Cities Globalizing World 2-15-06

Embed Size (px)

Citation preview

  • 7/31/2019 Cities Globalizing World 2-15-06

    1/56

    1

    Cities in a Globalizing World:

    Governance, Performance, and Sustainability

    Frannie A. Lautier, editor and authorOther authors: Sverine Dinghem, Daniel Kaufmann,

    Andrew Lemer, Massimo Mastruzzi & Barjor Mehta

    Presentation of World Bank Institute Book:

    We are grateful to the providers of the multiple primary data sources

    that we utilized in building the city database which was utilized in the

    empirical analysis in various chapters of the book, and particularly tothe World Economic Forum (enterprise survey), the UN Observatory,

    the Taylor database, and AT Kearney/Foreign Policy.

  • 7/31/2019 Cities Globalizing World 2-15-06

    2/56

    2

    Growth of Cities, 1950-2050

    1950

    1975

    2000

    2025

    2050WorldMore developed

    regions

    Less developed

    regions

    0

    1000

    2000

    3000

    4000

    5000

    6000

    7000

    8000

    9000

    10000

    Population (millions)

    Source: World Population Prospects: The 2000 Revision, vol1, Comprehensive

    Tables (United Nations publication, Sales No. E.01.XIII.8 and Corr.1).

  • 7/31/2019 Cities Globalizing World 2-15-06

    3/56

    3

    Understanding cities

    in a globalizing world

    Cities are the birthplace of globalization

    Cities are the testing ground forgovernance and democracy

    Questions: Does globalization help or hurt cities?

    What is the role of governance in city

    performance?

    What is the impact of city performance on

    globalization?

  • 7/31/2019 Cities Globalizing World 2-15-06

    4/56

    4

    The Research

    Purpose

    To test assumptions about globalization and urbanization

    To assess policy implications of findings

    Scope

    Research is exploratory and confirmatory Data limitations make it difficult to draw valid conclusionson the impact of globalization on city performance

    The paucity of data is a key obstacle to effective policy

    design at the national and subnational level

    Opportunities for future research

  • 7/31/2019 Cities Globalizing World 2-15-06

    5/56

    5

    Research Approach

    Confirmatory Analysiswith hypothesis

    development and empirical tests Exploratory Analysisusing existing data

    bases Case Studiesdeveloping them from

    secondary and primary sources

    Theoretical Analysisgame theory,

    political economy

  • 7/31/2019 Cities Globalizing World 2-15-06

    6/56

  • 7/31/2019 Cities Globalizing World 2-15-06

    7/56

    7

    Database and Primary Data Sources

    Existing and newly collected data and indicators Kaufmann, Leautier, Mastruzzi (KLM) database at the WBI

    Primary Data sources used to construct indices and

    variables UN Observatory 1998, 4 indicators of access in 80 cities in 60

    countries

    Firm Level Survey: EOS 2003 of the World Economic Forum, 12governance indicators, 5 service access indicators, in 271 citiesin 101 countries

    Taylor database, number of companies with major offices(advertising, accounting, finance) in 261 cities in 114 countries

    A.T. Kearney/Foreign Policy. Globalization Index for 62 countries

    Mercer 2004 quality of life index in 215 cities

    CIA World Fact Book, and Heston-Summers PPP for per capita Y

    Internet search for website presence, city population, budget dataand starting a business data (WBI)

  • 7/31/2019 Cities Globalizing World 2-15-06

    8/56

    8

    Globalization of City Infrastructure:Local, Networked, and Global Services?

  • 7/31/2019 Cities Globalizing World 2-15-06

    9/56

    9

    Globalization of City Infrastructure

    Infrastructure networks are the foundations

    for urban globalization

    Infrastructure plant and service are mainly local, butdemands are increasingly global

    Vulnerability and security heighten some old conflicts

    Individual preferences vs. collective interests Meeting immediate demands vs. serving future generations

    Maintenance for daily use vs. maintenance for more security

    Globalized infrastructure requires new institutions tomanage the interface between local and global interests

  • 7/31/2019 Cities Globalizing World 2-15-06

    10/56

    10

    Local-Global conflict

    requires new institutions . . .

    For example:

    Overton Park, Memphis TN 1956: citizens block the construction of

    a highway linking Memphis to other cities to preserve a local park

    Jamuna Bridge, Bangladesh 1994-1998: locating project-affected

    people in a land-scarce country and handling environmental

    problems of river-training to construct bridge linking cities in the NWregion to Dhaka and linking Bangladesh to trade in India

    Chad-Cameroon Pipeline, 2003: extensive local and international

    consultation for environmental and social protection including offuture generations for an international financed and owned pipeline

    New institutions, operating at the community, local, national, regional and global

    levels, have to respond to preferences of various stakeholders and respect the

    hierarchy of interests.

  • 7/31/2019 Cities Globalizing World 2-15-06

    11/56

    11

    Assessing institutional performance?

    The approach Exploration of globalization and city performance

    Construct worldwide database for more than 400 cities Measure globalization at both country and city level

    Examine city governance and city performancejointly and separately

    Definition of urban governance the processes that steer and take into account the links among

    stakeholderslocal authorities, citizens, firmsto favor activeparticipation and negotiation among actors, transparent decision-

    making mechanisms, and innovation in urban managementpolicies

    Defining city governance and globalization as outcomesthat are visible to citizens allows empirical tests of thecity as a place or as an enduring performance

  • 7/31/2019 Cities Globalizing World 2-15-06

    12/56

    12

    City Performance Profiles:

    Economic Performance of Cities, 1993

    4032Informal employment (percent)

    3772,066

    Average per capita income (Q3/person

    in US$)

    1,1753,818City product per capita (1993

    US$/year/person)

    LessglobalizedMore globalized

    Cities in countries that are

    Indicator

    Source: UNCHS 1998, Global Urban Indicators.

  • 7/31/2019 Cities Globalizing World 2-15-06

    13/56

    13

    City Performance Profiles:

    Residential Density, Growth Rates, and Household Size, 1993

    53Average household size (persons)

    32Annual population growth rates

    (percent)

    25296Residential density (persons / ha)

    Less globalizedMore globalized

    Cities in countries that are

    Indicator

    City Performance Profiles: Equity in Cities, 1993

    127Income disparity (Q5/Q1)

    2726Households below poverty line

    (percent)

    Less globalizedMoreglobalized

    Cities in countries that are

    Indicator

    Source: UNCHS 1998, Global Urban Indicators.

  • 7/31/2019 Cities Globalizing World 2-15-06

    14/56

    14

    City Performance Profiles:

    Transportation, 1993

    132Other (% of total to work trips)

    2224On foot (% of total to work trips)

    711Bicycle (% of total to work trips)124Motorcycle (% of total to work trips)

    3723Bus /mini bus (% of total to work

    trips)

    714Train /tram (% of total to work trips)

    1025Private car (% of total to work trips)

    Modes of travel to work3530Mean travel time to work (minutes)

    Less globalizedMore globalized

    Cities in countries that are

    Indicator

    Note: Percentages do not add to 100 due to rounding.

    Source: UNCHS 1998, Global Urban Indicators.

    Better balance between pedestrian and

    motorized forms of travel in more globalized

    cities

  • 7/31/2019 Cities Globalizing World 2-15-06

    15/56

    15

    Urban Local Government Revenue and Capital Expenditure, 1993

    3821

    Wages in the local

    government budget

    (%)

    22104

    Local government

    capital expenditure per

    capita (1993 US$ /

    year / person)

    115266

    Local governmentrevenue per capita

    (1993 US$ / year /

    person)

    Less

    globalized

    More

    globalized

    Cities in countries that

    areIndicator

    Source: UNCHS 1998, Global Urban Indicators.

  • 7/31/2019 Cities Globalizing World 2-15-06

    16/56

    16

    City Performance Profiles:What happened in Africa?

  • 7/31/2019 Cities Globalizing World 2-15-06

    17/56

    17

    City Performance Profiles:

    The Special Case of Africa Tremendous growth of urbanization in developing countries

    Differential performance of cities: Economic performance (production, jobs, income)

    Residential density, growth, household size

    Equity

    Access to services(transport, waste management, health and education)

    City government performance

    (revenues, expenditures, wages) Safety and security (urban crime)

    African cities perform well below their counterparts in the developing world,yet post the highest growth among urban populations

    Special dilemma of Africa: urbanization without globalization

    high urban growth not accompanied by the corresponding rapid economic growth

    Possible to test hypotheses in Africasince there is high urbanization withlow globalizationrelating to locus of policy decisions with respect to cities

  • 7/31/2019 Cities Globalizing World 2-15-06

    18/56

    18

    City-Level Performance Across Regions

    112334404262Children per primaryclassroom

    0.80.455812Child mortality (percentof children< 5 yrs.)

    Health and education in

    cities

    648718265415Waste water treated

    (percent of generated

    waste water)

    919985676536

    Regular wastecollection

    (from percent of city

    households)

    City waste management

    services

    Transitioneconomies

    Industrial

    izedcountries

    LatinAmericaAsiaPacificArabstatesAfrica

    Indicator

    Source: UNCHS 1998; Foreign Policy 2003.

  • 7/31/2019 Cities Globalizing World 2-15-06

    19/56

    19

    City-Level Performance Across Regions

    2,96222,92622508622,095682City product per capita(1993

    US$/year/person)

    Economic

    performance of cities

    7711331002343210

    Local government

    capital exp. per capita(1993 US$/year/person)

    2372763252245168215Local government

    revenue per capita

    (1993 US$/year/person)

    City government revenue, capital expenditure and wages

    Transition

    economies

    Industrial

    ized

    countries

    Latin

    America

    Asia

    Pacific

    Arab

    statesAfrica

    Indicator

    Source: UNCHS 1998; Foreign Policy2003.

  • 7/31/2019 Cities Globalizing World 2-15-06

    20/56

    20

    City Performance for Three African Countries

    by Level of Globalization: The Role of Governance?

    1002899Solid waste disposed in open dump

    (percent of total disposed waste)

    0.80.595Waste water treated

    (percent of generated waste water)

    n.a.3198Regular waste collection

    (from percent of city households)

    0.170.200.01Solid waste generated per capita

    (tons / year / person)

    285320Mean travel time to work (minutes)

    n.a.1.10.5Thefts (per 1,000 city population)

    n.a.0.020.007Murders (per 1,000 city population)

    8.15.53.5Average household size (persons)

    4.74.48.4City population growth rates

    (percent/year)

    SenegalNigeriaBotswana

    413733Indicator

    Source: UNCHS 1998, Global Urban Indicators; Foreign Policy

    2003.

    Botswana

    outperforms

    Nigeria andSenegal, both

    at higher levels

    of globalization,

    in access tolocal and

    networked

    services,

    security/safety,and other city

    characteristics

  • 7/31/2019 Cities Globalizing World 2-15-06

    21/56

    21

    62057594City product per capita

    (1993 US$/year/person

    244143

    Wages in the local

    government budget (percent)

    2.20.9181

    Local government capital

    exp. per capita

    (1993 US$/year/person)

    93250

    Local government revenue

    per capita

    (1993 US$/year/person)

    SenegalNigeriaBotswana

    413733Indicator

    City Performance for Three African Countries

    by Level of Globalization: The Role of Governance?

    Botswana

    outperforms

    Nigeria and

    Senegal both at

    higher levels of

    globalization in

    terms of local

    government

    and economic

    performance at

    the city level

  • 7/31/2019 Cities Globalizing World 2-15-06

    22/56

    22

    Globalization and City Governance:Dynamic interactions between the

    mayor, citizens, and firms?

  • 7/31/2019 Cities Globalizing World 2-15-06

    23/56

    23

    How do these outcomes come about?

    Figure 1

    Exit

    Exit Locate

    Exit

    Ignore Satisfy

    Influence

    Ignore

    Exit Locate

    Loyal

    Ignore Satisfy

    Influence

    Satisfy

    Loyal

    Exit Locate

    Exit

    Ignore Satisfy

    Influence

    Ignore

    Exit Locate

    Loyal

    Ignore Satisfy

    Influence

    Satisfy

    Voice

    Citizen's Choice

    1 2

    3

    4

    5 6

    7

    8

    9 10

    11

    12

    13 14

    15

    16

    0 Mayor

    Firm Mayor

    Citizen

    Citizen

  • 7/31/2019 Cities Globalizing World 2-15-06

    24/56

    24

    Citizens Choice

    Exit

    Ignore Satisfy

    Loyal

    Ignore Satisfy

    Voice

    Citizen's Choice

    Citizens care about quality of life

    Mayor influences quality of life and control of corruption

    Firms influence globalization

  • 7/31/2019 Cities Globalizing World 2-15-06

    25/56

    25

    Firms Options in light of Passive Citizens:

    Does it lead to bad governance?

    Exit Locate Influence

    Ignore

    Loyal

    Citizen's Choice

    5 6 7

    Citizens care about quality of life

    Mayor influences quality of life and control of corruption

    Firms influence globalization

  • 7/31/2019 Cities Globalizing World 2-15-06

    26/56

    26

    Firms Options from Voice:

    Does it lead to good governance?

    Exit Locate Influence

    Ignore

    Voice

    Citizen's Choice

    8 9 10

    Citizens care about quality of life

    Mayor influences quality of life and control of corruptionFirms influence globalization

  • 7/31/2019 Cities Globalizing World 2-15-06

    27/56

    27

    R2 = 0.3479

    90

    100

    110

    120

    1 2 3 4

    Control of Corruption

    QualityofLife

    Poor Control Good Control

    Source: Control of Corruption: KK04, 56 Quality of life: Mercer 2004, 56 cities. Mercers survey provides an

    evaluation quality of life in 215 cities. We have used the cities with the top 50 ranking in quality of life to catch

    the maximum effect of the corruption variable. The Mercer study is based on detailed assessments and

    evaluations of 39 key quality of life determinants, grouped in the following categories: political and social

    Environment; Economic environment; Socio-cultural environment; Medical and health considerations; Schools

    And Education; Public services and transportation; Recreation; Consumer goods; Housing; and Natural

    Environment. Quality of Life Index: New York City=100 (Highest: Zurich, Lowest: Brazzaville).

    Quality of Life and Control of Corruption both matter

  • 7/31/2019 Cities Globalizing World 2-15-06

    28/56

    28

    R2 = 0.1344

    10

    30

    50

    70

    90

    110

    90 100 110 120

    Quality of Life

    CityGlobalization

    Poor Quality Good Quality

    Source: Control of Corruption: KK04, 56 cities. Globaliization data taken from Taylor 2001. Globalization is

    defined as the number of international firms located in the citty. 46 'global' advanced producer service firms

    over 55 world cities. Global firms are defined by having offices in at least 15 different cities. The analysis is

    Done using the cities in the top 50 of the quality of life ranking according to Mercer 2004. An analysis done

    Using 261 cities from the Kaufmann-Leautier-Mastruzzi database indicates that when more cities are includedThe regression line is positive and significant, with good governance contributing to more globalization.

    City Globalization and Quality of Life both matter

  • 7/31/2019 Cities Globalizing World 2-15-06

    29/56

    29

    Globalization, Technology, and Scale:How do they interact?

    Patterns from History:

  • 7/31/2019 Cities Globalizing World 2-15-06

    30/56

    30

    400

    1,000

    450

    900 1,100

    23,000

    10,000

    y = -362.5x3 + 4870.8x2 - 16406x + 14071

    R2 = 0.5562

    -5,000

    0

    5,000

    10,000

    15,000

    20,000

    25,000

    0

    500

    1000

    1500

    2000

    2500

    195BCE 935 1750 1800 1975 2005775

    Decline

    Growth

    City Population (Thousands)

    Patterns from History:

    Largest City Population in the Last 5,000 Years

    Source: Population data taken from Chandler, Tertius. 1987. Four Thousand Years of

    Urban Growth: An Historical Census. Lewiston: St. Gourds.

    Decline

    Year

  • 7/31/2019 Cities Globalizing World 2-15-06

    31/56

    31

    City Size and Quality of Life

    Source: Mercer Human Resource Consulting 2002 and 200519532013

    Number

    of cities

    64.761.565.569.0

    Quality

    of Life

    (0-100)

    Megacities

    >5m

    Large

    cities

    1

  • 7/31/2019 Cities Globalizing World 2-15-06

    32/56

    32

    City Performance and City Type

    Source: UNCHS 1998, EOS-World Economic Forum 2003.

    3.03.53.53.3Internet in schools (1-7)

    3.33.33.43.2Quality of infrastructure (1-7)

    5.75.85.95.7Cell phones (1-7)

    87848190Telephone (%)

    96178106167# of cities

    76737079Electricity (%)

    65596264Water (%)

    YesNoYesNo

    CapitalPort

    Access

    to service

    Port cities have poorer access to services, except for internet, cell

    phones, quality of infrastructureall variables linked to globalizationCapital cities have better access to servicesIndication of political

    influence?

  • 7/31/2019 Cities Globalizing World 2-15-06

    33/56

    33

    City Performance and Technology

    Source: UNCHS 1998, EOS-World Economic Forum 2003.

    Technology is an enabler of voice but also provides citizens exit optionsfor self-provision (blue vs red cells)

    Transparency of information (budget and starting a business) has apositive impact on city performance

    6.05.86.15.86.15.7Cell phones (1-7)

    3.53.33.43.33.43.3Internet in schools (1-7)

    937491757675Electricity (%)

    958699869384Telephone (%)

    3.53.33.53.33.43.3Quality of infrastructure (1-7)

    12256626258210# of cities

    906292636862Water (%)

    YesNoYesNoYesNo

    Start-a-business

    info on site

    Budgeton siteWebsiteAccessto service

  • 7/31/2019 Cities Globalizing World 2-15-06

    34/56

    34

    Some Observations

    Cities play an important role in shaping global decisions(trade, diplomacy, culture, governance).

    City performance is trackable over long periods.

    Technology and globalization are intensively interlinked:

    Advances in technology influence not only globalization, but alsogovernance.

    Good performance has little to do with city size, but goodgovernance is more often obtained in large cities.

    Modeling interactions between mayors, citizens, and firms canprovides insights on the types of policies that are critical forgood city management.

    Africa has a particular pattern of urbanization andglobalization, and the lessons point to key areas for attention.

    Data weaknesses prevent us from making firmer conclusionsthat could inform better policies.

    Policy Implications:

  • 7/31/2019 Cities Globalizing World 2-15-06

    35/56

    35

    Policy Implications:

    Skills and Institutions

    Build the skills that city managers need to bettermanage the opportunities of globalization.

    Different skills are required for port cities and capitalcities.

    The donor community should work with citygovernments and intercity networks andpartnerships to support their globalization and

    governance efforts.

    Countries and international institutions shoulddevelop new institutions that can operate atlocal, regional, national, and multinational levels.

  • 7/31/2019 Cities Globalizing World 2-15-06

    36/56

    36

    Policy Implications: Africa

    Africa should continue in its process ofdecentralization, which has the potential ofyielding the benefits of both globalization andurbanization.

    Coastal and larger cities should start to play amore global or regional rather than a national

    role in order to tap into urbanization. Train city managers in Africa to better balance

    the tension between offering services that can

    make their cities attractive to foreign investment,while continuing to serve the needs of theirgrowing populations and regional economies.

  • 7/31/2019 Cities Globalizing World 2-15-06

    37/56

    37

    Globalization and City Performance:Does governance play a role?

  • 7/31/2019 Cities Globalizing World 2-15-06

    38/56

    38

    Globalization and city performance:

    The key role of governanceThe approach

    Define Globalized City as a place: location with precise boundaries but

    plugged into global flows (finance, people, products) Define Globalized city as a sustained achievement of performance

    providing services to citizens and firms over time

    City mayoras an actor who brings local value to citizens from global

    activities Citizens participate in key decision making, and the interests offirms are

    balanced with those of citizens by the city mayor= governance in the context of globalization and local interests

    The size of a city and the services it provides over time is a test ofsustainability as it interacts with other cities to which it is connected= city performance in the context of globalization

  • 7/31/2019 Cities Globalizing World 2-15-06

    39/56

    39

    Poorly governed

    local cityII

    Poorly governed

    global cityIII

    Well-governed

    global city

    IV

    Well-governed

    local cityI

    Qualityofcitygo

    vernance

    Extent of city globalization

    Highperformance

    Low

    performance

    City Governance and Globalization as Determinants

    of City Performance

    Expected

    Worst

    Performance

  • 7/31/2019 Cities Globalizing World 2-15-06

    40/56

    40

    Key Hypotheses

    Hypothesis 1: Governance matters A city can be well-performing whether local or global,

    driven by its good governance alone

    (quadrants I and IV)

    Hypothesis 2: Globalization matters

    A global city is better performing than a local city, for a

    given quality of governance(quadrants III and IV)

    Hypothesis 3: Globalization and governance

    interact positively

    There is a dynamic virtuous circle which pushes

    globalized cities to be better governed and which attracts

    further globalization in well-governed cities

    T ti th H th

  • 7/31/2019 Cities Globalizing World 2-15-06

    41/56

    41

    Testing the Hypotheses Comparison of performance for global and local cities

    Global city: multiple offices of major international advertising,accounting, and financial firms in the city

    Local city: few such offices

    City Performance is measured by access to: Local services (water, sewerage) Networked services (electricity, phone lines)

    Globalized services (cell phones, internet)

    Governance at country level is measured by: Control of corruption index

    Bribery to affect laws

    Diversion of public funds

    Illegal party financing

    Organized crime

    Governance at city level is measured by:

    Control of corruption Bribery in utility

    E t t f Cit Gl b li ti S l t d Citi

  • 7/31/2019 Cities Globalizing World 2-15-06

    42/56

    42

    Extent of City Globalization, Selected Cities

    Mon

    treal

    Ottaw

    a

    Toro

    nto

    Paris

    Zuric

    h

    New

    York

    Mad

    rid

    Barce

    lona

    Santi

    ago

    Singa

    pore

    Buda

    pest

    Athe

    ns

    M

    exico

    City

    SaoP

    aulo

    Mosc

    ow

    Mum

    bai

    New

    Delhi

    Nairo

    bi

    Lago

    s

    LevelofC

    ityGloba

    lization

    Y-axis measures (in logs) the sum of offices of accounting, advertising, financial and legal institutions in each city. Drawn

    from Taylor 2001. Total Sample: 260 cities.

    600

    15

    Ease of Starting Business Selected Cities

  • 7/31/2019 Cities Globalizing World 2-15-06

    43/56

    43

    Ease of Starting Business, Selected Cities

    0

    20

    40

    60

    80

    100

    Mon

    treal

    Ottaw

    a

    Toro

    nto

    Paris

    Zuric

    h

    New

    York

    Mad

    rid

    Barc

    elona

    Sant

    iago

    Singa

    pore

    Buda

    pest

    Athe

    ns

    Bue

    nosA

    ires

    Mex

    icoCity

    SaoP

    aulo

    Mos

    cow

    Mum

    bai

    New

    Delhi

    Nairo

    bi

    Lago

    s

    Gabo

    rone

    EaseofS

    tartingBu

    siness

    Source: EOS 2003. Question: Starting a new business in your country is generally difficult / easy. Total Sample: 271 cities.

    % Firms Rating Satisfactory (5, 6, 7)

    Bribery in Utilities Selected Cities

  • 7/31/2019 Cities Globalizing World 2-15-06

    44/56

    44

    Bribery in Utilities, Selected Cities

    0

    20

    40

    60

    80

    100

    Mon

    treal

    Ottaw

    a

    Toro

    nto

    Paris

    Zuric

    h

    New

    York

    Mad

    rid

    Barce

    lona

    Santi

    ago

    Singa

    pore

    Buda

    pest

    Athe

    ns

    M

    exico

    City

    SaoP

    aulo

    Mosc

    ow

    Mum

    bai

    New

    Delhi

    Nairo

    bi

    Lago

    s

    Gabo

    rone

    BriberyinUtilit

    ies

    Source: EOS 2003. Question: In your industry, how commonly would you estimate that firms make undocumented extra

    payments or bribes connected with Utilities. Total Sample: 271 cities.

    % Firms Reporting High Corruption (1, 2, 3)

    Variance in Governance across cities within same

  • 7/31/2019 Cities Globalizing World 2-15-06

    45/56

    45

    2

    3

    4

    5

    6

    7

    Yaounde Douala Bogota Medellin Vilnius Kaunas Madrid Barcelona

    Frequency

    ofBribery

    Variance in Governance across cities within same

    country: Bribery in Procurement as an illustration

    Source: author calculations based on EOS firm survey, WEF2003, 271 cities. Question: In your industry, how commonly firms make

    undocumented extra payments or bribes connected with awarding of public contracts? (7: very common. 1: never occur)

    High

    Bribery

    Low

    SpainColombia LithuaniaCameroon

    Quality of Infrastructure Selected Cities

  • 7/31/2019 Cities Globalizing World 2-15-06

    46/56

    46

    Quality of Infrastructure, Selected Cities

    0

    20

    40

    60

    80

    100

    Mon

    treal

    Ottaw

    a

    Toro

    nto

    Paris

    Zuric

    h

    New

    York

    Mad

    rid

    Barce

    lona

    Santi

    ago

    Singa

    pore

    Buda

    pest

    Athe

    ns

    M

    exico

    City

    SaoP

    aulo

    Mosc

    ow

    Mum

    bai

    New

    Delhi

    Nairo

    bi

    Lago

    s

    Gabo

    rone

    Qualityo

    fInfrastructure

    Source: EOS 2003. Question: General infrastructure in your country is poorly developed / among the worlds best. Total

    Sample: 271 cities.

    % Firms Rating Satisfactory (5, 6, 7)

    Quality of Life Index Selected Cities

  • 7/31/2019 Cities Globalizing World 2-15-06

    47/56

    47

    Quality of Life Index, Selected Cities

    0

    20

    40

    60

    80

    100

    Mon

    trealOt

    tawaTo

    ronto ParisZurich

    New

    YorkM

    adrid

    Barce

    lonaSa

    ntiago

    Singa

    pore

    Buda

    pestAt

    hens

    Mex

    icoCity

    SaoP

    auloM

    oscow

    Mum

    bai

    New

    DelhiNa

    irobiLagos

    QualityofLife

    Index

    Source: Mercier, 2003. Total Sample: 215 cities. Merciers survey provides an evaluation of quality of life in 215 cities. The

    study is based on detailed assessments and evaluations of 39 key quality of life determinants, grouped in the followingcategories: Political and social environment; Economic environment; Socio-cultural environment; Medical and health

    considerations; Schools and education; Public services and transportation; Recreation; Consumer goods; Housing, and

    Natural environment. Quality of Life Index: New York City = 100 (Highest: Zurich, Lowest: Brazzaville);

    Percentile Rank

    L l S iL l S i

  • 7/31/2019 Cities Globalizing World 2-15-06

    48/56

    48

    Local Services:Local Services:Access to Water, City Governance and GlobalizationAccess to Water, City Governance and Globalization

    (Non OECD Sample)(Non OECD Sample)

    20%

    100%

    AccesstoWat

    er(%)

    Poor Governance Good Governance

    Control ofCorruption

    Bribery in Utility State Capture Control ofCorruption

    Bribery in Utility StateCapture

    Local City

    Global City

    Sources: EOS 2003, UN 1998, KK 2002 & KLM 2004

    Networked Services:Networked Services:

  • 7/31/2019 Cities Globalizing World 2-15-06

    49/56

    49

    Networked Services:et o ed Se cesAccess to Electricity, City Governance and GlobalizationAccess to Electricity, City Governance and Globalization

    (Non OECD Sample(Non OECD Sample))

    50%

    60%

    70%

    80%

    90%

    100%

    Ac

    cesstoElectricity(%)

    Poor GovernanceGood Governance

    Control of

    Corruption

    Bribery in Utility State Capture Control of

    Corruption

    Bribe ry in Utility State

    Capture

    Local City

    Global City

    Sources: EOS 2003, UN 1998, KK 2002 & KLM 2004

    Globalized Services:Globalized Services:

  • 7/31/2019 Cities Globalizing World 2-15-06

    50/56

    50

    Globalized Services:Globalized Services:Access to Cell Phones, City Governance and GlobalizationAccess to Cell Phones, City Governance and Globalization

    ((Non OECD Sample)Non OECD Sample)

    3

    4

    5

    6

    7

    AccesstoCell

    Phones

    Poor Governance

    Good Governance

    Control of

    Corruption

    Bribery in Utility State Capture Control of

    Corruption

    Bribery in Utility State Capture

    Local City

    Global City

    Sources: EOS 2003, KK 2002 & KLM 2004

    High

    Low

    Control of Corruption Matters for Local,

  • 7/31/2019 Cities Globalizing World 2-15-06

    51/56

    51

    Control of Corruption Matters for Local,

    Networked, and Globalized Infrastructure Services

    1.12***

    0.98***

    1.21***

    -0.23

    0.93***

    0.82***

    0.78***

    0.04

    0.99***

    0.97***

    0.64***

    0.34*

    Full City Sample

    Global City

    Local City

    Differential

    Control of CorruptionState CaptureBribery in Utility

    GLOBALIZED SERVICE:

    INTERNET ACCESS AT SCHOOL (1-7)

    0.05***0.06**

    0.07**

    -0.01

    0.05**0.06*

    0.07*

    -0.01

    0.05**0.05

    0.05*

    0.00

    Full City SampleGlobal City

    Local City

    Differential

    Control of CorruptionState CaptureBribery in Utility

    NETWORKED SERVICE:

    ACCESS TO ELECRICITY (%)

    0.11***

    0.06*

    0.15***

    -0.09*

    0.10***

    0.04

    0.10**

    -0.06

    0.11***

    0.10*

    0.09**

    0.01

    Full City Sample

    Global City

    Local City

    Differential

    Control of CorruptionState CaptureBribery in Utility

    LOCAL SERVICE:

    ACCESS TO WATER (%)

    Significant and large

    Globalization and Governance Matter

    Si ifi t

  • 7/31/2019 Cities Globalizing World 2-15-06

    52/56

    52

    Globalization and Governance Matter

    For City Service Performance Delivery

    0.450.280.390.110.28Adjusted R-Squared

    1941941946163# of cities

    ++++/***+++/***++++/***+/**+/***Income per

    Capita

    ++++/***+/0++++/***0/*+/**Control of

    Corruption

    +++/***+/*+/*0/00/Kearney

    Globalization

    Index

    +/00/0+/00/00/0Global City (3)

    Quality of

    Infrastructure

    1-7

    Internet

    Access

    1-7

    Access to

    Telephone

    Lines

    1-7

    Access to

    Electricity

    %

    Access

    to

    Water

    %

    Dependent

    Variables

    EOS 2003EOS 2003EOS 2003UN 1998UN

    1988

    Source

    Source: Kaufmann-Leautier-Mastruzzi database

    Significant

    Determinants of Good Governance and Corruption Control:

  • 7/31/2019 Cities Globalizing World 2-15-06

    53/56

    53

    Determinants of Good Governance and Corruption Control:

    both city and country level globalization matter

    0.170.290.210.240.190.210.30Adjusted

    R-Square

    193193193193193193193# of Cities

    ++++/***++++/**

    *

    +++/***-/***++++/**

    *

    ++++/***++++/**

    *

    Kearney

    Globalization Index

    Country Variables

    ++/***++/**++/**-/**+/++/***+/GlobalCity (3)

    City Variables

    Low Illegal

    PartyFinancing

    Low

    Diversionof public

    funds

    Low

    Bribery toaffect laws

    Red Tape

    Cost ofImports

    Low

    StreetCrime

    Low

    InformalMoney

    Laundering

    Low

    Bribery inUtilities

    Dependent

    Variables

    EOS 2003EOS

    2003

    EOS

    2003

    EOS

    2003

    EOS

    2003

    EOS 2003EOS

    2003

    Source

    Source: Kaufmann-Leautier-Mastruzzi database, drawing from

    EOS-WEF 2003 as well as other sources per below. City level governance indicator = global city

    Country level governance indicator = Kearney Index

    Policy Implications: Governance

  • 7/31/2019 Cities Globalizing World 2-15-06

    54/56

    54

    Policy Implications: Governance

    Reforms needed to improve national-levelgovernance: it matters for city-level performance

    Donors/IFIs: further monitor & support governance

    Local level Governance Matters (incl. bottom-up)-- Reformist city leaders using their policy &

    institutional levers -- & working on anticorruption

    -- Donors/IFIs: more focus to support city-levelgovernance improvements [& programs]

    -- Voice and Transparency at local level:pressurefor good governance; and vs. Local Bosses

    -- IT revolution + globalized competition for investments:

    for transparency and good governance at city level

    Areas for future research

  • 7/31/2019 Cities Globalizing World 2-15-06

    55/56

    55

    Areas for future research

    Bridge data gaps and further validate initial results:-- Further collection of city level data to complement historical

    data; collect comparable cross-city data on globalization &urban governance; expand the 400-city KLM database

    -- With expanded & updated database, validate or challenge initialresearch results + shed further light on: i) links betweenglobalization, governance & city performance; ii) complex link

    between city-size and performance; iii) characteristics of urbanservices to citizens & their implications for choice; iv) interfacebetween technology and choices on voice, exit, and loyalty

    Towards methodology to capture dynamics of urbangovernance over time, (building on the game theoreticalmodel) for explaining Africa city performance

    What types of interventions at the local level can be

    particularly effective for improving governance?: voice, IT,transparency, media, scorecards, competition

    Data for Analysis and informing Policy

  • 7/31/2019 Cities Globalizing World 2-15-06

    56/56

    56

    Data for Analysis and informing PolicyAdvise, not for Precise Rankings

    Data in this presentation is from a plethora of individual

    sources, from WBIs aggregate governance indicators,

    as well as enterprise surveys (such as the WEFs EOS),and expert polls. All are subject to a margins of error. It

    is not intended for precise comparative rankings across

    countries or cities, but instead it is useful for statisticalempirical analysis to draw general insights and

    conclusions about policy and institutions, as done in

    the book chapters. The indicators do not reflect officialviews on rankings by the World Bank or its Board of

    Directors. Errors are responsibility of the authors.