Urbanization and development: The enabling policy environment

Urbanization, development, and the enabling policy environment were the themes discussed in the fifth plenary session at GDN’s 13th Annual Conference, chaired by Santiago Levy (Inter-American Development Bank)

 

Mario Pezzini, Director of the OECD Development Center, offered an interesting perspective on a changing world geography, triggered by a variety of events. Pezzini posited that all countries are experiencing a new geography of growth, where the middle class is growing. A middle class from the South, or developing world, adamant on changing the status quo for the better.

He then moved on to a discussion of a number of cities, citing that each city offers a different context, making generalizations about urban phenomena hard at best. The unit of analysis in question then must depend on a variety of factors, based on the uniqueness of context.

How to manage different city models

The socioeconomic context must be considered, if cities are to be managed efficiently. That, and the need for governance solutions, as well. The competitiveness of any type of sector depends on whether the political system can provide the public goods that are required, according to Pezzini.

A paradigm shift is required to address the urban problem and build coherent policy, one addressing territories and not specific points. A regional balance also needs to be established by rebalancing the distribution of money. Investments need to be considered in bundles, paying attention to the various externalities and connections between the different sectors.

Another central theme discussed during the session was the importance of coordination between the different sectors, specifically between local and national actors, to coordinate and spread information. All of which require the presence of a strong governing body capable of making decisions for the benefit of the city and state.

A different take on urbanization

Anthony Venables, (University of Oxford), the second speaker at the session, focused on the role of housing in urbanization, with a specific focus on housing and urbanization in Africa. Venables started by analyzing some of the challenges behind developing formal private affordable mass housing in Africa and pondered why it has not happened yet. All this in an attempt to discern why this market has gone missing.

Venables discussed the importance of a well-functioning housing market, essentially why housing matters. Reasons ranged from well-being to a high share of national assets and direct job creation. Housing also translates into good infrastructure, productive cities, and it is central for economic development and growth, but more importantly many see it as a form of employment creation.

A brief expose of how London was built was offered as a point of departure. Ducal estates existed as large developers and sold leases on their land to small builders. Clarity in legal rights existed between landowners and tenants, coupled with building standards. That not only facilitated transactions, but substantially led to the success of the industry.

Today, a vibrant building industry still exists in the London context, characterized by financial innovation and allowing low middle income individuals to own property. Can the London model be replicated, though? And if so, why hasn’t it?

The 5 key conditions

Venables discussed the five key conditions needed for an effective housing market: affordability, clarity in legal rights, financial innovation, utilities and infrastructure, opportunities for employment.

The challenge with affordability in the African context is that building standards remain high where regulations are usually ignored. Property then becomes hard to value and trade. The market is also defined by formal and informal sectors that cater to different sectors, leading to a bifurcated supply.

The legal backdrop

Urban land rights in Africa have been privatized, but not yet clarified. Obtained by elites who often pay negligible property tax, the reality of the situation now dictates the need for a legal system that supports the sector. And a need for public provision, planning ahead, and building in advance. Essentially, the land market needs to regulate and prices need to reflect the right signals to avoid the urban sprawl.

The conclusion revolved around the benefits from growing formal sector private mass housing, which requires central and city government involvement and joined up policy in addition to the highest level of coordination in government.

Can cities be done the right way, though?

The third and final speaker, Thomas Sevcik, (Arthesia), asked that very question to get our minds thinking about the ideal city. He posited that growth in population cannot be absorbed just by enlarging cities and that a new age of city foundations is beginning, offering us the opportunity to do it right.

Moving on to a discussion of how mass urbanization, and massive GDP growth, lead to a new type of city-state, a growing number of cities move towards the idea of a de facto city-state as the world becomes more urbanized.

Enter the modern nation

We now have a modern globally connected network of cities with urban areas, which are gaining importance and connectivity, as boundaries slowly disappear. Sevcik discussed three types of new cities being born: the charter, the smart, and the new city.

Charter cities are largely policy-focused, attractive for talented, hard-working people, and inspired by the Singaporean model. City dwellers would essentially self-govern, generate and attract expatriates. Fake cities, also known as smart cities, are ones with no jurisdiction and are heavily reliant on technology. And finally new cities are ones that involve a lot of greenery, and are aesthetically appealing.

We need to see cities as assets, and make an effort to have reliable data on them, in the form of a city performance tracker. That would enable stakeholders to assess a city’s success in implementing policies, both in the short and long term, and create an environment where the efficiency of city governments can be judged.

 

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About Maya Madkour
I am a Sociologist, eternal optimist, and spreader of joy. I was born in London, raised in Cairo, and call Dallas my home away from home; where I have been travelling for the past fourteen years. This blog is a place where we can share insights, learn, grow and master the art of life together.

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