This article examines the linkages between urban governance structures and an economically successful and environmentally sustainable democratic city. It will consider both developed and developing cities and the policy challenges that confront them in the twenty-first century. It is important to understand the political causes of urban economic decline, the unique fiscal and legal constraints on city governments and the opportunities for democratic participation and sustainable economic growth that only cities can offer. Urban policies or programs are only successful if they harmonize with city politics and with a city government's fiscal and operational capacity for implementation. The objective of this article is not simply to present the challenges of governing the twenty-first century city, but also to describe the structural characteristics of cities that promote democratic participation, effective urban governance and policies that support public safety, economic growth and environmental sustainability.
In the last half of the twentieth century, national policy makers in both the developed and developing world averted their attention from many of the problems facing urban areas. In the United States, the migration of the middle class out of cities after the Second World War indicated that America was becoming a suburban nation. The American Dream moved to the suburbs, where single-family homes, SUVs in the driveway and fenced-in backyards became the norm. At the same time, America's industries also abandoned cities, moving first to the suburbs and then abroad to find cheap land, cheap labor and the fewest government regulations. America's great cities were left in economic free fall, with concentrated poverty, unemployment, high crime rates, failing public schools and severely deteriorating physical infrastructure, including roads, mass transit and parks. Academics and policy makers agreed that cities were irrelevant to America's economic future; they would become places for poor minorities who could not afford to move to the suburbs. Urban policy became code for social-welfare policy. (1) Some historians have argued that national policies like the Federal Highway Act of 1957, which supported massive road construction, and the Federal Housing Administration, which promoted the construction of single-family homes over multifamily homes, contributed to suburbanization and the economic decline of America's most important cities. (2)
In American national politics, intergovernmental transfers to cities began declining in the late 1970s during the administration of President Jimmy Carter. (3) However, the real turning point was in 1984, when Ronald Reagan's reelection showed that it was possible to win a presidential campaign while losing the vote in America's major cities. (4) Afterward, urban voters were further marginalized and their issues of concern became toxic in American national politics. Even presidents like Bill Clinton and Barack Obama, whose electoral coalitions included urban voters, continued to cut funding for programs that benefited cities. Obama's current budget includes a $390 million cut to the Community Development Block Grant program, one of the few remaining federal programs that send funds directly to cities and not to states. (5) The "metropolitan area"--a geographic unit that includes a city and its surrounding suburban counties--has become the preferred unit of analysis among academics and policy analysts in Washington. (6) While metropolitan areas are important economic units and should be considered when formulating policy, very few states have created governance structures that are coterminous with metropolitan areas. Consequently, there is little operational or fiscal capacity for the government to implement metro-area policies. (7) A 2007 World Bank study of international metropolitan areas found that metropolitan governance structures are defined by political rather than economic boundaries, which would be more useful to policy makers. And given the nature of politics everywhere, these boundaries are difficult to modify. (8) Most significantly, in the places where metropolitan governments do exist, they rarely have sufficient resources or the fiscal autonomy to raise the funds they need to deliver public services. (9) It may now seem obvious that cities are crucial to the global economy, but this is a fairly new idea. It was not until the early 1990s that the academic and policy consensus in the United States shifted from the position that "cities are places where economic opportunity goes to die" to the position that "cities are the engine of the global economy." (10) At a 1997 conference in Nairobi, the United Nations Human Settlements Programme, or UN-HABITAT, formulated a global plan of action called the Habitar Agenda. The plan concluded that cities, when "properly planned and managed, hold the promise for human development and the protection of the world's natural resources through their ability to support large numbers of people while limiting their impact on the natural environment." (11)
The dramatic growth of urban populations in the United States and globally has contributed to this paradigm shift. According to the U.S. Census Bureau, the majority of Americans now live in urban areas. (12) Global policy discussions now begin with the startling facts that over hall of the world's population resides in cities and that urbanization is expected to continue unabated through the twenty-first century. (13)
As a result, cities in both the developed and developing worlds are facing many of the same challenges. Most significantly, cities worldwide cope with the highest concentrations of unemployment and poverty when national economies are weak. The dangers of environmental degradation are magnified in cities, whether they are older industrial cities in the United States and Europe or rapidly expanding cities in Asia and Latin America. Finally, a lack of public safety in cities can lead to civil unrest, political corruption and authoritarian rule. How can cities meet these public-policy challenges? They cannot be remedied by unilateral decisions made in the private sector or by civil society, particularly at the state or national level. The most effective way to address these twenty-first-century challenges is by strengthening institutions of urban governance.
STRUCTURING CITY GOVERNMENTS
The only way cities can meet the economic, environmental and security challenges of the twenty-first century is with an accountable and fair governance structure that delivers effective and efficient public services. In addition, democratic political institutions must be coterminous with the city's legal authority, its bureaucratic capacity for delivering services and its mechanisms for resource allocation. These linkages enable the citizenry to hold government accountable. According to the research done by the Global Campaign on Urban Governance and the Global Urban Observatory, the capacities of city governments to meet twenty-first-century challenges vary wildly. The Global Campaign, run by UN-HABITAT, identifies the five principles of good urban governance: effectiveness, equity, participation, accountability and security. An Urban Governance Index based on these principles was field-tested in twenty-four cities and offers a useful "starting point for local adaptation and development." (14)
However, the Global Campaign researchers acknowledge a significant limitation of their work, in that their "data does not differentiate between urban agglomeration, metropolitan and municipal areas." (15) This reflects a larger problem in the global studies of urbanization. Researchers rarely focus on the legal institutions of governance and their relationship to political participation, which makes it difficult to identify causal elements in any model of governance. If we really want to understand how democratic institutions support effectiveness and accountability in government, we must be clear about which governance entities have the legal authority to deliver services.
In much of the developing world, city-government capacity to provide basic services and build the infrastructure for supporting a robust, environmentally sustainable economy is strained or nonexistent. (16) In...