Cities, Not Nation States, Likely To Script The Next Age – Analysis


It is almost certain that cities will script the story of our future. If India is to capitalise on this megatrend, it becomes essential for the country to engage in widespread and deep reforms, which go beyond infrastructure and focus on reforming governance mechanisms and empowering local government.

By Akhil Deo

In August this year, the United Nations (UN)-Habitat, the UN’s lead agency on urbanisation, released a report, which recommended wide-ranging reforms to the institution. The significance of this report lies not only in its potential to catalyse solutions for sustainable urbanisation, but also in its recognition that cities are likely to be important actors in shaping global governance and instrumental in domestic growth.

This recognition was fuelled by two developments. The first was the rapid diffusion of power that resulted from the process of globalisation, and the second is the failure of current institutions of global governance to address some of the world’s most pressing challenges.

Unfortunately, these developments have not reinvigorated a conversation on urban governance reforms in India. If India is to emerge as a leading power, policymakers must revitalise the decentralisation agenda and empower local governments.

A changing world order

Ever since the peace of Westphalia in 1648, nation states have been the primary actors in coalescing societies. The institutionalisation of the UN only reinforced this status quo, with primacy accorded to ‘state sovereignty’. In the latter half of the twentieth century, especially following the end of the Cold War, the UN was relatively successful in ensuring peace and economic growth in many parts of the world.

The 21st century, however, has brought with it new developments and this world order is now befuddled by a myriad of challenges. On the one hand, rising inequality, populist politics, technological disruptions, climate change and immigration induced through strife in fractured states are crippling the ability of global governance institutions and nation states to act cohesively. On the other hand, citizens are increasingly frustrated with their lack of representation in these institutions, which often prioritise corporate interests and supra-national policymaking over the domestic aspirations of a nation’s constituents. The election of Donald Trump as American President and the United Kingdom’s decision to leave the European Union has only reinforced how widespread the angst against elite political classes and global governance institutions truly is.

In addition, globalisation has precipitated a rapid diffusion of power from Western countries to a wide constellation of actors. Accordingly, we now find ourselves in a ‘multiplex’ world, where actors at various levels of governance are capable of influencing global decision-making, ranging from nations themselves, powerful multinational corporations, to non-state players like the Islamic State and, perhaps most importantly, cities.

Against this backdrop, it is worth noting that centuries before the birth of the UN, powerful ‘city states’ such as Athens, Vienna and The Hanseatic league were capable of pooling their military, economic and political weight to secure their futures. In today’s world, we are witnessing a resurgence of this trend. The interlocking processes of globalisation, internet-enabled connectivity and rapid urbanisation have given rise to some ‘mega cities’, which are at the centre of commerce, growth, innovation, technology and finance.

Today, technology, economics and politics are diverting power away from the nation state and towards cities, which are likely to script the next phase of globalisation.

The future resides in cities

For the first time in history, more people live in cities than outside them — around 54% of the global population in 2014, according to the UN, a figure that is likely to grow to 60% by 2050. These urban centres are also catalysts of economic growth, with research revealing that just 600 urban centres generate about 60% of global gross domestic product (GDP). New York City’s GDP alone, for example, is just shy of Spain’s and Canada’s at $1.5 trillion, placing it among the world’s 20 largest economies.

This transformation is driving politics and economics in many parts of the world. While trust in national governments in many countries appears to be waning, citizens have consistently reported that they have faith in their local governments. Citizens of global cities such as New York and London are increasingly identifying with their local identities instead of national ones. For example, a poll in 2011 revealed that many Londoners identify with a “city state” more than they did with any national affiliation.

These results are unsurprising, considering that cities are stepping up where governments are failing. When President Trump announced America’s decision to withdraw from the Paris Climate Change Agreement, an effort led by the governors of California and New York culminated in ‘America’s pledge’ — a coalition of several states and over 200 cities, which have reaffirmed their commitment to support the emission reduction goals under the agreement.

Not only are cities increasingly emerging as concentrated centres of growth, they are also likely to be front and centre in facing some of the world’s most pressing challenges. Cities already account for 70% of global greenhouse-gas emissions and many of them are situated in coastal areas, rendering them most vulnerable to rising sea levels and adverse weather events.

Around the world, sub-national governments are responding to these challenges. Cities have taken the lead on climate change since at least 2006, when the C40 initiative brought together more than 60 local governments to promote partnerships in reducing carbon emissions. Today, more than 90 cities make up the partnership, and their commitments often significantly exceed those made by nations under international agreements.

Taking stock of these developments, the then UN secretary general Ban Ki-moon said in 2012 that “our struggle for global sustainability will be lost or won in cities.” The logic is simple: not only is it the case that more individuals today reside in urban centres, but cities also tend to be less bureaucratic and more flexible in comparison to national governments, allowing them to innovate and share best practices with each other.

Mayors from around the world are going one step further. Local leaders gathered in the Netherlands last September to discuss a new political and civil institution for cities — the Global Parliament of Mayors (GPM). A “Global Mayors Call to Action” signed by all delegates promises that participating cities will shape a “global cities rights movement” and will commit to work together in partnership with national governments, the private sector and civil society to advance agendas of international importance such as sustainable development, climate change and urbanisation.

This transformational vision is premised on the fact that cities will eventually be key actors in guaranteeing sustainable lifestyles to citizens. Accordingly, these cities are also demanding a greater voice in institutions of global governance. In 2016, when the UN-Habitat conference in Ecuador organised to discuss the implementation of the New Urban Agenda, mayors from over 500 cities released a manifesto calling for a “seat at the global table”.

Because cities are closest to citizens and more financially and technologically adept at dealing with local challenges, it is only natural that municipal governments integrate with global decision-making processes.

The UN is also responding to these demands. In September this year, a high-level panel was convened to explore how cities could contribute to the global governance agenda. The panel’s report called for a redesign of the UN-Habitat to include membership across all 193 UN states and the constitution of a new governance structure, which includes local governments.

Wither the nation state?

To be clear, the importance of nation states will not diminish overnight. Modern countries were a result of rapid industrialisation in the eighteenth century, where large bureaucracies were instrumental in pooling labour, capital and technology to drive economic growth.

However, technology today is proliferating in a distributed manner, which thrives on decentralisation. To truly benefit from interconnected communities, a rapidly-rising middle class and new forms of production fuelled by transformations in technology, it will be essential to consider a rearrangement of current political structures.

Therefore, cities are likely to supplement and support national governance structures. As former New York mayor Michael Bloomberg writes:

City leaders seek not to displace their national counterparts, …but rather to be full partners in their work — an arrangement that national leaders increasingly view as not just beneficial but also necessary.

Accordingly, an exciting new form of city politics is reshaping global governance and domestic development. As some commentators note, “glocalists” are at the forefront of negotiating new intercity relationships, charting alternative development pathways and canvassing for finance and resources alongside national governments.

Today, it is almost certain that cities will script the story of our future. If India is to capitalise on this megatrend, it becomes essential for the country to engage in widespread and deep reforms, which go beyond infrastructure and focus on reforming governance mechanisms and empowering local government.

India’s missing reforms

Despite rapid international engagement and a growing network of interconnected cities, India’s urban governance framework has not truly adapted to these transformational changes. This ignores the fact that India’s future is also decidedly urban. In 2011, it was estimated that over 400 million people, that is, 30 per cent of India’s population, lived in urban areas, and it is expected that this number will rise to over 800 million by 2050.

Some of India’s cities — such as Hyderabad, Chennai and Bengaluru — are poised to become the fastest growing in the world. Alongside these mega cities, patterns of growth suggest that India’s real urbanisation story will take place in smaller cities and towns. Many of these cities are also a part of initiatives like the C40 and the GPM. India, in fact, is currently the president of the UN-Habitat, and has supported calls for restructuring the forum to foster inclusivity of local government.

It is unfortunate then, that India’s cities and towns do not truly govern themselves. While the Indian government unveiled its ambitions ‘smart cities’ mission in late 2015, the official documents and narrative surrounding this programme make it clear that it is primarily an urban infrastructure initiative. What makes a city truly ‘smart’, however, is how effectively it is capable of exercising its powers to improve governance and the level to which it empowers participatory decision-making.

Even though the Seventy-fourth Constitutional Amendment introduced the concept of Urban Local Bodies to decentralise governance as early as 1994, its implementation has widely been acknowledged as a failure.

Stories which reveal the sorry state of affairs in Indian cities are plentiful. Unimaginative urban planning has resulted in urban sprawls, with proliferating slums and insufficient access to essential services like housing and healthcare. From Mumbai coming to a standstill every monsoon, the disappearing lakes in Bengaluru, to the polluted air in Delhi, it is becoming increasingly evident that local governments are failing their citizens.

A large part of the problem lies in the fact that under the current Constitutional framework, states have an undue influence over whether or not to devolve powers to local governments, and many local decisions have to be signed off by the state government. Municipal corporations also continue to remain under-financed, with no ability to raise tax revenue and limited bargaining power for additional financial transfers. Additionally, they continue to lack appropriate human capital, and the position of mayor is practically ceremonial.

Other developing countries have not been so slow. Mexico City, for example, was one of the first countries to adopt a constitution, guaranteeing a ‘right to the city’ to its citizens. The landmark idea, which India opposed, received recognition as a part of the UN-Habitat’s new urban agenda.

However, a note of caution needs to be struck in the Indian context. For one thing, unlike in some other parts of the world, Indians continue to bestow a high degree of trust upon their national government. While some level of paradiplomacy might be desirable, it must respect the primacy of the central government in foreign affairs. It might be useful to consider institutional mechanisms, as some commentators have argued, through which sub-national actors can engage in global governance.

Second, politics in India can often be vindictive, with different tiers of government likely to struggle over power if competing political parties are elected at various levels. Therefore, it will be necessary to create a grassroots consensus on any devolution of power. Citizens must be able to clearly distinguish between the expectations they have from the three tiers of government.

Third, the rising influence of cities has often polarised areas geographically. For example, during Brexit, there was a sharp contrast in the desires of those who resided in the more globalised cities, such as London, and those who resided in the smaller outlying regions. It will be essential to prevent these kinds of division in India, which are capable of further exacerbating inequality and religious and ethnic differences.

Nevertheless, these challenges should not detract from the fact that a failure on the part of Indian policymakers to rationally empower local governments will not only stunt India’s growth in the long run, but it will also prevent India from engaging constructively with developments in global governance.

On the other hand, a strong executive government at the municipal level can catalyse an enormous transformation in India’s politics, economics and international relations. It would result in a truly ‘bottom-up’ approach to democracy, ensuring that governments have an ear to the ground and are receptive to the needs of their citizens.

This article originally appeared in Swarajya.

Observer Research Foundation

ORF was established on 5 September 1990 as a private, not for profit, ’think tank’ to influence public policy formulation. The Foundation brought together, for the first time, leading Indian economists and policymakers to present An Agenda for Economic Reforms in India. The idea was to help develop a consensus in favour of economic reforms.

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