co-dene
dilemma
Appreciative mindsets
Deliberative processes
Commit to
collaboration Check point

DILEMA

BUILD READINESS BUILD RELATIONSHIP BUILD CAPABILITY

Source: Twyford, 2012, p. 29.

Section 1: Theoretical perspectives on metropolitan governance 127


Collaborative governance is differentiated from as road and transit agencies, and non-voting mem-
governance generally because it engages governments bers such as business and community groups (Deyle
and other stakeholders and sectors of society in and Wiedenman, 2014). Deyle and Wiedenman
structured and principled ways, leading to enduring (2014) recently studied 88 MPOs and argue that
outcomes and transformational change. developing draft LRTPs confor ms well with
consensus-based collaborative planning, where
many stakeholders with different needs have shared
Collaborative Governance Initiatives and interests in common resources or challenges and
Outcomes where no actor can meet their own interests without
the cooperation of many others.
Collaborative governance approaches have been Forest Stewardship Council, International:
successfully used in a range of sectoral problem and On the global scale, the Forest Stewardship
policy areas, at different territorial scales of gover- Council, International (FSC) is a not-for-profit
nance, as well as in different countries and globally organization dedicated to promoting sustainable forest
to address complex problems, reach agreements, management worldwide. The FSC has developed
and produce effective outputs and outcomes. Some an international certification system that indicates
examples of collaborative governance approaches the use of sustainable forest and timber production
are discussed to distinguish from general governance. practices and informs market choices by consumers.
Lower Rogue Watershed Council: A local Governments have played a major role in promoting
example is the Lower Rogue Watershed Council in forest certification in Latin America in collaboration
Oregon, US. Since 1994, the Council has undertaken with the FSC (Bell and Hindmoor, 2012). The FSC
data collection, catchment management, tree planting, has a General Assembly of voting members and
and fish passage improvement actions. In 2015, it works collaboratively to ensure no one viewpoint
produced the Rogue River Estuary Strategic Plan dominates. Membership has three chambers
(LRWC, 2016), which incorporates farmers, residents, environmental, social, and economicwith equal
fishing and environmental groups, water districts, rights in decision-making (FSC, 2016). Membership
and local and county governments. University and is diverse and includes international environmental
state government departments act as technical groups such as the World Wildlife Fund, the timber
advisers (LRWC, 2016). The group is voluntary and industry, forestry organizations, indigenous peoples
collaborative and meets around a table [where] groups, retailers such as IKEA, and forest owners.
members conduct their business in an open and The FSC constitutes an innovative governance
relaxed stylemaking decisions by consensus system which emerged to fill the vacuum left by
(Margerum, 2011, p.26). the failure of governmental and intergovernmental
Urban Transportation Planning in the United efforts to effectively address sustainable forestry
States: Transportation planning for large urban (Bell and Hindmoor, 2012, p.145).
regions in the United States is done by Metropolitan
Planning Organizations (MPOs) that are federally
mandated and funded to prepare 20-year, long-range A New Theoretical Framework
transportation plans (LRTPs). These plans guide
the allocation of federal money for local transport Collaborative governance does not replace gover-
projects. The MPOs and associated advisory nments but is a way for governments to work with
committees comprise a range of stakeholders, other sectors and to use their knowledge, resources,
including local governments, state transportation and ideas and to help solve complex social and
and environmental agencies, service providers such urban problems.

128 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
Collaborative governance offers a new theoretical of the most important results was the establishment
framework and model for successful governance and of the Regional Development Agency (RDA) in 1998
for governments to work with each other and with the (Andersson, 2015). Rojas, et al. (2008) argued that the
private sector and community. As will be discussed in ABC Region represents an incipient metropolitan
the next sections, collaborative governance has been governance model involving public and private agents,
successfully applied at the regional and metropolitan characterized by flexibility, pragmatism, and solid
level, and many further opportunities exist to apply problem-solving orientation (p.53).
these approaches in transforming governance and
managing metropolitan regions for sustainable
development. Planning for Liveability in Metro Vancouver

Collaborative Governance for The Greater Vancouver area in Canada has a long
history of regional planning and governance going
Metropolitan Regions back to the 1940s. Local municipalities began working
together as a region to address widespread flooding and
Metropolitan regions are diverse and complex rapid urban growth in the Fraser River delta. As regional
and commonly lack government and governance planning evolved, its focus changed to understanding
structures and institutions at the metropolitan level. and promoting the liveability of the metropolitan region
This creates challenges and opportunities in apply- (Abbott and DeMarco, 2017). The Greater Vancouver
ing collaborative governance approaches. However, Regional District is the legal entity responsible for
such approaches have been used successfully in regional planning and governance and, since 2007, it
a range of problem and policy areas in different has been known as Metro Vancouver. It includes as
metropolitan regions and countries, as discussed in members 21 municipalities, one electoral area, and one
the following examples. treaty First Nation. Abbott and DeMarco (2017) noted
that the consensus-based, federation of municipalities
governance model of Greater Vancouverprovides an
Economic Development in So Paulo ongoing collaborative framework for municipalities to
have conversations about regional growth management
The South Eastern part of So Paulo, Brazil, metro- and liveability and to agree on visions and legally
politan agglomeration comprises the ABC Region enforceable regional actions (p.272).
of seven municipalities and about 2.5 million people
(Andersson, 2015). In the early 1990s, the ABC
Region lost industries as a result of globalization and Climate Change Adaptation Planning in
technological change, and unemployment and poverty Santiago de Chile
grew. In 1996, regional leaders joined to address
these issues and created the Chamber of the Greater Climate change will impact on many physical, social,
ABC Region, a forum to discuss and act on regional economic, and environmental aspects of metropolitan
economic development that would involve local regions and requires an integrated response. The
governments, private enterprises, trade unions, and current and future impacts of climate change have been
civil society groups (Rojas, Cuadrado-Roura, and Gell, addressed in the Metropolitan Region of Santiago de
2008). The work of the Chamber and its collaborative Chile (MRS) by preparing a Regional Climate Change
processes has led to the signing of more than 20 Adaptation Plan. Barton, Krellenberg, and Harris
agreements on actions to promote the economic, (2015) reviewed the collaborative and participatory
social, and territorial development of the region. One processes used from 2010 to 2012 as one aspect of

Section 1: Theoretical perspectives on metropolitan governance 129


generating the plan. The participatory process, which (RPAG), consisting of state ministers, city mayors,
involved climate and social scientists who prepared and community and private sector representatives, was
detailed estimates of climate change impacts on MRS, established to oversee the process. By 1995, the RPAG
included a wide range of actors, from the regional had become an ongoing SEQ Regional Coordination
government, national ministries, community groups, Committee (RCC), and a regional planthe SEQ
and civil society, to the private sector and other Regional Framework for Growth Management 1995
institutions. The process consisted of a series of 10 (RCC, 1995)had been endorsed by all three levels of
Round Table meetings with representatives of all government. The 1995 Framework was an integrated
these organizations. Barton, et al. (2015) noted that plan covering land use, environmental, social, and
for Santiago this was an innovative and far-reaching infrastructure policies and actions. Many groups and
policy process within the existing planning and sectors who had not previously worked together had to
governance scheme, like Chile in general, and Santiago learn to work face to face, to find areas of agreement,
in particular, are typically characterized by non-inclusive, and to develop trust (Abbott, 2001, pp.11416).
sectoral, and piecemeal governance (p.177). By 2004, all sectors agreed that a statutory
The goal of the collaborative process was regional plan was needed and the SEQ Regional Plan
achieved: to generate a Climate Change Adaptation 20052026 (OUM, 2005) was endorsed in June
Plan for the MRS that could be incorporated into 2005. The SEQ Regional Plan provides a good
the budgets of regional and national governments. example of integrated, metropolitan planning for
The 10 Round Table meetings over a 2.5-year period sustainable development because it endorsed land
created the opportunity for an ongoing, horizontal use, environmental, social, and infrastructure policies
dialogue across sectors and between individual actors. and actions. It also provided the strategic policy
Barton, et al. (2015) observed that the experience in context and impetus for integrated, regional sectoral
Santiago shows sufficient rapport can be developed strategies for transport, water quality, and natural
to facilitate decision-making and consensus building resource management, as well as local government
for the final collaborative selection of adaptation statutory plans. Collaborative governance approaches
measures (p.181). have provided the framework for institutional change
and successful metropolitan planning in SEQ for
over 25 years and offer many lessons for other
Integrated Metropolitan Planning in South metropolitan regions (Abbott, 2012).
East Queensland
Challenges of Collaborative
South East Queensland (SEQ), Australia, is a fast
growing, polycentric metropolitan-city region, with
Governance for Metropolitan Regions
a population of around 3.3 million in 2014, centered
around the Queensland state capital, Brisbane. The Governing metropolitan regions presents many
region currently includes 12 local governments. The challenges. Collaborative governance of metropolitan
impacts of rapid population growth provided the regions shares many of these challenges but also
impetus for a new regional planning and governance presents other obstacles, as discussed below.
approach in SEQ in the early 1990s. At a community Trying to cover an entire metropolitan region:
conference called SEQ 2001, commonwealth, state, and It is difficult to motivate and involve the many
local governments, along with community, business, stakeholders of a metropolitan region in collaborative
and professional groups agreed to collaborate to governance processes. Economic development and
produce a non-statutory regional plan. A high-level global promotion of cities is one policy area where this
forum called the Regional Planning Advisory Group has been done successfully (McCarthy, 2011).

130 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
Trying to tackle too many complex urban interest groups directly in policy committees as in
problems: Trying to solve the complex, interdependent Santiago de Chile and SEQ may be a good approach.
problems of cities separately can be counterproductive Quality data collection, analysis, and technical
and futile. However, trying to tackle too many complex support: Obtaining good metropolitan data, analysis,
problems at once can overwhelm a collaborative and technical support is a challenge but is essential in
process with too many issues, too many stakeholders, collaborative processes to facilitate good collaborative
and too few resources. dynamics and engagement, and to achieve effective
Accountability, legitimacy, and transparency: outcomes (Figure 1).
Bryson, et al. (2006) argued that accountability is a Resourcing the collaborative process: Colla-
particularly complex issue for collaborations because borative processes require resources, both financial
accountability may not be clear. There are also issues and time, for participants to interact and build
of democratic legitimacy when the private sector trust. Having a collaborative process resourced and
and community groups, with their interests, become mandated by a higher level of government, as in
involved in public policy processes (Benz and urban transportation planning in the United States,
Papadopoulos, 2006). One way to address this issue greatly facilitates the involvement of stakeholders and
is to ensure the transparency of public governance agreement on outputs.
processes (Margerum, 2011).
One dominant local government: Where there Collaborative Governance and
is one powerful local government or core city in a
metropolitan region, the challenge for collaborative
Sustainable Development
governance may be to get them actively involved
and to find elements and initiatives for cooperation Sustainable development is a multi-faceted concept
that would benefit the dominant local government involving economic, social, environmental, physical,
(Andersson, 2015, p. 53). and governance aspects of the present and fu-ture
Getting the outputs of collaborative processes of society. Consideration of all of these multi-
accepted by governments and implemented: ple dimensions is required when planning for
Having governments engaged in collaborative the sustainable development of urban areas and
processesparticularly at the political level metropolitan regions (UN-Habitat, 2009). Wheeler
is important in order to achieve acceptance and (2000) argued that improved governance is particularly
implementation of the process outputs by important in planning for metropolitan sustainability
independent governments. Having clear lines and planners should includevoluntary and non-
of political accountability from the process to profit organizations and private firms as participants
government is also important. in metropolitan problem-solving processes (p.144).
Sustaining a collaborative process over an The development and prosperity of countries and
extended period: Margerum (2011) noted the urban regions have often been defined narrowly in
challenge sustaining collaborative political networks economic growth and gross domestic product or gross
over the long term. It may be better to define the regional product terms. However, UN-Habitat, in the
collaborative process as a project with a beginning State of the Worlds Cities 2012/2013: Prosperity of Cities
and an end. report (2012), developed a broader concept of pros-
Involving the community in the collaborative perity and sustainable development in large urban and
process: Individuals and community groups, metropolitan regions that includes economic, social,
generally, are more concerned with local issues, environmental, physical, and governance aspects. The
making it difficult to engage them in affairs at the report identifies five key dimensions of urban areas
metropolitan level. Involvement of community that underpin their prosperity: (i) economic productivity,

Section 1: Theoretical perspectives on metropolitan governance 131


(ii) urban infrastructure, (iii) quality of life, (iv) equity and and weak institutions act as major impediments to
social inclusion, and (v) environmental sustainability. urban prosperity (UN-Habitat, 2012, p. 117).
These five dimensions and their interrelationships Based on the Wheel of Urban Prosperity, the
constitute a conceptual framework called the Wheel UN-Habitat report introduces a new research
of Urban Prosperity (Figure 3), which symbolizes and policy instrument to assess the prosperity
well-balanced urban development through strength and sustainable development of urban areas and
in each of the five dimensions of prosperity. metropolitan regions, called the City Prosperity
The hub at the centrer of the wheel represents Index, or CPI (UN-Habitat, 2013, p.16). The CPI
urban government and governance arrangements is being used to analyze and measure the prosperity
and reflects government institutions, laws, and of individual cities, to understand their strengths
urban planning. The implication is clear: good and weaknesses regarding the five dimensions of
government and governance are central to achieving prosperity, and thus to identify complex problem
urban prosperity and sustainable development. areas for government, governance, and planning
Conversely, the report notes that poor governance intervention.

Figure 3. The Wheel of Urban Prosperity

Source: UN-Habitat, 2013, p. 12.

132 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
Collaborative Governance and local community involvement can assist in ensuring
Strengthening the Wheel of Urban that infrastructure is appropriate to the needs of
Prosperity local people. Co-funding arrangements between
governments, or levels of government such as for
Metropolitan regions throughout the world face urban transportation in the developed economies, are
many development challenges and opportunities also relevant (Charbit, 2011).
that vary between continents and between advanced Quality of life: Quality of life is a broad co-
and developing countries. The UN-Habitat State of ncept that reflects peoples access to housing,
the Worlds Cities 2012/2013 report highlights that in employment, a safe environment, recreation, and
advanced countries, urban population growth is next opportunities to enjoy life. To improve the quality
to stagnant, whereas in the developing countries it is of life of residents, metropolitan regions need to
growing at an average 1.2 million people per week facilitate access to all of these amenities. Efficient
(2012, pp.269). Challenges, complex problems, and and affordable public transport is critical in giving
opportunities in particular metropolitan regions can be people access to employment, open space, and social
identified using the CPI and other political and social opportunities. Collaborative processes with a high
processes. Collaborative governance approaches can level of involvement of civil society organizations and
be used to strengthen all five dimensions of the Wheel a degree of autonomy can assist in understanding what
of Urban Prosperity and the hub of government quality of life means for a community and advocating,
institutions, laws, and urban planning. upholding, and fighting for everyones rights (UN-
Economic productivity: The economic pro- Habitat, 2013).
ductivity of metropolitan regions can be improved Equity and social inclusion: Equity and social
by focusing on developing urban infrastructure, inclusion are challenging issues. A prosperous city
strengthening financial markets, identifying eco- has the reduction of inequality as its fundamental
nomic futures and preparing strategies to achieve objective (UN-Habitat, 2013, p.83). To improve
these, encouraging research and development by equity and social inclusion, metropolitan regions
the private sector and universities, and generally by need to improve access to employment and housing,
facilitating the business and social environment to public facilities and services such as public transport
encourage innovation and the exchange of ideas and open space, and civil society. Social inclusion
(UN-Habitat, 2013). Collaborative metropolitan means an urban environment where individuals and
forums, with a high level of private sector and social groups feel they belong to the larger whole
research group involvement, such as those in the moreover, are free fully to engage in collective
ABC Region of So Paulo, can help facilitate this affairs (UN-Habitat, 2013, p.89). When inequality
environment of innovation. and social exclusion exist, it is difficult for individuals
Urban infrastructure: Infrastructure is the and community groups to participate in collaborative
bedrock of prosperity and sustainable development processes or to affect change through them. It
(UN-Habitat, 2012). To improve urban infrastructure, requires regional leadership to create opportunities for
metropolitan regions need to provide safe water inclusion, such as the chamber or forum in the ABC
supply and sanitation, a reliable power supply, a region of So Paulo.
network of roads and efficient public transport, and Environmental sustainability: Collaborative
communications systems. Governments provide governance approaches were pioneered in addressing
urban infrastructure but UN-Habitat (2012) noted that issues of environmental sustainability, such as
beneficiary communities must be fully involved in the sustainable forest management and administering
design, provision, and maintenance of infrastructure water catchment areas. To improve environmental
(p.69). Collaborative processes with a high level of sustainability in metropolitan regions, governments

Section 1: Theoretical perspectives on metropolitan governance 133


need to strike a healthy balance between economic or financial benefits, will be required to initiate
growth and environmental preservation (UN-Habitat, collaborative approaches.
2013). Collaborative forums involving environmental Collaboration requires institutional arrangements
groups, the business sector, and research groups with and procedures. These may already exist, or will need
governments, such as the Round Tables on climate to be established, to allow governments and other
change adaptation in Santiago, could help facilitate sectors to interact regularly and discuss identified
the necessary balance of innovative solutions, urban problems. Koppenjan and Klijn (2004) called
renewable energy technologies, and preservation of these arenas and actor networks, while Abbott
environmental assets. (2012) characterized them as metropolitan forums
Government institutions, laws, and urban for collaboration. Forums need to be accountable to
planning: Institutions, laws, and urban planning governments and be properly resourced.
constitute the hub and governance framework in Principle 3: Metropolitan forums or arenas for
a metropolitan region. Strengthening any of the collaboration need to be identified or established,
dimensions of prosperity, as just discussed, will also involving relevant governments and stakeholders
reinforce the hub. However, collaborative governance from other sectors, to allow identified problems to
approaches and planning processes that are multi- be discussed and solutions sought.
dimensional and integrate several policy sectors, such Principle 4: Metropolitan forums need clear lines
as Metro Vancouver and the regional planning in SEQ, of accountability from and to governments and to
can strengthen the hub directly. ensure transparency in their meetings and processes.
Principle 5: Metropolitan forums need to be
properly resourced with relevant metropolitan
Ten Principles of Collaborative Governance information and data, analytical capacity, and ad-
for Metropolitan Region ministrative and technical support. The member-ship
and dynamics of collaboration among members
The models of successful collaborative governance of metropolitan forums are important to foster an
discussed above, particularly the integrative frame- understanding of different views, develop trust, and
work in Figure 1 and Table 1 (Emerson, et al., build the support and commitment of members
2012), have been used by the authors to develop and their governments or organizations to identified
10 principles of collaborative governance for solutions (Emerson, et al., 2012).
metropolitan regions. Principle 6: The members of metropolitan
Metropolitan urban regions have been described forums should be high-level representatives of
as complex adaptive systems and this system context their organizations or sectors and able to speak on
provides many complex problems and drivers as well their behalf. Governments should be represented
as opportunities for collaboration (Innes and Booher by politicians. Membership should be continuous
1999). Political leadership can be critical in initiating and stable.
collaborative processes (Fahmi et al., 2016). Principle 7: The meeting processes of me-
Principle 1: Complex urban problems with tropolitan forums should promote principled enga-
uncertain outcomes and involving organizations gement and quality interactions among members.
with interdependent roles need to be identified This requires facilitative leadership, high-quality
and provide opportunities and imperatives for information, trust building, and consensus-based
collaborative approaches. deliberations leading to agreed solutions and actions.
Principle 2: Political or organizational leadership The outputs of collaborative processes, namely
and incentives for stakeholders to collaborate on agreed solutions, policies, and actions, need to
problems, such as expected positive outcomes be presented back to accountable metropolitan

134 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
and higher-level governments, and other involved collaborative capital in relation to organizations,
organizations, for their consideration, endorsement, meaning the assets of an organization that enable
and implementation. Collaborative processes can be people to work together well. This concept of
viewed as projects with beginnings and ends but may collaborative capital can be applied to metropolitan
result in ongoing changes to collaborative governance regions to reflect the culture of collaboration that
arrangements and legislation. exists and the leadership and capacity to adopt and
Principle 8: The metropolitan solutions and successfully implement collaborative approaches.
actions endorsed by collaborative processes should Developing higher levels of collaborative capital
be considered by accountable governments and means that the region can apply collaborative
other stakeholders and, if possible, endorsed and approaches to broader and more complex problems
implemented. covering more dimensions of sustainability.
Principle 9: Metropolitan collaborative processes
should be managed as projects with beginnings and
ends. However, they may result in new ongoing Framework for Collaborative Governance to
collaborative governance arrangements to address the Create Collaborative Capital
initial problem, such as committees, authorities, and
statutory plans and policies. A framework for developing collaborative capital at
The outputs and actions of collaborative a metropolitan level using collaborative governance
processes will likely produce longer-term outcomes is shown in Figure 4. This framework may be
and changes to the metropolitan system context. useful when two or more local governments agree
This metropolitan context will likely also chan- to collaborate on standardizing, sharing, and
ge because of internal social, economic, and integrating data and information on infrastructure
environmental factors and because of external services, planning, land use, and building approvals
national and global forces. along common administrative boundaries using
Principle 10: As the metropolitan system context compatible management information and GIS
changes, new complex urban problems will arise systems. Much of this occurs by agreement at
along with new imperatives and opportunities a technical level with safeguards on access to
for governments and other sectors to collaborate information. The next step is to expand this to
to address these. Collaborative governance for sharing the same data with other local governments,
metropolitan regions is an ongoing process of social central and state governments, and public cor-
learning and adaptation. porations. The idea is to develop a metadata set
of information at local and metropolitan levels
A Collaborative Governance (Figure 4, Initiative A). The data may all be held
by a publicly owned entity, with the shareholders
Framework for Sustainable being the different levels of government and public
Development corporations. If desirable, city-wide metadata
involving co-ownership could be expanded to
Moving toward a collaborative governance model institutions and other entities.
for sustainable development of metropolitan The next step in the process could be the
regions begins with the premise that it must be integration of planning functions by agreement
based on a process of trust building through between planning agencies. The intent would
collaboration to enable a wider range of entities be to develop common standards, policies, and
to become engaged in decision-making. Beyerlein, practices to streamline planning and development
Beyerlin, and Kennedy (2005) used the ter m control, and to share resources and expertise using

Section 1: Theoretical perspectives on metropolitan governance 135


a cost-sharing arrangement. This could advance objective of the collaborative governance model
to the integration of other policy, regulation, for metropolitan planning and development is
and administration functions. For example, it to encourage the development of innovative
could result in multiple cities engaging in the and linked clusters of economic activity and to
preparation of a region-wide strategic plan give different parts of metropolitan regions an
(Figure 4, Initiative B) or a policy on levels and identity known by local competitiveness, urban
standards of service delivery, and standardization design, cultures, and geographic identity. With
of infrastructure, to enable local utility agencies high levels of collaborative capital, it becomes
and governments to co-purchase equipment and possible to move toward economic co-investment
services at reduced cost. strategies for metropolitan regions that affect all
The framework allows for the progressive five dimensions of prosperity. These strategies
evolution of the types and levels of engagement in would cover economic development, financial
collaborative initiatives, involving joint marketing co-investment between local governments and
and development of economic strengths of local business corporations, and institutions in crucial
and regional clusters of industry activities and strategic infrastructure. Co-investment is needed
common-user services. At a more advanced stage, to enhance community access and efficiency in
government, corporations, institutions, business, services at the metropolitan level and to realize
and other entities can collaborate on ser vice local area creativity, innovation, and development
delivery and ultimately co-investment and co- potential, as well as to create capacity in supply
development of essential strategic infrastructure chains to establish a strong network and system
designed to improve access to opportunities for of integrated micro industry clusters and regional
competitive business development. The long-term clusters such as health (Figure 4, Initiative C).
Figure 4. Progressive Levels of Collaborative Governance

HIGH LEVEL COLLABORATIVE


L GOVERNANCE
Public Corporations Business C
Infrastructure Co-investment Network
Governments G Partnership to support supply chain
Institutions Other entities C B I enhancement of metropolitan and local
area health industry clusters
Co-investment

Co-Services Delivery Thresholds of increasing Scale of


Collaboration an Complexity of
Economic Development Collaborative Governance Initiatives

Extended Policy and Regulation


C LOW MIDDLE LEVEL COLLABORATIVE
Strategic Planning H GOVERNANCE
I
G agreement on integrated metropolitan
Knowledge and data B regional strategic planning

Increasing Spread of Collaborative Governance Engagement in


LOW LEVEL COLLABORATIVE
Partnership and Network Arrangements
GOVERNANCE
agreement for local government N
G
data sharing between Metropolitan
LGU to develop meta data base A

Source: Authors.

136 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
Strategy for Building Collaborative Capital and educational institutions in building publicly
in Metropolitan Regions available metadata sets. Successful collaborations
build collaborative capital in a region and allow more
The framework in Figure 4 supports a progressive complex problems, involving more dimensions of
development, spread, and application of collaborative sustainability, as shown in Figure 5.
governance initiatives covering the five dimen-sions As the examples discussed earlier show, me-
of prosperity and sustainable development shown tropolitan collaboration can be initiated bottom-up
in the Wheel of Prosperity (Figure 3). A strategy for by a local authority or the community, or top-
building and applying higher levels of collaborative down from a higher level of government, and can
capital is illustrated in Figure 5. It begins with address a range of complex urban problems and
low-level areas of collaboration involving only dimensions of sustainable development. In all
one dimension of sustainable development. A cases, collaboration will require political leadership
catchment management for um that involves and development of collaborative capital in the
interest groups and governments who agree to metropolitan region, allowing for broader problems
share knowledge, data, and information might and opportunities to be addressed, and resulting
be the first step in the process. The forum could in higher levels of engagement or commitment,
be expanded to include corporations, business, investment, and risk sharing.
Figure 5. Strategy for Developing Collaborative Capital

Higher levels of collaborative capital are Metropolitan Co-Investment Strategy with goals covering
needed to address complex problems covering all ve Dimensions of Sustainable Development
more dimensions of sustainable development

Metropolitan Planning Strategy covering Environmental,


Social, Quality of Life & Infraestructure goals
Developing
collaborative
capital
Transport Project with Urban Infrastructure,
Economic Productivity & Quality of Life goals
Dimension of Wheel of Sustainability
Sub-Regional Strategy for Economic - Economic productivity
Productivity & Social Inclusion - Urban infrastructure
- Quality of life
- Equity and social inclusion
Watershed Strategy for - Environmental sustainability
Environmental Sustainability

1 2 3 4 5
Number of added dimensions of sustainable development (from wheel of Prosperity)

Source: Authors.

Many metropolitan regions have already engaged managing, and developing metropolitan regions in
in some of the lower order collaborative governance both developed and developing economies. The key
arrangements outlined in the model. However, there to the success of applying collaborative governance
is need to go forward, as the higher order levels of to metropolitan planning and development is to
collaborative capital have the potential to create a start to build trust and ensure a willingness to
pathway to more sustainable approaches to planning, change.

Section 1: Theoretical perspectives on metropolitan governance 137


Conclusion Aristotle said the whole is greater than the sum of
its parts. In other words, when individual governance
The current institutional and governance arrange-ments entities for metropolitan regions are connected, and
to manage the development of metropolitan regions have collaborative capital grows, they are more powerful and
changed little in more than a century. Trust between all more competitive in the world of increasingly competitive
levels of metropolitan government globally is continuing metropolitan regions. Collaborative governance, as
to fall (Snyder, Hernandez, Maxwell, et al., 2016) and the a metropolitan planning and management model,
competitive model of metropolitan governance is not has significant promise in the pursuit of sustainable
delivering the jobs, investment, or sustainable development development, regardless of country or region. Public
desired. New approaches to planning and managing officials who represent the interests of regional planning
development in metropolitan regions are required. and development will need to understand its benefits and
Collaborative governance offers one such approach. initiate the changes required before it can become a more
The competitive historical model of urban go- widely accepted model for sustainable development.
vernancewhere local governments act in self-interest to While the change will be challenging, it is crucial to
gain political influence or the next big project and cooperate making sustainable development a reality in metropolitan
only where it is expedient to do somust be replaced. regions, regardless of a countrys development status.
The problems of climate change, water and food In seeking to establish a New Urban Agenda and to
security, contaminated land, social dislocation, and implement Sustainable Development Goals, collaborative
inequitable access to knowledge, jobs, and investment governance must be promoted as a better way to
will not be solved by cities in metropolitan regions manage the development of metropolitan regions. The
competing against each other on a winner takes all basis. internationalization of cities and the greater levels of
If metropolitan regions are to become more sustainable, interconnectedness between them, as well as the trend toward
prosperous, better managed, and more liveable places, the sharing economy, calls for the development of new
changes in current governance arrangements and collaborative governance arrangements between cities within
practices are necessary. metropolitan regions and with other metropolitan regions.
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Section 1: Theoretical perspectives on metropolitan governance 139


1.8 Mega-City Region Governance and
Urban Planning
Jiang Xu (University of Hong Kong) and Anthony Yeh (University of Hong Kong)

Abstract

As a result of the large-scale urbanization and urban agglomeration over the past few decades,
mega-city regions have come to represent distinctive regional spatial formations undergoing major
transformation led by globalization. Mega-city regions in various parts of the world exhibit differences
in terms of rationale, development patterns, fiscal capacities, managerial abilities, and experiences in
regional governance and planning. This chapter examines mega-city regions in different circumstances,
treating them not only as functional and competitive nodes of global capitalism, but also as products
of diverse processes and contextually reconstituted state spaces. With cases from a variety of
theoretical and political perspectives, the chapter analyzes the experience of mega-city governance
across a range of geographical locations in Europe, North America, Australia, and China to enhance
our understanding of mega-city regions and consider how different approaches in governance and
planning are reshaping mega-city regions in divergent contexts.

Cities are increasingly at the center of global pro- 450 (mega) city regions with over 1 million residents,
duction and consumption as well as social and political at least 20 of which have populations of more than
transformation. Their role as important nodes of 10 million (Scott, 2001; UN, 2004). Although housing
global networks of commercial, social, and cultural a growing population, these regions are located in a
transactions has expanded, creating new types of relatively small land area. Their development poses
sprawling, often multi-centered urban agglomeration a direct impact on environmental change, land use
over the past decades. Various labels have been patterns, and spatial transformation, as well as on the
employed to describe this phenomenon of large-scale lives of existing and new city dwellers alike.
urbanization, such as the metropolis, the conurbation, Mega-city regions in various parts of the world,
megalopolis, and global city region. This chapter is while all undergoing rapid transformation in an era
focused on one type of large urban agglomeration of globalization, have many differences in terms of
the mega-city region. Hall and Pain (2006) defined a rationales, development patterns, fiscal capacities,
mega-city region as a cluster of contiguous cities or managerial abilities, and experiences in regional
metropolitan areas that are administratively separate governance and planning (Vogel, 2010). In addition,
but intensively networked, and clustered around one they are evolving in diverse political contexts and
or more larger central cities. These places exist both as economic landscapes. The roles of their public and
separate jurisdictional entities, in which most residents private sectors in regional formation vary in form
work locally, and as part of a wider functional urban and sophistication. Although much work on mega-
region connected by dense flows of people and city regions now exists (e.g., Simmonds and Hack,
information. 2000; Hall, 2001; Scott, 2001; Herrschel and Newman
Mega-city regions represent distinctive regional 2002; Salet, Thornley, and Kreukels, 2003; Laquian,
spatial formations under dramatic transformation 2005; Hall and Pain, 2006; Kidokoro, et al., 2008),
(Xu and Yeh, 2011a). Globally, there are more than none are devoted to exploring experiences and broad

140 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
questions related to governance and planning in development of mega-city regions around the world,
mega-city regions from an international comparative we observe that both top-down state-led projects and
perspective. Moreover, despite the fact that super- bottom-up initiatives are important shaping forces of
agglomeration, or city-regions, in the global south have mega-city regional (re)structuring. While bottom-up
attracted substantial attention (e.g., Scott, 2001; Stren, initiatives play key roles, even in the freest market
2001; Douglass, 2001, 2002; Laquian, 2005; Wu and economies, there are calls for and different degrees of
Zhang, 2007; Xu, 2008), we still know far less about strategic intervention at the mega-city regional level.
how regions have evolved in developing countries
compared to the regions of advanced capitalist states Regional Renaissances:
even though the largest and fastest-growing urbanized
locations are situated in this part of the world.
Region as Scale
This chapter examines different mega-city regions
in different circumstances by not only treating In the capitalist state, the region was first proposed
them as functional and competitive nodes of global as a platform to tackle the spatial mismatch between
capitalism, but also as products of diverse processes fragmented administrative boundaries and functional
and contextually reconstituted state spaces. With cases economic territory in metropolitan areas. During
from a variety of theoretical and political perspectives, the Fordist-Keynesian period, the main concern was
this chapter explores the experience of mega-city to create a form of regional regulation to achieve
region governance in a range of geographical locations administrative equalization and the efficient delivery
in Europe, North America, Australia, and China. Such of public services. However, the new notion of the
a comparative approach has at least two benefits to region as a scale for capital accumulation is in part a
enhance our understanding of mega-city regions. consequence of the collapse of Fordist-Keynesian
First, it provides a series of situated accounts to capitalism and the rise of post-Fordism regimes in
inform specificity and varieties of the reconstituted many Western countries. Jessop (2002) examined
state spaces, politics, and functionality around and the reconstitution of the national territorial space
across regions. Second, it can unravel generative where the capitalist state is transformed from a
conditions and circumstances through which new Keynesian welfare state to a post-Fordist accumulation
approaches to governance and planning are reshaping regime. The new regulatory system supports supply-
mega-city regions in divergent contexts. In this sense, side policies to develop the capacity of structural
the findings will offer an informed understanding competitiveness and facilitate labor market flexibility
of any common concerns and emerging trends and mobility. This defines a reworking of national
underpinning these purported regional renaissances. territorial space, in which state functions are re-
The remainder of the chapter is organized as articulated upwards, downwards, and outwards so that
follows. The next section begins with the background place- and territory-specific strategies of economic
of mega-city regions governance and planning, development can be mobilized and achieved. To map
describing the regional renaissances, as well as the this restructuring of modern capitalism, Scott (1998)
debates of regional institutions in recent years. The demonstrated how such profound reshufflings gave
main purpose is to answer why mega-city regions rise to a spatial hierarchy spanning four levels: the
matter. We then discuss various problems of mega- global scale, multinational blocs, sovereign states,
city regions in different countries and regions, and and regions. The single, hegemonic national space
how different regions deal with these problems. Next, has been reworked into deeply heterogeneous and
we concludes how those cases in various contexts can contested spaces at the supranational and subnational
yield beneficial lessons and implications for mega-city levels (Swyngedouw, 2000). In contrast to the Fordist
regional governance in the future. By exploring the era, we have witnessed that no privileged level

Section 1: Theoretical perspectives on metropolitan governance 141


assumes a preeminent role in the meta-governance of uncertainty in a fast growing, fragmented political and
socioeconomic affairs (Jessop, 1999; MacLeod, 2001). economic space.
This transformation of capitalism is closely Compared to the experiences of Western nations,
intertwined with the successive rise of new territorial the origin and growth of regions in other contexts
spaces. Various authors have sought to capture this may take different paths. One prominent example
moment. Tmmel (1997) highlighted the rise of is countries with a socialist history. Under state
multilevel governance in Europe, while Swyngedouw socialism, horizontal relationships among jurisdictions
(1997) examined the notion of glocalization and how were not considered important, with hierarchical
the global, local, and other relevant geographical linkages instead dominating spatial formation.
scales are the result and product of a heterogeneous, This resulted in the regions being dependent on
conflictual, and contested process. One important the center. The transition toward a more market-
consequence of the restructuring of state space is that oriented economy has generated new conditions for
the region became a focal point for economic growth regional development, with the divergent reasons for
and state regulation. introducing new territorial institutions reflecting their
Running parallel to this fundamental reco- specific governance problems.
nstitution of state territoriality is the rise of Central and Eastern Europe opted for neo-liberal
neoliberalism and the worldwide spread of neo- shock therapy marketization. This was believed to
liberal economic and political policies in response be a quick way to close the wealth gap with the West
to the crisis of the Fordist-Keynesian accumulation and facilitate the process of returning to Europe. The
regime (Ma and Wu, 2005). Market exchange has creation of new regionalism has been widespread
become dominant in both thought and practice during the post-socialist period. In contrast to the
throughout much of the world since the early West, regionalism in Central and Eastern Europe does
1970s (e.g., Reaganism in the United States). not stem from a fear of fragmentation or dysfunction
This powerful force of market revolution has of government services, but instead the objective is
resulted in multi-scalar deregulation, the removal to realize the post-communist political imagination of
of institutional constraints, expansion of market decentralization, quick recovery of historical-cultural
power, privatization, greater exploitation of labor, regional and local specificities, and Europeanisation
and the liberalization of finance (Ma and Wu, (Bialasiewicz, 2002; Herd and Aldis, 2003).
2005). One important consequence is the emerging However, China has taken a different path to
new localism of the 1980s to promote zero-sum regional growth. The objective of Chinas transition
politics of territorial competition (Peck and Tickell, was not to propose the retreat of the state, which
1994) and a growing trend toward greater urban is different from the shock therapy of Central and
entrepreneurialism (Harvey, 1989). Eastern Europe. Indeed, the success of Chinas
Out of this innovative restructuring of political gradual reform is often attributed to preserving
economic flows, new institutional spaces and new state state institutions while injecting market incentives.
spaces are being re-forged with urban and regional Many regions have been created as state projects to
scales coming to represent particularly significant induce the creative restructuring of state spacesa
strategic sites in the performance of accumulation, phenomena similar to that of advanced capitalism
regulation, and political compromise (MacLeod, 2001). (e.g., Kelly, 1997; Cartier, 2005; Laquian, 2005; Wu and
It is in this sense that governance and planning of Zhang, 2007; Xu, 2008; Xu and Yeh, 2016).
mega-city regions plays a potent function in delivering Chinas central government is confronting a series
the variety of regulatory spaces and facilities needed to of immense challenges to its authoritative power and
lubricate capital flows. It also helps develop a context- institutional capabilities because of decentralization
specific synergy of collective actions to manage radical and market reform. First, decentralization permits

142 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
local states a wide range of economic responsibilities. regional states were understood as merely instruments
Many socioeconomic risks originally internalized of central state policies (Brenner, 1997). The reform-
and meditated at the national level are now being consolidation approach is, however, under ideological
externalized to local governments. Second, market attack for lacking political legitimacy and operating in
revolution has had a tremendous effect on Chinese an authoritarian manner.
society. David Harvey (2005) argued that Chinas The second is the market-oriented approach in the
neoliberalism is growing rapidly, even as it festers public choice tradition. It looks at the individuality
and stagnates in capitalist economies. It is in this and multiplicity of fragmented regions as the most
context that we witness a systematic reworking of desirable way to better regulation (Tiebout, 1956;
state spaces and function, and the rise of regions Boyne, 1996). One important consequence of this
as an important scale of regulation and economic tradition is the emerging neoliberal localism of the
development. One goal in China is to reassert the 1980s to promote zero-sum politics of territorial
functional importance of state guidance and control competition (Peck and Tickell, 1994) and a growing
in the growing complexity of the powerful neoliberal trend toward greater urban entrepreneurialism
wave and the intensified economic competition. in the post-Fordist regime (Harvey, 1989). Many
region-wide institutions were dismantled in Western
Regional Institution for Economic Europe and North America. This heralded a retreat
of state intervention from spatial formation, instead
Governance substituting a more deregulated approach to en-
courage the unfettered operation of the market.
Along with regional renaissances goes the debate Spatial planning was thus in limbo and perceived to
on how to establish regional institutions. Broadly exert negative impact on wealth creation (Thornley,
speaking, three main typologies of regional instituti- 1993). As a result, an ad hoc, project-based planning
ons underscore divergent philosophies and objectives. approach was widely practiced to support private
The first is the so-called reform-consolidation sector development. However, the market public
approach. Under the influence of Keynesian capitalism, choice approach is also subject to criticism, as it is
this approach centered on creating a territorial form deeply rooted in a neoliberal political environment and
of regulation to achieve administrative equalization can produce external diseconomies (Briffault, 2000).
and efficient delivery of public services. The main The debate between the reform-consolidation
strategy in this tradition favored political consolidation and market public choice approaches resulted in
and strong institutionalization as the most effective the evolution of a reactive interest in a third form
means of achieving good governance (Bollens and of regional governance. Some advocate this new
Schmandt, 1982; Lowery, 2000). State intervention was regionalism approach as a shift of institutional
actively pursued in order to establish a consolidated focus from government to governance to address an
regulatory framework to guide outward urban interactive process through publicprivate partner-
expansion, to achieve planned decentralization ships, joint ventures, and cross-sectoral alliances
and regional balance, and to reach efficiency in (Jones, 2001; Macleod, 2001). The fascination with
infrastructural provision through the commanding regional governance has led to experimentation in
actions of planning to control spatial organization territorial formations, such as inter-government
and the location of development at the national level organizations, informal government partnerships,
(Healey, Khakee, Motte, et al., 1997). A range of and functional consolidation (Rusk, 1995). This
region-wide institutions were set up under a central political construction of institutional thickness
auspice. Spatial development was organized primarily prompts a systematic reworking of hierarchical and
around the national territorial scale, while the local and functional planning toward more horizontal and

Section 1: Theoretical perspectives on metropolitan governance 143


network-based structures (Williams, 1999). Planning contemporary Europe. He argued that at the scale
from this perspective means that cooperative thinking of the mega-city region, actions need to be taken to
in bargaining arrangements and alliance building is resolve the lack of governance (including the policy
valued (Healey, et al., 1997). This has been attributed instruments) as the city-region system, which grows
to the revival of strategic planning that accentuates a out of a functionally networked but morphologically
more interactive process in a multi-level governance polycentric space, demands an appropriate framework
environment. for the governance of flows and functional thinking
It can be concluded that creating regional insti- in spatial planning. This can be done by involving the
tutions has become one challenge for post-Fordist business community to gain a better understanding
economic governance. The region is regarded as of market drivers and conditions, inter-firm and
a significant and effective arena for situating such inter-sectoral relationships, and economic and
institutions to urge innovation in regional policies. spatial relationships. It is also necessary to promote
cooperative relations in order to reflect the network
Mega-city Region Governance and connections between cities across policy and sectoral
fields at all geographical levels, as well as to counter
Planning in Various Contexts
inter-regional competition for inward investment and
its converse in prosperous regions.
Diverse economic development and political systems Salet (2011) raised analogous themes. He noted
have led to great variations in the evolution of mega- that it is these very inter-scalar and relational webs of
city regions. While mega-city regions in different multi-actor and multi-level governance that inspire
parts of the world share a commonalityrapid planning innovation in local and regional public
transformation in an era of globalizationthey also agencies. Based on an interpretation of the shift in
have different rationales, development patterns, fiscal spatial form and governance structure in the urban
capacities, managerial abilities, and experiences in network of Randstad, he showed how regional
regional governance and planning (Vogel, 2010). In governance had responded to the rescaling of social
addition, they are evolving in diverse political contexts and economic parameters that generated an ongoing
and economic landscapes. The roles of the public and process of decentralization, increasing polycentrism,
private sectors in regional formation vary in form and and specialization of urban spaces. One example is
sophistication. Thus, we have done comparative study that the dynamic private sector developed its own
with cases from Europe, the United States, Australia, action spaces in the expansive urban system for both
and China to unravel generative conditions and economic development and residential areas. Such
circumstances based on divergent contexts. spatial dynamics of urban transformation are rooted
in the private sector, but the planning strategies are
created by the public sector. Thus, Salet claimed
Mega-city Regions in Europe that novel regional planning strategies should be
arranged through a completely new network of social
For European countries, the call for creative regional interaction and practice to rectify the functional
institutions is widespread in post-Fordist economic mismatch between the public sector-led planning and
governance. This is well illustrated by a number of the private sector network. The case of Randstad
studies that focus on European mega-city regions to illuminates important directions to reform state
explore how regions serve as a significant and effective planning and institutions in what are increasingly
arena for such institutions. multi-scalar and multi-centric political geographies.
Hall (2011) examined the emergence, dynamics, By rethinking strategic planning and regional
and planning of polycentric mega-city regions in governance in Europe, Albrechts (2011) concluded

144 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
that planning in Europe is moving toward a more the country (Yaro, 2011). Moreover, America has a
desirable scenario with the mobilization of a plurality tradition of local control. In large metropolitan areas,
of actors with different and even competing interests, the sheer number of local governments, each making
goals, and strategies. By critiquing the stereotypical decisions in their own self-interests, makes developing
planning approach, Albrechts (2011) proposed a new regional solutions or regional institutions very difficult
spatial planning strategy, which is conceived of as (Orfield and Juce, 2009). This results in inadequate
a democratic, open, selective, and dynamic process regional planning capacity. For a long time, regional
of coproduction. It produces a vision that leads to a planning in the United States has primarily looked at
framework within which problems and challenges can the functional relationship between core cities and
be understood, and provides justification for short- their surrounding small jurisdictions in a metropolitan
term actions within a revised democratic tradition. This context. There are no strategic interventions at the
account further illustrates the construction of regional level of mega-city regions, barring a few historical
governance ensembles by mobilizing a social support exceptions such as the Tennessee Valley Authority in
base to resolve conflicts between particular interests. the 1930s (Dewar and Epstein, 2006).
The above-mentioned studies sketch an institu-tional Harvey and Cheers (2011) examined the problems
approach that could prove instructive in comprehending affecting regions. First, administrative centers have
the wider politically and socially constructed arena around often been geographically distant, and therefore out
which regions are confi-gured, governed, and planned. of touch with the needs of diverse local regions. This
poses the difficulty of regulation at the regional level
and leads to demand for localized decision-making.
Mega-city Regions in Federalist Countries Second, many regions have struggled to qualitatively
configure new political and economic spaces to
Similar to European countries, the United States and prevent their erosion in national and global economies.
Australia, two federalist countries, have experienced a The inadequacy of regional planning capacity has
dramatic regional renaissance (Brenner, 2002; Eversole resulted in many obstacles that impede cooperation in
and Martin, 2005). However, even though numerous smaller metropolitan regions. For instance, appointed
parallels exist between the European pattern and economic development officials must justify their
those in the United States and Australia, the context existence by competing on behalf of their own
of the latter is distinguished by a legacy of extreme jurisdiction, rather than pursing tangible benefits
jurisdictional fragmentation within its major city from metropolitan cooperation; the short time frame
regions (Brenner, 2002). of elected officials encourages a preference for
A federal structure, by nature, has the seeds of visible accomplishments such as groundbreaking and
public policy fragmentation built in. Blatter (2003) ribbon-cutting in their own jurisdiction (McCarthy,
called it the multi-polity system. In the American 2011). Moreover, cooperation to achieve endogenous
context, particularly following the imposition of development (e.g., infrastructure) is more evident, while
Reagans New Federalism, the policy domain is attracting cooperation for exogenous development
fragmented vertically into state and local governments, (e.g., a new companys investment) is more difficult
and horizontally to special purpose agencies and private as the costs and benefits are not easy to establish for
capital (Brenner, 2003). Current planning capacity in each jurisdiction (McCarthy, 2011).
the United States is found to over privilege state and In short, the context of the United States is
local governments, as well as private investment, and distinguished by a legacy of jurisdictional fragmentation
thereby neglect the strategic priorities of the federal within major city regions (Brenner, 2002). The history
level to guide another generation of growth that can of federalism resulted in extreme local control over
be shared by every community and region across economic development and a bottom-up approach

Section 1: Theoretical perspectives on metropolitan governance 145


in developing social and political institutions. There McCarthy (2011) underscored that any new mega-
is little sign of practical movement by the state and city regional governance requires more than lip service
federal agencies to coordinate their regional policies in support to move cooperation between mega-city
a meaningful way due to the deficiency of inter-scalar jurisdictions from paper to practice. McCarthy pointed
flow. It is in this context that mega-city regions can out that, unless metropolitan regional competitive
become particularly significant strategic sites in the advantage is promoted by enhancing conditions for
performance of accumulation, regulation, and political business, and economic specialization occurs between
compromise. metropolitan areas, competing as a metropolitan
Yaro (2011) argued that the federal government region for inward investment eliminates competition
should provide leadership in mega-city regions only between the jurisdictions within particular
development in the United States and underscored metropolitan areas, while competition would continue
the ways in which traditional federal countries see the between metropolitan areas.
promise of major policies and development initiatives Harvey and Cheers (2011) investigated how a
finally moving ahead to herald a more strategic multi-centric city region in the Upper Spencer Gulf in
intervention at national and regional levels. At the southern Australia collectively resolved to reverse its
national level, the federal government could play a decline, the experience of which is readily transferable
constructive role in establishing a vision and a set of to regions. The authors identified 18 principles for
priorities for the nations infrastructure needs, in setting effective intra-regional cooperation (Table 1). The
standards for efficiency and safety, in promoting federal implications of the Upper Spencer Gulf model
objectives with conditionality, in convening multi-state for intra-regional development cooperation are not
partnerships, as well as in measuring performance and restricted to the principles mentioned in the table. For
collecting data. For the subnational level, individual instance, providing a strong and clear regional vision for
states could continue to play the role of planning, economic development and cooperation, and including
developing, and maintaining much of the nations regional monitoring mechanisms for cooperation at
infrastructure investments within the context of a both process and outcome levels, may serve as further
national vision, clear federal priorities, and performance evidence of best practice. These principles indicate
standards. At the regional level, metropolitan regions that regional development coalitions need to have an
could play a significant role in transportation policy independent existence rather than simply carrying out
and in coordinating transportation and land use central government policy and that two or more local
investments to promote greater energy efficiency, governments should be engaged as key players.
sustainability, and quality of life. Lastly, at the local Similarly, the fragmented and unstable nature of
level, cities have important roles to play in concentrating regional institutions in Australia makes it impossible to
jobs, housing, and activities in central places where develop a strategically coherent framework for regions
transportation options are plentiful. In addition to the (Eversole and Martin, 2005). While the practice
above-mentioned levels, Yaro suggested that a new of regional planning faces dynamic conditions of
urban level for responding to large-scale challenges, complexity and uncertainty due to inadequate inter-
namely mega-regions, be taken into consideration. Such scalar linkages (Abbott, 2011), strategic vision and
a level might benefit the development of intercity and planning capacity have to be built up by an organized
high-speed rail corridors linked to Americas global connectivity between key stakeholders in order to
facilities and other multi-state transportation networks, provide relevant technical, political, organizational,
as well as the protection, restoration, and management and economic information to deal with the complexity
of large environmental systems and resources, and the and uncertainties (Salet and Thornley, 2007). In this
development of economic revitalization strategies for process, the state governments need to be more open,
underperforming regions. innovative, and flexible in involving other stakeholders.

146 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
This implies that the linkages to the private sector and Similarly, the fragmented and unstable nature of
to Commonwealth Government need to be improved, regional institutions in Australia makes it impossible to
and that the linkages to the private sector and to the develop a strategically coherent framework for regions
community on a regional basis (rather than a project (Eversole and Martin, 2005). While the practice
or local basis) also need to be enhanced. of regional planning faces dynamic conditions of
complexity and uncertainty due to inadequate inter-
Table 1. Eighteen Principles for Effective
scalar linkages (Abbott, 2011), strategic vision and
Intra-regional Cooperation
planning capacity have to be built up by an organized
1 Recognize the complexity and interrelatedness of connectivity between key stakeholders in order to
regional economic and social development issues. provide relevant technical, political, organizational,
2 Focus on issues of investment and production, as and economic information to deal with the complexity
well as the social networks and relations in which
these are embedded. and uncertainties (Salet and Thornley, 2007). In this
3 Involve stakeholders across sectors within the region. process, the state governments need to be more open,
4 Involve all tiers of government. innovative, and flexible in involving other stakeholders.
5 Engage intra-regional, extra-regional, and
This implies that the linkages to the private sector and
government stakeholders with each other. to Commonwealth Government need to be improved,
6 Promote communication and interchange between and that the linkages to the private sector and to the
diverse sectors to create links between the community on a regional basis (rather than a project
development of ideas and initiatives originating
from stakeholders. or local basis) also need to be enhanced.
7 Relate top-down leadership to bottom-up
These studies raise a number of fundamental ques-
participation. tions about emerging forms of spatial organization in
8 Develop a broad and stable political base to offset federalist countries where traditionally there has been
domination by particular interest groups. little scope for strategic planning intervention. Taken
9 Develop cooperation between local authorities as together, they suggest that while bottom-up initiatives
members of dedicated coalitions, rather than as continue to play a role in regional structuring, state
the prime movers of regional development.
strategies and state-led projects must be formed to
10 Emphasize regionally based development.
bring strategic coherence to the regional path to pros-
11 Differentiate and rationalize interaction between
regional and community layers in development. perity. The net outcome of this political structure will
12 Ensure that central governments act as partners, reinforce the regional scale as an important site for
not as a dominating presence. accumulation and regulation.
13 Ensure that adequate and predictable funding is
provided, independent of electoral cycles, which
provides for stability and effective planning.
Mega-city Regions in China as a
14 Provide multi-track dialogue and feedback
between the cooperative regional development Transitioning Society
organization and industry, community partners,
and government. Regional restructuring is a historically embedded
15 Insulate cooperative regional development process. China is no exception as a transitional society
organizations from excessive bureaucracy.
that carries strong legacies of its socialist history.
16 Employ realistic appraisals of regional capabilities,
technology cycles, and competition. Under state socialism, horizontal relationships among
jurisdictions were not considered important, with
17 Provide access to expert advisors and best practice
knowledge. hierarchical linkage dominating spatial formation
18 Help local communities to identify and secure (Xu, 2008). This resulted in regions depending on
investment and funding for promising projects. the center. This dependency reduced regional policy
to sectoral policy (Gorzelak 1996) and within this
Source: Harvey and Cheers, 2011 (pp.2001).

Section 1: Theoretical perspectives on metropolitan governance 147


context, socialist states often used frequent and challenge, regional strategic planning has evolved
arbitrary changes of territorial-administrative structure as a key political strategy to reposition provinces in
to serve the two primary purposes of clearing up the both the national and global economic sphere and to
remnants of old regimes and enforcing central control impose better regulation.
(Solinger, 1977). In recent years, central agents at the national
Previously, socialist regimes in China were chara- level have been using strategic planning to influence
cterized by extensive expansion of the means of local economic governance for better top-down
production, constrained consumption, and forced regulation. One example is the invention of the
organized labor processes to achieve industrialization. Primary Functional Zones, which is a kind of
Beginning with the economic reforms of the large-scale zoning system officially initiated by the
late 1970s, the last three decades have witnessed National Development and Reform Commission in
extraordinary urban growth in China. Promoting the 12th Five-Year-Plan (201115). Chinas territory
urbanization has become a central policy to sustain is classified into four Primary Functional Zones that
economic prosperity. While various projections are placed under four types of spatial regulation.
anticipate an urban billion era for China, other For example, the development-prohibited zones
dynamics, such as globalization and the development are critical ecological areas that must be placed
of vast mega-city regions, will reinforce the role of under the protection of enforceable laws. To ensure
cities as centers of production and consumption as implementation of this zoning system, provinces and
well as of social and political transformation. cities are required to categorize these four zones in
The scale and speed of urbanization have over- their respective territories, and thus impose a restrictive
whelmed Chinese governments at all levels, leading to framework for urban and regional development.
a range of urban problems such as social exclusion, Therefore, Xu and Yeh (2011b) argued that regions
urban sprawl, misuse of land in all cities, but especially can be best conceptualized as the always-contested
in those that are under the threat of rapid (and spatial condensation for reconstructing state regulatory
often uncontrolled) growth, inadequate and poorly power. Using the PRDs strategic planning as a case
maintained infrastructure, rapid industrialization and study, Xu and Yeh developed a state-theoretical
escalating vehicle ownership. Equally paramount interpretation of what is behind the increasing interest
are problems of spatial regulation at both urban in this level of planning. For the PRD, the growing
and regional scales. While individual cities are eager mismatch between the fragmented administrative
to implement entrepreneurial strategies to enhance boundaries and the functional-economic territory
their competitiveness, they pay little heed to intercity over the past three decades of development requires
networking, thus failing to address the many urgent a strategic vision to plan the region in its entirety. It
social and environmental issues on a regional scale. is in this context that regional strategic planning is
Regional strategic plans are normally made by now increasingly being mobilized as a mechanism of
superior governments (individual provinces, groups economic development policy and a political device
of provinces, the State Council) to guide regional through which the state is attempting to enhance place-
transformation. In some mega-city regions such as the specific socioeconomic assets and to regain control in
Pearl River Delta (PRD), many formerly rural areas a growing sophistication of territorial development.
have developed into active economic centers. This has They also contemplate that current regional
resulted in a polycentric spatial form with profound planning practice can be understood as an important
impacts on the environment. Moreover, political political and strategic tool of capital accumulation
fragmentation has weakened cities governing capacity, to attract investors. Therefore, rather than shifting
thus creating an urgent need to regulate and constrain territorial development trajectories and coordinating
ongoing urbanization processes. In response to this regional growth patterns, regional strategic planning

148 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
may appear to be little more than a cosmetic makeover It does not easily lend itself to conceptualization
that hides the intensifying inter-scalar competition or interpretation. In all contexts, the enormous
within mega-city regions in China. This is further challenges have not yet been resolved through the
illustrated by Xu (2016), who used the planning construction of a new governance pattern and
process of the intercity railway system in the PRD as planning capacity. In Western Europe, there is a still a
a case study on intensive inter-scalar competition. She general lack of adequate policy instruments to manage
discovered how agents at different geographical scale functional flow within mega-city regions. Within
are engaged in long-lasting bargaining over the design existing administrative structures, some policymakers
and delivery of intercity railroads, and how established think they have power, when in fact they are lacking it,
hierarchies and bureaucracies use the region as a while some have power but do not realize it, and thus
discourse to reassert their functional importance and there are both direct and indirect influences that can
avoid takeover by others. have unintentional consequences (Hall, 2011). Current
Gu et al. (2011) raised closely related issues European spatial policies may not be able to address
by focu-sing on the spatial planning for urban these issues. This is deeply problematic and hinders
agglomerations in the Yangtze River Delta (YRD), one the development of capacity in strategic planning.
important dimension of which is the further depiction For the federalist systems, mega-city regions are
of the central state as a powerful regional player in featured by a high degree of fragmentation and local
shaping territorial growth through large infrastructure control. Previously, few believed that federal states
projects and top-down state spatial regulation. For needed regional strategies to promote territorial growth
instance, clarifying the spatial structure and urban and infrastructure investment. There are no longer
functions of YRD as well as its various sub-regions doubters. However, the problem is that neither the
solved the structural difficulties in forging coordinated United States nor Australia have developed adequate
growth in the region. institutions for governance and planning to address
The above-mentioned studies provide an initial either the explosive growth or dramatic decline of their
set of conceptual tools through which to reinterpret mega regions in the global capital circuit. There is also
the geographies of state space under transition. They much to be debated about how the mega-city region
denaturalize established assumptions associated with approach mediates between regional connectivity and
the decentralization of statehood and downward scalar political fragmentation, interdependence and autonomy,
shift of the states function in capital accumulation and and system-wide thinking and confinement to particular
regulation. They explore the emergent character of jurisdictions (Ross, 2009).
state reconsolidation through state-led planning and its In contrast to Europe, the United States, and
hidden and strategic agenda. This opens entirely new Australia, China has witnessed the rise of regional
ways of looking at spatial planning as a tool to overturn strategic planning as a powerful tool for spatial
established inter-scalar orders, in addition to its claimed regulation. This is understandable in that China has
rhetoric of sustainability and competitiveness. a strong state tradition and an enduring hierarchical
state system. Nonetheless, the institutional capacity
Conclusion for strategic intervention is problematic because the
function of regional planning is highly fragmented
This chapter has addressed the theme of governance among different ministries and departments. Matters
and planning of mega-city regions in different are further complicated by the top-down nature of
contexts, with special reference to Europe, the United strategic planning, which undoubtedly bred tension,
States, Australia, and China. The picture of the mega- particularly with the hyper-competitive political
city region in all these contexts is unstable, fragmented, environment tending to predominate, with local
context-specific, contested, and politically charged. interests being undermined to various degrees, and with

Section 1: Theoretical perspectives on metropolitan governance 149


cities being accorded different bargaining power and an interactive approach through publicprivate
political representation. Though scholars both inside partnerships and cross-sectoral alliances, with the
and outside China advocate the governance approach mobilization of a plurality of actors with different
and learning from the West to underpin the importance interests, goals, and strategies.
of an interactive and inter-scalar process in planning, The experiences of mega-city region planning
the difficulty in its actual implementation is related in Europe provide examples of the shift of such
to the question of fundamental government reform institutional focus, where the dynamic private sector
and even political transformation in China, where developed various spaces for urban and regional
traditionally, there has been a lack of an ordered and development. However, the current planning strategies
organized civil society. in all contexts are not yet completely responsive to the
It does appear, then, that in many countries we are socioeconomic change required in order to develop
witnessing the creation of heterogeneous regions in a completely new network of social interaction and
social, cultural, economic, and political terms. More practice. Therefore, there is a need to involve a range
interesting, perhaps, is the extent to which all contexts of actors, including as the business community, to
view the rise of regions as: gain a better understanding of market drivers and
emergent engines of economic growth that are conditions, inter-firm and inter-sectoral relationships,
closely tied to the global capital circuit; and economic and spatial relationships (Hall, 2011).
a venue for social and political transformations,
such as dramatic demographic shift, massive infra-
structure investment, climate change, and environ- Jurisdictional Cooperation with Cross-Scalar
mental degradation; and Governance
a new scale governing uncertainty and planning for
prosperity, where we see the continued, if radically Regional planning is frequently confronted with the
redefined, role of states in regulating inter-scalar challenges of jurisdictional separation, especially
relations and interceding with sociopolitical forces for countries under federalism. The inadequacy of
currently unfolding alongside globalization. effective cross-scalar interaction leads to obstacles
that impede cooperation, such as competing on
Overall, there is the hope that mega-city regions behalf of ones own jurisdiction, rather than pursing
are not simply a scale for capital accumulation and the tangible benefits of metropolitan cooperation.
state regulation, but also a platform used to address In this light, intervention at the national and the
the social and economic disparities, and other negative regional levels might be necessary to establish strategic
externalities such as regional environmental issues. visions, develop regional priorities, establish standards,
and convene sub-regional partnerships for regional
Implications and Future Directions growth, such as using central funding as an incentive
for different jurisdictions to cooperate.

Cross-Sectoral Governance as Novel


Regional Planning Strategies Rethinking Regional Planning in a
Transitioning Society
Novel regional political-regulatory institutions are needed
to manage radical economic, social, and environmental Mega-city regions have become important sites for
uncertainty. The focus of these institutions should economic growth and regulation. Accompanying this,
shift from the hierarchical government to horizontal regional strategic planning is mobilized as a growth
and cross-sectoral governance. They should address mechanism and a political device through which the state

150 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
resurgence of regional planning in part as a state
is attempting to regain control under powerful forces
project. However, there remains a need to explore
of globalization, neoliberal decentralization, and market
how the state power is forged into the regional
reform. Nonetheless, the institutional capacity for such
matrix within which state intervention is to occur.
strategic intervention is still quite problematic. Matters are
further complicated by the top-down nature of strategic
planning, which undoubtedly bred tension, particularly Future Direction
with the hyper-competitive political environment tending
to predominate, and local interests being undermined to Following the 2008 financial crisis, we see the promise
various degrees, as well as cities being accorded different of major policy and development initiatives, long
bargaining power and political representation. advocated by regional scientists and planners, finally
As a transitional society, China does not lack moving ahead in many countries. Good governance
experience in cross-scalar interaction within the state and strategic planning are unlikely to wane, even
system itself. Intensive cross-scalar negotiations and though powerful neoliberalisms market revolution
bargaining are frequently observed when capital has persisted for decades in many contexts. Further
allocation and large infrastructure projects are decided. exploring the direction of governance and planning,
However, there is a lack of mechanisms to build up both in theory and practice, is one of the most urgent
capacity for cross-sectoral interaction and public intellectual and political tasks.
engagement. The difficulty in doing this is related
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Section 1: Theoretical perspectives on metropolitan governance 153


Section 2
Sectoral approaches to metropolitan governance

Photography by Johnny Miller. https://www.millefoto.com/about


2.1 Metropolitan Governance and
the Urban Economy
Michael A. Cohen (Milano School of International Affairs, Management, and Urban Policy)

Abstract

The study of metropolitan governance has normally focused on the challenges of managing multiple
jurisdictions within a broader urban institutional framework that can address issues such as spillover
and cross-jurisdictional problems. Much of this literature and the policy debates on metropolitan
government have ignored the need for effective management of the urban economy on the metro-
politan and regional scale. This is surprising because the revenue base of municipalities depends on
the buoyancy of municipal revenue. Too often, urban economic management has focused on firms
and sectors through the lens of competitiveness rather than from a broader understanding of urban
productivity. A more comprehensive understanding of productivity would necessarily involve assess-
ments of the interactions of the metropolitan economy with urban form, the urban environment,
and sustainable development.

This chapter considers the metropolitan question This process was more evident as the urban-
from an economic perspective and examines the ization of developing countries grew far beyond
economic under-achievement of metropolitan areas. the historical and/or colonial boundaries of urban
It argues for much more focus on the needs of the ur- areas. What became known as the dispersion of
ban economy on the metropolitan scale and suggests the urban population and the generation of new
that the metropolitan imperative brings with it the centralities were the results of urban sprawl (Rojas,
requirement to broaden and deepen the understanding Cuadro-Roura, and Fernandez Guell, 2008). These
of the productivity of the urban economy. Indeed, processes, now confirmed as well through the lens
the meaning of productivity itself must be redefined of the de-densification of cities (Angel, 2011),
when the range of externalities of urban economic appeared to call for new forms of metropolitan
activity is fully taken into account. management. The 1990s marked the appearance of
The study of metropolitan governance in de- a metropolitan imperative, or the argument that the
veloping countries over the past 20 years grew out increasing scale of urban areas and the possible ben-
of the awareness that the spatial and demographic efits from agglomeration economies inevitably led to
growth of cities had exceeded the original municipal the consideration and/or adoption of metropolitan
boundaries of many large urban areas. Metropolitan frameworks (Cohen, 1998). This imperative seemed
studies tended to focus on what were known as to appear regardless of the income level of countries
spillover effects, when the economic, financial, and or their colonial heritages. The United States adopted
physical dimensions of cities extended beyond the Standard Metropolitan Statistical Area, as the
their jurisdictions and created challenges for policy, unit for metropolitan data collection for its hundreds
service delivery, and urban finance. Areas such as of metropolitan areas. The former French colonies
transportation management, security, public health, quickly followed, in adopting, and only sometimes
and waste management could rarely be kept within adapting, the metropolitan institutions found in
municipal areas. France to cities such as Abidjan or Dakar.

Section 2: Sectoral approaches to metropolitan governance 157


The creation of metropolitan governance frame- Productivity and Employment in the
works reflected the widespread belief that a metro- Urban Economy
politan area was the jurisdictional unit best suited to
manage infrastructure, the urban environment, and (This section draws on Cohen, 2015.)
urban finance, particularly public investment. It was big During 201516, it became apparent that the pre-
enough to capture spillovers yet small enough not to be paratory process for the October 2016 Habitat III-
a province or state within federal or unitary countries. Quito conference, along with the adoption of new
Yet the metropolitan area, despite its scale and political Sustainable Development Goals, offered a potential,
and institutional authority, has largely underperformed if missed, opportunity to grant the urban economy
when considered in terms of strategies to promote the a central place in the success of both political and
urban economy. This is paradoxical because the urban substantive agendas. There is growing, if reluctant,
economy represents both the nervous system and the official acknowledgement that cities are the engines of
blood vessels of a metropolitan area. Indeed, without growth in most economies in both industrialized and
the urban economy, the metropolitan area would not developing countries. They generate over 80 percent
exist and, without question, would not grow. The ques- of global GDP and over 60 percent of GDP in most
tions to be asked are why do metropolitan areas not countries, with the share in industrialized countries
generate higher gross domestic product (GDP) than reaching 8090 percent (World Bank, 2015). The
they already do? What are their constraints? Are we economic activities found in cities are slowly being
underestimating their economic potential? recognized as drivers of change and transformers
The contributions of metropolitan areas to GDP of cities and nation states. The growing share of
have been reflected in national statistics for almost a GDP attributed to services as income, coupled with
generation. At the end of the 1990s, Mumbai gener- the declining share of agriculture, demonstrates the
ated about one-sixth of Indias GDP, while the GDP transformation of economies through the process of
of Seoul, Korea, was equal to the GDP of Argentina. economic growth. In simple terms, urbanization is
Mexico Citys GDP was equal to all of Thailand, and driving economic growth. Higher per capita incomes
Sao Paulo and Rio de Janeiro together equaled the and higher productivity are outcomes of urbanization
GDP of all of the Andean countries (Cohen, 1998). and the process of economic agglomeration. The
In the United States over the past two decades, met- urban economy, therefore, should be a subject of
ropolitan areas have proven to be the critical arenas national and macroeconomic importance. The two
in which agglomeration, investment, and productivity issues of employment and productivity are paramount
have occurred. for national economic growth.
However, as Enrico Moretti (2012) pointed out in Yet the urban economy has largely been ignored by
The New Geography of Jobs, metropolitan patterns the G20 governments over the past decade, as periodic
are not static. They change according to global and meetings have failed to notice how much global GDP
national economic trends, with both winners and losers. comes from cities. A study by the McKinsey Global
In some cases, metropolitan authorities have not had Institute (2011) asserted that 60 percent of global GDP
the foresight to benefit from their own comparative comes from 600 cities. The case of New York is in-
advantages vis--vis other metropolitan areas. This is structive. We know that the productivity of larger cities
a more realistic view than the overly optimistic per- is greater than smaller cities, despite the negative exter-
spective of Bruce Katz and Jennifer Bradley (2013) in nalities associated with congestion, crime, and pollution.
their book The Metropolitan Revolution in which they In 2002, New York accounted for about 4.5 percent of
argue that metropolitan areas are both fixing the broken U.S. economic output, or approximately US$365 billion,
political system of the United States and repairing its a small part of the more than $10 trillion U.S. economy
fragile economy. (Cohen, 2012). By 2015, the New York economy had

158 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
been transformed, with almost 20,000 start-up firms, 60 Public Finance and Public Goods
percent of which have fewer than five employees, many
of whom work in the technology and service sectors. The generation of productive employment, therefore,
The metropolitan area has reinvented itself. also depends on the existence of public goods such as
Yet even among urban specialists, housing and infrastructure, a clean environment, public space, and
infrastructure continue to dominate most urban dis- an institutional framework to regulate economic and
cussions, including in the preparations for Habitat III. social activities. These public goods are essential for
But without employment there are no incomes and no both employment and productivity. All of the above
possibility for households or firms to invest and im- depend on a third foundational element in the urban
prove their conditions. If employment is at a low level economy: the capacity to generate public revenue.
of productivity, it does not matter how much human Public goods require financial resources for invest-
energy is devoted to work, the results will not be suffi- ment and maintenance. The lack of reliable sources
cient to meet the needs of growing urban populations. of public revenue and a financial system to permit
Increasing both employment and productivity are thus long-term finance are major constraints to investment
essential foundational challenges for urban policy and in needed assets, whether for public infrastructure, pri-
macroeconomic development. vate firms, or housing for urban families. Local taxes
At the same time, it is also evident that neither employ- account for only 2.3 percent of GDP in developing
ment nor productivity can grow by itself. Employment countries compared to 6.4 percent in industrialized
requires the demand for goods and services from the countries (Bird and Bahl, 2008).
population, infrastructure, investment capital, labor This situation, however, is made further compli-
markets, and rules governing work and compensation. cated by the fact that there are also tradeoffs between
Productivity requires that these inputscapital, labor, employment and productivity. Street cleaning vehicles
land, and technologyare available in appropriate quan- are more productive than people cleaning the streets,
tities, qualities, and forms, as well as markets for goods for example, but the latter provides more employment.
and services and prices for these outputs. In addition, Labor saving technologies are heralded as being more
policy and institutional support for small and medium productive, as in agriculture where much higher levels
start-up enterprises, and the process of innovation, are of productivity have been achieved through mechani-
necessary enabling conditions to allow sufficient profits zation, but employment is reduced.
to promote the sustainability of firms. While the avail-
ability and expansion of capital and labor are important A New Definition of Productivity at
to increase production and create employment, the type
and nature of technology and the way in which capital
the Metropolitan Level
and labor are combined in the production process deter-
mines the level of productivity. When key inputs are not When considered at the metropolitan level, concerns
available, productivity of capital and labor suffer, with about increasing productivity imply that the definition
firms unable to generate profits and thus unable to create of productivity itself must change, going beyond the
more jobs (Anas and Lee, 1989). narrow definitions of productivity and competitive-
These macroeconomic processes drive produc- ness of the firm and the city toward a broader evalua-
tivity at the national level, generating both GDP per tion of the impacts of firms and sectors on the urban
capita and value-added specific goods and services. area in which they operate. This is the intersection of
Their location and interaction with urban areas is a the urban economy and metropolitan thinking.
major contributor to the profits and growth of enter- This call for a wider metropolitan definition of pro-
prises and thus to the generation of public revenue at ductivity also needs to include the positive and negative
the local level. externalities that firms and sectors generate at the city

Section 2: Sectoral approaches to metropolitan governance 159


and metropolitan levels, whether industrial pollution or activity, specifically the productivity of firms, has both
positive contributions to community health by funding positive and negative externalities, urban finance should
a community clinic. Externalities need to be identified also play a regulating function in encouraging behaviors
and quantified to the extent possible in order to assess by firms to seek positive externalities and multipliers
the total productivity of firms and sectors that include while avoiding negative externalities. Simply put, the
their effects on the city in which they operate. These challenge is to promote activities that support sustain-
broader implications of productivity are not usually ability while discouraging those that do not.
included in conventional economic notions of total
factor productivity. The Urban Economy and
It would be important, therefore, to try to assess
all of the effects of the behavior of firms and sectors
Development Strategy
on a city and a metropolitan area, indeed even on a
countrys system of cities, as carried out by Hseih and This understanding of the linkages and tradeoffs
Moretti (2015). Such an assessment suggests that the between employment, productivity, and the role of
definition of productivity needs to include its effects at urban finance is not new. At the macroeconomic
different scales. In addition, the productivity of firms level, the centrality of employment and total factor
can have both private and public components: the productivity has been studied for many years and
private relates to a firms internal costs and benefits of incorporated into macroeconomic policies and strat-
production and sales and can be measured by profits. egies for specific developing countries. The role of
But the public component, at city and metropolitan the domestic economy within development strategies
levels, may include a wide range of externalities. The and particularly the link between industrialization and
impact of these externalities affect urban public goods, development itself has also been a subject of con-
such as air quality and water pollution, as well as traffic siderable controversy for over 50 years. Historically,
levels. From this perspective, productivity may be con- the rise in the share of manufacturing in output and
sidered in part as an urban public good. This is similar employment increases as GDP per capita rises. At the
to the argument that urban density is a proxy for a set same time there has been a decline in the agricultural
of necessary urban services and interactions that make share of GDP. This has been widely identified as part
cities attractive places to live and work and, accordingly, of the urbanization process in developing economies
urban density is also a public good (Buckley, Kallergis, (Montgomery, Stren, and Cohen, 2003).
and Wainer, 2015). A key metropolitan policy priority, But this process also should be understood within
therefore, must be to find the optimal density to max- a wider development context. Hollis Chenery, the
imize productivity and employment while minimizing former Vice President for Development Policy and
or mitigating negative externalities. Research at the World Bank, posed the question,
how does this transformation of the structure of
Public Finance and Metropolitan production affect the rate of growth and the distri-
bution of benefits? (Chenery, Robinson, and Syrquin,
Productivity 1986). He also asked: How essential is industrializa-
tion for development? What is the importance of
The role of urban finance in this wider understanding changes in demand in comparison with changes in
of productivity of cities and metropolitan areas consists such supply-side factors as capital accumulation and
of both playing its traditional role of raising public reve- comparative advantage? He raised the issue of the
nue and managing public spending in the public interest relationship between growth and structural change,
and actively contributing to a virtuous cycle of local tax- and questioned the contribution of specific policies to
ation, investment, and economic growth. If economic this structural change. For example, the much-debated

160 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
issue of import substitution from the 1950s has been While lip service is given in fiscal policy debates to
shown to have specific effects on patterns of urban- increasing local public revenue, this issue has not re-
ization, helping to spatially concentrate economic ceived the priority it deserves even though more than
activities and populations in the pursuit of agglomera- a quarter of public revenue is typically generated at
tion and economies of scale. Macroeconomic policies the local level in industrialized countries (Bahl and
therefore have direct effects on the formation and lev- Linn, 1992). Urbanization should be acknowledged
el of income and productivity of metropolitan areas. as a driver of development. At the moment, urban is
These issues should be central to our under- largely missing from the global development policy
standing of urbanization as a form of structural debate and national development discourse, while
change in metropolitan demographic distribution the economy is missing from urban discussions and
and concentration, and as the differentiation of this also needs to change.
economic opportunities within specific metropol- An essential step in this recognition process is
itan areas. This wider perspective is also essential integrating the metropolitan economy into global,
to the argument that metropolitanization is part national, and local systems of diagnostics, assess-
of these structural changes, both in terms of pro- ments, and monitoring. In general, neither the met-
duction and distribution. As noted by Cimoli, Dosi, ropolitan level nor the metropolitan economy has
and Stiglitz (2009), the structure of industries is received much attention in the diagnostic tools used
reflected in the distribution of income through by governments and multilateral institutions. More
remuneration policies. The production of goods recent analytic efforts by multilateral institutions at
and services and the distribution of salaries and the metropolitan level are very welcome, but data
benefits are closely related and interdependent. The sets are only partial and often unreliable. In some
industrial structure of a metropolitan area produces cases they ignore the full range of factors, whether
a specific level and distribution of salaries that is in exogenous or endogenous. And most importantly,
turn reflected in the pattern of social stratification. there does not appear to be much attention paid
The question for metropolitan areas in developing to their outcomes for individuals, households, and
countries is whether this industrial structure is communities at the urban level.
dynamic enough to evolve and grow fast. Another It should be understood that 12 of the 17
question is whether the required quality of labor is Sustainable Development Goals adopted by the
available to integrate increasing urban populations United Nations in September 2015 are to be imple-
or whether these population increments can only mented in urban areas. This calls for a much higher
find jobs in the informal sector. level of integrated conceptual and operational
thinking: across space, institutional jurisdictions,
Conclusion disciplines, and sectors. Indeed, we should consider
what effective metropolitan practice is. While policy
While these issues have long been debated in devel- is important, in the end, practices on the ground
opment policy circles, they are relatively new in the are a far more determining factor of development
world of international urban policy where there has outcomes. This is even more evident considering
been greater focus on housing and infrastructure, the metropolitan economy. All of the above sug-
and a reluctance to regard urban areas as sites of gests that while we certainly need to address the
value creation and employment generation. Value question of what to do at the metropolitan level, it
creation includes goods, services, and investments, as will be more important to focus attention on the
well as less tangible forms such as culture and infor- how: how building metropolitan frameworks can
mation, which now account for a growing share of contribute to material improvements in the lives
urban economies (Center for an Urban Future, 2011). of urban dwellers.

Section 2: Sectoral approaches to metropolitan governance 161


References Moretti, E. (2012). The new geography of jobs. Boston, MA:
Mariner Books. Retrieved from http://www.mckinsey.
Anas, A., and Lee, K.S. (1989). Infrastructure investment com/global-themes/urbanization/urban-world-map-
and productivity: The case of Nigerian manufactur- ping-the-economic-power-of-cities
ing a framework for policy study. Review of Urban & Rojas, E., Cuadro-Roura, J. R., and Fernandez Guell, J. M.
Regional Development Studies, 1 (2), 6576. (eds). (2008). Governing the metropolis: Principles and cases.
Angel, S. (2011). Making room for a planet of cities. Cambridge: Washington, DC: Inter-American Development Bank.
Lincoln Institute for Land Policy. World Bank. (2015). Urban development overview. Retrieved
Bahl, R., and Linn, J. (1992). Urban public finance in developing from http://www.worldbank.org/en/topic/urban-
countries. New York, NY: Oxford University Press. development
Bird, R., and Bahl, R. (2008). Subnational taxes in de-
veloping countries: The way forward. (Institute for
International Business Working Paper Series IIB
No.16). Retrieved from http://papers.ssrn.com/sol3/
papers.cfm?abstract_id=1273753
Buckley, R., Kallergis, A., and Wainer, L. (2015). The housing
challenge: Avoiding the ozymandias syndrome. New York,
NY: The Rockefeller Foundation.
Chenery, H., Robinson, S., and Syrquin, M. (1986).
Industrialization and growth: A comparative Study.
Washington, DC: World Bank.
Cimoli, M., Dosi, G., and Stiglitz, J. (2009). Industrial policy
and development: The political economy of capabilities accumu-
lation. London: Oxford University Press.
Cohen, M. (2002). The twin vulnerabilities: Anticipating
the urban and global. Talk to the Association of
Spanish Mayors. Bilbao, Spain.
. (2015). The Urban Economy. Paper prepared for
UN-Habitat.
Cohen, S. (1998). The contradictions of the metropolitan
imperative or vive la difference ou survive les differ-
ences? Paper presented to International Colloquium:
Cities in the 21st Century: Cities and Metropolises:
Breaking or Bridging, La Rochelle, France (October).
Dobbs, R., Smit, S., Remes, J., Manyika, J., Roxburgh, C.,
and Restrepo, A. (2011). The urban world: Mapping the
economic power of cities. McKinsey Global Institute.
Giles, D. (2011). Growth by design: The powerful impact and
untapped potential of NYCs architecture and design
sectors. New York, NY: Center for an Urban Future.
Hseih, C. T., and Moretti, E. (2015). Why do cities matter?
Local growth and aggregate growth. (NBER Working
Paper No.w21154). Cambridge, MA: National Bureau
of Economic Research.
Katz, B., and Bradley, J. (2013). The Metropolitan revolu-
tion: How cities and metros are fixing our broken pol-
itics and fragile economy. Washington, DC: Brookings
institution.
Montgomery, M., Stren, R., Cohen, B., and Reed, H. E.
(eds). (2003). Cities Transformed: Demographic change and
its implications in the developing world. Washington, DC:
National Research Council.

162 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
2.2 Metropolitan Governance for Land Use:
Current Practices and Alternative Approaches
Cynthia Goytia (Torcuato Di Tella University)

Abstract

The centrality of land use to many decisions that affect metropolitan urban development is often
underestimated. Yet there are limits to economic, social, and environmental sustainability that can be
prolonged by poor governance of land use. Rapid urbanization is often accompanied by short-term,
uncoordinated sprawling land development, leading to inefficient and inequitable socioeconomic out-
comes and affecting the spatial distribution of public urban infrastructure and services. A prime role
for land use norms and regulations is to facilitate synergies from different land uses while preventing
negative externalities. Yet, there are unintended effects. This chapter analyzes the effects of uncoor-
dinated land use on economic, social, and environmental sustainability. It specifies urban policy tools
used to improve the governance of land use in metropolises, discusses alternative policies and their
implementation, and presents some institutional framework options to support a changing approach.
Particularly, it highlights the role of national governments in promoting such structuresin the form
of incentives or regulationsto try to boost the sustainability of urbanization in metropolises.

By 2050, will metropolises be sustainable and equita- the benefits of agglomeration and increasing urban-
ble? Considering the extent of metropolitan growth ization costs.
in recent decades, the centrality of land use planning As a result of the sustainability challenges related
and regulation to many decisions that affect economic, to metropolises in transition, this chapter aims to
social, and environmental sustainability of metropo- answer two central questions: What are the effects
lises is often underestimated. Indeed, there are severe of uncoordinated land use planning and regulation
limits to sustainable development that are prolonged on metropolitan economic, environmental, and so-
by uncoordinated land use planning. One key fact is cial sustainability? And, how can public policies help
that, for a given population size, a metropolitan area achieve balanced sustainable metropolitan growth? In
with twice the number of municipalities is associated answering these questions, the chapter explores three
with around 6 percent lower productivity. Indeed, this main barriers to metropolitan sustainability associated
effect is mitigated by almost half by the existence of with uncoordinated land use planning and regulation.
a governance body at the metropolitan level (Ahrend, First, the author explains that uncoordinated land
Gamper, and Schumann, 2014). Not surprisingly, the use management affects the economic sustainabil-
fragmentation of metropolitan land use planning can ity of metropolises by minimizing the chances of
minimize the chances of achieving the very agglom- achieving the very agglomeration economies that
eration benefits of firm co-location and economies give metropolises their strength while heightening
of scale that give metropolises their strength. It can congestion costs and productivity losses associated
inadvertently encourage unnecessary urban sprawl, with insufficient articulation between places of res-
insufficient or irrational allocation of infrastructure idence and places of income generation (Rosenthal
and public services, traffic congestion and poor ac- and Strange, 2004; Puga, 2010; Combes, Duranton,
cessibility, pollution, and segregation, undermining and Gobillon, 2011).

Section 2: Sectoral approaches to metropolitan governance 163


Second, she highlights that harmonized urban zones, both multi-family and single-family housing,
growth and transportation planning requires infra- commercial uses and firms (including manufacturing
structure investments that cross municipal boundaries and services), public space, transport and public in-
with very real needs for land use coordination for their frastructure, and all other goods and services. From
approval and construction. But even more important a households perspective, the metropolitan spatial
is that uncoordinated land use regulation across a structure critically affects accessibility, not only to
metropolis can lead to urban sprawl or excessive den- potential jobs and labor market opportunities, but also
sities with the attendant increase in per capita costs in to other services that are essential for their welfare,
providing basic services and infrastructure (Libertun such as education and health, recreational activities
and Guerrero Compean, 2016). In addition, coordi- and green spaces, cultural activities, and consumer
nated land use regulation across the municipalities markets. At the same time, this metropolitan spatial
of a metropolis present investors with a predictable structure affects firms access to employees, consum-
investment framework conducive to spatially rational ers, and inputs that impact the economic sustainability
outcomes guarding the efficiency of the spatial form of metropolises.
that emerges or the negative externalities associated Second, land use management is economically
with mis-specified regulation. important as large investments in new housing and in-
The third major effect of uncoordinated land use frastructure must be made to accommodate the demo-
planning and regulation is the environmental sustain- graphic growth of metropolises. For instance, various
ability of metropolises. To understand why we expect levels of the U.S. government spend more than $200
uncoordinated land use planning and regulation to billion every year to maintain and expand road infra-
matter, returning to the fragmentation of the exten- structure (Duranton, 2013). Given that most of these
sive urban footprint is useful. Environmental issues investments are extremely durable, it is important to
such as watershed and flood management cannot be plan them properly and, for this, land use regulation is a
adequately addressed at the municipal level only be- key policy area that needs coordinated efforts. Yet, rapid
cause the land use footprint of watersheds and water urbanization tends to prioritize short-term uncoordi-
courses do not respect municipal boundaries. nated metropolitan land development over a long-term
Discussing the effects of uncoordinated land use spatial vision, leading to suboptimal and often inequita-
and regulation is incomplete if their strong effects ble outcomes. Moreover, local land uses disconnection
on the social sustainability of the metropolises are to other sectoral areassuch as transportation, housing,
ignored. This is the third key sustainability dimension. or urban financehas restricted the practice of urban
Land use planning and regulation can be mis-specified planning to a narrow performance without the inte-
or deliberately formulated to exclude specific socio- grated approach that is required to achieve far-reaching
economic groups from certain parts of the metropolis, effects on metropolitan sustainability.
severely affecting their quality of life, including their The three engines of sustainabilityeconomic,
access to economic opportunity, quality services, and social, and environmentalthat are explored here are
public spaces. The result can exacerbate inequality not exclusive: other potential drivers of unsustainable
and socioeconomic segregation with some of the development, such as the quality of institutions, may
attendant social ills, such as urban crime. also matter. Whether new encompassing forms of
Being able to answer these questions related to the metropolitan land use planning and regulation are
sustainability challenges involving metropolitan land needed to support economic, social, and environmental
use management is important for at least two reasons. sustainability raises the question of what institutions
First, land use regulation and its coordination defines are required and how they need to be framed. Even
the way the urban spatial structure of metropolises though the effort to build metropolitan governments
is framed. It determines the location of residential largely failed in some countries, there are successful

164 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
experiments that illustrate new modalities for building uncoordinated regulation within a metropolitan area
metropolitan land use governance. In contrast to the can minimize the chances of achieving the very ag-
limited impact of formal institutional reform, during glomeration benefits of firm co-location and econ-
the past 25 years there has been considerable experi- omies of scale that give metropolises their strength.
mentation and innovation surrounding new efforts to Yet, in many metropolitan areas, regulations are
promote metropolitan land use governance by different implemented at the sub-metropolitan level by local
types of coordination agreements (Lefvre and Weir, planners who seek to maximize local welfare. If,
2012). Indeed, some evidence suggests that building for instance, congestion is mostly municipal while
enduring metropolitan institutions requires strong agglomeration effects are more diffuse, municipal
political leadership to carry the process forward.One plannerswho do not fully internalize positive met-
key debate is whether the national government should ropolitan agglomeration effectswill unduly restrict
essentially be promoting such structures in the form of development. On the contrary, if congestion is a
incentives or regulations to try to boost the sustainabil- metropolitan-wide phenomenon and agglomeration
ity of urbanization in metropolises. economies are taking place within municipalities,
Finally, given recent trends in metropolitan area local planners will induce too much development
extension, this chapter presents some innovative (Duranton, 2007). In all the cases in which the exter-
land use tools that foster coordinated urban expan- nalities that land use planning tackles are not restricted
sion and promote infrastructure investments. These by municipal boundaries, the uncoordinated maximi-
tools induce a better land use spatial structure that zation of local planners will in general be inefficient
promotes accessibility for all, while allowing funding and can promote too much or too little development,
to be allocated to urban infrastructure. In this way, hindering agglomeration economies or significantly
synchronizing extension and infrastructure enhances increasing urban costs. All these circumstances open
accessibility, increasing productivity and liveability, space for public policies of which those related to
and reducing urban costs. Based on these measures, coordinated land use regulation play an important role.
land readjustment tools that support mixed uses in
inner city areas or historic centers and planned urban
extensions widen the spectrum of land use policies Mitigating Urban Costs: Gains from
in metropolises. The author concludes that there is Improved Accessibility
a menu of metropolitan governance institutions that
can improve metropolitan governance of land use The benefits of agglomeration are just one side of the
planning to foster the economic, social, and environ- coin. The other side, the costs of urbanization, are an
mental sustainability of metropolises. essential barrier to realizing the urban agglomeration
economies that support urban productivity. One unin-
Economic Sustainability tended consequence of administrative fragmentation
and uncoordinated land use governance is unneces-
The greatest productive advantage of modern-day sary sprawl and an inefficient spatial allocation pattern
metropolises is that they form large and integrated of activities. The shift toward multi-centric, unco-
labor markets that boost productivity. The increase ordinated urban structures could in turn exacerbate
in metropolitan size expands the availability of spe- the scattered nature of new residential developments,
cialized inputs, which in turn raises the productivity thus constraining overall accessibility. Furthermore, it
of final goods production. One policy implication of can heighten congestion costs and productivity loss-
this fact is that the more integrated metropolitan labor es associated with insufficient articulation between
markets are, the more productive they are, which re- places of residence and places of income generation.
quires coordinated land use decision-making. Indeed, Consequently, coordinated land use planning should

Section 2: Sectoral approaches to metropolitan governance 165


be used to strategically ensure systematic direction Infrastructure and Urban Sprawl
and efficiencies in urban expansion since those should
extremely affect accessibility and urban costs. Metropolitan areas are now growing at a rate faster
The second basic fact is that metropolitan produc- than their populations. A sprawling development
tivity also relies on a broad range of infrastructure in- pattern is a common spatial outcome of uncoordi-
vestmentsfrom roads to international airportsthat nated land use planning, forged when different ad-
are needed to cover the appropriate accessibility and ministrative jurisdictions within the region approve
mobility of people, goods, services, ideas, and technolo- subdivisions on greenfield areas. In such cases, each
gies. Indeed, when road infrastructure is inadequate, the jurisdiction is forced to provide new infrastructure
accessibility structure, and even congestion externalities investments (e.g., schools, roads, sewers, and police
within jurisdictions, are disturbed. Consequently, devel- and fire protection). As many of these are smaller,
oping an efficient metropolitan urban structure driven previously rural jurisdictions, they are often unpre-
by planned land use, transportation, and infrastructure pared to provide the required financial or structural
systems confronts policy with coordination demands. suburban services. As explained in the previous sec-
Nonetheless, it is important to keep in mind that major tion, some of these services would be better supplied
transportation and infrastructure networks are extreme- at the metropolitan level than at the local level without
ly costly investments that cross municipal boundaries economies of scale.
and require land use coordination for approval and Some aggregate figures on urban extension will help
construction. Adequate coordination facilitates timely illustrate these issues. Urban extension in cities of less
and more cost-effective infrastructure investment and developed countries increased on average by a factor
planning for large-scale metropolitan urban develop- of 3.5 between 1990 and 2015, while their populations
ment (Altshuler, Morrill, Wolman, et al., 1999). doubled. In parallel, in more developed countries, urban
Unfortunately, not all metropolises in transition territory increased by a factor of 1.8 while the population
are dealing effectively with their huge transportation increased by a factor of 1.2. Average urban densities in
infrastructure requirements. Evidence from the past cities in less developed countries were 3.3 times higher
25 years of urban extension in a global sample of than densities in more developed countries in 1990.
metropolises shows a significant gap in the amount of Between 1990 and 2015, urban densities in less devel-
land allocated to arterial roads within the newly built oped countries declined at an average annual rate of
expansion areas of most metropolitan areas. Using 2 percent compared to 1.5 percent in more developed
data from satellite observations, the Atlas of Urban countries (Angel, Lamson-Hall, Madrid, et al., 2016).
Expansion (2016) suggests that the fast growing During that period, urban land consumption per capita
areas of many metropolises display a notable failure in these regions increased at identical rates, the inverse
to lay out new areas for development, which results of density. Greater ratios of land consumption to popu-
in inadequate streets and roads for the accessibility lation growth increase the amount of undeveloped land
structure needed to boost agglomeration economies converted to urban areas that require increases in per
and reduce congestion costs. These issues are worse capita costs to provide basic services and infrastructure.
in metropolises of developing countries. There, the In part because economic development results in
failure to finance infrastructure in areas of urban more consumption in general and more land consump-
extension increases overall housing and urban costs tion per capita, the expansion of cities and megacities
and enhances the prevalence of informality. If not is essentially propelled by several factors besides urban
addressed by coordinated land management, this population growth. Factors include increases in income
condition can lead to serious harms on traffic conges- allowing residents to consume more land (Margo, 1992),
tion and accessibility, both very hard to rectify after technological improvements in transportation that
development has occurred. allow residents to travel to work over longer distances

166 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
(Baum-Snow, 2007), but also resistance to the densifi- against perverse incentives associated with a race to the
cation of built-up neighborhoods and even climate and bottom where neighboring municipalities in the same
topography (Burchfield, Overman, Puga, et al., 2006). metropolis compete for the same investments with little
Moreover, metropolises with more fragmented land use regard for spatial efficiency or the negative externalities
planning governance are more likely to have less dense associated with mis-specified regulation. Additionally,
suburban development in addition to favoring decen- it is necessary to ensure coordination where land use
tralized, dispersed development and sprawl (Burchfield planning and regulation policy from different local and
et al., 2006). Low-density development makes it difficult upper levels of government are consistent with each
and costly to provide bus, light rail, or metro services. other. Businesses and developers respond to incentives
The increased private car use required by dispersed and constraints, but they find uncertainty from an
urban extension leads to greater resource demands for unpredictable regulatory framework and delays very
transportation. destructive, which increases transaction costs and the
In sum, local decisions on land use regulation likelihood of irrational spatial outcomes. Both issues
related to urban extension reinforce unsustainable seem to be a fundamental argument for coordinated
spatial patterns. Further, local governments are likely metropolitan-level land use planning and greater con-
unable to coordinate and commit the funds needed to sistency in the vertical and horizontal metropolitan
support the new infrastructure. Effective governance business environment.
at the metropolitan level can reduce unnecessary ur-
ban sprawl, protect open space, and lower per capita Environmental Sustainability
infrastructure costs, all essential for the economic
sustainability of metropolises in transition. Uncoordinated land use planning and regulation af-
fects the environmental sustainability of metropolises
in different ways. First, many environmental issues,
Predictable Business Investment such as watershed and flood management, cannot ade-
Environment quately be addressed at the municipal level because the
land use footprint of watersheds and water courses do
Coordinated land use regulation across the municipalities not respect municipal boundaries.
that make up a metropolis present investors with a pre- Second, the fragmentation that inadvertently
dictable investment framework that is easy to navigate encourages urban sprawl is associated with the
in terms of transaction costs and conducive to spatially severe environmental implications of an extensive,
rational outcomes. The author already explained that unplanned urban footprint. When the amount of
uncoordinated land use planning means that different land converted from open space to residential use
local governments make independent land use decisions increases in disperse urbanization it can have negative
without much regard for how they affect or interact with environmental implications. Such extended suburban
adjacent jurisdictions or what the externalities might be areas can also cause negative externalities for individ-
for the metropolitan system. In the United States, as most ual communities and an entire region as a result of
city governments are overwhelmingly dependent on local the significant increase in land resource consumption,
property taxes, there is incentive for local governments to associated air pollution, and greenhouse gas emissions,
enact policiesparticularly favorable business incentives leading to increased urban environmental costs that
and infrastructure policiesto attract business. have long-term health effects.
One common practice in uncoordinated metropol- Third, many issues that involve climate change
itan regions is inter-jurisdictional competition to attract have metropolitan-wide consequences and require
investment from mobile firms. The major implication regional coordinated responses. Further, local insti-
is that metropolitan land use coordination guards tutions do not have adequate scope or capacity to

Section 2: Sectoral approaches to metropolitan governance 167


effectively address such problems. In preparing for groups have voiced concerns about the suburban
climate change, some priority areas for coordination exclusion of immigrant and non-traditional families.
include taking a strategic approach to land use plan- Consequently, all these facts raise questions about how
ning; providing the required infrastructure, such as equitable metropolitan spatial development patterns
dams or flood prevention sites to cope with changing are at a time when these social sustainability issues are
rainfall patterns and rising sea levels; managing natural not internalized in policymaking for land use planning.
resources sustainably; and effective planning for emer- The second fundamental feature connecting unco-
gencies. In all of these areas, coordinated planning can ordinated land use regulations to segregation is that can
reduce costs and damages and take advantage of time- it be motivated by considerations other than the need
ly adaptation action for environmental sustainability. to resolve market failures or correct for negative
externalities that increase urban costs. Several alterna-
Social Sustainability tive explanations to the motivations behind adopting
stringent local land use regulations came to be called
This section argues that public policy should focus the homevoter hypothesis. To respond to voter prefer-
more on the distributional consequences of uncoor- ences, municipalities restrict the supply of housing to
dinated metropolitan land use planning and regulation. maintain a communitys high prices for single-family
There are three central issues that support this view. homes (Fischel, 2001). Local jurisdictions have a strong
First, a stable and positive relationship between incentive to adopt zoning and development policies
administratively fragmented metropolitan areas and that exclude potential residents with incomes below
spatial segregation by income benefits patterns of ur- the median for their jurisdiction or who require more
ban development (Boulant,Brezzi, and Veneri, 2016). costly services, leading to metropolitan segregation by
Because the power to regulate land use is wielded by income. Thus, the tendency to segregate by income is
city and county or municipal governments in many exacerbated by the local nature of land use planning
metropolises, administrative fragmentation and differ- and regulation and the greater pressure from multiple
ences in service quality and local amenities (which are local interest groups on residential development.
often provided by different levels of local regulation Even in the metropolitan regions of OECD
and taxation) tend to exacerbate the tendency of people countries, the emergence of residential segregation
to sort into different jurisdictions. While this sorting is between the wealthy and disadvantaged populations
sometimes desirable to enable local governments to is far from being solved. Some figures can help to
specialize in the services that are more appropriated for illustrate this. In metropolitan areas of the United
each group, it can also generate inefficient patterns of States, households in the 90th income percentile are
urban development, which may cause sprawled, frag- more than twice as segregated as those in the 10th
mented, and dispersed urban extension and segregation. percentile (Reardon, Firebaugh, OSullivan, et al.,
The evidence suggests that jurisdictional frag- 2006) while segregation levels are quite similar for the
mentation promotes racial segregation (Altshuler et 30th to the 70th percentiles (Lens and Monkkonen,
al., 1999; Powell, 2002) or leaves some jurisdictions 2016). In Hong Kong (Monkonnen and Zang, 2014)
with a disproportionate share of needy populations, and the Buenos Aires Metropolitan Region (Goytia
causing segregation by income (Pagano, 1999). Local and Pasquini, 2013), segregation levels are lowest for
zoning causes income segregation by municipality the 20th percentile and increase rapidly as incomes
(Fischel, 2001; Lens and Monkkonen, 2016) in that grow. Spatial concentrations of poverty and wealth
suburban land use regulations lock certain minority lead to unequal access to jobs, schools, and safe
groups out of the suburbs because these regulations neighborhoods, and exacerbate negative life outcomes
(minimum lot size requirements) increase the cost of for low-income households, which can adversely af-
housing beyond what those groups can afford. Some fect the social sustainability of metropolitan regions.

168 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
Moreover, the segregation of the affluentwhich (Monkkonen and Ronconi, 2013) and higher levels of
is growing rapidly in metropolitan areasresults in informality (Goytia and Pasquini, 2013).
the hoarding of resources and amenities, and dis- Current urban planning systems, shaped by fragment-
proportionate political power. There are worries that ed and unreasonable urban norms and land use regula-
this exclusionary zoning may instead maintain land tions, have failed to respond adequately to population
development at inefficiently low levels. If this is right, growth adjustments in metropolises, especially strong
overly restrictive regulations in developed areas of demand for infrastructure and affordable housing for
metropolitan regions would be a powerful force ex- lower income households. Making matters worse, the
plaining excessive urban sprawl in undeveloped areas. underlying failure to tackle the problem at the munici-
A third key issue is that, given that cities and jurisdic- pal level increases the potential for strategic interaction
tions in metropolitan areas operate within a system, there between local jurisdictions, which aggravates the role of
is potential for strategic interaction that would exacerbate uncoordinated regulations in determining informality.
the role of regulations in price determination. As noted Again, variation in the stringency of land use regula-
byHelsley and Strange (1995), restricting growth in one tion and the level of infrastructure within jurisdictions
community also negatively affects neighboring jurisdic- creates externalities, making segregation and informality
tions by pushing growth into those areas, although not even greater. For example, such variation can engender
all regulatory interventions will have equal effects in this a pervasive tolerance toward informal development in
regard. For example, the regulatory environment of some jurisdictions while enacting even more exclusive
the central city plays an important role in metropolitan land use regulation in others. At the same time, without
segregation patterns (Lens and Monkkonen, 2016). On coordinated land use planning and regulation, if some
the other hand, increased competition for (limited) sup- metropolitan jurisdictions offer improved access to
ply causes land and housing prices to increase, making land compared to their peers, these jurisdictions are
housing costlier in the entire metropolitan area (Glaeser likely to disproportionately attract (poor) migrants.
and Ward, 2009). As such, regulations that lead to ex- If the induced population growth is higher than any
cessive stratification of the population by income may adjustment to the formal housing supply, informality
not be welfare improvements for the society or engines is likely to grow in that jurisdiction.
of social sustainability. At the same time, when more The same type of inter-jurisdictional effects must be
coordinated actionor regional governmentshave considered in the case of slum upgrading programs that
power over land use decision-making processes at the improve availability and access to local public services
metropolitan level, income segregation is significantly and amenities in situ. Pro-poor land interventions in
lower. Taken together, this suggests strong arguments single jurisdictions, rather than coordinated at the met-
to push for greater metropolitan land use coordination ropolitan level, may attract the poor and increase slums
(Lens and Monkkonen, 2016). in that jurisdiction. Thus, the lack of metropolitan
The resilience of informality is emblematic of met- coordination might undermine the benefits as a result
ropolitan areas in developing countries. Characterized of improvements to informal settlements.
by a duality between land with appropriate property
titles and leases and squatted land, it is fuelled by the Land Use Governance and
incapacity of local jurisdictions to finance the neces-
sary infrastructure, forcing them to enact inadequate
Institutions
local land use norms and regulations to protect areas
from further development. In fact, strict local regula- The growth of metropolises raises questions about
tions intended to provide optimal conditions for land whether new encompassing forms of land use
use and occupation have had a completely opposite planning and regulation coordination are needed
effect of lower rates of compliance with the norms to promote economic, environmental, and social

Section 2: Sectoral approaches to metropolitan governance 169


sustainability. Larger and well-coordinated metropoli- national goals, such as promoting agglomeration
tan areas that achieve economies of scale are the most economies and productivity, reducing urban costs
effective in providing services and infrastructure. Also, and increasing overall accessibility, improving eq-
there is conclusive evidence that coordination fosters uity or reducing carbon footprint, and managing
spatial equity and balanced social inclusion. watersheds and basins. Conceived as a combination
There are two essential debates related to metro- of requirementsor incentives to induce behavior,
politan governance. The first is related to the type of national policies constitute a substantial force to
institutions and the second is whether the national encourage metropolitan coordination, whether in
government should be promoting land use planning the form of incentives or regulations.
coordination structures to try to boost the economic, The main justification lies in several facts related
social, and environmental sustainability of urbaniza- to decentralization and bottom-up efforts. In many
tion in metropolitan areas. federal countries, control over land use is decen-
Regarding types of institutions, on one hand there tralized to localities and states, which enjoy formal
is government consolidation, calling for a single met- authority over land use and have long placed only
ropolitan government to promote efficient and equi- loose requirements on metropolitan coordination
table development. On the other hand, there are more (Lefvre and Weir, 2012). For instance, the U.S. bias in
flexible modalities (e.g., proposals for a polycentric favor of local control has made it an outlier in failing
approach to metropolitan governance, as envisioned to create formal metropolitan institutions. Political
by Ostrom, Tiebout, and Warren, 1961) in which local economy complexities in the context of institutional
governments cooperate with each other depending on fragmentationand the resultant diversity of power
the nature of the issue. The latter offer considerable coalitionsalso constitute a challenge for land use
variation in scale, through agreements or institutions and spatial policy coordination. In Europe, central
for ad hoc coordination, particularly the interplay be- governments have succeeded in enacting top-down
tween public and private sectors and the interaction reforms intended to generate metropolitan governing
between different levels of government (Pierre, 1999). capabilities, but in most cases the new institutions
Among these approaches, one used in many major have not taken hold. In The Netherlands, metro-
city-regions is coordination of spatial policy by for- politan governance is currently organized through
mulating land use and strategic spatial perspectives. Plusregios, bodies typically headed by the mayor of
This coordination task for the whole metropolitan the central city of the metropolitan area. In Plusregios,
area is successfully addressed by special institutional municipalities are obliged to cooperate closely on land
structures that respond to the challenge of coordi- use planning, infrastructure, and housing, as well as on
nating metropolitan spatial policies in a complicated transport and regional economic development.
multi-actor and multi-level environment. In other cases, metropolitan area governance
Regarding whether national governments should bodies are started by state law. For example, Montreal
promote such land use planning structures, there and Quebec City are the two metropolitan areas in the
are at least three main considerations related to this Province of Quebec in Canada. The Communaut
role. First, in practice, the function of the national Mtropolitaine de Qubec is an institutionalized body
government is not envisioned as imposing direc- that has powers mainly over land use planning and
tives from above but as encouraging and prodding strategic transport planning, while the Communaut
metropolitan land use and planning governance. Mtropolitaine de Montral is active on a much wider
Thus the national government can be a key actor by range, including waste management, social housing,
providing incentives or implementing regulations and environmental issues. Their powers vary greatly
to promote coordinated planning actions at the and there are large differences in their actual influence
metropolitan level that are aligned with achieving on policies (Ahrend and Schumann, 2014).

170 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
Instead, in both Europe and America, bottom-up ef- assembling land for (re)development, providing the
forts at collaboration and strategic planning characterize public infrastructure that urban growth requires, and
the contemporary process of (incrementally) building creating greater social inclusion.
metropolitan and regional institutions. In OECD coun- One tool regularly used to guide new urban devel-
tries, spatial planning and land use is a common field of opment is land readjustment. This scheme requires
cooperation after regional economics and transportation: contributions of land by local owners to a coordinat-
almost 70 percent of governance bodies work in this area, ing entity that then uses these inputs to facilitate the
and more than half of all government bodies (91 out introduction or expansion of public space, including
of 178) work on in three fields (Ahrend and Schumann, roads and truck infrastructure. In some versions, con-
2014). Some governance bodies exert centralized control tributed land that is surplus to the public space needs
over the entire planning process in a metropolitan area. is sold to help finance the cost of infrastructure and
Others merely serve to inform local governments of services. The instrument has been successfully applied
each others plans. In between those extremes, there is a in Korea, Japan, The Netherlands, India, Germany,
continuum of governance bodies with varying degrees and Colombia, among other countries. In these
of influence over the planning process. All are active in schemes, increases in land values from urbanization
the field although most have few formal competencies. typically more than compensate for the reduction in
However, a strong vertical dimension in metropol- individual land holdings. At the same time, the model
itan governance is characteristic of many Asian coun- requires managing land price expectations in the areas
tries, imposing interactions between governments and of urban expansion.
non-state actors (Pierre, 1999). For example, in Japan Another major challenge is coordinating and fi-
and Singapore, urban development policies are heavily nancing large metropolitan investments in new infra-
administered by the state (Vogel, 2010). In centralized structure to adjust to urban growth, including transit
countries like China, where they follow a state-led, systems to improve accessibility and new public spaces,
dirigiste approach, policies are enacted by the national which cannot be borne by any local government alone.
government to support inter-city coordinated devel- Coordinated planning can help not only in widening
opment. States respond to economic and political accessibility to a range of opportunities by major
pressure by adopting aggressive metropolitan devel- public transport infrastructure investments but also
opment strategies in pursuit of their goals (Ye, 2014). in encouraging mixed social and economic use in ur-
Functional and ad hoc models of metropolitan co- ban corridors. Changes in land uses and development
ordination around certain issues belong to the type of intensity or new infrastructure that raises property
pragmatic solutions that can be supported by federal values can provide potential revenue sources to meet
requirements or incentives. If effective these models the public investments required.
may mature into more integrated and enduring sys- Finally, measures aimed at helping reverse segrega-
tems of coordination (Lefvre and Weir, 2012). One tion and fostering the social sustainability of metrop-
key issue is that, in metropolises where organizations olises involve inclusionary zoning for mixed-income
responsible for metropolitan governance exist, their development. The mandatory inclusion of affordable
areas tend to be larger but they record lower levels of housing can be enforced by planning obligations or in-
urban sprawl (Ahrend and Schumann, 2014). clusionary housing zoning that prescribe the nature of
the development. Limiting the spatial concentrations
Land-Based Tools of poverty and wealth that lead to unequal access to
jobs, schools, and safe neighborhoods, and exacerbate
Metropolitan land management strategies for sustain- negative life outcomes for low-income households can
ability in the context of rapid urban transformation positively affect the long-term economic and social
need to deal with at least three main objectives: sustainably of metropolitan regions.

Section 2: Sectoral approaches to metropolitan governance 171


Conclusion Even more relevant, the author suggests that there is
space for national governments to play a central role in
In this chapter, the author reviewed key land use di- encouraging metropolitan coordinated planning action
mensions that interact in a complex manner and affect aligned with achieving national goals, such as promoting
metropolitan sustainability. Where does this leave us agglomeration economies and productivity, reducing
in terms of implications for urban policy? The first urban costs, increasing overall accessibility, improving
message should be that traditional local institutional equity, reducing the carbon footprint, and managing
structures of land use planning and regulation often do watersheds and basins. Conceived as a combination of
not correspond to the geographical extent of the dis- requirementsor incentives to induce behavior, national
tinct sustainability challenges associated with the ways policies constitute a substantial force encouraging metro-
in which land is planned. Individually, each municipality politan coordination, whether in the form of incentives
or the corresponding lowest level of local government or regulations. Especially when the frameworks for met-
is too small to provide solutions to metropolitan area ropolitan planning agencies can be complicated to put in
problems. The agglomeration benefits that are con- place, incentives from higher levels of government can
sidered the main advantage of metropolises, and the help to encourage their creation.
driver of economic sustainability in such regions, might Lastly, it is worth considering whether the 11th
be significantly diminished by fragmented governance. Sustainable Development Goal (United Nations, 2015)
Metropolitan land use planning can allow for great- and the New Urban Agenda (UN-Habitat, 2016) could
er coordination and equity in planning processes and be two valuable steps toward committing to these chal-
outcomes and can help align and finance infrastructure lenges. Calling for the adoption of socially sustainable
projects. As metropolitan coordination in land use and land management models broadens the scope from
planning is implemented more fully, it can also play a traditional conceptions of planning to highlight the
critical role in using coordinated data to help jurisdictions effects of uncoordinated land use management on key
plan to accommodate growth and density in appropriate urban economic, social, and environmental costs, such as
transportation corridors. These goals are significant given lack of accessibility, segregation, or environmental risks.
that highly fragmented governance systems contribute Enhancing socially inclusive urbanization indicates a rad-
to increasing unnecessary sprawl and congestion, and ical move away from exclusively focusing on efficiency
deepen disparities in the quality of local services, which and toward promoting inclusion and reducing wealth
both reduce productivity while increasing segregation. disparities through coordinated land use management
As a result of this complexity, the author identified related to access to urban opportunities for all, such
several coordination problems along with a range of solu- as dense labor markets, public goods and services, and
tions to the challenge of metropolitan governance. One affordable housing.
key issue is that the diversity of drivers of metropolitan
coordination suggests that there is no one solution, but References
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Section 2: Sectoral approaches to metropolitan governance 173


2.3 Developing Metropolitan Finance in the
Broader Fiscal and Institutional Context
Paul Smoke (NYU Wagner Graduate School of Public Service)

Abstract

Urban finance has received considerable attention over the years and is reemerging in 2016 as a fo-
cal area within the Sustainable Development Goals, the Financing for Development initiative, and
the dialogue around the Habitat III Conference. Although there is a well-developed framework for
designing intergovernmental and local finance systems, performance of these systems has often
failed to meet expectations. The mainstream framework focuses heavily on technical policy consid-
erations derived from public finance and fiscal federalism, as well as public management principles.
Underwhelming performance is often framed as a product of poor design and management, limited
capacity, and inadequate political will. The premise of this paper is that the conventional approach
does not sufficiently consider the larger institutional framework in which urban finance must operate,
the political economy factors underlying this framework, or the forces that shape the implementation
of even normatively well-designed reforms. Taking these considerations into account can help poli-
cymakers and practitioners understand the openings for and constraints on pursuing more effective
and sustainable urban finance reform.

The global community is dedicating substantial energy Local Development International, 2013; Ojendal and
to the task of financing sustainable development post- Dellnas, 2013; Faguet and Poschi, 2015). Performance
2015 through public and private as well as domestic challenges can reflect improper application of the
and international sources. The role of local, partic- dominant intergovernmental fiscal framework, such
ularly urban and metropolitan, governments in this as decentralizing less fiscal power than conditions
process has been given prominence as the Sustainable warrant. But the framework itself also suffers from de-
Development Goals are adopted, the Financing for ficiencies. Most critically, it is normative and narrowly
Development initiative is advanced, a strong Urban focused on technical concerns, failing to consider
Agenda surrounding the Habitat III Conference arises, key elements of country context, including political
and the urgency surrounding the need to mitigate the economy dynamics that shape system design and the
effects of climate change increases. This emerging behavior of the actors involved. The main argument
emphasis reflects an increasingly broad consensus on is that technical elements of the system are important
the need to unlock the developmental potential of and could be better designed and applied. However,
metropolitan areas and the bodies that govern them. reformersat the national and metropolitan level
Finance is obviously a critical element. need to think beyond conventional analytics to pursue
Fiscal decentralization has been a ubiquitous effective and sustainable metropolitan fiscal reform.
component of public sector and urban reform in The next section provides a short background on
developing countries. Despite advances, anticipated the key principles of fiscal decentralization and metro-
benefits have been unevenly realized and often disap- politan finance, including a very general assessment of
pointing (Connerley, Eaton, and Smoke, 2010; UCLG, how these systems look in practice. The third section
2010; Martinez-Vazquez and Vaillancourt, 2011; highlights neglected factors underlying the shape fiscal

174 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
systems take, with an emphasis on political economy view advocates empowering them as autonomous
and the lack of strategic implementation. Finally, a entities with a general mandate to provide for the
summary and some suggestions are provided regard- overall welfare of their constituents. In contrast to the
ing how to think about metropolitan finance reforms sectoral approach in orthodox thinking, it emphasizes
more productively and pragmatically. more holistic public service provision in specific ter-
ritories. This framing allows discretion to tailor plans
The Fiscal Framework and Related and budgets to local conditions (Commonwealth
Local Government Forum, 2013; Romeo, 2013).
Public Sector Reforms Proponents see this as necessary for sustainable de-
velopment, particularly for metropolitan governments.
Basic fiscal decentralization principles focus on as-
signing functions and revenues to subnational gov-
ernments. These are well documented elsewhere and Financing Routine Operations
will not be detailed here (Ahmad and Brosio, 2014).
For current purposes, it is sufficient to note the strong Central governments have intrinsic advantages in
priority placed on assigning clear functions to all lev- revenue generation due to the nature of productive
els of government and ensuring, in accordance with revenue bases and administrative considerations, while
the core finance follows function principle, that each subnational governments have an edge in providing
has sufficient resources to meet their responsibilities. a range of public services due to differences in needs
These can be in the form of tax and other revenues and preferences across jurisdictions. This situation
they generate, transfers they receive from higher levels means that intergovernmental transfers are inevitably
of government, or funds they secure from the private important, including for many metropolitan areas.
sector or other sources.
Subnational governments are often legally assigned Own-source revenues
functions seen as conceptually suitable for local pro- Although dependence on transfers is typical, there is a
vision, but there is wide variation in practice. A lack strong case for localespecially metropolitangov-
of clarity in local government powers resulting from ernments raising a significant share of their own funds.
the legal framework or the behavior of government Stronger local resource mobilization alleviates de-
actors is often a factor. Ambiguity can result in gaps mands on national budgets, links benefits and costs of
and redundancies in service delivery, complicate mobi- local services, generates funds to repay infrastructure
lization and allocation of resources, and muddle areas investment loans, and allows more national resources
of local government accountability to higher levels of to be targeted to poorer local governments, among
government and citizens. Metropolitan governments others. A range of subnational revenue instruments
are sometimes more empowered than other local is available (Bird and Slack, 2013; Martinez-Vazquez,
governments, either legally in formal fiscal frame- 2015), including property taxation, fees and charges,
works, or in practice, and by virtue of their larger licenses, and economic activity taxes. At intermediate
economies they generally have stronger revenue bases. and sometimes metropolitan levels, options include
At the same time, how overall government systems motor vehicle and natural resource revenues and
and processes are organized and managed can create some form of business or sales taxes. Other metro-
restrictions for cities and give rise to special challenges politan sources, such as land value capture, are also
of their own. emerging as promising (see below). Local add-ons
Mainstream literature frames fiscal decentraliza- to selected higher level taxes are often advised and
tion as the national assignment of specific roles and sometimes practiced, but mostly in federal or large
resources to subnational governments. A more robust countries, and typically by regional governments.

Section 2: Sectoral approaches to metropolitan governance 175


These recommended revenue sources are not very performance may be affected. In some countries,
controversial, although details of how they are struc- transfers largely target intermediate tiers, making low-
tured and managed may be. er levels, including metropolitan governments, subject
Overall, many central governments are conser- to ad hoc state or provincial decisions about how to
vative and decentralize fewer revenue sources than share national resources.
warranted by fiscal principles and local needs, al- The use of objective criteria, such as service
though experience is diverse (United Cities and Local needs or fiscal capacity, to allocate transfers among
Governments, 2010). Full local autonomy over any tax subnational governments is increasingly common.
is rare, even in metropolitan areas, but there is often Politicization can be reduced by making it evident why
some local control over rates. Pricing of major ser- each local government receives a specific amount. It
vices may be subject to regulation, with some degree is, however, important to avoid problematic incentives
of local discretion in setting user charges. created by criteria, such as subnational governments
The often high functional demands and limits relying too heavily on transfers and limiting own-
on own-source revenue result in large vertical fiscal source revenue generation.
imbalances. In many countries, subnational govern- Transfers can be unconditional or conditional. The
ments collect 10 percent or less of their total revenue. mixture reflects national goals and has implications for
If national policy adequately empowers metropolitan metropolitan governments. Unconditional transfers
governments, their superior economic bases and can enhance autonomy and redistribution, while con-
capacity could allow them more fiscal independence ditional grants better stimulate spending on national
than other subnational entities. In federal systems, the priorities. Redistributional transfers may not favor
revenue authority of metropolitan governments can metropolitan areas if they raise significant shares of
be heavily affected by state government control over their funding through local sources. Conditional trans-
sub-state revenue policies and practices. fers can assist metropolitan governments in providing
key urban services.
Intergovernmental transfers
Transfers can improve resource access, strengthen Financing development
metropolitan government autonomy, and help meet Subnational governments account for nearly two-
priority developmental and redistributional objec- thirds of public infrastructure investment global-
tives (Bird and Smart, 2002; Shah, 2013). Transfers in ly, about a third of which is financed with grants
developing countries, however, have commonly been (Martinez-Vazquez and Timofeev, 2012). In poorer
structured problematically, with wide variations in countries, grants dominate. In some cases, a single
annual funding levels, multiple programs controlled large transfer program covers both recurrent and
by different ministries, and subjective allocation of capital spending, while other countries use devel-
available funds. Competing programs can confuse opment-specific transfers, sometimes unconditional,
local officials and undermine incentives for them to but often sectoral. These may be allocated in ad hoc
perform, while subjective allocation weakens transpar- (often project specific) ways or by formula, and local
ency and complicates accountability. matching contributions may be required.
Many countries base the annual transfer pool on a There is little documentation of major transfers
share of fixed revenue to ensure predictability and sta- dedicated to metropolitan areas, but a number target
bility. This is considered preferable to determining the urban infrastructure more generally. Examples include
pool through annual budget decisions, which makes the Jawaharlal Nehru Urban Renewal Mission in
transfers more vulnerable to politics. If the transfer India (being replaced by a Smart Cities program) and
pool fluctuates significantly, as it may due to economic the Municipal Development Fund in the Philippines.
fluctuations or political dynamics, metropolitan fiscal In the past there seems to have been a lack of

176 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
prioritization in this area and perhaps a presumption issued municipal bonds. Other approaches in mul-
that major urban areas can take care of themselves. In tiple countries include co-financing initiatives, sec-
the Habitat III/SDG era, this situation may change. ondary market support, and bond banks (Giugale,
Subnational government access to capital mar- Korobow, and Webb, 2000; Kehew, Matsukawa,
kets has been important in wealthier countries but and Petersen, 2005; Petersen, 2006; Matsukawa and
limited in developing countries. Opening local bor- Habeck, 2007; UCLG, 2015).
rowing channels and promoting creditworthiness Although not covered in this chapter, publicpri-
more broadly are considered priorities (Peterson, vate partnerships can also support metropolitan
2000; Friere and Petersen, 2004; Platz, 2009). Two governments to secure the expertise and resources
mechanisms have dominated past efforts: public or they need to meet their obligations (Marin, 2009;
quasi-public municipal development banks or funds, Brinkerhoff and Brinkerhoff, 2011; Ingram, Liu, and
and private sector borrowing. The former have often Brandt, 2013). In some cases, these partnerships may
been plagued by poor performance due to weak man- involve using funds that would have been difficult to
agement or capacity and politicization, while the latter obtain without engaging a private sector partner.
was long constrained by risk.
Recent initiatives to improve subnational access to Commonly recognized challenges in designing
development finance have included issuing borrow- the fiscal framework
ing or fiscal responsibility frameworks, reinventing (on Central governments in many countries tend to respect
more market-oriented principles) quasi-public lend- core fiscal decentralization principles in defining in-
ing bodies, and opening direct capital market access tergovernmental fiscal policy, but there are challenges.
(Ingram, Liu, and Brandt, 2013; Smoke, 2013). Leaders First, even the technical aspects of design are not easy
in fiscal responsibility frameworks have included to manage. Various tradeoffs in the principles (such as
Argentina, Brazil, and South Africa. Experience with efficiencyequity) can make their application difficult
borrowing is varied. For example, in India, several and contentious, and there is often inadequate infor-
municipal corporations have raised sizable resources mation. In addition, weak capacity is recognized as a
through taxable and tax-free municipal bonds (some major constraint on effective local fiscal performance.
guaranteed). A few state entities, such as the Tamil Much attention has been directed toward capacity
Nadu Urban Development Fund and the Greater building, but concerns remain that conventional ap-
Bengaluru Water Supply and Sewerage Project, use proaches are inadequate.
pooled financing to improve municipal access to cap- Perhaps the main challenge is that, although
ital markets. Mexico has also used pooled finance, as political obstacles to productive intergovernmental
well as future flow securitization and other innovative relations are recognized, they are often framed in an
mechanisms, to facilitate municipal borrowing. ad hoc way or in terms of the nebulous claim of weak
Much borrowing in the Philippines flows through political will for local empowerment. There is growing
public agencies: the Municipal Development Fund, awareness that a more nuanced approach to political
which mixes grant and loan finance, and the Local dynamics is needed. So-called second generation
Government Unit Guarantee Corporation, a private fiscal federalism focuses on important issues beyond
entity promoted by the Development Bank of the technical concerns of first generation theory, but not
Philippines. In South Africa, most subnational bor- in an integrated way (Weingast, 2014).
rowing is from the Development Bank of Southern Beyond basic fiscal principles for sharing powers,
Africa or the Infrastructure Finance Corporation, a there is broad recognition that metropolitan finance
private entity that funds municipal lending through depends on other conditions (Connerley, Eaton, and
bond issues. A few large metropolitan municipali- Smoke 2010; Manor, 2013; Ojendal and Dellnas, 2013;
ties, including Cape Town and Johannesburg, have Faguet, 2014; Smoke, 2015). Structures and processes

Section 2: Sectoral approaches to metropolitan governance 177


of local administration and governance must be set be considered, as well as basic motivations for reform
up or modified. Metropolitan governments require and their compatibility with mainstream principles
adequate staffing, planning, budgeting, financial man- and developmental goals (Connerley, Eaton, and
agement, audit systems, and partnership frameworks. Smoke, 2010; UCLG, 2010; Brinkerhoff, 2011; Bahl,
Appropriate accountability is essential for both opera- Linn, and Wetzel, 2013).
tional and political purposes: upward, to monitor and The diversity of existing intergovernmental sys-
maintain basic processes and standards and to foster tems suggests the need to map distinctive country
national priority goals at higher levels; horizontal, landscapes that help explain the role of metropolitan
between elected subnational officials and staff; and governments. Many countries have multiple levels of
downward, to constituents. government with differences in authority and fiscal
These requirements alone are quite onerous, but importance. There may a mix of elected and admin-
there are even more elements of the broader national istrative levels that may be relatively independent or
legal framework not specific to decentralization that hierarchical. In federal countries, state governments
can influence whether metropolitan governments will may have more control over local governmentseven
be able to perform as mainstream theory envisions. larger metropolitan governmentsthan the center.
Prominent examples include basic rule of law, proper- The starting point for thinking about reform is to
ty rights, right to civic association, right to information, document and understand which levels exist, how
freedom of expression, and open media. they are currently empowered, and how they relate
to each other.
Underlying Forces that Shape If divisions of power are incompatible with fiscal
principles, are normatively desired reforms attainable?
Intergovernmental Systems The framework suggests that a centralized service
should be provided locally, but this may not be fea-
Having outlined the key principles of fiscal decentral- sible. Metropolitan governments may be kept weak
ization relevant for metropolitan governments and the by regional government pressure or because they are
larger landscape in which they are applied, this section dominated by opposition parties. If underlying forces
turns to several neglected analytical and practical con- preclude the faithful application of basic principles,
siderations, including historical trajectories and nation- prospective reformers must consider how to craft
al political economy, central government bureaucratic feasible alternatives under prevailing conditions.
dynamics, subnational context and political economy After a decision to rebalance intergovernmental
dynamics, and implementation strategy. relations is made, national politics influence the de-
gree of empowerment and autonomy of each level as
well as the processes that enable subnational entities
Recognizing Historical Trajectories and to assume new roles. Weak authority may just reflect
National Political Economy Factors a central aversion to sharing power, but pro forma
or incongruous reforms can also result from clashes
The organization of an intergovernmental system between the national legislature and executive or
and the role of the multiple actors involved needs to among interest groups. A regime may also strategically
be interpreted in terms of historical trajectories and decentralize to consolidate power. In some cases, sub-
national politics (Eaton, Kaiser, and Smoke, 2011; national governments may be able to take advantage
Smoke, 2014). Existing levels and roles of subnation- of a crisis to demand greater empowerment.
al governments are derived from a mix of tradition, The point is that intergovernmental political dy-
external and colonial influences, and demographic di- namics play a key role in shaping the system. They may
visions. In contemplating reform, these factors should be difficult to influence and/or unstable. After a crisis

178 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
or in competitive political environments, the situation Finally, international agencies can influence
can change suddenly. Powers and funds can be de- or intergovernmental policy, especially in aid-depen-
re-centralized if an opposition party gains power or dent countries (Donor Partner Working Group
a crisis emerges. Policy analysts and policymakers on Decentralization and Local Governance, 2011;
need to be mindful of pertinent political dynamics Dickovich, 2014). Agencies have enabled good in-
and what they imply for the fiscal empowerment of tergovernmental and metropolitan reforms, but non-
metropolitan governments. trivial issues persist. Despite global agreements, many
donors continue to use unsustainable institutional
arrangements and to compete with each other, rein-
Recognizing Central Government forcing policy inconsistencies generated by competing
Bureaucratic Dynamics or uncoordinated government agencies.

Although political and historical factors often deter-


mine the broad characteristics of intergovernmental Recognizing Subnational Political Dynamics
systems, detailed planning and execution of policies
is primarily done by national agencies that operate Even countries that follow normative fiscal prin-
in complex and divided bureaucratic settings (Eaton, ciples and enjoy official national commitment may
Kaiser, and Smoke, 2011). A variety of national face major performance challenges. How metropol-
agencies are often mandated to develop and/or over- itan governments use powers depends on the local
see specific aspects of intergovernmental systems. political landscape and the incentives it generates for
These actors include ministries in charge of broad local officials (Boex and Yilmaz, 2010; Brinkerhoff
subnational government policy and oversight (local and Azfar, 2010; Yilmaz, Beris, and Serrano-Berthet,
government, home affairs, or interior), agencies in 2010; Grindle, 2013; Faguet, 2014). The relative in-
charge of public administrative functions (planning, fluence of economic elites, political parties, ethnic
finance, and civil service), and sectoral agencies with groups, labor unions, civil society groups, and others
lead responsibility for specific services (e.g., education, shape the local environment. If reforms increase
health, and water). accountability and civic trust in metropolitan gov-
Even with broad national consensus, individual ernments, performance can improve, but if there is
agencies may have divergent perspectives on the capture by influential actors, corruption and poor
intergovernmental system and their role in designing outcomes can be generated.
and managing it. If inherently related policies are Elections are the foundation of local governance,
conceived separately by different agencies and/or are but their impact depends on the interaction of local
inconsistent with national policy provisionswheth- context with the national framework (Bland, 2010).
er due to inattention or strategic behaviorthe In addition, the most robust elections are a broad
ensuing policy incoherence may weaken the devel- means of downward accountability. Other account-
opment and performance of the subnational and ability mechanisms that provide more frequent input
metropolitan government system. Examples abound: into metropolitan government decisions or feedback
conflicting policies of local government and finance on performance, such as participatory planning and
ministries; unjustified control of metropolitan em- budgeting, town meetings, oversight boards, com-
ployment and expenditure policies by civil service plaint bureaus, citizen report cards, and social audit-
or sectoral bodies; disparities between metropolitan ing, have been adopted to help shape metropolitan
functions and revenues; fiscal transfers that distort fiscal behavior. Such mechanisms can improve citizen
metropolitan spending priorities or create disincen- awareness, stimulate civic engagement, and exert
tives to revenue generation. pressure for improved performance, but their effects

Section 2: Sectoral approaches to metropolitan governance 179


are uneven in practice (Boulding and Wampler 2010; elusive. Each of these arrangements reflects polit-
Brinkerhoff and Azfar, 2010; Blair, 2013). Even if ical dynamics and embedded incentives that shape
designed and used well, their impact depends on who how they operate and perform. Where other types
is involved, how they are implemented, and if the of accountability and funding channels noted above
results influence decisions. exist, the challenges for metropolitan governance and
Horizontal accountability (between elected officials finance are amplified.
and staff) is an overlooked element of the subnational
landscape. Particularly in historically centralized coun-
tries, local staff may retain strong upward linkages to Recognizing Implementation Challenges
central agencies, which can be problematic, especially
if there is dependence on transfers. This may limit Even with strong commitment and careful design of
the ability of metropolitan governments to pursue fiscal systems, implementation often receives inade-
integrated territorial development and to be responsive quate attention at both national and subnational levels.
to their constituents. Required reforms are often extensive and involve
Other concerns arise if there are multiple ac- major operational and behavioral changes. There is
countability channels. Subnational governments often growing recognition of the need to consider how new
co-exist with local offices of well-funded national systems can be adopted and sequenced strategically
agencies, and functional boundaries between them may so as to improve the quality and sustainability of out-
be unclear. Some countries establish dedicated entities comes (Smoke, 2010; Eaton, Kaiser, and Smoke, 2011;
to finance and manage specific services, potentially Bahl and Martinez-Vazquez, 2013).
complicating metropolitan government operations. If If reforms are major, central government atten-
these actors were coordinated, they could collectively tion to sequencing and coordination of national ac-
maximize their skills and resources for territorial de- tors is essential to reduce disjointed implementation.
velopment. Too often, however, roles are unclear or At one extreme, reform could involve immediate
not respected, and robust cooperation mechanisms adoption of new policy, assuming that affected
are lacking. Such a situation could confuse citizens, actors can and will comply. At the other extreme,
encourage service deficiencies and redundancies, and reform may be phased in gradually, based entirely
generate inequities. on central choices. There is a range of options in
A final issue is how to manage large metropolitan between. A developmental approach could involve
areas (Slack, 2015). In some cases, such as Cape Town, systematic (criteria-based), asymmetric empower-
a unified metropolitan government replaced multiple ment of entities with different capacities as they meet
jurisdictions and works fairly well, including through specific conditions and move at varied paces toward
innovative publicprivate partnerships. This stands assuming new roles.
in stark contrast to Manila, where the central govern- If there is fairly strong metropolitan govern-
ment created the Metropolitan Manila Development ment capacity, the framework approach provides
Authority (MMDA) to coordinate planning and service an opening for them, while a highly managed
delivery among multiple jurisdictions located in the centralized process may constrain them. An asym-
greater metro region. The MMDA is not considered metric developmental approach could also benefit
very effective because each city tends to focus on its metropolitan governments as many will have stron-
own needs, and most cooperation is based on limited ger capacity and be eligible for greater powers and
funding from the center. The situation is even more resources early on. If such an approach was poorly
complex in greater Cairo, which has five governorates defined, however, and/or became politicized, met-
(intermediate tier of administration) and eight new ropolitan governments could find it difficult to
cities with more autonomy. Coordination has been assume new powers.

180 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
Metropolitan governments also face local infrastructure (Peterson, 2009; Ingram and Hong,
challenges. Even capable governments need to 2012; Walters, 2012; World Economic Forum, 2014;
strategically roll out reforms that require adopting Suzuki, Murakami, Hong, et al., 2015). Options
new processes and developing new skills. For ex- include betterment levies and special assessments
ample, taxpayers may resist if a government tries (lump-sum levies on developers or property owners
to assume new revenue powers too rapidly. It may to finance improvements that raise property values);
be more productive to raise assessments gradually, tax increment financing (surtaxes on properties re-
perhaps attaching them to service enhancements. developed and financed from bonds issued against
Broadly speaking, metropolitan governments pur- anticipated property tax increases); and land read-
suing reform could better connect to constituents. justment (pooling land with a share sold to partially
Civic education and participatory mechanisms can finance new infrastructure).
enhance awareness, generate valuable input, and Increasing existing revenue and adopting new
improve acceptance. revenue-raising mechanisms is challenging for both
political and logistical reasons, though these can be
The Future of Metropolitan Finance reduced by strategic incrementalism and flexibility.
When increasing property valuations, for example,
If metropolitan governments are to meet demands a metropolitan government could begin with a low
to be more significant players in sustainable devel- assessment ratio and gradually raise it. Similarly, new
opment, they will often need stronger powers to act or enhanced user charges could build progressively
more vigorously and autonomously. This must occur, toward cost recovery to soften equity effects, adverse
however, within an appropriate framework of insti- changes in service use, and political resistance that
tutional structures, processes, and mechanisms for may arise from sudden large increases. Flexibility
coordination and collaboration across different levels and enhanced convenience in payment schemes
of government, within metropolitan areas, and with could also improve compliance, especially where
non-governmental partners. significant lump-sum payments are demanded, such
Central government reluctance to devolve ade- as betterment assessments or connection charges for
quate revenue powers to metropolitan governments new infrastructure.
commonly hinders their ability to perform. National There is potential benefit in tying revenue in-
policy reforms and support measures are thus typically creases more closely to improved services. Public
essential, but metropolitan governments can take education and consultation schemes can be helpful
some steps on their own. Specific actions are often in this regard. Since perceived fairness is important,
required for financing, be it own-source revenues, metropolitan governments also need to be con-
intergovernmental transfers, or borrowing. cerned about revenue rules and how they are applied
and understood. Efforts to publicize new procedures,
to adopt mechanisms for citizen appeals and com-
Own-Source Revenues plaints, and to improve enforcement consistency
could be constructive.
There is often room to improve the structure and
administration of major metropolitan revenues,
such as property taxes and user fees. There may Intergovernmental Transfers
also be legal options to piggyback on revenues
collected at higher levels or to adopt new sources. Central governments can often take the steps need-
A potentially productive but underutilized base ed to improve intergovernmental transfers. Some
is the growth in land value generated by local common reforms were noted above, such as use of

Section 2: Sectoral approaches to metropolitan governance 181


objective allocation formulas that help to meet spe- initiatives to cultivate creditworthiness are also
cific national goals and do not undermine local tax needed. An intergovernmental fiscal system should
efforts. It is also critical to ensure that development include a range of investment finance options, from
transfers do not undermine incentives for metropol- grants and subsidized loans for less creditworthy
itan governments to borrow, especially for self-fi- governments and non-self-financing projects, to
nancing infrastructure projects. As the Sustainable loan mechanisms for more fiscally robust govern-
Development Goals become more prominent, there ments and self-financing projects. Metropolitan
may be a role for dedicated intergovernmental trans- governments will often be in the best position to
fer programs that help metropolitan governments take advantage of capital market access and some of
finance key targets. the other innovations and risk mitigation strategies
A more recent innovation in revenue sharing is noted above. At the same time, pro-active support
performance-based transfers (Steffensen, 2010). By from national governments and international actors
rewarding good and penalizing poor performance, is required, and dedicated funding streams could
such transfers can push metropolitan governments to create some momentum for advancing development.
increase fiscal responsibility, to meet key development
goals, to collaborate with adjoining jurisdictions, and Conclusion
to be more responsive to their constituents. It may
be productive to include an element of negotiation There are many needs and opportunities to improve
in setting performance objectives for any given year. metropolitan finance. Understanding key constraints
If metropolitan governments have a say in defining and how to overcome them, however, is no simple
what is to be achieved, the system can move away matter. Institutional frameworks and the way metro-
from a paternalistic the center knows best approach politan governments are organized and empowered
and place more onus on metropolitan governments vary widely across and even within countries, as do
to meet agreed targets. the nature and quality of accountability mechanisms
considered essential for fiscal performance. Some
variations are rooted in historical and contextual
Subnational Borrowing realities that may be difficult or impossible to change.
Given such diversity, generalization beyond a few
There has been a growing movement to improve basic points is elusive. The core challenge is how to
subnational access to development finance, which is approach fiscal and related reforms in a particular
particularly relevant for metropolitan governments. context. Moreover, even well-conceived reforms
There are several elements: developing more robust based on applying principles in context are unlikely
fiscal responsibility guidelines and standards; reform- to succeed without sufficient effort to develop cred-
ing public lending mechanisms to operate on more ible implementation strategies.
market-based principles than previous entities of An overarching concern is that metropolitan
this nature; facilitating broader and deeper access to finance has to be interpreted in the terms of broad-
capital markets; and seeking robust ways to mitigate er institutional, territorial, and political structures;
risk, among others (Kahkonen and Guptu, 2015). A relative degrees of empowerment; vertical and
national borrowing framework needs to be in place horizontal relationships across government actors
for metropolitan governments to take advantage of (independent or hierarchical); and means for coor-
borrowing for development. dination, among others. The significance of these
For many subnational, including metropolitan, factors, how countries have dealt with them to date,
governments, creditworthiness remains a challenge. and the forces underlying what they have done will
Fiscal reforms noted above can help, but dedicated inform the prospects for improving the status quo.

182 Steering the Metropolis: Metropolitan Governance for Sustainable Urban Development
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