A new book from the World Bank, Cities in a Globalizing World – Governance, Performance and Sustainability, now translated into Chinese and launched in Shanghai today, explores the latest trends in city development in the era of globalization and highlights what local governments can do to attract investment and overcome economic challenges in their cities.

Throughout history cities have been the birthplace of globalization and the testing ground for governance and democracy. They have played an important role in shaping global decisions on trade, diplomacy, culture, and government.

Today, globalization is becoming the driving force behind economic growth and development. With increased investment, both foreign and domestic, successful cities will need to meet new job requirements, and provide security and access to services and urban infrastructure. This will present enormous performance challenges to local governments. Good governance at the city level will be critical in turning the demands and opportunities of globalization to the advantage of all urban dwellers, including the urban poor.

According to World Bank research, 55 percent of the world's population will live in urban areas by 2020. Almost 94 percent of the increase will occur in developing countries. This trend will reshape the world and make cities compete for a skilled labor force and potential investors.

How do the pressures of globalization affect the quality of life in a city? What makes some cities prosper in this new environment, while others seem to stagnate? What are the effects of globalization on city performance such as providing local services for water and sewerage, networked services such as electricity and phone lines, and globalized services like cell phones and the internet?

"The evidence, drawn from a database of more than 400 cities, suggests that improving governance at the city level makes cities better places to visit, reside or conduct business," says Frannie Léautier, Vice President of the World Bank Institute and editor of the book. "Cities in a Globalizing World seeks to understand the often highly complex connections among urbanization, globalization, and governance, by examining cases where those forces come together most successfully."

For example, researchers found that whether a city has a website with relevant and transparent information or not makes a difference in the quality of its governance. Furthermore, in cities where a citizen can get access to information on the budget (a measure of transparency and accountability) or there is information on how to start a business (a measure of good response to firms in a transparent manner), services also tend to be better. The authors indicate that good governance leads to better outcomes at the city level. 

Technology and globalization are intensively interlinked. Technology can be used to improve governance and provide better services for the people living in the city. For example, if citizens can provide their own services—such as a water-well with treated water or a small solar panel for self-generating electricity—they put less pressure on city leaders to improve the performance of infrastructure services. Thus technology is seen to have the potential to provide both the enabling environment for “voice” as well as the competitive environment for "choice."

The theoretical and empirical analyses in the book explore the possibility that well-governed cities are more global and more global cities are better governed. It discusses how the twin pressures of having to respond to stiffer competition that comes with globalization and the need for responsiveness to citizen needs that comes from good local governance work together to enhance even further the performance of cities.

The book also focuses on African cities. Africa has experienced the most rapid urbanization the world has ever seen. More than 50 percent of Africans will live in cities in the next 20 years.

"Currently over 150 million people live in slums without municipal services; and local authorities in Africa lack the appropriate resources and capacities to manage the rapid urbanization process," writes Sir Nicholas Stern, Head of Government Economic Service of the United Kingdom, in the preface to the book. "Any strategy for growth and poverty reduction must place urbanization centre stage."

Based on their research the authors of Cities in a Globalizing World make some broad policy recommendations:

•     Reforms should focus on improving national governance.

•     Governance at the local level matters significantly for urban performance, so reformist city leaders would be well advised to use the local policy and institutional levers at their disposal to translate global opportunity into local value for their citizens.

•     International financial institutions should continue to assess the quality of national governance in their member countries.

•     Countries and international organizations should develop new institutions that can operate at local, regional, national, and multinational levels.

•     Donor agencies could focus more on supporting improvements in city-level governance, for example, helping to build the skills that city managers need to take advantage of the opportunities of globalization.

•     The donor community can also contribute by working with city governments and intercity networks and partnerships to support their globalization and governance efforts.

The authors stress that the collection of more and better quality data is needed for analysis which will, in turn, improve policy design in the field of urbanization.

Cities in a Globalizing World will be of interest to students and practitioners of urban management and those concerned with globalization and the developing world.

(China Development Gateway September 22, 2006)