International Handbook of Urban Policy, Volume 2. Issues in the Developed World

INTERNATIONAL HANDBOOK OF URBAN POLICY, VOLUME 2

International Handbook of Urban Policy, Volume 2 Issues in the Developed World

Edited by

H.S. Geyer Director, Centre for Regional and Urban Statistical Exploration, Stellenbosch University, South Africa

Edward Elgar Cheltenham, UK • Northampton, MA, USA

© H.S. Geyer 2009 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical or photocopying, recording, or otherwise without the prior permission of the publisher. Published by Edward Elgar Publishing Limited The Lypiatts 15 Lansdown Road Cheltenham Glos GL50 2JA UK Edward Elgar Publishing, Inc. William Pratt House 9 Dewey Court Northampton Massachusetts 01060 USA

A catalogue record for this book is available from the British Library Library of Congress Control Number: 2007017062

ISBN 978 1 84720 459 2

02

Printed and bound by MPG Books Group, UK

Contents List of contributors Preface PART ONE 1

3 4

THE URBAN POLICY CONTEXT

Introduction: the policy context of urbanization M. Pacione

PART TWO 2

6 7 8

9

10

Differential urbanization trends in Europe: the European case E. Heikkilä and H. Kaskinoro Large urban economies: the role of knowledge and ICT infrastructure P. van Hemert, M. van Geenhuizen and P. Nijkamp World cities: organizational networking and the global urban hierarchy P.J. Taylor

11

25 46 74

FORCES OF SPATIAL ECONOMIC CHANGE

The new economic geography: a simple exposition D. Urban Land markets and their regulation: the economic impacts of planning P. Cheshire and W. Vermeulen The continuing urban form controversy: towards bridging the divide H.S. Geyer Spatial planning and institutional design: what can we expect from transaction cost economics? F. Moulaert and A. Mehmood The economy of the large European city: the social nature of articulated rationality F. Moulaert and J. Nussbaumer E-government: turning the digital divide into a digital dividend in Manchester (UK) D. Carter

PART FOUR

3

EVOLVING URBAN SYSTEMS

PART THREE 5

vii xiii

105 120 152

199

212

230

THE CHANGING DEMOGRAPHIC LANDSCAPE

International labour migration in the EU: likely social and economic implications T. El-Cherkeh

v

245

vi

Contents

12

Immigration in the USA: evolving demographic contexts, geographies and policy debates D.A. Plane and L. Hoffman Winds of change: controversies underlying the urban policy debate H.S. Geyer

13

Index

259 276

313

Contributors D. Carter. Dave is Head of the Manchester Digital Development Agency (MDDA) at Manchester City Council. MDDA coordinates informationsociety initiatives across the city-region including community-based broadband initiatives and the ONE-Manchester Digital Challenge initiative. MDDA focuses on how digital technologies can support economic regeneration and social inclusion. He was one of the founder members of the Telecities network (part of Eurocities) and first President of Telecities (1994–96). P. Cheshire. Paul is Professor Emeritus of Economic Geography at the London School of Economics and previously Professor of Urban and Regional Economics at the University of Reading. He has served as consultant nationally and internationally, including the European Commission, the UN, the World Bank and OECD. In his policy-related research he focuses on four areas: the growth and development of European cities; the economic analysis of urban land and housing markets; urban/spatial labour market analysis; and local economic development. He is the author or editor of 12 books, including the 1999 North Holland Handbook of Applied Urban and Regional Economics, and more than 100 journal articles in the field of applied urban and regional economics. He is President of the European Regional Science Association and an elected Fellow of the Academy of Social Science. T. El-Cherkeh. Tanja is head of the Migration Research Group (MRG) at the Hamburg Institute of International Economics (HWWI). Her main research focus is on the labour market integration of migrants, in particular of migrant entrepreneurs; issues in the context of migration and development; and specific aspects of female migration (such as trafficking). H.S. Geyer. Manie is the Statistics South Africa Chair of Urban and Regional Analysis and Director of the Centre of Regional and Urban Statistical Exploration at Stellenbosch University. His research interests lie in globalization, location theory, urban systems analysis, demography and migration, urban development policy and social polarization. He has published widely in these fields. He has been a visiting scholar at the University of Utah. Academically and as a consultant he has coordinated a number of governmental and academic research projects nationally and internationally. His latest edited volumes include: The International Handbook of Urban Systems (2002); Global Regionalization (2006) and The International Handbook of Urban Policy, Volume 1 (2007). E. Heikkilä. Elli is Research Director at the Institute of Migration, Finland. Her research focus is on migration and regional development, and she has participated in international research projects such as the differential urbanization and migration and labour markets in the Nordic countries. She is vii

viii

Contributors

the co-editor of the international Migration Letters journal. She was the winner of the International Prize of Environmental Creation in 2006 and since then she has held the position of professor at the Institute of Environmental Creation International. L. Hoffman. Lawrence is a Master’s student in the Department of Geography and Regional Development at the University of Arizona. His BA in Geography was awarded summa cum laude from the University of Wisconsin–Eau Claire in 2007. Hoffman’s research investigates the uneven enforcement of US immigration policy across the nation’s interior. Of particular interest are the ways that local governments construct new forms of citizenship to protect unauthorized immigrants’ rights in the face of stringent federal efforts to control the nation’s borders. H. Kaskinoro. Helena has worked as a researcher and a research assistant in the Institute of Migration, Finland. Her studies have mainly dealt with immigration and urban development. She specializes in immigration from Russia to Finland and immigrants’ issues in Finland, especially integration of young immigrants. She has also taken part as an assistant in research that dealt with the labour market position of immigrants in Finland. A. Mehmood. Abid is a postdoctoral researcher at Global Urban Research Unit, School of Architecture, Planning and Landscape, Newcastle University, UK. He has a PhD in Planning. His research interest lies in the evolutionary perspectives of spatial planning and socioeconomic development, especially in small islands and peripheral regions. He has worked on a number of UK and European Framework research projects on regional development planning, social innovation and exclusion, as well as environment, sustainability and climate change. He is co-editor (with Simin Davoudi and Jenny Crawford) of a forthcoming book, Planning for Climate Change: Strategies for Mitigation and Adaptation, to be published by Earthscan. F. Moulaert. Frank is Professor of Spatial Planning at the KU Leuven, Belgium. He obtained his PhD in Regional Science from the University of Pennsylvania. Presently he is Visiting Professor and Research coordinator at APL/GURU, Newcastle University and CNRS–IFRESI, Lille, France. Frank has coordinated seven EU-sponsored research projects on social exclusion and urban redevelopment. He received three Marie Curie Fellowships (Reggio Calabria, Lesbos, Naples) and was holder of a Leverhulme Trust Fellowship (2006–07). His recent publications address regional and urban development models of social innovation. Recent and forthcoming books include Globalization and Integrated Area Development in European Cities (2000, with Jean-Cédric Delvainquière, Christophe Demazière et al.); The Globalized City: Economic Restructuring and Social Polarization in European Cities (2003, edited with Erik Swyngedouw and Arantxa Rodriguez); La logique sociale du développement territorial (2008, with Jacques Nussbaumer); Social Innovation and Territorial Development (2009, with Diana MacCallum, Jean Hillier and Serena Vicari); and Ri-Generare la Città. Pratiche di innovazione sociale nelle città europee (2009, with Serena Vicari).

Contributors

ix

P. Nijkamp. Peter is Professor of Regional and Urban Economics and of Economic Geography at the Free University, Amsterdam. His research interests cover plan evaluation, multicriteria analysis, urban and regional planning, transport systems analysis, mathematical modelling, technological innovation and resource management. In recent years he has focused on quantitative methods for policy analysis, as well as on behavioural analysis of economic agents. He has a broad expertise in the area of public policy, services planning, infrastructure management and environmental protection. In all these fields he has published many books and numerous articles. He is a member of editorial boards of more than 20 journals and has been visiting professor in many universities all over the world. He is past president of the European Regional Science Association and of the Regional Science Association International. He is a fellow of the Royal Netherlands Academy of Sciences and the immediate past vice-president of this organization. Since June 2002 he has served as president of the governing board of the Netherlands Research Council (NWO) and has been president of the European Heads of Research Councils (EuroHORCs) since 2005. J. Nussbaumer. After a PhD on the role of culture and institutions in the debate on local development, Jacques has worked on social economy at the local level. His particular emphasis on the contribution of German economists of the nineteenth century directs his analysis towards the articulation of institutional levels, showing the necessity of a broad understanding of the way economy is woven into the formal and informal social organization of localities. M. Pacione. Michael received his PhD in 1973 and his Higher Doctorate degree from the University of Strathclyde in 2002, and is Chair of Geography at the University of Strathclyde, Glasgow. His principal research interest is in the field of urban geography. An applied or problem-oriented perspective informs much of his research activity. He has published 25 books and more than 100 research papers in an international range of academic and professional journals. His most recent books include: Britain’s Cities: Geographies of Division in Urban Britain (1997); Applied Geography: Principles and Practice (1999); and Urban Geography: A Global Perspective (2001). D.A. Plane. Dave is Professor of Geography and Regional Development, University of Arizona, Tucson, USA. He received his doctorate in regional science from the University of Pennsylvania in 1981. He served as head of Arizona’s Geography Department from 1990 to 1997. His research interests lie primarily in the area of population geography, focusing on US migration and settlement patterns, on the role of the life course in affecting mobility, and on methods for modelling temporal change in spatial interaction systems. Dr Plane has served as president of the Association of Pacific Coast Geographers, president of the Pacific Regional Science Conference Organization, chair of the North American Regional Science Council (NARSC), editor-in-chief of Papers in Regional Science and co-editor of the Journal of Regional Science. Since 1992 he has directed the Western

x

Contributors

Regional Science Association (WRSA). He has published more than 50 refereed journal articles in geography, regional science and demography, a dozen chapters in scholarly books, and a variety of other works, including Fifty Years of Regional Science (co-edited with Raymond Florax, 2004) and Classics in Planning: Regional Planning (co-edited with Lawrence Mann, Kenneth Button and Peter Nijkamp, 2007). P.J. Taylor. Peter is Professor of Geography and Director of the Globalization and World Cities (GaWC) Research Network at Loughborough University. With over 300 publications (60 translated into over 20 languages) including over 20 books, he is a world-systems analyst interested in cities and states. His latest books are World City Network: A Global Urban Analysis (2004), Political Geography: World-Economy, Nation-State and Locality (5th edn 2006, with C. Flint) and Cities in Globalization (2006, edited with B. Derudder, P. Saey and F. Witlox). He is a Fellow of the British Academy, an Academician of the Academy of Social Sciences (UK), was designated for Distinguished Scholarship Honors by the Association of American Geographers (2003), and has been awarded Honorary Doctorates by the Universities of Oulu and Ghent. D. Urban. Dieter is Professor of Economics at RWTH Aachen University, Germany. He previously held teaching and research positions at Johannes Gutenberg-University Mainz, Germany, Centrol Studi Luca d’Agliano in Milan, the London School of Economics, and Penn State University in the USA. He obtained his PhD from Copenhagen Business School, Denmark. His dissertation was on new economic geography and growth theory. He has published in several scholarly journals such as Regional Science and Urban Economics, Journal of International Economics, and Review of International Economics. M. van Geenhuizen. Marina is Professor at the Faculty of Technology, Policy and Management, and Chair of Innovation and Innovation Policy in Urban Economies at Delft University of Technology. She obtained her PhD from Erasmus University at Rotterdam and has a background in applied innovation studies in regional science. Her research interest lies in theoretical and empirical studies of innovation and incubation processes of small high-technology firms and in related policy studies. She has been editor or co-editor of five books dealing with urban innovation, transport policy and environmental policy, and author of 35 articles in refereed English journals and 60 chapters in international volumes. P. van Hemert. Patricia has a background in European studies (University of Amsterdam). She is currently working as a researcher at the Centre for Innovation and Corporate Sustainability at the Vrije Universiteit, Amsterdam. For the Department of Spatial Science she participates in two European Commission Sixth Framework Programmes: ‘Dynamic Regions in a Knowledge-Driven Global Economy: Lessons and Policy Implications for the EU (DYNREG)’, and ‘Social Sciences and Humanities Futures (SSH Futures)’. Her research interest is in theoretical and empirical studies of innovation and entrepreneurship,

Contributors

xi

and economic growth issues, and in related policy studies. She has published four international papers and in one international volume. W. Vermeulen. Wouter holds an MSc in Applied Mathematics from Utrecht University and an MPhil in Economics from the Tinbergen Institute, both in the Netherlands. Presently, he works for CPB Netherlands Bureau for Economic Policy Analysis and VU University. His research concentrates on the economic analysis of government interventions in the land market and their repercussions on the functioning of local housing and labour markets.

Preface Passion and resourcefulness are positive driving forces in scholarly endeavours. Give us a challenge and we shall find the answers, so history has taught us. But experience has also taught us that ideological conviction could be a devilish factor, one that could turn passion and resourcefulness into a negative force. Personal conviction could mean finding a way of proving or disproving a particular view even if it means slanting evidence, withholding knowledge or even using propaganda for the sake of achieving the desired result. In his brilliant A Short History of Nearly Everything Bill Bryson showed how often in the past scientific progress in particular fields of research was slowed down by controversy caused by personal convictions and academic stubbornness. This volume – the second in a series of three – attempts to engage in some measure in discourse that has proven to be contentious. While the first volume focused on issues that are globally significant and the third will look at issues in newly developed and the less developed countries, this volume focuses on issues that are relevant to policy formulation in the developed world, focusing largely on the USA and Europe. Although not all topics discussed in this volume are controversial, some certainly are. For the sake of reflecting differences of opinion, authors were asked not to shy away from controversy wherever it exists. Some tend to expose differences of opinion circuitously; others do it in a much more straightforward manner. Whatever the approach, the overall the aim of the book is to deal with all themes, even the most politically sensitive, in the true spirit of intellectual freedom. The book is divided into four parts. In the introductory chapter Michael Pacione outlines subtle differences in the mediating roles that the state can play in making capital accessible to people within different ideological policy frameworks. The second part deals with the evolution of urban systems. Since urban policy in the USA is largely individualized at the federal state level, the focus in two of the chapters in this part of the book falls on the European urban system. In the third chapter Peter Taylor looks at how the focus in world-city research has shifted from attribute to flow data in figuring out changes in the hierarchical status of cities in the global urban system. Part three deals with forces of spatial economic change. The new economic geography, land markets and controversies in the urban form debate are some of the themes dealt with in this part of the book. In the other chapters authors take a critical look at matters such as institutional design in spatial planning, the social articulation of urban economic space and realizing the information city. The last part of the book deals with the way in which migration has been changing the demographic landscape of cities in Europe and the USA in recent years. An attempt is made here to uncover some of the causes of the controversies that exist in current urban policy discourse in Europe and the USA. As in the case of the first volume, the selection of themes and the way in which the authors handle the material mean that the book should be of interest to a wide readership but particularly to those who tend to spend more time at the economics, geography and planning sections of bookstores. Constantly having to deal with heavy writing commitments is one of the burdens that xiii

xiv

Preface

those of us who are tilling the academic acres usually have to face. With this reality in mind, I want to extend a word of true appreciation to the chapter authors and co-authors who remained committed to the project despite difficult circumstances. I also want to thank the staff of Edward Elgar Publishing for their professionalism in the production of this book. H.S. Geyer December 2008

PART ONE THE URBAN POLICY CONTEXT

1

Introduction: the policy context of urbanization M. Pacione

Introduction Urban policy is concerned with the management of urban change. It is a state activity that seeks to influence the distribution and operation of investment and consumption processes in the built environment. It is important to realize, however, that urban policy is not confined to activity at the urban scale. National and international economic and social policies are as much urban policy, if defined by their urban impacts, as land use planning or urban redevelopment. In effect urban policy is often made under another name. Urban policy is dynamic. Its formulation and implementation form a continuing process, not an event. Measures that are introduced cause changes that may resolve some problems but create others for which further policy is required. Furthermore, only rarely is there a simple optimum solution to an urban problem. More usually a range of policy options exists for the consideration of decision makers and urban managers. Urban policy is the product of the power relationship between the different interest groups that constitute a particular social formation. Foremost among these actors are the state, both local and national, and capital in its various fractions. Capital and state pursue specific goals, which may be either complementary or contradictory. For capital, the prime directive is profit maximization. The state, on the other hand, in addition to facilitating the process of accumulation, must also satisfy the goal of legitimation. These political and economic imperatives have a direct influence on the nature of urban policy. Urban policy is also conditioned by external forces operating within the global economic system, as well as by locally specific factors and agents. Understanding the policy context of urbanization and urban restructuring in Western society requires a comparative examination of the particular manifestations of urban development processes in different countries and localities, informed by an appreciation of the macropolitical economy. In this introductory chapter I provide a context within which subsequent chapters in the book can be positioned and more clearly interpreted. I begin by outlining the main tenets of the capitalist development process that underwrites urban restructuring in Western cities. I then consider the relationship between ideology and urban policy, and identify different forms of urban policy. Based on this conceptual framework I discuss the particular construction of urban policy in the UK and the USA, and the significance of urban policy and planning in the reconfiguration of urban space. The discourse on urban policy and planning is interwoven with references to key processes and challenges in contemporary Western urban society – including uneven development, poverty and disadvantage, urban politics and governance, public–private partnerships and urban change, the role of property-led regeneration, the cultural economy of cities, suburbanization and urban sprawl, and sustainable urban development – all of which are amplified in the chapters that follow. 3

4

International handbook of urban policy

The restructuring of urban space Uneven development is an inherent characteristic of capitalism that stems from the propensity of capital to flow to locations that offer the greatest potential return. The differential use of space by capital in pursuit of profit creates a mosaic of inequality at all geographic levels from global to local. Consequently, at any one time certain countries, regions, cities and localities will be in the throes of decline as a result of the retreat of capital investment while others will be experiencing the impact of capital inflows (Smith and Feagin, 1987; Smith, 1988; Pacione, 1997). The older industrial cities in the advanced economies have been among the biggest losers in the global investment competition. Cities such as Pittsburgh and Cleveland, Glasgow and Liverpool have experienced the strains of recession and contraction as a result of the new international division of labour and the deindustrialization of traditional economies. In stark contrast, global command cities such as London or Tokyo are booming and experiencing the diverse problems caused by concentration of activities. Centrally planned economies have not been immune to the forces of change emanating from the operation of the global economic system either. In the former Soviet Union urban policy makers must negotiate the transition towards a ‘post-Socialist’ city, characterized by capitalist tendencies such as suburbanization, gentrification and sociospatial polarization. In the Third World, as a direct result of the uneven pattern of development within most countries, urban areas are growing at an explosive rate as a consequence of rural–urban migration. Given the comparatively low levels of urbanization in many regions, such as Africa, and the limited resource base of most Third World states, the urban crisis seems destined to deepen. The central importance of capital in this process of urban restructuring is axiomatic, but it is important to avoid the fallacy of economic determinism that, paradoxically, is shared by the conservative New Right and the Marxist Left, and is enshrined in many contemporary interpretations of globalization. Technical and economic processes, the material forces of production, are not the only determinants of urban growth and decline. The policies of the local and national state can exert at least an equally important influence on urban change. Regulatory and tax policies shape the environments that attract or repel investors, decisions about public investment determine whether infrastructure will be rebuilt or allowed to deteriorate, government procurement policy stimulates the private economy, and intergovernmental transfer payments can prevent the total collapse of a local economy (Budd and Whimster, 1992; Sassen, 1994; Mohan, 2000). A structural interpretation of urban change that emphasizes the omnipotent logic of the capitalist (or any other) mode of production also affords insufficient consideration to the way in which general processes are embedded in and modified by historically specific national and local settings (Persky and Weiwel, 1994; Cox, 1997; Eade, 1997). For example, it is the combination of economic forces with historically specific social and political processes that produces the particular form of uneven development found in the USA. Sprawling suburban development, widespread urban fiscal stress and extreme class segregation of residential communities are not reproduced to the same extent in other capitalist states. In Europe, for example, suburban sprawl is less extensive, the central state finances a larger share of local government budgets thereby mediating local fiscal stress, and the upper social strata are less anti-urban in lifestyle and residential location. The restructuring of urban space is best understood as the outcome of actions taken by

Introduction

5

both economic and political actors operating within a complex and changing matrix of relations between global and national political–economic forces, and national and local social and political processes. Ideology and urban policy The form of urban policy employed depends on the problem to be tackled and, most fundamentally, on the ideological position of the state. The outcome of the power relationship between capital and polity can be usefully translated into four ideological regimes (Fainstein and Fainstein, 1982; King, 1983; Judd and Swanstrom, 1998). In two of these – the market capitalist (or market conservative) and the corporate fascist – capital as a whole occupies a hegemonic position that enables it to maximize the benefits of state programmes and limit the costs. In the first, the degree of state penetration of the means of production is low, involving, for example, tax reductions, employment subsidies, urban renewal and designation of free trade zones. In the second, state involvement is more direct and may include controls over investment decisions, wage structure, union power and the banking system. The third type of policy regime – the liberal democratic or welfare state liberalism – incorporates working-class interests through the dominance in the governing coalition of a conservative party of the Left (such as the British Labour Party or the German Social Democrats). The final ideological position is represented by a social democratic regime dominated by a leftist workingclass party favouring direct control of production to channel income benefits to labour rather than to capital. Whichever ideology is dominant in a country largely determines the form of urban policy. During the postwar period, in advanced economies particular attention has focused on the changing strength of market capitalism and welfare state liberalism. Advocates of market capitalism (as espoused by Reaganomics in the USA and Thatcherism in the UK) view the production of unevenly developed cities and regions as the inevitable outcome of technological change within an economic system that readily adapts to innovation. The negative sociospatial effects of this restructuring that impinge on disadvantaged people and places are regarded as unavoidable consequences of a process that is of benefit to society as a whole. Since market forces are seen to be the most efficient allocators of capital and labour, state intervention is considered unnecessary. Policies involving social welfare expenditure and government financial aid to declining cities are regarded as harmful because they anchor low-wage workers to sites of low employment opportunity, discourage labour force participation and inhibit labour mobility. Welfare state liberals, on the other hand, while accepting the central role of the market, acknowledge that the institutional and cyclical ‘market imperfections’ that have left certain people and places in prolonged economic distress must be rectified by compensatory government policies. Forms of urban policy Policies vary considerably between countries, reflecting the institutional environment in which they are set and the procedures and instruments selected for implementation. Nevertheless it is possible to distinguish several general forms of urban policy. The first consists of policies designed to guide urban growth and change at a national scale, i.e. between urban regions. The second consists of policies to guide urban growth

6

International handbook of urban policy

and change at an intraregional or metropolitan scale, i.e. within urban regions. Third, in some federal countries (such as Australia, Canada, Germany, India and the USA) there may be an intervening level of policy development at the state or provincial level. Finally, there are ‘non-urban’ policies that indirectly and often inadvertently affect urban restructuring. Two broad kinds of national urban policies may be identified. The first refers to attempts to restrain the growth of core city-regions and promote growth in peripheral regions. These policies have been applied to cities such as London, Paris and Tokyo with varying levels of success. Since the mid-1970s, however, the reduction in economic and population growth in many cities of the developed world and increased concern for declining inner-city areas have questioned the general need for growth constraint policies. The second type of national policy seeks to reshape the settlement system. In the 1960s and early 1970s many countries adopted growth pole strategies (for example, the French metropoles d’équilibre), in part as a response to metropolitan restraint policies. By the late 1970s, however, these policies had lost favour because of political opposition from those small and medium-sized towns not designated as growth centres, and the fact that in practice the geographic spread effects of the policy were less than postulated by theory. More recently, governments have employed a range of national policy initiatives to direct investment into declining industrial cities. These have typically included tax concessions, employment incentives, infrastructure improvements, selective public sector procurement policies and creation of special economic zones (such as enterprise zones, simplified planning zones and urban development corporations). Although not all countries have national urban strategies, most have attempted to influence the form of urban development at the metropolitan scale (Peterson and Lewis, 1986; Stegman, 1995; Hill, 2000). For much of the postwar period such policies have aimed to channel development in order to stem the physical expansion of the built-up area, avoid excessive loss of valuable agricultural land, ensure more efficient use of infrastructure and reduce congestion in the urban core. A variety of housing, transport, land use and development control policies has been employed in pursuit of these goals. Since the late 1970s, policy emphasis at the metropolitan level has also turned to the steering of employment and investment into inner urban areas or to new suburban sub-centres using a combination of controls on and inducements to the private sector. Of at least equal importance to these explicit urban policies, in terms of their influence on urban development, are those national policies that are urban in neither focus nor intent but that significantly affect the form and rate of urban change. These ‘non-urban’ policies include the following. ●

●

Fiscal policies such as tax relief on mortgage interest payments affect urban development. In the USA the availability of tax relief and federal mortgage insurance for new single-family dwellings was a major stimulus to low-density suburban development in the postwar period. Industrial policies including decisions to support certain industries (such as steel production) or expand certain public expenditure (such as defence) have a differential spatial impact since relevant activities are unequally distributed among cities and regions.

Introduction ● ●

●

●

7

Equalization policies that result in intergovernmental transfers operate in favour of some urban areas above others. Transport policies can have significant urban effects. For example, the US interstate highway programme greatly encouraged postwar metropolitan sprawl and stimulated the growth of cities whose accessibility was enhanced. Even agricultural policies can have an urban impact. Structural policies to promote the capitalization of agriculture directly affect the size of the agricultural labour force and therefore rural–urban migration. This is of particular significance in the Third World today. The impact of immigration policies tends to be concentrated on particular cities. Flows of migrants profoundly affect urban labour markets, housing programmes and social structures.

The implementation of urban policy under differing ideological regimes can be illustrated with reference to postwar developments in the UK and the USA. Urban policy in the UK We can identify five major phases in British postwar urban policy (Oatley, 1998). The physical redevelopment phase From the end of the Second World War until the late 1960s, urban problems were seen largely in physical terms. The policy response to issues of housing quality and supply, transport and industrial restructuring focused on slum clearance and comprehensive redevelopment strategies, and the planned decentralization of urban population via regional policy and New Town development. The social welfare phase In the early 1970s, empirical research highlighted the incidence of poverty within the UK’s cities as the long postwar boom faltered. Emphasis was placed on supplementing existing social programmes to improve the welfare of disadvantaged individuals and communities. Influenced by US initiatives, such as the Head Start project developed as part of the Model Cities programme, a range of area-based experimental schemes was introduced during the 1970s. These ‘Urban Programme’ initiatives, which included educational priority areas and community development projects (Edwards and Batley, 1978), operated from a ‘culture of poverty’ perspective (under which poverty is held to be self-reproducing) and aimed to give deprived communities the capacity to solve their own problems. The widespread increase in unemployment in the mid-1970s, in the wake of the Arab oil embargo and world recession, made it clear, however, that the scale of urban deprivation could not simply be the result of the inadequacies of the poor. An alternative ‘structural’ explanation of poverty was enshrined in the final report of the Community Development Project. This rejected a social pathological view of deprivation in the conclusion that there might certainly be in those areas a higher proportion of the sick and the elderly for whom a better co-ordination of services would undoubtedly be helpful, but the vast majority were ordinary, working-class men and women who, through forces outside their control, happened

8

International handbook of urban policy to be living in areas where bad housing conditions, redundancies, lay-offs and low wages were commonplace. (Community Development Project, 1977, p. 4)

It followed that to tackle the root causes of urban decline would require more than marginal adjustments to existing social policies. This was acknowledged by the 1977 White Paper on policy for the inner cities, which signalled a more broadly based approach to urban problems, combining economic, social and environmental programmes and involving new partnership arrangements between central and local government to provide a more coordinated response. The emphasis on improving the economic environment of cities was promoted in several ways, including a shift of attention from New Towns to urban regeneration and increased powers to enable local authorities to aid and attract industrial developments. The major vehicle for these measures was the expanded Urban Programme (Lawless, 1988). In practice, however, a concerted attack on the urban problem was undermined by the prerogatives of national economic policy, which led to reductions in local authority finance. The Conservative government elected in 1979 continued the concept of partnership but stressed the necessary involvement of the private sector. The entrepreneurial phase The advent of the Thatcher government in 1979 ‘witnessed the fracture of three main pillars upon which post-Second World War social democratic politics was constructed – Fordism, Welfarism and Keynesianism’ (Gafficken and Warf, 1993 p. 71). The reorientation of urban policy by the New Right Conservative government was part of a wider agenda to restructure the UK economically, socially, spatially and ideologically around a new consensus of free market individualism and an unequivocal rejection of the social democratic consensus of the postwar Keynesian welfare state. As Martin (1988, p. 221) observed, the thrust of state policy shifted from welfare to enterprise: the aim has been to reverse the post-war drift towards collectivism and creeping corporatism, to redefine the role and extent of state intervention in the economy, to curb the power of organised labour, and to release the natural, self-generative power of competitive market forces in order to revive private capitalism, economic growth and accumulation.

The Keynesian commitment to the macroeconomic goal of full employment was replaced by the objective of controlling inflation by means of restrictive monetary measures and supply-side flexibilization. From its inception, ‘Thatcherism’ was a doctrine for modernizing the UK’s economy by exposing its industries, its cities and its people to the rigours of international competition in the belief that this would promote the shift of resources out of inefficient ‘lame-duck’ traditional industries and processes into new, more flexible and competitive high-technology sectors, production methods and work practices. The principal mechanisms for achieving this transformation centred on tax cuts and deficit spending, deregulation and privatization, all of which had geographically uneven impacts. At the urban level these three macroeconomic strategies were combined most strikingly in the concepts of the enterprise zone (EZ) and the urban development corporation (UDC). As part of the broad political and economic agenda, urban policy was also used to restructure central government–local government relations. Five processes characterized the changes:

Introduction ●

● ● ●

●

9

displacement involving the transfer of powers to non-elected agencies (e.g. UDCs), thereby bypassing the perceived bureaucracy and obstructiveness of local authorities; deregulation involving a reduction in local authorities’ planning controls to encourage property-led regeneration (e.g. in EZs); the encouragement of bilateral partnerships between central government and the private sector; privatization, incorporating the ‘contracting out’ of selected local government services, housing tenure diversification, and provision for schools to ‘opt out’ of local education authority control; and centralization of powers through a range of quangos (quasi non-governmental organizations).

The competitive phase By the early 1990s it was evident that the approach to urban policy pursued since 1979 had failed to reverse urban decline. The limitations of a property-based approach to regeneration had been exposed by a slump in the demand for property in the recession of 1989–91. As Turok (1992, p. 376) observed, although property development has potentially important economic consequences, it is ‘no panacea for economic regeneration and is deficient as the main focus of urban policy’. Property development lacks the scope, powers and resources to provide the holistic approach required to tackle urban decline. Its limited perspective and goals are unable to guarantee a rise in overall economic activity in a locality and ignore important ‘human issues’ such as affordable housing, education and training, social exclusion and investment in basic infrastructure. The government’s response was to reconstruct urban policy around the ‘initial catalyst’ of competition. This era of competitive urban policy was heralded by the City Challenge initiative, which introduced competitive bidding among local authorities for urban regeneration funds. Successful schemes are managed by a multi-agency partnership involving the local authority along with the private, voluntary and community sectors. While local authorities appeared to have a greater role under this arrangement, in practice local autonomy was constrained by the underlying entrepreneurial ethos of the partnership organizations and by the need for successful bids to conform to central government guidelines. The Third Way The fifth phase of UK urban policy began in 1997 with the election of ‘New Labour’ committed to a political ‘Third Way’ (Levitas, 1998; Giddens, 2000) between the principles of Thatcherite neoliberalism and more traditional forms of social democracy and welfarism. This approach had clear links to policies of the New Democrats in the USA (Collinicos, 2001) and to several Scandinavian welfare states (Etherington and Jones, 2004). Introduction of Labour’s Third Way marked a move away from the neoliberal era of policy under the Conservatives towards a situation in which greater attention is given to the social consequences of economic policy. In policy terms the key priorities include strengthening local and regional economies, increasing economic opportunities for deprived areas, rebuilding neighbourhoods and promoting sustainable development.

10

International handbook of urban policy

Specifically, New Labour’s CORA approach to urban policy is based on: ● ● ● ●

Community – involvement, with greater public participation Opportunity – to work or to obtain training and education Responsibility – in the obligation of citizens who can work to do so Accountability – of governments to their publics.

In practice, urban policy initiatives have proliferated at such a rate since New Labour came to power that, in 2003, the then regeneration minister likened the policy maze to a bowl of spaghetti made up of diverse strategies and initiatives that cross different spaces, scales and policy areas. Collectively, while it represents Labour’s attempt to generate a ‘renaissance’ in urban economic, social and community life, the ‘monumental complexity’ (Johnstone and Whitehead, 2004, p. 13) of New Labour’s urban policy also presents a barrier to success. For most of the past 25 years urban policy in the UK has been based on a market-led approach to urban development. Justification for the market-led approach to urban regeneration centres on the concept of ‘trickle down’, which argues that, in the longer term, an expanded city revenue base created by central area revitalization provides funds that can be used to address social needs. In practice, however, these funds are generally recycled into further development activity. Nowhere has a substantial trickle-down effect been demonstrated. The available evidence suggests that it is naïve to expect a ‘morally aware’ private sector to effect the revitalization of run-down urban areas. Private sector investment decisions are founded largely upon self-interest and not philanthropy. The privatization of urban development inevitably means accepting a policy of triage and concentrating on areas of greatest economic potential – with adverse consequences for other areas. In order to address problems of deprivation and disadvantage, urban policy must possess both a social and an economic dimension. It must be concerned as much about the distribution of wealth as about wealth creation. Such social criteria did not figure prominently in ‘top-down’ urban policy in the UK (and the USA) during the last quarter of the twentieth century. Postwar urban planning in the UK The importance of urban planning as a vehicle for carrying urban policy into practice varies between countries. The UK has established a powerful national planning system to guide urban change. The structure of modern urban planning in the UK was laid down in the 1947 Town and Country Planning Act (Cullingworth and Nadin, 2006). The basic principle enshrined in the 1947 Act is that of private land ownership but public accountability in use, so that landowners seeking to undertake development first had to obtain permission from the local planning authority. The local authority was also given the power to acquire land for public works by compulsory purchase on payment of compensation to the landowner. Local planning authorities were required to prepare and submit quinquennial development plans to the Ministry of Town and Country Planning indicating how land in their area was to be used. A second principle embodied in the 1947 Act was that of community gain, rather than individual gain, from land betterment. This meant that when land was developed, the increase in its value that resulted from the granting of planning permission was reserved for the community by the imposition of a

Introduction

11

100 per cent land development tax. Political opposition ensured that this provision was removed in 1952. Today, compulsory exaction of betterment values from land developers has been replaced by a system of negotiated agreements over ‘planning gain’ (Claydon and Smith, 1997), which represents the benefits that a local authority may require of a developer as a condition for receiving planning permission. The primary objectives of the 1947 planning system at the city-region scale were urban containment, protection of the countryside, and the creation of self-contained balanced communities (e.g. New Towns). These goals were advanced by local authorities using the development plan and development control process; and by central government through the New Towns programme, supplemented by the Expanding Towns scheme (which enabled cities with problems of overcrowding to arrange overspill schemes with other local authorities). The first major changes to the 1947 planning system were contained in the 1968 Town and Country Planning Act. This sought to introduce greater responsiveness and flexibility to the plan-making process. The single development plan with its specific land-use focus and five-year life expectancy was replaced by a two-tier system of structure plans and local plans. Structure plans are comprehensive strategic statements designed to translate national and regional economic and social policies into the specific areal context of the local authority. Local plans apply the structure plan strategy to particular areas and issues, and make detailed provisions for development control. Most commentators would agree that the 1947 planning system has achieved its objectives: postwar suburban growth has been contained to the extent that coalescence of adjacent cities has been prevented and good-quality agricultural land protected. The major mechanism of green belts around the large cities has prevented peripheral sprawl, although they have contributed to inflation in land and housing prices in existing settlements within the green belt and provoked an ongoing conflict between developers and planners over the availability of land for housing (Adams and Watkins, 2002). Also, the green belt has been powerless in the face of increases in transport technology and in the length of acceptable commuting journey, which have seen some residential development leapfrog into settlements beyond the green belt. But, in general, the UK planning system has prevented the kind of scattered urban development in evidence around cities in North America. Urban policy in the USA Federal involvement in the economic and social life of urban America, in terms of policy formulation, increased during the Depression of the 1930s, when Franklin D. Roosevelt’s New Deal programme supported poor citizens by providing a minimum wage, unemployment insurance and social security, and middle-class Americans via programmes such as the Federal Housing Administration’s scheme for below-market-rate mortgages. Following the Second World War the role of the federal government in urban life expanded even though policies were not specifically urban by designation – a particular example being the way in which FHA mortgage insurance and federal funding of the interstate highway system contributed to the suburbanization of American cities. During the 1960s the number of federal programmes aimed specifically at the city increased in response to the growth of urban problems, ranging from poverty and civil rights riots to the financial crises of urban governments. In 1965 the Department of Housing and Urban Development was established as part of Lyndon B. Johnson’s Great

12

International handbook of urban policy

Society. New federal programmes included the War on Poverty (which was intended to extend beyond the basic income security programmes of the New Deal era to job training for those unable to find work), the Community Action Program (designed to facilitate the maximum feasible participation of residents in the local organization of anti-poverty services) and the Model Cities Program (which aimed to produce the comprehensive renewal of urban slum neighbourhoods in 150 selected cities). The era of ‘creative federalism’ and its wide range of categorical urban programmes was ended by Richard Nixon’s (1969–74) concept of new federalism. The stated policy objective was to allow localities to take spending decisions on the basis of local knowledge. Accordingly, the two main initiatives were a system of general revenue sharing which provided cities with funds according to a needs-based formula, and the amalgamation of individual programmes into a block grant, the most significant of which was the Community Development Block Grant (CDBG), which consolidated seven categorical grants, including those for urban renewal and the Model Cities Program. In terms of social impact there is evidence that, owing to the high level of local discretion, up to 40 per cent of the CDBG expenditure occurred in wealthier urban areas (Heinig, 1985). For example, the town of Little Rock, Arkansas, used $150 000 from the CDBG to build a tennis court in a wealthy area. The introduction of the Urban Development Action Grant (UDAG) programme under the Carter Administration aimed to encourage private investment in distressed communities by using federal grants to leverage private money into public–private sector development schemes. The reorientation of urban policy towards private-sectorled urban economic development was extended by the subsequent New Right administrations of Ronald Reagan and George Bush, who, like Margaret Thatcher in the UK, believed in the power of unfettered market forces to create a prosperous economy within which benefits would ‘trickle down’ to most sections of society, leaving residual problems to be addressed by specific people-oriented as opposed to place-oriented policies. Programmes considered counterproductive were reduced or eliminated, including UDAGs and subsidized housing. The withdrawal of government intervention in urban policy and planning was reflected by a 59 per cent reduction in federal spending on US cities between 1980 and 1992. Following the coming to power of the Clinton Administration in 1993, urban policy was spearheaded by the concept of empowerment zones and enterprise communities (McCarthy, 2003). Designated EZ/ECs receive federal investment plus tax incentives to help create employment. To be eligible for the programme, cities were expected to have secured a commitment of private sector investment and to involve the community in the planning and implementation of the initiative. By 2000, 22 EZs and 45 ECs had been designated. A further 8 EZs were ordered in 2002, together with 28 Urban Renewal Communities in which tax incentives (but not direct federal funding) are available to stimulate local private sector job growth and economic development. The Detroit URC area, for example, covers 25 square miles and contains 120,000 residents, 40 per cent of whom live in poverty. Use of tax-based incentives to promote urban regeneration is a key element of US urban policy. Major initiatives involving taxation measures include EZs at federal and state level, tax incremental financing (TIF) at city level, and business improvement districts at neighbourhood level (McGreal et al., 2002). The neoliberal trajectory of US urban policy over recent decades was continued

Introduction

13

during the administration of G.W. Bush with introduction of legislation to involve faithbased and community organizations in provision of social services, re-authorization of the 1996 Personal Responsibility and Work Opportunity (Workfare) Act, and passage of the No Child Left Behind Act to address the problems of poor-quality public schools. Urban planning in the USA By contrast with the situation in the UK, in the USA there is no national system of planning in the sense of a common framework with a clearly defined set of physical, social and economic objectives. Planning is not obligatory, and together with the fragmented structure of local government – in addition to the federal government and 50 states, there are about 8000 counties, 18 000 municipalities and 17 000 townships each with the power to plan or regulate land use, i.e. an average of 760 per state – this means that the content of planning is both local and variable from place to place. In principle a range of techniques for controlling urban growth and land use is available, but in practice the major tool employed is land-use zoning. Specific urban problems, such as provision of low-income housing, are addressed through federal policy. The first comprehensive zoning ordinance was passed in New York in 1916. The judgment of the US Supreme Court in 1926 that zoning did not infringe the Fourteenth Amendment to the Constitution (which protects against property being taken without due process of law) led to widespread adoption of the technique. Under this procedure, the effective control of land use was transferred from the state to the municipalities and townships, which were thereafter permitted to limit the types of development on land within their boundaries (Nelson, 1980), including control over the height, bulk and area of buildings constructed after the enactment of zoning regulations. The purposes of such controls were to minimize problems of congestion, fire hazard, shading by high buildings; to control population density; to ensure provision of urban services; and to promote the general welfare of the public. In practice there are many forms of zoning (Jackson, 1981; Cullingworth and Caves, 2003). Common forms of land-use zoning in the USA include cluster zoning and planned unit development used extensively by residential community developers, and incentive zoning that (like the planning gain mechanism in the UK) operates as a means of obtaining private sector provision of public amenities by offering zoning bonuses such as extra levels in a multi-storey building. This variety, and the underlying presumption in favour of development, means that controls over market-induced physical growth and change are much weaker in the USA than in the UK. The effects of land-use zoning on urban development in the USA have generated significant debate. Critics of zoning maintain that it is unnecessary, since market forces will produce a fair segregation of land uses. It is open to corruption, particularly in respect of variances (permitted modifications or adjustments to the zoning regulations). It can lead to premature use of land resources by owners who fear an unfavourable zoning change (downzoning). It is unequal in its effect, since a piece of property zoned for commercial use provides its owner with windfall profits at the expense of neighbours who must bear the costs of increased traffic noise and congestion. The most vociferous criticism is reserved for the practice of exclusionary zoning whereby suburban municipalities adopt legal regulations designed to preserve their jurisdictions against intrusion of less desired land uses. Regulations requiring large lots, excessive floor space, three or more bedrooms,

14

International handbook of urban policy

or excluding multiple-unit dwellings, high-density development or mobile homes, all serve to maintain high-cost housing and effectively exclude lower-income population. Supporters of zoning, on the other hand, argue that it is a flexible tool and an effective means of allowing local residents to determine part of the character of their neighbourhood. Certainly the widespread use of zoning during much of the twentieth century has helped to determine the current land-use structure of metropolitan America. The characteristic low-density sprawl of suburban America has provoked a number of ‘growth management’ policy responses designed to counteract this expansive form of development. Growth management in the USA A wide range of growth management strategies has been employed by cities and states in an attempt to moderate the negative effects of urban sprawl (Daniels, 1999). Many of the techniques in use seek to link residential development to infrastructure provision. The town of Ramapo, New York, 35 miles from downtown Manhattan, introduced a timed growth plan in the late 1960s to ensure that residential development proceeded in phase with provision of municipal services. To this end, developers were required to obtain a permit for suburban residential development. Where the required municipal services were available, the permit was granted but elsewhere development could not proceed until the programmed services had reached the location or were provided by the developer. The town of Petaluma, 40 miles north of San Francisco, introduced, in 1972, an annual development quota of 500 dwellings. Applications to build were assessed against criteria that included access to existing services with spare capacity, design quality, open space provision, inclusion of low-cost housing, and provision of public services. The city of Napa, CA introduced an urban limit line intended to cap the population at 75 000 by the year 2000. Beyond the boundary essential public services would not be provided (the actual population in 2000 was 72 585). Several Californian cities, including San Diego and San Jose, have passed laws requiring voter approval for proposed developments. While ‘voter requirements’ have not prevented new development in the long run, they have affected the power balance between ‘pro-growth’ developers and ‘slow-growth’ community interest groups, and have provided current residents with some compensation for the negative aspects of growth (Gerber and Phillips, 2004). A related anti-growth strategy is encapsulated in the concept of smart growth (Burchell et al., 2000). The smart thing about the smart-growth movement that has emerged in the USA since the mid1990s is that while advocates share many of the goals of previous anti-sprawl efforts, their language and methods are more pragmatic and inclusive. Rather than appealing narrowly to environmental sensibilities, the focus is on broader quality-of-life issues based on a more comprehensive view of the urban development process. Many of the principles of smart growth (such as attractively designed, mixed land use, compact communities) overlap with those of New Urbanism (Talen, 2005). Public–private partnership The entrepreneurial thrust of urban policy in the USA and UK during the 1980s was underwritten by cooperation between the government and the private sector. This approach owed much to experience in North America’s cities, where the practice of public–private partnership in urban regeneration dates back more than half a century.

Introduction

15

Following the Second World War, US city governments, faced with growing blight in downtown areas and attracted by federal funding from the urban renewal programme, joined forces with private developers in ‘quasi-public’ redevelopment corporations that were able to sidestep conventional procedures for municipal policy making. By the 1960s these business–government partnerships had produced a range of downtown redevelopments including Pittsburgh’s Golden Triangle, Baltimore’s Charles Centre and Minneapolis’s Nicolett Mall. In the 1970s and 1980s, prompted by the problems of deindustrialization and fiscal distress, city governments moved beyond single-project collaboration with developers. In the context of heightened inter-city competition for private investment, municipal governments, especially those with high-profile ‘boosterish’ mayors, became entrepreneurial, providing extensive subsidies and incentives to attract developers, and often becoming co-developers of more risky redevelopment projects. Public–private partnerships became the cornerstone of economic development strategies of virtually all US cities – strategies that centred on the creation of a good business climate (Levine, 1989). This trend is exemplified by the ‘Rouse-ification’ of downtowns across the USA. With its production of ‘festival marketplaces’ in, for example, Boston (Faneuil Hall), New York (South Street Seaport), Baltimore (Harborplace), Milwaukee (Grand Avenue Mall) and St Louis (Union Station), the Rouse Company became the leading downtown developer in the country. The distributional impact of these projects has been typically uneven, with, in most cities, redeveloped downtowns resembling ‘islands of renewal in seas of decay’ (Berry, 1985, p. 69). Baltimore’s Inner Harbor is heralded as a national model of public–private waterfront reclamation, but during the course of its redevelopment the poverty rate increased in 90 per cent of the city’s non-white neighbourhoods (Levine, 1987). A principal reason for such contrasts is that downtown corporate centres based on advanced services and tourism often have only limited links to a local economy and rarely generate economic development in surrounding neighbourhoods. In addition, since the kinds of jobs created are unlikely to provide employment opportunities for urban poor and minority populations, many of the benefits of redevelopment are taken up by suburban commuters. The efficacy of relying on the ‘trickle-down’ effect, rather than public targeting to encourage economic development in the most distressed urban neighbourhoods, is open to question. Property-led regeneration Property-based development has played a prominent role in urban regeneration projects undertaken by public–private partnerships. During the 1980s property-led regeneration assumed a central place in urban policy, with the key role of the private sector demonstrated most visibly in flagship projects such as the redevelopment of Canary Wharf in London’s Docklands or the transformation of Baltimore’s waterfront (Malone, 1996). However, property development alone is an insufficient basis for urban economic regeneration. Although property development and rehabilitation can improve a residential environment and construction projects can provide scope for employment, a property-led approach fails to consider the crucial issues of (a) development of human resources, such as education and training, which have long-term effects on people’s incomes and employment prospects; (b) the underlying competitiveness of local production; and (c) investment in infrastructure, such as transport and communications.

16

International handbook of urban policy

The value of property-led redevelopment is locally contingent. A strong role for property-based measures may be appropriate where there are problems associated with land or building conditions or where shortages of floorspace restrict inward investment and indigenous growth. Nevertheless, uncontrolled property development may drive up local property prices, encourage land speculation and displace existing economic activities and populations unable to afford higher rents. More generally, the capital market’s preference for short-term moneylending and speculation rather than longer-term investments can divert finance capital into property and away from more productive activities such as manufacturing. Nowhere has the impact of property-led urban redevelopment been more evident than in the global cities of London and New York, where, during the 1980s in particular, the growth of the financial services industry and concomitant expansion of office space interacted to engineer a major restructuring of urban space (Fainstein, 1994). By the end of the 1980s London was witnessing the largest office-building boom in its history as a result of the Conservative government’s opening up of a once highly regulated property development arena for speculative ventures. Much of the new development appeared in the traditional heart of the City, which sought to protect itself from a leakage of financial sector activity to European rivals such as Frankfurt and Paris, as well as to the emerging Docklands, with its flagship development at Canary Wharf (Merrifield, 1993). The regeneration of the London Docklands is part of a longer 20-year strategy to redevelop the Thames Gateway subregion stretching 32 miles (52 km) from the old docklands to the Thames estuary (Church and Frost, 1995). Cultural industries and urban reconstruction The cultural economy of post-industrial/postmodern cities has assumed increasing importance (Scott, 1997). Cultural production embraces activities such as printing and publishing, film production, radio, television and theatre, libraries, museums and art galleries. High fashion, tourism and sports-related activities are also included in some definitions of the cultural industries sector (Mort, 1996). Such activities cut across the conventional production–consumption divide, blur the distinction between the functions of cities as centres of production and consumption, and illuminate the post-industrial/postmodern concept of flexible specialization. Los Angeles represents the largest cultural industries economy in North America, if not the world. In Britain the coincidence of production and consumption activity in ‘consumption spaces’ is seen in the regeneration of favoured areas such as Sheffield’s cultural industries quarter with an emphasis on media production (Oatley, 1996), and Nottingham’s lace market quarter, with its focus on fashion, design and media industries (Crewe and Beaverstock, 1998). The development of cultural industries quarters in contemporary cities has also involved the redevelopment of past urban landscapes as heritage areas as in the Gastown district of Vancouver, Albert Dock in Liverpool and the Merchant City in Glasgow. As urban places compete within the global economy for limited investment funds, their success often depends on the conscious and deliberate manipulation of culture in an effort to enhance their image and appeal. Critics of cultural-based strategies for urban renewal have pointed to a number of problem issues, including the uneven distribution of benefits and costs for the urban society as a whole.

Introduction

17

Urban tourism and downtown redevelopment Tourism, along with finance and business services, is one of the fastest-growing components of the service sector. In many post-industrial cities the ‘visitor economy’ is of increasing importance, and promotion of tourism and leisure is a central element of downtown revitalization strategies. Las Vegas, the archetypal postmodern 24-hour consumption space, attracts over 46 million visitors annually. In the UK, the city of Glasgow has used arts and special events (such as its designation as European City of Culture, 1990) to re-brand its image from that of a declining industrial city, and increase visitor numbers (Law, 2002). Advocates of urban tourism development also identify wider benefits for cities. It is argued that advertising the city as a tourist destination and engaging in place promotion events (such as arts festivals, sports events and world fairs) benefit efforts to attract footloose economic activities. A revitalized inner city may also draw middle-class residents back into the centre, while new facilities constructed partly to attract tourists will also be available to local residents. Critics of tourist-based development contend that the industry provides only low-paid and seasonal work. However, many of the components of urban tourism, such as conferences, experience only minor seasonal variations. The industry also provides skilled employment at a management level, while the availability of low-skilled employment in centrally located tourist enterprises may benefit local populations. A further criticism concerns the possible diversion of public funds from services of direct benefit to resident groups, and the risk that cities may subsidize loss-making visitor attractions for the benefit of private businesses. In a number of US cities the force of these criticisms has been reduced by use of a room tax or sales tax that transfers development costs to visitors. Calculation of the costs and benefits of urban tourism is complicated by the fact that the impact is spread across many sectors from the visitor attractions to shops and transportation. Individual city authorities must decide whether the balance is right for them as they seek to compete successfully in the global economy of the early twenty-first century. Sustainable urban development Increasingly, urban policy and planning is required to adopt a long-term prospective role. This is particularly so when society, in managing urban change, seeks to strike a balance between economic priorities on the one hand and social and environmental priorities on the other. This issue is central to the question of sustainable urban development that aims to meet ‘the needs of the present without compromising the ability of future generations to meet their own needs’ (Brundtland Commission, 1987). The concept of urban sustainability comprises five key dimensions: ●

●

Economic sustainability – the ability of the local economy to sustain itself without causing irreversible damage to the natural resource base on which it depends. This implies maximizing the productivity of a local (urban or regional) economy not in absolute terms (e.g. profit maximization), but in relation to the sustainability of the other four dimensions. The difficulty of achieving economic sustainability in capitalist societies is compounded by economic globalization that is promoting competition among cities, and between cities and their surrounding regions. Social sustainability – a set of actions and policies aimed at the improvement of quality of life and at fair access to and distribution of rights over the use and

18

●

●

●

International handbook of urban policy appropriation of the natural and built environment. This implies the improvement of local living conditions by reducing poverty and increasing satisfaction of basic needs. Natural sustainability – the rational management of natural resources and of the pressures exerted by the waste produced by every society. Overexploitation of natural capital and growing inequality in access to, and rights over, the natural resources of a city or region compromises the sustainability of natural capital. Physical sustainability – the capacity of the urban built environment to support human life and productive activities. Crises of physical sustainability are evident particularly in metropolitan areas of the Third World as a result of the imbalance between in-migration of population and the ‘carrying capacity’ of the cities. Political sustainability – the democratization and participation of the local civil society in urban governance. Attainment of this goal may be undermined by the increasing influence of non-local and market forces in urban change.

The ethos of sustainable development policy in the UK (and in the USA) is to move towards sustainable urban development within the context and standards of living commensurate with a developed world urban economy. This policy perspective is embedded in a belief that environmental costs may have to be accepted as the price of economic development (HMG, 1994); that social and economic dimensions of sustainable urban development are as important as environmental and resource-use issues (HMG, 1999); and in a commitment to high and stable levels of economic growth and employment (HMG, 2005). This governmental ethos is indicative of a more general national population view of the place of sustainable development in urban development. The rhetoric of sustainable development should not cloud the fact that most people will not relinquish voluntarily a cherished lifestyle. Further, the goal of sustainability is not an integral element of market capitalism and will inevitably encounter opposition from other competing interests. Realization of a sustainable and liveable city requires both an integrated planning and decision-making framework, and a fundamental shift in traditional values and perspectives. There needs to be a change in focus from curative measures such as pollution reduction to measures based on prevention, from consumption to conservation, and from managing the environment to managing the demands on the environment. This will require change at the individual, community, business and urban levels. Despite the difficulty of translating the rhetoric of sustainable urban development into policy reality, it is evident that, given the increasing numbers of people living in urban settlements, strategies designed to substitute sustainable development for unsustainable growth have the potential to exert a major influence on the future form and function of cities in the twenty-first century. Challenges for urban policy The contemporary world is an urban world. This is apparent in the expansion of urban areas and the extension of urban influences across much of the habitable surface of the planet. Today, for the first time in the history of humankind, urban dwellers outnumber rural residents. Current trends in world urbanization, the increasing number and size of cities, and the deterioration of many urban environments have placed a particular

Introduction

19

responsibility on policy charged with the management of urban change. The extent to which policy can meet this challenge depends on a variety of factors. These include the nature of the problem to be addressed, the organizational, institutional and fiscal framework of the country, the effect of external forces such as ‘non-urban’ policies and those emanating from the global political economy, and the power balance between capital and polity. The variability of policy environments in the modern world ensures that there is no single optimum approach to the formulation and implementation of urban policy. While Western cities evolve towards a post-industrial postmodern future, most Third World cities are striving to attain the characteristics of a modern industrial city. These differences generate particular problems within each setting. Among the most pressing challenges for urban policy in the developed realm are those related to the ongoing process of urban expansion highlighted by the emergence of edge cities and ex-urbs within a polycentric urban region; fiscal and political stress between core cities and suburbs; increased sociospatial polarization within the post-industrial city and the accompanying need for urban policies to accommodate the growing diversity among urban populations; the impact of new telecommunications technology on urban form; and progress towards a sustainable city for the twenty-first century that reduces urban demands on and pollution of the natural environment. In the context of the Third World city urban policy makers are confronted by challenges of ‘over-urbanization’, including the poverty endured by the mass of the urban population; a widespread lack of decent housing, health care and other social services; and serious infrastructural deficiencies in the face of burgeoning populations. Despite these differences, however, it is possible to offer a number of conclusions and recommendations for future urban policy research and practice. The increasing scale and impact of the restructuring process affecting the world’s urban areas, together with the continuing scarcity of public resources, require a realistic appraisal of the problems and prospects for cities. Rather than attempting to recreate the historic economic base of many old industrial cities, policy must seek to exploit the new opportunities that emerge from the process of economic change. Possibly the greatest challenge for urban policy concerns the distribution of the benefits and costs of urban restructuring. While the problems experienced by people and places marginal to the capitalist development process have deepened over recent decades, urban policy has proved incapable of remedying the situation. At the crux of the matter is the relative importance attached to social and economic priorities in national policy. The resolution of urban poverty and deprivation requires a complementary programme of ‘people policies’ operating over a long term at the structural level in order to achieve a redistribution of wealth in society, and more immediate local-level ‘place policies’ to improve the current position of the disadvantaged. The practical difficulties of implementing such policies should not be underestimated, particularly in states where economic and political elites enjoy a symbiotic relationship. Varying degrees of ideological antipathy between capital and national and local states cannot disguise the fact that the magnitude of the urban crisis in both the developed and developing world is such that the successful restructuring of urban space, and in particular the revitalization of declining cities, requires capital investment from the private sector. It also requires a combination of traditional ‘top-down’ urban policies and community-based ‘bottom-up’ strategies (such as Community Development Corporations

20

International handbook of urban policy

and Local Exchange Trading Systems) (Pacione, 2005). Policy makers must strike an appropriate balance between the demands of capital and the needs of people. While embracing the need for private sector investment in urban regeneration, the social deficiencies of property-led urban change must also be recognized. This was evident in the conflict between the goals of local residents and the aims of the Urban Development Corporation established in London’s Docklands. The aim must be for urban policy to work with, but not for, capital. The administrative structure of an urban region can influence the impact of policy. Metropolitan-wide government can overcome problems of fragmented decision making and via cross-subsidization can aid resource redistribution within an urban region. The merits of public participation, on the other hand, point to increased decentralization of government. The distribution of powers between different levels of government is a key issue. Urban policy makers must be prepared to experiment with new ideas when existing administrative arrangements prove unsatisfactory. Academic research also has a role to play in forming future urban policy. Several important questions merit analysis. In view of the impact of ‘non-urban’ policies on cities, consideration could be given to the derivation of a method of urban impact analysis whereby the differential effect of public spending on distressed urban areas might be one component of decisions on whether to implement a particular policy. An important issue at a time of resource scarcity is the cost-effectiveness of policy and, in particular, the extent to which public expenditures succeed in generating private investment. Finally, it is important to realize that contemporary urban problems are long term, multisectoral and global in scope. There are clear policy benefits to be derived from greater international cooperation. More systematic observation of cities throughout the world with different types of government, in different cultural realms, and at different stages of technological evolution could reveal recurring themes, uncover innovative policies and practices, and may suggest important new directions for urban policy and governance. References Adams, D. and C. Watkins (2002), Greenfields, Brownfields and Housing Development, Oxford: Blackwell. Berry, B. (1985), ‘Islands of renewal in seas of decay’, in P. Peterson (ed), The New Urban Reality, Washington, DC: Brookings Institution, pp. 69–98. Brundtland Commission (1987), Our Common Future, Oxford: Oxford University Press. Budd, L. and S. Whimster (1992), Global Finance and Urban Living, London: Routledge. Burchell, D., D. Listokin and C. Galley (2000), ‘Smart growth’, Housing Policy Debate, 11, 821–79. Church, A. and M. Frost (1995), ‘The Thames Gateway’, Geographical Journal, 161(2), 199–209. Claydon, J. and B. Smith (1997), ‘Negotiating planning gains through the British development control system’, Urban Studies, 34(2), 2003–22. Collinicos, A. (2001), Against the Third Way, Cambridge: Polity Press. Community Development Project (1997), Gilding the Ghetto, London: HMSO. Cox, K. (1997), Spaces of Globalization: Reasserting the Power of the Local, New York: Guilford Press. Crewe, L. and J. Beaverstock (1998) ‘Fashioning the city: cultures of consumption and contemporary urban spaces’, Geoforum, 29(3), 287–308. Cullingworth, B. and R. Caves (2003), Planning in the USA, London: Routledge. Cullingworth, B. and V. Nadin (2006), Town and Country Planning in the United Kingdom, London: Routledge. Daniels, T. (1999), When City and Countryside Collide, Washington, DC: Island Press. Eade, J. (1997), Living the Global City: Globalization as a Local Process, London: Routledge. Edwards, J. and R. Batley (1978), The Politics of Positive Discrimination, London: Tavistock. Etherington, D. and M. Jones (2004), ‘Beyond contradictions of the workfare state’, Environment and Planning C, 22(1), 129–48.

Introduction

21

Fainstein, N. and S. Fainstein (1982), Urban Policy Under Capitalism, Beverly Hills, CA: Sage. Fainstein, S. (1994), The City Builders: Property, Planning and Politics in London and New York, Oxford: Blackwell. Gaffiken, F. and B. Warf (1993), ‘Urban policy and the post-Keynesian state in the United States and the United Kingdom’, International Journal of Urban and Regional Research, 17(1), 67–84. Gerber, E. and J. Phillips (2004), ‘Direct democracy and land use policy’, Urban Studies, 41(2), 463–79. Giddens, A. (2000), The Third Way and its Critics, Cambridge: Polity Press. Heinig, J. (1985), Public Policy and Federalism, New York: St Martin’s Press. Hill, D. (2000), Urban Policy and Politics in Britain, London: Macmillan. HMG (1994), Sustainable Development: The UK Strategy, Cmd 2426, London: HMSO. HMG (1999), A Better Quality of Life – Strategy for Sustainable Development for the UK, Cmd 4345, London: TSO. HMG (2005), The UK Government Sustainable Development Strategy, Cmd 6467, London: HMSO. Jackson, R. (1981), Land Use in America, London: Arnold. Johnstone, C. and M. Whitehead (2004), ‘Horizons and barriers in British urban policy’, in C. Johnstone and M. Whitehead (eds), New Horizons in British Urban Policy, Aldershot, UK: Ashgate, pp. 3–21. Judd, D. and T. Swanstrom (1998), City Politics: Private Power and Public Policy, London: Longman. King, R. (1983), Capital and Politics, London: Routledge & Kegan Paul. Law, C. (2002), Urban Tourism, London: Continuum. Lawless, P. (1988), ‘British inner urban policy’, Regional Studies, 22(6), 531–42. Levine, M. (1987), ‘Downtown redevelopment as an urban growth strategy: a critical appraisal of the Baltimore renaissance’, Journal of Urban Affairs, 9(2), 133–8. Levine, M. (1989), ‘The politics of partnership’, in G. Squires (ed.), Unequal Partnerships, New Brunswick, NJ: Rutgers University Press, pp. 12–34. Levitas, R. (1998), The Inclusive Society, Basingstoke, UK: Macmillan. Malone, P. (1996), City, Capital and Water, London: Routledge. Martin, R. (1988), ‘Industrial capitalism in transition’, in D. Massey and J. Allen (eds), Uneven Redevelopment, London: Hodder and Stoughton, pp. 202–31. McCarthy, J. (2003), ‘Regeneration and community involvement: the Chicago empowerment zone’, City, 7(1), 95–105. McGreal, S. Berry, J. Lloyd and J. McCarthy (2002), ‘Tax-based mechanisms in urban regeneration’, Urban Studies, 39(10), 1819–31. Merrifield, A. (1993), ‘The Canary Wharf debate’, Environment and Planning A, 25(9), 1247–65. Mohan, G. (2000), ‘Dislocating globalization: power, politics and global change’, Geography, 85(2), 121–33 Mort, F. (1996), Cultures of Consumption, London: Routledge. Nelson, R. (1980), Zoning and Property Rights, Cambridge, MA: MIT Press. Oatley, N. (1996), ‘Sheffield’s cultural industries quarter’, Local Economy, 11(2), 172–9. Oatley, N. (1998), Cities, Economic Competition and Urban Policy, London: Paul Chapman. Pacione, M. (1997), Britain’s Cities: Geographies of Division in Urban Britain, London: Routledge. Pacione, M. (2005), ‘National and local responses to urban economic change’, in M. Pacione, Urban Geography: A Global Perspective, London: Routledge, pp. 330–51. Persky, J. and W. Weiwel (1994) ‘The growing localness of the global city’, Economic Geography, 70, 129–43. Peterson, G. and C. Lewis (1986), Reagan and the Cities, Washington, DC: Urban Institute Press. Sassen, S. (1994), Cities in the World Economy, London: Pine Forge Press. Scott, A. (1997), ‘The cultural economy of cities’, International Journal of Urban and Regional Research, 21(2), 323–39. Smith, M. (1988), City, State, and Market, Oxford: Blackwell. Smith, M. and J. Feagin (1987), The Capitalist City, Oxford: Blackwell. Stegman, M. (1995), ‘Recent United States urban change and policy initiatives’, Urban Studies, 32(1), 1601–7. Talen, E. (2005), New Urbanism and American Planning, London: Routledge. Turok, I. (1992) ‘Property-led urban regeneration: panacea or placebo?’, Environment and Planning A, 24(3), 361–80.

PART TWO EVOLVING URBAN SYSTEMS

2

Differential urbanization trends in Europe: the European case E. Heikkilä and H. Kaskinoro

Urban history of Europe One could claim that European urbanism started with the emergence of the Greek polis in the eighth century bc. The polis, the city and the surrounding countryside and smaller villages and hamlets were usually integrated into harmonious political entities. Between 800 and 146 bc the Greeks formed small, independent city-states composed of coastal cities and their adjoining farmlands. Its largest city, Athens, may have reached 100 000 in population, but most other cities rarely exceeded 40 000. The formation of the Roman Empire between 146 bc and ad 300 represented the largest political and economic integration of territory in the ancient world. As the centre of the country’s military and administrative organization, Rome grew to a remarkable size, surpassing 800 000 inhabitants and perhaps reaching a million by ad 2 (Kim, 2007, p. 4). The Roman Empire collapsed in the seventh century in the face of Islamic expansion, competition and invasions from the East. Because large-volume, long-distance trade was difficult, towns become isolated and inward-looking, urban life in Western Europe declined to its nadir by the end of the ninth century (Urban Origins and Preindustrial Cities, 2006). After that, urban patterns became established. Most of the settlements that exist today were already established by ad 1350. The basic dimensions of the European urban system, including its urban–rural structural relations are of medieval origin (Bengs and Schmidt-Thomé, 2003, p. 19). The largest cities of Southern Europe were founded around 1350 and were closely linked to the maritime economy of the Mediterranean basin. Although it was estimated that cities like Milan and Venice might already have had populations of about 100 000, most of the towns in medieval Europe were small (van der Knaap and Wall, 2002, p. 2). By the 1380s, the European economy was already largely centralized. At the time Venice economically dominated the urban system. By 1500 the focus shifted from Venice to Antwerp. The period of 1550–60 saw a return of the dominance of the Mediterranean area with Genoa as the centre (Fields, 1999, p. 111; Hohenberg, 2004, p. 24). In the seventeenth century, cities in Middle Europe grew rapidly. By the beginning of the seventeenth century Amsterdam became the dominant city of Europe. By 1650 London and Paris were also dominant cities (Bengs and Schmidt-Thomé, 2003, p. 20). During this period urban growth was generally concentrated in large cities. They became centres of political administration, bureaucracy and culture, and as population agglomerations constituted the main centres of consumption. Larger cities grew at the expense of the smaller cities. A new pattern of urbanization emerged corresponding to the more regional as opposed to local focus on trade and market links (Fields, 1999, pp. 104, 110, 113). Ports stood out among cities that grew fast, particularly those on the Atlantic coast from Cadiz to Glasgow (Hohenberg, 2004, p. 18). By 1800 London already had close to one million inhabitants. In 1815 it became the 25

26

International handbook of urban policy

dominant city of Europe (Fields, 1999, p. 111; Hohenberg, 2004, p. 24). During the Industrial Revolution Europe’s population grew rapidly. Much of this growth occurred in cities and was made possible by the mechanization of the agricultural sector. Scores of non-agricultural workers left rural areas for the large industrial cities (see van der Knaap and Wall, 2002, p. 2; Ioannides and Rossi-Hansberg, 2005). Some cities developed into metropolitan regions whose location and growth were based on natural resources. Centres such as Sheffield and Birmingham, for instance, grew as a result of particular local industries. Some city-regions arose from no particular urban centre but rather out of a number of settlements that coalesced over time. The Rhine–Ruhr metropolitan conurbation is a prime example of such a centre. Exaggerated growth of the capital or primate city characterized some countries such as Austria, France, Sweden and even England, while others developed an oligarchy of major towns with no one dominating (Netherlands, Switzerland) in the industrial age (Hohenberg 2004, pp. 26–8, 35). There were 125 cities with populations larger than 10 000 and four cities of about 100 000 inhabitants in the early fourteenth century. In 1500, the corresponding numbers were 156 smaller and four large cities. Of these, 28 per cent (as well as three of the large ones) were located in Italy. The total population of cities larger than 30 000 in Western Europe in 1650 was 4.7 million (De Long and Shleifer, 1992, p. 19; Bengs and SchmidtThomé, 2003, p. 20). By 1800 there were 363 cities bigger than 10 000. The nineteenth century witnessed a pace of urban growth different from the previous centuries. The links between economic development and levels of urbanization are obvious (Bengs and Schmidt-Thomé, 2003, p. 20). By 1800, Western Europe had become the most prosperous and economically most advanced region in the world. London and Paris had more than 500 000 inhabitants each. Cities with more than 100 000 inhabitants included Dublin, Amsterdam, Hamburg and Berlin in Northern Europe; Vienna, Lyon, Milan, Venice, Rome, Naples, Palermo, Barcelona, Madrid and Lisbon in Southern Europe (De Long and Shleifer, 1994, p. 9). The urban population of Europe (excluding Russia) increased from 12.6 million in 1700 to 108.3 million in 1900. The level of urbanization was thus 12.3 per cent in 1700 and 37.9 per cent in 1900. The purpose of this chapter is to examine the differential urbanization trends of Europe, especially from the twentieth century to the present day. The history of urbanization discussed above provides the necessary background for what is to follow. Next, theoretical perspectives on the urbanization process will be discussed. After that an analysis of sequences in urbanization as well as explanations for urban development trends will be offered. In the final section we shall look at future perspectives and provide an overview of urban policy in Europe. Theoretical background The theoretical background to the orientation of migration flows is discussed by Pred (1965) in the context of his theory of cumulative growth and by Gibbs (1963) in his theory of the growth of population concentrations. At some stage urban deconcentration in highly urbanized societies begins to exceed their administrative urban districts (Wild, 1983, pp. 179–81). This refers to the phenomenon known as counter-urbanization (Geyer, 1996) or simply the ‘turnaround’, used to describe the migration turnaround from urbanization to exurban deconcentration (see Dillman, 1979, pp. 960–66). The theoretical model of differential urbanization put forward by Geyer and Kontuly

Differential urbanization trends in Europe

27

(1993) explains three things: (1) it uses net migration flows to identify clearly distinguishable phases in the process of urban development; (2) it identifies ‘productionism’ and ‘environmentalism’ as two major forces (ideals) dictating migration dynamics overall; and (3) it regards substream migration as important as mainstream migration trends, because it represents early traces of a future potential mainstream trend or the last remains of a previous mainstream trend. In the model, groups of large, intermediatesized and small-sized cities go through successive periods of fast and slow growth in a continuum of development that spans the evolution of urban systems over long periods of time. The model identifies different stages of differential urbanization, starting with urbanization, followed by polarization reversal and ending with counter-urbanization. Subsequently, urban development in a country becomes more spatially integrated, during which time traces of urbanization, polarization reversal and counter-urbanization are visible at different levels of spatial aggregation (Geyer, 1996). During this advanced stage of urban development – as in the case of the urban system in Western Europe – parts of primate cities may keep on losing population, while intermediate- and small-sized cities in their vicinity may gain momentum. Due to advances in the transportation and communication networks the urban system will become spatially and functionally integrated at this stage (Friedmann, 1966; Richardson, 1973). Urban settlements were once described as systems operating as interacting mediators within systems of settlements (Berry, 1964). From the beginning two sets of forces have driven the process of urban development, expressed respectively in central places and networks. Central places serve rural (agricultural) territory, resulting in pyramidal structures of settlements, with many small centres, followed by tiers of larger, higher-order centres, topped by a single capital. Networks, on the other hand, link specialized cities and zones of production (mines, plantations) in an inter-urban, often international, division of labour, and thus typically feature a limited range of activities (initially at least) in a single place. Central places tend to show a bias towards more rapid growth of larger cities, with a frequent tendency to primacy in the principal city, usually a political capital. In the network system, by contrast, growth can be very rapid, as for example in a mining area or when a new trade or industry opens up (Hohenberg, 2004, pp. 6–8). A hierarchy of central places forms a region around a dominant city in a trading system known as ‘territorially organized’ subsystems of cities (Friedmann, 1972). Collections of subsystems form national networks of urban systems that can extend beyond the borders of the countries in which the cities are located (Fields, 1999, p. 126). Because of cities’ greater size, population concentration and inherent dynamism (Friedmann, 1972), technical innovations used to occur more in, and were diffused more easily through, urban areas than rural areas. It has always been argued that higher population density facilitated contacts, and therefore led to accelerated flows of information. In addition, the city has always been regarded as the seat of educational and intellectual activities, and to have maintained close contact with other cities (Bengs and SchmidtThomé, 2003, p. 22). But things have changed. The urban way of life has become an almost universal phenomenon. Even in the countryside, life has become very similar to that in the cities. As a result of improved communication technology, the reach of particular urban areas and the extent of ‘local urban systems’ are expanding rapidly. People can now live further from the city or town than before while maintaining close contact (Hohenberg, 2004,

28

International handbook of urban policy

World

1950 1975

Africa

2005 2030

Asia Europe Latin America and the Caribbean North America Oceania 0

20

40 60 80 Percentage urban (%)

100

Source: World Urbanization Prospects (2005).

Figure 2.1

World urbanization in 1950–2030

p. 3). Cities often interact strongly with their surrounding regions. The concept of ‘cityregion’ has become useful in this new social, economic and political order. It is important that the city-region is seen as a form of cooperation between adjacent local governments with different needs and priorities (UNFPA, 2007, p. 53). Urbanization in the 1900s Urbanization is a continuing trend worldwide. In the twentieth century, especially, the world has experienced rapid urbanization. Globally, it increased from 13 per cent in 1900 to 29 per cent in 1950, and in the year 2005, almost 50 per cent of the world’s population was living in cities. The trend is expected to continue (see Figure 2.1). In 2030, it is projected that 60 per cent of the world’s population will be living in urban areas. The rising numbers of urban dwellers give the best example of the scale of these urbanization trends: the urban population increased from 220 million in 1900 to 732 million in 1950, and reached 3.2 billion in 2005. According to the United Nations population projections, 4.9 billion people are expected to live in urban areas in 2030. There are clear differences in urban population changes between the more developed regions and the less developed regions. The more developed regions are already highly urbanized, while a majority of the inhabitants of the less developed regions live in rural areas. Despite their lower levels of urbanization, the number of urban dwellers in less developed regions are already more than twice the number of urban dwellers in more developed regions – 2.3 billion compared to 0.9 billion. This trend is expected to continue. By 2030 the urban population of the less developed regions is projected to be nearly four times as large as that of the more developed regions – 3.9 billion and 1 billion respectively. Another factor is the growth of

Differential urbanization trends in Europe

29

the rural population. Whereas the rural population of the more developed regions has been declining during the second half of the twentieth century, that of less developed regions has continued to increase (World Urbanization Prospects, 2006, p. 1). During the last decades the highest growth in urbanization has occurred in Africa and Asia, a tendency that is expected to continue in the future. Europe, North America and Oceania have been highly urbanized since the 1950s, and their growth has subsequently slowed. By 2030, the growth of urbanization in Latin America and the Caribbean will have reached high levels, too. North America is the world’s most urbanized area. In 2005, 80 per cent of people living in North America were urban, while in Africa and Asia urban dwellers accounted for only 38 and 40 per cent of their populations respectively. In 2005, 71 per cent of EU member states’ population was urban. Urbanization has been an old, longstanding phenomenon in countries like the UK and Belgium, whereas in some of the smaller states such as Ireland and Portugal urbanization started to pick up only much later. Rapid urbanization is expected to continue to occur in the near future. Growth rates are not related to the population size of the country or to the size of the national urban system. The newest member states, Bulgaria and Romania, have both experienced rapid urbanization from the 1950s to the 1980s, but since then the share of urban population in these countries has increased only marginally (Bulgaria) or has even declined (Romania). Most of the new member states (EU-10) are in a similar situation. They have all experienced urbanization from the 1950s to the 1980s, some countries even into the 1990s, but since then the rate of urbanization has been slowing down. Slovenia is a case in point. Otherwise, in countries such as Lithuania and Slovakia, the share of the urban population is declining. The most rapid urbanization occurred in the Czech Republic during the 1970s, when the share of urban population increased from 52 to 75 per cent (World Urbanization Prospects, 2005; European Commission and European Environment Agency, 2006, p. 11). The periphery experienced depopulation in areas in which the level of urbanization has increased (Leeson, 2002, pp. 14–15). Generally, though, the rate of urbanization has tapered off and it seems as if the period of rapid urban growth is over. Based on the level of urbanization it is possible to divide EU member countries into five groups: ●

● ● ●

●

Those that were already highly urbanized by the 1950s but whose levels have kept on rising, to more than 80 per cent today – the UK, Belgium, Malta, Luxembourg, Sweden and Denmark. Those whose urbanization levels steadily kept on rising – Portugal, the Netherlands, Ireland and Germany. Those whose urbanization levels rose until the 1990s but then started to decline – Slovakia, Romania, Lithuania, Latvia, Finland, Estonia and the Czech Republic. Those whose urbanization rapidly increased from the 1950s to the 1980s, then slowed down – Spain, Slovenia, Poland, Italy, Hungary, Greece, France, Cyprus and Bulgaria. Those who experienced no significant growth or decline from 1950 to 2005 – Austria.

Although the growth patterns of the cities of Europe followed different trajectories during the second half of the twentieth century, their trends were similar. However,

30

International handbook of urban policy

sequences in urbanization differ significantly from country to country, even within countries. This makes comparisons difficult. According to Panebianco and Kiehl (2003, p. 10), contradictions in different studies could be the result of the use of different databases and different time series. We shall now sum up some of the research findings regarding the different sequences in growth patterns of European cities during the twentieth century. In the first half of the twentieth century factors such as wars and a depression caused urban growth to slow down and the systems to stagnate. None of the massive waves of urban concentration, a feature during the previous century, was visible during this time. Many cities were destroyed during the Second World War but much of the urgent reconstruction was done within the first decade after the war. As a result of the urgency and pace at which the reconstruction was undertaken, the layout of the cities did not change much (Hohenberg, 2004, pp. 36, 38). During the second half of the twentieth century the European urban system started showing signs of maturity although not all parts matured at the same rate and at the same time. However, the evolution of the urban system followed sequences of growth and decline that loosely resembled those outlined in the differential urbanization theory. Urbanization occurred up until the end of the 1960s. International migration, but also the natural increase of the populations of cities, played an important role in their growth, particularly during the baby-boom period directly following the Second World War (Hohenberg, 2004, p. 39). During this time suburbanization became a prominent feature of urban development. From the 1960s to the early 1970s, suburbanization as a percentage of total urban growth in Europe increased from 59 per cent to 84 per cent. Massive suburbanization reached its peak in the industrialized countries of Western Europe during the 1980s (van der Knaap and Wall, 2002, p. 3). From the late 1960s the growth of large European cities slowed down and by the early-1970s they entered the counter-urbanization phase. In Western Europe, counterurbanization started earlier than in Southern and Central Europe. In the core cities of Western Europe the turnaround from urbanization and suburbanization to counterurbanization was first detected by the end of the 1960s. By the early 1970s in the UK, and later on during the 1970s in France, Germany and Italy, most large cities were in decline. Many of the large cities of Northern Europe experienced deconcentration in the form of both suburban and rural growth (Ecotec Research and Consulting, 2007, p. 9.) The decline in city growth rates since the 1960s seems to be more a function of the diminishing attractiveness of cities to migrants and less the result of a slowdown in the birth rate (Turok and Mykhnenko, 2006, p. 15). Throughout this period, virtually all metropolitan areas in Central and Eastern Europe were still growing rapidly. The ESPON programme (Bengs and Schmidt-Thomé, 2003, p. 24) showed that in many West European countries, from 1950 to 1975, from 70 to 100 per cent of all population growth occurred in towns with fewer than 50 000 inhabitants. During this period, growth rates of the urban population were inversely related to size. It is presumed that residential preferences assumed a leading role in suburbanization and in urbanization of smaller towns. It has become clear that the redistribution patterns (counter-urbanization) of the 1970s were not driven by the same processes that drove suburbanization in the 1950s and the early 1960s. The creation of job and housing opportunities beyond the outer edges of the commuting zones of the major cities attracted ex-urban migrants (Fielding, 1989, p. 63.) The phase of counter-urbanization continued until the 1980s. After that

Differential urbanization trends in Europe

31

the situation became unclear. Some countries showed continuing counter-urbanization tendencies, while others experienced re-urbanization (Bengs and Schmidt-Thomé, 2003, p. 24; Fielding, 1989, p. 61; Leeson, 2002, p. 15). According to Bontje (2001, pp. 783–4), indications of an urban recovery were detected during the 1980s. According to him, factors such as compact-city policies, the economic downturn (which discouraged suburbanization), the increase in foreign migration, which tends to be focused on large cities, and the growing proportion of small non-family households with a predominantly urban housing preference could have played a role in that. Others differ on the issue. Turok and Mykhnenko (2006, p. 13) showed that the late 1990s was the worst period for European cities, in both absolute and relative terms. Decline was at its worst during this time. By the turn of the millennium the number of cities in relative decline still exceeded that of those that were growing. Evidence has shown that urban decline rather than urban growth was the common trend over the last decade. According to Panebianco and Kiehl (2003, pp. 16–17, 22), population figures show that Finland, Sweden and Denmark are now in a phase of re-urbanization, while suburbanization dominates in France, Italy, West Germany, the Netherlands, Ireland, Greece and Spain. Austria, Portugal, Belgium and the UK are experiencing deconcentration, with Belgium and the UK counter-urbanizing. The UK and Germany are not only experiencing growth of peripheral rural areas (counter-urbanization), but, at the same time, an above-average development of the urban centres (re-urbanization). Apparently they have been in the process of passing from counter-urbanization to re-urbanization in recent years. Several explanations have been given for the transition of Western Europe from urbanization to counter-urbanization during the late 1960s and early 1970s. According to Leeson (2002, p. 15), improved transportation infrastructure, housing economics, the relocation of businesses and changing lifestyles encouraged counter-urbanization. Panebianco and Kiehl (2003, p. 6) agree. They also attribute counter-urbanization to infrastructural improvements, but add reasons such as changed mobility patterns and progress in information technology, agglomeration diseconomies, residential preferences of employers, technological changes in industrial production, the role of public policies, the popularity of anti-urban ideologies and quality-of-life considerations. Barriers to human mobility have been reduced in postwar Europe, resulting in an increase in the flow of migrants at all levels of spatial aggregation, national, within Europe and between Europe and the rest of the world. Population growth or, in certain cases, decline in urban areas still largely depends on the net in- and outflow of migrants. The bulk of the new urban dwellers started to come from abroad rather than originate locally. Foreign migrants have provided much of the labour supply on which cities depend for economic growth. This has changed the look of Europe’s cities and life inside them. International migrants clustered strongly, and they showed a preference for large cities and industrial conurbations (Hohenberg, 2004, pp. 42–3). At present nearly 80 per cent of the population of the industrialized countries lives in cities. Demographic and socioeconomic developments continue to change both the internal structure of cities and their external linkages. The second demographic transition contributes not only to the ageing of the population and to a changed aged distribution, but also to an absolute decline of the population itself. This process will start for most

32

International handbook of urban policy

industrialized countries in the second quarter of the twenty-first century and its possible consequences for the future of the urban landscape are not yet well understood (van der Knaap and Wall, 2002, p. 3). Sequences in urbanization Growing and stagnating cities This section is based on the data provided by Eurostat and, within it, the Urban Audit Database, in 2007. The Urban Audit brought together urban statistics for 258 large and medium-sized cities across 27 European countries and contains data for 1991, 1996 and 2001. Urban Audit data have been collected on three spatial levels: the ‘core city’, the ‘larger urban zone’ (LUZ) and the ‘sub-city district’. We mainly use data for the core city and larger urban zone levels. The term ‘core city’ refers to the administrative areas of towns and cities, while the ‘larger urban zones’ are approximations of the functional urban zones surrounding towns or cities. In the period 1996–2001, a large proportion of Europe’s overall population growth occurred in the EU-15 member states, while population declined in the new member states. The highest overall population decline happened in Bulgaria, Romania and the three Baltic States, although the population in Hungary, the Czech Republic and Poland was also decreasing. At the same time, large urban areas in these countries also suffered from population loss similar to large cities in most other parts of Europe. Although there is a strong correlation between population changes nationally and in urban areas, the national context does not explain all the variations. To obtain a fuller picture, the regional context of cities is crucial. Across Europe, urban areas located within rapidly growing regions tend to experience higher than average population growth. But there are also exceptions, for example in some cities in Greece, Spain, Ireland and Northern Europe, where regional urban growth centres located in more peripheral areas also attracted population at a faster rate than the rest of the region to which they belong. On the other hand, there is also a smaller group of cities, mostly in Romania, whose economic performance and population growth are lagging behind that of the region to which they belong (Ecotec Research and Consulting, 2007, p. 9; Urban Audit database). The disparities between cities are far greater than the differences between regions or countries (European Commission 2005, p. 4). There are marked regional differences in population growth dynamics between cities across Europe. Here we approach this theme region by region. Northern European cities Northern European cities have experienced generally positive growth. The population of cities has on the whole grown substantially faster than their respective countries. The largest growth differential between a country and its cities was seen in Finland, where cities covered in the Urban Audit outgrew the country average by between 1 and 2 percentage points each year. For example, in 1996–2001, the population of the capital of Finland, Helsinki, grew approximately 6 per cent while the country average was 1.3 per cent. According to the State of European Cities Report (Ecotec Research and Consulting, 2007), the strong service-led economic growth of Finnish cities during this period was the fundamental cause of this phenomenon. Urban growth has also been strong in Denmark and Sweden. The overall population growth

Differential urbanization trends in Europe

33

in Nordic countries and surrounding NUTS (nomenclature of units for territorial statistics) areas is at a lower level than the population growth rate of cities covered in the Urban Audit, which means that the population growth is concentrated in cities. During the study period 1996–2001, core cities in Northern Europe were growing more strongly than larger urban zones, so urbanization and counter-urbanization have turned to reurbanization (Ecotec Research and Consulting, 2007, p. 23; Urban Audit database). The urban structure of Nordic countries differs from that of other European regions. Large stretches of sparsely populated land contain networks of towns and cities, originally developed because of their proximity to raw materials, which are today small by international standards (Ecotec Research and Consulting, 2007, p. 23). Nordic countries are dominated by their capitals, and there is a clear correlation between size and growth. The largest cities have the largest population growth (Espon, 2003a, p. 10). Peripheral areas continue to experience depopulation, and one of the consequences apart from declining population would seem to be the marginalization of population with higher percentages of economically less active groups – the aged, unemployed and unemployable – populating these regions, thereby weakening the local tax base (Leeson, 2002, p. 15). The integration of immigrant populations is one of the key challenges facing Nordic cities today. Increased inflows of immigrants have led to the settlement of nonnative groups in the capital-city regions (Ecotec Research and Consulting, 2007, p. 23; Rauhut et al., 2007, p. 10). Western Europe Contrary to Nordic countries, there is not a clear tendency towards city growth in Western Europe. The Western European urban pattern is mixed, and most of these countries have comparable shares of growing, stagnating and declining cities. Ireland and Irish cities have experienced the most pronounced growth. Ireland is dominated by its capital, Dublin, and this and smaller settlements in the commuter belt around the city were growing during the study period. This has resulted in increased pressure on housing and on the transport system. In Luxembourg, the urban population is concentrated in Luxembourg City and the old industrial belt that surrounds it. Luxembourg has also experienced growth but most of it has occurred outside the city. The growth mostly results from a significant inflow of foreign nationals, mainly from the other EU countries, often working for the EU institutions or the country’s financial sector (Ecotec Research and Consulting, 2007, p. 25; Urban Audit database; Espon, 2003a, p. 10). After relative population decline and economic difficulties, some cities in the UK have experienced a revival in recent years. London is dominant and has continued its growth, consolidating and strengthening its position among world capitals. At the same time, in general the Greater South-East region, and the capital as its engine, have experienced population growth pressures, driven particularly by immigration from elsewhere in the UK, as well as international migration. This has created challenges such as high housing prices. The affordability of housing has emerged as a major obstacle to sustaining the economic growth in this area in recent years. Edinburgh has also experienced growth, only on a smaller scale. By contrast, the comparative weaknesses in the local economy have remained a problem in urbanized parts of Northern England and some parts of the English Midlands. But there are some examples of urban growth in these regions (Ecotec Research and Consulting, 2007, p. 25; Urban Audit database; Espon, 2003a, p. 10).

34

International handbook of urban policy

There is not one dominant city in Germany. In fact, the German urban structure is quite polycentric (Espon, 2003a, p. 10). As in the UK, cities in some parts of Germany have experienced growth, while in other parts they have been declining. In Germany, as in the UK, the main reason for this uneven development is the economic fortunes of the different regions. Cities in the northern part of Germany, such as Bremen, Hamburg and Hanover, have been relatively stagnant. In contrast, cities in South and West Germany such as Munich, Frankfurt am Main and Freiburg in Breisgau and their surrounding areas have been growing strongly. However, the cities of East Germany, such as Magdeburg and Frankfurt an der Oder, have been declining. The demographic situation in Germany is problematic. Generally, fertility rates are low, causing low urban population growth as well. Many urban centres in the former East Germany have lost population, leaving large areas of unoccupied housing and increasingly ageing populations. This is placing additional strain on local finances due to declining numbers of local taxpayers (Ecotec Research and Consulting, 2007, p. 25; Urban Audit database; Espon, 2003b, p. 68). France is strongly dominated by Paris. Overall, urban population growth has been positive. French cities are dynamic and growing, especially in the South of France, which attracts citizens for its good image in terms of high quality of life and relative economic dynamism. Similar to the Nordic countries, integration of large immigrant populations, often of North African origin, is challenging. The Netherlands is highly urbanized and polycentric. Randstad dominates the urban landscape in the western part of the country. In recent decades a number of medium-sized cities outside Randstad have been gaining in size and popularity. The urban situation in the Netherlands is complex: examples of growth, affluence, stagnation and social exclusion can be found in urban areas close to one another (Ecotec Research and Consulting, 2007, p. 26; Urban Audit database; Espon, 2003a, p. 10). Similar to the Netherlands, Belgium is highly urbanized and polycentric, and growth and stagnation are both common. The dense network of small and medium-sized cities centred around Brussels and Antwerp is home to around 80 per cent of the country’s population. The main challenge facing Flemish towns is widely acknowledged to be the strong suburbanization of higher income groups and unemployment and deteriorating living conditions in poor inner-city areas. Despite efforts to revitalize the urban core in recent years, many cities continue to face large restructuring challenges. Austria is dominated by Vienna. The urban population of Austria has remained quite steady. Areas surrounding cities are generally growing faster than cities. According to statistics, Austria is facing the same demographic difficulties as Germany (Ecotec Research and Consulting, 2007, p. 26; Urban Audit database; Espon, 2003a, p. 10). Central and Eastern Europe The common trend in Central and Eastern Europe is population loss at the city as well as at the country level. The changing economic and social context had a strong impact on urban development. This population loss affects both small and large cities, despite the strong economic growth in many of the regions’ capitals. In most countries, cities have lost population through both natural change and migration. Only Prague gained significantly from an inflow of migrants from other EU countries and from outside the EU (Ecotec Research and Consulting, 2007, p. 26–7). Although development has taken place in many sectors in Central and Eastern

Differential urbanization trends in Europe

35

European countries, the standard of living has not improved to the same extent for all people. This has motivated many to leave the areas and find new ways of making a living abroad. This emigration trend has a negative effect on cities’ population development. The role of Central and Eastern European countries is now shifting from a region of emigration to a region of immigration, emphasizing the potential importance of transit migration (Bayer, 2006, p. 157). Population decline in Eastern and Central European cities is most prevalent among the younger half of the citizenry, those under the age of 45. The decline in the number of people in the economically active population group is a threat to urban economies. A decline in the 0–14 age groups is indicative of declining birth rates in recent years. At the same time, the number of elderly people, 65 years and older, is increasing nominally and proportionally, which also poses problems for urban economies (Ecotec Research and Consulting, 2007, pp. 26–7). Population decline in Eastern and Central European cities is most visible in core cities. This implies suburbanization. Suburbanization is a quite new phenomenon in the new member states, and it often takes a form of unplanned and unregulated sprawl, which is recognized to be a significant threat to sustainable development in these metropolitan areas. Hungary is one example where suburbanization has increased. Population growth has occurred in urban areas but has mainly been confined to the small and medium-sized towns. The capital, Budapest, is steadily losing population. This is due to two factors: more deaths than births and an increase in suburbanization (Ecotec Research and Consulting, 2007, p. 27; Urban Audit database). Southern Europe Many Southern European city populations have experienced growth in recent years, and this has brought with it a number of pressures and challenges mainly caused by large-scale suburbanization. In particular, middle- and high-income families have tended to leave the core urban areas, which has resulted in urban sprawl, often uncontrolled and sometimes illegal (Ecotec Research and Consulting, 2007, pp. 27–8). There has been rapid urban growth on the islands of Cyprus and Malta, particularly in the form of suburban development on the fringes of existing core cities. Traffic congestion and a loss of open space have become common on the islands. Urban sprawl has gone hand in hand with the increased use of private cars, which has brought with it the typical environmental problems. For example, in many coastal areas, population increase has placed strains on water supply. The population in Greece is strongly concentrated in Athens and Thessaloniki, and traffic-related pollution remains a serious problem. Recent investments in transport have improved the situation, though. Suburbanization is a prevailing trend in Greece (Ecotec Research and Consulting, 2007, pp. 27–9; Urban Audit database). The main challenge in Spain’s two biggest and dominating cities, Madrid and Barcelona, is a lack of affordable housing. House prices in these two urban areas are among the highest in Europe, especially in relation to local income levels. Social housing provision has been inadequate and private housing markets are rigid. Demand has also been pushed up by high levels of immigration. In larger urban areas in particular there is evidence that social segregation between the middle class on the one hand, and lowincome and immigrant groups on the other hand, is on the increase. Suburbanization is a dominant trend in Spain and also in Portugal’s two largest cities, Lisbon and Porto.

36

International handbook of urban policy

Much of the population and the country’s economic activity is concentrated around these cities. In recent decades, Portugal, which previously suffered from high levels of emigration, has experienced higher levels of immigration, particularly from Eastern Europe, Portuguese-speaking Africa and Brazil in recent years. These immigrant communities are concentrated in certain urban areas, in both the inner and outer cities of Lisbon and Porto (Ecotec Research and Consulting, 2007, p. 27; Urban Audit database; Espon, 2003a, p. 10). Italy’s situation is somewhat different from that of other countries in Southern Europe. The economic strength of the country continues to be concentrated in the North, which has brought common problems such as pressure on transport networks, housing supply and pollution, while the relative stagnation of many southern cities has led to a range of social problems in poorer districts and areas of depopulation. The economic success of Northern Italy attracts not only large numbers of foreign migrants; the economic gap between the North and the South also causes large numbers of people to flock to the area from the South. People prefer to live outside core cities. Population loss is bigger in cities than NUTS regions surrounding them. The country’s demographic situation is similar to that of Germany. There is a natural population decline which is made good by the inflow of international migrants to the large cities of Northern Italy (Ecotec Research and Consulting, 2007, p. 29; Urban Audit database, Espon, 2003b, p. 69). Migration to cities Migration is an important determinant of urban population change in many parts of Europe. Although immigration has always played an important role in the demographic development of European cities, evidence from the Urban Audit points to growing numbers of migration in an increasingly mobile European community. High levels of migration can have a stronger and less predictable demographic effect than natural population change. Measuring migration is not easy. The role of migration in explaining population change in European cities is therefore complex, often unpredictable. Generally there is a correlation between the levels of migration and population change evident in Urban Audit cities, with inward migration acting as a key driver of population growth in a number of cities. It is anticipated that migration and mobility will play an even greater role in urban population change in the coming decades (Ecotec Research and Consulting, 2007, pp. 18, 22–3). Much of the debate in migration tends to focus on international migration. However, the facts reveal that the majority of movements take place within national borders. In most cities, more than three-quarters of all population movements consist of the relocation of citizens of the countries in question. In Central and Eastern Europe nearly all migrants to cities are nationals. During the study period 1999–2001, the largest flow of non-European nationals to European core cities was directed towards Paris, while the largest inflows, comparative to city size, were directed to Luxembourg and some German cities. The biggest proportional inflow of EU nationals was to Luxembourg. Cities that experienced relatively high proportions of immigrants are situated in Northern Europe, Germany, France and Ireland. By 2001, more than 7 per cent of the total population of these cities consisted of migrants who had moved in over the previous two years. It must be noted that migration data are not available for every country (Urban Audit database). Labour market opportunities lie behind many migration decisions and modern

Differential urbanization trends in Europe

37

communication tools allow migrants to be better informed about such opportunities than ever before (Ecotec Research and Consulting, 2007, pp. 18, 20). The Urban Audit reveals sizeable differences in the extent to which migration affects cities across Europe. A general pattern is for large cities to have a high inflow of migrants, while smaller ones tend to have much lower shares of immigrants. For example, in the Nordic countries, the capital regions show the highest proportions of net inflow of young and highly educated people from all parts of the countries, even from abroad (Edvardsson et al., 2007, p. 29). Smaller cities tend to attract new residents from nearby, often from surrounding regions (Ecotec Research and Consulting, 2007, p. 20). Urban population profiles The population profiles of cities differ from national profiles on almost every socioeconomic indicator. City residents are more likely to be single, they are less likely to have young children, and if they do have children they are more likely to be single parents. They are more likely to have tertiary education and are more likely to be unemployed. These differences are, in part, due to the suburbanization of very specific groups and, in part, to the state of European cities (European Commission, 2006, p. 4). Single-person households are commonly concentrated in the core cities. There are various reasons for this. City centres have high service levels and are well placed to respond to the needs of single people and other individuals living alone. Younger citizens are likely to be attracted by the leisure facilities located there, while elderly citizens find comfort in the proximity to shops, public transport and health-care facilities. The housing market responds to such demands. Single-person households do not often occur outside city centres, and, at the same time, families with children are pushed towards the outskirts of cities where houses are larger and often more affordable (Ecotec Research and Consulting, 2007, p. 14). Besides being single, European city residents are more likely to be better educated than people living outside the cities. These concentrations of highly educated people play a crucial role in the development of a knowledge-based society and in exploiting the economic potential associated with it. Cities act as magnets for talent, as people with a higher education tend to be more geographically mobile and have a relatively high income. Cities with a large share of highly educated inhabitants must have interesting employment opportunities and, for households fitting the profile described above, be more socially attractive places to live in than suburbs. Factors such as attractive housing, high-quality services, a lively cultural scene and open social structure attract highly educated people into the cities (Ecotec Research and Consulting, 2007, p. 15; European Commission, 2006, p. 14). The unemployment rates of cities are commonly higher than the national unemployment rates. One explanation for this could be that cities have a disproportionately high share of residents with tertiary education and a disproportionately high share of residents without secondary education. Cities are centres of employment providing work not only to their own inhabitants, but also to many people who live in their regions. However, three out of four cities have lower employment rates than the countries in which they are located (European Commission, 2006, pp. 16–19). Monocentric cities often occur in the UK, France and Spain. The urban centres of these cities tend to attract skilled migrants and in this manner create popular gateways

38

International handbook of urban policy

for international migrants to the country. Cities tend to specialize in certain industrial sectors. This results in the growth and specialization of companies and organizations that need direct access to large and varied pools of specialized skills. In the same way, if workers invest in building up their competences but are unable to secure long-term employment, they will prefer to locate where the employment opportunities are the greatest (Kultalahti, 2006, p. 23; Scott and Storper, 2007, p. 195). In 2001, unemployment rates were the highest in cities in Poland, Belgium and Southern Italy, while the lowest rates were in the Netherlands, individual cities in Germany, and Northern Italy. Unemployment rates also differed between the core cities and the wider urban area, and between neighbourhoods, but there is no clear pattern here. In most cities in the old member states, a larger share of the suburban population is generally employed than in the cities themselves, which means that more people with jobs have chosen to live in the suburbs. In the new member states this is not the case. The Urban Audit reveals huge disparities in neighbourhood unemployment rates, accentuating unemployment in particular neighbourhoods. The highest inter-neighbourhood differences occur in cities with high overall unemployment (Ecotec Research and Consulting, 2007, p. 12; European Commission, 2006, pp. 16–19). As might be expected, the Urban Audit data show that the fastest-growing cities have the lowest share of elderly people and the highest share of children and young people. The number of elderly people has increased in a large proportion of Urban Audit cities, and this trend is broadly consistent with increases at national level in most EU member states. There were only a few examples where the number of elderly people did not grow at the city level despite increases in the same age bracket at the national level in these countries. Examples are Paris, Prague, Budapest, Florence and Trieste in Italy, Frankfurt am Main and Darmstadt in Germany, Tilburg and Enschede in the Netherlands and Bruges and Ghent in Belgium. The increase in the number of elderly residents in the cities of Spain, Italy and Germany is particularly striking as these countries already have the highest share of elderly people in the EU-27. The ageing population is a more recent phenomenon in many French, Polish, Romanian and Estonian cities. In contrast, a significant minority of cities have a small and declining percentage of elderly residents. The most notable examples are London, several Dutch cities, and most Danish and Lithuanian cities. There are also cities that traditionally had a large elderly population but have been rejuvenated, for example Vienna, The Hague, Brussels, Bristol and Belfast. Rather than senior citizens moving out in these cases, this trend is more likely to be driven by younger and middle-aged citizens moving into the core cities (Ecotec Research and Consulting, 2007, p. 14). Between 1996 and 2001, the core cities of Central and Eastern Europe, Southern Italy, Greece and, to a lesser extent, Ireland, Portugal and the northern UK faced a sharp decline in the number of children. Meanwhile, the number of children (under 15 years old) remained stable in many French and German cities, while Dutch and Danish cities actually experienced an increase. One explanation for the decline in the number of children is that many cities in the new member states had been faced with a relatively recent decline in birth rates. Many Central and Eastern European cities have a high proportion of young residents, resulting from comparatively high birth rates during the late 1980s. This decline is an important underlying cause of the overall population loss in these cities (Ecotec Research and Consulting, 2007, p. 16).

Differential urbanization trends in Europe

39

The percentage of non-nationals living in Europe’s cities is steadily increasing as a result of the continuing European and global integration process. More than half of the cities that were covered in the Urban Audit have a higher share of foreigners than their respective countries. Foreigners are especially concentrated in capitals and large cities. For example, in the Nordic countries the capitals and major cities have been the most attractive destinations for immigrants (Urban Audit database; European Commission, 2006, pp. 20–21; Rauhut et al., 2007, p. 9). Urban systems in Europe The most polycentric countries are Germany, Poland and Italy, three countries with large populations and well-developed urban systems. France and the UK are also large countries with several strong cities, but their urban systems are more monocentric due to the primacy of their capital regions. In most of the new EU member states capital cities play a prominent economic and cultural role. Only Poland has some strong regional centres that can compete with Warsaw economically and culturally. Three agglomerations – Budapest, Warsaw and Prague – form an integral part of the European metropolitan network (Espon, 2003c, p. 7; 2003d, pp. 6–8). Also in the Nordic countries the population concentration and monocentric development suggest a polycentric development (Edvarsson et al., 2007, p. 5). Urban sprawl is the result of a combination of different types of pressures on territorial expansion. They can be classified into two groups: residential suburbanization and peri-urbanization. The process of urban growth – largely in non-contiguous transitional zones between city and countryside – is thus increasingly being referred to as periurbanization. Even in Europe, where cities traditionally used to be compact, there are signs of increasing sprawl and suburbanization. Between 1969 and 1999, for example, urbanized areas in France increased five-fold while their populations grew by only 50 per cent. The trend is even more recent in Mediterranean Europe. It is fuelled in part by land speculation, nurtured by the prospect of rapid urban growth. Deconcentration and decentralization of production is often found on the outskirts of the more dynamic cities where growing workplaces and workforces can no longer find space in city centres, making spillover growth inevitable. In turn, the periphery offers cheaper infrastructure, land and labour, which encourage further peri-urbanization (UNFPA, 2007, pp. 47–9). From a functional viewpoint, there are also signs of peri-urbanization occurring in the Nordic countries, but socially and economically these areas remain dependent on the city centres due to the monocentric nature of the cities (Edvardsson et al., 2007, p. 5). In many ways the hierarchy of Europe’s urban system has remained remarkably stable over the years. The big cities of the past have either more or less retained their relative position in the urban hierarchy or at least remained significant. While large cities can be found in all parts of Europe, the urban grid continues to reflect past trends; i.e. Western Europe, as the region that has been urbanized for the longest period, has retained the highest density of urban places and still constitutes the urban core of the region (Hohenberg, 2004, pp. 3–4). On a European scale, the central area is also an area with a high density of businesses and population as well as with a very good level of accessibility. It stretches from London and Amsterdam to Brussels, Paris and Munich. In addition there are individual central areas such as Berlin, Madrid, Rome and Vienna (Federal Office for Building, 2006, p. 12). In terms of the long-term changes in the European

40

International handbook of urban policy

urban system, network system logic is behind most structural transformations, whereas the central place system has shown much greater stability over time (Hohenberg, 2004, p. 9). Disentangling the urban development process Although early industrialization began in rural areas, the shift in the division of labour from agriculture to manufacturing and services led to rapid urbanization. During the Industrial Revolution cities became the centres of manufacturing and decision making. The formation and growth of industrial or modern cities are attributed to benefits from a variety of market and non-market factors such as the typical urban division of labour, lower search costs of matching specialized workers and firms, information spillovers, market size and non-traded intermediate inputs (Kim, 2007, p. 11, citing Henderson and Thisse, 2004). Urban centres are sustainable because agricultural productivity in general has increased sufficiently to allow people to move away from the land and devote themselves to non-food-producing activities. The new economic geography literature has emphasized how an economy can become ‘differentiated’ into an industrialized core (urban sector) and an agricultural ‘periphery’. Urban concentration is beneficial because the population benefits from the greater variety of goods produced (forward linkages) and may be sustained because a larger population generates in turn greater demand for those goods (backward linkages) (Ioannides and Rossi-Hansberg, 2005, pp. 3–4). One striking feature of modern societies is thus the geographic concentration of economic activity. The classic concept of agglomeration economies emphasizes the ‘positive externalities’, or external economies of scale, scope and complexity that result from the clustering of businesses. For example, firms enjoy access to a more extensive pool of labour and find specialists with greater ease. Workers in turn benefit from a greater choice of potential employers and from improved career prospects (Turok, 2006, p. 21). Large urban metropolitan areas, in particular primary cities, benefit from an increased concentration of skilled labour, the globalization of investments and the development of new technologies, good infrastructure and a favourable geographical position (Pumain et al., 1999; Heikkilä et al., 2006, p. 90). Cities are the main beneficiaries of globalization, the progressive integration of the world’s economies. People are the agents of economic activities (executed jobs). Because of this association, people are attracted to economic investments as much as investments are attracted by people. This is a chicken-and-egg situation in which the agglomeration of the one causes the agglomeration of the other. Urban size seems to matter because people and investments are increasingly concentrated in and around small and large dynamic cities (UNFPA, 2007, p. 8). Smaller, more peripheral cities compete quite differently from core cities since the former cannot match the economic diversity of world and primate cities. The fact that cities compete (to attract investments and people) does not imply that they compete on equal terms. Because the playing field is uneven, core and peripheral areas attract investment and development for different reasons (Malecki, 2006, p. 28). The movement of young people from the rural areas to cities in search of better employment opportunities is seen as ‘productionism’-driven migration (Geyer and Kontuly, 1993). Migration in the opposite direction – from productive parts of inner-city locations to more environmentally friendly areas elsewhere in the cities or out in the countryside – has been termed

Differential urbanization trends in Europe

41

‘environmentalism’ (Geyer, 1996). The latter often consists of more affluent people and families who hope to find better conditions to live in or to raise children. Both trends make different parts of a country competitive for different reasons – one forming a concentration force, the other deconcentration. Evidence of both processes has been found in Finland, for example (Heikkilä, 2003, p. 59). Lower commuting costs tend to reduce the need for the juxtaposing of the home and workplace. This has traditionally resulted in increased productivity because of knowledge spillovers, the concentration of businesses in certain areas, and lower housing costs in the periphery of the city. All over the world this combination of location conditions has resulted in urban sprawl associated with suburbanization and multiple business centres. Although European cities used to be generally compact in the mid-nineteenth century, sprawl is a common phenomenon throughout Europe today (Ioannides and Rossi-Hansberg, 2005, p. 6; European Commission and European Environment Agency, 2006, p. 5). Urban economists also identified the tussle between agglomeration and dispersion forces, but have generally stressed commuting costs and congestion rather than the costs of transporting goods and services as the main factor limiting urban growth. The distinction between the two is historical: earlier on, city growth was largely determined by the need to serve economic activities such as agriculture that made use of dispersed resources, but recently commuting costs, land rents and pollution have gained importance (Puga, 1996, p. 2). The urban footprints of cities are visible well beyond their built-up areas, particularly in developed countries. Rising incomes and consumption in urban areas lead to increasing pressure on natural resources, triggering land-use and land-cover changes deeper inside their zones of influence, sometimes over vast distances (UNFPA, 2007, p. 56). The internal and external environments of cities are in a continuous state of flux and adaptation. It is no longer central cities alone that create conditions for development. The whole city-region forms part of the urban productive system, including the central city and outlying (sub)urban centres. Although the latter have been gaining economic independence all the time, they remain part of a complex structure of mutual interdependence at a larger urban scale. For example, the large cities that make up the Randstad in the Netherlands, together with a large number of smaller urban centres in the vicinity, are now forming a new core region in the service economy. This multifunctional structure demonstrates both complementarity and specialization in functions, which are all components of a multi-centred network city (van der Knaap and Wall, 2002, pp. 5, 8). Changes in urban form are dependent upon the nature, type of interaction, and the direction of these forces. Transport and information technology seem to be exerting the strongest influence on urban change today. New types of urban configurations appear as a result. Corridor cities – as intermediate stages – could turn traditional monocentric cities into multi-nucleated cities to ultimately form network cities (ibid., p. 13). Urban policy issues in Europe The promotion of competitiveness and the improvement of social and territorial cohesion have been set as key policy ideals in the strengthening of European cities and their regions. Six territorial priorities have been identified: (1) the strengthening of polycentrism and innovation through the networking of cities and their regions; (2) the forging

42

International handbook of urban policy

of new forms of partnership and territorial governance between rural and urban areas; (3) the creation of regional clusters of competition and innovation across borders; (4) the strengthening and extension of trans-European networks; (5) improving trans-European risk management including the impacts of climate change; and (6) the strengthening of ecological structures and cultural resources for a new approach to development (Eltges and Schön 2007, p. 4). There has already been notable proof of cooperation in urban management in the EU. Since Eurocities, a network of major European cities, was founded in 1986, an extensive exchange of experiences to jointly find solutions for nearly all problem areas in large cities has been occurring. Urbact is a network that has been dealing with the exchange of experience and information between cities and actors involved in the urban programmes of the EU since 2002. Together, Eurocities, Urbact and the EU Commission are partners in the European Urban Knowledge Network (EUKN). This network aims to improve the exchange of information and experience in the field of urban development. The profound changes that have occurred in the economic and demographic patterns of Europe in recent years pose enormous challenges for cities in particular. There are economically thriving cities with growing populations and economies but there are also cities that are struggling with declining and ageing populations and with problems that have been caused by structural changes that have occurred in the European economy. At the same time, cities must also adjust to the threat posed by climate change. One of the alarming prospects of climate change is its impact on sea levels and its potential consequences for coastal urban areas. Because of their natural resources and the trading opportunities they offer, coastal zones attract concentrations of people and economic activities. A rise in the sea level would flood large parts of these areas. So-called lowelevation coastal zones currently account for only 2 per cent of the world’s land area but 13 per cent of its urban population. Much larger proportions of the African and Asian urban populations live in coastal zones than in North America and Europe (Eltges and Schön, 2007, p. 4; UNFPA, 2007, pp. 61–2). The holistic strategy of integrated urban development planning has proved to be an effective instrument for achieving sustainability in numerous European states. By integrating the concerns of the public, economic, sectoral plans and neighbouring communities can, at an early stage and in a comprehensive manner, make urban development more sustainable (European Commission and European Environment Agency, 2006, p. 48; Eltges and Schön, 2007, p. 5). People spend increasing shares of their personal and working time outside their own communities. Their activity spheres regularly exceed urban areas but the areas of jurisdiction of local governments tend to be limited to the urban areas, and public administration has been slow to catch up in terms of competences and boundaries. Local communities, cities and regions need to engage each other in a new way beyond the local and regional context. Closer coordination and harmonization of different sectoral policies with spatial objectives are bound to become more important in the future (Federal Office for Building, 2006, p. 56). Future prospects for urban development The population of the world continues to grow. People in the developing world are moving into cities at a rate that has not been seen since the Industrial Revolution.

Differential urbanization trends in Europe

43

Overall, the growth rate of the population of the world stands at 1 per cent but, at 1.8 per cent, the growth rate of urban areas is nearly twice as high. Growth will increase even more rapidly in the urban areas of less developed regions, averaging 2.3 per cent per year over the next 30 years. Cities have existed for over 5000 years but have initially grown slowly (Wyly, 2008; United Nations and UNCHS (Habitat), 2001, p. 6). By 1800 only 2 per cent of the world’s population lived in urban areas. As we have entered the ‘urban millennium’, half of the world’s people are now living in towns and cities, with 180 000 people added to the urban population each day (United Nations and UNCHS (Habitat), 2001, pp. 5–7). However, over the last decades, growth in the largest European cities has been tapering off and, as a result, development of the urban system has become increasingly balanced (Puga, 1996, p. 1). Despite this slowdown in urbanization, it is still expected that 84 per cent of the population in developed countries will be living in urban areas by 2030 (United Nations and UNCHS (Habitat), 2001, p. 6). Rapid urbanization in the developing world keeps on creating mega-cities. In 1950, New York City was the only metropolitan area with a population of more than 10 million. By 2015, it is expected that there will be 23 such cities, 19 of them in developing countries. Up until 2000 no city in Europe reached the 10 million mark. It is expected, though, that Istanbul will reach mega-city status with an expected population of 12.5 million by 2015 (United Nations and UNCHS (Habitat), 2001, p. 8). One particular factor is causing the acceleration of urbanization in Europe – immigration. Immigrant cities are growing in number due to globalization and the increase of immigrant flows driven by income differentials, social networks and various state policies. Among the 20 cities in the world with more than 1 million foreign-born residents, three are located in Europe. Many of these cities are established immigrant gateways. London is one of them (Price and Benton-Short, 2007, pp. 2–3). When looking at the cities with at least 100 000 foreign born, all the Western European states now have at least one major immigrant city, and states such as Germany, France, and the UK have several. In fact, 30 European metropolitan areas currently have over 100 000 foreign-born inhabitants. In certain cases the numbers are artificially created, however. In Moscow and St Petersburg, for example, the numbers of foreign born are more a by-product of political change and reclassification of people after the break-up the Soviet Union in 1991 than they are caused by real migration. People who were once classified as citizens of the Soviet Union turned into ‘foreign-born’ residents when their country of birth was no longer their country of residence (Price and Benton-Short, 2007, p. 4). According to Price and Benton-Short (2007, p. 6), immigrant cities tend to be extremely diverse. ‘Hyperdiverse’ localities are defined as cities in which at least 9.5 per cent of the total population is foreign born. Immigrants come from all parts of the world. Not one country of origin accounts for more than 25 per cent of the immigrant stock in immigrant cities. In Europe, London, Amsterdam, Copenhagen, Hamburg and Munich are regarded as hyperdiverse, a by-product of globalization that has economic, labour and cultural implications. To meet the challenges that cities in Europe face in future they will increasingly have to expand their networks, accessibility, collaboration and production of innovative services and technologies (van der Knaap and Wall, 2002, p. 16).

44

International handbook of urban policy

References Bayer, Agnes (2006), ‘New role of Visegrad countries as a region of transit migration’, in Olli Kultalahti, Ilari Karppi and Heikki Rantala (eds), Europe in Flux: Transitions and Migration Pressures, Finland: Institute of Migration, pp. 155–91. Bengs, Christer and Kaisa Schmidt-Thomé (2003), ‘ESPON 2006 Programme/Urban–rural relations in Europe. Third Interim Report’, http://www.espon.lu. Berry, B.J.L. (1964), ‘Cities as systems within systems of cities’, Papers and Proceedings of the Regional Science Association, 13, 147–64. Bontje M. (2001), ‘Dealing with deconcentration: population deconcentration and planning response in polynucleated urban regions in North-West Europe’, Urban Studies, 38(4), 769–85. De Long, J. Bradford and Andrei Shleifer (1992), ‘Princes and merchants: European city growth before the Industrial Revolution’, Journal of Law and Economics, 36 (October), 671–702. Dillman, D.A. (1979), ‘Residential preferences, quality of life and the population turnaround’, American Journal of Agricultural Economics, 61, 960–66. Ecotec Research and Consulting Ltd, in cooperation with Nordregio and Eurofutures (2007), ‘State of European Cities Report. Adding value to the European Urban Audit. European Union, Regional Policy’, study contracted by the European Commission. Edvardsson, Ingi Runar, Elli Heikkilä, Mats Johansson, Lars Olof Persson, Torben Dall Schmidt and Lasse Sigbjörn Stamböl (2007), ‘Economic renewal and demographic change. Evaluation of policies for well functioning local labour markets in the Nordic countries’, Institute of Migration, Web Reports 30. Eltges, Markus and Karl Peter Schön (2007), ‘Germany’s EU presidency: key issues for urban and spatial development’, in Karl Peter Schön and Wendelin Strubelt (eds) EU 2007 DE, Federal Office for Building and Regional Planning, Research News 1/April, Bonn, pp. 4–5. Espon (2003a), ‘The role, specific situation and potentials of urban areas as nodes in a polycentric development. Espon Project 1.1.1. Third interim report’, August. Espon (2003b), ‘The spatial effects of demographic trends and migration. Espon 2006 Programme Action 1.1.4. Second interim report’, August. Espon (2003c), ‘Particular effects of enlargement of the EU and beyond on the polycentric spatial tissue with special attention on discontinuities and barriers. ESPON Action 1.1.3. Second interim report, Part I’, August. Espon (2003d), ‘Particular effects on enlargement of the EU and beyond polycentric spatial tissue with special attention on discontinuities and barriers. ESPON Action 1.1.3. Second interim report, Part II’, August. European Commission, Directorate-General, Joint Research Centre and European Environment Agency (2006), ‘Urban sprawl in Europe. The ignored challenge’, EEA Report 10/2006, Copenhagen. European Commission, Directorate-General, Regional Policy (2005), ‘Cities and the Lisbon Agenda: Assessing the Performance of Cities’, Brussels. Federal Office for Building and Regional Planning and Federal Ministry of Transport, Building and Urban Development (2006), Perspectives of Spatial Development in Germany, Bonn/Berlin. Fielding, A.J. (1989), ‘Migration and urbanization in Western Europe since 1950’, The Geographical Journal, 155(1), 66–9. Fields, Gary (1999), ‘City systems, urban history, and economic modernity. Urbanization and the transition from agrarian to industrial society’, Berkeley Planning Journal, 13, 102–28. Friedmann, J. (1966), Regional Development Policy: A Case Study of Venezuela, Cambridge, MA: MIT Press. Friedmann, J. (1972), ‘A general theory of polarized development’, in N.M. Hansen (ed.), Growth Centres in Regional Economic Development, New York: The Free Press, pp. 82–107. Geyer, H.S. (1996), ‘Expanding the theoretical foundation of the concept of differential urbanization’, Tijdschrift voor Economische en Sociale Geografie, 87(1), 44–59. Geyer, H.S. and T. Kontuly (1993), ‘A theoretical foundation for the concept of differential urbanization’, International Regional Science Review, 15(2), 157–77. Gibbs, J.P. (1963), ‘The evolution of population concentration’, Economic Geography, 39, 119–29. Heikkilä, Elli (2003), ’Differential urbanisation in Finland’, Tijdschrift voor Economische en Sociale Geografie, 94(1), 49–63. Heikkilä, E., P. Nijkamp, I. Traistaru and S. Yousfi (2006), ‘Extended Europe: patterns and agglomeration, migration and economic performance differentials’, in H.S. Geyer (ed.), Global Regionalization. Core Peripheral Trends, Cheltenham UK and Northampton, MA, USA: Edward Elgar Publishing, pp. 85–112. Henderson, J. Vernon and Jacques-François Thisse (eds) (2004), Handbook of Regional and Urban Economics, Volume 4, Cities and Geography, Amsterdam: Elsevier. Hohenberg, Paul M. (2004), ‘The historical geography of European cities: an interpretive essay’, in J.V. Hendersson and J.-F. Thisse (eds), Handbook of Regional and Urban Economics, Volume 4, Cities and Geography, Amsterdam: Elsevier, pp. 3021–52.

Differential urbanization trends in Europe

45

Ioannides, Yannis M. and Esteban Rossi-Hansberg (2005), ‘Urban growth’, working paper, Department of Economics, Tufts University. Kim, Sukkoo (2007). Urbanization’, The New Dictionary of Economics, 2nd edn, http://soks.wustl.edu/urban ization.pdf. Kultalahti, Olli (2006), ‘An analytical framework of research on migration pressure: concepts and approaches’, in Olli Kultalahti, Ilari Karppi and Heikki Rantala (eds), Europe in Flux. Transitions and Migration Pressures, Finland: Institute of Migration, pp. 19–54. Leeson, G.W. (2002), ‘The changing face of the population of Europe. Geographical distribution, urbanization, depopulation and international migration’, Nordregio Working Paper 2002:2, Stockholm. Malecki, Edward J. (2006), ‘Jockeying for position: what it means and why it matters to regional development policy when places compete’, in Ron Martin, Michael Kitson and Peter Tyler (eds), Regional Competitiveness, London: Routledge, pp. 111–30. Panebianco, S. and M. Kiehl (2003), ‘Suburbanisation, counterurbanisation, reurbanisation? An empirical analysis of recent employment and population trends in Western Europe’, paper presented at the ERSA 2003 conference, Jyväskylä. Pred, A. (1965), ‘Industrialization. Initial advantage and American metropolitan growth’, The Geographical Review, 55(2), 158–85. Price, Marie and Lisa Benton-Short (2007), ‘Counting immigrants in cities across the globe’, MPI, Migration Information Source, www.migrationinformation.org/Feature/display.cfm?id5567. Puga, Diego (1996), ‘Urbanisation patterns: European vs. less developed countries’, Discussion Paper No. 305, London School of Economics, Centre for Economic Performance. Pumain, Denise, Hélène Mathian and Céline Rozenblat (1999), ‘A regional typology of rural–urban patterns’, Study program on European spatial planning. Strategic study: Towards new urban–rural partnership in Europe, 2.2. Typology of cities. Rauhut, Daniel, Elli Heikkilä, Lasse Sigbjörn Stamböl, Sirkku Wilkman and Mats Johansson (2007), ‘Immigrant population, labour supply and labour market participation in the Nordic regions’, paper presented in the 47th Congress of the European Regional Science Association, Paris. Richardson, H.W. (1973), Economic Growth Theory, London: Macmillan. Scott, Allen J. and Michael Storper (2007), ‘Regions, globalization, development’, Regional Studies, the journal of the Regional Studies Association. 40th Anniversary Classic Papers Supplement 41 (S1), 191–205. Turok, Ivan (2006), ‘Cities, regions and competitiveness’, in Ron Martin, Michael Kitson and Peter Tyler (eds), Regional Competitiveness, London: Routledge, pp. 79–93. Turok, I. and V. Mykhnenko (2006), ‘Resurgent European cities?’ Working Paper 2, Centre for Public Policy for Regions. UNFPA (United Nations Population Fund) (2007), ‘State of world population 2007. Unleashing the potential of urban growth’, United Nations Population Fund. United Nations and UNCHS (Habitat) (2001), ‘Urban millennium: special session of the General Assembly for an Overall Review and Appraisal of the Implementation of the Habitat Agenda’, New York, 6–8 June. Urban Audit database, Eurostat, http://epp.eurostat.ec.europa.eu/portal/page?_pageid50,1136162,0_4557 2076&_dad5portal&_schema5PORTAL. Urban Origins and Preindustrial Cities (2006), ‘Urban Studies 200, Cities’, 19 September. van der Knaap, G.A. (Bert) and Ronald Wall (2002), ‘Linking scales and urban network development’, in Henk van Dijk (ed.), The European Metropolis 1920–2000, Proceedings of a conference at the Centre of Comparative European History, Berlin. Wild, T. (1983), ‘The residential dimension to rural change’, in T. Wild (ed.), Urban and Rural Change in West Germany, London and Canberra: Croom Helm, pp. 161–99. World Urbanization Prospects (2005), The 2005 Revision Population Database, http://esa.un.org/unup/. World Urbanization Prospects (2006), The 2005 Revision. Executive Summary, Department of Economic and Social Affairs, Population Division. United Nations, New York. Wyly, Elvin (2008), ‘Urban origins and historical trajectories of urban change: geography 350 – introduction to urban geography’, 11 September, http://www.geog.ubc.ca/~ewyly/g350/origins.pdf.

3

Large urban economies: the role of knowledge and ICT infrastructure P. van Hemert, M. van Geenhuizen and P. Nijkamp

Introduction The modern age of globalization not only means increasing openness (in terms of imports, exports and trade of goods, services, foreign direct investment (FDI), capital and information) among the nations of our world, but also an intensification of interaction between players and stakeholders at the international level. Regions (both national and urbanized) are increasingly influenced by global forces. This holds not only for Europe and North America, but also for Asia and Africa. Globalization leads to a new force with a new division of power and economic progress at all geographical levels. It is often argued that globalization forces and the benefits associated with them tend to be concentrated in the richest metropolitan regions of the world (OECD, 2006a). For example, metropolitan areas act as magnets of FDI, but the type of FDI motivation and the type of economic activity concerned may be very different. Thus cities in developing economies are attractive mainly for reasons of cheap labour, availability of cheap raw materials in adjacent regions, and market penetration. Cities in the developed world attract FDI because they are centres of knowledge but also because they are strong markets (distribution–logistic nodes). This broad pattern reflects major traits of the traditional global division of labour, but the division seems to be changing. For example, some cities in Eastern Europe and Asia, traditionally attractive as centres of cheap labour supply, are increasingly attracting activities requiring high levels of knowledge. The city of Brno in the Czech Republic now attracts development activities not only because of its traditionally high local skill capacity but also because that capacity is expanding, while Singapore attracts FDI because it manages to attract foreign expertise to the city. Also, cities like Mumbai (India), which used to attract foreign investment because wages in the ICT (information and communication technology) sector there were known to be low, continue to focus on activities with a strong knowledge component (UNCTAD, 2006). It appears as if globalization tends to force regions to continuously update their urban policy in order to remain attractive for FDI, trade of goods and so on, and not to lose momentum in economic growth. Strengthening urban policy nevertheless requires appropriate insight into what exactly drives urban economic growth. In this chapter, an attempt is made to define several of the drivers of urban economic growth that seem to be gaining ground. First, the pattern of specialization towards higher-value-added economic activities tends to favour metropolitan areas, which also have a larger and more diversified economic basis. This might explain why some metropolitan regions tend to have a faster growth rate than others. But there are currently also other drivers of urban economic development. The productivity per worker in a given region appears to play an important role. Productivity seems to be positively influenced by the level of knowledge investments in a country or region, and cities seem to be the perfect place for knowledge spillovers. 46

Large urban economies

47

In order to gain a better understanding of what is meant by urban regions, we shall first try to define the three most dominant forms of urban agglomeration as well as the advantages and disadvantages of urbanization. Next, we shall map out some of the most important drivers of urban-led economic growth. We focus on the ICT sector and the importance of productivity and investment in the information (knowledge) sector.1 When looking at the economic development of Europe, we come to the conclusion that Europe is still lagging behind the global frontrunners. Much of this has to do with Europe’s low knowledge investment, which seems to hamper overall productivity. We end by providing some suggestions for future urban policy making to further enhance Europe’s urban economic capacity. Emerging role of metropolitan regions Definitions of metropolitan regions in literature differ significantly. Some are functionally based. In such cases they are regarded as ‘core areas’ when they are associated with large concentrations of population and employment opportunities, surrounded by urbanized areas that are closely linked to the core. They may also be distinguished according to the sizes of their populations (OECD, 2006a) or otherwise in terms of their morphology. In this section we first discuss different archetypes in some detail. Then we move on to the main factors explaining the advantages and disadvantages of urban areas. This will give a better picture of the different dynamics that exist in urbanized areas and explain some of the differences that appear to exist between different urban regions. Structurally, a metropolitan area (also called an urban agglomeration) comes into being when two or more adjacent cities begin to coalesce. This usually happens when fast-growing large cities expand and engulf adjacent smaller towns or cities. When metropolitan areas begin to coalesce they become a ‘metropolitan region’, also sometimes called a ‘megalopolis’. If cities coalesce to become metropolitan areas, they can, strictly speaking, only be multicentric – the city centres of the coalescing cities bringing about the multicentricity – but because one city centre in such a region often dominates the rest, the literature also often refers to ‘monocentric metropolitan regions’. The monocentric metropolitan region has a single core dominating a hinterland of lower-order centres (towns) and rural areas. In addition to dominant cores they usually also have a number of separate cities within reasonable proximity that are well connected to each other. Examples are Stuttgart, London and Seoul. ‘Polynuclear’ or ‘polycentric metropolitan regions’ represent a number of urban areas adjacent to each other that have grown over the years to become an urban network, comprising a built-up or urbanized territory. Examples are the Randstad in the Netherlands, comprising the four largest Dutch cities of Amsterdam, Rotterdam, The Hague and Utrecht, or the Rhine–Ruhr metropolitan region in Germany, which includes Bonn, Cologne, Dortmund, Düsseldorf and Essen. When defined in terms of size, reference is often made to ‘mega-cities’. These normally have large and growing populations fed by large-scale internal migration. Examples are Mexico City, Seoul and Istanbul. In the mid-1980s the United Nations set the threshold population size of mega-cities at 8 million and later raised it to 10 million (United Nations, 1998). In the data used in this chapter all three types of regions are referred to. They may be helpful in exploring key issues concerning metro-regions such as the relationship between urban growth, the importance of capital cities, productivity and the

48

International handbook of urban policy

contribution of metro-regions to their national economies. However, sometimes a more general country- or continent-level distinction is also made in order to show differences in growth between, for example, the EU and the USA. In general, factors that are used to explain the differences in growth between the different metropolitan regions comprise population, employment and production. We discuss these different factors in more detail later on. Positives and negatives in urban dynamics First, we outline some of the factors that may explain the advantages and disadvantages associated with urban areas in order to demonstrate the growing importance of cities in the process of economic growth. Overall, metropolises are believed to be the engines of economic growth and innovation, and this role will probably continue in the future. There is an abundance of literature on the role of metropolitan areas in prompting economic growth. In our modern age, cities are believed to offer spatial advantages related to knowledge spillover effects and an abundant availability of knowledge workers in the labour market (Acs et al., 2002). As such, an urban environment offers a reduction in business risk through a dense (formal and informal) information network (Nijkamp, 2006). The city is the place par excellence for spillovers of communication and information, and hence for learning economies (Cohen and Paul, 2005). Nevertheless, the urban environment also has its diseconomies (congestion, pollution, concentration, diseconomies of density, crime and urban anonymity). In ‘Are cities dying?’, Glaeser (1998) raises the question of whether cities will survive economically, socially and environmentally in the long run and emphasizes the importance of agglomeration economies (e.g. in the urban market and the urban ICT sector) as a natural key force for continued urbanization. Here lies an important challenge for urban policy. Positive factors Metropolization is a structural trend that is the result of several processes, among which are urbanization, suburbanization, migration, centripetal forces, spatial networks, and the linkages among polycentric regions. While the formal definitions of metropolitan regions often differ, they typically identify a core area with a significant concentration of employment or population and a surrounding area densely populated and closely linked to the core (OECD, 2006a). General criteria that apply include: large size (in terms of either employment or population), high population density, and higher commuting within the region than between these regions and other surrounding areas. A number of factors may explain the advantages of large agglomerations in generating higher output per capita and productivity. In a study by the OECD (2006a) the following positive factors have been identified. Agglomeration economies Large metro-regions tend to attract global or regional corporate headquarters, offer a wide range of choice in resources (especially labour), and concentrate on more specialized business services and infrastructure. Hence they are often incubation places for innovative activities. Specialization and diversity The size of urban labour markets and the range of firms located in urban areas tend to permit higher competition and specialization, which in

Large urban economies

49

turn raises efficiency. High-value-added activities in both the service sectors and manufacturing are often dominant. Specialization activities such as these do not demand large factory sites and intensify clustering and global access to knowledge. R&D activities and innovation Metropolitan regions tend to attract the largest proportion of R&D activities, and generate innovation due to their more favourable pattern of industrial companies. This phenomenon is particularly relevant in the case of urban areas with an extensive knowledge base (such as universities and research laboratories). Human capital Metropolitan areas tend to have greater endowments of human capital. These regions have a particular pull effect on the young and highly skilled. Higher education and training facilities are often seen as necessary ingredients of a strong local knowledge-based system. Physical capital There tends to be a larger stock of physical capital measured by equipment of firms and the stock of buildings and infrastructure facilities in metropolitan regions. Universities and research centres are also important examples of such infrastructure, especially since such intellectual capital overall tends to be located in larger metropolitan areas. In conclusion, metropolitan areas are favourable places for economic progress, but they are neither necessary nor sufficient conditions for high economic performance. However, metropolitan regions are not always associated with success. Negative factors The OECD (2006a) has identified several factors that may have a negative impact on the growth of a metropolis. Urban deterioration There are always some metropolitan regions that perform less well due to outdated infrastructure, unfavourable geographic conditions or industrial decay. According to the OECD, economic history has shown that Berlin (Germany), Fukuoka (Japan), Lille (France), Naples (Italy) and Pittsburgh (USA) have become economically stagnant due to a combination of these factors. Diseconomies of agglomeration Beyond a certain point (around 7 million), the correlation between metro-region size and income tends to become negative. These diseconomies of agglomeration are visible in mega-cities such as Seoul, Mexico City, Istanbul and probably Tokyo. Clearly, this turning-point depends on whether positive agglomeration forces are greater or less than negative agglomerations forces. As such, there is no natural or economic law that would indicate that there is an optimal limit to city size. Unemployment Large urban areas have a dynamic and fluctuating labour market. There tend to be large and persistent levels of unemployment in several metropolitan regions. This can partly be explained by the relative share of the population, but it also demonstrates that job creation may remain insufficient despite output accumulation.

50

International handbook of urban policy

Exclusion and poverty Overall, urban regions have pockets of population with low standards of living and which experience social problems. These issues are prominent not only in less advanced metropolitan regions like Mexico City (about 50 per cent of the population), partly due to rural–urban migration, but also in cities that have faced strong industrial restructuring (Rotterdam, Lille, Detroit) as well as in the suburbs of some of the richest metro-regions (Paris, London, New York). Socioeconomic inequalities Inequalities exist between people with high incomes who work in the high-value-added services sector and those engaged in servicing them, and those that are unemployed. Dual labour markets are often found in these metroregions. Immigrants Immigrants and their descendants tend to cluster in large cities, where they have difficulty in accessing economic networks. A reason might be that many have lower skills and do not speak the language (well), but even skilled immigrants find it difficult to access these networks. Problems of social cohesion often surface in metro-regions. Criminality Criminality is on average 30 per cent higher in urban areas than the national level, mostly due to higher levels of poverty and social exclusion. This development may negatively affect the growth rate of a region as deprived neighbourhoods often have reduced access to public infrastructure and services, and in many cases feature lower levels of investment per capita than other richer neighbourhoods. Congestion costs Urban regions have particularly prominent congestion costs in the form of traffic congestion, but also other forms of pollution such as lower air and water quality, high noise levels and the degradation of green areas. Pollution and congestion in turn result in physical and mental health costs that could otherwise have been avoided. Other forms of congestion costs that particularly affect the low-wage population but also affect the level of FDI, for example, are high prices of land, labour and other related resources. Poor-quality infrastructure A problem that may arise in some urbanized regions is the lack of good-quality public facilities because of the costs of maintaining them in areas where there is a high concentration of people and activities. Infrastructure is the glue that holds global city-regions together and connects them with smaller cities and remote regions. This connection function is particularly true for hard infrastructure such as transport and ICT, which facilitate connectivity and accessibility. However, without well-developed soft infrastructure hard infrastructure cannot be optimized in urban economic growth. How soft infrastructure is utilized depends on the quality of urban social and cultural life as well as on the organizational quality and the attitudes of the urban actors towards education and innovation (Haynes, 2006). The management of negative externalities of metro-regions poses a formidable challenge to urban policy makers. As globalization gains momentum it will most likely further stimulate urban-focused economies. Successful cities tend to attract talented young, highly skilled workers. They are centres of innovation and entrepreneurship, and are

Large urban economies

51

competitive locations for global and regional headquarters. However, large cities are also associated with negative externalities such as congestion, pollution, social segregation and high crime rates. This raises questions about the long-term sustainability of urban regions that need to be taken seriously. Metropolitan areas need to avoid the exacerbation of negative externalities, as they will undoubtedly lead to even higher costs and have a negative effect on their growth potential. In Europe, for example, major structural problems in several metropolises, particularly in Central Europe, are likely to limit Europe’s growth potential (ERECO, 2006). Although the most diverse and dynamic urban centres, especially of Western Europe, have grown fairly fast, many cities oriented towards manufacturing or public administration have grown rather slowly. In the next section, we look at Europe’s urban development and the obstacles it faces in more detail. It is hoped that this will give a better understanding of what exactly drives current urban economic development and how this development might be improved. After a further definition of the main drivers of urban growth, we look at the investments necessary to further improve the growth level. The ICT sector, which plays a role of growing importance in the economy, will hereby serve as an example. Urban economic development Productivity is key In a model of cross-country comparison developed by the OECD, different factors are examined that may explain a given region’s advantage in GDP per capita relative to other metropolitan regions. When looking at the performance of metropolitan regions, productivity per worker emerges as a key factor. It outstrips other factors, in particular efficiency of the local labour market expressed in terms of employment/unemployment and the relative size of the labour force with respect to the population, i.e. the activity rate. It is productivity differences from the OECD average that determine whether the per capita income in a particular metro-region stands below or above the average. Figure 3.1 shows that productivity, measured as the quotient between GDP in PPPs (purchasing power parities) and employment, explains most variation in GDP per capita among metropolitan regions. Employment rates appear to differ only slightly among metro-regions (from 81.1 to 98.9 per cent). This makes the activity rate the secondmost important explanatory factor. However, the activity rate’s capacity to determine income is much weaker than productivity (activity rates between 36.3 and 63.4 per cent). Productivity differences from the OECD average, therefore, seem to determine whether per capita income in a particular metro-region stands below or above the average and as a result seems to explain a great deal of the level of competitiveness of a country, a region or a metropolitan area. In order to stimulate competitiveness, higher levels of productivity are important for an urban area. But how can a metropolis promote higher levels of productivity? Scientific research shows that performance in the productivity level of many (although not all) metropolitan regions appears to be strongly linked to certain kinds of economic activity, in particular high-tech and advanced services (Henderson et al., 1995). Investment in knowledge in order to stimulate further growth of the urban economy is thus essential. When considering the lower level of growth of European metropolises compared to, for example, US urban regions, it becomes clear that Europe does not seem to invest

52 Productivity Employment Rate Activity Rate

Main explanations of GDP differentials between OECD metropolitan regions (2002)

OECD (2006a).

Figure 3.1

Source:

–150

–100

–50

0

50

% 100

Boston San Francisco New York Washington San Diego Seattle Los Angeles Houston Philadelphia Dallas London Paris Denver Atlanta Chicago Detroit Minneapolis Portland Baltimore Lyon Phoenix Miami St. Louis Brussels Cleveland Vienna Rome Dublin Tampa Bay Milan Turin Hamburg Frankfurt Stuttgart Stockholm Munich Sydney Oslo Zurich Helsinki Rhein-Ruhr Pittsburgh Melbourne Birmingham Copenhagen Randstad Warsaw Madrid Manchester Leeds Tokyo Toronto Lille Auckland Naples Lisbon Osaka Aichi Barcelona Vancouver Montreal Budapest Prague Berlin Valencia Athens Busan Fukuoka Monterrey Seoul Mexico City Puebla Guadalajara Istanbul Krakow Ankara Daegu Izmir

Large urban economies

53

enough in knowledge. This idea is supported by the OECD (2005), which states that economic growth in the Euro area has been lagging that of the best-performing OECD countries since the mid-1990s. The growth of output amounted to 1.3 per cent in the Euro area in 2005, substantially lower than the 3.5 per cent in the USA and the 2.7 per cent in Japan, and the 4.8 per cent at world level. It should be acknowledged, however, that some EU countries have performed rather well economically in the past decade. This group includes the member states formerly classified as cohesion countries (especially Ireland), as well as Finland, the Netherlands and the UK. Let us first define the growing importance of knowledge investment in the economy a little more precisely. Knowledge investment In the context of the overall economy, Europe has a well-developed knowledge economy measured by employment in knowledge-based industries. However, in the context of the potential growth and productivity of Europe there have been few pay-offs so far. Apparently the expansion of employment in knowledge-based industries has seen a slowdown in productivity growth in Europe, while a similar expansion of knowledgebased employment in the USA has been accompanied by an acceleration in productivity. According to Brinkley and Lee (2006), a reason for this may be that Europe has expanded the number of knowledge jobs but has not made the underpinning investment in knowledge that would release wider economic benefits. The degree to which Europe has been falling behind in knowledge-based investments is shown in Table 3.1. The OECD has developed a composite indicator of knowledge-based investments comprising investment in R&D, investment in IT software and investment in higher education as a share of GDP. By this measure (see Table 3.1) most EU economies, with the exception of the Nordic countries, failed to significantly increase knowledge-based investment between 1994 and 2002. In contrast, the USA increased investment significantly and pulled even further away from the rest. In 2002, the USA invested 6.6 per cent of GDP in knowledge compared with 3.7 per cent in Germany, 3.7 per cent in France and the UK, and 2.4 per cent in Italy. When we examine the urban regions within these countries, their overall score tends to outweigh the national average. Well-performing metropolitan regions such as Stockholm and Helsinki are used to attracting high-tech economic activity, as they have developed strong value-added clusters in telecommunications and ICT, as well as in biopharmaceuticals, and to a lesser extent (and especially in Stockholm) in financial and other business services, and transport and logistics. In both cases, strong concentration of productivity and a high skill level have been established, supported by a network of universities and advanced research centres around industrial activities, making use of the diversity of innovation sources that a metro-region can provide (OECD, 2006b, 2003). In Milan, the percentage of firms and people working in high-knowledge activities is respectively 9.4 per cent and 45.9 per cent compared to the national average of 6.15 per cent and 32.1 per cent (OECD, 2006c). On the other hand, the Randstad, a polycentric urban region located in the Western Netherlands, is an example of a metropolitan region in which economic performance has witnessed relatively low labour productivity growth over the last decade. After having experienced high economic growth rates during the 1990s, it performed less well at the beginning of the new decade (OECD, 2007). The Randstad’s economy scores well on

54

International handbook of urban policy

Table 3.1

Investment in knowledge, 1994–2002

Countries (percentage of GDP)

1994 (%)

2002 (%)

Change

5.4 4.9 3.9 4.5 3.9

6.6 5.9 5.0 4.7 4.1

11.2 11.0 11.1 10.2 10.2

5.1 4.7 3.7 3.4 3.6 3.4 3.4 3.5 2.3 2.1 2.6 2.0 1.1 1.3

6.8 6.1 5.5 3.7 3.8 3.8 3.7 3.7 3.4 2.8 2.4 2.4 1.9 1.8

11.7 11.4 11.8 10.3 10.2 10.4 10.3 10.2 11.1 10.7 20.2 10.4 10.8 10.5

World excl. Europe USA Korea Japan Canada Australia Europe Sweden Finland Denmark Germany Belgium Netherlands France UK Austria Spain Ireland Italy Greece Portugal

Note: Investment in knowledge is defined as investment in R&D, software and higher education. Source: OECD, in Brinkley and Lee (2006).

many indicators. It has a relatively high regional income per capita, its unemployment rate is one of the lowest in OECD metropolitan regions, and labour productivity is high. Economic growth, though sluggish in the early 2000s, was good in the 1990s and has been picking up in 2006. The main challenge, however, is the low levels of productivity growth exhibited in recent years, with the Netherlands having one of the lowest growth rates in the OECD over the last decade. The Randstad region had a lower productivity growth rate (1.7 per cent over 1995–2005) than several other regions in the Netherlands, and is well below that of many other European cities such as Dublin (4.3 per cent) and Stockholm (3.7 per cent). It appears that the Randstad in particular lags behind in the knowledge-based potential of its workforce. Although the Randstad has seven universities and 18 higher education colleges, universities have few opportunities to select their students. Also, existing knowledge migrants such as foreign students and highly qualified refugees are not used sufficiently. Similarly, the Randstad does not do well when it comes to attracting innovative foreign firms. Although the Randstad is highly successful in attracting FDI, only a minor share of it consists of R&D facilities. Universities’ payment systems and funding

Large urban economies

55

systems in the Netherlands, in addition, do not create incentives for academic staff to be proactive in creating interaction with the private sector, thereby obstructing knowledge transfer. It has also been shown that market forces in the Netherlands are less likely to promote R&D activities in SMEs (small and medium-sized enterprises) than in large firms. When we look at the low productivity rates of the Randstad region, knowledge-based investment seems very important for urban economic growth. As such, the Randstad may be representative of other poorly performing European urban regions. A good example of a sector where both urban conditions and knowledge positively affect the level of growth is the ICT sector, the sector that also in large part explains the high growth rate of the Nordic countries. It seems very important, then, for a city to have a well-functioning ICT network in order to remain competitive, although a wellfunctioning network alone is not enough for high growth levels. In the next section, we give an idea of what exactly is meant by ‘investment in knowledge’ by taking a closer look at the development of the ICT sector. The EU’s performance on the ICT front Two key aspects of the post-1990 globalization phase seem to have been the rapid deepening of global trade integration and the cost-induced, and ICT-enabled, acceleration in the worldwide relocation of production processes. In a recent study by the European Commission (Havik and McMorrow, 2006), the extent to which the EU is responding to these developments, especially its performance in particular high-technology/skillintensive categories of trade, was investigated. Some interesting conclusions were drawn that deserve some attention here. First, the study supports the idea that the hightechnology sector is indeed gaining ground in the economic process. Second, the study supports the EU’s seeming inability to make the underpinning investment in knowledge that would release wider economic benefits, especially with regard to ICT. When we look at world trade, there seems to have been a sharp increase in the technology/research content of trade over time. Table 3.2 gives a breakdown of world trade based on classifications that focus either on the technology level of products or the intensity with which they use different factors of production. In terms of skill intensities, we can see that high-technology products now account for over 22 per cent of world trade compared with 18 per cent back in 1992. This growth in the skill content of trade would appear to be totally due to the ICT sector since its share has risen from 13 per cent to 18 per cent over the same period. While the medium-high- and medium-lowtechnology groupings have broadly maintained their relative positions, there has been a sharp decline in the share of low-technology goods. The main trends emerging from the skill-based breakdown of manufacturing trade is confirmed by the factor intensity breakdown. This classification also points to a significant increase in the share of goods that use R&D intensively, with both the ‘easy-to-imitate’ and ‘difficult-to-imitate’ research goods categories increasing their shares of overall world trade over the period. All other areas have seen declines in their respective performances, with the most significant declines occurring in the raw-material-intensive and labour-intensive categories. Further, in terms of developments at the overall trade balance level, Table 3.3 shows that the EU has remained in broad balance with the rest of the world over the 1992–97 and 1998–2003 periods, with its position improving over time. The rest of the world is

56

International handbook of urban policy

Table 3.2

World export and import market shares and trade balances, 1992–2003* 1992

EU-15* EU-10 EU neighbours USA Americas (excl. USA) Japan China South East Asia (excl. China) India

2003

Share of world exports

Share of world imports

Trade balance (% of GDP of area)

Share of world exports

Share of world imports

Trade balance (% of GDP of area)

15.0 1.0 6.2 12.6 7.6 9.5 2.4 12.1

16.5 1.1 5.7 15.1 7.3 6.4 2.2 12.5

−0.9 −2.8 0.7 −1.7 0.2 2.8 1.0 −2.1

15.9 2.8 7.6 10.2 9.0 6.7 6.2 13.3

15.8 3.1 6.9 17.7 7.7 5.2 5.6 11.9

−0.4 −6.6 1.7 −5.3 2.5 2.1 1.6 3.1

0.6

0.7

−1.5

0.9

1.0

−2.2

Note: *Extra-EU-15 (columns do not sum to 100 since the rest of the world grouping and intra-EU-15 trade is excluded). Source:

UN Comtrade, in Havik and McMorrow (2006).

characterized by either large deficits or surpluses. On the surplus side, the EU neighbours and the Americas (excluding the USA) have seen large improvements in their trading positions over the decade, with surpluses of 1.7 per cent and 2.5 per cent respectively in 2003. The other big trading surpluses are registered in Asia, where Japan, China and the rest of South-East Asia all had large surpluses, ranging from 1.5 per cent of GDP in China to 3 per cent for South-East Asia. In terms of deficits, India, the EU’s new member states (EU-10) and the USA have consistently showed deficits over the period, with the EU-10 and the USA having external deficits in excess of 5 per cent of GDP. However, while the EU in general seems to be managing to maintain its share of overall world markets, there are concerns regarding its performance in the hightechnology sector, and ICT in particular. When one compares the EU’s performance with that of the other country groupings, as is done in Table 3.4 on the basis of export market shares, it becomes apparent that the EU is the world leader in medium-high- and medium-low-technology sectors, but is ranked only third in the world (behind the USA and South-East Asia, excluding China) in the high-technology area. In terms of factor intensities, the EU is the largest world player in the difficult-to-imitate research goods and capital-intensive goods sector. For China and the EU-10 groupings, both have large shares in the low-technology sectors. Japan has the highest concentration in the mediumand high-technology sectors of any of the covered areas. Finally, regarding the rest of the world, India displays remarkable stability in its shares for the different skill and factor intensity categories. Overall, the study by Havik and McMorrow (2006) shows that while the EU has done well over the last 10–15 years in maintaining its leading role in world trade, this performance may reflect a certain element of good fortune given that the initial intensive

Large urban economies Table 3.3

(a)

57

Global overview: breakdown of total world trade by skill and factor intensity, 1992–2003

Breakdown of trade by skill intensity Percentage breakdown of manufacturing imports

High technology (of which ICT) Medium-high technology Medium-low technology Low technology Total (b)

1992

2003

18.0 (12.8) 36.8 18.8 26.5 100

22.4 (17.9) 37.6 18.8 21.2 100

Breakdown of trade by factor intensity Percentage breakdown of total imports

Raw-material-intensive goods Labour-intensive goods Capital-intensive goods Easy-to-imitate research goods Difficult-to-imitate research goods Total

1992

2003

22.6 20.5 18.0 14.3 24.6

20.6 17.4 17.5 18.3 26.2

100

100

Note: *Imports are used for the skill and factor intensity breakdowns due to the generally more reliable nature of the underlying, duty-based, data sources. Source:

UN Comtrade, in Havik and McMorrow (2006).

investment phase of the ongoing global catch-up process tends to benefit those capitalgoods industries in which the EU is relatively strong. The EU’s specialization in these industries has also helped to bolster the external pricing power of EU companies since the mid-1990s, with the region as a whole enjoying significant terms-of-trade gains at the aggregate economy level over this period. However, with regard to a skills-based breakdown of product groupings, the EU’s poor performance in the high-technology sector, particularly in ICT, seems a source of concern. Apparently, in a progressing globalizing world economy a good ICT performance seems essential to stay competitive, especially given the evidence that many developing countries seem anxious to rapidly move up the value-added chain (and indeed are investing heavily in R&D and education to hasten this process). Metropolitan environments in particular seem to offer favourable conditions for ICT-related activity, as this highly urbanized setting provides the necessary conditions for proper infrastructure (e.g. by means of specialized training and educational institutes etc.), although it should be recognized that non-metropolitan regions may also have high-technology and ICT-related activity. This local ICT activity is especially successful in combination with university proximity. For the ICT sector to become successful, then, new knowledge and R&D seem essential, and this combination overall tends

58

16.1 1.4 4.2 13.0 6.2 10.8 3.0 15.7 0.6

1992– 97 15.8 2.4 4.6 12.7 7.4 8.2 5.0 16.5 0.7

1998– 2003

Total manufacturing exportsb

13.4 0.5 2.4 18.7 4.0 14.8 2.1 22.9 0.1

1992– 97 13.1 0.8 2.5 19.9 4.7 11.8 2.8 22.8 0.1

1998– 2003

High technology

10.3 0.6 1.5 16.2 4.2 16.3 2.2 26.8 0.1

1992– 97 10.4 1.0 1.6 16.6 4.9 12.8 3.0 26.8 0.1

1998– 2003

ICT (part of high technology)

19.8 1.4 4.3 13.2 7.6 13.2 1.4 7.3 0.3

1992– 97 19.9 1.9 4.5 13.9 8.3 11.6 1.7 7.2 0.3

1998– 2003

Medium-high technology

Breakdown of trade by skill intensity

18.5 2.5 7.1 9.6 9.1 8.1 2.3 11.4 0.4

1992– 97

17.3 2.4 10.3 9.9 9.4 7.2 2.8 11.9 0.4

1998– 2003

Medium-low technology

Breakdown of trade by skill/factor intensity: comparisons based on world export market shares

EU-15a EU-10 EU neighbours USA Americas (excl. USA) Japan China S.-E. Asia (excl. China) India

Table 3.4

14.1 2.4 4.8 8.4 9.1 1.7 6.4 18.4 1.8

1992– 97

14.0 2.6 5.6 8.4 9.8 1.6 7.4 17.4 1.9

1998– 2003

Low technology

59

15.5 1.4 6.3 12.8 8.2 8.8 2.8 15.5 0.6

15.4 2.2 7.7 12.0 9.3 6.9 4.4 15.8 0.7

1998– 2003 19.8 1.3 3.9 16.4 4.5 14.8 1.5 13.2 0.1

1992– 97 19.7 1.5 3.9 18.1 5.2 12.4 1.9 13.5 0.1

1998– 2003

Difficult-to-imitate research goods

14.5 0.8 4.2 14.1 4.7 11.7 2.7 18.4 0.3

1992– 97 15.1 1.1 4.4 14.5 5.2 9.6 3.3 17.8 0.3

1998– 2003

Easy-toimitate research goods

15.9 1.9 3.8 9.7 11.9 12.9 1.4 6.2 0.4

1992– 97 15.6 2.2 5.5 9.9 12.5 11.6 1.4 6.3 0.4

1998– 2003

Capitalintensive goods

15.4 2.4 5.2 8.0 5.7 3.0 7.7 18.8 1.8

1992– 97

15.4 2.7 5.7 8.4 6.4 2.7 8.5 17.8 1.8

1998– 2003

Labourintensive goods

8.4 1.8 16.6 10.4 17.9 0.7 2.3 14.2 0.9

1992– 97

8.0 1.8 18.8 9.6 18.5 0.6 2.3 14.3 0.8

1998– 2003

Raw-materialintensive goods

Source:

UN Comtrade, in Havik and McMorrow (2006).

Notes: a Trade with world 5 extra-EU-15 for EU-15. Columns do not sum to 100 since the rest of the world grouping and intra-EU-15 trade is excluded. b There may be small discrepancies between the total column and the sum of the remaining columns due to the differences in the date of the extraction from Comtrade/data revisions.

EU-15a EU-10 EU neighbours USA Americas (excl. USA) Japan China S.-E. Asia (excl. China) India

1992– 97

Total exportsb

Breakdown of Trade by Factor Intensity

60

International handbook of urban policy

to be more widely available in densely populated urban areas. But the impact of ICT on economic growth varies again according to the urban production structure, e.g. the size of local companies and their embeddedness in larger supplier/customer networks. In the next section, we explore the role of ICT in urban economic growth in more detail, thereby further defining the optimal seedbed conditions for ICT-related growth. The role of ICT in economic growth ICT influences the performance and growth of cities in many ways (Cohen et al., 2005). First, by connecting the city with important external telecommunication networks and by employing adequate internal networks (rings), the potential of cities may significantly increase for large and quick data transport and use by high-technology companies and research institutes. Second, ICT and related technologies in informatics, multimedia etc. constitute a basis for establishment of new firms and for restructuring product markets and business models of existing firms, thus enabling the urban economy to renew its structure. Third, with the use of ICT, the performing of particular tasks by city departments may improve and may at the same time support urban regeneration (e.g. Kotval, 1999). Examples are the improvement of traffic flow and prevention of congestion; surveillance services to prevent crime and search for criminals, thereby increasing public safety; particular tasks in health care; supply of education for particular groups; and support in decision-making in spatial planning through GIS-based tools. We may also mention the supply of e-governance services to the public and, in particular areas, support in certain modes of participatory urban planning (Cohen et al., 2005; Conroy and Evans-Cowley, 2006). If we focus on companies, ICT (which includes the Internet) enables them to add electronic space to physical space, and to develop the best mix of physical and electronic activity and presence (see, e.g., Cairncross, 2002; Van Geenhuizen, 2004). Because it ‘shrinks distance’, ICT enables interaction over much larger distances than before, allowing companies to become more footloose and to locate more freely. In addition, based on the latest optical network technology, opportunities are created to facilitate the flow of huge amounts of data. The connection of computer technology, modern communication and science allows innovative companies to participate in basic and applied research in an interactive manner. Potential impacts of ICT on spatial patterns of production, including R&D, are based on various unique and far-reaching characteristics of the Internet (Kenney and Curry, 2001). An important feature is interactivity, such as in information (feedback) loops in supply chains, leading to an increased efficiency but also to reconfiguration of physical segments and the potential withdrawal from some of them (e.g. wholesale and retail). Probably the most powerful feature of the Internet is information intelligence, i.e. the ability to collect information across the network, to store and process it, and utilize and disseminate the results throughout the network. This also includes the more sophisticated activities of grid cluster computing using connected computer power and data inventory capacity across global networks, and data analysis such as data mining and diagnostics, and interactive experimentation, development and design. An example of the last kind of interaction is the participation of thousands of scientists in research at the accelerator facility of CERN (Geneva, Switzerland) using a highly sophisticated optical network. Such interaction is only possible if high-speed Internet access is provided. A recent development is to facilitate extremely large data flows between fixed points

Large urban economies Table 3.5

Metropolitan areas and ranking on ICT accessibility and city size (USA)

Metropolitan area

Accessibility indicator (2000)

Population size (1999) (million)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

6.8 7.4 8.9 4.9 20.2 16.0 3.9 2.4 3.5 4.5 6.0 2.6 3.0 1.8 1.3

San Francisco–Oakland–San Jose Washington–Baltimore etc. Chicago–Gary–Kenosha Dallas–Fort Worth New York etc. Los Angeles–Riverside–Orange City Atlanta Denver–Boulder–Greeley Seattle–Tacoma–Bremerton Houston–Galveston–Brazoria Philadelphia–Wilmington etc. St Louis Phoenix–Mesa Kansas City Salt Lake City–Ogden Source:

61

Adapted from O’Kelly and Grubesic (2002).

without interfering with the Internet traffic by using a hybrid network. This is a combination of a state-of-the-art Internet network and revolutionary optical technology using light paths. Such a hybrid network is currently being introduced in the Netherlands as SURFnet6, including Netherlight as the optical Internet exchange in Amsterdam. This network allows the supply of specific services and applications such as are found in astronomy and high-energy physics research, and provides capacity between 1 and 10 Gbit/s (Gigaport, 2005). Scholars in spatial science increasingly recognize that advanced digital infrastructure disproportionately agglomerates in a few world cities and that high-order activities increasingly concentrate there – be it in a somewhat spread manner (Sohn, 2004) – with low-order activities being exported to more peripheral regions (e.g. Malecki, 2002). This implies that large cities, while being favoured through their potential market size in becoming advanced nodes, strengthen their economies through the opportunities provided by such nodes. This circular development pattern does not exclude the possibility that a few selected small cities may benefit from ICT if they can attract advanced knowledge-intensive activity. The last phenomenon can be illustrated with data on cities in the USA. Table 3.5 shows the top 15 metropolitan areas on the basis of a ranking of relative accessibility to the commercial Internet (O’Kelly and Grubesic, 2002). The ranking suggests that it is not the largest metropolitan areas (New York and Los Angeles) that are on top but smaller ones, such as San Francisco and Washington. Nevertheless, all relatively large metropolitan areas are among the top 15, except for the Boston and Detroit metropolitan area. Note that a few selected smaller metropolitan areas are among the top ten, i.e. Atlanta, Denver and Seattle. A strong connectivity through hard forms of infrastructure is no longer sufficient to

62

International handbook of urban policy

bring about economic growth and innovation. In the course of the 1990s it became increasingly apparent that ICT cannot simply be transplanted onto an urban economy with information directly affecting this economy like a bullet hitting the target. There is no simple linear cause–effect model of the introduction of ICT in the urban and regional economy. Rather, the outcome is the result of a complex interplay between the technologies and the socioeconomic field of forces in the recipient economy and policy unit (Graham and Marvin, 1996). The impact of ICT on economic growth, for example, varies according to the urban production structure, e.g. the size of local companies and their embeddedness in larger supplier/customer networks. Regions with many large companies linked with metropolitan areas and the global economy seem to benefit more from ICT than regions with a dominance of independent, small and medium-sized companies (SMEs). Thus a certain amount of advanced networking must exist before it can be mediated through ICT. Advanced networks cannot be created by providing an ICT infrastructure if no networks existed before. The point made here is that the competitive position of cities cannot be changed merely by the introduction of ICT in a supply-side approach. Much depends on the organizational quality and learning and innovation attitude of firms, supporting institutes and in policy making in the recipient economy. These institutional factors are also known as ‘soft infrastructure’ (Estache and Goicoechea, 2005; World Bank, 2006). The latter may, however, also include elements of social and cultural life. Good-quality dining, entertainment, recreation and art facilities may attract and help retain high-quality knowledge workers. Tolerance and diversity issues have also been identified as relevant, while safety is increasingly addressed today as an issue in this context. Currently, soft infrastructure is seen as just as important as hard infrastructure in the economic development of urban regions. So, how can these conditions be optimized to get better overall results, i.e. higher productivity rates? Urban seedbed conditions seem to play an important role here. Without good-quality soft infrastructure, productivity seems destined to remain low. Urban seedbed conditions Seedbed conditions largely cover what has been named soft infrastructure in the previous section. New knowledge is the basis on which new technology, new organizational modes and new logistic and management practices contribute to restructure global value chains and existing firms, and to underpin newly established firms, thereby affecting the urban economy. In studies on urban innovation, much attention is paid to local knowledge availability and access. Accordingly, innovative firms in the urban economy are seen as enjoying the benefits from locally embedded knowledge networks and knowledge spillovers (Acs, 2002; Audretsch, 1998; Van Oort, 2004), provided that these firms belong to these socioeconomic networks through similar norms, practices and interests (Gertler, 2003). In addition, cities provide an abundance of knowledge workers. These workers preferably interact with each other in agglomerated environments to reduce interaction costs and they tend to be more productive in such environments (Jacobs, 1969; Florida, 2002). The facilitation of face-to-face contacts and repeated meetings in person by local proximity, and the limits to this by particular geographic borders, for example, of a daily activity system or central business district (e.g. Rosenthal and Strange, 2001), are central in the arguments of some schools of thought that view localized knowledge spillovers and learning as a major benefit of agglomerated urban environments, learning regions and the like (Maskell and Malmberg, 1999). In particular, social network theory has put an emphasis

Large urban economies

63

on proximity-based social ties promoting trusting relationships, fine-tuned information exchange and joint problem solving. On this view, local firms and organizations know each other better due to a common history and culture, and trust each other more than distant partners, thereby reducing transaction costs of knowledge exchange. A popular concept in this context is a cluster, defined by Porter (1998) as a geographic concentration of interconnected firms, specialized suppliers, service firms, associated institutions and firms in related industries. In cluster thinking, the link established between competitiveness of firms and cooperative relationships on the basis of local proximity has partially led to ideas of knowledge exchange and learning taking place almost exclusively in the cluster. Recently, some doubt has arisen about the arguments of local knowledge spillovers and role of local proximity in agglomerated urban places and clusters, particularly due to the recognition of the influence of modern high-speed transport and telecommunication. Telecommunication may substitute a part of face-to-face communication, search operations, meetings and working on particular tasks, through for example, e-mail, webassisted searches, teleconferencing and virtual teams (e.g. Loane, 2006; Malecki, 2002). Currently, a slightly reduced importance of spatial proximity in an urban setting seems to be becoming accepted on the basis of various studies of research collaboration, measured through publications in journals and patent citations (Johnson et al., 2006). However, particular agglomeration advantages seem to remain exclusively available in the largest cities in urban innovation systems (Van Geenhuizen and Nijkamp, 2007), such as access to a particular urban workforce and to the highest-level digital nodes. Despite somewhat shifting perspectives, the basic idea remains supported by recent studies: urban agglomeration advantages matter but their influence stretches over somewhat larger distances in a fairly selective way. The role of ICT here seems slightly contradictory: this technology allows firms to spread over larger distances, whereas particular firms (even ICT firms) are closely tied to the physical digital nodes. Investments in ICT to enhance productivity growth, then, seem of vital importance for the EU as a whole and some regions in particular (the Randstad). The EU needs to increase its knowledge potential and the ICT sector seems to be the sector par excellence to have benefited from the globalization process (Havik and McMorrow, 2006). ICT may therefore be considered very important for the economic growth of a country. An optimal result can be gained when urban conditions, including soft infrastructure, are well taken care of. Investment in knowledge alone is not enough. The supporting conditions are just as important for economic growth. However, too often this is not sufficiently recognized by policy makers. Therefore countries do not obtain the maximum results and fall behind economically. On the other hand, a too narrow focus on ICT may have the opposite result, as the sector seems very responsive to external forces (‘dot-com boom’). We discuss this in greater detail in the next section, supporting this idea with some general figures on the diverging levels of growth both worldwide as well as within Europe itself. European urban development from an international perspective Lagging European cities Metropolises of Europe have grown faster as a group than the mean of growth of the respective countries in terms of population, employment and production. As such, economies of scale and the benefits of agglomeration are important factors explaining the faster

64

International handbook of urban policy

growth rates of big cities. However, in an annually published study by ERECO (2006) that covers 27 countries in Western and Central Europe, it was found that the most diverse and dynamic centres of Western Europe have grown fairly fast, but many cities oriented towards manufacturing or public administration have grown rather slowly. Nineteenthand twentieth-century industrialization generated massive economic development in almost all of the cities that are today the metropolises of Europe. More recently, however, the service sector has expanded at the expense of manufacturing industries in nearly all large European cities. Outsourcing of manufacturing industries to low-wage countries may be the cause of this, together with the growth of a more highly educated workforce in the cities of (Western) Europe. Environmentalist legislation inhibiting what is regarded as ‘dirty industries’ as compared to the ‘clean’ ICT sector may also have had an effect. Having said this, manufacturing still plays a substantial role in the economy of many European metropolitan areas such as Stuttgart, Milan, Turin, Bologna and Barcelona. Also, Madrid, Athens, Lisbon and Prague have strong construction industries. Deindustrialization is often taken as a further sign of Europe’s deteriorating competitiveness. Slow labour productivity growth, high labour costs, and short and inflexible working hours drive entire industries to low-cost, high-tech countries in Eastern Europe and Asia. The evidence for deindustrialization is not clear cut. Some analyses point out that industry still accounts for the same important share of GDP in terms of volume as in the past, while the declining share in terms of value-added and employment is due simply to decreasing prices because of productivity gains and exposure to competition stronger than that for services (Muldur et al., 2006). If this were the case, the impact of deindustrialization would indeed be worrying: industry pays better wages than services, even for lower-skilled jobs; industry accounts for most innovations and technological revolutions, and has an important strategic role. On a European level a distinction can be made between economically diverse metropolises, which are most likely to experience stable economic growth because the economic fluctuations of individual clusters or industries normally balance each other out, and cities highly dependent on one cluster, typically a branch of manufacturing. The latter cities are vulnerable because they are highly affected by the economic fluctuations of the cluster on which they depend. This might explain the phenomenon of the so-called lagging regions, one of the factors mentioned before that appears to have a negative impact on the growth of a metropolis. Metropolitan areas, overall, provide a better climate for diversity and dynamism than non-metropolitan areas. As such, cities are of major importance for the future of Europe’s economy. A major challenge, however, for the development of Europe’s knowledge economy in the future may be the provision of human capital. Ageing could cause potential annual growth in the GNP in Europe to fall from 2–2.25 per cent today to 1.25 per cent in 2040 (Eurostat, 2004). One of the reasons for Europeans not to have more children seems to be that they are discouraged from doing so by all kinds of problems that limit their freedom of choice, including difficulties in finding housing. It seems therefore of great importance for authorities to provide good-quality (soft) infrastructure in urban areas in order to try to optimize the quality of urban and social life, thereby sustaining a reasonable level of knowledge and human capital. In the following section we define the differences that exist between different EU metropolises further by means of graphic material from ERECO and the European Regional Innovation Scoreboard.

Large urban economies

65

Warsaw Madrid Barcelona Oslo Vienna Zurich Lyon Lisbon Helsinki Dublin Brussels Stockholm Paris London Amsterdam Mean of 45 cities Mean of EU-25 Hamburg Copenhagen Rome Birmingham Milan Berlin Athens Prague Budapest –1 –0.5 0 0.5 1 1.5 2 2.5 3 3.5 % p.a. Source:

ERECO, in Helsinki City Urban Facts Office (2006).

Figure 3.2

Population growth (per cent p.a.) in selected metropolises (2001–04)

European urban growth patterns First, we identify some of the developments that are taking place in European cities by looking at population growth, employment growth and production growth (GVA – gross value-added) of the metropolises during the years 2001–04. This might give some insight into what actually drives growth in the European cities at the moment. Next, we look at the factors that negatively affect the growth rate of these cities. Population The western and central regions of Europe are among the most urbanized areas in the world. Approximately 80 per cent of the population of these regions lives in urban areas. The cities and towns nevertheless differ considerably with respect to size, urban structure and economic base, ranging from small agricultural towns to huge mega-metropolises. When we look at the population change in Europe (see Figure 3.2), it appears that the population grew faster in metropolises – approximately 0.6 per cent annually – than in the 25 countries on average (0.4 per cent p.a.) during the period 2001–04. Population growth was fastest in Warsaw (3 per cent p.a.) and Madrid (2.4 per cent p.a.), followed by Barcelona (1.8 per cent p.a.), Oslo (1.1 per cent p.a.) and Vienna (1.0 per cent p.a.). Population declined significantly in Budapest and Prague, and also (outside the selected metropolises of Figure 3.2) in some manufacturing cities in the UK and Central

66

International handbook of urban policy Dublin Madrid Rome Barcelona Milan Lisbon Helsinki Athens Budapest Birmingham Mean of 45 cities Mean of EU-25 Brussels Lyon Amsterdam London Prague Paris Oslo Stockholm Zurich Hamburg Vienna Warsaw Copenhagen Berlin –1 –0.5

Source:

0

0.5

1 1.5 % p.a.

2

2.5

3

3.5

ERECO, in Helsinki City Urban Facts Office (2006).

Figure 3.3

Employment growth (per cent p.a.) in selected metropolises (2001–04)

Europe. Many new member states saw falling populations, due to net emigration and natural decrease (European Commission, 2004). However, overall, the EU’s population is set to increase just slightly until 2025, thanks mostly to immigration, before it is expected to start dropping: 458 million in 2005, 469.5 million in 2025 (12 per cent), followed by 468.7 million in 2030 (Eurostat, 2004). The effect on the total working population (15–64 years) appears to be even greater: between 2005 and 2030, it is due to fall by 20.8 million. Employment Employment rates also grew faster in metropolises when set against national figures. The average rate of employment growth in the metropolises was 0.6 per cent p.a. while the average growth in the 25 EU countries was 0.5 per cent p.a. Economies of scale and the benefits of agglomeration seem to be important factors that explain the faster growth rates of large cities. When we look at Figure 3.3, we see that employment growth was particularly rapid in Dublin: 3 per cent p.a. from 2000 to 2004. The nextfastest growth rates occurred in Madrid (2.5 per cent p.a.), Rome (1.9 per cent p.a.) and Barcelona (1.3 per cent p.a.). In the Nordic capitals, however, employment growth was lower than in most of the cities in 25 EU countries, while Copenhagen experienced negative growth. Employment also declined in Berlin, Warsaw, Vienna, Hamburg and Zurich. Although there appears to be a clear correlation between employment and population growth, we see that in some cities population increases without employment growth, at least in the short run. In other cities the opposite may occur.

Large urban economies

67

Dublin Warsaw Budapest Prague Athens Helsinki London Madrid Stockholm Lyon Birmingham Barcelona Amsterdam Mean of 45 cities Vienna Mean of EU-25 Oslo Brussels Hamburg Paris Rome Copenhagen Zurich Lisbon Milan Berlin –1

Source:

0

1

2

3 4 % p.a.

5

6

7

8

ERECO, in Helsinki City Urban Facts Office (2006).

Figure 3.4

GVA growth (per cent p.a.) in selected metropolises (2001–04)

Production On average there was a slightly faster growth of production in the metropolises (1.9 per cent p.a.) than in the 25 EU countries as a whole (1.7 per cent p.a.) during the period 2001–04. This gap, however, is fairly small and has diminished further during the last few years. A reason for this may be that the ICT sector has taken off, which has lessened distances to a large extent. This might also explain the economic success of Dublin, having become a worldwide leader in teleservicing. During the period 1995–2000, rapid growth in Dublin, Helsinki and Stockholm, for instance, was driven by their expanding ICT sectors, whereas from 2001 to 2004 the very same sector caused growth to slow in other regions, notably Helsinki. In Figure 3.4, we can see that the GVA growth rate was fastest in Dublin (7 per cent p.a.), closely followed by Warsaw. Next in order were Budapest, Prague and Athens, whereas in Berlin GVA declined, as did employment. The rapid growth of Warsaw, Budapest, Prague and Athens (and to a lesser extent, Dublin) was, nevertheless, for a large part instigated by foreign investments, extensive rebuilding programmes and the restructuring of the economy. By contrast, growth in Berlin and Rome seems to be held back by a merely modest expansion in the public sector concentrated in these cities. Regional innovation performance Table 3.6 shows the outcomes of a composite indicator of regional innovation performance for the 25 best-performing European regions (Eurostat, 2006). These data indicate a differentiated pattern of highly innovative regions in Europe. As far as the largest cities (in population) in the national urban systems are concerned, six are included in the top 25, i.e. Stockholm, Helsinki, Paris, Berlin, Prague

68

International handbook of urban policy

Table 3.6

Composite indicator of regional innovation performance for the 25 best-performing European regions

Name of region (rank order)

Score

Broad urban character (in national system)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Stockholm Västsverige (Gothenburg) Oberbayern (Munich) Etela-Suomi (Helsinki) Karlsruhe Stuttgart Braunschweig Sydsverige Ile-de-France (Paris) Ostra Mellansverige Berlin South-East UK Tübingen Manner-Suomi* Prague Darmstadt Eastern UK Dresden Cologne Noord-Brabant (Eindhoven, NL) Denmark Pohjois-Suomi

0.90 0.83 0.79 0.78 0.77 0.77 0.76 0.76 0.75 0.74 0.74 0.72 0.72 0.71 0.70 0.69 0.69 0.69 0.69 0.68 0.68 0.68

23 24 25

Mittel-Franken Vienna Utrecht

0.68 0.68 0.66

Largest city Large city region Large city region Largest city in zone Medium-sized city Medium-sized city Smaller university town region Medium-sized city Largest city region Region adjacent to largest city Largest city Smaller university town region Smaller university town region Not applicable to country level Largest city Medium-sized city Smaller university town region Medium-sized city Medium-sized city Large and medium-sized cities Not applicable to country level Low level of urbanization (but small university town) Smaller towns Largest city Large city region

Note: Source:

* Mainland Finland. Eurostat (2006).

and Vienna, but the other largest cities are not included. Madrid (ranked 31), London (ranked 35) and Amsterdam (ranked 40) are relatively close to the top, but Brussels is ranked at 62 and Lisbon at 108. In addition, we observe city-regions in the top 25 that are second or third largest in the national systems, such as Gothenburg and Munich, aside from various relatively small university towns, like Cambridge and Oxford in UK and Braunschweig and Tübingen in Germany. This differentiated pattern of types of cityregions in the top 25 suggests that city size alone is not a sufficient condition for a good performance in innovation. Apparently, medium-sized cities and smaller cities, the latter eventually in a polycentric configuration, may be highly successful as well. Sustainable urban growth Figures 3.2 to 3.4 show that, as a group, the metropolises of Europe have grown faster than the mean growth of their respective countries in terms

Large urban economies

69

of population, employment and production. Metropolises, from looking at these figures, do indeed seem to matter as engines of growth. It must be noted that the gaps between metropolises and the whole of the EU area with respect to GVA, employment and population growth were significantly larger in the 1990s than from 2001 to 2004. This might partly be explained by the rapidly growing ICT sectors at that time. However, if a city is too dependent on one cluster – often typically a branch of manufacturing – its development appears to be dominated by fluctuations in this key cluster. Rapid growth in cities such as Dublin, Helsinki and Stockholm in the period 1995–2000, for example, was driven by their expanding ICT sectors, whereas from 2001 to 2004 the very same sector caused growth to slow. On the other hand, cities such as London and Paris have several strong expert clusters. These economically diverse metropolises are more likely to experience stable economic growth because the economic fluctuations of individual clusters or industries normally balance each other out. Major future challenges and solutions for European metropolises lie in the diversification of their economic base by developing new strong industrial clusters to complement the traditional industries or sensitive sectors like ICT. There seem to be considerable risks associated with the great volatility of the global ICT business and the modest growth prospects in manufacturing. However, the increased use of ICT has had a radical impact on the way we live – nowhere more so than in our enterprises. There is, therefore, a considerable role for the government in facilitating the diffusion of ICT and other innovations across the economy, because they are the current engines of economic growth. The above figures also show that, even though the size of the population does not provide a clear explanation for short- or medium-term differences in growth, the working population is slowly decreasing. In order to remain attractive as a metropolis for high-skilled workers, but also for domestic and foreign investments, European metropolises need to become more diversified and innovative, not only in terms of their economic base, but also in terms of their urban infrastructure. Drawing up the balance sheet Clearly, investments in knowledge and human capital are essential for keeping pace with major economic players such as the USA or Korea. With the acceleration of urbanization, the weight of large cities, or metropolitan regions, has strengthened. As such, cities are key components in a territorial development strategy. As we move towards a knowledge economy, metropolitan areas gain importance as magnets of high-skilled labour and FDI. The case of the Randstad, however, shows that in order to become attractive as an urban region for skilled labour and FDI, the infrastructure should be in a very favourable state. This is supported when we look at the growth potential of the ICT sector. Here we see that proper investments in the soft infrastructure are equally important. This, in turn, requires proactive and dynamic governments that are prepared to develop policies and that guide investments appropriate to a metropolitan region’s need and potential. Not only must governments re-examine their roles and responsibilities and explore ways to foster synergies in a collaborative framework, there is also a large role for the EU that needs to be taken on if it wants to continue to compete on the global market. The metropolitan areas of Europe are the engine of economic growth in the EU but, overall, there is still a large discrepancy between the different metropolitan areas in the EU in their levels of growth. Let us look at some of the challenges that Europe faces in this regard and how they may be improved.

70

International handbook of urban policy

Future challenges of European urban regions Very often changes in public policy in general and urban policy in particular are incremental, meaning changes in small steps compared with the current situation. This pattern is based on a type of learning in which actors find solutions based on previous success, i.e. familiar procedures and routines (e.g. van den Bergh and Fetchenhauer, 2001; Nelson and Winter, 1982). The use of such procedures and routines in fact reduces the range of different possibilities and causes a situation in which the near future is very much like the recent past (path-dependence). In more extreme developments, accumulated investments (sunk costs) and strong lobbies add to path-dependence in such a way that public policy organizations remain led by previous success (or failure) and reinforce old trajectories (negative lock-in) (e.g. Magnusson and Ottosson, 1997; Maskell and Malmberg, 1999). While the general development trend is one of path-dependence, evolutionary views also recognize that particular high-impact events, such as a simultaneous closure of old manufacturing companies in one municipality, may work as a trigger to quickly open the road to new trajectories. The alternative for urban governments is to prevent path-dependence through adopting learning strategies that continuously evaluate conventional practices and routines critically and adapt them to new situations, and to develop critical awareness about the future (e.g. Bock, 2006). This reasoning may be helpful in better understanding the dynamic patterns of economic activity in different types of urban development. When we look at recent figures, Europe appears to be the only advanced economy suffering from chronic low growth and high unemployment, and an unceasing lack of dynamism. An important reason for this may be that Europe is not investing sufficiently in R&D compared with its international partners. There are problems of fragmentation and lack of coordination, which imply a better adaptation of the system of governance for research in the EU. Research policy needs to be linked better with other complementary policies. Europe is underinvesting not only in R&D but in knowledge more generally too. According to a European Commission study from 2005, the USA is investing roughly $200 billion more annually in its knowledge economy than the EU (European Commision, 2005). This important knowledge investment gap is due to European underinvestment in R&D, education and innovation. The need for more human resources also deserves special mention here, especially in the light of the emerging economies with large populations and the ageing EU workforce. The USA and Japan not only invest more of their GDP in R&D than the EU (2.67 per cent respectively in 2003 compared with 1.90 per cent for the EU), but have also increased their R&D intensity since the mid-1990s, leaving Europe lagging seriously behind (see Muldur et al., 2006). Meanwhile a number of Asian countries either are ahead of the EU (e.g. Korea at 2.63 per cent in 2003) or have recorded dramatic increases in their R&D intensity since the mid-1990s (e.g. China and Singapore) (Figure 3.5). Policy support has to be provided at the most appropriate level, and consistency in support has to be ensured across all policy levels. In a world that is increasingly interlinked, government measures will generate effects to go beyond the sheer local, regional and national level. Multi-level governance means finding the best combination of government intervention at all policy levels in order to create synergies that none of the policy actors will be able to achieve on their own. Research policy can be effective only if a multi-level governance approach is applied in designing, implementing and evaluating the success of the policy. There is a growing realization that the framework conditions

Large urban economies

71

Note:

hi na C

-2 5 EU

re ap o Si ng

Ta ip ei

SA U

re a Ko

Ja pa n

3.5 3 2.5 2 1.5 1 0.5 0

Japan, Rep. Korea and Chinese Taipei 5 2003.

Source:

Eurostat, in Muldur et al. (2006).

Figure 3.5

Total R&D spending as a percentage of GDP, 2004

for R&D need improving and, where necessary, harmonization by means of greater coordination between member states. Also, Europe needs to coordinate research policy with other related policies. Simply boosting investment in R&D will not suffice to raise Europe’s economic growth rate, increase its competitiveness or create jobs if it is not combined with macroeconomic stability and with horizontal coordination among structural policies (education, competition, energy, environment, internal market, transport, soft infrastructure etc.). Conclusion Our conclusions are as follows: ● ● ●

● ●

● ●

●

Overall, metropolises are believed to be the engine of economic growth and innovation, and this role will probably continue in the future. Investments in knowledge and human capital appear essential in the global economic growth process. Europe has expanded the number of knowledge jobs, but seems not to have made the underpinning investment in knowledge that would release wider economic benefits. A strong concentration of productivity and a high skill level should therefore be established. A high-skilled workforce can only be attracted if metropolises become more diversified and innovative, not only in terms of their economic base, but also in terms of their urban infrastructure. When we look at the growing importance of the ICT sector, proper investments in the soft infrastructure appear to be equally important. This requires proactive and dynamic governments that are prepared to develop policies to guide investments appropriate to a metropolitan region’s need and potential. Negative lock-in, where public policy organizations remain led by previous success (or failure) and reinforce old trajectories, should be avoided.

72

International handbook of urban policy

●

● ●

Path-dependence should be prevented by urban governments through adopting learning strategies that continuously evaluate critically conventional practices and routines and adapt them to new situations, as well as developing critical awareness about the future. Europe should adapt its system of governance for R&D, and research policy needs to be linked better with other complementary policies. A multi-level governance approach should be applied for designing, implementing and evaluating the success of the policy.

Note 1. Reference to ‘investment in knowledge’ is meant in the broadest sense.

References Acs, Z.J. (2002), Innovation and the Growth of Cities, Cheltenham, UK and Northampton, MA, USA: Edward Elgar. Acs, Z.J., H.L.F. de Groot and P. Nijkamp (eds) (2002), The Emergence of the Knowledge Economy: A Regional Perspective, Berlin: Springer. Audretsch, D.B. (1998), ‘Agglomeration and the location of innovative activity’, Oxford Review of Economic Policy, 14(2), 18–29. Bock, S. (2006), ’21 cities in quest of the future: new forms of urban and regional government’, European Planning Studies, 14(3), 321–34. Brinkley, I. and N. Lee (2006), The Knowledge Economy in Europe, a report prepared for the 2007 EU Spring Council, The Work Foundation. Cairncross, F. (2002), The Company of the Future: How the Communications Revolution is Changing Management, Cambridge, MA: Harvard Business School Press. Cohen, G., M. van Geenhuizen and P. Nijkamp (2005), ‘Bytes of urban planning: a Dutch perspective’, in M. van Geenhuizen, D.V. Gibson and M.V. Heitor (eds), Regional Development and Conditions for Innovation in the Network Society, West Lafayette, IN: Purdue University Press, pp. 99–117. Cohen, J. and C.J.M. Paul (2005), ‘Agglomeration economies and industry location decisions’, Regional Science and Urban Economics, 35, 215–37. Conroy, M.M. and J. Evans-Cowley (2006), ‘E-participation in planning: an analysis of cities adopting on-line citizens participation tools’, Environment and Planning C, 24(3), 371–84. ERECO (2006), European Regional Prospects. Analysis and Forecasts to 2010, The European Economic Research Consortium (ERECO) and Cambridge Econometrics. Estache, A. and A. Goicoechea (2005), ‘A research database on infrastructure economic performance’, World Bank Policy Research Working paper 3643, Washington: World Bank. European Commission (2004), Commission Communication: Third Report on Economic and Social Cohesion, Com (2004) 107 final, 18 February, http://www.okm.gov.hu/doc/upload/200506/cohesion_report_3_execu tive.pdf. European Commission (2005), ‘The economic costs of non-Lisbon – a survey of the literature on the economic impact of Lisbon-type reforms’, Commission Staff Working Document, SEC 385, 15 March. Eurostat (2004), Eurostat’s baseline scenario, used for population forecasting, provisional results. Eurostat (2006), European Regional Innovation Scoreboard. Florida, R. (2002), The Rise of the Creative Class, and How it is Transforming Work, Leisure, Community and Everyday Life, New York: Basic Books. Gertler, M. (2003), ‘Tacit knowledge and the economic geography of context, or the undefinable tacitness of being (there)’, Journal of Economic Geography, 3, 75–99. Gigaport (2005), Gigaport, Annual Review, www.gigaport.nl. Glaeser, E.L. (1998), ‘Are cities dying?’, Journal of Economic Perspectives, 12(2), 139–60. Graham, S. and S. Marvin (1996), Telecommunications and the City, London, Routledge. Havik, K. and K. McMorrow (2006), European Economy, Economic Papers, Directorate-General for Economic and Financial Affairs, European Commission. Haynes, K.E. (2006), Infrastructure: The Glue of Megacities, Megacities Lecture, Amsterdam/The Hague: Megacities Foundation/NICIS. Helsinki City Urban Facts Office (2006), The Economic Map of Urban Europe: Helsinki in the European Urban Network, Urban Facts Office web publication, 39, http://www.hel2.fi/tietokeskus/julkaisut/pdf/.

Large urban economies

73

Henderson, V., A. Kuncoro and M. Turner (1995), ‘Industrial development in cities’, Journal of Political Economy, 103, 1067–85. Jacobs, J. (1969), The Economy of Cities, New York: Vintage. Johnson, D.K.N., N. Siripong and A.S. Brown (2006), ‘The demise of distance? The declining role of physical proximity for knowledge transmission’, Growth and Change, 37(1), 19–33. Kenney, M. and J. Curry (2001), ‘Beyond transaction costs: e-commerce and the power of the Internet dataspace’, in T.R. Leinbach and S.D. Brunn (eds), Worlds of E-Commerce: Economic, Geographical and Social Dimensions, New York, Wiley, pp. 45–6. Kotval, Z. (1999), ‘Telecommunication. A realistic strategy for the revitalization of American cities’, Cities, 16(1), 33–41. Loane, S. (2006), ‘The role of the internet in the internationalisation of small and medium-sized companies’, Journal of International Entrepreneurship, 3, 263–77. Magnusson, L. and J. Ottosson (eds) (1997), Evolutionary Economics and Path Dependence, Cheltenham, UK and Lyme, USA: Edward Elgar. Malecki, E. (2002), ‘The Internet age: not the end of geography’, in D. Felsenstein and M.J. Taylor, Promoting Local Growth: Process, Practice and Policy, Aldershot, UK: Ashgate, pp. 227–53. Maskell, P. and A. Malmberg (1999), ‘Localised learning and industrial competitiveness’, Cambridge Journal of Economics, 23, 167–85. Muldur, U., F. Corvers, H. Delanghe, J. Dratwa, D. Heimberger, B. Sloan and S. Vanslembrouck (2006), A New Deal for an Effective European Research Policy. The Design and Impacts of the 7th Framework Programme, Dordrecht: Springer. Nelson, R.R. and S.G. Winter (1982), An Evolutionary Theory of Economic Changes, Cambridge, MA: Harvard University Press. Nijkamp, P. (2006), ‘Megacities: lands of hope and glory’, in K.E. Haynes, Infrastructure: The Glue of Megacities, Megacities Lecture 9, NICIS. O’Kelly, M.E. and T.H. Grubesic (2002), ‘Backbone topology, access, and the commercial Internet, 1997– 2000’, Environment & Planning B, 29, 533–52. OECD (2003), OECD Territorial Reviews: Helsinki, Finland, Paris: OECD. OECD (2005), Economic Survey of the Euro Area 2005: Outlook and Challenges, Paris: OECD. OECD (2006a), OECD Territorial Reviews: Competitive Cities in the Global Economy, Paris: OECD. OECD (2006b), OECD Territorial Reviews: Stockholm, Sweden, Paris: OECD. OECD (2006c), OECD Territorial Reviews: Milan, Italy, Paris: OECD. OECD (2007), OECD Territorial Reviews: Randstad–Holland, The Netherlands, Paris: OECD. Porter, M.E. (1998), ‘Clusters and the new economic competition’, Harvard Business Review, 76(6), 77–90. Rosenthal, S.S. and W.C. Strange (2001), ‘The determinants of agglomeration’, Journal of Urban Economics, 50, 191–229. Sohn, J. (2004), ‘Information technology in the 1990s: More footloose or more location-bound?’, Papers in Regional Science, 83, 467–85. UNCTAD (2006), World Economic Report, New York: UNCTAD. United Nations (1998), ‘World Urbanization Prospects: The 1996 Revision’, New York: United Nations. Van den Bergh, J.C.J.M. and D. Fetchenhauer (2001), Beyond the Rational Model. Evolutionary Explanations of Behaviour and Socio-economic Institutions (in Dutch), The Hague: NWO (Netherlands Organization for Scientific Research). Van Geenhuizen, M. (2004), ‘Cities and cyberspace: new entrepreneurial strategies’, Entrepreneurship and Regional Development, 16(1), 5–19. Van Geenhuizen, M. and P. Nijkamp (2007), ‘Cities and footlooseness: in search of place-bound companies and effective location policies, Environment and Planning C (Government and Policy), 25(5), 692–708. Van Oort, F.G. (2004), Urban Growth and Innovation. Spatially Bounded Externalities in the Netherlands, Aldershot, UK: Ashgate. World Bank (2006), Local economic development website, available at http://web.worldbank.org/website/ external/topics/exturbandevelopment.

4

World cities: organizational networking and the global urban hierarchy P.J. Taylor

Introduction Urban studies is a field of enquiry that has ‘gone global’ in the last quarter of a century or so. Three particular developments in the 1970s heralded this ‘up-scaling’ of what had previously been considered as largely ‘local studies’. First, the breakdown of the Bretton Woods settlement in 1971 led to worldwide financial markets and a consequent interest in major cities as ‘international financial centres’. Second, the rise of multinational corporations and the new international division of labour led to interest in cities as ‘command-and-control centres’, city concentrations of corporate headquarters. Third, one particular corporate sector, the airlines, was extending international flights to such a degree that they were seen as constituting worldwide networks connecting cities across all continents. In the 1980s and 1990s these developments became part of the macrosocial process that we know as globalization. And cities became integral to understanding this potentially epochal change, as signalled by the development of a large and vibrant world cities literature. Further, there were early assertions that cities would be the key winners since this globalization ‘unbound’ them from their overarching states (Knight and Gappert, 1989). The development of a new literature is never a straightforward process. There is the basic question of what concepts and ideas are brought forward from existing literatures on the subject. In this case the question was especially pertinent since the literature was part of a wider view concerning a fundamental shift in the organization of society. How new the world city literature should be depended on how fundamental a change globalization was deemed to be. Since there were many different positions on the latter, the newness of the world city literature was very variable. This may be a recipe for vibrancy through debate, but it is also a cause of uncertainty and confusion. The result was not just a contested literature but one that attracted extremely damning critiques. The world city literature was vulnerable to such critiques on two essential grounds. First, the confusion manifested itself conceptually: there appeared to be numerous alternative ways of describing cities and their interrelations but without fully respecting the different meanings that these choices indicated. Clarification is attempted in the first section. Second, there was a data crisis in the literature: partly related to conceptual confusion, the evidential basis of the literature was found to be severely wanting. This is addressed in the second section below. It is only after we have cleared away this obscuring brushwood that we can develop some theoretically informed empirical results on world cities in globalization. These are presented in three empirical sections that focus on inter-city connectivities: (1) describing the contemporary ‘world city network’; (2) exploring the ‘mega-city region’ concept; and (3) using this way of thinking to critique an example of ‘national spatial planning’. A short conclusion draws out the main points of the argument. 74

World cities

75

Clarifying basic concepts The purpose of this section is not to close down debate: there will be many viable ways of understanding world cities in globalization. However, there is a need for a consistent approach to the subject in which the development of theory and empirical analyses iterate in a mutually beneficial manner. In this chapter I present one way in which this may be achieved. Only when a degree of consistency is attained can any approach be fruitfully compared to alternative conceptualizations. I focus on three contested ideas that are at the heart of the argument: globalization, world cities and cities as process. Contemporary globalization At its most elementary, globalization refers to a specific geographical scale of activity. This scale, the ‘global’, is sometimes contrasted with the ‘local’, but more often the contrast is with the nation-state scale. In fact, the latter is often portrayed as the victim of a pincer movement, with social processes previously concentrated at the state scale ‘leaking’ upwards to the global and downwards to the local. It is certainly true that there is a contemporary restructuring of some state functions in this way and the new term ‘glocalization’ has been coined to emphasize their interrelatedness. Further, this might appear as superficially attractive to studies of cities in globalization since cities are commonly identified as the local in glocalization. But for understanding cities this is rather too simple. If globalization is merely ‘upscaling’ to a worldwide level, then the process is not that contemporary. International relations had been largely European in the nineteenth century but towards the end of that century first the USA and then Japan emerged as major powers to produce a new scale of ‘global conflict’ culminating in two world wars in the twentieth century (Bartlett, 1984). The United Nations – an almost universal club of states – was a key product of the Second World War and in one key text, 1945 is identified as the most prominent date for the beginning of globalization (Held et al., 1999). I have labelled this section ‘contemporary’ globalization to distance the argument from this naïve political upscaling argument. There are two key reasons not to pursue this approach. First, the political changes are international in nature; they are about relations between states being extended worldwide. There is no doubt that this was important a century ago but it is not globalization as understood today. A key point about contemporary globalization is that it is based upon trans-state processes, actions that are not organized by states but that transcend state boundaries. For instance, it has been pointed out that world trade in 1913 was at least as large in relative terms as its equivalent in the 1990s. But the difference is that in contemporary globalization international trade statistics are no longer credible data for understanding the world economy. A large proportion of ‘international trade’ is now intra-firm as large corporations transcend boundaries in their global production strategies. Globalization is not international relations: worldwide financial markets through cities are the best illustration of this position. Second, the implication of emphasizing trans-state processes is that globalization is a new spatial organization. This is Castells’s (1996) seminal argument on the construction of social spaces. He argues that before globalization the dominant spatial form was a ‘space of places’ – the notable example being the world political map of states upon which international relations are premised. However, new enabling technologies – the

76

International handbook of urban policy

combination of communication and computing industries in the 1970s – have led to a new dominance of ‘space of flows’. It is the Internet that allows corporations to have truly global strategies since it provides for worldwide simultaneity in social interactions. It is this global space of flows that is globalization. According to Castells it operates at three levels: (1) the infrastructural level, mainly electronic-enabling technology (cable and satellite) but also air travel; (2) social relations, importantly including routine work practices in corporations; and (3) the increasingly ghettoized spaces of the super-rich, a transnational economic elite (Sklair, 2002). Ironically it was a political event that brought this globalization to the fore in the public consciousness. Through the 1970s and 1980s the cold war with its myth of ‘three worlds’ – First, Second and Third (Worsley, 1984) – obscured the unrelenting rise of a global space of flows and therefore it was not until the demise of the USSR and end of the cold war that globalization became the buzzword of the 1990s. Johnny-come-lately it might have been, but the buzzword has proved to be resilient: globalization remains the favoured term to describe our contemporary world. World cities The concept of a ‘world city’ has a long lineage in many languages but the contemporary concern for such prominent urban locales is usually dated to Hall’s (1966) book The World Cities. This described six major city-regions and, with Hymer’s (1972) politicaleconomy approach to cities worldwide and Reed’s (1981) focus on cities as financial centres, formed the basis of a world cities literature that developed in the 1980s and blossomed in the 1990s. Two writers have dominated this literature: John Friedmann and Saskia Sassen. While contributions of both have been invaluable, their works each left an important problem legacy. Friedmann’s interventions (1986, 1995; Friedmann and Wolff, 1982) provided a global vision for urban studies. Cities were viewed as command-and-control centres of global corporations in their management of the new international division of labour. Friedmann produced an argument that successfully integrated the local (cities) with the global (world economy) as a ‘world city hierarchy’. This image of the city in globalization came to dominate the literature. And therein lay a problem. What Friedmann had done was to up-scale the basic state-level modelling of inter-city relations to the global scale: national urban hierarchy became world city hierarchy. But there was no empirical basis for the hierarchical premise – we return to this question in the next section. Sassen (1991/2001, 1994/2000/2004), in two very influential books, largely accepted Friedmann’s hierarchical position but emphasized the role of advanced producer services. These financial, professional and creative firms were concentrated in great cities that acted as both production centres and the markets for the services. Thus she coined the concept of ‘global city’ to describe a few cities that acted as ‘strategic places’ for servicing global capital. She focused on New York, London and Tokyo; no list of such cities was produced but it was implied that there were only a few global cities across the world, perhaps 20 or so. Her argument was that such cities are unique to globalization: they are not world cities as previously known but rather a special product of contemporary globalization. Sassen provides a basic process for understanding contemporary world cities but in describing them as exclusively global she had created a problem. Her work attracts the question: ‘Which cities are global cities?’, with the implication that the rest

World cities

77

are in some sense ‘un-global’. This is unfortunate since globalization is a bundle of processes that impinge upon the development of all cities in all countries: there are no nonglobal cities. Phrases developed to counter Sassen’s exclusivity are ‘globalizing cities’ (Marcuse and van Kempen, 2000) and ‘cities in globalization’ (Taylor, Derudder et al., 2006), both of which suggest a more inclusive approach. Sassen’s exclusivity is related to Friedmann’s hierarchical postulate: both can be transcended together. Cities as process What we get from the seminal work of both Friedmann (1986) and Sassen (1991) is a strong sense of cities as place. Castells (1996), on the other hand, treats cities as process, and in this he follows the influential urbanist Jane Jacobs (1969). As you might expect from Castells, this argument leads to a focus on flows in relation to place. He conceptualizes cities as a continuous network process of spatial interactions with place reduced to the role of node within the networks. This position is important in two respects. First, for world cities there is no presumption of a hierarchical arrangement. This is not a simple organizational or semantic matter – whether we describe cities as networked or hierarchical has critical implications about the nature of relations (Thompson, 2003). Hierarchies are there to be climbed and hence incorporate a competitive relation between cities – there is a whole ‘cities competition’ literature built upon this assumption. In complete contrast, a network can develop and prosper only through mutuality between its components: in this case there is a premise for the cooperative nature of cities. Clearly the implication of these two contrary positions for urban policy and planning is fundamental. In this chapter, the mutuality argument is assumed, with the existence of ‘hierarchical tendencies’ relegated to an empirical question. Second, as networked process, all cities have or had the potential to be integrated into networks. Following Jacobs (1969), we might expect at any one time for some cities to be dynamic and others to be stagnant but we do not expect a small elite group of cities separated from the rest: networks do not operate in boundaries. The global-city concept is essentially hierarchical and therefore not the city process we develop below. Since we treat cities as networked process, we shall try to understand world cities as a world city network. But before we come to that there is the not inconsequential matter of the empirical deficit in the world city literature. The evidential crisis In the 1990s the evidential crisis in the world cities literature was so severe that Cox (1997) even questioned whether world cities actually existed. From within the literature Short et al. (1996) referred to the dearth of relevant data as ‘the dirty little secret’ of world city researchers. There are actually three key questions that have contributed to this crisis: (1) the nature of the main source of social data; (2) the nature of the resulting data; and (3) the use made of the data. For the study of macrosocial change by far the most important source of data is the state – hence the name ‘statistics’. The problem is that what interests state officials and what social scientists need do not always coincide. And this is particularly the case for world-cities researchers. For a start, states collect statistics largely on their own territories; there is no institution to collect ‘global statistics’. Of course, the UN publishes a lot

78

International handbook of urban policy

of statistics through its various organs but these are invariably international statistics derived from its member states. In addition, states have a penchant for attribute data, counting things in places to describe those places – the census is the classic example. This prime data source typically has little relational data, information on flows. Such data require an origin, destination and measure of flow size. Trade and migration data are the rare examples of such information but they remain strongly international in nature, as the previous discussion on the limitations of trade data indicated. Thus we can get some information on the relations between the UK and France or the UK and USA, but very little on the relations between London and Paris or London and New York. It seems the best that can be done is to search out train and air-flight timetables. But New York– London is widely seen as ‘Main Street, World Economy’ – it has its own name NYLON – yet we know so little about it. This is because there is no official body charged with dealing with any city dyad however important. In this case neither the UK or USA nor London or New York city governments have any statutory reason to concern themselves with collecting statistics on NYLON. Faced with largely attribute data, world city researchers have used these statistics to rank cities (Taylor, 1997). There is nothing wrong with ranking: as a simple ordering description it can often provide a useful initial description of cities. But this is not how ranking has been interpreted. The concept of rank has been conflated with hierarchy so that high rankings are assumed to equate with top positions in a world city hierarchy. This conceptual slip completely misses the notion of hierarchy as a power relation: lower rungs do as higher rungs order or instruct (Lukermann, 1996; Taylor, 1997). To describe such power relations requires, not unnaturally, relational data: to assume that attributional data in ranked form describe a hierarchy is simply a fallacy. Of course, attributional data are also of limited use for describing and understanding networks. The lesson of this evidential crisis is that world city researchers cannot advance their researches very far using official statistics. The only recourse is to turn to collecting one’s own data specifically geared to world city network modelling needs. But this is a very tall order given the global scope of our studies. It can be adequately carried out only as some form of collective effort. This conclusion was the initial stimulation for developing the Globalization and World Cities (GaWC) Research Network (www.lboro. ac.uk/gawc). The remainder of this chapter describes some GaWC research that has generated data and models, results and theory, on inter-city relations in globalization. World city network My purpose is to begin to understand contemporary interactions between cities worldwide. Previous sections have indicated conceptual and empirical obstacles in my path. In this section these impediments are addressed. Further, I shall not consider infrastructural spaces of flows (e.g. Internet paths, airline flights) but concentrate on social links that they enable. In particular I shall explore the business links between world cities as the critical level two in Castells’s (1996) global space of flows. The key initial task is the specification of inter-city relations at a global scale. This is required in order to cut through the conceptual confusion and to guide the empirical task of measurement. Box 4.1 confirms the need to know specifically what we are studying. Fifty different ways of describing worldwide inter-city relations are listed from the literature: they indicate a certain casualness of description since different terms imply

World cities

BOX 4.1

FIFTY DESCRIPTIONS OF INTER-CITY RELATIONS UNDER CONDITIONS OF CONTEMPORARY GLOBALIZATION

Archipelago economy Chain of metropolitan areas Cities in global matrices Cross-border network of global cities Functional world city system Global city network Global city system Global competition among cities Global grid of cities Global metropolitanism Global network of cities Global network of financial centres Global network of major metropolitan management centres Global network of nodes and hubs Global system of cities Global urban hierarchy Global urban network Global urban system Global web of cities Hierarchical global system of urban places International global–local networks International hierarchy of cities International systems of interlinked cities International urban system Internationally networked urban spaces Lynchpins in the spatial organization of the world economy Metropolitan hierarchy exercised throughout the world Neo-Marshallian nodes in global networks Network of world cities Nodal centres of the new global economy Nodes in global networks of institutional arrangements Planetary urban networks System of major world cities System of world cities Transnational system of cities Transnational urban system Transnational urbanism World city actor network World city hierarchy World city network

79

80

International handbook of urban policy World city system World hierarchy of financial centres World relations of cities World system of cities World system of metropolises World urban hierarchy World urban system World-systems city system Worldwide grid of global cities Worldwide grid of strategic places

different meanings. We have already mentioned the network/hierarchy contrast: in Box 4.1 ‘system’ is the most popular relational term and this brings with it a huge baggage of ideas that are generally not used (e.g. holism, feedback). From the title of this section it can be seen that it is the world city network that will be specified below. All three words are chosen precisely: (1) ‘network’, not hierarchy or system as previously noted; (2) ‘city’, not merely a node or centre and more specific than the general term ‘urban’; and (3) ‘world’, certainly not international and more than transnational, this refers to our ‘modern world’, as in modern world system, which has not always been ‘global’ and may not be so in the future, the reason for not using this most popular adjective in Box 4.1. The ‘world city network’ is specified as an interlocking network model. The interlocking network model The interlocking model is described in detail elsewhere (Taylor, 2001a, 2004) and a summary is provided here to underline the main points of the modelling. The model builds upon Sassen’s (1991) identification of advanced producer services as a cuttingedge industry in contemporary globalization. However, instead of focusing on just a few main offices of firms in selected ‘global cities’, the complete office networks of the firms are considered, thus bringing in many more cities. It is these business service firms that are the agents in this model: in the everyday conduct of their business (e.g. drawing up an inter-jurisdictional contract; planning a global advertising campaign) firms will use personnel across their office network as and when required. This is a space of flows of information, knowledge, instruction, planning, strategy, videoconferencing, face-to-face meetings, etc. that links the high-rise office blocks, ubiquitous to contemporary world cities, across the world. The aggregation of all these flows across myriad financial, professional and creative firms constitutes the world city network. Thus advanced producer service firms ‘interlock’ cities to create a network. Interlocking networks are unusual because they have three layers (Knoke and Kuklinski, 1982). Most network analysis deals with two layers – the net and nodes that create the net (e.g. a gang as a net with gang members as nodes). In the world city network the net is the worldwide set of inter-city relations, the nodes are the cities, and there is an additional subnodal level of the firms. The latter are not just additional, they are crucial as the agents, the network makers. Thus in this model it is not the nodes

World cities

81

– cities – that make the network, and therefore cities are not reified as actors in their own right. As the agents, it is firms that are the subjects of this research, with cities as the object, the outcome of the process being modelled. The model is formally specified as follows. A universe of m advanced producer service firms located in n world cities is defined. The importance of the office of firm j in city i, which is called the ‘service value’ of a firm in a city, is vij. Service values for all firms in all cities define a ‘service value matrix’. The conjecture behind using these values is that the more important the office, the more connections it will generate with other offices in a firm’s network. The equation Si 5 ∑ vij

(4.1)

defines the total quantity of services provided by a city. This is a simple attribute measure but a relational measure can be generated from a second equation: rab,j 5 vaj · vbj

(4.2)

which defines the relation between cities a and b in terms of firm j. This is an ‘elemental interlock link’ between the two cities for one firm. The aggregate ‘city interlock link’ between the cities for all firms is then given by: rab 5 ∑ rab,j

(4.3)

For each city there are n − 1 such links, that is one to every other city. These links can be used to measure the overall status of a city within the network: Ra 5 ∑ rai

(4.4)

This is the ‘gross interlock connectivity’, which defines the integration of a city in the network. To make such results more easily interpretable, they are converted to proportions of the largest connectivity recorded in the given universe. If the largest connectivity is designated L, the ‘city network connectivity’ is given as Ca 5 Ra /L

(4.5)

Ca will have a range from 0 to 1: cities with no offices of firms in the universe of the study will score zero and the city with the highest interlock connectivity will score one. This is the basic output of an interlocking network analysis: it assesses each city’s overall position within the network, their relative levels of integration into the network. The remainder of this chapter will illustrate numerous examples of the application of equation (4.5), city network connectivity. The main initial application, the one for which the model was devised, is measurement of the world city network. Connectivities in the world city network In order to measure world city network connectivities, the interlocking network model has to be operationalized by the creation of a service values matrix. This requires

82

International handbook of urban policy

selection of cities and firms and then production of service values for each firm in every city. Such an exercise was first carried out in 2000 and the data collection exercise is described in Taylor et al. (2002), to which reference should be made for a complete description. A total of 315 cities was selected from past knowledge of firms’ office networks. One hundred firms (in accountancy, advertising, banking/finance, insurance, law and management consultancy) were selected for having multiple office locations in at least 15 different cities worldwide. Service values were coded 0 to 5, with the latter scored for the firm’s headquarter city and zero indicating no office for the firm in that city. The data outcome was a 315 cities × 100 firms array of service values, a total of 31 500 pieces of information on advanced producer service provision across the world in 2000. Figure 4.1 shows the first world city connectivity map depicting 123 cities with at least one-fifth of the highest recorded connectivity (London’s) in 2000 (see equation (4.5) above). This cartogram shows the dominance of cities in Northern America, Western Europe and Pacific Asia in the world city network but also indicates that the networking extends into all continents with, for instance, São Paulo, Johannesburg and Mumbai being relatively important and other ‘Third World’ cities such as Lima, Nairobi and Chennai featuring. This is confirmation that in the twenty-first century there exists a world city network interlocked by numerous advanced producer service firms. The data collection exercise was repeated in 2004 so as to measure change in connectivities and assess the stability of the world city network – for details see Taylor and Aranya (2008). In fact fluidity was found in the firms: only 80 out of the original 100 survived in a comparable form in 2004, meaning that the service values matrix for 2004 was 315 cities × 80 firms. Despite these differences in firms, there was relatively strong stability in the network. This was especially the case for the leading 20 cities in terms of connectivity: in Figure 4.2 there are no changes in the top six and only two differences in membership of the top 20. Figure 4.3 shows the 109 cities with city network connectivities (equation (4.5)) above 0.2 in 2004, which are comparable to 2000 (Figure 4.1). Here we can see more changes and these have been further analysed. The results (in Taylor and Aranya, 2008) show just two statistically significant effects in the distribution of connectivity changes: (1) sub-Saharan African cities relatively declined in network integration from 2000 to 2004, and (2) the same is true of US cities. These two contrasting regions in world-systems terms have experienced similar declines but for different reasons. In Africa this appears to be another indication that the continent is a prime regional loser in economic globalization. The US result is more complicated: the USA is by far the largest national market for advanced producer services, which means than many large US firms have less incentive to globalize their offices and hence do not qualify for our data collection (for further discussion of this argument see Taylor and Lang, 2005). Interpretation of city network connectivities: a UK case study It is sometimes hard to get one’s head round global analyses and therefore a much smaller case study is used to aid in interpreting the meaning of these connectivities in urban planning terms. Seventeen UK cities are featured in the global analyses reported above. If we abstract them from the overall analyses, we can assess how UK cities are positioned in the world city network and how this has changed between 2000 and 2004 (for further details on this research, see Taylor and Aranya, 2006). These are important questions for UK spatial planning since the country has an archetypal primate pattern

World cities

83

of cities. London has dominated other UK cities for centuries and is one of the main cities worldwide to have prospered immensely in contemporary globalization: for Sassen (1991) it is one of her three ‘global cities’; in our analyses above it records the highest city network connectivity. Is this good news or bad news for other UK cities? Does it mean that advanced producer service firms concentrate their business in London, leaving other UK cities as globalization urban backwaters? This certainly seemed to be the case in the 2000 analysis wherein only London appears in the top 100 cities (Birmingham and Manchester appear in Figure 4.1 but are in the final 23 of cities featured in the diagram). ‘Second cities’ in all other comparable European national economies (Germany, France, Italy, Spain, Netherlands, Belgium) appear in the top 100 in 2000, which would suggest that London does cast a network ‘shadow’ over cities in the rest of the UK. Despite this initial finding, there has been much discussion on the revival of UK provincial cities after many decades of relative decline. Is this a case of city boosterisms with little link to reality or have there been advances for provincial UK cities in recent economic globalization? Table 4.1 strongly supports the latter position: UK cities are to be found among the cities experiencing positive change between 2000 and 2004. Remarkably, three UK cities feature in the ten most improved connectivity scores, with Edinburgh actually being the most improved of all 315 cities in the data. Along with Cardiff, this may be an effect of UK political devolution, but it will also be an effect of Edinburgh consolidating its role as a European financial centre. Bristol, on the other hand, has improved without any political push. And it does not end there: all but three UK cities report positive change. The results are shown in Figure 4.4, where we can see that for 2004 there are four UK cities in addition to London in the top 100 worldwide: as well as Manchester and Birmingham moving up, they are joined by Bristol and Edinburgh. These positive results can be interpreted on two levels. First, it is clear that business service provision has appreciably expanded in many UK provincial cities, showing that if there were a London globalization shadow it appears to be being lifted. In other words, major service firms are expanding their provision to cities beyond London. Second, and more generally, this expansion can be considered as an economic indicator. Firms are only expanding because they are finding new business in provincial UK cities. Business services are cutting-edge economics and therefore their presence indicates much more than more services: it implies development of vibrant and dynamic city economies. This is a very important finding for UK cities and spatial planning policy makers. Mega-city regions So far we have treated cities without considering the new urban forms that are emerging under conditions of contemporary globalization. For instance, Allen Scott (2001) has argued that it is global city-regions rather than global or world cities that are the growth nodes of the world economy. Also called mega-city regions (Hall, 1999), these urban forms can often include several cities and therefore may be polycentric in structure. The interlocking network model has been applied to analysis of mega-city regions in the POLYNET project led by Peter Hall and Kathy Pain (2006). Here one part of this project is reported upon (for more details see Taylor et al., 2006, 2008); an additional study that developed out of POLYNET is described as follow-up research (see Taylor et al., 2007 for further details).

84

V N S E P D S F L A S D

D V

C G

M P K C D A H S

M X

C H S I

P N B G Q U

D T I N

L M S A

C R

A T

T R C V P B

S P B A

M T B S N Y P H W C C L M I

R J M V

H M N S L B

D B

P A L Y B C M D

M C B M L N

O S A M R T A N B R L X G N

C S

C P H B D S C O F R S T Z U M L

L G

R M

M U V I Z G

S K B L P R

J B C T

B V B D

W S

H L

C A N R

B U S O I S A S

K V

M S

P L

N C B T T A J D K U R Y

M M

D U A B

A B A B A B A B A B A B

K R M B

N D C N B N

C C

0.20–0.29

0.30–0.39

0.40–0.49

0.50–0.59

0.60–0.74

Over 0.95

B K S G

H C K L J K P E

H K G Z

B J S H

Proportion to highest connectivity, 2000

A D

M N

T P

S U

B B S Y M E

T K

A K W L

85

Figure 4.1

World city connectivity map, 2000

Note: The cartogram places cities in their approximate relative geographical positions. The codes for cities are: AB: Abu Dubai; AD: Adelaide; AK: Auckland; AM: Amsterdam; AS: Athens; AT: Atlanta; AN: Antwerp; BA: Buenos Aires; BB: Brisbane; BC: Barcelona; BD: Budapest; BG: Bogota; BJ: Beijing; BK: Bangkok; BL: Berlin; BM: Birmingham; BN: Bangalore; BR: Brussels; BS: Boston; BT: Beirut; BU: Bucharest; BV: Bratislava; CA: Cairo; CC: Calcutta; CG: Calgary; CH: Chicago; CL: Charlotte; CN: Chennai; CO: Cologne; CP: Copenhagen; CR: Caracas; CS: Casablanca; CT: Cape Town; CV: Cleveland; DA: Dallas; DB: Dublin; DS: Dusseldorf; DT: Detroit; DU: Dubai; DV: Denver; FR: Frankfurt; GN: Geneva; GZ: Guangzhou; HB: Hamburg; HC: Ho Chi Minh City; HK: Hong Kong; HL: Helsinki; HM: Hamilton (Bermuda); HS: Houston; IN: Indianapolis; IS: Istanbul; JB: Johannesburg; JD: Jeddah; JK: Jakarta; KC: Kansas City; KL: Kuala Lumpur; KR: Karachi; KU: Kuwait; KV: Kiev; LA: Los Angeles; LB: Lisbon; LG: Lagos; LM: Lima; LN: London; LX: Luxembourg; LY: Lyons; MB: Mumbai; MC: Manchester; MD: Madrid; ME: Melbourne; MI: Miami; ML: Milan; MM: Manama; MN: Manila; MP: Minneapolis; MS: Moscow; MT: Montreal; MU: Munich; MV: Montevideo; MX: Mexico City; NC: Nicosia; ND: New Delhi; NR: Nairobi; NS: Nassau; NY: New York; OK: Osaka; OS: Oslo; PA: Paris; PB: Pittsburgh; PD: Portland; PE: Perth; PH: Philadelphia; PL: Port Louis; PN: Panama City; PR: Prague; QU: Quito; RJ: Rio de Janeiro; RM: Rome; RT: Rotterdam; RY: Riyadh; SA: Santiago; SD: San Diego; SE: Seattle; SF: San Francisco; SG: Singapore; SH: Shanghai; SK: Stockholm; SL: St Louis; SO: Sofia; SP: São Paulo; ST: Stuttgart; SU: Seoul; SY: Sydney; TA: Tel Aviv; TP: Taipei; TR: Toronto; TY: Tokyo; VI: Vienna; VN: Vancouver; WC: Washington DC; WL: Wellington; WS: Warsaw; ZG: Zagreb; ZU: Zurich.

86

International handbook of urban policy Ranks in 2004

Ranks in 2000 11. London

11. London

12. New York

12. New York

13. Hong Kong

13. Hong Kong

14. Paris

14. Paris

15. Tokyo

15. Tokyo

16. Singapore

16. Singapore

17. Chicago

17. Toronto

18. Milan

18. Chicago

19. Los Angeles

19. Madrid

10. Toronto

10. Frankfurt

11. Madrid

11. Milan

12. Amsterdam

12. Amsterdam

13. Sydney

13. Brussels

14. Frankfurt

14. São Paulo

15. Brussels

15. Los Angeles

16. São Paulo

16. Zurich

17. San Francisco

17. Sydney

18. Mexico City

18. Mexico City

19. Zurich

19. Kuala Lumpur

20. Taipei

20. Buenos Aires 23 26

Figure 4.2

21 25

Change in the ranks of the top 20, 2000–04

Variations in polycentricity in North-West Europe The POLYNET project compared eight mega-city regions in North-West Europe: South-East England, the Randstad, Central Belgium, Rhine–Ruhr, the Rhine–Main Region, Northern Switzerland, the Paris Region and Greater Dublin. The interlocking network model was used to estimate the polycentricity in each of these regions. Operationalizing the model required a massive data collection exercise. Research teams for each region collected data on firms in eight sectors, the six used for the world city network plus design consultancy and logistical services. Service values were simplified to

87

ST

QU

BG JB

SA BA MV

LM SP

World city connectivity map, 2004

CT

PL

CA JD

AS NC

IS

BD BU

SJ

RM

VI

TA

ML

GN ZU

LX

BR FR MU BV

DS PR WS

SS

RJ

BC

PA

LN

LB MD

BI

BM RT

BT

MI

DB

MX GU

CR

AT

WC

PH

The codes for cities are as for Figure 4.1.

HS

SD

Figure 4.3

Note:

DA

DV

LA

SF

MP CH DT CV NY

BS

SE

TR

MT

VN CG

RY

AB

DU KR

BN

MB CN

ND

0.75–1.00

0.60–0.74

0.50–0.59

0.40–0.49

0.30–0.39

MS

conn_04_80

GZ

HK

SH

BJ

PE

JK

SG KL

BK

Proportion to highest connectivity, 2004

MC AM HB BL

SK HL 0.20–0.29

CP

ED

OS

MN

TP

OK

ME AK

SY

BB

SU TK

88

International handbook of urban policy

Table 4.1

UK cities: world city network connectivity change, 2000–04

City Edinburgh Bristol Cardiff Newcastle Belfast Liverpool Southampton Leeds Birmingham Manchester Glasgow London Aberdeen Norwich Sheffield Nottingham Plymouth

Standardized change 0.510 0.479 0.420 0.287 0.279 0.243 0.236 0.184 0.165 0.161 0.135 0.099 0.072 0.031 −0.035 −0.110 −0.172

World rank (out of 315 cities) 1 3 6 26 31 43 45 63 72 76 88 110 125 147 190 219 243

a scale of 0 to 3 to make comparisons across teams more consistent. Each team collected data at four geographical scales: (1) the mega-city regional scale; (2) the national scale; (3) the European scale; and (4) the global scale. For the latter two scales all teams used the same cities, drawn from the world city network results; for the other two scales teams chose which cities to include based on their local and national knowledge. In total, 1963 office networks were recorded across 74 city-regional cities, 87 national cities, 25 leading cities at the European scale and 25 leading cities at the global scale. The result was a total of 32 potential service value matrices: one for each geographical scale for each of eight mega-city regions (in the event the Belgium team did not analyse at the national scale so that analyses reported below are from 31 service value matrices). For each city in each mega-city region, its network connectivity (equation (4.5)) can be computed at four different geographical scales: for city interlocks (equation (4.3)) with other cities in its region, with national cities, with leading European cities, and with leading cities at the global scale. In Table 4.2 these city connectivities at the regional scale are shown for the leading six cities in each mega-city region. Thus, in the Randstad Amsterdam is the most connected to other Randstad cities, closely followed by Rotterdam, with Utrecht and The Hague some way lower in connectivity, and with Alkmaar and Amersfoort at the bottom. Table 4.3 shows the same connectivity measures but at the opposite end of the scale, the links to leading cities at the global scale. Note immediately that in every analysis in Table 4.3, the decline in connectivity from the leading city in the region is much more rapid at this scale. For instance, even though the Randstad’s second city has a high connectivity of 0.91 within its region, at the global scale Rotterdam falls to 0.68, indicating the increased importance of Amsterdam in terms of global links. Polycentricity can be computed from these results, as shown in both tables. This is

World cities 2000 London (1)

Manchester (106) Birmingham (115) Bristol (144) Glasgow (150) Nottingham (159) Leeds (161) Edinburgh (172) Belfast (176)

89

2004 London (1)

Manchester (84) Bristol (87) Birmingham (90) Edinburgh (96) Belfast (120) Glasgow (124) Leeds (126)

Liverpool (145) Newcastle (148) Southampton (151) Cardiff (180)

Liverpool (197) Southampton (201) Aberdeen (205) Newcastle (210)

Nottingham (186) Aberdeen (187)

Norwich (229) Norwich (233) Plymouth (248) Cardiff (252) Sheffield (253)

Figure 4.4

Sheffield (261) Plymouth (273)

UK cities: world city network connectivity rankings, 2000–04

measured as simply the average connectivity of the five cities in each region ranked below the leading city. In this scale from 0 to 1 the latter represents ‘pure polycentricity’ where all six cities have ‘equal connectivity’, whereas zero results from ‘pure primacy’ when ‘all connectivity’ resides in the leading city. In these two tables it is Rhine–Ruhr at the regional scale that is closest to pure polycentricity with an average connectivity of 0.87 (Table 4.2), whereas with an average connectivity of only 0.02 (Table 4.3) it is Greater Dublin at the global scale that comes very close to pure primacy. Quite clearly these

90

International handbook of urban policy

Table 4.2

North-West Europe: city network connectivities and polycentricity at the city-regional scale

City/town

Ca

City/town

Ca

City/town

Ca

The Randstad Amsterdam Rotterdam Utrecht The Hague Alkmaar Amersfoort

1.00 0.91 0.72 0.71 0.40 0.39

Rhine–Main Frankfurt Wiesbaden Mainz Darmstadt Aschaffeburg Hanau

1.00 0.61 0.57 0.44 0.27 0.25

Rhine–Ruhr Düsseldorf Cologne Dortmund Essen Bonn Duisburg

1.00 0.99 0.90 0.89 0.79 0.77

Polycentricity

0.63

Polycentricity

0.43

Polycentricity

0.87

Central Belgium Brussels Antwerp Ghent Hasselt-Genk Liège Mechelen

1.00 0.94 0.66 0.48 0.48 0.25

S.-E. England London Reading Southampton Cambridge Milton Keynes Crawley–Gatwiek

1.00 0.52 0.47 0.39 0.34 0.33

N. Switzerland Zürich Basel St Gallen Zug Lucerne Aarau

1.00 0.80 0.53 0.49 0.36 0.33

Polycentricity

0.56

Polycentricity

0.41

Polycentricity

0.50

Greater Dublin Dublin Naas Newbridge Dundalk Drogheda Navan Bray

1.00 0.61 0.53 0.43 0.31 0.31

Paris Region Paris Rouen Orlèans Reims Amiens Chartres

1.00 0.61 0.53 0.45 0.41 0.36

Polycentricity

0.44

Polycentricity

0.47

Note: Source:

Polycentricity is measured by the average % of the five non-leading cities. Derived from Taylor et al. (2008).

results show that polycentricity varies by the scale of links considered as well as across different regions. These differences in scale are shown in Table 4.4, in which the mega-city regions are ranked in terms of their polycentricity at the city-regional scale: Rhine–Ruhr and the Randstad are the most polycentric and South-East England (London) and the Rhine– Main Region (Frankfurt) are the most primate. What is interesting about Table 4.4 is that this ranking is not invariant to scale: at the global scale, for instance, South-East England is the fourth-most polycentric region. This means that while polycentricity declines as scale increases, this does not happen to the same degree in every mega-city region. This effect can be measured by regressing scale (regional 5 1, national 5 2, European 5 3, global 5 4) against polycentricity: the gradient measures the degree of relative decline of connectivities by scale for each mega-

World cities Table 4.3

91

North-West Europe: city network connectivities and polycentricity at the global scale

City/town

Ca

City/town

Ca

City/town

Ca

The Randstad Amsterdam Rotterdam Utrecht The Hague Amstelveen Haarlemmermeer

1.00 0.68 0.37 0.36 0.23 0.18

Rhine–Main Frankfurt Wiesbaden Mainz Darmstadt Aschaffenburg Hanau

1.00 0.12 0.08 0.07 0.03 0.03

Rhine–Ruhr Düsseldorf Cologne Essen Dortmund Bonn Duisburg

1.00 0.58 0.39 0.34 0.26 0.22

Polycentricity

0.36

Polycentricity

0.06

Polycentricity

0.36

Central Belgium Brussels Antwerp Ghent Hasselt-Genk Liège Mechelen

1.00 0.38 0.20 0.14 0.13 0.09

S.-E. England London Reading Cambridge St Albans Southampton Crawley–Gatwick

1.00 0.24 0.17 0.15 0.11 0.11

N. Switzerland Zürich Basel Zug St Gallen Aarau Lucerne

1.00 0.41 0.13 0.11 0.10 0.08

Polycentricity

0.19

Polycentricity

0.24

Polycentricity

0.17

Greater Dublin Dublin Naas Newbridge Dundalk Drogheda Navan Bray

1.00 0.03 0.03 0.02 0.02 0.01

Paris Region Paris Rouen Orléans Reims Marne-la-Vallée Amiens

1.00 0.37 0.32 0.25 0.20 0.19

Polycentricity

0.02

Polycentricity

0.27

Note: Source:

Polycentricity is measured by the average % of the five non-leading cities. Derived from Taylor et al. (2008).

city region. These results are shown in the final column of Table 4.4. The main finding of this part of the analysis is the way in which South-East England and the Paris Region are quite different from the other six regions. With gradients of only −0.065 and −0.073 respectively, these two mega-city regions are quite distinctive in the flatness of their gradients. Interpretation of this finding requires us to think of the mega-city regions, like cities, as process. In the cases of the other six regions, polycentricity falls appreciably with scale, indicating that the leading city becomes more dominant – firms with worldwide office networks will tend to congregate in the leading city. This is particularly the case for Dublin, where it has almost all the global connections of its region (i.e. the near pure primacy referred to earlier). But in the two regions centred on London and Paris a rather different process appears to be happening. Here the minor cities are attracting firms with

92

International handbook of urban policy

Table 4.4

North-West Europe: polycentricity for different geographical scales by mega-city region

Mega-city region Rhine–Ruhr The Randstad Central Belgium N. Switzerland Paris Region Greater Dublin Rhine–Main South-East England Notes: Source:

Regional scale mean Ca

National scale mean Ca

European scale mean Ca

Global scale mean Ca

Scale decline gradient

0.87 0.63 0.56 0.50 0.47 0.44 0.43 0.41

0.75 0.69 0.56 0.39 0.38 0.21 0.15 0.41

0.39 0.36 0.20 0.17 0.25 0.03 0.07 0.27

0.36 0.36 0.19 0.17 0.27 0.02 0.06 0.24

20.189 20.114 20.147 20.121 20.073 20.144 20.119 20.065

The Belgium national scale was conflated with the Brussels regional scale. Adapted from Taylor et al. (2008).

wider office networks, including at the global scale. These appear to be examples of the sort of city-region expansion that Jacobs (1984) has described but at a somewhat larger mega-regional scale. In other words the vibrant growth processes operating in London and Paris in contemporary globalization are diffusing out to other smaller cities in their respective regions. Thus these other cities are attracting business service firms with worldwide office networks, resulting in the relatively high mean connectivities for the global scale relative to the regional scale in Table 4.4. This finding of two different mega-city regional processes operating in North-West Europe will have important implications for spatial planning policy. As such, this POLYNET research stimulated a follow-up study at just the national scale to seek out the two processes within the UK space-economy. Two mega-city processes in the UK space-economy In the previous UK case study, cities were separately assessed for their connectivities. Here we change scale to search out mega-city regions in the UK: we contrast a greater South-East England region with a prospective mega-city regional development in the rest of the UK. From the POLYNET project we understand that the London mega-city region will exhibit a Jacobs regional growth pattern; we expect mega-city region processes to be quite different outside this region. In this national scale only study, 158 firms from the eight sectors used in the POLYNET project with multiple locations in the UK were selected. These firms were found to have offices in 76 cities across the country. However, 14 of these cities had just a single firm’s office and these were dropped from the study, leaving 62 cities. Firms’ presences in cities were scored 0 to 3 as in the POLYNET project to produce a UK 158 firms × 62 cities service values matrix (for further details see Taylor et al., 2007). In the connectivity analysis, London came top as expected but at this national level it is less dominant among UK cities than at the global level as POLYNET results predict: Ca for Manchester, ranked second, is a relatively high 0.71. The next 11 cities are

World cities Table 4.5 Rank 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 Note: Source:

93

Middle-ranking UK cities by connectivity Ca 0.2850 0.2617 0.2611 0.2398 0.2103 0.1785 0.1692 0.1575 0.1540 0.1377 0.1348 0.1158 0.1126 0.1033 0.1015 0.1009 0.0986 0.0939 0.0910 0.0893 0.0878 0.0878 0.0788 0.0747 0.0741 0.0723 0.0715

Greater South-East cities* Reading Southampton Cambridge Aberdeen Milton Keynes Sheffield Crawley–Gatwick Norwich Leicester St Albans Ipswich Northampton Oxford Stoke on Trent Maidstone Brighton Guildford Plymouth Bedford Bournemouth Swindon Exeter Hull Slough Luton Basingstoke Derby

*Cities in bold are ‘provincial cities’. Derived from Taylor et al. (2007).

a ranking list of the UK’s leading provincial cities: Birmingham, Leeds, Bristol, Glasgow, Edinburgh, Cardiff, Newcastle, Belfast, Liverpool and Nottingham, with no particular surprises. But then it is all changing. In Table 4.5 the middle-ranking cities are shown and here we find a UK urban revolution. In the next 28 ranked cities all but seven are from the greater South-East region. For the locational strategies of advanced producer service firms in the UK, traditionally important provincial cities are losing out to smaller urban places around London. This is perhaps epitomized at either end of this table, with Milton Keynes being more connected than Sheffield and Basingstoke being more connected than Derby. But at least Sheffield and Derby are on the list; some important provincial cities are missing completely. For this data set, Blackburn, Bradford, Coventry, Middlesbrough and Sunderland record no connectivity in business services within the UK. This contrast between the greater South-East and the rest of the country can be interpreted as two distinctive mega-city processes consequent upon economic globalization.

94

International handbook of urban policy

This study confirms the POLYNET finding of a classic city-region formation as famously described by Jacobs (1984) and adds much more detail to the process. Jacobs used the remarkable creation of a large Tokyo city-region in the third quarter of the twentieth century to illustrate her argument (Jacobs, 1984, pp. 47–55). It is contended here that London under conditions of contemporary globalization – Sassen’s (1991/2001) archetypal ‘global city’ – is experiencing a process similar to that described for Tokyo’s earlier expansion. We term this Type A polycentricity ‘a mega-city regional process’. London has long had a city-region (the Home Counties) but today’s mega-city regional process is at an altogether new scale of activity. The economic expansion is represented here by the growth of advanced producer services both within London itself and beyond, creating a new, larger city-region. This is what Table 4.5 indicates. It can be further investigated by concentrating on just London links (i.e. using equation (4.3) above). Table 4.6 shows 28 cities that have one-tenth or more of their UK network connectivity with London. These cities can be divided into three categories. First, the greater South-East, which clearly extends far beyond the Home Counties to cities such as Bournemouth, Peterborough, Oxford, Swindon, Cirencester, Chelmsford and Cambridge. Second, there are the leading provincial UK cities for which, clearly, the London link is essentially part of their contemporary economic success: Manchester, Birmingham, Leeds, Bristol, Edinburgh and Cardiff are strongly linked to London. Third, there are three minor provincial urban places: Solihull, York and Chester. These are particularly interesting in suggesting that the economic power of London is moving beyond the south: in the case of Solihull right up to the edge of Birmingham. In English national imagery, York and Chester are not typically ‘northern cities’; they are part of what has been termed the ‘real (English) north’, that is to say, the leading ‘preindustrial’ northern cities (Taylor, 2001b, p. 137). These appear to be being privileged over traditional industrial cities. In summary, Type A polycentricity as ‘mega-city regional process’ is new to London in two ways. First, as just shown, it reaches far beyond the traditional London city-region and clearly bursts out of the South-East standard region, even the phrase ‘greater SouthEast’ appears inadequate to describe London’s spatial imprint as a ‘global city’ within the UK. Second, it has encompassed several large cities that are themselves becoming important advanced producer service centres: Reading, Southampton, Cambridge and Milton Keynes are beginning to rival some leading provincial cities in terms business service links. In other words, the current economic expansion of London is creating a very large polycentric mega-city region in contrast to its history of regional primacy. The situation in the rest of the country is very different, both historically and today. The leading provinicial cities have traditionally been part of polycentric industrial regions not unlike Rhine–Ruhr. However, clusters of cities developed in the northern British Industrial Revolution have since declined through most of the twentieth century and there has been little concern to see them as polycentric city-regions until recently. In fact, it is not the distinctive industrial regions (Lancashire cotton textile region, West Yorkshire woollen textile region etc.) that are the current focus but their combination as a ‘Northern way’ for balancing the economic power of London (Taylor et al., 2007). But this ‘balancing’ is through a rather different process than that just described for the greater South-East. This is Type B polycentricity, a ‘multi-city regional process’ in

World cities Table 4.6

Places with relatively close links with London

Greater S.-E. cities* Newbury Bournemouth Solihull Southampton Peterborough Wimbourne Oxford Swindon St Albans Manchester Hemel Hempstead Epsom Cirencester Edinburgh York Chelmsford Birmingham Cambridge Bedford High Wycombe Leeds Guildford Bristol Chester Tunbridge Wells Cardiff Basingstoke Reading Note: Source:

95

raLONDON (equation (4.3)) 0.18 0.16 0.15 0.14 0.13 0.12 0.12 0.12 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10

*Cities in bold are ‘provincial cities’. Derived from Taylor et al. (2007).

which leading cities prosper but there is little or no diffusion of growth to neighbouring cities. This is the message of our connectivity analyses: Newcastle is doing well but not Sunderland: Leeds is doing well but not Bradford, Manchester is doing well but not Blackburn; Birmingham is doing well but not Coventry. It seems that business service firms are concentrating their offices on selected leading provincial cities, leaving the rest dependent on just a few major ‘regional capitals’. Thus this is still a polycentric pattern but, unlike the greater South-East, there is just a single layer of service centres with little or nothing below. In summary, Type B polycentricity, the ‘multi-city regional process’, constitutes multiple concentrations of business service provision but there is no spreading of the service expansion, even to large cities, in comparison to London, where even relatively small

96

International handbook of urban policy

towns appear in the UK office networks of business service firms. Rather, outside the greater South-East, the Type B process bypasses many previously important cities and is largely about enhancing the service capacities of selected larger cities. This GaWC research on mega-city regions is clearly relevant for state-level spatial planning, which will be addressed in the concluding comment. But before then we can briefly review a case study of national spatial planning from a city network perspective. There is no single document that describes spatial planning in the UK; hence we move to Poland for the final case study where national planning and its spatial requirements have recently been clearly spelt out (Taylor, 2007b). A case study in spatial planning: Poland’s national development policy The official Polish document National Development Strategy 2007–2015 (NDS) (Ministry of Regional Development, 2006) defines itself as ‘the principal strategic document defining the goals and priorities of Poland’s social and economic development and the conditions that should ensure this development’ (p. 7). Social and economic development is a very broad subject and the focus here is on the spatial planning components of the development strategy that are seen by the writers of the document to be a key element of the strategy. As it is a state document we expect discussion of these topics to be overtly territorial – a space of places approach – which we will engage with from a spaces of flows approach. Regional development and territorial cohesion It is perhaps instructive that cities (or metropolitan areas) do not warrant a mention in the official vision of what Poland wants to be by 2015 (‘III: Vision of Poland until 2015’, pp. 25–8). The only spatial references are to ‘a country being organized spatially’ (p. 27) and ‘territorial cohesion’ (p. 28). Clearly, and perhaps ominously, there is no vision of a successful Poland as a territorial constellation of vibrant and dynamic cities strongly integrated into a world city network. The vision is converted into ‘the main goal of the strategy’ of raising the quality of Polish lives (p. 29) that is to be realized by policy promoting ‘fast, constant economic growth’ (ibid.). The latter is described in terms of ‘development of human capital, increasing innovativeness in the sphere of research and development’ (ibid.), all features that require vibrant networked cities for their generation, but again cities are conspicuous by their absence in this discussion. However, to plot the path towards this main goal, six priorities are identified as ‘the most important directions and main actions’ (p. 30). Two points immediately come to mind on considering these directions and actions. First, spatial priority is to be found at the bottom of the list; does this indicate a lack of importance? Possibly not because it actually gets most text: the chapter dedicated to this priority is the longest of any priority chapter. Second, key elements of what make spatial development crucial are separated out as separate priorities: competitiveness/innovativeness listed first, and employment quality listed third. These are quintessential city processes: does their separation from the spatial priority render the latter largely irrelevant to economic development? Probably not, since the chapters on competition and education priorities do not mention cities at all; this provides an opening for spatial priority to synthesize material from the other priorities. Let’s see the degree to which this happens. The regional development goals for spatial priority are listed in Box 4.2. These do not

World cities

BOX 4.2

97

POLISH NATIONAL PLAN: REGIONAL DEVELOPMENT GOALS IN PRIORITY 6

(a) To provide a spatial order of the country; (b) decentralization of the development processes and the decentralization of public finances; (c) development of metropolitan areas; (d) development of the rural areas. Source:

Taylor (2007b), derived from Ministry of Regional Development (2006), p. 73.

look very promising, with just one goal announcing that metropolitan areas should be developed, like rural areas. But this listing hides more than it reveals. It is followed by this most pertinent statement: The key task in the regional development is a fuller usage of the endogenous potential of the largest city centres and strengthening of relations between metropolises and urbanized areas and the rural areas and small towns surrounding them. The fundamental result should be diffusion of economic growth to adjacent areas and using the relative superiority of a large city – creation of new jobs, opportunities for economic cooperation, and participation in the social and cultural infrastructure. (pp. 73–4)

This describes an ideal starting point for integrating spaces of flows into spatial planning to make it more dynamic. In the lists of the ‘basic directions of activities of the state’ that follow, both competitiveness and education priorities feature (as well as other priorities) and this leads on to a synthesis of policies tailored to the specificities on individual voivodships. These policy vignettes for each of Poland’s 16 voivodships are quite short (typically about 20 lines) but they all include a statement on the need for metropolitan development – see Table 4.7. This is a classic space of places policy framework in that there is no notion of links between voivodships or metropolitan areas. In the NDS Annex metropolitan areas are defined for Poland as a large city (or cities) that, combined with its surrounding areas, has a population of 500 000 people or more (p. 134). There are nine cities that qualify and they are emboldened in Table 4.7. Since no voivodship has more than one metropolitan area, it follows that seven of them have no metropolitan area. Table 4.7 indicates a policy of rectifying this, converting Polish economic space into the ‘territorial cohesion’ that is being sought. It is important to note that despite the demographic definition of metropolitan areas, their roles are to be dynamic, as the statements on Warsaw and Trojmiasto clearly show. In other words, the term metropolitan is used to mean city process as described at the beginning of this chapter. But the ‘one metropolitan area per voivodship’ approach makes the policy very territorial; it is a space of places policy that privileges seven urban places that are not currently metropolitan areas. The key issue not developed explicitly in these policy vignettes is the matter of ‘threats’ from spaces of flows. For instance, out-migration, especially of graduates (p. 57), is a space of flows that neutralizes gains from improved education policies. Already the

98

International handbook of urban policy

Table 4.7

Polish National Plan: metropolitan statements in the regional development and territorial cohesion priority

Voivodship

Metropolitan statement

Dolnoslaskie

‘Enhancing the metropolitan functions of Wroclaw (together with its metropolitan area) will be an important direction of activities.’ ‘to integrate the duopoly of Bydgoszcz and Torun . . . enhancing the metropolitan functions of these cities’. ‘The regional policy will support activities aiming at enhancement of metropolitan function of Lodz.’ ‘Metropolitan functions of Lublin will be enhanced . . .’ ‘activities aiming at integration of its two largest cities: Gorzow Welkopolski and Zielona Gora . . .’ ‘Maintaining the development of metropolitan functions of Cracow together with its metropolitan area will have a substantial significance.’ ‘The regional policy will enhance the metropolitan functions of Warsaw, in particular those that have a substantial significance for the international role of this metropolis and its relation in the world metropolitan network.’ ‘Activities enhancing the Opole urban area and developing its metropolitan functions will be supported.’ ‘Activities aimed at developing the metropolitan functions of Rzeszow will . . . be supported.’ ‘The regional policy will . . . support the development of the metropolitan functions of Bialystok.’ ‘The state’s regional policy will support the development of the metropolitan functions of Gdansk–Sopot–Gdynia (‘Trojmiasto’) and other development centres with emphasis on raising the European (Baltic) significance of the metropolitan area of Trojmiasto.’ ‘The development of the metropolitan functions of the Silesia conurbation will be supported . . .’ ‘An essential task of the regional policy is the development of the metropolitan functions of Kielce.’ ‘The development of the metropolitan functions of Olsztyn will be supported . . .’ The international role of the emerging Poznan metropolis will be enhanced . . . as a place of international exhibitions and events.’ ‘An important element of the regional policy will be enhancing the metropolitan function of Szczecin . . .’

Kujawsko-pomorskie Lodzkie Lubelskie Lubuskie Malopolskie

Mazowieckie

Opolskie Podkarpackie Podlaskie Pomorskie

Slaskie Swietokrzyskie Warminsko-mazurskie Wielkopolskie Zachodniopomorskie

Note: Source:

All quotes are from Priority 6 in Ministry of Regional Development (2006), pp. 78–83. Derived from Taylor et al. (2007).

migration of health professionals is a problem (p. 122), which means that Polish cities are training doctors and nurses to provide medical services in richer non-Polish cities. This question of human capital is addressed only briefly, where a ‘rational migration policy’ is described in less than a page (p. 57). This is largely about restrictions on foreigners

World cities

99

working in Poland and as such seems to be distinctively unhelpful. Attracting foreigners produces cosmopolitan cities, which should be seen as positive (obviously not with contemporary high levels of unemployment but these levels ensure little attraction of foreigners). However, the positive element of migration is understood. As well as proposing policies for retaining skilled/professional labour (previously, low-cost, high-skilled labour had been seen as an attraction to foreign investment (p. 14)), out-migrants should be encouraged to return: ‘conditions will be created giving a possibility of using the knowledge and skills acquired abroad in the business activity in Poland’. This is classic space of flows thinking involving collaboration across cities, a process of integrating Polish cities into the world city network. Despite the lack of real integration of the spatial into the economic and social priorities of the main goal, NDS is a document that far transcends the problem of spatial planning as space of places policy with resultant little relevance in economic globalization. In NDS, spatial planning is as much about process as place, and realization of goals is most certainly expected to rely heavily on cities; in fact it will be largely realized through cities. But are the goals, especially spatial cohesion, relevant to the country’s development needs? Beyond regional cohesion: the need to rethink polycentricity In an initial discussion of ‘Polish specificity’, ‘polycentric spatial development’ of the country is seen as an asset. This is because the country is not dominated by one large city and there are ‘a number of other large metropolitan areas’ to provide ‘development opportunities’ (p. 15). Let us relate this polycentric thinking to our previous mega-city region studies, in particular Type A polycentricity – polycentric mega-city regional process – and Type 2 polycentricity – polycentric multi-city regional process. Since in NDS polycentricity is identified as a state-scale spatial property, at this large scale Type B processes are very likely; for instance, the three eastern voivodships are seen as being in danger of being bypassed by metropolitan processes (p. 77). This is clearly a problem for NDS’s interpretation of the polycentricity as having positive implications for national territorial cohesion. However, in the NDS Annex there is reference to the first stages of Warsaw developing faster than other metropolitan areas (p. 133). While this would be counter to the territorial cohesion ideal, it might signify a move to Type A city polycentricity whereby surrounding towns and cities share in the growth. And since Warsaw is in the east of Poland, this is the process that, if it developed to approach London or Paris scales, it could economically stimulate the three eastern-border voivodships in the longer term. But beyond the territorial cohesion ideal there is a pressing need for economic growth. It is recognized that such ‘fast development’ occurs in ‘urban conurbations’ (p. 17) in voivodships with the ‘best development perspectives’ (p. 18). These alternative positions on the role of cities in development – cohesion and growth – are understood to be a ‘basic development dilemma’: Faster growth translates into greater development diversity [at] the scale of the country and within the regions, since it is powered by growth centres, which are mainly urban agglomerations and metropolises. Taking this into consideration we should decide to what extent our vision should concentrate first of all on the growth, that is on supporting the most robust regions and urban centres, and to what extent we should take into consideration rural areas and marginalised regions? (p. 24)

100

International handbook of urban policy

Table 4.8

Warsaw in the world city network, 2000–04

City

2004

Warsaw Budapest Moscow Prague Source:

2000

2000–04 change

Ca

World rank

Ca

World rank

Ca change

World rank

0.430 0.422 0.402 0.400

31 35 37 38

0.416 0.411 0.422 0.434

40 45 34 29

0.216 0.099 0.034 −0.218

53 111 144 263

Derived from Taylor et al. (2007).

This is an impeccable argument of a general dilemma in spatial planning but it remains mired in spaces of places thinking. Other ‘conditions and premises’ are recognized that are clearly about spaces of flows and are not linked to this dilemma. For instance, ‘high unemployment’ is seen as ‘the main problem’ and is linked to a low level of ‘innovativeness’ (p. 17), both of which can be seen as a failure of Poland’s cities to generate sufficient expansion as part of city networks. The result has been the huge increase in out-migration on entering the EU. But, again, this ‘draining of human capital’ (p. 20) should be interpreted as relatively stagnant Polish cities losing out to other more dynamic EU cities that are prospering from this fresh injection of young skilled workers. Without integrating spaces of flows thinking into spatial planning, Polish workers will continue to develop cities outside Poland. Warsaw as the centre of a Type A polycentricity is one obvious way to bring new thinking into spatial planning and keep workers in the country. The goal of spatial cohesion is not intrinsically a problem, but it is lethal if it brings spaces of places to a ‘common lowest denominator position’ through lack of integrating spaces of flows. Is Warsaw up to the job? We can go back to the worldwide connectivity analyses discussed previously to provide some evidence to answer this question. In Table 4.8 Warsaw is compared to the three other main ex-COMECON capital cities for connectivities in 2000 and 2004, and 2000–04 change. The results are very encouraging: Warsaw is faring well under conditions of contemporary globalization relative to the other cities and is clearly becoming an important world city. The findings show that major advanced producer service firms are using this city, indicating both capacity to engage in global business and the existence of a developing vibrant city economy. These are presumably the hints that Warsaw is growing faster than other Polish cities in the NDS Annex noted previously. From a space of flows perspective this emerging position of Warsaw in the world city network should be nurtured and consolidated in any national spatial planning. Poland still needs a modern vision of itself as a land of vibrant, dynamic, creative cities. A simple measure of success in 2015 will be how cosmopolitan Polish cities are, especially Warsaw. Concluding comment This chapter has attempted to introduce a space of flows way of thinking to an urban policy audience. The latter will inevitably be concerned about territories, and their

World cities

101

spatial authority and responsibility will be bounded, meaning that a space of places will be their standard way of thinking. My emphasis on an alternative form of social space should not be interpreted as suggesting that space of places is not important for urban policy; that would be ridiculous. Rather, it is a plea to be prepared to think in new ways consequent upon contemporary globalization. I have concentrated the empirical sections on city network connectivities to provide some coherence to the text, but the initial sections of the argument should have indicated that there are many issues beyond measuring inter-city relations. In any urban policy development the question of hierarchy or network must be clear, along with the concomitant competition or cooperation. I shall conclude with one feature of the approach developed above that will be a challenge for urban policy making but one that it should be possible to address. A key part of the space of flows argument from Castells is to think in terms of processes rather than of places. This translates on the ground, as it were, to being able to transcend absolute bounded spaces with relational overlapping spaces. This is not to abandon places but rather to see them, as Doreen Massey (1997) does, as having no strict boundaries: places are made by the flows that go in, through and out of them; there is no contradiction between place and flow except for the need to make administration and government simple (Taylor, 2007a). But cities are inherently complex: instead of debating city boundaries in regular administrative reviews, we should be thinking of how to transcend boundaries in a mark of respect for city complexity. Without such respect, urban policy will tend to being an obstacle to creating vibrancy in cities rather than a facilitating tool. Certainly mega-city regional processes cannot be sensible bounded and therefore urban policy reactions to globalization should not be simply the latest episode in extending city boundaries. References Bartlett, C.J. (1984), The Global Conflict, 1880–1970, London: Longman. Castells, M. (1996), The Rise of Network Society, Oxford: Blackwell. Cox, K.R. (1997), ‘Introduction: globalization and its politics in question’, in K.R. Cox (ed.), Spaces of Globalization, New York: Guilford, pp. 3–34. Friedmann, J. (1986), ‘The world city hypothesis’, Development and Change, 17, 69–83. Friedmann, J. (1995), ‘Where we stand: a decade of world city research’, in P.N. Knox and P.J. Taylor (eds), World Cities in a World-System, Cambridge: Cambridge University Press, pp. 21–47. Friedmann, J. and G. Wolff (1982), ‘World city formation: an agenda for research and action’, International Journal of Regional and Urban Research, 3, 309–44. Hall, P. (1966), The World Cities, London: Heinnemann. Hall, P. (1999), ‘Planning for the mega-city: a new eastern Asian urban form?’, in J. Brotchie, P. Newton, P. Hall and J. Dickey (eds), East–West Perspectives in 21st Century Urban Development, Aldershot, UK: Ashgate, pp. 3–36. Hall, P. and K. Pain (2006), The Polycentric Metropolis, London: Earthscan. Held, D., A. McGrew, D. Goldblatt and J. Perraton (1999), Global Transformations, Cambridge, UK: Polity. Hymer, S. (1972), ‘The multinational corporation and the law of uneven development’, in J. Bhagwati (ed.), Economics and the World Order from the 1970s to the 1990s, London: Collier-Macmillan, pp. 257–89. Jacobs, J. (1969), The Economy of Cities, New York: Vintage. Jacobs, J. (1984), Cities and the Wealth of Nations, New York: Vintage. Knight, R.V. and G. Gappert (eds) (1989), Cities in a Global Society, Newbury Park, CA: Sage. Knoke, D. and J.H. Kuklinski (1982), Network Analysis, Beverly Hills, CA: Sage. Lukermann, F. (1966), ‘Empirical expressions of nodality and hierarchy in a circulation manifold’, East Lakes Geographer, 2, 17–44. Marcuse, P. and R. van Kempen (eds) (2000), Globalizing Cities, Oxford, Blackwell. Massey, D. (1997), ‘A global sense of place’, in T. Barnes and D. Gregory (eds), Reading Human Geography, London: Arnold, pp. 315–23.

102

International handbook of urban policy

Ministry of Regional Development (2006), National Development Strategy 2007–2015, Warsaw: Ministry of Regional Development. Reed, H.C. (1981), The Pre-eminence of International Financial Centers, New York: Praeger. Sassen, S. (1991/2001), The Global City, Princeton, NJ: Princeton University Press (two editions). Sassen, S. (1994/2000/2004), Cities in a World Economy, Thousand Oaks, CA: Pine Forge (three editions). Scott, A.J. (ed.) (2001), Global City-Regions, Oxford: Oxford University Press. Short, J.R., Y. Kim, M. Kuss and H. Wells (1996), ‘The dirty little secret of world city research’, International Journal of Regional and Urban Research, 20, 697–717. Sklair, L. (2002) Globalization: Capitalism and its Alternatives, Oxford: Oxford University Press. Taylor, P.J. (1997), ‘Hierarchical tendencies amongst world cities: a global research proposal’, Cities, 14, 323–32. Taylor, P.J. (2001a), ‘Specification of the world city network’, Geographical Analysis, 33, 181–94. Taylor, P.J. (2001b), ‘Which Britain? Which England? Which North?’ in D. Morley and K. Robins (eds), British Cultural Studies, Oxford: Oxford University Press, pp. 127–44. Taylor, P.J. (2004), World City Network: A Global Urban Analysis, London: Routledge. Taylor, P.J. (2007a), ‘Problematizing city/state relations: towards a geohistorical understanding of contemporary globalization’, Transactions, Institute of British Geographers, NS32, 133–50. Taylor, P.J. (2007b), ‘Spatial planning and city networks in economic development: a friendly critique of the Polish National Development Strategy 2007–2015’, GaWC Research Bulletin, No. 255. Taylor, P.J. and R. Aranya (2006), ‘Connectivity and city revival’, Town and Country Planning, November, 309–14. Taylor, P.J. and R. Aranya (2008), ‘A global “urban roller coaster”? Connectivity changes in the world city network, 2000–04’, Regional Studies, 42, 1–16. Taylor, P.J. and R.E. Lang (2004), ‘The Shock of the New: 100 concepts describing recent urban change’, Environment and Planning A, 36, 949–54. Taylor, P.J. and R.E. Lang (2005), US Cities in the World City Network, Washington, DC: The Brookings Institution (Metropolitan Policy Program, Survey Series). Taylor, P.J., G. Catalano and D.R.F. Walker (2002), ‘Measurement of the world city network’, Urban Studies, 39, 2367–76. Taylor, P.J., B. Derudder, P. Saey and F. Witlox (eds) (2006), Cities in Globalization, London: Routledge. Taylor, P.J., D.M. Evans and K. Pain (2006), ‘Organization of the polycentric metropolis: corporate structures and networks’, in P. Hall and K. Pain (eds), The Polycentric Metropolis, London: Earthscan, pp. 53–64. Taylor, P.J., D.M. Evans and K. Pain (2008), ‘Application of the interlocking network model to mega-city regions: measuring polycentricity within and beyond city-regions’, Regional Studies, 42, 1079–93. Taylor, P.J., D.M. Evans, M. Hoyler, B. Derudder and K. Pain (2007), ‘The UK space economy as practised by advanced producer service firms: identifying two distinctive polycentric city-regional processes in contemporary Britain’, GaWC Research Bulletin, No. 227. Thompson, G.F. (2003), Between Hierarchies and Markets: The Logic and Limits of Network Forms of Organization, Oxford: Oxford University Press. Worsley, P. (1984) The Three Worlds, London: Weidenfeld and Nicolson.

PART THREE FORCES OF SPATIAL ECONOMIC CHANGE

5

The new economic geography: a simple exposition1 D. Urban

1. Introduction The focus of interest of regional and urban economics is the explanation of how economic activity is distributed in space. This issue becomes both academically interesting and important for economic policy exactly because economic activity is not distributed evenly in space. Cities form large agglomeration centres where economic activity is concentrated: there is a high population density, a concentration of shops and a concentration of firms. By contrast, the hinterland has lower population density, fewer shops and fewer firms per square mile. Moreover, there is also spatial specialization. Certain activities are concentrated in certain regions within a country. For example, cities have a larger concentration of service industries while rural areas are more specialized in agriculture. Finally, there are agglomeration phenomena at different levels of spatial aggregation. There are uneven spatial structures both within a city, separating downtown from residential areas or edge cities, and across regions, separating industrial cores from peripheries. There are also uneven spatial structures across countries. Strikingly, those spatial structures are often not related to geographical characteristics in an obvious way. For instance, many cities were founded at a river confluence, benefiting from inland water navigation. Many of these cities remained viable, however, even when road, rail and air transport replaced inland water navigation. Apparently agglomeration is to some extent self-reinforcing. Understanding the economic forces that form uneven self-reinforcing spatial structures has occupied regional and urban economists for a long time, ever since Marshall’s (1920) well-known discussion of agglomeration forces.2 Yet the models employed often departed considerably from mainstream economics. One of the achievements of the new economic geography literature launched by Krugman (1991) was to explain spatial structure within a model framework that was at the same time familiar in international trade, growth and macroeconomic theory. The purpose of this chapter is to give an introduction to the seminal new economic geography model of Krugman (1991). While there are already many excellent surveys, such as Fujita et al. (1999), Baldwin et al. (2003), Neary (1999) and Duranton and Puga (2004), that reviewed the new economic geography literature, this chapter focuses on the seminal model and develops a new and easily accessible graphical apparatus that sheds light on its basic mechanics from a new angle. The emphasis is on explaining the agglomeration and divergence forces in this model. The main text is by and large based on graphical expositions while Appendices A–E give a rigorous mathematical treatment. Section 2 repeats the familiar model set-up for convenience; Section 3 gives the equilibrium conditions; Section 4 explains why there is agglomeration or convergence; and Section 5 concludes. 105

106

International handbook of urban policy

2. The model set-up In this section, the basic structure of a typical geography and trade model as developed by Krugman (1991) is presented. The model has two regions with one increasingreturns-to-scale sector (industry) and one constant-returns-to-scale sector (agriculture) in each region. The increasing-returns-to-scale sector is monopolistically competitive. Furthermore, transport costs for industrial goods introduce a geographical dimension into the model. There are two types of consumers j 51, 2, which are distinguishable only in terms of their place of residence. The home region’s consumers are indexed by 1 and the foreign region’s consumers by 2. Regions are defined as areas in which internal trade of industrial goods is costless but costly when it occurs across the border. Furthermore, there is no short-run mobility of production factors across borders. However, a long-run mobility of labour across borders is considered. The two types of consumers, j, have identical Cobb–Douglas utility functions of the form: Uj 5 C mMjCA12m, 0 , m # 1

(5.1)

where CA is consumption of the agricultural good produced with constant returns to scale and CMj is an aggregate basket of industrial goods produced in both regions under monopolistic competition and increasing returns to scale. The industrial goods basket CMj is further specified by a Dixit–Stiglitz (1977) subutility function: n1 1n2

CMj 5 c a cij(s21/s) d

s/ (s21)

,a . 1

(5.2)

i51

The demand of consumer j for a single industrial firm i’s product is denoted cij. There are n1 firms in the home region and n2 firms in the foreign region. The number of firms is assumed to be sufficiently large. The elasticity of substitution between the industrial goods is denoted s. There is factor specificity for industrial production by workers and agricultural production by peasants. Peasants work according to a constant-returns-to-scale technology in perfectly competitive markets. The price for agricultural products serves as numeraire and price equals wage. Industrial workers have an increasing returns to scale technology of a simple structure: there is a fixed cost a and a constant marginal cost b for each firm i. The firm i uses LMi units of labour for producing xi goods: LMi 5 a 1 bxi

(5.3)

Every firm produces a different variety in order to exploit potential monopoly profits. In equilibrium, firms will not succeed, however, because free costs of firm entry and exit will ensure zero profits. Because firms are assumed to be symmetric, we drop the firm index i for convenience. However, we shall use the index i 5 1,2 in order to distinguish the home and the foreign firms respectively. The number of industrial workers in region 1, L1, and in region 2, L2, are for simplicity assumed to add up to μ:3

The new economic geography L1 1 L2 5 μ

107 (5.4)

Without loss of generality, I define the domestic region (region 1) to be the smaller one, i.e. where there are fewer industrial workers than in the foreign region (region 2). The total amount of peasants is 1 − μ: they are assumed to be equally distributed in both regions, and they are not mobile. Every worker and peasant supplies one unit of work and earns a salary 1 if peasant and wi if worker in region i. Finally, there are trade costs of the Samuelson iceberg-type t such that only a fraction t of one produced unit of an industrial good arrives at its foreign destination (0 ,t ≤ 1). There are neither trade costs for goods delivered to domestic customers nor trade costs for agricultural goods. 3. Equilibrium conditions In this section, we state some well-known economic relationships that stem from firm optimization, consumer optimization, the zero-profit condition, the labour market equilibrium condition and the goods market equilibrium conditions. Given the usual assumption that the firm takes into account the impact of its pricing decision on its own demand but not on other firms’ pricing decisions, the well-known pricing rule for the firm holds:4 pi 5 g · b · wi

(5.5)

where g K s/(s − 1), and pi denotes the mill price of region i firms’ goods.5 Prices are constant mark-ups over wages due to the assumptions of constant elasticities of substitution and constant marginal cost. Prices and wages are proportional. An increase in wages drives up prices and vice versa. Therefore, prices and wages can be used interchangeably. The optimal output of the firm is known to be determined by the zero profit condition: xi 5

a # (s 2 1) ; x b

(5.6)

The equilibrium output of the firm is independent of the number of workers or the number of firms in a region. In fact, it is an exogenously given constant x. All the interesting effects that drive the agglomeration or convergence process stem from the demand side. This is again a result of the simplifying assumption of constant marginal cost.6 The equilibrium number of firms per region follows from the labour market-clearing conditions and the output decision: ni 5

Li as

(5.7)

This is the third important economic relationship to be kept in mind. If the number of workers increases in a region, workers drag industries with them, and the number of goods increases proportionally. Since profits are zero, aggregate income in a region is the sum of the income of all workers and peasants in that region:

108

International handbook of urban policy 12m yi (wi, Li) 5 wi # Li 1 2

(5.8)

This implies also that the wage bill of all firms in a region equals the sales of all firms in that region: 12m yi ( pi, ni) 5 pi # ni # x 1 2

(5.9)

These economic relationships are useful, because every behavioural equation of the model can be interchangeably expressed in terms of the two prices pi and the number of goods per region ni, or equivalently in terms of the two wages wi and the labour distribution Li.7 Hence it will be completely sufficient to describe the model in terms of prices and number of goods, which will be determined by the goods market equilibrium conditions. Another example is the CES (constant elasticity of substitution) price index Pj that can be written in both ways as function of prices and number of goods or wages and the worker distribution:8 Pj 5 Pj (p1, p2, nj) 5 Pj (w1, w2, Lj).

(5.10)

An increase in the number of domestic goods will lower the price index even at given prices, because there will be fewer goods to pay transport costs for than before (∂Pj/∂nj , 0 and ∂Pj/∂Lj , 0). With these ingredients, a short-run equilibrium can be defined as an equilibrium of the goods market, the labour market and zero-firm profits at a given distribution of labour. Such an equilibrium can be found as the solution of the excess demand curves of the domestic firms f( p1, p2, n), the foreign firms f *( p1, p2, n), and the agricultural sector g( p1, p2, n).9,10 E ( p1, P2) # y2 f ( p1, p2, n) 5 D ( p1, P1) # y1 1 2x50 t E ( p2, P1) # y1 f * ( p1, p2, n) 5 D ( p2, P2) # y2 1 2x50 t g ( p1, p2, n) 5 (1 2 m) ( y1 1 y2) 2 (1 2 m) 5 0

(5.11)

where D( pi, Pi) describes the fraction of region i’s income spent on region i’s firms and E( pi, Pj), i 5 j describes the fraction of region j’s income spent on imports from region i’s firms.11 The home regions’ income y1 and the foreign regions’ income y2 are defined according to equation (5.9), and the price indices are defined according to equation (5.10). These functions describe the excess demand in the three goods markets. The two industrial goods’ excess demand functions add up domestic demand and exports of a firm and subtract its output. The agricultural goods demand is a constant fraction of world income, whereas supply equals the number of peasants. Urban (1999) proves the uniqueness of the equilibrium of the system (5.11). Therefore we can depict the equilibrium of the goods markets in Figure 5.1. The figure shows the three implicit functions f( p1, p2, n), f *( p1, p2, n) and g( p1, p2, n) in the p2 − p1 space for a given n. The three schedules show the equilibrium in the domestic industrial goods

The new economic geography

109

p2

f(p1, p2, n) f*(p1, p2, n)

1

g(p1, p2, n) 1 Figure 5.1

p1

Short-run equilibrium

market, the foreign industrial goods market and the market for agricultural products, respectively. The intersection of the three curves is the short-run equilibrium. One of the equations is redundant due to Walras’s law. I dropped the excess demand function for the foreign industrial goods market f*(p1, p2, n). The equilibrium condition for domestic firms (f-schedule) is upward sloping, because any increase in domestic prices for given foreign prices reduces demand for domestic industrial products (∂f/∂p1 , 0).12 In order to restore equilibrium at a given constant supply, foreign prices must also rise (because ∂f/∂p2 . 0). The equilibrium condition for agricultural products (g-schedule) is downward sloping. A constant fraction of world income is spent on agricultural products. Supply is proportional to the number of peasants in the world and is thus a constant in this model. If industrial wages in one region rise, world income is rising, thus raising demand for agricultural products at constant supply. In order to restore equilibrium, the industrial wages in the other region must fall, until world income is back at the original level. As mentioned above, prices follow wages. The way economic geography papers are written does not, in my opinion entirely clarify how the mechanics of the model operate. Before we analyse this system, we shall depart from the previous model by setting up a completely different well-known microeconomic three goods and two heterogeneous agents pure exchange economy. This new set-up will lead to the same demand system as (5.11). It will be this analogy that sheds new light on the geography and trade models. In particular, it will contribute to the question of how to interpret trade costs and region size in this model. 4. Why is there agglomeration or convergence? Suppose for the moment that a worker changes, for some arbitrary reason, his or her residence. What will happen to the wages and prices? If wages rise in the immigration region and fall in the emigration region, there will be an incentive for more workers to follow (agglomeration). If wages fall in the immigration region and rise in the emigration region, there will be an incentive for this worker to go back (convergence).13 Because of equation (5.5), wages are proportional to prices. Hence we have to examine how prices

110

International handbook of urban policy

change if a worker moves, thereby changing the regional distribution of firms and goods. We shall begin with the impact of a movement of a worker on the equilibrium condition for domestic industrial goods. If an industrial worker moves from the foreign to the domestic region at a given level of prices and wages, then the demand-change for domestically produced industrial goods will be described by the following equation: 0f E ( p1, P2) 5 w1D ( p1, P1) 2 w2 # t 0L y2 # 0E ( p1, P2) # 0P2 0D ( p1, P1) # 0P1 1 y1 1 t 0P1 0L 0P2 0L

(5.12)

where we made use of (5.9), (5.10) and (5.11). A movement of labour from the bigger to the smaller region has two effects on domestic demand for industrial goods, an income effect and a number-of-goods effect. In the former effect there is one worker more in the domestic region, who spends his or her income on domestic goods and hence there is one person fewer in the foreign region who could spend some income on exports. Note that the price for the domestic good is reduced for this person due to the absence of trade costs in intra-regional trade. This means that this person now spends relatively more on the domestic good than before. This effect is captured in the first and second terms of equation (5.12). In the latter effect, if a worker moves from the foreign to the domestic region, firms will relocate too. Because there are now more firms in the domestic region and fewer in the foreign, the composition of the price index also changes. At given prices, domestic consumers have fewer import goods to pay transport costs for (and vice versa for the foreign consumer). This lowers the domestic price index for industrial goods and raises the foreign one. If the domestic price index is lowered, the relative price of domestic goods to the price index is increased. This reduces ceteris paribus domestic demand for products of domestic firms. The reverse holds true for exports. This effect is captured in the third and fourth terms of equation (5.12). Because these two effects are key to the understanding of agglomeration and convergence in this model, we shall repeat them, looking from a different angle that coincides with the graphical exposition that follows. Supposes a worker moves from the smaller domestic to the bigger foreign region (rather than vice versa as in the explanation above). On the one hand, the migrated worker increases total income in the foreign region and reduces total income in the domestic region. This typically reduces demand for the domestic firm because the migrated worker buys fewer goods from the former home region. This is an agglomeration force, because it raises domestic prices and wages at given foreign prices and wages. On the other hand, the decrease in the number of workers in the domestic region reduces the number of firms and goods produced. The domestic CES price index accounts for this effect by an increase, because the composition of the index changes towards foreign goods, which are more expensive because of the transport cost and because of the higher labour cost in the bigger foreign region. The increase in the domestic price index reduces the relative price for domestic goods. This increases domestic demand for industrial goods and is thus a convergence force in the model, because a decrease in domestic demand lowers domestic prices and wages at given foreign prices and wages.

The new economic geography p2, w2

f(p1, p2, 0) f(p1, p2, n1 = n2)

p2, w2

111

f(p1, p2, n1 = n2)

f(p1, p2, 0) g(p1, p2, 0)

1

g(p1, p2, 0)

1

g(p1, p2, n1 = n2)

g(p1, p2, n1 = n2) (a)

Figure 5.2

1

p1, w1

(b)

1

p1, w1

Comparative statistics of worker migration

It is ambiguous, i.e. dependent on the parameters of the model, whose force dominates (sign of ∂f/∂L undetermined). This can be demonstrated in Figure 5.2. Figure 5.2(a) shows the agglomeration case. Suppose that starting from the equal distribution equilibrium, workers move out continuously from the domestic region, making it smaller. If the emigration causes a reduction in demand for domestic goods, this causes prices and wages in the domestic region to fall at given prices and wages in the foreign region. Hence the f-schedule shifts leftward. Additionally, the g-schedule twists anti-clockwise around the (w1 5 1, w2 5 1) coordinate. If wages in the domestic region are smaller, the emigration will cause a rise in world income, which leads to excess demand in the market for agricultural goods. In order to restore equilibrium, domestic wages have to fall at given foreign wages. Both movements of the f- and the g-schedule lead to a fall of domestic wages relative to foreign wages. Hence the emigration is self-reinforcing. The economy ends up at complete agglomeration (L 5 0). Figure 5.2(b) shows the convergence case. Now, emigration causes a rise in domestic industrial goods demand, which increases domestic prices and wages at given foreign prices. Hence the f-schedule shifts toward the right. If wages in the domestic region are higher than in the foreign region, then the emigration causes a fall in world income, which leads to excess supply in the market for agricultural products. In order to restore equilibrium, domestic wages have to rise at given foreign wages. The movements of both schedules together induce a rise in domestic wages relative to foreign wages. Hence the incentive to move out is reversed and the equal distribution equilibrium is stable in the long run. The last conclusion can be demonstrated more clearly in Figure 5.3. Figure 5.3(a) repeats the line with arrows from Figure 5.2(b). Figure 3(b) is constructed from 3(a) by drawing a ray through the origin to the equilibrium wage combination for a specific worker distribution. Taking the tangents of the angle of this ray gives the relative nominal wage (w2(L)/w1(L)) at this labour distribution. Repeating this procedure for every possible labour distribution gives a schedule depicting the relative nominal wage as a function of the labour distribution. This curve is drawn in Figure 3(b) and describes the short-run equilibrium condition.14 Points A, B, C and D correspond in the two panels of Figure 5.3. The schedule is either upward or downward sloping. However, this is not the end of the story, because so far only relative nominal wages

112

International handbook of urban policy p2, w2 w2 — w1 <1

w2 — >1 w 1 A

1

D B

w2 — w1 A

1

C

D

␤

C

B

␣ (a) Figure 5.3

1

p1, w1

(b)

␮/2

L

Short-run equilibrium condition

have been considered. A migration decision is rather based on relative real wages. Let us look at the long-run steady state condition: equal real wages. w1 ;

w1 w2 ; w2 m 5 P1 ( p1, p2, n) P2 ( p1, p2, n) m

(5.13)

Let us suppose that all nominal wages and prices are equal in both regions. Does this guarantee equal real wages, too? The answer is no. If the domestic region is smaller, i.e. has fewer workers and fewer industrial products, more industrial products have to be imported. This raises the domestic CES price index above the foreign one, because the transport cost mark-up has to be paid for more products. But then the domestic real wage is smaller than the foreign one. Hence the domestic nominal wage needs to be bigger than the foreign nominal wage for the real wages to be equal if the domestic region has fewer workers. The equal real wage condition is downward sloping in the (w2/w1; L)-space and is depicted in Figure 5.4 as the solid line.15 Real wages are higher in the foreign region above this line (agglomeration) and higher in the domestic region below this line (convergence). Urban (1999) proves that three cases are possible. The short-run equilibrium condition is always above the equal real wage condition; then real wages are higher in the larger region and workers of the smaller region have an incentive to move to the larger region, thus self-reinforcing the agglomeration process (see Figure 5.4(a)). The short-run equilibrium condition is always below the equal real wage condition; then real wages are higher in the smaller region and the equal distribution equilibrium is dynamically stable (see Figure 5.4(c)).16 The equal real wage condition cuts the short-run equilibrium condition from above (see Figure 5.4(b)). There will be an unstable intermediate steady-state equilibrium S1 next to the symmetric steady-state equilibrium S2. For any labour distribution smaller than the one corresponding to S1, there is an agglomeration process going on. For any labour distribution greater than the one corresponding to S1, the system converges to the equal distribution equilibrium.17 This case can be considered a ‘poverty trap’, because it depends on the initial distribution of industries whether a region becomes industrialized or not. Urban (1999) gives the precise conditions for each of these cases in his proposition 2. If an economy starts out with low scale economies (low s), a big agricultural sector

The new economic geography

w2 — w1

w2 — w1

1

1 – >␻ – ␻ 2 1 – <␻ – ␻ 2

(a) Figure 5.4

w2 — w1 S2 – >␻ – ␻ 2 1

1 – >␻ – ␻ 2 1

S1 – <␻ – ␻

1

2

␮/2 L

113

(b)

– <␻ – ␻ 2 1

1

␮/2 L

(c)

␮/2 L

Agglomeration or convergence

(high μ), and high transport costs (low t), then the economy is likely to be described by the convergence scenario (Figure 5.4(a)). As transport costs are falling, industries are developing, and economies of scale are rising, the economy will most likely end up in the agglomeration scenario (Figure 5.4(c)).18 Whether the ‘poverty trap’ scenario is passed on the path of development (Figure 5.4(b)) depends on whether the first industries started to be spread evenly in a plane or were already clustered in a few places. Then the tendency of clustering might have appeared in some regions, but not in others. This intermediate stage (poverty trap) might explain different stages in the degree of agglomeration. 5. Summary This chapter analyses the reasons for agglomeration or convergence in a typical geography and trade model such as Krugman (1991). There are two agglomeration forces (income effect or home-market effect and price-index effect) and one convergence force (number-of-goods effect). Income effect If one worker moves from the smaller to the larger region, then this worker will spend more on goods produced in the larger region than before, because there are no longer any transport costs to be paid for these goods. Hence there is, ceteris paribus, excess demand for goods produced in the larger region. This will raise producer prices and wages and, ceteris paribus, attract even more workers to the larger region. Number-of-goods effect If one worker moves from the smaller to the larger region, then output of the existing firms in the larger region rises. Profits increase since fixed costs are spread over more units of a good, new firms enter, and the number of goods increases in the larger region but falls in the smaller region. Next, the price index falls in the larger region, because trade costs have to be paid for fewer goods than before. Conversely, the price index rises in the smaller region. Hence the ratio of the producer price divided by the consumer price index falls in the larger region and rises in the smaller at given producer prices. This induces excess supply in the goods markets of the larger region and excess demand in the goods markets of the smaller region. Therefore producer prices and wages rise in the smaller region and the worker has an incentive to move back.

114

International handbook of urban policy

The price-index effect Since the consumer price index is, ceteris paribus, larger in the smaller region, real wages will be smaller in the smaller region, attracting workers to the larger region. Agglomeration Agglomeration occurs if the income effect and the price-index effect overcompensate for the number-of-goods effect. Convergence Convergence of manufacturing distribution occurs if the number-of-goods effect overcompensates the income and price-index effect. An interior for equilibrium exists for some parameter range. If a region has a certain critical mass of industries, industries tend to spread equally in space. If a region does not have this critical mass of industries (‘poverty trap’), it is likely to ‘run out’ of industries completely. Notes 1.

2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

The author thanks Kjetil Bjorvatn, Niels Blomgren-Hansen, Pascalis Raimondos-Moller and participants of seminars at Copenhagen Business School, Copenhagen University, Penn State University, and Uppsala University for their comments. This chapter draws in part on the author’s PhD dissertation at Copenhagen Business School. The usual caveats apply. See Anas et al. (1998) for a broad survey of agglomeration forces within the context of urban economics, or Fujita and Thisse (1996). See Krugman (1991), footnote 1, for a justification of this assumption. This equation is only an approximation, which is fairly good for a large number of firms. (It does not imply that ni has to be large, because ni is normalized to the number of firms per country population.) See the discussion in Yang and Heijdra (1993), Dixit and Stiglitz (1993) and d’Aspremont et al. (1996). The pricing decision for export goods pExport requires the firm to demand the domestic price plus the addii tional transport cost: pExport 5 g · b · wi/t, i 51, 2. i Hence one effect that one might think of is missing in the model: the larger region does not have larger firm sizes and hence lower production cost under increasing returns to scale. See Krugman (1980), footnote 3, on this issue. From now on L denotes the number of domestic workers and μ − L the number of foreign workers. Respectively, n denotes the number of domestic goods, whereas the number of foreign goods is given by μ/as − n. The explicit functional forms are given in Appendix A. The agricultural sectors can be merged into one equilibrium condition, because there are no transport costs for agricultural goods. The explicit functional forms of the equation system (5.11) are given in Appendix B. The explicit definition for D( pi, Pj) is D ( pi, Pi) 5 aspi2s /Pi12s and the explicit definition for E( pi, Pj) is E ( pi, Pj) 5 as ( pi/r) 2s /P12s . j

12. 13.

The rigorous mathematical derivation of the derivatives in this paragraph is part of Appendix C. In the context of economic geography, convergence means the tendency of increasing-returns-to-scale industries to allocate equally in a plane, whereas convergence in the growth literature means the tendency of growth rates of GDP of poorer countries to be higher than those in richer countries. (This is absolute convergence as defined by Barro and Sala-i-Martin, 1995.) The two notions are interrelated if increasingreturns-to-scale industries have higher technological progress than agriculture. An agglomeration process of industries would then also imply divergence of income growth rates and a convergence process of industries would also mean convergence of income growth rates.

The new economic geography 14. 15. 16. 17. 18.

115

The mathematical derivation of this line is found in Appendix D and denoted h(W, L). The mathematical form of the equal real wage condition is derived in Appendix E and is denoted k(W, L). These two cases are reported in Krugman (1991). This case is found in Urban (1999). A further elaboration of the intuition behind these comparative static results is found in Urban (2007).

References Anas, A., R. Arnott and K.A. Small (1998), ‘Urban spatial structure’, Journal of Economic Literature, 36(3), 1426–64. d’Aspremont, C., R. Dos Santos Ferreira and L.-A. Gérard-Varet (1996), ‘On the Dixit–Stiglitz model of monopolistic competition’, American Economic Review, 86, 623–9. Baldwin, R., R. Forslid, P. Martin, G. Ottaviano and F. Robert-Nicoud (2003), Economic Geography and Public Policy, Princeton, NJ: Princeton University Press. Barro, R.J. and X. Sala-i-Martin (1995), Economic Growth, New York: McGraw-Hill. Dixit, A.K. and J. Stiglitz (1977), ‘Monopolisitic competition and optimum product diversity’, American Economic Review, 67, 297–308. Dixit, A.K. and J.E. Stiglitz (1993), ‘Monopolistic competition and optimal product diversity: reply’, American Economic Review, 83(1), 302–4. Duranton, G. and D. Puga (2004), ‘Micro-foundations of urban agglomeration economies’, in J.V. Hernson and J.-F. Thisse (eds), Handbook of Regional and Urban Economics, Vol. 4, Amsterdam: Elsevier Science, pp. 2063–118 Fujita, M., P. Krugman and A.J. Venables (1999), The Spatial Economy – Cities, Regions, and International Trade, Cambridge, MA and London: MIT Press. Fujita, M. and J.-F. Thisse (1996), ‘Economics of agglomeration’, CEPR Discussion Paper No. 1344. Krugman, P.R. (1980), ‘Scale economies, product differentiation, and the pattern of trade’, American Economic Review, 70, 950–9. Krugman, P.R. (1991), ‘Increasing returns and economic geography’, Journal of Political Economy, 99(3), 483–99. Marshall, A. (1920), Principles of Economics, 8th edn, London: Macmillan. Neary, P. (1999), ‘Of hype and hyperbolas: introducing the new economic geography’, Journal of Economic Literature, 39, 536–61. Urban, D.M. (1999), Economic Geography and Growth, Copenhagen Business School PhD, serie 2.99. Urban, D.M. (2007), ‘Neoclassical growth, manufacturing agglomeration, and terms of trade’, Review of International Economics, 15(5), 1014–35. Yang, X. and B.J. Heijdra (1993), ‘Monopolistic competition and optimal product diversity: comment’, American Economic Review, 83(1), pp. 295–301.

Appendices Appendix A: definition of price indices The explicit functional forms for the price indices are: 1

m 2 L 12s 12s L P1 (w1, w2, L) 5 gba w112s 1 ts21 a bw2 b m m P1 ( p1, p2, n) 5 anp112s 1 a P2 (w1, w2, L) 5 gba a P2 ( p1, p2, n) 5 a a

1

m 2 nb (p2 /t) 12s b 12a as 1

m 2 L 12s L bw2 1 ts21 w112s b 12s m m 1

m 2 nbp212s 1 n (p1 /t) 12s b 12s as

(5A.1)

116

International handbook of urban policy

Appendix B: the excess demand functions The equation system (5.11) is written in explicit functional form: p2s 1 ap1nx 1 np112s

m 12m 12m 2 nbx 1 p2s b b 1 ap2 a as 2 2 x 1 5 m m m 2 nbp212s 2 nbp212s 1 ts21 a np112s 1 t12s a as as

ts21p2s 2 ap1nx 1 s21

t

np112s

12m b 2

m 2 nbp212s 1a as

p2s 2 ap2 a 1 np112s

m 12m 2 nbx 1 b as 2 x 5 m m 2 nbp212s 1 ts21 a as m m 2 nb 5 p1 # n 1 p2 # a as x

(5A.2)

Appendix C: partial derivatives of excess demand functions This part of the appendix calculates the signs of the partial derivatives of the excess demand functions of equation system (5.11), which is written in explicit functional form in Appendix B. 1. The determination of the sign of ∂f/∂p1 We first rewrite the first equation in (5A.2) in the following way: f5

f1 f3 1 2x f2 f4

where we used the notation n1 and n2 and defined f1 ; max 1

12m b.0 2p1n1

f2 ; 1 1 ts21 a

n2 p2 12s .0 ba b n1 p1

f3 ; ts21my2 . 0 f4 ; ts21n1 p1 1 n2 p212sps1 . 0 The partial derivatives are thus 0f1 12m 52 2 ,0 0p1 2p1n1x 0f2 n2 5 ts21 (s 2 1) a bp212sps22 .0 1 n1 0p1

(5A.3)

The new economic geography

117

0f3 50 0p1 0f4 5 ts21n1 1 sn2 p212sps21 .0 1 0p1

(5A.4)

The partial derivative of f is then given by the following expression: 0f2 0f1 f 2 f1 0f 0p1 2 0p1 5 2 0p1 f 22

f3 ,0 0f 2 4 f4 0p1

(5A.5)

which is readily checked to be negative. QED. 2. The determination of the sign of ∂f/∂p2 | | First, we slightly rewrite (5A.3) by defining f 3 and f 4 to replace f3 and f4, respectively: 12m | # # f 3 ; mts21p2s b.0 1 ap2 n2 x 1 2 | f 4 ; ts21n1 p112s 1 n2 p212s . 0

(5A.6)

Then we can formulate the following partial derivatives: 0f1 50 0p2 0f2 n2 5 ts21 (1 2 s) a bp112sp2s 2 , 0 n1 0p2 | 0f3 5 mts21p2s 1 n2x . 0 0p2 | 0f4 5 (1 2 s) n2p2s 2 , 0 0p2 The partial derivative of f is then given by the following equation: | | 0 f 3| | 0f4 f 2 f3 f1 0f 0p2 4 0p2 5 2 1 .0 | 2 0f 0p2 f4 2 2 f2 0p2

(5A.7)

(5A.8)

which is readily checked to be positive. QED. The sign of the partial derivative ∂f/∂L is ambiguous. The signs of the partial derivatives of g (p1, p2, L) can be readily seen from the third equation of (5A.2).

118

International handbook of urban policy

Appendix D: goods-market equilibrium condition This part of the appendix derives an implicit functional form of the goods-market equilibrium condition in W–L-space, which is repeatedly shown in Figures 5.3 and 5.4. Reformulating the first two equations from Appendix B by using (5.5), (5.6) and (5.7) yields the following equation system, which guarantees goods-market equilibrium for domestic industrial products and agricultural products: m 5 w1L 1 (m 2 L) w2 w2s 1 aw1L 1 15

L 12s w m 1

12m 12m ts21w2s b b 1 aw2 (m 2 L) 1 2 2 1 m 2 L 12s m 2 L 12s L 1 ts21 a ts21 w112s 1 a bw2 bw2 m m m

(5A.9)

Expressing this system of equations in relative wages W 5 w2/w1 and rearranging yields: aL 1

12m 12m ts21 aW # (m 2 L) 1 b b 2w1 2w1 1 51 m2L m2L L s21 12s s21 L 12s 1a bW b bW b a 1t a at m m m m L 1 W (m 2 L) 1 5 w1 m

(5A.10)

Plugging the second into the first equation of (5A.10) allows us to define an implicit function h (W, L) in the relative nominal wage W and the labour distribution L, which fully characterizes goods market equilibrium in both sectors: h (W, L) ;

1

2mL 1 (1 2 m) (L 1 W (m 2 L)) (L 1 ts21 (m 2 L) W 12s) ts21 (2mW (m 2 L) 1 (1 2 m) (L 1 W (m 2 L))) 2250 (ts21L 1 (m 2 L) W 12s)

(5A.11)

The implicit functional form h(W, L) can be solved for L, giving two solutions. Only one of them can be in positive prices because of the uniqueness of the short-run equilibrium (for the proof, see Urban, 1999, Proposition 1). Hence the short-run equilibrium condition must be either monotonically increasing or monotonically decreasing in W−Lspace. By inspection of the algebraic form of the solution to L that is a rational function, the schedule of h(W, L) must also be continuous. Appendix E: equal real wage condition This part of the appendix gives a functional form for the equal real wage condition in Figures 5.3, 5.4 and 5.5. The definition of the relative real wage can be rewritten in terms of the nominal real wage and the labour distribution by using (5A.1) and (5.13):

The new economic geography

119

m

(ts21L 1 (m 2 L) W 12s) 12s w (L, W) 5

(5A.12)

m

W (L 1 ts21 (m 2 L) W 12s) 12s In the steady state, the relative real wage needs to be equal to one (w (L, W) 5 1). This equation is solved for L, and an implicit function k (W, L) in W and L is defined for which the real wage is one: maW 12s 2 ts21W (12s) a11 m b b 1

k (W, L) ; 2

ts21 2 W (12s) 2 W a

12m m b

1 ts21W (12s) a11 m b 1

2L50

(5A.13)

This is the implicit functional form for the equal real wage condition used in Figure 5.4.

6

Land markets and their regulation: the economic impacts of planning P. Cheshire and W. Vermeulen

1. Normative framework: welfare economics versus planning The great majority of the world’s population, and all those living in developed economies, live in societies in which the goods and services they consume are provided through markets and – subject to their incomes – they are free to choose what, where and how much to consume. But to varying degrees governments intervene and regulate all markets. So the regulation of land markets is not exceptional in itself; but it is exceptional in its form and severity. What economists call ‘land market regulation’, however, most people – including those who practise it – call land use ‘zoning’ or ‘planning’. This is definitely a form of regulation, however, since it determines the use of an economic resource according to rules and norms: prices and land markets are still influential, as we shall see below, but their influence is constrained and regulated by planning decisions. Underlying and guiding the form of most systems of market regulation there are general analytical principles derived from welfare economics, which build essentially on two ‘fundamental theorems’. The first of these theorems is that under certain conditions, the outcomes generated by markets are ‘efficient’ or ‘socially optimal’. The economic concept of efficiency has a very particular meaning: an outcome is socially optimal if no redistribution of ‘goods’ or reallocation of resources is possible which would not make at least one person worse off in welfare terms than they were previously. In other words, taking the real income distribution and legal property rights as given, it is impossible to improve total welfare without damaging the welfare of at least one individual. The validity of this theorem rests on four principal conditions holding, however: first, people are the best judges of their own welfare; second, the actions of no person or firm influence the welfare of others without that influence being reflected in prices; third, no agent in the system has any degree of monopoly; and finally, it must be the case that all goods have prices. A violation of any one of these conditions is usually referred to as a ‘market failure’. The point and power of this result may seem paradoxical to a non-economist. It is that the conditions that would have to hold for markets to deliver a socially optimal outcome almost never hold in practice. But they can be identified with complete precision. The beauty of this first fundamental theorem of welfare economics is that it provides clear guidelines for regulating markets. The best sort of regulation intervenes in ways to ensure that so far as possible the conditions leading to market failure are eliminated or, more realistically, their influence is minimized. In nearly all countries there are government bodies charged with ensuring fair competition, regulating monopolistic practices, advising and intervening on health aspects of industrial processes, or devising policies to restrict pollution or combat global climate change. Some goods – the most obvious being national defence – do not have prices and are provided directly by the government. All 120

Land markets and their regulation

121

these examples of government intervention or regulation reflect clearly identified sources of market failure. Economists make a sharp distinction between efficiency – the best society can do on the basis of the current distribution of incomes and wealth – and what is ‘equitable’, that is, what society might collectively choose as a fairer distribution of income and wealth. The advantage of the notion of efficiency is that outcomes can be analysed without resorting to ethical judgements beyond those identified above. It is a feature of the second fundamental theorem of welfare economics that whatever its distributional properties, every outcome that is efficient can be attained in a market economy by transferring money between agents in a lump-sum fashion. So if society, for example, really prefers an outcome in which every agent is equally well off, irrespective of their endowments in terms of human capital, it can attain this outcome by transferring money to agents with little human capital and leave the allocation of commodities to markets. Nevertheless, this result takes the distribution of real incomes again as given, treating the ‘ideal’ distribution as a matter of individual conscience and judgement. Economists are of course interested in distribution but they are less confident in their analysis. For instance, economics has important things to say about the often unexpected distributional outcomes of planning interventions (see Section 4 for some examples), but it has little to say about what those distributional outcomes should be. Economics contributes a great deal to the analysis of issues such as the affordability of housing, exclusionary zoning or social housing, but it has little to say about the necessity or desirability of the distributional purposes of such policies. To most planners, welfare economics is an alien way of thinking, as they tend to come from a completely different intellectual tradition. Economists are rational, calculating and – aspirationally at least – the closest in approach to natural science of any social science. Planning’s roots are in design, and engineering and its aspirations are utopian. Hall (1974), in his wonderful overview of the historical origins of planning, devotes a whole chapter to ‘The Seers’. The founder of the Council for the Preservation of Rural England (in 1925) was Abercrombie, the author of the seminal 1944 plan for Greater London. Another influential figure in the early days of planning was the eccentric architect of Portmeirion, Clough William-Ellis (1928). Planning has added a good deal of social science over the past generation and is now an established, legalized and legalistic system, but its intellectual roots are in design and what draws eager students into the subject is an aspiration to improve the lot of human kind by means of a better built environment. Ultimately, for many in the planning profession, ‘urban containment’ and ‘mixed development’ are worthwhile because they regard them as right – or at least that is how it seems to be to an economist looking into the world of planning. Another essential distinction is that while planners treat aesthetics and amenities as having intrinsic value, economists attempt to value these attributes in terms of how they influence human welfare, reflected in what people are willing to pay for them. For instance, environmentalists appear to economists to set some absolute value on environmental outcomes, independently of human preferences. Economists try to estimate the willingness to pay for environmental outcomes. Planners favour mixed land uses and mixed communities. Economists ask awkward questions, such as: what is the value of such attributes? Who gains from them? Who loses? And how much do they cost to secure? All these issues can be treated within the framework of welfare economics, which

122

International handbook of urban policy

puts sustainability and environmental outcomes, including those of the built environment and its relationship to rural preservation or conservation, to the same fundamental tests: costs and benefits. They are not outcomes given value in their own right, but their value depends on the preferences and willingness of people to pay for them and what we have collectively to forgo in order to obtain them. This chapter offers a welfare-economic perspective on land-use regulation that is accessible to planners. Our aim is to persuade planners of the value this perspective has. In the next section, we discuss the reasons for land-use regulation in terms of various types of market failure. The following section illustrates how economic theory may be employed to derive optimal land-use policies that take account of externalities and the public nature of certain types of land use, while offering some thoughts on the applicability of these theoretical results in the real world. Next, empirical evidence on costs and benefits of land-use regulation is considered. As land-use regulation is relevant for other sectors too, and as there may be indirect effects of these policies, our concluding section puts this discussion into a wider perspective. 2. Why is intervention in urban land markets needed? How exactly does the rather general framework of welfare economics apply to land markets and cities? Land markets are riddled with problems of market failure, particularly those associated with actions of landowners that are not priced and the provision of specialized public ‘goods’, such as open space, which it is difficult or impossible to price. An obvious feature of land is that any parcel has a specific and fixed location. The value of any parcel of land is, moreover, largely determined by the characteristics and uses of other parcels of land bordering it and to which it gives access. A plot of land in central London may be worth £100 million per hectare, not because of its fertility but because it gives easy access to one of the largest, most highly skilled and highest-paying labour markets in the world and large numbers of high-spending customers. If it is close to a parcel of land being used as a major intersection of the Underground system its value will be substantially greater because access will be even easier. If a firm were to set up on the adjoining plot, smelting lead or incinerating toxic waste, the value of the site would be greatly reduced. Houses under a flight path at Heathrow airport will be worth less than similar houses not affected by aircraft noise. A house in a National Park and with a view out over its unspoilt beauty or with frontage to a good fishing or boating river will equally have a substantially higher price than a similar house looking out to a railway line or a power station. There is an extensive literature documenting the extent, complexity and sophistication of the ways in which land and housing markets capitalize the impact of amenities, neighbourhood characteristics and disamenities to which their location exposes them. As far as it concerns the valuation of open space and other planninginduced amenities, a brief review of this literature is offered in the section dealing with evidence on the effects of land-use regulation. But while the value of any given site depends on the uses of sites bordering it and to which it gives access, the actions of the owners of those other related sites which generate (or reduce) that value would, in unregulated markets, be neither rewarded nor penalized – or at least only incompletely. The firm that decides to set up a lead-smelting plant may lose value in its own site but does not (at least without regulation) have to compensate the owners of the other surrounding sites for the losses they incur. A farmer who pollutes

Land markets and their regulation

123

a river would lose the value of his own fishing rights but not the value of all those down river who also suffered loss. These are all examples of ‘externalities’, and because land values are so strongly influenced by the actions of owners of adjoining and nearby plots, land markets if left unregulated would exhibit serious problems of market failure. The pattern of land uses would consequently be far from the optimum. It should be added, though, that land-use externalities do not need to be negative. Households that live in close proximity to each other may find it easier to maintain their social networks and firms may want to locate in close proximity to other firms in order to reap the benefits of agglomeration economies, such as the easy transfer of knowledge. The provision of ‘public goods’ is another significant source of market failure in land markets. In economics the term ‘public goods’ is used in a very specific way to describe goods (or services) which (1) are non-rival in consumption and (2) are non-excludable. What ‘non-rival’ in consumption means is that if one person benefits from the provision or consumption of a good, this does not affect the welfare of its other consumers or the costs of the producer. I might share a packet of cashew nuts with my friends, but the more I eat the fewer there are for my friends, and replacing the packet would cost resources. But this is not true of all goods – national defence is an example often used, but the same is true of National Parks or, indeed, any park, museum, open space, cityscape or architecturally attractive neighbourhood. If I enjoy a walk on London’s Hampstead Heath, this in no way restricts the enjoyment of others and any additional costs of park maintenance are so trivial we can forget about them. The exception might arise when a park or open space begins to get congested. Then an additional user would impose costs. The enjoyment of existing users (as well as that of the additional user) would be reduced by the congestion effect. ‘Non-excludable’ means that it is impossible to stop people consuming the good, if it is provided. For practical purposes I can only eat my cashew nuts if I buy them. If I do not pay for them it is easy to exclude me from enjoying them. With some goods this is not possible: for example, if a view is beautiful, it is impossible to exclude people from enjoying it. Cityscapes or areas of architectural interest are equally impossible to exclude people from and it is difficult to exclude them from parks. This class of public goods is relevant because markets will not provide any incentive, or sufficient incentive, to provide optimal quantities of them. It is also difficult to know what the optimal quantity to provide is, since markets do not provide the necessary signals.1 Tiebout (1956) demonstrated that this was not necessarily the case for local public goods where the ability to consume was determined by where someone lived. So long as such local public goods were provided and paid for by local governments and their residents and people were free to move, then people could vote with their feet and choose rates of local taxes and supplies of local public goods that best suited their pockets and preferences. But this conclusion rests on particular fiscal and political institutional arrangements and minimal costs of mobility, so it may not be generally applicable as a solution to the real-world problem. In fact, a significant element of land-use regulation is to provide such goods directly by preserving open space within and around cities, supplying parks and recreational facilities as well as conserving architecturally significant areas, environmentally important sites and helping to provide and maintain cityscapes. The locational specificity of land, housing and real estate is central to both these reasons for market failure. It also underlies yet another reason for market failure, related

124

International handbook of urban policy

to ‘market power’. Many development projects, most obviously large infrastructure projects such as roads or railways but also large restructuring projects in developed urban areas, require the merging of several or many parcels of land under different ownership to make a viable development. A railway line that is incomplete because a particular landowner refused to sell the essential final parcel of land would be useless.2 This gives increasing market power to hold-out sellers. For private developers, trying to assemble larger sites from several separately owned plots, this is a nuisance and may lead to nondevelopment, loss of private profits and a suboptimal outcome in terms of social welfare. For major infrastructure projects, the potential for suboptimal social-welfare outcomes is very substantial. This led nearly all countries to introduce some form of compulsory powers of purchase either for government on behalf of the developers, or the granting of such powers directly to the companies themselves with (usually) significant regulation attached. This cause of market failure in land markets is, however, not endemic in the way that externalities and problems of public-good provision are, and it generates a more specialized and particular type of regulation. For completeness, we should include the possibility that another assumption underlying the first fundamental theorem of welfare economics, namely that people are the best judges of their own welfare, may also be violated. In this case, the government may want to revert to ‘paternalism’ and decide for the individual how much to consume of certain goods. The goods that would call for such interventions are usually referred to as ‘merit goods’, defined as ‘goods that society deems to be especially important and that those in power feel individuals should be required or encouraged to consume’ (Lipsey and Chrystal, 1995, p. 423). There are also the inverse of merit goods: goods such as hard drugs or, in some times or cultures, alcohol, that are judged too bad for individuals to be allowed to make their own choices. This type of argument could possibly be invoked to cover, for example, affordable housing policies, as certain groups in society – such as the very young or very old – may not have the effective power to make their own informed housing consumption choices. However, it is questionable whether the argument could be stretched to justify a large social housing sector, such as for instance in the Netherlands, where it constitutes about one-third of the total housing stock. 3. Optimal land-use policies in economic theory and in practice Since outcomes in unregulated land markets can often, for a number of reasons, be socially suboptimal, government interventions in these markets may be welfare enhancing. This section introduces a highly simplified economic framework, which enables us to identify costs and benefits of land-use regulation in the context of two particular market failures: a negative externality of residential land use and the public-good nature of some open space, such as city parks. We show how this framework may – at least in principle – be used to derive an optimal policy. The next subsection then proceeds to discuss the range of assumptions and simplifications that needs to be made, and what this means for applying the stylised economic framework to land-use regulation in the real world. Next to externalities and public goods, redistribution is often another motive for government intervention in land and housing markets, but since economic theory offers no clear reason for large-scale redistribution specifically by interventions in housing and land markets, we ignore this issue here.3

Land markets and their regulation

125

3.1 A simple economic framework for land-use policy analysis In order to illustrate how a welfare-economic framework may be used to analyse optimal policy in the presence of land-use externalities, we consider a city-region within which all residents live and work. The city-region has an urban core but is surrounded by a rural (or, as the French might have it, a ‘peri-urban’) hinterland. This hinterland is interpreted as a multifunctional park that provides citizens with recreational areas, environmental amenities and scenic views – as in the greenbelt that was originally envisioned by Ebenezer Howard.4 Urban expansion implies that open space in this greenbelt is reduced, or that it is moved outwards and so becomes less accessible to residents of the inner city. However, in unregulated markets the size of the urban area is the outcome of land-use decisions of individual households, and in determining the size of their own houses and gardens, these households will generally ignore the loss of access to open space at the urban fringe that their choices impose on the wider community. Hence they do not take full account of the burden that their behaviour imposes on society, and government intervention in the land market may be appropriate. Although we may thus conveniently introduce the welfare economics of urban containment policies, it should be noted that the existence and significance of negative externalities related to the total amount of urban land in residential use are not in practice as clear-cut as the conventional wisdom on greenbelt-type policy implies.5 We consider the market for residential land in a partial equilibrium setting. It is assumed that people derive utility from the consumption of residential land, from recreational activities in open space at the urban fringe, and from all other goods and services that are aggregated into a single numeraire good. This composite or numeraire good may be normalized in such a way that one unit of it is equivalent to one currency unit. This allows us to express utility and social welfare in pounds sterling, euros or any other currency unit. Furthermore, we assume that the demand for residential land is not affected by income, and that no relationships exist between the outcome in this market and prices in other markets. These are all simplifying assumptions to help us reveal more clearly important underlying relationships and policy choices. It is helpful to represent this welfare analysis of land-use regulation diagrammatically, as in Figure 6.1. This figure features aggregate residential land on the horizontal axis, and the price of a unit of residential land on the vertical axis. The downward-sloping line D indicates the aggregate demand for residential land, which is the sum of all the demands of individual households in society – in this case all those living and working in our ‘city-region’. This demand curve is downward sloping because, as the price of residential land falls, households may increase the size of their houses and gardens, choose to live in detached houses rather than town housing or apartments, and new households will form as housing is cheaper.6 Formally, it shows the particular level of consumption for every price if all consumers choose their demand for residential land optimally. This price may be interpreted as the social benefit of increasing the aggregate supply by one unit at the specified level of consumption, as it measures the total amount of numeraire goods that residents are willing to forgo in order to obtain it. Hence the area under the demand curve may be interpreted as the total social benefit from residential land consumption, or its contribution to aggregate utility, exclusive of the costs that are associated with it. Figure 6.1 also contains two supply curves. The first curve, MPC1, for marginal private costs, indicates the costs of a unit of land that are internalized in markets, consisting

126

International handbook of urban policy

Price per unit of residential land

a D d

C1

MSC i

P1

l MPC

1

p

m

S1

0 Total area of residential land

Figure 6.1

Equilibrium in an unregulated market for residential land

mainly of opportunity costs (the price of agricultural land) and conversion costs. We assume that the curve MPC1 is flat, that is, the costs that are internalized in unregulated markets do not vary with the total supply of residential land. More agricultural land could always be converted to urban use at an approximately constant cost in real terms.7 The second supply curve, MSC, for marginal social costs, adds to these private costs the burden imposed on society that is not reflected in market prices. This is the reduced accessibility of greenbelt land at the urban fringe that people value, but by assumption in our model, do not pay for. It can be measured in terms of the loss of the numeraire consumption good that would be associated with an equal reduction in their welfare. As numeraire goods are normalized to currency units, this loss may also be converted into a money value – the payment people would have to make to have exactly the same impact on their well-being as the loss of open space. Formally, MPC1 indicates the private costs of producing an additional unit of residential land for each level of supply, and MSC adds the penalty that is equivalent to the loss of access to open space associated with it. The areas under these supply curves therefore indicate the total private and the total social costs from the supply of residential land. We assume that the two curves intersect when the total supply of residential land is zero, and that the marginal social costs increase with the total supply of residential land. In a very small community, in which every person can see and walk into the surrounding green open countryside, the externality problem does not arise. It only sets in when the city becomes so big that people within it begin to place a value on access to unbuilt land external to the city – access to true green space. This is predicated, though, on there being public access to that green space and one must accept the possibility that large ‘country parks’ internal to the urban area could be substitutes, even superior substitutes (see also notes 4 and 5). Households will choose to buy residential land up to the point at which the cost to them is equal to the value or welfare they derive from it. In the absence of any

Land markets and their regulation

127

government intervention their consumption of residential land will be at the point at which the demand curve D and the supply curve MPC1 intersect, with a supply of S1 at a price P1 for each unit of residential land. How should this equilibrium be evaluated from a welfare-economic point of view? The area alpm under the demand curve measures the gross social benefit that is derived from the consumption S1 units of residential land. The total internalized production costs are measured by the area ilpm under the supply curve MPC1. The triangle ali that results when all internalized costs are subtracted from the gross social benefit is the ‘consumers’ surplus’ in the residential land market. Intuitively, it derives from the fact that all except the marginal consumer would have been willing to pay more than they actually had to for the land they consume. The consumers’ surplus may also be interpreted as the value of the numeraire good people would have to be given in order to make them equally well off if the consumption of residential land were zero. However, it does not take account of the loss of access to open space at the urban fringe that their consumption choices entail, which is not internalized in the cost function. This additional ‘social cost’ is measured by the triangle idl. This can be interpreted as the amount of the numeraire good or money that would have to be taken away from society to have the exact same negative impact on welfare as the loss of access to open space. Because in making their own individual decisions consumers ignore the external costs of land consumption, in the free market equilibrium this outcome cannot be optimal. This is readily seen in Figure 6.1. Consider a fall in the consumption of residential land by one unit, relative to the free market outcome (S1, P1). This reduces the gross social benefit by an amount equal to 0P1, while the reduction of social costs (both internal and external) amounts to 0C1. Equivalently, we can say that a marginal reduction of the consumption of residential land does not affect the consumers’ surplus in this market, but that it reduces the external costs by an amount C1 − P1. Hence, on balance, it makes society better off. Indeed, the condition for optimality in this framework is that a marginal change in residential land use would create changes in social benefits and costs that exactly offset each other. We can now use this analysis to show how government could intervene in land markets to produce this socially optimal outcome, first by imposing a tax on land consumption and then by direct regulation. Figure 6.2 illustrates a tax on the conversion of open space to residential land, t1, which raises the marginal private costs of supplying residential land to the curve MPC2.8 Again, households will choose their consumption of residential land such that the social benefit of increasing aggregate consumption by one unit equals the actual costs to suppliers of providing it. Since these costs now include the development tax, this leads to an equilibrium with a lower supply of residential land S2 at a higher price P2. The gross social benefit derived from the consumption of residential land is now indicated by the area agom, and the total private costs are given by the area egom, including tax expenditures egki. The consumers’ surplus is the triangle age. It is much smaller than in the free market equilibrium, both because less residential land is now consumed (incurring a reduction of glk), and because people pay a higher price for it (incurring a reduction of egki), although since this latter rectangle represents the increase in tax revenues, consumers could be fully compensated if these were entirely redistributed to them.9 Therefore the costs of this policy, interpreted as the loss of consumers’ surplus in the residential land market that cannot be compensated by tax revenues, amounts only to the shaded grey triangle glk. This cost reflects the shift in residential land consumption

128

International handbook of urban policy a

Price per unit of residential land

D d

e

P2

MPC2

g

␶1

MSC i

k

l

P1

m 0

o S2

p S1

Total area of residential land

Figure 6.2

An optimal tax on residential land development

caused by the tax, which might be reflected in slightly smaller houses and gardens or in other adjustments reducing personal consumption of space. However, as the aggregate consumption of residential land was – before the tax was imposed – too large because of the unpriced reduction in access to open space at the urban fringe it caused, the tax also generates benefits. The total external costs are now given by the triangle igk, so the tax leads to a reduction of external costs of gdlk. This trapezoid may be interpreted as the social value of the open space protected from development by the tax. The net welfare gain of imposing the tax, t1, is the difference between the costs, glk, and the benefits, gdlk; that is the dotted triangle gdl. There can be government failure as well as market failure, however, and in Figure 6.3 we illustrate the case in which the government sets the development tax at a level t2 that is too high. The marginal private cost curve is now raised to the level MPC3, resulting in a supply of S3 at a price of P3. The trapezoid acnm is the value of the gross benefit society derives from the consumption of residential land. After subtracting the total private costs bcnm (of which bcji represents the tax), the consumers’ surplus of acb is left over. The loss of consumers’ surplus relative to the free market equilibrium that cannot be compensated through tax revenues amounts to the triangle clj – which exceeds the value of the benefits generated by the lower external costs imposed by loss of open space that is represented by the area of the trapezoid hdlj. The net welfare effect relative to the free market outcome is the difference between the light grey area gdl and the dark grey area cgh. Hence it is seen that this particular level of the development tax not only exceeds the social optimum, but it also leaves society worse off than in the equilibrium without any government intervention at all. As illustrated in Figure 6.3, the government could also secure the equilibrium (S3, P3)

Land markets and their regulation

129

a

Price per unit of residential land

D

b

P3

MPC 3

c

g

d g

MSC P1

␶2

h

i

j

l

m

n

p

0

S3

S1

Total area of residential land

Figure 6.3

A suboptimal quantity restriction on the supply of residential land

by imposing a direct restriction on the supply of residential land, for instance through an urban growth boundary or the designation of greenbelt land. In practice, this type of direct land-use regulation is much more common than the imposition of development taxes. If the government were to impose a growth boundary and prohibit any residential land development in excess of the quantity S3, then the supply curve would in effect be the vertical line at S3. In our simplified framework, the welfare implications of directly limiting the supply of residential land to S3 are the same as when the government levies a development tax t2. Moreover, for any level of development tax, the government could impose an equivalent quantity restriction, and vice versa. However, although this does not affect net welfare in principle, it should be noted that in the case of the quantity restriction, the area bcji cannot be interpreted as a tax revenue. Instead, while pushing residential land prices above their marginal production costs, direct supply restrictions give rise to ‘scarcity rents’, which accrue to owners of land with permission for residential development. Hence there are important distributional consequences, as we shall see in the next section.10 Furthermore, the scarcity rent on a unit of land with permission for development may be interpreted as the shadow price of direct land-use restrictions, and being equal to t2 – the tax that would lead to the same outcome – it is sometimes referred to as a ‘regulatory tax’ (cf. Glaeser et al., 2005; Cheshire and Hilber, 2008). Whereas we have focused so far on a negative externality of residential land use, the public-good nature of certain land uses such as open space may be a much more

130

International handbook of urban policy

Willingness to pay/costs of provision

a MSWTP

g MSC i

m

o S

0

Total area of land in parks

Figure 6.4

The optimal provision of a public good

important rationale for government intervention, particularly within urban areas. As explained in the second section, which asked why intervention in urban land markets is needed, public goods are characterized by non-rivalry and non-excludability in consumption, and these conditions substantially hold for certain types of land use such as public parks, beautiful landscapes or coastlines and rare habitats; and features of cities, such cityscapes and historic districts or architecturally interesting neighbourhoods. The free market would not provide enough of these goods, because their social benefit could not be fully converted into a private flow of revenues to compensate the provider. In other words, the private provision of public goods like city parks would generate a particular type of positive externality: the urban community would benefit from them without fully paying either for the social value they generated or the costs of provision. Hence the reason for government intervention here is conceptually related to the negative externality of residential land use that was discussed earlier in this section, and subsidies (rather than taxes) or direct provision of these public goods could equally generate optimal outcomes. Again, in the practice of land-use planning, public goods are usually provided directly, rather then through pecuniary incentives to private developers. We illustrate the optimal provision of land in parks in Figure 6.4, which has a similar general set-up as Figures 6.1 to 6.3. On the horizontal axis, we now measure the total area in parks rather than the amount of land in residential use. A market for land in parks does not exist, so that demand and supply curves do not reflect market prices. Nevertheless, it may still be assumed that land in parks generates benefits to the urban community, and that if land in parks were not available in order to have an equivalent level of welfare, residents would have to be compensated with more numeraire goods – measured in currency units. This implies that people, collectively, would be willing to pay a certain sum of money in return for the provision of these parks. The ‘demand curve’

Land markets and their regulation

131

MSWTP should be interpreted in this way – as the marginal social willingness to pay for land in parks. This curve is downward sloping because the people derive less utility from an additional piece of park land if the total supply of parks in the area is already substantial – as is aptly illustrated in the Cheshire and Sheppard (1995) paper that we discuss in the next section. On the other hand, if society provides these parks, it pays a price in terms of forgone alternative land use and maintenance costs. Here, we assume this marginal social cost curve MSC is upward sloping, although the argument would run in the same way for a horizontal supply curve.11 As for optimal development taxes and land-use restrictions dealing with a negative externality of residential land use, the optimal supply of land in parks has the property that the marginal social benefit it generates equals the marginal costs of production, so at the optimum, the net welfare effect of providing an additional unit of park land is zero. This point is simply the intersection of the MSWTP and MSC curves, where an amount S of park land is provided. The gross total benefit derived from this policy is measured by the trapezoid agom, and by subtracting the total social costs igom we obtain the net social benefit of agi. 3.2 From welfare-economic theory to practice What value do the optimal policy rules that we derived in the previous subsection have for land-use planning in the real world? Clearly, numerous simplifications have been made that could drive a wedge between optimal policy in theory and practice. This subsection discusses a number of these simplifications, and how relaxing them might alter policy prescriptions. One major simplification of the approach in the previous subsection is that for both residential land and open space, it aggregates demand and supply to the level of ‘society’ – composed of all the residents of a city-region. However, in Section 2, where it was asked why intervention in urban land markets is needed, we stressed that many landmarket failures arise from the fact that each parcel of land has a specific and fixed location. The bundling of land use with accessibility implies that social welfare depends not just on the quantity of open space but on its distribution relative to that of residential land. For instance, if all open space is supplied in the north of the city, and residents live in the south, then the social value of this open space will be less than if it were supplied in a more accessible way. On the other hand, a certain quantity of open space may be appreciated more when it is provided in one large area than when it is divided into many small pieces. Moreover, patterns of residential land use determine landscapes and cityscapes, and some patterns may be more pleasing than others. If we allow for hills and valleys, then houses on the high ground will command views that are valued. But having houses on hills may deprive other residents of views of open hilltops. The implication is that for a more complete policy prescription, we should disaggregate our framework to many different local residential land markets, and derive an optimal regulation of land use for each of them. Nevertheless, the bundling of land use and accessibility implies that the local supply of open space is capitalized into land prices. Land, and hence the houses on it, located near a nice park, is more expensive, all other things being equal. So, in contrast to the assumptions made in the previous section, the social value of open space may be largely reflected in market prices. This may have important consequences for the provision of certain types of open space by local governments or private developers not considered here.12

132

International handbook of urban policy

A second complication that arises when implementing the policy prescriptions of the previous subsection is that their optimality is conditional on the absence of market failures in other markets. However, as we have extensively discussed in the section that asked why intervention in urban land markets is needed, urban land use is associated with a myriad of externalities, which are not always easy to disentangle. In principle, externalities should be addressed in the most direct way possible, because such policies are likely to be the most effective, while generating the least undesirable side effects. For instance, if the use of carbon-based fuel is excessive from a social point of view, contributing to global warming, the answer is to address this market failure directly. The closest we are likely to get to an optimal solution is by imposing a fuel tax. This gives households a direct incentive to reduce fuel usage. It would push up the demand for higher-density living only to the extent that there is a link between housing density and the demand for transport. Similarly, a link between urban form and traffic congestion may exist but congestion externalities will probably be addressed more efficiently by taxing them directly, rather than regulating land use in such a way that the urban form becomes less congestion prone. Yet, in practice, land-use regulation is often treated as a solution to a wide range of externalities. To illustrate the disadvantages that this may have, let us consider again the example of a negative externality of fuel use. If the government seeks to reduce these external costs by restricting the supply of residential land through urban containment policies, the only effect on fuel use will come from a more compact urban form reducing car mileage. There are two issues to consider here. The first is that a restraint on urban land take will affect only new development – perhaps as little as 1 per cent of all development. The result would be that even if there is any causal relationship between density and less fuel use, the impact via land-use controls will be painfully slow. The second point is that reactions may be altogether more complex. A more compact urban form might intensify social contacts so that, while trips are shorter on average, the total number of trips increases. Because houses and shops would be smaller, shopping and restocking trips might be more frequent and more subject to congestion. So overall the land-use policy is likely to be at best marginally effective, and it may even increase the external costs of fuel use.13 A third major assumption underlying the derivation of optimal taxes or direct regulation in the case of externalities and public goods is that the government has sufficient information. For instance, in order to find the optimal development tax of Figure 6.2, the government needs information about the private and social costs of residential land use. Moreover, if it chooses to restrict land use directly, it also has to know the shape of the demand curve, and because of the spatial fixity of land, in principle it has to know the shape of these curves at each location. Implementation of the optimal supply of parks in Figure 6.4 presumes knowledge about the value that an urban community attaches to the marginal unit of land in parks, which is even more complicated since there is no market for parks and residents have an incentive to overstate their valuation in surveys (‘freeriding’). Although the informational requirement for optimal land-use regulation may seem prohibitive, the bundling of land and accessibility also offers the opportunity for measuring the social costs and benefits of particular types of land use providing amenities, such as open space, or disamenities, such as noise or pollution. In so far as these are capitalized in land prices, we can estimate their social value through the impact they have

Land markets and their regulation

133

on house prices. As we shall see later, this is one of the main techniques for empirical welfare analysis of land-use regulation. In summary, we might say that policy implications of the simple framework set out in the next subsection should be hedged about with many provisos – some relating to the nature of the particular externalities and sources of market failure, and others relating to more technical issues including failures in other markets that may have a bearing on the particular market – here the land market – we are interested in, and a substantial informational burden exists on top of this. Policies in the real world may end up attempting to achieve something close to a second best, and the best policy mix will need to be based on both the unachievable ideal and on judgement about how significant particular market failures are and how failures in one set of markets may interact with failures in others. Nevertheless, the intuition obtained here provides a useful and in fact practical benchmark. In particular, government interventions in land and housing markets always generate costs and benefits for society, and policy makers should aim to strike a balance between them. 4. Evidence on the effects of land-use regulation This section reviews some of the evidence that has been built up over the past 20 years or so about the welfare effects of land-use planning. In principle the net effects could be positive or negative. On the one hand, by correcting market failure and ensuring a supply of amenities that would otherwise be undersupplied, land-use regulation in the form of planning or zoning creates benefits. At the same time, however, it may restrict the supply of valued goods – notably the supply of specific kinds of space – in housing, offices, shops, factories or, of course, in the form of private open space: in gardens. Any planning policy that curbs urban expansion, increases densities or restricts building heights necessarily restricts the supply of a particular type of space. If supply is restricted it is not just that the price is driven up, so the good in question becomes more expensive; there may be knock-on effects on productivity and mobility, and there will certainly be distributional effects. Those landowners who own land on which it is allowed to build (or build higher) get an increase in their asset values; those who are unable to develop their assets in the most profitable way get a corresponding reduction in asset values. Those who own houses gain in asset values, especially if their houses are endowed with more of the attribute of which the planning system is restricting the supply (they have bigger gardens or their houses are constructed in the greenbelt); those who rent or are wouldbe house buyers suffer a reduction in asset values or incomes. We review the evidence on each of these effects in turn, including the rather sparse evidence on the net welfare effects: the net impact on welfare allowing for both the value of benefits generated and higher costs imposed on the use of space. 4.1 The valuation of planning-induced amenities The two main methods for empirical valuation of open space are via the estimation of ‘hedonic’14 models and stated preference analysis. The use of hedonic models is theoretically preferable since it is based on clear theoretical foundations and observes the actual behaviour of people. As pointed out in Section 3, each house consists of a complex bundle of attributes, and because each parcel of land has a unique location its occupation determines access to a wide range of local public goods. This implies that their value is

134

International handbook of urban policy

reflected (or capitalized) in house prices. The price of any house is in a sense the aggregate price of all its attributes, including the access it gives to local amenities and public goods. In fact these non-structural attributes typically account for the great majority of the total value of a house. Although as an empirical technique the estimation of hedonic models goes back to the 1920s (see Sheppard, 1999), it was Rosen (1974) who provided the theoretical framework and showed how the valuation of such goods may be estimated in hedonic models. A sizeable and ever-growing literature has followed his idea. In their survey of hedonic studies on the benefits of open space, McConnell and Walls (2005) report a wide variation between estimates, and they highlight the importance of distinguishing between different types of open space. The value of preserving a piece of land in a certain use is bound to depend strongly on whether it is a park in an urbanized area, a piece of ex-urban agricultural land or a wetland. The careful study of house prices in the Minneapolis–St Paul metropolitan area in the USA by Anderson and West (2006) shows more than this. Not only does the capitalized value of proximity to open space depend on the type of open space and how far away it is from the house; it also varies according to the characteristics of the neighbourhood. For an average home, they find that benefits from proximity to open space range from a low of 0.0035 per cent of sales price for every 1 per cent decrease in the distance to the nearest neighbourhood park, to a high of 0.034 per cent for every 1 per cent decrease in the distance to the nearest lake. Importantly, they find that the value of proximity to open space rises with average income and density in the neighbourhood, while it falls with distance to the central business district. Given that access to open space is a ‘normal’ good – people consume more of it as they get richer – it is not surprising to find that it has a higher value in richer neighbourhoods. Equally, the finding that its value is higher in higher-density neighbourhoods suggests that at least to an extent public open space is a substitute for private open space. The reason why the value of open space falls with distance from the city centre could be that the total supply of (private and public) open space in suburban areas is higher, so that its marginal benefit is lower, or that residents in suburbs have easier access to open space outside of city boundaries as a substitute for parks. A potential drawback of estimating the value of proximity to open space by means of its hedonic price is that while this yields the slope of the valuation of open space with respect to distance, its level – its total value – is not inferred. The valuation of a large special park might decline less with distance, simply because it is appreciated over a wider area, so that its value to the whole metropolitan community might be considerably larger than the total value of a local park, the valuation of which declines more steeply with distance. This problem is circumvented by estimating the value of the amount of open space surrounding a house at the expense of imposing more restrictive assumptions on the relationship between valuation and distance. This latter approach has been applied for instance by Cheshire and Sheppard (1995, 1998), who estimated a hedonic model for house prices in two UK towns, subject to land-use restrictions that varied significantly in severity. In order to measure the benefits of planning-induced amenities, these authors considered the share of land in a square kilometre around each house that was used for either ‘accessible’ or ‘inaccessible’ open space, as well as the share of land that was not in industrial use.15 Accessible open space meant accessible to the public – parks, recreation grounds, churchyards or common land; this was mainly internal to the urban area. Inaccessible open space was land not built on and not accessible to the

Land markets and their regulation

135

public. This was mainly greenbelt land used for farming at the urban fringe but included private woodland. Increasing the shares of both types of open space was found to yield significant gross benefits, with the benefits associated with accessible open space considerably exceeding those from inaccessible open space, but accessible open space was valued less at the margin in the town where land-use planning was more restrictive. In a similar hedonic analysis of house prices in three Dutch cities, Rouwendal and Van der Straaten (2008) find a significant effect of the share of land in parks and public gardens within 500 metres, while proximity to industrial land reduces house values. While the main focus of these studies was on the value of open space within urban areas, the preservation of open space outside cities may generate significant benefits as well. As we saw, Cheshire and Sheppard (1995) found some value for agricultural land in the greenbelt for houses within the kilometre square. Irwin (2002), however, concentrates on this issue, analysing residential transactions in an ex-urban region in central Maryland, USA. She found that within 400 metres of a house, the conversion of one acre of developable pastureland to conservation land raised the average house price by 1.9 per cent; converting it to public land yielded a premium of 0.6 per cent. That is, the more certainly the agricultural land was protected from development, the greater the ‘value’. Interestingly, conversion to low-density residential land had a negative impact on surrounding house prices, underlining the fact that one of the important attractions of open space is simply that it is not developed. This negative impact is also likely to be one reason for NIMBYism. As Fischel (2001) has argued, since houses form a substantial element in people’s asset portfolios and are immobile, there is a significant incentive to protect their value by using local zoning or planning policies to prevent land in one’s neighbourhood from being developed. Although the hedonic approach has the advantage that it rests on revealed preferences – actual behaviour – it also has potential limitations. It is only truly applicable if the value of the amenity in question is localized within the housing market area covered by the study. This may be reasonable in the case of a neighbourhood park or a local school but would be questionable in the case of an amenity for which demand extended over a wide area. This is very likely to be the case with, for example, National Parks, and might possibly be the case with a greenbelt provided that it acts as an accessible recreational area, such as the ‘green heart’ in the west of the Netherlands. It is also almost certainly the case with world-famous attractions, such as Hyde Park, in London, or a famous cityscape, such as Venice. There is an alternative approach to valuing such amenities: stated preferences, sometimes known as ‘contingent valuation’. In this approach people are asked to put a value – how much they would be willing to pay and in what circumstances – to have access to or just to know that particular amenities exist so that they could access them if they felt inclined. This approach has significant disadvantages since people may make different choices or suggest different values when they are actually confronted with decisions for which they have to pay. There is also a potential for the ‘free-rider’ problem. That is, people overstate their valuations in order to increase the supply of an amenity that will largely be paid for by others. Although research using the contingent valuation method has become substantially more sophisticated over time, these methodological concerns remain (cf. Arrow et al., 1993, McConnell and Walls, 2005). Nevertheless, it may yield valuable insights that complement findings relying on revealed preferences, and sometimes there is simply no alternative method available.

136

International handbook of urban policy

Table 6.1

Benefits from different land use in the UK

Land type Urban core public space (city park) Urban fringe greenbelt Urban fringe forested land Rural forested land Agricultural extensive Agricultural intensive Natural and semi-natural wetlands Source:

Present benefit (per hectare per year, in 2001 £) 54 000 889 2 700 6 626 3 150 103 6 616

Barker (2003), p. 36.

As in their survey of hedonic studies, the McConnell and Walls (2005) survey of stated preference research finds substantial heterogeneity in the estimated stated value of open space, and again its type and location appear to matter a lot. Nevertheless, for agricultural land, the stated value is of the same order of magnitude as in the Irwin (2002) study of ex-urban house prices discussed previously, suggesting that fears about missing wider benefits of agricultural land using hedonic methods may be misplaced. Also consistent with Irwin’s results, stated preference studies suggest that negative externalities of residential development are an important motivation for the preservation of open space. Based on a survey of stated preference research in the UK, Barker (2003) also reports a strong dependence of the value of open space on its location and use (see Table 6.1). For instance, publicly accessibly open space in the urban core is valued much more highly than greenbelt land, and the landscape value of intensively farmed land is particularly low. These values are broadly consistent with those in Cheshire and Sheppard (1995). Open space at the urban fringe not accessible to the public has a relatively low value, although its value is significant. Interestingly, the values reported in Barker are significantly higher than in most US studies that are surveyed by McConnell and Walls. Perhaps, this is a parallel finding to that of Anderson and West (2006): open space is more valuable in more densely developed contexts and densities are greater in the UK than in the USA. In addition, of course, in the UK there are some access rights even to agricultural land by means of ‘public footpaths’ or ancient rights of way. So the amenity value of agricultural land in the UK – even in Europe generally – may be higher than in the USA or other countries that have no rights of public access to private land at all. While our discussion of the benefits of land use regulation has so far focused on the provision of open space, it is important to keep in mind that urban planning is about much more. Other aspects, which have received considerable attention in so-called ‘new urbanism’ and ‘smart growth’ initiatives in the USA, are dense development, the mixture of land uses, access by public transit and the provision of infrastructure for pedestrians and bicycles. The valuation of such planning-induced features of neighbourhoods may be estimated using similar hedonic or stated preference methods. An interesting example is Song and Knaap (2003, 2004), who find significant effects for several new urbanism design features in a hedonic model of the Portland, USA housing market. For instance, they find that the connectivity of local street networks, pedestrian accessibility

Land markets and their regulation

137

to commercial uses and proximity to light-rail stations raises house values. On the other hand they find that higher densities of neighbourhoods and mixed land uses within a neighbourhood have a negative impact on house prices. This may be comparable to the finding that there is a positive income elasticity of demand for (private) space and that more industrial land in a neighbourhood generates a negative price effect. Nevertheless, Song and Knaap show that these effects are more than compensated by the many positive contributions of new urbanism design features to house prices, so that neighbourhoods that by and large adhere to these principles command a significant premium. 4.2 The costs of land-use restrictions: housing supply and prices In generating these benefits, land-use regulation imposes limits on supply, although the question has to be asked: what exactly does the regulation restrict the supply of? Different systems and instruments of land-use planning may restrict the supply of different attributes of the built environment. For example, the planning system in the UK and in some South-East Asian countries explicitly restricts the supply of land for urban development by imposing containment boundaries and greenbelts. But they do not impose much restriction on the subdivision of existing developed sites. In the USA, by contrast, there are strong restrictions on converting existing houses to multiple occupation or to subdividing built lots. Many communities also impose minimum lot sizes that, to European eyes, can be oppressively large.16 Spatial planning in the Netherlands combines restrictions on urban expansion through greenbelts with regulation on the type and size of houses to be built, but it tends to foster higher-density development rather than minimum lot sizes. Furthermore, restrictions on building height are a form of land-use regulation that is observed all over the world. Notwithstanding the heterogeneous form in which supply restrictions come, their effect is to push up house prices. Indeed, various countries and cities have experienced soaring house prices in recent years, and in some cases the role of planning as a mechanism restricting supply has been well established. Glaeser et al. (2005), in their study of the Manhattan housing market, where prices increased by more than a half between 1980 and 2000, concluded that supply restrictions imposed by the New York zoning laws, particularly on height, were the likely cause. Since the Manhattan market consists mainly of condominiums, the marginal construction costs of new housing amount to the costs of increasing building height, which can be estimated fairly accurately. The authors calculated that average condominium prices exceeded $600 per square foot in the early 2000s, while construction costs for space on an additional floor – even for the typical high-quality, luxury-type condominium unit – were no higher than $300 per square foot. Given these costs and prices in an unrestricted competitive market, the construction of condominiums would have been a lucrative business, so high construction rates should have been observed. However, only 21 000 new units were permitted throughout the entire decade of the 1990s, whereas 13 000 new units were permitted in 1960 alone. The authors argue that since the construction industry in New York is highly competitive, the difference between prices and construction costs must be interpreted as a shadow price of planning restrictions, or as a regulatory tax (see our discussion in Section 3.1). In other words, restrictions on building heights have pushed up house prices in this city. Left without the height restrictions, developers would have built higher – because it was profitable to do so. Similarly, Quigley and Raphael (2005) show

138

International handbook of urban policy

that in Californian cities, where land-use regulation is more restrictive, new construction is less sensitive to prices and housing is more expensive. In some European countries, a rise in aggregate house prices has also been related to land-use regulation. This has been a particular issue in the UK, for instance, where there has not only been a long-run upward trend in real house prices (increasing in real terms by a factor of 3.5 between 1955 and 2002 – see Cheshire and Sheppard, 2004), but also increasing volatility in the housing market. The argument here is that if the supply becomes less responsive to price changes because of regulatory restrictions, any shortrun changes in demand translate more directly into price changes. In a series of reports to the Treasury and the Office of the Deputy Prime Minister, Barker (2003, 2004) identified both a falling affordability of housing and a reduced responsiveness of supply to demand. She argued that the UK planning system was the main cause of these problems. Furthermore, the Barker reports contain a thorough discussion of the consequences of such housing and land market institutions for the wider economy and for aggregate welfare. Real house prices have also risen substantially over the past decades in the Netherlands (increasing by a factor of 3 in real terms since the early 1970s), which may be attributed at least in part to a lack or supply responsiveness. Vermeulen and Rouwendal (2007) find that the Dutch housing supply had become almost totally price inelastic as a consequence of government interventions in land and housing markets. Long-term trends in real house prices in the UK and the Netherlands contrast starkly with, for instance, the German experience, where the real price of houses fell in both the 1980s and 1990s and was completely stable over the whole period 1971–2002. Over the same 30-year period German real household disposable incomes increased at 2.6 per cent per year compared to 2.3 per cent in the Netherlands and 2.9 per cent in the UK (OECD, 2004), so variation in this typical determinant of housing demand across these countries has been modest compared to the observed variation in real house price growth. However, similar shifts in demand may lead to strongly divergent price developments under different supply conditions and, in line with this argument, the estimated price elasticity of housing supply in Germany of 6 is of a completely different order of magnitude than in the other two countries (Swank et al., 2002). It should be recognized, however, that many studies relating aggregate housing supply and prices to land-use regulation fail specifically to identify the causal effect of particular regulatory measures. For instance, in their study of the Manhattan condominium market, Glaeser et al. (2005) admit that ‘while it is difficult to think of a plausible alternative explanation of why buildings are not taller, we recognise that our analysis essentially is naming a residual’ (p. 351). In a critical assessment of the empirical literature on the effect of land-use regulation on house prices, Quigley and Rosenthal (2005) find that the evidence is mixed and inconclusive. Some of the challenges to proper estimation of this effect are fairly standard in the econometrics of policy evaluation. In particular, there may be simultaneity in housing market developments and the imposition of land-use policies, and it is difficult to control for factors that affect both. For instance, wealthier communities where housing is more luxurious might have a taste for certain zoning regulations (and the incomes, of course, to indulge such tastes). In addition to these issues, the measurement of land-use regulation is problematic, because the heterogeneity in shapes it may take is vast, ranging from caps on population or construction to urban growth boundaries and from minimum lot

Land markets and their regulation

139

size zoning to impact fees17 (Quigley and Rosenthal provide a taxonomy in their survey). There is no reason to expect that these different policy options would have similar effects on housing market outcomes, so the estimated effect of an aggregate index of land-use regulation is difficult to interpret. Nevertheless, recent studies that deal with one or more of these issues suggest that land-use regulation restricts housing supply while pushing up prices. For instance, in an analysis of new residential construction in US cities, Mayer and Somerville (2000) distinguish the average delay in obtaining permission for subdivisions, the number of growth management techniques and the imposition of impact fees. They report that metropolitan areas with more extensive regulation can have up to 45 per cent fewer starts and price elasticities that are more than 20 per cent lower than those in less regulated markets, even if the effect of impact fees is not statistically significant. Ihlanfeldt (2007) analyses the impact of an aggregate measure of land-use regulations on jurisdictional house prices in Florida, USA. Dealing carefully with the issue of endogeneity, he also finds a significant positive impact. However, in another study with Burge (Burge and Ihlanfeldt, 2006), he had already shown that communities that used impact fees and therefore had a greater fiscal incentive to permit development were indeed less restrictive. Besides methodological issues, Quigley and Rosenthal (2005, p. 84) suggest that part of the difficulty in establishing an upward effect of land-use regulation on prices is that, in practice, they may not be binding: The net effect of adopting development restrictions may ultimately be symbolic only, meant to appease ‘not-in-my-backyard (NIMBY)’ and other constituencies, but generally lacking the will or ability to implement true growth management in the face of population pressures.

This statement is telling for the differences that exist between planning in the USA and in many European countries, where governments tend to have a much stronger grip on land use and be far more restrictive in terms of land supply. In South-East England or the west of the Netherlands, for instance, ‘grotesque’ (Muellbauer, 2005) discontinuities exist between the price of land in agricultural use and adjacent land that is zoned for residential development. Cheshire and Sheppard (2005) report an increase of price from £7500 to £3 000 000 per hectare at the urban boundary in Reading and data for 2007 – see Figure 6.5 – show several locations where the value of agricultural land that is rezoned to permit residential development is well over £6 000 000 per hectare: so getting permission to change use from agricultural to residential could increase the price of land some 700-fold. Against the background of such direct evidence on the planning-induced segmentation of land markets, the question of whether land-use regulation raises prices seems somewhat pedantic. Nevertheless, in spite of a sizeable literature on the impact of land-use regulation on supply and prices, evidence on its costs in terms of welfare and their distribution over different groups in society is scarce. Quigley and Swoboda (2007) consider restrictions on the amount of developable land through critical habitat designation under the US Endangered Species Act. Their analysis is only of costs – they ignore any benefits – and their prime focus is the distinction between partial equilibrium effects in the preserved area and general equilibrium effects in the wider urban area, assuming that the total regional population is given. The authors show theoretically that reductions in the

140

International handbook of urban policy N

£6 000 000 and above £4000 000–£5 999 999 £2 500 000–£3 999 999 £1 250 000–£2 499 999 Below £1 250 000 South-East Fringe

0

Source:

20

40

80

120

160 Kilometers

Author’s map from Valuation Office Agency data for July 2007.

Figure 6.5

Prices of developable cleared land in the UK South-East (per hectare)

amount of developable land increase the population density in existing urban areas and induce urban expansion into other areas. The owners of both types of land benefit, while consumers of housing and owners of the protected land lose. The model is calibrated on data for a typical US city to show that general equilibrium effects of critical habitat designation are substantially larger than partial equilibrium effects, and that this policy induces major transfers, predominantly from consumers to owners of developed land. These findings extend to the case of an urban growth boundary. Bertaud and Brueckner (2005) consider the social costs of restrictions on building height also in the framework of a monocentric city. They apply this analysis to the city of Bangalore, India, where a cap exists on the ratio of a building’s total floor area to the area of the land parcel on which it sits. Again the authors look only at costs and ignore any potential benefits. They show that, in general, height restrictions increase a city’s ‘footprint’ – the total area of land it occupies – and that for each household in the city, the welfare loss is equal to the extra commuting costs that a household at the urban fringe incurs. Their model indicates that lifting the height restrictions in Bangalore would reduce city size by about 17 per cent, and that the cost saving would range from 1.5 per cent to 4.5 per cent of household income, depending on the specific assumptions about urban form. The same framework could be applied to the minimum lot size zoning policies that enjoy significant popularity in the USA.

Land markets and their regulation

141

4.3 The evidence on net welfare effects To the best of our knowledge, Cheshire and Sheppard (2002) were the first to provide a comprehensive account of the welfare effects of land-use regulation that is empirically founded on revealed preferences in land prices. They use estimates from earlier work on the Reading housing market, discussed in the subsection that provides a simple economic framework for land-use policy analysis, coupled with data on the incomes and demographic composition of the households to estimate the structure of demand for both private residential land and planning-produced amenities such as open space, as a function of prices and household income. More specifically, the planning-induced amenities that contribute to household utility in their model are the share of land in a square kilometre around the house that is used for either accessible or inaccessible open space and the share of land that is not in industrial use. This demand system is integrated in a monocentric urban economic model, which is calibrated to various data sources for the Reading housing market. Since both costs and benefits of changing the planning system operate through the residential land market, the authors can then use this model to estimate the trade-offs involved in producing a little more or less of the ‘planning amenities’ and a little more or less of private space for residential occupation. From this it is possible to estimate the net welfare effects of relaxing the planning system’s constraints on land supply in various ways. The authors find that increasing the amount of residential land within the city boundary and shifting this boundary outwards both have positive net social gains, although gains of the latter policy option are substantially larger. If Reading were allowed to expand by 70 per cent of its total surface, the estimated net welfare gain would amount to almost 4 per cent of household income, even allowing for the loss of inaccessible greenbelt land and accessible open space such a relaxation would entail. Nevertheless, these findings do not support the abolition of land-use regulation altogether since the system did produce benefits. The problem is that it produced those benefits in its then current degree of restrictiveness on supply at considerably greater cost to the community than the value of the benefits generated. In the same study, Cheshire and Sheppard consider the distributional effects of landuse regulation. This was possible because their sample included the precise location of the houses (and so the ‘value’ of their consumption of planning-produced amenities) and the income of the households. With respect to the gross benefits, they report that the provision of inaccessible open space – greenbelt land – tended to increase inequality; benefits were even more inequitably distributed than were the incomes of owner-occupiers. The separation of industrial from residential land was broadly neutral in distributional terms compared with the incomes of owner-occupiers, while the provision of accessible open space tended to reduce inequality. However, overall, adding all three amenities together, the net welfare effect was almost distributionally neutral – again relative to the distribution of the incomes of owner-occupiers. This suggests that richer households not only benefit more from planning-induced amenities, but that they also, through the housing market, pay a higher price. The distributional effects through land ownership, which were the focus of Quigley and Swoboda (2007), were not considered explicitly here. The study by Rouwendal and Van der Straaten (2008), also mentioned in Section 3.1, closely follows the work by Cheshire and Sheppard in various respects, although their prime focus was on open space within cities. In a stylized theoretical model, the

142

International handbook of urban policy

authors show that the amount of open space in a neighbourhood is optimal when the total benefits of increasing it by one unit are equal to the local price of residential land. Applying this cost–benefit rule to three Dutch cities, they find that the share of land in open space is too high in Amsterdam, too low in The Hague and approximately optimal in Rotterdam. The similarity in the specification of land-use externalities suggests that the same first-best policy rule would apply equally in the Cheshire and Sheppard model. Since the local provision of open space renders urban growth boundaries superfluous in such an ideal setting, it is not surprising that relaxing growth restrictions in Reading was found to be so beneficial. Walsh (2007) assumes that not only the share of open space in a neighbourhood enters household utility, but also the distance to the nearest parcel of publicly held open space, as in Anderson and West (2006). This specification of demand is incorporated into a general equilibrium model of land use, which is calibrated to data from Wake County in North Carolina, USA. As in Quigley and Swoboda (2007), an important message of this paper is the likely existence of a gap between partial and general equilibrium evaluations of land-use regulation, because the preservation of land use in one location may induce urban expansion and loss of open space at other places. Walsh even finds that through endogenous adjustments in privately held open space, for example land in agricultural use, increases in the quantity of land in public preserves may lead to a decrease in the total amount of open space in the metropolitan area. Among the policy scenarios that are considered, the public acquisition of land or development rights in the more densely populated parts of the county appears to be the most beneficial, while the imposition of an urban growth boundary is found to be particularly costly. A small number of studies analyse the costs and benefits of greenbelts or urban growth boundaries within urban equilibrium models that rely more heavily on theory, with a sensible choice of key parameters constituting their main empirical foundation. Lee and Fujita (1999) provide a useful theoretical framework for the welfare analysis of greenbelts, considered as a multifunctional park that provides citizens with recreational areas, environmental amenities and scenic views.18 The authors show that if the enjoyment of at least some of these public goods declines with distance, the imposition of a greenbelt that imposes binding restrictions on residential development is socially desirable, although leapfrogging development at its outer fringe should be allowed under certain conditions. Similarly, Brueckner (1990) and Engle et al. (1992) propose a theoretical framework in which urban growth boundaries may be socially desirable, as negative externalities increase with the number of people in a city because of congestion, pollution or crime. It should be realized that the externalities or public goods in these latter models affect all residents in the same way, so their impact would not identifiable via variations in local house prices. Both Bento et al. (2006) and Cheshire and Sheppard (2003) have analysed the efficiency and distributional impacts of alternative anti-sprawl policies, coming to rather different conclusions. Bento et al. assumed that households value the amount of open space that is preserved through such policies and set parameters so that their numerical model resembled a typical US city, although the parameter for the valuation of open space was chosen arbitrarily. In terms of efficiency, both an urban growth boundary and a tax on land conversion turned out to be optimal policy responses to the externality, and should reduce the equilibrium city size by about 12 per cent. Taxes on fuel or property appeared to be rather poor second-best policy alternatives, reducing city size by about 8 per cent

Land markets and their regulation

143

and 4 per cent respectively in the constrained optima. Cheshire and Sheppard (2003) used the valuation of open and private space as estimated in their 2002 model (rather than assuming values) and then modelled the welfare effects of (a) growth boundaries; (b) fuel taxes; and (c) a tax on the consumption of land, with each tax rate selected to achieve the same total urban take of land as the observed urban growth boundaries in (a). The result was that by a significant margin the most welfare-effective mechanism was a tax on land consumption, with a fuel tax being no more efficient in welfare terms than an urban growth boundary. This assumed, however, that tax revenues were converted entirely into welfare – there was no deadweight loss associated with collection and spending. It also did not evaluate the welfare impact of the growth boundary itself. It simply asked the question: if this is the total urban area that society wants, what is the least costly way in welfare terms of achieving it? They also took no account of other possible benefits associated with fuel taxes. Bento et al. (2006) also considered the distributional effects for landowners. As in Quigley and Swoboda (2007), these depended strongly on the location of the land. For instance, the fuel tax harmed owners of land close to the city fringe and the property tax harmed owners of land near the CBD (central business district). To owners of land that was not developed, the development tax was preferable to an urban growth boundary, because they benefit from the redistribution of tax revenues. In a welfare analysis of clustered deconcentration policies, which combine urban growth boundaries with accommodative policies in satellite communities, Vermeulen and Rouwendal (2008) consider a negative externality of city size. Their model was calibrated to the Dutch capital of Amsterdam and a nearby town founded in the 1960s, and the parameters that relate to the externality were chosen such that the present level of restrictiveness in the main city was optimal by assumption. This required that, on average, households spent about 10 per cent of their disposable household income on development taxes. Despite this, government plans to accommodate demographic growth mainly in the satellite city while maintaining tight restrictions around Amsterdam itself could not be justified with this externality. Furthermore, the authors showed that implementation of the present land-use controls might impose a net welfare loss of several percentage points of disposable household income, if the government had overestimated the importance of the city size externality. As in Bento et al. (2006), open space within cities is ignored in this paper. 4.4 Regulation of non-residential land use All the above evidence has related to the impacts of land-use planning on prices and welfare through the residential sector. By far the largest proportion of a city’s occupied land is in residential use but planning restrictions can in principle have impacts on prices and welfare in other land uses. There is very little evidence here, however. Again in principle there are likely to be benefits and costs, and to observe price increases is not necessarily to infer a welfare loss. If the supply of, say, commercial space is restricted, then there will be both distributional effects – owners of property allowed to (fully) develop will gain while owners of property unable to develop will lose. The costs of space will be increased and, since space is an input into production output, prices will increase and total output will fall somewhat. But there may also be benefits in the form of historic cityscapes preserved, and the amenity values of cities.

144

International handbook of urban policy

Glaeser et al. (2005), in their study of the New York housing market, note in passing that the impacts of height (development) restrictions on office costs are slight. Indeed, at the low point in the real-estate price cycle, in 1996, they estimated the effect of development restrictions on the cost of office space to be zero although by the high point of the cycle, in 2002, there appeared to be some small effect – equivalent to a tax of perhaps 50 per cent. This, however, may have simply reflected a short-run adjustment problem since expansion of the stock of office space in the face of a rapid increase in demand is difficult. However, as has already been noted, European governments are less wary of regulating markets than is the case in the USA, and the local fiscal system in the USA provides a very strong incentive to local communities to encourage commercial development. Business property taxes are an important source of net revenues to local governments – business property creates more tax revenues than it costs local communities to service. Again these conditions are not uniformly found in Europe, where in some countries such as the UK business property taxes are entirely a national tax providing no direct revenues to local communities at all despite the legal obligation local communities have to provide services for businesses. Thus in effect the fiscal incentive is entirely reversed. Local communities are fined for allowing any development at all. It is against that background that the figures in Table 6.2 should be interpreted. These derive from Cheshire and Hilber (2008) – the first study to have planning impacts on commercial property as its main focus. They used the same measure of the gross costs as Glaeser et al. (2005) – the so-called ‘regulatory tax’ (RT): that is the difference between the costs of building an additional unit of space and the price of that space (see also our discussion in Section 3.1). In the Cheshire and Hilber study, however, this is expressed as a ‘tax rate’ on costs. Thus the value reported for London West End offices as the average, 1999–2005, means that the excess of the price of space over its costs of construction was estimated as being equivalent to a 809 per cent tax on construction costs. It is obvious that the gross costs of regulation in European centres is far higher than in the USA and far higher in the UK than in nearly all continental European cities. It is not surprising to find a higher cost in London’s West End or the City of Paris than in the City of London, London’s Docklands or Paris (La Défense). Amenity values are higher in such locations. Nevertheless it is not clear why Amsterdam or Brussels (Belgium is well known for having by European standards very flexible planning controls) deserve much lower levels of restriction than London Docklands or even Birmingham. The gross costs for many of these cities suggest that there is a least a case to answer. Are the costs being imposed on office users generating even remotely matching benefits for society? 5. Conclusions The wide range in terms of institutional arrangements, form and restrictiveness with which land-use regulations are applied all over the world make it impossible to summarize their effects on housing markets and welfare in a few key facts and figures. In some cases, regulations on land use appear to exist merely pro forma and no impact whatsoever can be empirically identified, while planning-induced discontinuities in land prices have been described as ‘grotesque’ in cases at the other extreme. Clearly, land-use regulation that does not impose binding restrictions neither generates benefits to society nor imposes costs, but in places where planning has a strong grip on housing supply and urban form, adverse welfare effects have been found to be substantial, sometimes even

Land markets and their regulation Table 6.2

Estimated regulatory tax (RT) for UK office markets and selected European cities

City

Estimated regulatory tax rate (RT)

UK markets

1999

2005

Average 1999–2005

London West End City of London Canary Wharf London (Hammersmith) Manchester Newcastle upon Tyne Croydon Edinburgh Glasgow Maidenhead Reading Bristol Birmingham Leeds

9.18 6.41 3.43 2.77 2.71 1.06 1.18 3.11 2.33 3.72 2.71 1.53 2.59 2.15

8.89 3.34 2.77 1.82 2.50 1.19 0.99 2.62 2.05 2.27 1.61 1.96 2.68 2.17

8.09 4.88 3.27 2.19 2.30 0.97 0.94 2.91 2.04 2.70 2.03 1.57 2.50 1.93

Selected European cities

1999

2005

Average 1999–2005

London West End City of London

7.62 4.68

8.37 4.31

8.00 4.49

Frankfurt Stockholm Milan Paris: City Barcelona Amsterdam Paris (La Défense) Brussels

5.44 4.28 2.07 2.35 2.23 2.12 1.41 0.52

3.31 3.30 4.11 3.75 3.16 1.92 1.93 0.84

4.37 3.79 3.09 3.05 2.69 2.02 1.67 0.68

USA (based on Glaeser et al., 2005)

1996 (cycle bottom)

2000 (cycle peak)

0

0.50

Manhattan (New York City) Source:

145

Cheshire and Hilber (2008).

amounting to several percentage points of household income. Less is known about the impacts of planning on costs of space for economic activities although again, what evidence there is suggests these can be substantial. As we have emphasized throughout this chapter, there is still a lot of research to be done, and the evidence on net welfare effects of land-use regulation is particularly scarce. Illustrating the discrepancy between the importance of the topic and the extent

146

International handbook of urban policy

to which it was ignored by most economists, Cheshire and Sheppard (2004, pp. 619–20) observed: In the US 32.4% of consumer expenditures are on housing generally, with 18.7% (virtually the same as the 18.5% in the UK) of expenditures specifically for shelter. This is about three times the expenditure on all fuels, utilities and public services combined. Telecommunication services comprise only 2.3% of household expenditures, yet regulation of such services receives much more attention from economists; in economics journals telephone regulation alone is the subject of about three times as many papers as land market regulation.

It is therefore not surprising that the literature has hardly come to grips yet with the fact that over and above the welfare effects that operate via urban land and housing markets, binding land-use regulation is likely to have additional indirect effects. While we have provided a rather extensive survey of the existing evidence on the former type of welfare effects in this chapter, we conclude by sketching a number of these wider consequences, as some of them are likely to be important for aggregate welfare and policy. To begin with, the paperwork that comes with residential development in a regulated urban land market imposes a ‘fixed cost’. Whoever bears that cost, and it is likely to be mainly negatively capitalized into land prices, it does cost real resources. It is reported in Shanghai that getting from a cleared site to a saleable building requires a total of more than 130 permits, licences and permissions.19 It is easier to carry such costs in large development projects and large developers that have more experience with the bureaucratic processes. Hence a barrier to the entry of new and small firms in the industry may be imposed, so that competition is restricted. Furthermore, as illustrated in Figures 6.3 and 6.5, development in urban land markets that are directly regulated may generate substantial ‘scarcity rents’ which become available once development is permitted. Would-be developers and others attempting to capture a share of these scarcity rents spend resources. At one extreme this may just lead to wasteful expenditures on advocates, glossy brochures and luxurious trips with people who make planning decisions; at the other it can lead to large-scale corruption, damaging the capacity of public administration. The Italian research institute CENSIS (CENSIS, 1985) estimated that more than 2.7 million illegal homes were built in Italy between 1971 and 1984. That was more than 50 per cent of all homes built over that period and in 1985 constituted 12.3 per cent of the total stock of homes in Italy. Anticompetitive effects may extend indirectly to other sectors by restricting entry. In this respect the retail sector has been much discussed because restrictions on the supply of land for shops may lead to market power for the existing retailers in a local area (Competition Commission, 2008). Just the same happens to the price of beer if the planners restrict the number of pubs in a neighbourhood. In Oxford, England, the local planning system determined that the community ‘did not need any more estate agents’. The established local estate agents were the sole beneficiaries of this restriction. Furthermore, planning may inhibit the development of ‘big box’ retail shops at the urban fringe, in which the exploitation of economies of scale may lead to significantly higher productivity levels. Gordon (2004) argues that this type of regulation explains a significant part of the observed difference in aggregate productivity growth between the USA and Europe over the past decade. This measure obviously does not reflect any benefits that people may derive from having more small local shops in their residential

Land markets and their regulation

147

area and less development on land at the edge of cities. But this benefit comes at the unrecognized and unquantified expense of higher prices in the shops and more frequent, smaller, shopping trips. Other important indirect effects of land-use regulation may derive from its potential repercussions on regional labour markets. As shown for the USA by Glaeser et al. (2006), regulation that restricts housing supply in an urban area may also restrict the number of workers and hence job growth, while it pushes up house prices and wages.20 In turn, the full benefit of economies of agglomeration may not be reaped, so that labour productivity growth is hampered throughout the economy. This also appears to be relevant in the Randstad area in the west of the Netherlands – one of the most densely populated metropolitan areas of the OECD – where job growth in the past decades has been lower than in surrounding regions as a consequence of land-use planning (Vermeulen and Van Ommeren, 2008). In line with the argument of forgone economies of agglomeration, the OECD (2007) pointed to lagging labour productivity growth in this area relative to other metropolitan areas, partly as a consequence of rigidities in housing markets. Nevertheless, with the notable exception of Rossi-Hansberg (2004), hardly any theoretical or empirical work on the relationship between land-use regulation and economies of agglomeration exists. As housing dominates the budget of most households, land-use regulation that raises prices is likely to affect more macroeconomic outcomes than just the productivity of labour. For instance, high house prices make each dollar earned less valuable, so that restrictive planning reduces the incentives to supply labour. Furthermore, housing being the dominant asset in most households’ portfolios, there are also repercussions on saving, investment and consumption choices. Most households are not able to adequately diversify the uncertainty about asset returns of housing, and land-use regulation may not only push up the share of housing in their portfolios, but also the degree of uncertainty about its returns. Since these returns may be spent in turn on consumption, this enhances macroeconomic volatility and risk, as has been extensively discussed in Barker (2003, 2004) at the time that the UK considered entry into the Euro area (see also OECD, 2004). Finally, the fact that housing features so prominently in the portfolio of owneroccupiers, and that the risk associated with this is hard to diversify, opens up a range of issues within the field of political economy. For instance, it implies that older generations who already own a house have an incentive to limit new construction, as this will raise their asset gains. For essentially the same reason, it implies that homeowners have an incentive to limit new construction in their local neighbourhoods, the NIMBY behaviour that we have briefly discussed in the previous section. This may be particularly problematic if voting for land-use regulation occurs at the local level, where its costs are most strongly experienced and bear particularly heavily on small numbers of voters, while the benefits of new development accrue to people in a wider area (who have no votes in the decision-making process).21 Such considerations may lead to policies that deviate from optimal planning, and as we have amply discussed throughout this chapter, the costs this imposes on society may be large. Hence, next to its welfare-economic aspects, the political economy of land-use regulation is another field in which progress should be made, in order to understand not only the consequences but also the causes of the restrictive planning of land use that is presently gaining popularity in various parts of the world.

148

International handbook of urban policy

Notes 1.

2.

3.

4.

5.

6. 7.

The polar opposite is ‘private goods’. For these there is a price reflecting the willingness of consumers to pay for the goods and so signal their preferences, given the distribution of incomes; and a cost reflecting the value of the resource used to produce the goods. The reality is that many goods are neither purely private nor ‘pure’ public goods. There may be a degree of rivalry in consumption – for example a mildly congested park or a piece of infrastructure for which there are some additional costs of maintenance: excludability is frequently a matter of the costs of exclusion and whether it is worthwhile. One issue important for welfare is that for goods that are non-rival in consumption, regardless of excludability, there is a strong welfare argument for a zero price. So long as the museum is not congested and someone would derive welfare from entering, even if just to shelter from the rain, then charging a zero price makes someone better off without reducing the welfare of anyone else, and so it meets the criterion defined above for a welfare improvement. This was a real problem for the early canals and railways constructed after strong property rights had been legally established but before there was significant government intervention or regulation. Acts of Parliament were necessary to acquire the land. Stamford is now a picturesque historic market town but was intended in 1846 to be the site of a major station on the planned railway going from London to Newcastle and Edinburgh. However, local landowner, Lord Exeter (the head of the Cecil family), with his political influence, successfully fought off the railways, thus preventing the town’s expansion – indeed causing its serious decline since it was a major coaching stop on the soon-deserted Great North Road – but preserving his control of the electorate and keeping his pocket borough with two members of parliament (Hoskins, 1970, pp. 287–9). The second fundamental theorem of welfare economics holds that under certain conditions, every efficient outcome can be attained in a competitive economy by transferring money between agents in a lump-sum fashion. So if society prefers an outcome in which every agent is equally well off, irrespective of their endowments in terms of human capital, it can attain this outcome by transferring money to agents with little human capital and leave the allocation of commodities to free markets. Hence, in the stylized world in which this result is derived, redistribution does not require any market intervention. In practice, it is usually not possible for governments to transfer money in a lump-sum fashion, so it has to resort to other means of redistribution. The two main options are progressive income taxation and the taxation or subsidization of commodities, of which the extensive social or affordable housing programmes in some countries are an example. However, it has also been shown that under certain conditions, progressive income taxation is a more efficient means of redistribution than commodity taxation. Intuitively, the reason for this is that redistribution of income allows people to spend the money in ways that they judge most desirable themselves, whereas with redistribution in kind, it is the government that decides this for them. Redistribution in kind may be preferable for individuals whom society judges incapable of deciding what is best for them – as in the merit-good argument, but one would expect that the number of such individuals that need to be protected from themselves should be relatively small. Note, however, that these assumptions require that the land in the greenbelts is open to public access. That was certainly the rationale for greenbelts in the original vision of Ebenezer Howard, and it arguably applies in some countries. Lee and Fujita (1999) consider the case of the greenbelt around Seoul, South Korea, for which Lee and Linneman (1998) had shown that a premium of about 5 per cent of the land value per kilometre is paid for proximity to the greenbelt. Equally, in the Netherlands, areas such as the ‘green heart’ and green ‘buffer zones’ between cities are accessible through a myriad of walking and bicycle routes. However, in other countries such as the UK and the USA, access is limited or manifestly absent. In particular, evidence to be discussed in the section dealing with the effects of land-use regulation suggests that residents put much more value on parks within an urban area than on open space at the city fringe (see for instance Table 6.1). To the extent that large chunks of parkland interior to the city – like Hampstead Heath in London – provide a similar experience to recreation in greenbelt land, they may be good substitutes at closer proximity for most urban residents. The economic framework for analysing the public provision of parks will be considered later in this section. In the UK Peterson et al. (1997) estimate an elasticity of response of 20.1 per cent: a 10 per cent reduction in housing prices is associated with a 1 per cent increase in the rate of household formation as additional people can afford to set up on their own account. Formally, in a monocentric city, the supply curve of residential land is upward sloping because, as the urban area grows, the quality of agricultural land at the fringe falls in terms of access to jobs in the centre. Hence the price of land within the city and the intensity of its usage must rise before it becomes profitable to expand. However, the amount of land that becomes available with each kilometre of city expansion increases quadratically, so for medium to large urban areas, the effect may be negligible for practical purposes; and land at the margin of development should have a constant real supply price.

Land markets and their regulation 8.

9. 10.

11. 12.

13.

14. 15. 16.

17.

18. 19. 20. 21.

149

In a stylized model, this development tax is equivalent to a tax on the consumption of residential land, because developers will pass it on to consumers in a competitive setting. Although direct regulation of land use is much more common than this type of fiscal incentive, there is some analogy with the impact fees that are gaining popularity in the USA. We return to the topic of impact fees in Section 4. This assumes that tax revenues are converted entirely into welfare – so there is no deadweight loss associated with collection and spending. Besides transfers from consumers to landowners, these scarcity rents may also dissipate in rent-seeking behaviour. Furthermore, in a spatial setting, they may be partly offset by forgone gains to owners of land where development is restricted. This is discussed in Section 4. Both considerations are ignored in this stylized framework. Note that if the park is publicly provided, the distinction between private and social costs becomes meaningless. Consider for example a developer who owns all the land in a neighbourhood. The developer may give up some land and create parks instead. These parks push up the price of surrounding houses, compensating for the opportunity costs of assigning land to parks. Under certain conditions it may be shown that, if all benefits of the parks capitalize fully within the neighbourhood, the developer will provide an optimal amount of them while maximizing profits. So, in this case, no government intervention is required to arrive at the social optimum. This line of argument has, for example, been applied to the characteristic development of West London: residential squares surrounded by houses. It has been suggested that the more unified land ownership patterns to the west of London made this a more common pattern of development than the high-density development on the land in fragmented ownership to the east of London. The landowners and developers in the west could internalize the benefits of the open space they provided. However, other factors such as the spatial distribution of natural amenities (clean air for example because of the prevailing westerly winds) played an important role. West London was developed for richer households; the demand for open space is income elastic so was more valuable in the developments designed for richer people. Conversely, it has been argued that fuel taxes should be increased because this would lead to more compact urban form. However, fuel taxes have been shown to be less efficient instruments for this purpose than development taxes or growth boundaries (cf. Bento et al., 2006, Cheshire and Sheppard, 2002). One of the undesirable side effects of raising fuel taxes, relative to these direct instruments, is that it increases the density gradient in cities. ‘Hedonic’ from the ancient Greek for ‘pleasure’. The authors did note, however, that there were no significant impacts on house prices of open space (or less industrial land) in locations further than the surrounding square kilometre. Some communities in the mid-West have 10-acre minimum lot sizes. Glaeser and Gyourko (2003) conclude that in many communities in New England the willingness to pay for an increase in lot size beyond the mean is negative! That is, people are being constrained to buy and consume more land than they would ideally like to. But they still found that house prices were increased as a result of this restriction on supply. What was being restricted was the supply of house1land bundles. However, impact fees, in principle, cannot legally be used in the USA as a mechanism of land-use regulations since they have to satisfy a ‘rational nexus’ test: that is, for them to be legally valid, government has to be able to show a clear connection between the development and the need for additional infrastructure etc. and the level of fees has to be a function of these costs (see Ihlanfeldt and Shaughnessy, 2004). On the realism of these assumptions, see our discussion at the outset of Section 3.1. Private communication from a Chinese developer. The same mechanism holds equally for cities that compete on international labour markets, which may find it more difficult to attract highly skilled workers as housing gets more expensive. Moreover, even if voting occurs at a higher regional level, this type of behaviour may still be influential through local lobby groups. If the costs of residential development fall on a small group of people, it is worthwhile for them to lobby and the transactions costs of forming lobbying groups are lower than for the large group of people each receiving only small benefits. This is likely to be true even when the combined value of the many small benefits substantially exceeds that of the relatively few large costs.

References Anderson, S.T. and S.E. West (2006), ‘Open space, residential property values, and spatial context’, Regional Science and Urban Economics, 36, 773–89. Arrow, K., R. Solow, P.R. Portney, E.E. Leamer, R. Radner and H. Schuman (1993), Report of the NOAA Panel on Contingent Valuation, Washington, DC: Resources for the Future. Barker, K. (2003), Review of Housing Supply: Securing our Future Housing Needs: Interim Report – Analysis, London: HMSO.

150

International handbook of urban policy

Barker, K. (2004), Review of Housing Supply: Final Report – Recommendations, London: HMSO. Bento, A.M., S.F. Franco and D. Kaffine (2006), ‘The efficiency and distributional impacts of alternative antisprawl policies’, Journal of Urban Economics, 59, 121–41. Bertaud, A. and J.K. Brueckner (2005), ‘Analyzing building height restrictions: predicted impacts and welfare costs’, Regional Science and Urban Economics, 35, 109–25. Brueckner, J.K. (1990), ‘Growth controls and land values in an open city’, Land Economics, 66, 237–48. Burge, G. and K.R. Ihlanfeldt (2006), ‘Impact Fees and single family home construction’, Journal of Urban Economics, 60, 284–306. CENSIS (1985), Italy Today, Rome: CENSIS. Cheshire, P.C. and C.A.L. Hilber (2008), ‘Office space supply restrictions in Britain: the political economy of market revenge’, Economic Journal, 118, F185–221. Cheshire, P.C. and S. Sheppard (1995), ‘On the price of land and the value of amenities’, Economica, 62, 247–67. Cheshire, P.C. and S. Sheppard (1998), ‘Estimating the demand for housing, land and neighbourhood characteristics’, Oxford Bulletin of Economics and Statistics, 60, 357–82. Cheshire, P.C. and S. Sheppard (2002), ‘Welfare economics of land use regulation’, Journal of Urban Economics, 52, 242–69. Cheshire, P.C. and S. Sheppard (2003), ‘Taxes versus regulation: the welfare impacts of policies for containing urban sprawl’, in D. Netzer (ed.), The Property Tax, Land Use and Land Use Regulation, Cheltenham, UK and Northampton, MA, USA: Edward Elgar, pp. 147–72. Cheshire, P.C. and S. Sheppard (2004), ‘Land markets and land market regulation: progress towards understanding’, Regional Science and Urban Economics, 34, 619–37. Cheshire, P.C. and S. Sheppard (2005), ‘The introduction of price signals into land use planning decisionmaking: a proposal’, Urban Studies, 42, 647–63. Competition Commission (2008), ‘Groceries market investigation – provisional decision on remedies’, Press Release, London: Competition Commission, 15 February. Engle, R., P. Navarro and R. Carson (1992), ‘On the theory of growth controls’, Journal of Urban Economics, 32, 269–83. Fischel, W. (2001), The Homevoter Hypothesis, Cambridge, MA: Harvard University Press. Glaeser, E.L. and J. Gyourko (2003), ‘The impact of building restrictions on housing affordability’, Federal Reserve Bank of New York Economic Policy Review, June. Glaeser, E.L., J. Gyourko and R.E. Saks (2005), ‘Why is Manhattan so expensive? Regulation and the rise in housing prices’, Journal of Law and Economics, 48, 331–69. Glaeser, E.L., J. Gyourko and R.E. Saks (2006), ‘Urban growth and housing supply’, Journal of Economic Geography, 6, 71–89. Gordon, R.J. (2004), ‘Why was Europe left at the station when America’s productivity locomotive departed?’, NBER Working Paper no. 10661. Hall, P.G. (1974), Urban and Regional Planning, Harmondsworth: Penguin. Hoskins, W.G. (1970), The Making of the English Landscape, Harmondsworth: Penguin Books. Ihlanfeldt, K.R. (2007), ‘The effect of land use regulation on housing and land prices’, Journal of Urban Economics, 61, 420–35. Ihlanfeldt, K.R. and T. Shaughnessy (2004), ‘An empirical investigation of the effect of impact fees on housing and land markets’, Regional Science and Urban Economics, 34, 639–61. Irwin, E. (2002), ‘The effects of open space on residential property values’, Land Economics, 78, 465–81. Lee, C.-M. and M. Fujita (1999), ‘Efficient configuration of a greenbelt: theoretical modelling of greenbelt amenity’, Environment and Planning A, 29, 1999–2017. Lee, C.-M. and P. Linneman (1998), ‘Dynamics of the greenbelt amenity effect on the land market – the case of Seoul’s greenbelt’, Real Estate Economics, 26, 107–29. Lipsey, R.G. and A. Chrystal (1995), Economics, Oxford: Oxford University Press. Mayer, C.J. and C.T. Somerville (2000), ‘Land use regulations and new construction’, Regional Science and Urban Economics, 30, 639–62. McConnell, V. and M. Walls (2005), The Value of Open Space: Evidence from Studies of Nonmarket Behavior, Washington, DC: Resources for the Future. Muellbauer, J. (2005), ‘Property taxation and the economy after the Barker Review’, Economic Journal, 115, C99–C117. OECD (2004), ‘The contribution of housing markets to cyclical resilience’, OECD Economic Studies, 38, 125–56. OECD (2007), Territorial Review: Randstad Holland, Netherlands, Paris: OECD. Peterson, A.W.A., C.F. Pratten and J. Tatch (1997), An Economic Model of the Demand and Need for Social Housing: Technical Report of a Feasibility Study, London: Department of the Environment, Transport and the Regions.

Land markets and their regulation

151

Quigley, J.M. and S. Raphael (2005), ‘Regulation and the high cost of housing in California’, American Economic Review, 95, 323–8. Quigley, J.M. and L.A. Rosenthal (2005), ‘The effects of land use regulation on the price of housing: What do we know? What can we learn?’, Cityscape, 8, 69–137. Quigley, J.M. and A.M. Swoboda (2007), ‘The urban impacts of the Endangered Species Act: a general equilibrium analysis’, Journal of Urban Economics, 61, 299–318. Rosen, S. (1974), ‘Hedonic prices and implicit markets: product differentiation in pure competition’, Journal of Political Economy, 82, 34–55. Rossi-Hansberg, E. (2004), ‘Optimal urban land use and zoning’, Review of Economic Dynamics, 7, 69–106. Rouwendal, J. and J.W. Van der Straaten (2008), The costs and benefits of providing open space in cities’, Tinbergen Discussion Paper, 2008–001/3. Sheppard, S. (1999), ‘Hedonic Analysis of Housing Markets’, in P.C. Cheshire and E.S. Mills (eds), Handbook of Regional and Urban Economics Vol. III: Applied Urban Economics, Amsterdam: Elsevier Science Publishers. Song, Y. and G. Knaap (2003), ‘New urbanism and housing values: a disaggregate assessment’, Journal of Urban Economics, 54, 218–38. Song, Y. and G. Knaap (2004), ‘Measuring the effects of mixed land uses on housing values’, Regional Science and Urban Economics, 34, 663–80. Swank, J., J. Kakes and A.F. Tieman (2002), The Housing Ladder, Taxation and Borrowing Constraints, Amsterdam: DNB Report no. 9. Tiebout, C. (1956), ‘A pure theory of local expenditures’, Journal of Political Economy, 64, 416–24. Vermeulen, W. and J. Rouwendal (2007), ‘Housing supply and land use regulation in the Netherlands’, Tinbergen Discussion Paper, 2007–058/3. Vermeulen, W. and J. Rouwendal (2008), ‘Urban expansion or clustered deconcentration? An applied welfare economic analysis of growth controls and the foundation of satellites’, Tinbergen Discussion Paper, 2008–043/3.3. Vermeulen, W. and J.N. Van Ommeren (2008), ‘Does land use planning shape regional economies? A simultaneous analysis of housing supply, internal migration and local employment growth in the Netherlands’, Tinbergen Discussion Paper TI 2008–004/3. Walsh, R. (2007), ‘Endogenous open space amenities in a locational equilibrium’, Journal of Urban Economics, 61, 319–44. Williams-Ellis, C. (1928), The Octopus in England, London: Geoffrey Bles.

7

The continuing urban form controversy: towards bridging the divide H.S. Geyer

Introduction A large body of research has developed over the years arguing for and against urban sprawl (see STPP, 1997; Smart Growth, 2008; Audirac and Zifou, 1989), but differences of opinion about the relationship between urban form and sustainability and whether urban densification or market-driven urban development is the preferred way forward have not diminished. Opposing positions in this debate are as passionately defended now as they were in the mid-1990s when Jenks et al. (1996, p. 11) called it ‘one of the most hotly debated issues on the international environmental agenda’. Questions about the way in which cities should be developed to reduce resource depletion and improve social and economic sustainability are still as central to this debate now as they were a decade ago. In many respects, global climate change has made the issue even more pertinent. Daily one would be bombarded by the media with references about global warming and its possible effects on human life or vice versa. For some time now the compact city idea has been widely propagated as the only responsible urban form in the wake of global climate change while sprawl has been singled out as bad – a major contributor to global warming (Congress of New Urbanism Charter, 2008; Smart Growth, 2008; Tyler, 2005; Darby, 2007; Ellis, 2002; European Commission, 2006; Hickman and Banister, 2007; and many others). This view is advanced by an energetic and vocal group within the international academic fraternity through all possible forums and media outlets – a move that is also strongly supported in liberal political circles. In the meantime, however, market-driven urban development quietly seems to gain ground in many parts of the world. In parts of North America, especially in the USA, it remains a dominant driver of urban development, while in Western Europe it also seems to be gaining popularity – a phenomenon that is clearly dreaded by activists who are opposed to it. Although faint voices of moderation are picked up here and there in the literature, so much emotional noise is being generated by the frenzy around the issue that it seems harder and harder for opponents to hear each other’s arguments. In the debate of urban densification versus market-related urbanization several questions need to be answered. What arguments are usually used to promote one urban form and vilify the other? Are certain obvious factors not being overlooked in the debate? Are we not going too far in (ab)using certain arguments or misrepresenting facts for the sake of achieving goals that otherwise could have been achieved through other means? What outcomes of urban development could be regarded as unhealthy and unsustainable? What generalizations are made about sprawl and compact cities, and how applicable are they under different circumstances? It is the purpose of this chapter to attempt to find answers to these questions. The chapter will not only look at the narrow range of issues 152

The continuing urban form controversy

153

that tend to be repeated in the day-to-day discussions of the topic in the media. Instead a broader literature search has been done to see what substantively the two groups have to offer in their arguments. The hope is that this will help widen perspectives and demonstrate how much common ground there actually is between the two groups. The sprawled city The difficulties of defining sprawl The earliest reference to the concept ‘urban sprawl’ was made before the Second World War (Buttenheim and Cornick, 1938). Since then the term has become common usage, but as with the term ‘compact city’, ‘urban sprawl’ means different things to different people.1 Sometimes ‘sprawl’ is used as a noun, sometimes as an adjective, and sometimes as a verb (Hess et al., 2001). Some definitions of sprawl are descriptive, referring to how it manifests in space; others are operative, explaining its social or economic impact; while, for some, sprawl represents something undesirable based on aesthetic, equity, environmental or economic grounds. Physical descriptions often imply stages of development (Ewing, 1997; Harvey and Clark, 1965) – continuous dense urban coverage around the centre at an early stage, followed by lower-density development in the form of ribbon development along major corridors, and scattered development towards the fringe later on. Functionally, others see it spontaneously evolving from a mononodal to a multinodal structure over time (Richardson, 1980). And because it is associated with big, multinodal cities, terms such as ‘megalopolis’, ‘mega-city’, ‘urban agglomeration’ and, at a lower level of spatial aggregation, ‘suburb’, ‘satellite town’, ‘edge city’ and ‘ex-urb’ have all, to some degree, become token terms for the phenomenon. More often than not a ‘shotgun’ approach is employed in describing or criticizing sprawl. Condemning the phenomenon out of hand by so many in popular and academic circles without attempting to distinguish between different kinds of sprawl seems quite deliberate. It shows how politicized the issue has become. Paradoxically, even urban densification eventually has to become sprawl if the process is allowed to continue long enough. When 8 million people live in a city, sprawl is inevitable, no matter how dense the development. In fact, theoretically speaking, the processes of urban densification and urban sprawl are morphological indivisibilities. Depending on one’s vantage point and the stage and scale of urban development, eventually concentration inevitably has to become deconcentration if the process continues long enough. The following explanation may serve as proof of this. In an attempt to show how difficult it is to ‘wrestle the meaning of urban sprawl to the ground’, Galster et al. (2001) link the following parameters to the concept: density, continuity, concentration, clustering, centrality, nuclearity, mixed uses and proximity. If one considers that, in logic, a term used in a definition should first place the thing referred to in that term in a class, and then explain how it is distinguished from other things in the same class (James, 1952), then it is clear that each of the terms listed above could equally well have qualified as descriptions of the compact city. Galster et al. (2001) seem to have recognized this problem when they asked how small an urban patch and how far apart patches should be to still be regarded as part of the main urban complex. Also, using the term ‘urban area’ instead of ‘metropolitan area’ (ibid.) did not help much in bringing clarity, especially when, in the same breath,

154

International handbook of urban policy

they moved on from the urban area in descriptive terms to references to functionality (employment activities). In their discussion of the different parameters listed in their definition, Galster et al. (2001) point out various manifestations in each category, proof that we are dealing here with indivisibilities. For instance, two areas with the same overall density but whose distribution of land uses differs could end up in different categories, the one tending towards higher density, the other towards urban sprawl. Time plays an important role in clearing up the confusion surrounding the description of sprawl. In their study of definitions of urban sprawl, Hess et al. (2001) found density to be the most common measure, followed by rates of urban coverage in relation to population growth. The time factor in the latter reminds one of Harvey and Clark’s (1965) view that the trend in urban development, at a particular point in time, is a more accurate indicator of sprawl, and of urban densification for that matter, than current urban densities. It makes the case for either densification in parts of cities that represent sprawl or compact cities with features that are normally associated with sprawl. Generally speaking, it is suggested that separating causes, characteristics and effects of sprawl is essential in unravelling the complexities of the concept (Galster et al., 2001; Ewing, 1997). Ewing et al. (2002) highlight four (composite) elements of sprawl: low-density development; segregated land uses; lack of significant centres; and poor street accessibility. Some studies cover entire metropolitan areas (Bunting et al., 2002), others only certain suburbs, while others focus on neighbourhood characteristics (Srinivasan, 2002). Some studies are restricted to the definition and measurement of urban form: others relate to its outcomes in terms of quality of life and sustainability, often expressed in terms of travel time (Ewing et al., 2002; Srinivasan, 2002; Schwanen, 2002; Dieleman et al., 2002). Most critics see it as unplanned, inefficient, low-density and scattered (Harvey and Clark, 1965; Ewing, 1997; Pennock, 2004). But the townscapes show that there is much more variety in sprawl than is generally recognized. Some forms of sprawl can be compactly designed, others low-density, some drab and uninteresting, others pleasing. Switzerland is probably one of the best examples of a country that often uses marginal agricultural land for residential purposes – one of the reasons why people find it one of the most pleasant and idyllic places to live in on earth (see Figure 7.1). To adequately define the concept it seems that a distinction must be drawn between its causes, characteristics and effects (Malpezzi, 1999; Galster et al., 2001). Paulsen (2005, p. 3) concurs: Many definitions conflate cause, effect and characteristics of sprawl. For example, one of the most common definitions of sprawl within . . . urban and regional planning . . . is low-density, auto-dependent, fragmented land use patterns (including ‘leapfrog’, commercial strip, and single use zoning). This definition conflates cause and effect. For example, is auto-dependence (or, more precisely, dependence on single-occupancy privately owned automobiles for journeyto-work trips) a cause of sprawl, a consequence of sprawl or simply a necessary characteristic of sprawl? One of the hottest topics in urban planning research is the land use–transportation connection, which attempts to answer the question: what is the effect of urban form (land use patterns) on travel behavior? It is fair to say that we are not even close to a consensus answer.

However one goes about it, measuring sprawl remains a complicated undertaking, because how sprawl is defined depends on how we see the concept. This uncertainty makes it easy to dispute the validity of an approach or the accuracy of the statistical

The continuing urban form controversy

Source:

155

Author’s photograph.

Figure 7.1

The mixing of urban and agricultural land uses in Switzerland

procedure that is used to measure or define it (Hess et al., 2001). Problems are often encountered because of the different use of variables, data sources, scales of data sets, research techniques and spatial aggregations (Hickman and Banister, 2007). Processes underlying market-driven urbanization Social and economic gravity forces Early contributors to morphological theory focused on the fundamental forces that shape urban form. Distinguishing between ‘intrinsic’ and ‘extrinsic’ influences, Hurd (1924) named land value the single most important factor determining the location of land uses in a city. According to him, the value of land depends on location, location on comfort and comfort on nearness. Disregarding the relationships in between, it can be stated that value depends on nearness. But people value nearness differently. For some, nearness to workplace is paramount; for others, nearness to facilities such as transport networks, health and educational services. For many, cheaper land, a particular ambience, and being near nature are important. Friction of distance – the mechanism through which the effect of nearness to something of value is measured and operationalized – has been and remains an important force shaping urban form. Every possible location in the city represents a particular friction cost – cost to

156

International handbook of urban policy

deliver a product, reach work, reach a client, the school, natural environments and many others. In this regard optimum levels of friction of distance are determined through the interplay of the minimizing of travel time and costs and the maximizing of opportunities and activities within a person or household’s financial means and other abilities (Zahavi, 1974). Centripetal and centrifugal forces are created by the different desires of different people to live as near as possible to some locations and as far as possible from others. The combined influence of the two forces, created by different people’s desire to live near different things for similar (or different) reasons, brought about the modernist urban environment in which most of us live today (Burgess, 1925; Hoyt, 1939, 1978; Harris and Ullman, 1945; Lowry, 1964; Bollens and Schmandt, 1965; Doxiadis, 1970; and many others). They are rich in social and cultural content and varied in function, form and scale, and reflect place-making based on people’s choice and abilities in urban space (see Volume 1, Chapter 11 for a more detailed discussion). Some choose to live in dense central urban locations; others out in the suburbs or in ex-urban rural locations. It is these differences in people’s preferences that shape our cities socially and economically. Collectively, people’s social and economic desires and abilities are transformed, first, into choices, then into spaces and ultimately into places. Those who try to narrow this diversity of needs and abilities down to one kind of urban form are likely to be disappointed. As Perroux (1950) so aptly demonstrated, the ultimate and eventual triumph of social and economic space over administrative space is inevitable. The fall of the Iron Curtain in Berlin is a case in point. The different needs and lifestyles of people that shape urban morphology and give structure and character to cities dictate the urban form they choose and the transport modes they use. Higher urban densities do not necessarily change this behaviour (Marshall, 2005). The same forces also apply to economic activities. Acting first on macro-location factors – agglomeration (location) and scale economies (size) – then on micro-locational factors (Haig, 1927, referenced in Stefaniak, 1963; Alonso, 1964), different kinds of businesses tend to cluster at specific locations within an urban system and within cities. Influences such as a strong client base, available services or available land could play an important part in the development of nodes in cities. The exact two forces operating on transportation and communication axes bring about linear urban development, within and between cities (Hurd, 1924; Pottier, 1963; Friedmann, 1966). As cities grow, rising congestion costs and property values eventually cause concentration forces to give way to deconcentration, a process that, in the long run, turns monocentric cities into multi-nucleated urban agglomerations (Richardson, 1980). Diseconomies of scale (Richardson, 1977) play a major role in this. In fact, multinodality and sprawl are a longterm physical inevitability when cities become as large as many of them have become, however we might argue. To think otherwise would be to ignore the reasons why Köhl’s (1850) perfect urban cupola remained little more than a figment of the imagination. Experience has taught us that continued residential compacting in central areas of large cities tends to drive families out. Yu (2002), for instance, found that household growth has a stronger causal link to sprawl than overall population growth in the USA. The reason for this is simply because high-density housing is not an attractive option for families. It erodes family living space, complicates social life and inflates land prices. To overcome high land prices, housing and business units have to be stacked on top of

The continuing urban form controversy

157

each other until unit prices have come down sufficiently for developers to get a reasonable return on their investments. It is therefore inevitable that as competition for land drives land prices upwards, central cities will eventually end up as high-rise, high-density areas. This makes single housing options in cities increasingly unlikely and even when single-family housing is considered in central areas, brownfield developers usually have little choice but to opt for the higher-income market to overcome the burden of high land prices and construction costs. Small wonder that social activists often complain about residential (even new urbanist) development in central city areas becoming elitist and too expensive, displacing the urban poor who previously lived there. For the same reasons, cheaper housing developments tend to cascade outward, and as they do, so do businesses that provide household goods and services to those people moving out. That is why concentrated deconcentration of businesses remains a popular economic trend. Views differ on the relationship between sprawl and energy use. Some believe that continuing sprawl causes steadily rising travelling time and energy use (Newman and Kenworthy, 1989; Hickman and Banister, 2007), while evidence showed that multinodality could bring about a significant reorientation of traffic flows in metropolitan cities (Gordon et al., 1991; Gordon and Richardson, 1996). The expansion of suburban and ex-urban business and industrial nodes causes increasing numbers of people to travel from suburban areas to such nodes for shopping, relaxation and work rather than to travel to central city locations. Business decentralization could therefore significantly shorten trip lengths.2 This process has its downside as well. Urban sprawl transforms the spatial divisions of labour in cities and often leaves ageing residential areas in central areas struggling, economically and socially. Migration Clark (1967, p. 280) described urbanization as the macro-location of industry and population, tending towards ‘an ever-increasing concentration in a limited number of areas’ while their micro-location tends towards ‘an increasing diffusion’, or ‘sprawl’. As a general economic rule, it can be said that people tend to move to where they can find (for them) the best accommodation, at the best location and at the most affordable price. Housing and land for residential development located towards the outskirts of cities are often more affordable than closer to the centre, resulting in proportionally more people tending to deconcentrate than concentrate (Johnson, 1986). There are psychological factors causing urban deconcentration too. It seems as if there has always been a need for city folk to live in or near green areas. In anticipation, at the end of the nineteenth century, of changes that could be expected in urbanization in the twentieth century, Wells (1902, pp. 55–60) wrote about how big cities could grow by 2000 and about the urban residents’ ‘passion for nature’, their ‘craving for a little private imperium’ and the ‘wholesome isolation that is possible from much that irritates’. Peri-urbanization is the outcome, among others, of this passion at the local level – a longstanding trend that has resulted in the continuing urbanization of rural areas around cities all over the developed world for many years (Caruso, 2001; Champion, 2007; Pumain, 2002; Bendixson, 2004). In certain circumstances, that same force can become so strong that its effects can be seen nationwide. Counter-urbanization is an example of this. Sometimes environmental externalities in cities (often accompanied by social and economic externalities) can become so high that significant proportions of city dwellers decide to move to rural

158

International handbook of urban policy

locations (Berry, 1976). Environmentalism-driven migration is regarded as a strong psychological force behind this deconcentration process (Geyer and Kontuly, 1993; Geyer, 1996). Whether its effect is measured locally or nationally, the yearning of people for ‘a relationship to the land not otherwise attainable without farming for a living’ (Price, 1999) is a lasting force that should not be underestimated. Richardson and Gordon (1999) refer to claims being made that sprawl is not a spontaneous process but is induced by taxes, subsidies and marketing techniques. Evidence refutes this view. The break-up of concentration trends in Europe during the 1960s (Fielding, 1989) and the turnaround in migration from ‘urbanization’ to ‘counter-urbanization’, which started in the Occident in the 1970s, serves as an example. At the time some regarded counter-urbanization as a completely new phenomenon – a ‘clean break’ from previous trends (Vining and Strauss, 1977). We now know, however, that the newly discovered deconcentration trends were nothing but a continuation of old waves of deconcentration, from the well-known earlier phases of decentralization within urban agglomerations outward to ex-urban locations (Gordon, 1979; Headicar, 2003; Pumain, 2002). Then, a decade later, the turnaround (which was generally regarded as the beginning of a new era) suddenly started to fade. At the time the conclusion was drawn that the turnaround of the 1970s was merely a blip in an ongoing process of urbanization (Champion, 1987, 1989; Frey, 1988) and that migration patterns in the Occident had returned to ‘normal’ – i.e. slow but continuing concentration. It was later discovered, however, that although several external forces could disrupt local trends, population deconcentration was the more lasting and dominant migration trend in countries nationally. It turned out that not the urban–rural trend but signs of the return of urbanization were the blip in a more or less ongoing process of deconcentration in the UK and the USA (Richardson and Gordon, 1999; Townsend, 1993). When the first signs of (what was regarded as) the return to urbanization were found in the First World, Berry (1988) accused researchers (mavens) of being too close to their data sets. He urged everybody to take a step back and look at the bigger picture. The idea of long waves (Berry, 1988) was one attempt to recognize the fractal properties of the urban development process. Another was the idea of differential urbanization. The former is a process-driven explanation. An urban system (in his example, the USA) goes through consecutive periods of concentration and deconcentration caused by several interlinked (mostly economic) cycles in a country’s space economy. The latter is an allembracing vision of vaguely predictable economically and socially driven main and substream counter-migration processes occurring among different sections of the population and between different subsets of the urban system in the same country at the same time. In an attempt to break with the preoccupation with main migration trends at the time, this vision recognized the fact that different migration patterns may unfold among different layers of the population inside cities and within subsets of national urban systems at the same time, all of them driven by the same fundamental forces. It is suggested that differential urbanization patterns may include different degrees of centralization and suburbanization (at the micro level), and urbanization, polarization reversal and counter-urbanization (at the macro level), all happening at the same time in a country (Geyer, 1996; Geyer and Kontuly, 1993; Pacione, 2001, 2005). Dominant migration patterns might be the most visible trends in a country but they could conceal other smaller but significant (substream) migration patterns, some of which might be early signs of an

The continuing urban form controversy

159

emerging new (possibly future dominant) trend or represent the last remaining streaks of a fast-disappearing (dominant) trend of a previous era, all locked into a potentially complex network of differential urbanization patterns. Urban areas may therefore be affected differently (internally and between cities) by several different migration streams, all occurring at the same time. A significant proportion of a particular section of the population of a large urban agglomeration may, for instance, as part of a larger process, choose to leave central city locations for the suburbs, as some middle-class African Americans in the USA who previously lived predominantly in central areas, now tend to do. Others, who have the means to do so, might choose to move to ex-urban locations, some merely for environmental reasons, others to be closer to edge city nodes. Older couples might choose to move to rural areas, away from the hustle and bustle of city life. Others of the same age might prefer to move back to quality housing near the city centre to be closer to health and public transit facilities. All of these choices can simultaneously be made by different sections of the population at any point in time and all of them are perfectly legitimate choices – the one not superior or morally more correct than the other, just different. In the free world – everywhere in the world for that matter – local governments would be overstepping their authority if they were to make it impossible for people to exercise their general right to choose where they want to live. Over a period of time such choices on aggregate would lead to an assortment of migration processes, some inside cities, others between cities and rural areas, others between cities. Some would lead to urbanization, others to polarization reversal, others to counter-urbanization, causing population movements in cities to range from centralization to suburbanization and ex-urbanization, all happening at the same time. Mobility Much has been written about the sprawled city, especially the sprawled US city. New urbanists see sprawl as ‘ever-increasing congestion on suburban arterial roads, a lack of meaningful civic life, the loss of open space and limited opportunities for children and others without cars’ (Fulton, 1996, p. 3). Many commentators believe that the perpetuation of urban deconcentration is environmentally and socially unsustainable (Owens, 1995). In the blogosphere, European cities are often regarded as an example of healthy urban densities. However, urban sprawl has also become a trend in Europe. The transport-effectiveness of a variety of urban development options has been studied by academics and practitioners in the UK over the past two decades. Study findings range from urban densification through maintaining the status quo to different forms of urban deconcentration (see Headicar’s survey of studies in 2003). Although urban concentration seems to be favoured by some – a view that has become public policy in the UK since the Labour Party came to power – research results are mixed. Research by Rickaby (1987), which focused on the geometry of six different urban models, singled the urban concentration model out as the most fuel-efficient, but warned that fuel savings can be offset by considerable concentration cost externalities. Deconcentration to exurban locations, on the other hand, tends to bring about concentration savings, but is less fuel-efficient. In real-life conditions, however, the exodus of people from the city is usually followed by the deconcentration of businesses as well, reducing the need for citydirected commuting in the process. Differences in travelling patterns are only significant when extremities in the density range – i.e. the most urban versus the most rural – are compared. Thus far, the overall verdict seems to be that transport savings in the middle

160

International handbook of urban policy

band of urban densities, where most planning decisions are made, are quite insignificant. As a result, very little real change has occurred in urban development in the UK. New additions remain ‘incremental’ and continue to take place ‘almost exclusively in the form of adaptations to existing settlements’ (Headicar, 2003, p. 140). In his study of peri-urbanization in Europe, Caruso (2001) singles the Netherlands out as one of the countries where he found the least GIS-detectible sprawl, but despite the implementation of strong urban containment policies for many years, local governments have not been able to stop urban deconcentration there. This has been proven conclusively in the case of the Netherlands (Bontje, 2003). Much more urban sprawl has occurred in the Netherlands in recent years than is generally acknowledged. According to Neuman (2005), energy use in the Netherlands has increased 13-fold from 1950 to 1992 while the population increased by only 50 per cent over the period. Although cities in the Netherlands are, comparatively, much more compact than elsewhere in Europe, and cities in Europe are by and large much more compact than cities in the USA, the former have by no means escaped urban sprawl (Caruso, 2001). Generally, urban sprawl has more than doubled in Europe over the past 50 years (European Commission, 2006). Drawing on Bruegmann’s (2005) book, Rybczynski (2005) writes: Despite some of the most stringent anti-sprawl regulations in the world and high gas prices, the population of the City of Paris has declined by almost a third since 1921, while its suburbs have grown. Over the last 15 years, the city of Milan has lost about 600 000 people to its metropolitan fringes, while Barcelona, considered by many a model compact city, has developed extensive suburbs and has experienced the largest population loss of any European city in the last 25 years. Greater London, too, continues to sprawl, resulting in a population density of 12 000 persons per square mile, about half that of New York City . . . The point is not that London, any more than Barcelona or Paris, is a city in decline (although the demographics of European city centers have changed and are now home to wealthier and older inhabitants, just like some American cities). Central urban densities are dropping because household sizes are smaller and affluent people occupy more space. Like Americans, Europeans have opted for decentralization. To a great extent, this dispersal is driven by a desire for home-ownership. ‘Polls consistently confirm that most Europeans, like most Americans, and indeed most people worldwide, would prefer to live in single-family houses on their own piece of land rather than in apartment buildings.’ . . . So strong is this preference that certain European countries such as Ireland and the United Kingdom now have higher single-family house occupancy rates than the United States, while others, such as Holland, Belgium, and Norway, are comparable. Half of all French households now live in houses.

Car ownership has also increased dramatically in Europe since the middle of the last century. In England it increased from 14 per cent in 1951 to 74 per cent by the turn of the century. The transportation situation has dramatically changed in the UK over the last 25 years. Cycling and travelling on foot decreased by 25 per cent while automobile use has increased by 48 per cent. Today, almost 80 per cent of all distances travelled are done by car, 7 per cent by bus, walking or cycling. Distance travelled increased by 41 per cent overall, but by car it increased by 62 per cent. Not only the use but also the popularity of the bus as a public transport service has declined dramatically in the UK, to such an extent that there is talk a ‘strong antipathy’ to its use (Headicar, 2003). The assumption that public transport is the most appropriate mode of transport in compact cities is also questioned. In the Netherlands the need to travel shorter distances

The continuing urban form controversy

161

in compact cities prompts people to either cycle or use their car instead of making use of public transport (Le Clercq and de Vries, 2000). A survey of critique Spontaneity of sprawl Urban sprawl occurs in cities all over the world, also in those where densification policies have been practised for some time (Mills and Lubuele, 1997; Gordon and Richardson, 1996; Mieszkowski and Mills, 1993). The general view is that increasing wealth, advances in transport technology, changes in production technology, and advances in information technology contribute towards sprawl (Anas, 1999; Dieleman and Wegener, 2004). Neuman (2005) adds to this, ‘the lure of cheap open land outside the city, easily available capital to buy property, the rise of the real estate developer, mass production of housing, and the always-present image of the single family home as the American dream’. However, some claim that sprawl is not the result of spontaneous consumer demand but that it is induced by taxes, subsidies and marketing techniques (Richardson and Gordon, 1999). Strictly speaking, all types of housing in cities are marketed for commercial purposes. Once a person has bought a home, it automatically becomes part of that person’s capital portfolio – an asset that can be turned into capital and, it is hoped, profit, at any time. In the market-oriented approach to urban development, keeping the housing market vibrant is a priority. To achieve this, Staley (2001) lists several market-related policy imperatives: ● ● ● ● ●

focusing on market preferences – the kinds and types of housing and neighbourhoods that housing consumers prefer; maximizing opportunities to increase housing choice and innovation in the realestate market; openness; linking housing location, the provision of civil services and the control of negative spillover impacts on neighbours; making sure that the provision of public facilities and services is adequately planned for and that the planning process is depoliticized.

Low-density single houses in suburban areas are usually more popular and more generally associated with commercial or commodity housing, especially among families, while more crowded forms of accommodation in central city locations are more popular among single people, retirees and young couples without children. Part of the reason for the popularity of suburban housing is that people regard the former as a more desirable living environment (especially for families) than ‘congested, polluted, and crime-ridden’ central areas. [T]he demand for residential sprawl is driven by ‘pull’ factors, i.e., the amenities of a suburban or semi-rural environment, as well as ‘push’ factors, i.e., escape from the social problems of cities such as crime which together constitute a powerful force for and argument in support of the generation of urban sprawl. (Pennock, 2004, p. 15; Gottdiener, 1994)

Although there are exceptions,3 older residential areas in central cities are usually associated with high concentrations of ethnic groups and immigrants, high percentages

162

International handbook of urban policy

of social housing, high levels of unemployment and people with high drop-out levels, low levels of education and low levels of productivity. Factors such as inferior public education, high crime rates, high taxes, regulatory barriers and fewer housing opportunities also play a role in declining areas suffering from urban flight (Staley, 1999). Marketing techniques are partially responsible for urban sprawl. However, to suggest that suburbanization is popular merely because of marketing techniques, and that central city areas would somehow become as popular as suburban areas for all sections of the urban community if only marketing techniques were to be adjusted, is stretching the point. Marketing tends to follow market trends. If there is a trend visible, or there is potential that something might become trendy, then the market will respond, as the up-market developments in so many large urban agglomerations in recent years have proven. To market something for which there is no obvious market or holds no potential to become marketable goes against standard marketing principles and practice. Another argument in support of urban densification is the ‘wastefulness’ of urban sprawl. This is often offered as additional justification for the enforcement of an urban edge; a popular policy mechanism against urban sprawl. Valuable agricultural land that could be used for food production is gobbled up by cities, so it is argued. While there are grounds for such an argument in the highly urbanized parts of Europe, the same does not apply to the same extent in the USA. There, it was found that all development takes up less than 5 per cent of the country’s total land area. Urban areas cover only 3.5 per cent of it and only approximately 25 per cent of the loss of farmland from 1945 to well into the 1990s could be attributed to urbanization. In more than 75 per cent of the states the land areas are more than 90 per cent rural. This includes forests, cropland, pasture, wildlife reserves and parks. Protected areas exceed urbanized areas by 50 per cent (Staley, 1999). Also, it has been determined that the amount of additional housing that can be provided through densification by infill development is largely overstated. US jurisdictions estimate that close to 90 per cent of medium-term development will in any case have to be placed on greenfield sites. Even Portland, Oregon, a local authority committed to urban densification, officially projects that only around 30 per cent of its medium-term growth will not consist of greenfield development (Heid, 2004). It could therefore be concluded that, for the USA – possibly also for parts of peripheral Europe – the consumption argument seems to be stylized, highly exaggerated, even misleading, and real-estate markets simply respond to the need for open land in and around urban areas. Contrary to the widely held view that urban sprawl necessarily consumes all open landscape around cities, private land trusts are often formed, and agreements among property owners concluded to preserve open space in fast-growing areas (Staley, 1999). A third argument against urban sprawl is that it increases the burden for the provision of infrastructure in outlying areas for everybody in the city. In the USA, Staley (1999) found that [Infrastructure] costs are recovered through on-site improvements made by developers. Local governments often choose not to recover the full costs of development, preferring to subsidize development through general revenues. Most studies also fail to recognize the interconnected nature of land development, ignore cheaper and alternative ways to provide services (e.g., through the private sector), and use a static snapshot of communities.

The continuing urban form controversy

163

The arguments given above are precisely the reasons why (1) centrists have become critical about urban sprawl; (2) the debate on urban form has become so strongly ideologically driven (Owens, 1995); and (3) one so often finds ‘stylized’ forms of criticism against sprawl (Anas, 1999). The dilemma, according Owens (1995), lies in the apparent irreconcilable void between elements of neo-liberalism and socialism in the arguments on either side of the divide. By and large the centrist’s ideals are to reinvigorate central city areas by containing urban expansion, increasing urban density, and integrating the inner and suburban communities; hence the popularity of the compact city ideology. Imposing an ‘urban edge’ – beyond which no or only limited urban development is allowed – is a popular policy mechanism to enforce this vision onto urban communities. The compact city Definitions As in the case of ‘sprawl’, it is not always clear what is meant by the term ‘compact city’. International planning literature does not sufficiently recognize local differences and particular conditions (Clark, 2005). Numerous calls have been made for centralization but very little clarity exists about what form it should take. Clark (2005) asks, with justification, whether the compact city refers to the dense, integrated inner-city living environment where residence and workplace are juxtaposed and, if so, whether it is an ideal for parts of the city or for the city as a whole. Neuman (2005) also hints at this uncertainty when he points to his focus in his study on the city as a whole, not merely a part of it. In the latter’s attempt at finding a clear definition in the literature, he finds only references to vague claims of greater energy efficiency (because people can live closer to work) and more meaningful community life, but what form it should take is not really spelled out. In his attempt to clarify ideas, Clark (2005) came to the conclusion that the concept could hardly refer to a universal central city profile. The reason seems to be logic. Character and composition of central city environments in Europe and North America differ significantly and urban densification can take on many forms, as is evident in cities all over the world. Density-wise, Salingaros (2006) sees the outcome as lying somewhere between the monolithic ‘ultra-high-density environments based on skyscrapers’ and ‘lowdensity suburban sprawl’. According to Salingaros (2006), there is nothing wrong with high density or low density per se, as long as it is well integrated with other densities and is located in the right place – too much of the same thing is not good, so he suggests. Neuman (2005) characterizes the ideal compact city as a mixed land-use area with a high residential and employment density. Expansion of the city is restricted by a ‘legible urban edge’. The compact city stimulates increased social and economic interaction, it provides a high degree of accessibility, locally and regionally, and a high degree of street connectivity, internally and externally. Otherwise, it encourages multimodal transportation, has an inflexible design and a low open-space ratio, and requires unitary planning or at least closely coordinated planning control. What it entails and where it originated from The history of new urbanism ‘New urbanism’ is a relative new concept4 – ‘the latest in a long line of reform movements’. It started as ‘neotraditionalism’ in the 1980s, but became

164

International handbook of urban policy

a movement when the new urbanist ideals – called the Ahwahnee Principles – were formulated at a meeting that was arranged at the Ahwahnee Hotel in Yosemite National Park by California’s Local Government Commission in 1991 (Fulton, 1996). Examples of the best-known ‘original’ neotraditional enclaves in the USA are Celebration in Florida, Kentlands in Maryland, Blount Springs in Alabama, and Battery Park City in New York. Aggressively marketed as a new concept, they have become better known for their urban design and traditionally directed architectural designs than for their compactness. In his excellent review of the movement’s roots, Fulton (1996) shows how new urbanism drew from the utopian ideas of reformists such as Downing, Olmsted, Vaux, Nolen, Howard, Unwin, Stein and Wright. Not all the ideals held by the antecedents correspond with the new urbanist principles, though. Some suggested quite the opposite, but the focus on aesthetics, ‘sense-of-place’ properties and community life remained common denominators. Rethinking public spaces was one of the main objectives, especially streetscapes. Streets had to be transformed into ‘pedestrian’ and ‘transit-friendly’ spaces. New urbanism aimed to reduce social and economic segregation and ‘foster a sense of community by the creation of dense developments with a broad mix of housing prices and land uses’ (AlSayyad, 1998, p. 8; Youngentob and Hostetler, 2005). New urbanists see urban incarceration as the only solution to the problem of innercity stagnation. According to them, compact cities bring uses into proximity and mix uses in town centres. This, Neuman (2005) believes, will enhance choice and liveability. The hypothesis that compact urban forms and mixed land uses will make more people walk and cycle should impact positively on sustainability and health. New urbanism moves away from zoning and coding, and the principles of competition and flexibility in land use and construction choice (Hickman and Banister, 2007). Location and the mixing of land uses are highly prescriptive (Williams, 2005) and are founded on traditions of a slow-moving, walking and cycling urban lifestyle of a bygone era. Access by car is intentionally frustrated in an attempt to recapture an old lifestyle. Urban structure plays a pivotal role in it and is narrowly enforced through tightly controlled ‘master plans’ with little regard in business for modern economic requirements of location, scale and transaction costs. It is therefore principally a development control mechanism alien to modern corporate business practices, and although some present it as an urban form allowing choices, it aims to limit, even deny, personal choice. And ‘although they were designed as post-political communities, politics could not be prevented from moving in. Political frustration has been expressed by inhabitants whose needs to participate in decision-making processes are being thwarted by the settlements prefabricated ideological blueprint’ (AlSayyad, 1998, p. 9). As a result, neotraditionalist development has become ‘as exclusionary as the suburbs they seek to replace’ (ibid.). It is therefore not a sustainable concept on a large scale in economically progressive societies that value freedom of residential choice. The potentially negative effect that this form of inhibiting planning would have on people’s preferred lifestyles, house prices and business patterns would be insignificant as long as it remains what it is: a peculiarity. This means that there is certainly room for neotraditionalism in modern societies. Overall it widens the variety of residential choice despite the limits it puts on individual house choice locally. A reasonable view, therefore,

The continuing urban form controversy

165

would be to simply regard neotraditionalism as just another type of housing, part of the larger variety on offer to home buyers in a city. As for all other housing, demand will ultimately determine its fate in the urban real-estate market. Evidence shows that the implementation of new urbanist ideals on a localized scale in parts of cities can be successful (Vernez Moudon, 2000). It adds to the variety of housing options available to people in the cities. Trying to apply the same principles on a macro scale does not seem achievable, however (Garde, 2004). The new urbanist’s vision of compact metropolitan areas containing ‘multiple, yet dense walkable neighborhood centers, connected via transit and bounded by regional and local park systems’ (Loomis, 1999) can add to but not replace the wider range of residential types and economic nodes that are part and parcel of the ‘conventional’ urban area. To try to replace the latter by the former would require negating a whole section of the needs and desires of the people who live in cities – a range of needs that exceeds the spatial constraints envisaged by the new urbanists. On the whole, new urbanist ideas are advantageous and should be implemented wherever possible, but they are not universally applicable. Attempts by over-zealous proponents to enforce narrow new urbanist ideas onto entire metropolitan populations have been met with stern opposition all over the world. Some call them ‘nostalgia peddlers’, ‘social engineers unwilling to accept real preferences’ (Fulton, 1996) – social political activism presented under the guise of responsible planning policy. Others describe their policies as dogmatic (Neuman, 2005), draconian (Gordon and Richardson, 1989) and dictatorial – an undemocratic solution offered ‘in the absence of the people’ (AlSayyad, 1998). To many proponents, new urbanism has become a near religion – egalitarian dogma turned into a substitute religion – an ‘evangelical mission’ of reforming the conventional city (Loomis, 1999), the ‘savior of all things wrong’ with suburban and urban living (Pyatok, 2002).5 It is regarded as a movement that ‘emerged from political and social origins that made its members unable to assess the class biases of their own assumptions and prescriptions’, a movement that ‘sought media coverage and access to power – in politics and real estate’ – instead of broadening its base to make it socially more balanced and acceptable (Pyatok, 2002). Generally, new urbanism means different things to different people. For some it implies displacement of the urban poor. For others it means exactly the opposite – i.e. to use new urbanist principles to help the poor and to socially integrate urban societies. The physical environment that is associated with new urbanist development might not suit social conditions in central cities (Day, 2003). New urbanist development should therefore be more flexible if it is to stand a chance of becoming generally acceptable to the range of cultures and income groups it is intended to accommodate. Few can argue against the new urbanist ideal of improving the ‘legibility’ (Lynch, 1960) of cities. It could assist in building a stronger ‘sense of place-identity’ and create ‘recognizable community symbols’ through design and construction. Whether the architecture necessarily has to fit into the current narrow band of ‘traditional and nostalgic’ urban settings is obviously questionable. Traditional designs do not always translate into the kinds of townscapes that are associated with twenty-first-century urban living everywhere on earth. For one, the oppressive codes that are necessary to make the quaint townscapes of neotraditional communities work tend to be too controlling for many (Falconer Al-Hindi and Till, 2001). As Durack (2001, pp. 67–8) puts it: ‘The New

166

International handbook of urban policy

Urbanist Village is by necessity a fully planned and regulated environment, fiercely resistant to change and any deviation from the rigid rules that govern its form and function.’ This limits personal choice and reduces the concept of normative planning to a prescriptive condition of ‘my norms only, always’, an approach that can only go in one direction, from the moral high ground, downhill. Closely allied to neotraditionalism is ‘conservation planning’. While a case can often be made for the preservation of many old buildings in cities, preserving large numbers of dysfunctional housing in parts of central cities for the sake of maintaining traditional buildings does not make sense unless alternative uses can be found for them. Not enough modern households fit the sizes and designs of many traditional house designs (Ashworth, 2005). ‘Real towns’, according to Calthorpe (1994) (cited in Falconer Al-Hindi and Till, 2001, p. 191), are communities that ‘house a diverse population, provide a full mix of uses, maintain walkable streets and positive public space, integrate civic and community centers, are transit oriented, offer accessible open space, and honor the unique qualities of a place’. Durack (2001, p. 67) also argues for ‘open, indeterminate planning’ that accommodates cultural diversity and topographic, social, and economic ‘discontinuities’. New regionalism To achieve spatial objectives in metropolitan areas as a whole, the promotion of the concept of ‘regional government’ – i.e. metropolitan-wide regulation of land-use management based on ‘new regionalist’ principles – has become a key strategy of new urbanists in recent years. The ‘promotion of multifunctional land use’ is usually the reason given for the necessity of metropolitan-wide land use control (Jenks et al., 1996). Continuing sprawl, they say, is associated with governmental fragmentation, exacerbated inequalities and prolonged cultural ‘deterioration’. New regionalist government will be effective in reducing sprawl and fragmentation which, in turn, will slow down if not stop the progress of the continuing dispersion and decentralization of population and employment in large cities. This, it is believed, will eventually slow down the spread of central city degeneration into inner suburbs. The hypocrisy in this strategy has not gone unnoticed, however. ‘Top-down’ government, which was vehemently opposed as undemocratic a while earlier, has now become the preferred way of government, while the ‘devolution of power’ or government from the ‘bottom up’ – concepts that were invented by the same people who are now promoting new urbanism and regional government – is now considered a threat to the universal enforcement of new urbanist principles. Regional government has now become the ideal, while ‘power to the people’ and local government – both concepts that allow local communities to determine their own destiny – are opposed on grounds of ‘ineffective’ governmental ‘fragmentation’. While there is agreement that some issues can best be handled at the regional (or metropolitan) level, such as pollution, transportation and protection of scenery (Anas, 1999), this does not apply to all matters, certainly not to run-of-the-mill land-use management. One-size-fits-all approaches are not helpful in solving metropolitan problems (O’Brian Caughy et al., 1999). However, new urbanists see (big) metropolitan government as a way to seize power in areas that normally reside with local government and the ‘people on the ground’. New regionalism boils down to an attempt by proponents to restrict freedom in a range of areas of urban management under the guise of ‘regional

The continuing urban form controversy

167

imperatives’ and ‘responsible government’. Opponents point to the negative cost implications of containment policies. Comparing the potential benefits of regional against what is termed ‘fragmented’ metropolitan government in terms of cost savings, variety, competition and segregation in the USA, Anas (1999) argued that public services that can benefit from scale economies are usually provided on a larger scale. Public transportation is an example of this. Overall, however, the localization of government in metropolitan areas is a spontaneous process based on best practices for specific outcomes. Some local governments choose to be business friendly and pro-growth; others resident-friendly and growth-control oriented, allowing both residents and entrepreneurs an assortment of locational choices within the confines of the metropolis. Although some benefits may be gained by the bundling of certain functions, the bundling of metropolitan government across the board, as new regionalists suggest, is neither cost- nor delivery-effective. The need for containment There are several important reasons given for the opposition to urban sprawl, especially in the USA. Social inequalities in large cities, the consumption of agricultural land, traffic congestion on arterial routes linking central city areas with the suburbs, and the social negatives of suburban living are some of them (Burchell et al., 2000; Ewing et al., 2002). As a solution, compact cities are promoted for the sake of protection of the rural landscape, for their ‘energy-saving possibilities’ and their ‘quality-of-life implications’ (Owens, 1995), but perhaps most of all, for the revitalization of central city areas. The downtowns of large cities used to provide a ‘focus for local communities’ and gave a ‘sense of identity’ to their residents. They were associated with ‘the concept of community’ which created a ‘common sense of purpose’ (Tyler, 2005). But the structure, composition and function of these cities have changed over time. They have lost their traditional role as the provider of the full array of urban functions and have taken on a new role as the hub for specialized high-order services. Functionally, they may still be positioned and acting like city centres, but still to regard them as the ‘economic cores’ of most urbanized regions’ might be a slight overstatement (Tyler, 2005). In the USA the displacement of retail business by specialized functions in the centres of large urban agglomerations is continuing (Tyler, 2005). The increase in the number of super and smaller ‘strip malls’, conveniently located and accessible to people living in suburban areas, are testament to the continued impact of market forces on urban space. Generally, the overprovision of retail in the USA, and the consequent phenomenon of ‘dark stores’, has been hitting city centres very hard in recent years (Tyler, 2005). The decline of business activities in city centres seems to have had two outcomes: downtowns are beginning to look and function like suburban centres and have started to specialize (Tyler, 2005). New urbanists regard this as a problem. A total package of urban containment, to stop sprawl and to induce urban densification, coupled with the mixing of land uses, will address it, so they believe. This would lead to greater energy efficiency through the use of public transportation, revitalize urban cores, create greater vitality and equity in urban areas, and improved quality of urban life (Vernez Moudon, 2000). Especially the integration of land uses will be greatly beneficial. Wrote Dieleman and Wegener (2004, p. 309) of Rodenburg et al. (2003), ‘the merging of land use functions can lead to economies of synergy, save space, and be environmentally benign’.

168

International handbook of urban policy

Evaluating the claimed outcomes The meaning of sustainability Sustainability means different things to different people. Neuman (2005, p. 17) describes sustainability as ‘a debate about how to live’, ‘our relationship to the cultural construct we call nature, to the earth, and to each other’. Sustainability, he says, ‘refers to the way things ought to be and how we ought to live’. It is ‘a moral dialogue’. ‘As with all moral arguments, there is a danger, for it is but a small step from dialogue to dogma.’ The compact city concept, just as much as the sprawled city for others, has become part of the ‘dogma of the controversy surrounding sustainability’. Sustainability, according to him, is a ‘platonic idea, a category of the good’. However, there is ‘not yet a clear, single image of what sustainability is’ and because it is ‘fuzzy’ and has ‘many facets’; it is often ‘appropriated without fear of challenge because there is no single accepted image of how to specify it exactly’. Because of its fuzziness, the term ‘sustainability’ and its antonym, ‘unsustainability’, have probably become two of the most misused terms in the urban form debate over the past two decades. The overall impression one gets from reading literature on urban form is that it has become extremely (and unfortunately increasingly) biased, divisive and polarized in recent years. The overwhelming majority of papers present urban sprawl unconditionally as ‘bad’ and ‘unsustainable’, while new urbanism and urban densification are generally described as ‘good’ – a ‘sustainable’ urban form. It cannot be denied that new urbanism holds great promise for improvement on the considerable shortcomings of the sprawled city. For instance, it is difficult to see how authorities will be able to lure people back to old and failing suburbs in central city areas to counter residential deterioration without an urban renewal programme in which new urbanist development plays a significant role. But there are limits to the problems new urbanism can solve and there are certainly limits to its universal acceptability as an urban form. Differences in urban population profiles, household composition, income levels, abilities, needs and choices, and especially the rigidity of urban form and the unbending nature of social and economic forces are simply too great to expect the urban society to find a single form of development universally acceptable, no matter how beneficial it is in particular circumstances. This we have learnt from the reactions of society to the narrow-minded ideas of idealists such as Le Corbusier (1922), Bellamy (1888) and Gillette (1894) in the past. To get closer to the truth, one would have to concede that not every aspect of urban sprawl is bad, exploitative, unfair and unsustainable, just as not every aspect of the compact city and new urbanism is advantageous, its application responsible and its outcome sustainable. Reading literature on the compact city ideology has revealed one thing: the advantages of certain aspects of the concept are real and considerable, particularly in certain areas and in particular conditions. New urbanism should be vigorously promoted under those conditions, but other advantages are overrated, even untrue in other circumstances. These weaknesses should be acknowledged. To make progress, new urban as well as urban sprawl critics will have to be more accommodating. Characterizations of legitimate criticism of new urbanism as ‘caricature, inadequate sampling of projects, deficient understanding of new urban principles and practices, premature judgments, unrealistic expectations and ideological bias’ (Ellis, 2002, p. 261) are unhelpful. We all know that ideologically loaded topics such as this

The continuing urban form controversy

169

tend to breed intolerance. Caricature, the careful selection of cases to prove or disprove a particular point, deliberate skewing of principles and practices, carefully worded deductions, unfair judgements, unrealistic conclusions and ideological bias are certainly also not above critics of urban sprawl. Those of us who have been toiling on the academic acre for long enough know that scholars are resourceful. If they want to prove something they will find evidence to prove it, no matter what. My general impression is that resourcefulness is not in short supply among critics on both sides of this divide. Reading Bill Bryson’s (2003) remarkable account of how the ‘human factor’ in the academic fraternity – hard-headedness in most cases – tended to hinder rather than help scientific advancement by not admitting the obvious, has made one thing abundantly clear: passionate travellers on the academic highway do not like to be found stranded in the middle of the road. Overcrowding and health Urban density is perceived (and measured) differently in different countries and by different disciplines (Churchman, 1999; Nagar et al., 1988; Mitrany, 2005). Some authors are in favour of urban densification and integration for social reasons. They believe that new urbanism will improve quality of life and living standards for all. Jane Jacobs (1961) was probably one of the most-quoted exponents of the cosmopolitan (integrated) city concept. Decentrists dispute this on several grounds. First, they believe that densification leads to congestion, which ultimately causes quality of life to deteriorate. There is ample evidence that high indoor urban density has mainly negative emotional and cognitive effects (Mitrany, 2005). Although there are exceptions to this rule, the compact urban environment is more generally linked to factors such as the deterioration of health and negative mind-sets towards the neigbourhood and the people who live in them (Mitrany, 2005). Regoeczi (2003) listed many studies in her survey on human behaviour in densely urbanized areas that have found high residential densities to adversely affect the physical and mental health of people (see also Krause, 1998; Luginaah et al., 2001; Baldassare, 1975). ‘Fight’ or ‘flight’ are the general responses found among most affected people by researchers in this field. Behavioural experiences and responses among people who live in dense urban conditions include: withdrawal from social life due to social overload; a decrease in neighbourliness and a lack of desire to meet new people and make new friends; regulation of social interaction through intimidation; stimulation of escalated aggression in individuals due to greater numbers of targets for aggression; experiences of impersonal atmospheres; close contact with deviant role models; difficulties in exercising freedom of choice; frustration; and difficulties even with routinized behaviour – the list goes on. And often high-density living elicits more than one of those experiences and responses from an individual. In this context the idyllic picture in Jacobs’s (1961) mind’s eye of lively, peaceful street scenes where people are out on the streets socializing or where ‘kids can walk to the store, buy a popsicle, and be home in ten minutes’ (Shibley, 1998, p. 80) can hardly be seen as a realistic goal under compact city conditions in densely developed inner city areas. Neither should it necessarily be directly linked with suburban areas. Conceptually, conditions that are most conducive to the kinds of intimate street life envisaged by Jacobs (1961) and her followers seem to be present in neotraditionalist enclaves. However, evidence and logic about modern lifestyles seem to refute this claim in practice (Neuman,

170

International handbook of urban policy

2005; Talen, 1999; Landecker, 1996). Another form of development that is designed to sustain communal life is gated settlements. While positive responses from people living in such communes abound on the blogosphere, new urbanists are critical of the concept on social grounds. Nevertheless, gated communities are gaining in popularity in the USA and the UK and seem to be an urban phenomenon that is here to stay (Atlas, 2001; Hirschfield et al., 2001). Second, universal urban densification is also resisted on grounds of population diversity. Planners are planning for cities to accommodate singles, couples and the elderly. Contemporary strategic planning has almost become child-blind, with the new higher density centres being built essentially for the childless in mind. The talk is of ‘vibrant’ and ‘liveable’ mixed use town centres, characterised by pavement cafes, restaurant and entertainment precincts, shopping and office jobs. These are a long way from the traditional familycentric suburbs of the past. In the process, the new . . . compact city will be developed into distinctive zones based on age, life style and household composition. Town centres for the childless, the suburbs remaining for the minority with children. (Randolph, 2006, p. 5)

Children who are forced to live in dense central city areas have to cope with higher levels of household mobility, crowdedness inside homes, inter-generational and intergender tension, a lack of external space and of ownership of space, social isolation, insecurity (especially in public space), and having to face more heavy traffic more often than children living in suburban homes. A general outcome of a combination of these conditions is poorly developed social and motor skills amongst children who have to grow up in highly densified urban environments inside the cities (Randolph, 2006). Third, nature, both as areas to visit and views of it from home, is an important ingredient of the quality of life urbanites so dearly cherish (Kearney, 2006). Having private space in and around buildings is equally important. Indications are that new urban development rarely satisfies in this regard (Till, 2001; Youngentob and Hostetler, 2005). It puts pressure on the urban environment in both areas. As a result, urban design becomes an increasingly important element of compact city planning. Making trade-offs between space for private vehicles and open space on the one hand, and private living space and public space around buildings in cities on the other, becomes inevitable. To compensate for the lack of space, there is a belief that urban inhabitants should ‘acquire a taste’ for the crowded spaces that are presented as ideal by new urbanists (Day, 2000; Clark, 2005). A typical example of this is the way in which Platt (2003), in a tribute to the legendary Holly Whyte, referred to the littered Bryant Park in New York City, packed with people, probably during lunchtime (Figure 7.2), as an example of the ‘ideal use’ of a ‘people-friendly’ public open space in a metropolitan area. Had it been presented as ‘the best that we could do under unfavourable circumstances’ it would have been understandable, but if this is honestly regarded as ideal, then heaven help us. Such small public open spaces in city centres are the result of too much pressure being allowed to be put on land for public use by policy makers. Their locations, sizes and frequency of use are often far from ideal. Wherever you look in small parks in densely developed parts of cities – Bryant Park (in the photo), St James’s Park, Green Park, the Mall, examples abound – you would find countless tell-tale signs of environmental fatigue, a clear indication of the over-use of public open spaces. One rarely finds similar examples of park fatigue in Switzerland, where opens spaces in and around urban areas abound.

The continuing urban form controversy

Source:

171

Platt (2003).

Figure 7.2

Bryant Park, New York City

Urban communities seem to struggle to adapt to the kinds of thinking the new urbanist agenda requires. Even in cases where communities were ‘educated’ with the aim of ‘shaping’ the attitudes of people about the advantages of compact inner-city living, it is clear that the ‘inherent conservatism’ in the way people choose places to live (Crilly et al., 2004), and the ‘the quarter acre mindset’ (Darby, 2007), remains as strong as ever. Till (2001) points to ‘the unrepenting attitude of planners’, while Pyatok (2002) expresses his discontent with new urbanist development that often ends up conventional and elitist, out of reach of the urban poor. It displaces existing residents and dislodges current communities. Day (2003) and Ackerly et al. (1999) echo these sentiments. In their survey of the origins, progress and advantages of new urbanism, positive connections are made by Falconer Al-Hindi and Till (2001) and Neuman (2005) between the urban form and design, human scale, sense of community, greenery, sense of safety, good schools, quiet streets and spatial imageability. However, the general conclusion is that the main beneficiaries of new urban developments thus far seem to have been the upper-class home buyers. The reason for this seems obvious. It confirms the widely held view that extraordinary architectural and urban design requirements – which usually have extensive cost implications – are necessary to bring about the positive characteristics attributed to new urbanization and counter the many potential societal negatives that are associated with high-density urban development. Realities of market forces, combined with the costs of the reuse of infrastructure that is not always practical and efficient (Clark, 2005; Ashworth, 2005; Horner, 2005; Geyer, 2007), the high cost of infilling, as well as the prospects of inflated housing costs

172

International handbook of urban policy

to cater for the extras that are necessary in design, services and construction to make new urbanist development as seductive and functional as is generally claimed, are bound to make such housing costly and inaccessible to the urban poor. Brownfield development in cities usually has to contend with significant amounts of dead capital and also normally requires the connection of old to new civil services. Dead capital could involve getting rid of unwanted buildings, coupled with the rehabilitation of land, or the integration of parts or whole buildings into new development. Either way, dead capital almost always pushes up construction costs. Ideology and control Empirical results of studies on the impact of urban growth regulation on property prices are mixed. Some indicate a positive relationship, others none at all, and yet others that the relationships seem to be determined by local conditions (Quigley and Rosenthal, 2004). However, stringent land-use control measures can have several negative consequences on urban development and the economy (Evans, 2002; Quigley and Rosenthal, 2004), some relating to economic growth, others to increasing housing costs and urban growth. Although the economic growth rate of a country is determined by many factors, stringent land-use policies are one that is usually overlooked (Evans, 2002). In a chain of cause and effect, limiting the supply of urban land cannot but lead to a proportional increase in the demand for it, followed over time by a nominal increase in land prices in all cities whose populations grow. In his discussion of planning policy in the UK, Evans (2002) implied that harsh urban land-use policies are generally overlooked by researchers as a possible hindrance to economic growth. The reason for this oversight seems obvious. Reducing economic inequality and preserving the rural landscape through urban containment (among others) have become an allabsorbing social issue in the UK planning profession. The consequences of this policy are clear. In cities where the supply of land is limited, changes in property prices might be mixed during interim periods (Song and Knaap, 2004a), but in the long run price increases are inevitable on the whole. Paradoxically, this will not detrimentally affect the wealthy but will certainly make housing less affordable for increasing numbers of people in the lower income brackets. Based on this reasoning, stringent containment policies are likely to eventually cause a decrease in urban growth. And given the relationship between economic growth and the real-estate market, a decrease in urban growth would normally also have a delayed knock-on effect on the economy. Evans (2002) cautiously refers to increasingly stringent planning legislation since 1947 as an important reason why, according to him, the UK has been experiencing lower economic growth rates than many other countries since the Second World War. The second consequence relates to decreasing housing costs towards the urban fringe. Land for residential development is often more affordable towards the outskirts of cities than closer to their centres. Strict containment policies could make a difference here. Rural land (or simply open land in urban areas for that matter) often has a ‘shadowvalue’ effect on adjacent residential land (Cavailhès et al., 2004), causing the prices of choice properties adjacent to, or overlooking rural or open landscapes, to be significantly higher than would have been the case elsewhere in the vicinity. Stringent supply-limiting control measures are not only likely to amplify this effect along the urban edge or areas where open spaces are preserved (Cheshire and Sheppard, 2004), but are also likely to attract new urban development to the urban fringe (Irwin and Bockstael, 2004).

The continuing urban form controversy

173

Whatever the case, when regulations rather than market forces determine urban form, housing stock and density, people who still have to enter the housing market will be negatively affected by the artificially inflated property prices. Potential gainers are owners who happened to own properties in places that are advantaged by the distorted market forces. It is therefore not surprising to see how restrictions placed on land trigger relocations of people to areas where such restrictions are either absent or more accommodating (Clark, 2005). Over the past two decades we have gone full circle on the application of urban policy. The top-down approach, which was regarded as modernist, authoritarian, repressive, people-unfriendly and ‘uncommunicative’, fell out of fashion, while bottom-up, communicative planning, ‘for the people by the people’, became fashionable. Paradoxically, the democratization of planning which was intended as decision making driven from the bottom upwards has once again become a repressive process, enforced from the top downwards. Freedom of choice in urban living is now being threatened yet again by suggestions (and indeed applications) of new forms of authoritarianism. The most disturbing form of authoritarianism visible currently is social activists who would do anything in their power (so it seems) to persuade local governments to use their power structures to enforce a (one-size-fits-all) compact city lifestyle onto entire communities, everything in the name of ‘responsible government’. Communicative planning (Forester, 1989; Taylor, 1999; Healey, 1997; Sager, 1994, 2006) has become the vehicle through which transactions costs are lowered for some and increased for others. Planning, by definition, is ‘a mechanism with the explicit purpose of directing future events and seeking to achieve particular future conditions’ (Pennock, 2004, p. 168). Dictating urban form through the planning profession has consequently proven to be the most effective way for social activists to achieve the goal of social integration and reduce income inequality in urban areas without making the liberty- and growth-limiting consequences of the strategy too obvious. Through communicative planning practice, planners have claimed the right to make ‘value judgements’ about the way people live based upon what they regard as appropriate (Cheshire and Sheppard, 2004). Precedence is given to control and process above market and choice (Evans, 2002). Numerous scholarly documents in circulation bear witness to suggestions (even encouragement) of how this self-declared authority could be extended and how policy could be further manipulated to achieve specific environmental and ideological objectives (Headicar, 2003; Meen and Andrew, 2004; Sager, 2006). The way in which a deaf ear is turned to opposing arguments, while local government authority continues to be used to enforce one point of view onto urban communities (Paivanen, 2000; Pond, 2006), is another disturbing tendency. The standard argument offered in defence of such authoritarian policies is the need to curb individual choice, which tends to be ‘fallible, emotional, and instinctive’. Even collectively, the outcome of individual decisions is ultimately destined to be ‘disastrous’ (Beard, 2007). At the same time new urbanists claim that ‘collective responsibility’ enforced through regulation ‘provides better long-term results for society’ (ibid.), an argument that is echoed by many (Pennock, 2004; Pond, 2006). Apart from the fact that the former statement immediately puts concepts such as democracy under suspicion, the latter fails to indicate on what grounds they claim to have the ability to collectively make decisions for the general good of the society at large and why others do not. Although

174

International handbook of urban policy

the intention might be different, the implied assumption of the anti-sprawl, anti-market activists is that individual choices necessarily contradict community interests. By and large, the anti-sprawl lobby’s point of departure is that they are the only ones who know what kind of urban development is in the community’s best interest, that they have a monopoly on responsible decision making and occupy the moral high ground. Their attitude is that public policy, devised by idealists and technocrats, is necessarily beneficial for the community at large while personal choice, even collective personal choice – or the market – undermines the society’s well-being. The implications of these statements are clear. Progressively inclined decision makers, whether they act individually or collectively, are not able to make decisions that can ‘benefit society’, but people on the other side of the divide are. Frustration is often voiced in the blogosphere about this form of oppression. Reacting to this kind of paternalism, an angry group of people in Cambridge once wrote: ‘Someone decides where everyone else is going to live and work, and under what conditions. When government defines the highest and best uses of the earth, it also assigns people their places in society’ (Ackerly et al., 1999). Not only is the claim of new urbanists that their judgement is the only responsible one presumptuous; the subtle abuse of power to enforce biased ideas onto urban communities as a whole represents state tyranny of the worst kind. Part of the urban densification debate, of course, revolves around equity issues. Social liberals believe that the only way in which the issue of class differences and economic inequalities between central city areas and suburban areas can be resolved is to turn the deconcentration trends around, if not spontaneously, then by force. Declaring an urban edge and forcing everybody to live inside the declared city boundary is their way of enforcing their point of view on everybody. Through infilling, densities will gradually increase and eventually people who might have chosen to live in lower-density areas will have no choice but to live in inner-city areas and, in the process, urban poverty can be ‘diluted’. Somehow, the argument seems to be that the urban poor will automatically benefit from this proximity. Socialists believe that by deconcentrating, the affluent manage to ‘escape’ environmental externalities while the urban poor get trapped on the inside. There is an underlying contradiction in all of this, however. While the equity aspect of the ideology is being pursued under the rubric of environment vigilance and social justice, other aspects of equal importance are casually undermined. In the process obvious flaws are being overlooked, flaws that defeat some of the key principles on which the ideology was originally founded. In planning, plan (5 control) has taken precedence over markets (5 choice). Market preferences (5 liberty) are frowned upon because they are not utility (5 morally) driven. They simply reflect people’s desires (5 imperfect) for amenities (5 greed/sprawl), which are inherently unsustainable. A more balanced view, perhaps, is that the causes of urban poverty are diverse. Some are poor through no fault of their own and deserve to be given priority. Others are poor because repetitive disastrous personal decisions over a long period of time have affected them and their families’ living conditions negatively. This is an important cause of urban poverty, not necessarily racism or income inequality. Social activists tend not to make this distinction. However, urban poverty is a reality and should not be ignored. Enforcing a ‘new urbanist-only condition’ on entire urban communities seems to be neither a popular nor a wise policy option. Empirical evidence has shown that the creation of a

The continuing urban form controversy

175

particular built environment does not ensure a sense of community (Landecker, 1996). Freedom-loving urban citizens will simply not be manipulated into the constricted lifestyle envisaged by environmental and social extremists, so experience has taught us. The continuing deconcentration in cities in the USA and Europe has made this abundantly clear (Meen and Andrew, 2004; Caruso, 2001; Song and Knaap, 2004b). Attracting more affluent communities to central city areas through new urbanistoriented development is one (and a potentially prudent) way of bringing money and life back into central city areas that have lost momentum. It will widen (and deepen) the tax base of parts of cities that have lost ground and, in doing so, will create capacity to improve social and civil infrastructure there. However, trying to persuade entire urban communities to take one potion – social and land-use mixing in a compact city environment – to treat an ailment whose healing in affected areas does not seem obvious, while so many others who do not show symptoms of the illness have to suffer so many adverse effects of the medicine across the board, is bound to be a hard sell. It is not surprising to see how often subtle references are made to the ‘popularity’ or ‘widespread support’ of an idea (Cheshire and Sheppard, 2004) to persuade rather than using rigorous argumentation or empirical evidence to prove claims of alleged advantages of urban densification. To also expect the urban poor to benefit significantly from the proximity of the affluent might be too much to ask. To use an extreme example, the proximity of Favelas to more affluent residential areas in Rio de Janeiro as such, for instance, has not changed the fortunes of the urban poor significantly but has brought much greater risks and insecurities to the other people living there. The reason for this is simple: environmental externalities in poverty-stricken communities are largely home-bound – internalized and locked into the micro spaces in and around the homes of households. Moving neighbourhoods closer to one another or, worse, breaking down ghettoes and mixing them with the more affluent in the same urban environment does not mean that the poor will now, somehow, miraculously manage to escape the misfortune they experienced before. Proximity to the more affluent does not improve a person’s level of education, put food on the table, or pay the bills. Ideologically loaded arguments, usually with predictable social and environmental overtones, are often offered as a pretext for authoritarian planning practices to try to achieve the kinds of social integration referred to above. Through legislation and policy, social and environmental activists use the planning profession to license themselves as the sole interpreters of what urban sustainability implies, and use their own interpretation as a benchmark to prescribe to a largely passive, vulnerable (and often frustrated) urban community what kind of lifestyle the latter is permitted to lead.6 In this process, civil liberties, quality of life and economic growth are on the losing side. When comparing the advantages and disadvantages between new urbanism and sprawl, one often finds inaccurate and unqualified statements in which one urban model is unduly demonized while the other is unequivocally offered as a wonder cure for today’s urban ailments (Schwartz, 2005; Vernez Moudon, 2000). The following quote serves as an example (Song and Knaap, 2004a, p. 664): Advocates for mixed land uses have argued that the practice of separating land uses has led to excessive commute times, traffic congestion, air pollution, inefficient energy consumption, loss of open space and habitat, inequitable distribution of economic resources, job–housing imbalance, and loss of sense of community (Smart Communities Network, 2002). Mixed land use has

176

International handbook of urban policy

been considered one of the antidotes to the problems brought by urban sprawl. It is argued that greater mixture of complementary land use types, which may include housing, retail, offices, commercial services, industrial and civic uses, can be beneficial since it can promote transitsupportive development, preserve open space and other landscape amenities, facilitate a more economic arrangement of land uses, encourage street activity to support retail businesses, help achieve regional housing and employment targets, reinforce streets as public spaces, encourage pedestrian and bicycle travel, and thereby create a sense of community (American Planning Association, 1998).

Broad sweeping statements are often made about how urban sprawl sidelines ‘large sections’ of urban society from ‘mainstream’ urban life and how urban densification would remedy this dilemma. In one example Michael Lewyn (Schwartz, 2005) refers to a third of the American urban population – the young and the disabled – as well as an unknown number of poverty-stricken people among the remaining two-thirds who are ‘frozen out’ of the ‘auto-oriented lifestyles’ created by sprawled cities. Looked at uncritically, this might seem a valid argument, but if the practical implications of such statements are carefully considered it soon becomes clear that urban densification is unlikely to make a meaningful difference. First, ‘mainstream’ communal life means different things to different sections of society. Each need requires different forms of networking to be totally fulfilled and holds different spatial consequences for different users. For the elderly, mainstream (or parts thereof) usually means something completely different from what it means for the toddler, the teenager and the middle-aged, let alone choice differences among different cultures within those groups (Wieand, 1975) or realistic choice options among the poor and the disabled. Urban densification alone is unlikely to make provision for the mainstream needs of all (or most of) the people in the various groups. Second, there clearly is an implied accusation in the statements that (a) existing suburban (sprawled) communities have been mindlessly planned across the board without due consideration of local social and economic ‘mainstream’ needs and that (b) only the compact city could remedy those shortcomings. For the most part, this is simply not true. Although many suburban layouts are not inspiring and do not provide enough variety, accusing authorities of mindless planning is going too far. There has been a long tradition of enforcement of planning codes in urban areas in North American and European cities, and those planning codes have been carefully designed (and are regularly revised) to provide for the ‘mainstream’ communal needs in all parts of the cities, including suburban areas. Public and private planning practitioners acting on behalf of the urban society are constantly working to alter the urban land-use structure of cities to conform to changing local needs, whether they are working in a compact or sprawled city environment. Market forces also play an important role in bringing mainstream activities closer to the people. In fact, urban multinodality, from large edge cities right down to the local corner shop, school, club, postal service or religious institution, serves as proof of how urban communities localize ‘mainstream’ urban life. Third, the assumption that current city structures could somehow be transformed into ideal, fully integrated, new urbanist utopias in which all people from all walks of life live peacefully together in mixed land-use environments where everybody lives close to work and commercial and communal facilities is simply unrealistic. The urban structure is remarkably resistant to change. Due to cost factors, private and public ownership,

The continuing urban form controversy

177

sentiment and choice, land-use patterns in cities tend to resist change relatively effectively. Layout and land-use patterns are still visible – often vigorously protected – years (sometimes centuries) after their establishment. Solving the underlying causes of urban decay and urban povery in central city areas requires a multi-pronged approach. Largescale redevelopment alone, even if it is new urbanist in design, will not do it. Many unsuccessful attempts at redevelopment in the past are testament to that (Jacobs, 1961).7 Sensitive small-scale new urbanist development should make a difference, but, logically, the most effective steps to reduce urban poverty and improve inequalities are to keep chipping away at its many known root causes. The multi-pronged approach followed by the UK government in recent years to improve the quality of life of the disadvantaged in inner cities seemed to have made a difference (Parkinson et al., 2006). Causes such as inappropriately high levels of legal and illegal immigration of lowly qualified people, allowing substandard residential standards (such as overcrowding and urban neglect, crime, vandalism and unsocial behaviour) to persist, not taking effective steps to improve the standard of education programmes, facilities and teachers in poverty-stricken areas, and not introducing incentives to increase productivity need to be addressed. The latest move of the UK Labour government to remove people from social housing who have been taking advantage of the low rents for years while choosing to live off benefits and, at the same time, not trying hard enough to find employment, is a particularly promising step in the right direction to fight self-inflicted poverty in inner-city areas, for instance. Production processes The splitting of business functions and flexible accumulation have become commonplace in industrialized communities. In the former, core decisionmaking functions in the industrial and service sectors tend to move to central city areas while their associated large-scale production and ‘back-office’ functions are either outsourced (often to the quality South) or moved to cheaper peripheral locations locally (Breheny, 1995; Geyer, 2006). In the latter, new combinations of just-in-time production processes based on production flexibility are often found in new ‘clean’ locations outside industrial cities. Judged by the apparent inflexibility and aggression of centrists who suggest more stringent land-use policies ‘to confront’ (Owens, 1995) market-driven, deconcentrated production processes, little scope remains for these producers to remain competitive. The future does indeed not look promising if unsustainable locational limits – described as ‘draconian’ by some and as ‘Maoist’ by others – are imposed without sufficient regard for the reasons why spatial economic patterns have spontaneously evolved in the manner that they did over time. The picture becomes even more sombre when the underlying threat is considered concerning the ‘challenges’ that policy makers will have to face in the case of those who ‘are resistant to change’ (Owens, 1995). Policy makers in the EU and North America have hard choices to make. They can (1) cut entrepreneurs a little slack, especially large-scale producers, and allow them to become as competitive as possible under very tough global competitive conditions – and here the economics of location play a pivotal role – or (2) enforce unsustainable productive patterns onto the business community but keep them artificially viable through measures such as spatial closure and production subsidies (in which case the consumer will directly and indirectly have to pick up the tab for turning spatial unsustainabilities into sustainabilities), or (3) run the risk of losing some large-scale producers to more

178

International handbook of urban policy

accommodating locations elsewhere. Sweet-sounding phrases that describe new urbanist development as ‘facilitating more economic arrangements’ of land uses (American Planning Association, 1998), while location economists know that the intended outcome of the urban form will in many respects have the exact opposite effect on an array of businesses, are quite misleading. Creating a production environment that undermines cost-effective locations holds huge potential risks for a country, not only for those firms competing at the global level, but also for the local-oriented producer. For the global competitor some might argue that factors leading to industrial clustering at the global scale are macro processes and that spatial limitations imposed on production processes locally could not have a significant impact on the former. However, limits imposed on the location of firms affect the viability of production patterns not only in terms of local economic peculiarities but also in terms of global processes. Different combinations of economic activities that tend to cluster at core locations in global economic space (Krugman, 1991) and the composition and scale of these economic clusters (Krugman, 1993) are largely enabled by possibilities of localized increasing returns to scale (Krugman, 1998). If those possibilities are diminished, the cumulative effect on the sustainability of firms locally will certainly also have diminishing effects at higher levels of aggregation. It should also be mentioned that the deliberate expansion, stimulation and nurturing of existing economic agents and social communities could serve as the groundwork for new embryonic industrial clusters that are sometimes found inside metropolitan areas (Morosini, 2004). This offers some hope of creating an environment that will spontaneously attract certain types of firms back to the cities despite the usual negative externalities typical of inner-city locations such as high land prices and service costs, inaccessibility, a lack of space and difficulties with the juxtaposing of firms. Intra- and inter-city migration Despite the more or less ongoing deconcentration, in varying degrees, of people from large cities in Europe and the USA since the 1970s, small but clearly detectable streams of people migrating to central cities have also been detected in US metropolitan areas. Some are remnants – now mostly productionoriented young and ethnic migrants – of the previous dominant urbanization process of a previous era (Geyer and Kontuly, 1993; Geyer, 1996), but others consist of educated professionals, many without children moving back to potentially quality locations inside large urban agglomerations (Tyler, 2005). Similar trends have been observed by Bourne (1992) in Canadian cities, while the same has been happening in Paris, London and Edinburgh, to name but a few. Much of the movement of professionals back to cities is associated with inner-city gentrification and new high-quality brownfield developments. Although the developments help to revitalize inner city areas, they do not visibly contribute to the diminishing of inner-city poverty. These trends tie in with compact city policies in many parts of the world. While, according to Randolph (2006, p. 4), compact city plans do not explicitly exclude children, the logic of what is being planned will, under current settings, effectively result in a polarised city, one newly built in town centres and transport corridors for childless households, where the great growth in urban population is expected to come from, and the other, a suburban population in low density housing where families will be catered for.

The continuing urban form controversy

179

In an attempt to specifically address the poverty problem in inner-city areas, it has been an expressed desire of policy makers in the UK to create dense, mixed land-use areas. This policy has not been met with as much success as was hoped, however. There is clear evidence that increasing urban density negatively affects social equity (Pyatok, 2002). In areas where the objective of greater equity has been actively sought in the UK, households, according to Meen and Andrew (2004, pp. 736–7) tend ‘not [to become] randomly distributed over space but tend to group together with others of similar status, either through deliberate housing market choices or by necessity because of the absence of available alternatives’. In the same study of residential choice in the South-East of England, it was also established by Meen and Andrew (2004) that 60 per cent of people in the inner zones that are moving preferred not to stay in that zone, while 86 per cent in the peri-urban areas preferred to stay there. Only 3 per cent of the latter chose to move to the inner-city area. Although the percentage of people in the inner zone is likely to increase to 75 per cent if social deprivation is eliminated, this is only of academic importance given the relatively little success achieved in eliminating deprivation by different local and national governments over the years. Neuman (2005) came to the conclusion that when people are given a choice, the outcome seems sure: most people are likely to move away from high-density, high-activity central areas. Only under very strict settlement-controlling policies in which freedom of choice is limited can the opposite objective be achieved. But, as was pointed out in the section that dealt with the driving forces shaping urban form, the continuing spontaneous deconcentration of people is not only limited to intracity movements. Empirical studies in the USA also showed that employment growth in the outer suburbs as well as in ex-urban and rural areas exceeded growth in the innercity areas during the 1980s and 1990s (Richardson and Gordon, 1999). And, despite signs of the slowdown of counter-urbanizaton in the UK during the 1980s (Champion, 1987; Champion and Congdon, 1988), evidence clearly showed that the decentralization process had not stopped during the 1980s, but had been continuing ‘with almost law-like regularity’ after that (Townsend, 1993, p. 217). Although the inner city of London did show a net population gain of 3 per cent towards the end of the 1980s, net population losses were widely recorded in the industrial cities (Breheny, 1995). This trend stands in stark contrast with New Towns as well as remote and more accessible urban and rural settlements and resorts, which gained population strongly between 1981 and 1991 in England. In view of this, Breheney (1995) expressed his doubts about whether the counter-urbanization process could realistically be reversed. Recent research in the UK seems to have confirmed this (Champion and Coombes, 2008). Whether the fear of high oil prices created by a combination of factors – the continuing rise in demand for oil in Central and East Asia, restrictions put on oil exploration in the USA and limits put on production levels in the Middle East to manipulate markets – will eventually have a dampening effect on deconcentration trends in cities worldwide in the future remains to be seen. But population growth patterns are also likely to have a significant impact on future urbanization patterns. Germany was the first country to reach the demographic transition from net natural population growth to net decline. This happened in the early 1970s. Many other countries followed the same pattern, leading to liberal immigration policies aimed at importing labour for the sake of maintaining expected industrial output levels

180

International handbook of urban policy

at the time. However, post-Fordist industrial restructuring, leading to higher levels of unemployment at first, together with the unforeseen long-term political consequences of erstwhile immigration policies, led to revisions of immigration policies. The combined effect of these factors points to continuing low levels of urban growth in large parts of Europe and North America. The implication of this is that the massive monotonous suburban sprawl that has characterized suburban growth in the USA during the postSecond World War period is neither necessary nor likely to occur at the same rate as before in slow-growing areas. There are therefore ample opportunities for all kinds of infilling and densification in slow-growing metropolitan areas without the necessity (or fear) of creating unliveable high-density areas. Energy use and high densities Getting more people to walk, cycle and use public transport is a cornerstone of the compact city concept. Statistics show, however, that public transport is losing the battle against the car in many parts of the world (Richardson and Gordon, 1999). There might be simple but very practical reasons for this. Climate is certainly one reason why people prefer to use cars, whether they live in suburbs or in compact, mixed land-use areas inside cities. For obvious practical reasons, excessively hot, humid or freezing conditions are simply not conducive to walking, cycling or using public transport. Flexitime, odd working hours, meeting schedules, work pressure, time constraints, odd routes, long distances between home and work necessitating multimodal trips, homework or equipment needed for work, the loss of productivity and, above all, social factors such as crime, the vulnerabilities of people, ill health, age, disabilities, stress, fatigue and many others (even laziness should not be discounted!) are all practical reasons why people may prefer, or be forced, to travel by car rather than use public transport or walk or cycle to work. But there is a sinister side to this debate too. Environmental extremists are campaigning for radical solutions. They want to frustrate to death car use in cities – not in city centres only, but generally. As long ago as the mid-1990s, metro officials in Portland, for instance, indicated that traffic congestion inside their city would, in their opinion, ‘signal a positive urban development’ (Thoreau Institute, 1996; O’Toole, 2001). This is really a disturbing thought since millions upon millions of people depend on the economic viability of cities for their survival and if these activists were to succeed in their quest to grind automobile traffic to a halt, or even come close to succeeding, the economic consequences would be too ghastly to contemplate. Gradually squeezing private vehicle traffic out of downtown areas of large cities is understandable and makes good sense. It is something that has been happening in cities all over the world for many years anyway. Businesses in areas where skyscrapers abound are simply too densely packed and often stacked too high on each other to be expected to provide adequate parking in all cases. In fact, cities where traditional parking requirements have remained in force have tended to end up with (often continuous) large, dull parking areas on land that could have been used much more effectively – such as for open space, for example. Therefore, to expect visitors in downtown areas to make their calls on foot or by public transport is not unreasonable at all: people visiting city centres do it all the time anyway and, what is more, the availability of public transport in such areas usually makes up for the lack of private parking space. However, to expand the concept to urban

The continuing urban form controversy

181

areas in general, as new urbanists say they want to do, is neither feasible nor seems at all wise. Reversing the established requirement for businesses to provide sufficient on-site and side-street parking elsewhere in cities will eventually do much more harm than good. Also, to increase residential densities up to the point where private vehicle ownership becomes impossible (especially when the policy is accompanied by the mixing of land uses) is a step whose economic consequences have not been properly thought through. The best one can realistically hope for in urban compaction is partial success. If this is accepted, then the next logical questions are: how far should urban densification go and where in cities should the policy apply? The most likely answer to these questions are: in central areas in cities where urban decay has already (or is about to) set in and where large-scale brownfield development could be expected to take place in the near future. Generally, areas inside, adjoining or contiguous to metropolitan downtowns are the most likely candidates. Proponents of the compact city concept are normally adamant that their approach is the most energy-efficient and environmentally friendly, making us less dependent on fossil fuels and reduces global warming. Some critics say that it does not reduce energy use substantially, and others say only in certain areas of use. A significant problem is that only a few of the scholars participating in the debate attempt to spell out what they regard as the upper limit of urban densification. Why do they find it difficult to indicate what the desired outcome should be? Is it because they have turned it into a political issue? It is true that new urbanism has been turned into a political whirlpool – made partisan by linking its outcome to a number of highly questionable remedies. Reductions in carbon dioxide emissions and (as a consequence) global warming, reductions in economic inequality, improved urban ecology, enhancement of urban social liveability, summed up in the most abused cliché of all – ‘achieving urban sustainability’ – have all become part of the current new urban vocabulary. To be able to judge the realism of these claims one needs to unpack some of the underlying realities of current urban living. One is the issue of mixed land uses. The mixing of land uses is not new. Wherever one looks in traditional parts of industrial cities in the UK and Europe one finds examples of urban areas that have been planned as mixed land-use areas – residential mixed with commerce and services – and, to make the scenario more ideal, clearly not designed for the automobile. Look in those places and you will find many ‘dark windows’ of business premises. Look further and you will find motor cars, millions of them, often parked bumper to bumper at night in front of houses that were not constructed to accommodate cars. During the daytime, however, scores of those cars that have been parked there overnight are used. The question that needs to be answered is: why do people who live in areas where housing and businesses are mixed and who, despite the presence of various forms of efficient public transport in the areas, continue to use cars daily? Once again, the answer lies in ordinary things – climate, time, the market, affluence, kinds of employment, personal circumstances – the list goes on and on. Would the mixing of land uses in predominantly residential areas necessarily reduce car travelling significantly, as is hoped for in the neotraditionalist enclaves in the USA? Probably not. Practical experience has borne this out in the UK. Mixed land-use areas have been in existence in predominantly residential areas in UK cities for decades, even centuries, yet many of the businesses in those areas have become vacant, even derelict,

182

International handbook of urban policy

and those businesses that exist are often small, commercially or service-oriented, aimed at the lowest (local) end of the market. A significant percentage of these businesses in the UK have been taken over by foreigners, to such an extent that London is now sometimes also referred to as ‘Londinistan’. Originating from poor countries, these business owners are still able to survive financially in the marginal business conditions that are typical of such locations, tapping a small market at hours of the day and days of the week when other businesses are not open. For most of the remainder, market conditions and the consequent structure and composition of businesses simply require accessibility to larger markets, locally and globally. For them, the location in higher-order business nodes – some standing alone within neighbourhoods, others seeking regional connectivity through major transport corridors – is still a requirement. The question is whether the latest business trends that are spontaneously popping up as new small, medium and large commercial and industrial nodes everywhere within the fabric of urban space, some situated inside, others closer to the fringe or even outside cities along major transport axes (Clark, 2005; Tyler, 2005), should be regarded as unhealthy and unacceptable. Probably not. Perhaps one should accept the fact that we operate in a glocalized economy – a situation that is highly unlikely ever to be turned around – whether we like it or not. The sizes and locations of businesses are simultaneously determined by local, national and international economic forces, forces that are not always readily understood or anticipated by policy makers. Policies that ignore these market forces are likely to do more harm than good in the long run – a luxury that countries, constantly under pressure to keep as many job opportunities at home as possible, cannot afford. Trying to turn back the business clock to what cities ‘traditionally’ looked like is neither practical nor sustainable. These are the likely reasons why statistics of energy use look as they do. New urbanists are adamant that urban sprawl is an energy-inefficient urban form, but research findings differ hugely on the matter. The positive impact of energy consumption across the board in urban densification is by no means a foregone conclusion. While certain kinds of travel are directly related to land use (such as home–workplace trips, for instance), others are not and therefore remain unchanged whatever the density of the centres (Breheny, 1992; Williams et al., 2000). According to Schwanen et al. (2001), deconcentration does lead to an increase in the use of the automobiles for non-work purposes but not necessarily for work-related travelling. An important reason for this is the increasing numbers of people who work from home using the e-environment for business (Clark, 2005) and pleasure. Titheridge et al. (2000) regard the impact of urban form on non-work travel as a neglected area of research. Urban densification and the mixing of land uses will not necessarily reduced travelling in highly mobile societies (Owens, 1992; Simmonds and Coombe, 2000). While work-related travelling might be reduced in densely populated areas, car use for a range of other purposes is unaffected (Williams et al., 2000). Evidence points to the fact that daily travel in central urban areas is lower than in suburban areas, but much of this gain is cancelled out by higher levels of leisure travel (Holden and Norland, 2005). Congestion is an important cause of energy consumption (Breheny, 1995; Gordon and Richardson, 1996) and pollution. Part of the problem of traffic congestion in cities is created by cars cruising in search of free or cheap curb parking (Shoup, 2004). In mixed land-use areas this problem is likely to escalate and exacerbate noise and air pollution. Generally,

The continuing urban form controversy

183

metropolitan areas with the highest population densities in America receive the worst smog ratings from the US Environmental Protection Agency (Staley, 1999). In contrast, people living in sprawled urban environments are less exposed to harmful car and industrial emissions than those in compact city environments (De Ridder, 2004). Social and cultural behaviour is a far more important determinant of travel patterns than urban form. The importance of urban form is, therefore, highly exaggerated (Stead et al., 2000). Clark (2005, p. 3) agrees: [t]he myth of functional efficiency and assumptions about sustainable living miss the lengthening communications and growing energy needs of modern society, whatever its built form.

Travel preferences are a more important determinant of travel behaviour than urban form (Boarnet and Crane, 2001). Mixed findings are reported on the effect of fuel prices on travel. Some say travelling is much more strongly linked to fuel prices and income than to urban form (Hall, 2001). Gordon and Richardson (1989), Hall (2001) and Boarnet and Crane (2001) maintain that engine technology, fuel and road taxes are more effective in reducing energy use than urban form. However, according to Breheny (1995), an increase of 10 per cent in the fuel price in the Netherlands only led to the reduction of car use by 2 per cent in the early 1990s. In high-density cities with high public transportation usage, private vehicle ownership rose when incomes rose, resulting in ‘untenable living conditions’ due to congestion (Barter, 2000). The relationship between fuel consumption and urban density is also not linear. According to Holden and Norland (2005), energy use per capita first decreases as population density increases, but after a point it starts increasing again. High urban densities are therefore not necessarily energy-efficient. Other studies have shown that energy use per household has been on the decline since 1980 (Holden and Norland, 2005). Urban size also plays a role. Although urban densification could cause reductions in energy use, especially in smaller centres, this is not necessarily true for larger centres. There is significant empirical evidence that concentrated decentralization could effect even greater overall energy savings than urban densification alone in larger cities (Jenks et al., 1996). This finding is not new. Monson and Monson (1950), as referenced in Hess et al. (2001), were early advocates of controlled concentrated deconcentration instead of ‘poorly planned sprawl of central cities’. Energy use and global warming In recent years, saving energy has become an important reason for the promotion of urban densification. In fact, it is safe to say that global warming has become the first line of defence for new urbanists, a moral defence that makes them feel untouchable. Strongly anchored in socialist thinking, and given a strong voice by the liberal media, a broad alliance of anti-growth, anti-industry, antiautomobile, and anti-establishment oriented political activists now support this movement. However, not many topics are more skewed and abused for reasons other than its environmental and economic effect on earth and on society than global warming. For the most part, however, few people try to learn more about the mechanics of the process. To make up for the lack of understanding and proof, tactics of propaganda and scaremongering are often unashamedly employed by the media to keep momentum going.8

184

International handbook of urban policy

To a large degree the new urbanists use global warming to write history from the future into the present – the future is the cause and the present is the effect. Owens (1995) maintains that the politics of urban development are used to induce research that can be used as ‘ammunition’ in discourse. Global warming is one such field. The current environmental fanaticism surrounding human-produced global warming, especially the frenzy on the issue in the media reminds one of Eric Hoffer (1951), the longshoreman philosopher who demonstrated how often one form of fanaticism gets transformed into another and how easily a great movement, which begins as a just cause, gets turned into a business and eventually ends up as a racket. This is what has happened with global warming. Sensible compassion for the environment, a just cause with which everybody with a sincere bone in their bodies could identify, was first turned into a hostile movement and eventually into an ideological war zone, driven ahead by environmental fanatics under the banner of global warming. Two factors tend to undermine some of the worthwhile causes of the movement: (1) failing to recognize the obvious complexities of the process of global warming, and (2) the one-dimensionality of the urban ‘solutions’ that are offered to save energy. Perhaps the most important dilemma for those who see global warming as a problem lies in the agents that are driving the process. In this regard, the well-known urban legend of the astute investor who had his shoes cleaned by a young boy at a street corner in New York in September 1929 serves as parable. When the semi-literate boy, while making small talk, rambled on about the bullishness of the stock market and which stocks were the best money makers, the investor immediately went and sold all his stocks, days before the crash. When later asked how he knew he had to sell everything, he remarked: if even the boy in the street thinks he knows everything about the stock market, then we’re in big trouble because there are bound to be many people playing in the field who know very little about the mechanics of the business. The same applies to global warming and the oversimplified views of some, especially those in politics and the entertainment business, on how to best solve what they regard as a problem. For exactly the same reason, I am apprehensive about venturing into this field. However, so much has been said about global warming that is an obvious oversimplification of an immensely complex and obviously little-understood issue that I feel obliged to state at least some of the general views on either side of the divide. One of the things that strikes one is how the awareness of not only global warming but also the ‘role of humans’ in climate change is driven by generalizations and clichés: Sprawling land use patterns and auto-dominated transportation choices are the largest contributor to global warming and dwindling oil supplies . . . The debate about Global Warming and Peak Oil are [sic] over . . . All the latest reports confirm Global Warming is happening now, is caused by the burning of fossil fuels, and urges serious and immediate action to prevent global catastrophe. The urgent message is that we need to reduce our oil consumption by 70–80% as quickly as possible . . . [Urban sprawl] is probably the single largest contributor to oil addiction and global warming . . . (New Urbanism, 2008)

Global warming is a fact and its consequences are real. But that is more or less where the general consensus on this topic among scientists ends. Two schools of thought on the causes of global warming and its outcome have developed of late, both directly affecting urban policy. One states that ‘changes in the atmospheric abundance of greenhouse

The continuing urban form controversy

185

gases and aerosols, in solar radiation and in land surface properties alter the energy balance of the climate system’ (IPCC, 2007). Causes of the change in the abundance are largely anthropogenic, so they say. The releasing of excessive amounts of humanproduced carbon dioxide into the air due to the use of ‘dirty’ energy – industries and the automobile are the main culprits here – has been the main cause of the rise in the earth’s temperature over the past three decades. This has been and will be the cause of many natural catastrophes in the future, a view that is enthusiastically advanced by the media in movies and documentaries such as The Day After Tomorrow, The 11th Hour and An Inconvenient Truth. The other school states that climate change is a natural phenomenon. The earth’s temperature oscillates over time (GCRIO, 1996). Although industrial and automobile emissions do pose an environmental and health risk through pollution and should therefore be limited as far as possible, global warming is largely unrelated to human consumption of fossil fuels. To distinguish between the two schools I shall call the former the ‘Catastrophists’ (not to be confused with the school of geologists in the nineteenth century) and the others the ‘Oscillatists’. The view of the Catastrophists is quite simple and elegant. Greenhouse gases in the earth’s atmosphere make the earth habitable.9 Carbon dioxide forms a small but vital part of these gases because it traps infrared radiation that warms the atmosphere. The absence of greenhouse gases would render the earth an inhospitable, frozen place. Too much carbon dioxide, however, and the greenhouse effect will become literally ‘too effective’, causing the earth to heat up, and that, so they say, is exactly what is happening. Excessive ‘dirty’ fuel usage has pushed up the carbon dioxide content of the atmosphere from an estimated 260 parts per million previously – carbon levels have been monitored only since the 1950s – to the current level of 315. To avoid disaster we had better not exceed the 450 limit, so they warn (McKibben, 2007). Current rates of increase in energy usage would soon push the world over that ‘threshold’ (Gore, 2007). What exactly the consequences would be if we were to exceed this limit is unknown, but the message is loud and clear: they will be catastrophic. Some of the consequences predicted in the media and elsewhere include catastrophes such as Hurricane Katrina, droughts, floods etc. (Gore, 2007). One certain consequence is that the polar ice caps will melt, causing the ocean levels to rise dramatically (and the polar bear to become extinct, among others). Initially there was talk of a rise by as much as 17 metres, flooding large parts of coastal cities around the world and displacing millions upon millions of people. These wild estimates have since gone down to 6 metres. Currently the best estimates are that, if global warming continues, the rise in sea levels might be measured in centimetres. As regards the issue of carbon dioxide as the main cause of climate change, Oscillatists believe differently. They say that the earth’s temperature changes all the time (Allen et al., 2007; Channel 4, 2007). It has periodically gone through warmer periods followed by colder periods without the help of human-generated carbon dioxide. Part of the Holocene Period was warmer than today, for instance. Most of the Middle Ages was also warm, for periods significantly warmer than now.10 In contrast to the catastrophes predicted by Catastrophists, Oscillatists say that the warm period of the Middle Ages was associated with great prosperity in Europe. Crops were planted in parts of the UK that have been unheard of since, urban expansion occurred, communities flourished and

186

International handbook of urban policy

the great cathedrals of Europe were built during that time (Mumford, 1961; Dickinson, 1963; Hohenberg and Lees, 1985). The medieval warm period was followed by a cold period during the fourteenth century – when the Thames, for instance, became frozen over during the winter. From 1880 to 1940 the earth’s temperature increased again, yet the human-generated carbon dioxide levels, also according to Catastrophists, were then also lower than now. From 1940 to 1975 the earth cooled down once again, but this time human-produced carbon dioxide emissions were already on the increase. At the time it was said that, if the cooling trends were to continue, the arctic cap would eventually cover Europe. Clouds of industrial pollution blocking out the sun were responsible for the emerging ice age, so Catastrophists claimed. However, the ‘imminent’ ice age never materialized. Instead temperatures started to rise again and in the process fears of the pending ice age gave way to fears of global scorching. Once again Catastrophists linked the rise in temperatures with the rise in human-produced carbon dioxide. They speculate that global warming may even affect sea currents, which might cause a mini ice age in localized regions of the world. This has subsequently been judged a scientific impossibility. The Oscillatists claim global climate and temperature cycles to be the result of a complex interplay of several factors – some astronomical, others atmospheric and tectonic-related – not only human-generated carbon dioxide. They present strong evidence of a high long-term correlation between sunspot activity and the earth’s temperature on a decadal basis (Channel 4, 2007; Geerts and Linacre, 1997). There is strong evidence, for instance, that the sun is now nearing the end of its current high sunspot cycle. A decline in solar activity is predicted, leading to a new (and possibly severe) cooling period of advancing glaciers and expanding polar ice caps (Archibald, 2006). Ice-core analyses have shown that a long-term link also exists between carbon dioxide levels and the earth’s temperature. Catastrophists present this as their main argument against the use of fossil fuels (Gore, 2007). Oscillatists agree that the link exists but they say that changes in the carbon dioxide levels constantly lag behind temperature changes – as much as 800 years (Channel 4, 2007). This lag is explained by what the Oscillatists call the ‘thermal memory’ of the ocean – i.e. the time it takes for the oceans to respond to temperature changes on the surface (warming up and emitting more carbon dioxide into the air or cooling down and absorbing more from the air). Carbon dioxide levels therefore do not cause temperature changes, so they say. The opposite is true: temperature changes cause naturally generated carbon dioxide levels to change; hence the time-lag. According to Oscillatists, carbon dioxide is an important but minor greenhouse gas. They agree that the contribution of humans to atmospheric carbon dioxide is real, but according to them its effect is minimal and largely beneficial (Archibald, 2007). Also, naturally produced carbon dioxide (by volcanoes, oceans, animals and plants) outstrips human-produced carbon dioxide proportionally by at least 23 times, making the role of the latter even more insignificant in the bigger scheme of things. The entire load of carbon dioxide, let alone the human component thereof, plays a far less important role in climate change than the sun, the solar wind, cosmic rays and water vapour (Veizer, 2005). According to Oscillatists, the sun and its related effect on the earth’s climate is underplayed if not completely ignored by the Catastrophists. Using the parallel of an automobile that is giving trouble, the Oscillatists accuse the Catastrophists of ignoring the sun (the engine) and the water vapour (the transmission), and instead focus on the

The continuing urban form controversy

187

human-generated component of carbon dioxide (one loose nut on the rear wheel of the car) to explain global warming. The Oscillatists go as far as accusing the Catastrophists of creating a carbon dioxide emission hoax for the sake of achieving a larger long-term political goal – i.e. enforcing settlement forms and lifestyles on people that more closely resemble the Catastrophists’ ideal urban society while, at the same time, dealing a blow to things such as global capitalism, the free market system, big business and, as they see it, the resultant economic inequalities in the urban world. According to the Oscallists (Channel 4, 2007), stranded socialists of the post-Soviet era have been gradually drifting towards like-minded people in the West since the early 1990s. Together they found a common home in an environmental movement that has become increasingly radical since the 1960s (Rome, 2003). The movement has since become even more fanatical, extremist, dogmatic and intolerant – near-religious – while working towards a common ideological social-economic goal. In their ‘fight against climate change’, large business (especially industry) and urban deconcentration are increasingly being portrayed as the main contributors to global warming – ‘environmental criminals’ – while people in the developing world regard the preoccupation with relatively cheap fossil fuel generation as selfish and discriminatory (Channel 4, 2007). Countries in the First World that have benefited developmentally from cheap fossil energy for a long time are now trying to prevent developing countries from similar benefits based on bad scientific premises, so Oscillatists claim. In terms of the theme of this chapter, the bottom line seems to lie close to what the Oscillatists suggest: a greater recognition of the full range of factors that influence global climate and a moderation of unrealistic predictions and demands based on what some regard as wobbly scientific arguments. It seems as if there is sufficient common ground between the two schools to effect many of the improvements necessary in industrial processes to further reduce environment and health risks. Bridging the divide In the discussion of the urban sprawl and compact cities models above, an attempt has been made to show how questionable some of the views about the unsustainability of urban sprawl are, and how overblown others are on the sustainability of the compact city. The following section deals with trends in recent years. An alternative approach Urban variety The ultimate outcome of compact cities is sometimes characterized as ‘monolithic’ – unfairly so, according to Marshall (2005). But high-rise, ultra-highdensity residential areas in central city areas do appear monolithic and are regarded part and parcel of the compact city concept. Although there are doubts in the minds of some (Clark, 2005), new urbanists generally do not seem to mind the confusion. In fact, they generally seem reluctant to criticize any form of high-density development. The feeling one gets is that new urbanists would rather live with high-rise housing than low-density development. As long as the accusation remains unanswered, critics of the compact city cannot be condemned for making the connection. However, to be fair, monolithic, highrise residential areas form an essential part of the housing stock of cities, a transitional component usually targeted by single people and younger couples at the entry level,

188

International handbook of urban policy

or older couples early on in their retirement. Cities therefore cannot escape it, just as they cannot escape polycentricism, no matter how sprawled or densely developed they become. Balance seems to be the operative term here. As Salingaros (2006), a staunch supporter of compact cities, remarked: ‘There is nothing wrong with either high density or low density per se, as long as it is well integrated with other densities and is in the right place.’ It is in this context that unqualified urban densification as a universal urban development solution fails to be convincing. Proponents of the compact city tend to be very environmentally deterministic and morphologically prescriptive, basing their ideal urban model on arguments that do not always seem to take social and economic spatial realities fully into account. In fact it would be safe to say that the difficulties compact city proponents have in selling their product to a larger part of society lie more in the environmental, economic and social realities of urban space that they seem to ignore than in the admirable ideals they try to advance. Physical structure – urban forms and networks – and the relationships between different parts of the structure are the outcome of social, economic and environmental processes that determine the sustainability of settlements. The ageing of urban areas is part of this process. Urban areas age and buildings become redundant. Urban structure – above and under ground – that was once regarded as functional becomes dysfunctional over time. And although cities are continuously reinvented, the question whether we should densify our inner cities and ‘reproduce’ our current inner cities on the outskirts (Tyler, 2005) is a valid and fair one. Are the roads and civil services in city centres sufficient and ready for reuse to accommodate significant reinvention? Has the cost-effectiveness of reinventions really been considered in all its dimensions and contexts? Do we have to completely rethink what we have done until now, and is only one option – the new urbanist compact city – acceptable, and all forms of sprawl bad, unacceptable and cost-ineffective? Does the most likely answer to the last question fall in the not-this-only-that category or does it lie closer to some-of-this-and-some-of-that? Causes of inequalities in the liveability of different parts of cities and their outcome have been a source of fierce disagreement between urban morphologists for a long time. Brownfield development, a concept that is usually linked with the concept of urban densification, has always been regarded as a potentially important way of vitalizing depressed areas. However, although brownfield development has been responsible for some economic and demographic revival in parts of central metropolitan areas, it seems as if its potential to revive entire depressed areas is sometimes overestimated. Despite many attempts to use brownfield development projects to achieve urban regeneration, successes in large urban agglomerations in North America and Europe have rarely been more than partial. While parts of depressed areas become gentrified, other parts nearby sometimes remain depressed while others simply continue to spiral downwards. The reasons for this are all too obvious. Urban decay and adverse living conditions in economically depressed areas in large urban agglomerations are usually accompanied, and at the same time compounded by, large concentrations of foreigners, many of them ethnic people and many of those illegal immigrants (Carey, 2000; Philp, 2000). Dropout levels in these communities tend to be higher than normal, resulting in high unemployment rates, high levels of poverty, illegal activities and violence. Brian Berry identified several push and pull factors that could be responsible for urban deconcentration in urban America: people’s preference for newness in the areas in which they live cause

The continuing urban form controversy

189

flight from ‘urban decay and the abandonment of the nonachieving social underclass’; urban violence, often the result of unemployment and poverty; a longstanding desire to live near nature; freedom of choice and of movement; individualism; and opportunities for upward mobility – the desire of individuals from a variety of backgrounds to become part of the ‘achievement-oriented’ mainstream of society. Most observers are alarmed by these trends. They regard them as a sign of the growing urban ‘fragmentation’ and social stratification of urban societies – an attempt by the privileged to disassociate themselves from others less fortunate – the beginning of the spatial and social collapse of cities and the onset of organizational chaos. Others see urban fragmentation and social stratification as a natural phenomenon, a situation that develops spontaneously. For them it is the inevitable outcome of a diverse population – people of different cultures with different habits, needs and inherent qualities – living together in the same city. It is an inescapable part of the human condition, an inevitable outcome of human coexistence, not a conspiracy of some against others. For some, the inequalities that these economically depressed areas represent and the fragmentation that current urban development trends are causing are an alarming tendency that needs to be resisted (almost at all costs). Others want to accommodate diversity. They see it as the beginning of a new form of urban order because chaos and order go hand in hand. They see some chaos in all order, just as they see some order in all chaos (Schurmann, 1995). Communities are the building blocks of an urban population, and in that sense trying to exploit the small community concept through neotraditionalist development makes good sense. Neotraditionalism is a welcome addition to the urban variety. It adds as much to the richness of the urban diversity as high-rise, high-density housing around urban nodes, gated communities and conventional suburban development elsewhere in cities do. The provision of each kind of housing is based on the real needs and desires of different communities – the cause of typical urban ‘fragmentation’. If the discomfort with diversity on either side of the ideological spectrum could be overcome, then perhaps the integration of different income and ethnic groups in certain areas and the differentiation in others would pose much less of a problem than it does for some at present. Whatever the case, urban development always represents urban fragmentation in one form or another and, because of that, perhaps one should admit that fragmentation is a natural phenomenon, a strength not a weakness in the creation of a happy urban society. Instead of trying to enforce only one kind of urban vision onto all people, irrespective of their background, abilities and needs, maybe it is time to see the fragmentation that social diversity causes as a necessary condition for creating sufficient living space for a multitude of urban needs. Indoor living space Two questions that are central to the compact city debate but have thus far remained largely unresolved are: what is meant by high urban densities and how reconcilable are the concepts of high urban densities and market-driven urbanization? In his study of urban patterns and density, Marshall (2005) demonstrates how much double talk there is in the treatment of these issues. According to him, the concepts of compact city and polycentric (sprawled) city are not mutually exclusive. Different levels of compactness are perfectly reconcilable with the polycentric urban structure. According to him, ‘both “polycentric” and “permeable” settlement patterns could . . . be interpreted as compact – depending on how each of these terms is defined’ (ibid., p. 4). To stretch the point: in

190

International handbook of urban policy

the American context, New York City can be regarded as a dense city, denser than Los Angeles, and the same can be said of Los Angeles compared to Atlanta. And although parts of all three are as densely developed as the densest parts of most other cities, overall they are not as densely developed as European cities. In some cities, especially in the USA, polycentricity is a well-established urban form that is still going strong, just as polycentricity is still being planned for in metropolitan areas elsewhere in the world (Sorensen, 2001). In other cities it is less visible. To scramble the economic layer of American cities will be just as difficult as trying to unscramble the European cities. The relativity of terms such as density, liveability and sustainability makes it difficult to disprove the sustainability of market-related urbanization on density grounds alone. Management of urban development should not be one-dimensional. Enforcing one particular urban development format on all, irrespective of their background, choice or means, makes no sense. Instead, urban management should be accommodating because, according to Kate Williams, urban form relates to many facets of city building: city size, urban density, types of buildings, urban configurations and layouts. Urban sustainability can be undermined by any one or a combination of those elements. Growth management frameworks of cities should therefore allow for all urban types, neotraditional planning, conventional suburban development, as well as innovations such as ‘coving’11 (Staley, 2001). According to Staley (ibid.): Market-oriented approaches to growth management are agnostic on urban design – New Urbanist designs ‘work’ only if consumers are willing to pay for their costs in the land market . . . The key to a market-oriented approach is its open-ended nature – it avoids choosing a specific path for development and keeps options open. Market-oriented approaches acknowledge the evolutionary nature of community development, and that a community of 2,500 will have different needs than a community of 10,000, 50,000, or 100,000. These needs, in the real world, are almost impossible to predict.

The ideal urban model, if that could ever be achieved, will have to accommodate the reasonable needs of everybody, from Fernando Coronil’s (2001) favourite local corner store and Franz Schurmann’s (1995) illegal informal African-American markets to the corporate business world operating on a global scale (Taylor, 2004; Geyer, 2006) and hybrid neoliberal–new urbanist housing markets (Pyatok, 2002) flourishing in cities all over the world. Wherever you go, urban form reflects this diversity. Allowing people an additional housing option by advancing neotraditionalism in cities seems logical and should be encouraged. However, people who are turning the concept into dogma by trying to turn back the clock, unscramble metropolitan government and urban policy, and suggest onedimensional solutions to all urban problems are bound to be disappointed. To overcome the urban challenges of the twenty-first century, extraordinarily creative thinking will be required because current urban forms should be recognized for what they are – wellestablished patterns of social and economic networks representing the collective outcome of the wishes and desires of millions of individuals living in cities over many years. Policy suggestions that are aimed at the wholesale changing of a variety of established urban forms into one bland single brand of new urbanism – an urban form whose claimed advantages are suspect and overoptimistic (Landecker, 1996) – are not only impractical; they are bound unnecessarily to unsettle untold millions of people who have been happily living a lifestyle of their choice, in houses of their choice, in areas of their choice, for many years.

The continuing urban form controversy

191

To accommodate the variety that the twenty-first-century city communities require, space will have to be created for different needs of different people in different places. Trying to undo those patterns and redo them in a completely new and largely untested format will not only be impractical and enormously costly, but also socially unsettling. Instead of continuing the age-old unhelpful tradition of seeing urban plurality only as a social and economic problem, perhaps it is time to start looking holistically for new solutions that lie hidden in our diverse urban societies (Schurmann, 2005). If we want to pay more than lip service to ideas of cultural diversity, environmental justice, freedom of expression, opportunity and democracy, then we have to embrace an open and indeterminate urbanity that allows these qualities to flower. (Durack, 2001, pp. 67–8)

For this to happen we should look for the best in all urban forms, the urban village (Thompson-Fawcett, 2000), ‘new urbanism’, the sustainable urban matrix (Hasic, 2000), transit-oriented development (Boarnet and Crane, 2001), smart growth/new urbanism (Stoel, 1999) and decentralized concentration (Breheny, 1996; Høyer and Holden, 2003; Holden, 2004; Jenks et al., 1996). Durack (2005, p. 67) believes that we must find a way of thinking that concedes to the future, not in an acquiescent or submissive way, but as an act of affirmation and supreme optimism, proffered with sufficient humility to acknowledge that the next generation just may come up with better ideas than ours.

This is a challenge to find the equivalent of Christopher Langton’s lambda (http:// math.hws.edu/xJava/CA/EdgeOfChaos.html) of orderly progress in urban form – a free, self-organized form of urban existence that leaves room for everybody to express themselves within well-established limits of moderation. The suggestion here is to approach urban policy in a dynamic and open manner. Durack’s (2005, p. 68) words serve well in a similar context: turn policy into ‘a state of continuous adaptive activity, resisting the equally destructive alternatives of locking into a rigid order or descending into the turbulence of chaos’. Subjecting society to constrictive formalist thinking and subordinating everybody to traditionalist forms of central urban living, irrespective of culture, conditions, capabilities or circumstances, would not succeed. Wherever societies have been subjected to limiting, dogmatic thinking in history, they were always the ones that ultimately had to pay the highest price. Notes 1. 2.

3.

Some progress has been made in recent years to ‘wrestle the concept to the ground’, however (Galster et al., 2001; Song and Knaap, 2004b; Ewing et al., 2002). It is more than likely that the ‘constellation principle’ also exerts a significant influence on business trips and internal migration patterns in this regard. Following Kepler’s sixteenth-century construction, Ravenstein (1885), Zipf (1949), Pottier (1963), Friedmann (1966), Lee (1966) and many others found that the economic and population flows between nodes are proportional to the sizes of the nodes and inversely proportional to the distance between those nodes. Although the application of these principles was first conceived at the macro (supra-urban) level, they equally apply to intra-urban dynamics. Islands of high-income housing are sometimes created in rundown central city areas. Examples of this are the fashionable waterfront developments found in so many cities around the world and erstwhile quality housing areas that have been ‘rediscovered’ and renovated by people who previously lived elsewhere in the cities (Bourne, 1992). Both kinds of development contribute significantly to the gentrification of central areas.

192 4. 5. 6. 7. 8. 9. 10. 11.

International handbook of urban policy The term ‘smart growth’ – synonymous with new urbanism – and clearly chosen for its marketability is also being strongly promoted in the USA. To drive this point home, one organization even named itself ‘Earthministry.’ This in no way implies that there is anything wrong with positive, quality-oriented planning control. Matters such as control over billboards, menacing land-use practices and the visual and safety aspects of building structures remain an important urban planning control function in any civilized society. Jacobs (1961) explains, for instance, how Morningside Heights, NY deteriorated over a period of time. A part of the area was redeveloped. The redevelopment included normal and social housing – one of the approaches new urbanists try to advance – but it did not work. Urban decay simply continued. In an interview about a film Leonardo diCaprio made on global warming, he said that he wanted to make a movie that would scare children. In the interview he said: ‘When they see the movie they have to be afraid, very afraid.’ Although some question the existence of the ‘greenhouse’, others question its operation, saying that the theory of the greenhouse effect and actual temperature measurements do not add up – a decreasing rate of warming with altitude when it should have gone up (Channel 4, 2007). And the polar bear obviously survived it. ‘Coving is a concept pioneered by urban designer Rick Harrison in Minneapolis. Coving uses curved streets and long set-backs from the road (the opposite of New Urbanist street grids and short set-backs) to create a more rural feel than conventional subdivisions. Currently, more than 20,000 housing units have been approved or are under construction using the coved concept, and the concept has been applied to wealthy subdivisions as well as affordable housing projects’ (Staley, 2001, p. 8).

References Ackerly, B., J. Biggs, P. Driscoll, O. Farnum, J. Garside, M. Kramer, D. Lee, L. Lee, E. Ramos, C. Savignano, and R. Shea (1999), ‘Which People’s Republic? Race and class in the development of Cambridge’, http:// stuff.mit.edu/afs/athena/activity/m/mit-rnr/col/WhichPeople.pdf. Allen, J.R.M., A.J. Long, C.J. Ottley, D.G. Pearson and B. Huntley (2007), ‘Holocene climate variability in northernmost Europe’, Quaternary Science Reviews, 26, 1432–53. Alonso, W. (1964), Location and Land Use, Cambridge, MA: Harvard University Press. AlSayyad, N. (1998), ‘Planning lessons of the American dream: historical limitations and democratizing potential’, Prostor, 6(1–2), 1–12. American Planning Association (1998), ‘The principles of smart development’, PAS report No. 479, APA, Chicago, IL. Anas, A. (1999), ‘The cost and benefits of fragmented metropolitan governance and the New Regionalist policies’, Planning and Markets, University of Southern California, http://www-pam.usc.edu/. Archibald, D. (2006), ‘Solar cycles 24 and 25 and predicted climate response’, Energy and Environment, 17, 29–38. Archibald, D. (2007), ‘The past and future of climate’, a presentation to the Lavoisier Group’s 2007 Workshop: Rehabilitating Carbon Dioxide, Melbourne, 29–30 June, www.warwickhughes.com/agri/pastandfuture. pdf. Ashworth, G.J. (2005), ‘The Georgian city: the compact city as idealised past or future ideal’, Global Built Environment Review, 4(3), 40–53. Atlas, R. (2001), ‘Defensible space: an architectural retrospective’, Atlas Safety and Security Design, Inc., Miami, FL, www.cpted-security.com/cpted16.htm. Audirac, I. and M. Zifou (1989), Urban Development Issues: What is Controversial in Urban Sprawl? An Annotated Bibliography of Often-Overlooked Planning Literature, Bureau of Economic and Business Research, College of Business Administration, University of Florida. Baldassare, M. (1975), ‘The effects of density on social behavior and attitudes’, American Behavioral Scientist, 18, 815–825. Barter, P.A. (2000), ‘Transport dilemmas in dense urban areas: examples from Eastern Asia’, in M. Jenks and R. Burgess (eds), Compact Cities: Sustainable Urban Forms for Developing Countries, London: Spon Press, pp. 271–84. Beard, T. (2007), ‘A sprawling argument’, Wellurban, 8 February, http://wellurban.blogspot.com/2007/02/ sprawling-argument.html. Bellamy, E. (1888), Looking Backward: 2000–1887, Cleveland, OH: The World Publishing Company. Bendixson, T. (2004), ‘Push–pull forces in the spatial organization of London and South East England’, in H.W. Richardson, and C.-H. C. Bae (eds), Urban Sprawl in Western Europe and the United States, Burlington, VT: Ashgate, pp. 55–64. Berry, B.J.L. (1976), ‘The counterurbanization process: Urban America since 1970’, Urban Affairs Annual Review, 11, 17–30. Berry, B.J.L. (1988), ‘Migration reversals in perspective: the long-wave evidence’, International Regional Science Review, 11, 245–51.

The continuing urban form controversy

193

Boarnet, M.G. and R. Crane (2001), Travel by Design. The Influence of Urban Form on Travel, New York: Oxford University Press. Bollens, J.C. and H.J. Schmandt (1965), The Metropolis: Its People, Politics and Economic Life, New York: Harper & Row. Bontje, M. (2003), ‘A “planner’s paradise” lost? Past, present and future of Dutch national urbanization policy’, European Urban and Regional Studies, 10(2), 135–51. Bourne, L.S. (1992), ‘Population turnaround in the Canadian inner city: contextual factors and social consequences’, Canadian Journal of Urban Research, 1, 66–89. Breheny, M.J. (1992), ‘The contradictions of the compact city: a review’, in M.J. Breheny (ed.), Sustainable Development and Urban Form, London: Pion, pp. 138–59. Breheny, M. (1995), ‘The compact city and transport energy consumption’, Transactions of the Institute of British Geographers, 20(1), 81–101. Breheny, M. (1996), ‘Centrists, decentrists and compromisers: views on the future of urban form’, in M. Jenks, E. Burton, and K. Williams (eds), The Compact City. A Sustainable Urban Form?, Oxford: Oxford Brookes University, pp. 13–35. Bruegmann, R. (2005), Sprawl: A Compact History, Chicago, IL: University of Chicago Press. Bryson, B. (2003), A Short History of Nearly Everything, London: Black Swan, Transworld Publishers. Bunting, T., P. Filion and H. Priston (2002), ‘Density in Canadian metropolitan regions, 1971–1996: differential patterns of central area and suburban growth and change’, Urban Studies, 39, 2531–52. Burchell, R., D. Listokin and C. Galley (2000), ‘Smart growth: more than a ghost of urban policy past, less than a bold new horizon’, Housing Policy Debate, 11(4), 821–79. Burgess, E.W. (1925), ‘The growth of the city’, in R.E. Park, F.W. Burgess and R.D. MacKenzie (eds), The City, Chicago, IL: Chicago University Press, pp. 47–62. Buttenheim, H.S. and P.H. Cornick (1938), ‘Land reserves for American cities’, The Journal of Land and Public Utility Economics, 14, 254–65. Carey, E. (2000), ‘Race, income splits Toronto, study warns: “huge” inequality shown in survey of census figures’, Toronto Star, 7 July. Caruso, G. (2001), ‘Peri-urbanisation: the situation in Europe. A bibliographical note and survey of studies in the Netherlands, Belgium, Great Britain, Germany, Italy and the Nordic countries’, report prepared for the Délégation à l’Aménagement du Territoire et à l’Action Régionale (DATAR), Ministère de l’Aménagement du Territoire et de l’Environnement, France. Cavailhès, J., D. Peeters, E. Sekeris and J.-F. Thisse (2004), ‘The periurban city. Why to live between the suburbs and the countryside?’, Regional Science and Urban Economics, 34(6), 681–703. Champion, A.G. (1987), ‘Momentous revival in London’s population’, Town and Country Planning, 56, 80–82. Champion, A.G. (1989), ‘Conclusion: temporary anomaly, long-term trend or transitional phase?’, in A.G. Champion (ed.), Counterurbanization: The changing pace and nature of population deconcentration, London: Edward Arnold, pp. 230–44. Champion, A.G. (2007), ‘Defining “urban”: the disappearing urban–rural divide’, in H.S. Geyer (ed.), International Handbook of Urban Policy, Volume 1: Contentious Global Issues, Cheltenham, UK and Northampton, MA, USA: Edward Elgar, pp. 22–37. Champion, A and P. Congdon (1988), ‘An analysis of the recovery of London’s population change rate’, Built Environment, 13, 193–211. Champion, A and M. Coombes (2008), ‘Using the 2001 Census Individual CAMS to explore the relationship between longer distance commuting in rural England’, paper presented at the Census Micro Data Findings and Futures internation conference, University of Manchester, 1–3 September. Channel 4 (2007), The Great Global Warming Swindle, documentary broadcast in the UK on Saturday, 10 March, http://www.martijndevisser.com/blog/flv-player/. Cheshire, P. and S. Sheppard (2004), ‘Land markets and land market regulation: progress towards understanding’, Regional Science and Urban Economics, 34, 619–37 Churchman, A. (1999), ‘Disentangling the concept of density’, Journal of Planning Literature, 13(4), 389–411. Clark, C. (1967), Population Growth and Land Use, New York: St Martin’s Press. Clark M. (2005), ‘The compact city: European ideal, global fix or myth?’, Global Built Environment Review, 4(3), 1–11. Congress of New Urbanism Charter (2008), http://www.Cnu.org/charter. Coronil, F. (2001), ‘Smelling like a market’, American Historical Review, 106(1), 119–29. Crilly, M., R. Charge, T. Townshend, N. Simpson and C. Brocklebank (2004), ‘NE1: want to live here? Shaping attitudes to urban living and housing options in Newcastle Gateshead’, Newcastle Gateshead Housing Market Renewal Pathfinder. Darby, C. (2007), ‘Living in a compact city’, http://www.nscc.govt.nz/PDFs/Urban-design/Living_in_a_ Compact_City.pdf.

194

International handbook of urban policy

Day, K. (2003), ‘New urbanism and the challenges of designing for diversity’, Journal of Planning Education and Research, 23(1), 83–95. Day L.L. (2000), ‘Choosing a house: the relationship between dwelling type, perception of privacy and residential satisfaction’, Journal of Planning Education and Research, 19(3), 265–75. De Ridder, K. (2004), ‘How sustainable is the compact city regarding exposure to air pollution?’, European Meteorological Society Annual Meeting Abstracts, Vol. 1, www.cosis.net/abstracts/EMS04/00338/EMS04-J00338.pdf. Dickinson, R.E. (1963), ‘The scope and status of urban geography: an assessment’, in H.M. Mayer and C.F. Kohn (eds), Readings in Urban Geography, Chicago, IL: University of Chicago Press, pp. 10–26. Dieleman, F.M. and M. Wegener (2004), ‘Multifunctional urban land use: a new phenomenon? A new planning challenge?’, Built Environment, 30(4), 308–23. Dieleman, F.M., M. Dijst and G. Burghouwt (2002), ‘Urban form and travel behaviour: microlevel households attributes and residential context’, Urban Studies, 39, 507–27. Doxiadis, C.A. (1970), ‘Man’s movement and his settlements’, Ekistics, 29, 296–321. Durack, R. (2001), ‘Village vices: the contradiction of new urbanism and sustainability’, Places, 14(2), 64–9. Ellis, C. (2002), ‘The new urbanism: critiques and rebuttals’, Journal of Urban Design, 7(3), 261–91 European Commission (2006), Urban Sprawl in Europe – The Ignored Challenge, Joint Research Centre, European Environment Agency, Report No. 10/2006. Evans, A.W. (2002), ‘Building Jerusalem: can land use planning affect economic growth?’, Lincoln Institute of Land Policy, Conference Paper CP02A11. Ewing, R. (1997), ‘Is Los Angeles-style sprawl desirable?’, Journal of the American Planning Associaton, 63(1), 107–26. Ewing, R., R. Pendall and D. Chen (2002), Measuring Sprawl and its Impact: Volume I, Washington, DC: Institute for Transportation & Development Policy. Falconer Al-Hindi, K. and K.E. Till (2001), ‘(Re)placing the new urbanism debates: toward an interdisciplinary research agenda’, Urban Geography, 22(3), 189–201. Fielding, A.J. (1989), ‘Migration and urbanization in Western Europe’, The Geographical Journal, 155, 60–69. Forester, J. (1989), Planning in the Face of Power, Berkeley, CA: University of California Press. Frey, W.H. (1988), ‘The re-emergence of core region growth: A return to the metropolis?’, International Regional Science Review, 11, 261–7. Friedmann, J. (1966), Regional Development Policy: A Case Study of Venezuela, Cambridge, MA: MIT Press. Fulton, W. (1996), ‘The New Urbanism: Hope or Hype for American Communities?’, report of the Lincoln Institute of Land Policy, Cambridge, MA. Galster, G., R. Hanson, M. Ratcliffe, H. Wolman, S. Coleman and J. Freihage (2001), ‘Wrestling sprawl to the ground: defining and measuring an elusive concept’, Housing Policy Debate, 12(4), 681–717. Garde, A.M. (2004), ‘New urbanism as sustainable growth? A supply side story and its implications for public policy’, Journal of Planning Education and Research, 24(2), 154–70. GCRIO (1996), U.S. Global Change Research Information Office, Suite 250, 1717 Pennsylvania Ave, NW, Washington, published in Consequences, 2(1), http://gcrio.org/CONSEQUENCES/winter96/article1-fig2.html. Geerts, B. and E. Linacre (1997), ‘Sunspots and climate’, http://www-das.uwyo.edu/%7Egeerts/cwx/notes/ chap02/sunspots.html. Geyer, H.S. (1996), ‘Expanding the theoretical foundation of differential urbanization’, Tijdschrift voor Economische en Sociale Geografie, 87, 44–59. Geyer, H.S. (2007), ‘ “Place” qualities of urban space: interpretations of theory and ideology’, in H.S. Geyer (ed.), International Handbook of Urban Policy, Volume 1: Contentious Global Issues, Cheltenham, UK and Northampton, MA, USA: Edward Elgar, pp. 190–211. Geyer, H.S. and T.M. Kontuly (1993), ‘A theoretical foundation for the concept of differential urbanization’, in N. Hansen, K.J. Button and P. Nijkamp (eds), Modern Classics in Regional Science: Regional Policy and Regional Integration, Vol. 6, Aldershot, UK and Brookfield, USA: Edward Elgar, pp. 135–60. Geyer, H.S. (2006), ‘Introduction: the changing global economic landscape’, in H.S. Geyer (ed.), Global Regionalization: Core–Peripheral Migration and Economic Trends, Cheltenham, UK and Northampton, MA, USA: Edward Elgar, pp.178–224. Gillette, K.C. (1894), The Human Drift, Boston, MA: New Era Publishing. Gordon, P. (1979), ‘Deconcentration without a “clean break”’, Environment and Planning A, 11, 281–90. Gordon, P. and H.W. Richardson (1989), ‘Gasoline consumption and cities: a reply’, Journal of the American Planning Association, 55, 342–5. Gordon, P. and H.W. Richardson, (1996), ‘Employment decentralization in U.S. metropolitan areas: is Los Angeles an outlier or norm?’, Environment and Planning A, 28, 1727–43. Gordon, P., H.W. Richardson and M.-J. Jun (1991), ‘The commuting paradox: evidence from the top twenty’, Journal of the American Planning Association, 57(4), 416–20. Gore, A. (2007), An Inconvenient Truth, http://www.climatecrisis.net/.

The continuing urban form controversy

195

Gottdiener, M. (1994), The Social Production of Urban Space, Austin, TX: University of Texas Press. Haig, R.M. (1927), ‘Major economic factors in metropolitan growth arrangement’, Regional Plan of New York and its Environs, New York. Hall, P. (2001), ‘Sustainable cities or town cramming?’, in A. Layard, S. Davoudi and S. Batty (eds), Planning for a Sustainable Future, London: Spon Press, pp. 101–14. Harris, C.D. and E.L. Ullman (1945), ‘The nature of cities’, Annals of the American Academy of Political and Social Sciences, 242, 7–17. Harvey, R.O. and W.A.V. Clark (1965), ‘The nature and economics of sprawl’, Land Economics, 41, 1–9. Hasic, T. (2000), ‘A sustainable urban matrix: achieving sustainable urban form in residential buildings’, in K. Williams, E. Burton and M. Jenks (eds), Achieving Sustainable Urban Form, London: Spon Press, pp. 329–36. Headicar, P. (2003), ‘The contribution of land use planning to reducing traffic growth: the English experience’, European Journal of Transport and Infrastructure Research, 3(2), 137–54. Healey, P. (1996), ‘The communicative turn in planning theory and its implications for spatial strategy formations’, Environment and Planning B: Planning and Design, 23(2), 217–34. Heid, J. (2004), Greenfield Development Without Sprawl: The Role of Planned Communities, Washington, DC: The Urban Land Institute. Hess G.R., S.S. Daley, B.K. Dennison, S.R. Lubkin, R.P. McGuinn, V.Z. Morin, K.M. Potter, R.E. Savage, W.G. Shelton, C.M. Snow and B.M. Wrege (2001), ‘Just what is sprawl, anyway?’, University of North Carolina Department of City and Regional Planning, Carolina Planning, 26(2), 11–26. Hickman, R. and D. Banister (2007), ‘Transport and reduced energy consumption: what role can urban planning play?’, Working Paper No. 1026, Transport Studies Unit, Oxford University Centre for the Environment. Hirschfield, A., S. Johnson and K. Bowers (2001), ‘National evaluation of new deal for communities: scoping report. Review of major policy developments and evidence base: crime domain’, Northern crime consortium (ncc), University of Liverpool. Hoffer, E. (1951), The True Believer: Thoughts on The Nature of Mass Movements, New York: Harper & Row. Hohenberg, P.M. and H.L. Lees (1985), The Making of Urban Europe, 1000–1950, Cambridge, MA: Harvard University Press. Holden, E. (2004), ‘Ecological footprints and sustainable urban form’, Journal of Housing and the Built Environment, 19(1), 91–109. Holden, E. and I.T. Norland (2005), ‘Three challenges for the compact city as a sustainable urban form: household consumption of energy and transport in eight residential areas in the greater Oslo region’, Urban Studies, 42(12), 2145–66. Horner, D.J. (2005), ‘Global re-knitting urban fabric, compacting the city: a case study in Glasgow’, Built Environment Review, 4(3), 35–9. Høyer, K.G. and E. Holden (2003), ‘Household consumption and ecological footprints in Norway: does urban form matter?’, Journal of Consumer Policy, 26, 327–49. Hoyt, H. (1939), Structure and Growth of Residential Neighborhoods in American Cities, Washington, DC: Federal Housing Administration. Hoyt, H. (1978), ‘Recent distortions of the classical models of urban structure’, in L.S. Bourne (ed.), Internal Structure of the City: Readings on Space and Environment, New York: Oxford University Press, pp. 84–96. Hurd, R.M. (1924), ‘Principles of City Land Values, Estate Record Association, New York: The Record and Guide. IPCC (2007), Climate Change 2007: Mitigation. Contribution of Working Group III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, Cambridge and New York: Cambridge University Press, http://www.ipcc.ch/ipccreports/ar4-wg3.htm. Irwin, E.G. and N.E. Bockstael (2004), ‘Land use externalities, open space preservation, and urban sprawl’, Regional Science and Urban Economics, 34, 705–25. Jacobs, J. (1961), The Death and Life of Great American Cities: The Failure of Town Planning, New York: Random House. James, P.E. (1952), ‘Towards a further understanding of the regional concept’, Annals of the Association of American Geographers, XLII(3), 195–222. Jenks, M., E. Burton and K. Williams (1996), The Compact City. A Sustainable Urban Form? Oxford: Oxford Brookes University Press. Johnson, D. (1986), ‘Suburban frontier: new settlers adjust’, Special in the New York Times, 30 April. Kearney, A.R. (2006), ‘Residential development patterns and neighborhood satisfaction: impacts of density and nearby nature’, Environment and Behavior, 38(1), 112–39 Köhl, J.G. (1850), Der Verkehr und die Ansiedlung der Menschen in ihrer Abhaengigkeit von der Gestaltung der Erdoberflaeche, Leipzig: Arnoldische Buchhandlung. Krause, N. (1998), ‘Neigbourhood deterioration, religious coping, and changes in health during late life’, The Gerontologist, 38, 653–64.

196

International handbook of urban policy

Krugman, P. (1991), ‘Increasing returns and economic geography’, Journal of Political Economy, 99, 483–99. Krugman, P. (1993), ‘First nature, second nature and metropolitan location’, Journal of Regional Science, 33(2), 129–44. Krugman, P. (1998), ‘Space: the final frontier’, Journal of Economic Perspectives, 12(2), 161–74. Landecker, H. (1996), ‘Is new urbanism good for America?’, Architecture, 85(4), 68–77. Le Clercq, F. and J.S. de Vries (2000), ‘Public transport and the compact city’, Transportation Research Record, Annual Meeting of the Transportation Research Board, National Research Council, Washington, pp. 3–9, http://cat.inist.fr/?aModele5afficheN&cpsidt5940996. Le Corbusier (Jeanneret, C.-E.) (1922), Ville Contemporaine, http://en.wikipedia.org/wiki/Le_Corbusier. Lee, E.S. (1966), ‘A theory of migration’, Demography, 3, 47–57. Loomis, A.A. (1999), ‘My urbanism is better than yours. Exploring (new) urbanism at the GSD’, http://www. deliriousla.net/essays/1999-debates.htm. Lowry, I.S. (1964), A Model of Metropolis, RM-4035-RC, Santa Monica, CA: Rand Corporation. Luginaah, I., M. Jerrett, S. Elliott, J. Eyles, K. Parizeau, S. Birch, T. Abernathy, G. Veenstra, B. Hutchinson and C. Giovis (2001), ‘Health profiles of Hamilton: spatial characterisation of neighbourhoods for health investigations’, GeoJournal, 53, 135–47 Lynch, K. (1960), The Image of the City, Cambridge, MA: MIT Press. Malpezzi, S. (1999), ‘Estimates of the measurement and determinants of urban sprawl in US metropolitan areas’, Center for Urban Land Economics, University of Wisconsin, Madison. Marshall, S. (2005), ‘Urban pattern specification’, Institute of Community Studies, SOLUTIONS, London. www.suburbansolutions.ac.uk/DocumentManager/secure0/S%20MARSHALL-background%20paper-Urban% 20pattern%20specification.pdf. McKibben, B. (2007), ‘Carbon’s new math to deal with global warming: the first step to do the numbers’, National Geographic, October. Meen, G. and M. Andrew (2004), ‘On the use of policy to reduce housing market segmentation’, Regional Science and Urban Economics, 34, 727–51. Mieszkowski, P. and E.S. Mills (1993), ‘The causes of metropolitan suburbanization’, Journal of Economic Perspectives, 7(3), 135–47. Mills, E.S. and L.S. Lubuele (1997), ‘Inner cities’, Journal of Economic Literature, 35(2), 727–56. Mitrany, M. (2005), ‘High density neighborhoods: who enjoys them?’, GeoJournal, 64, 131–40. Monson, D. and A. Monson (1950), ‘How can we disperse our largest cities? Part I’, The American City, 65(12), 90–92. Morosini, P. (2004), ‘Industrial clusters, knowledge integration and performance’, World Development, 32(2), 305–26. Mumford, L. (1961), The City in History: Its Origins, its Transformations, and its Prospects, San Diego, CA: Harcourt Brace Jovanovich. Nagar, D., J. Panday and P.B. Paulus (1988), ‘The effects of residential crowding experience on reactivity to laboratory crowding and noise’, Journal of Applied Social Psychology, 18, 1423–42. Neuman, M. (2005), ‘The compact city fallacy’, Journal of Planning Education and Research, 25, 11–26. New Urbanism (2008), http://www.newurbanism.org. Newman, P.W.G. and J.R. Kenworthy (1989), ‘Gasoline consumption and cities: a comparison of US cities with a global survey’, Journal of the American Planning Association, 55(1), 24–37. O’Brian Caughy, M., P. O’Campo and A.E. Brodsky (1999), ‘Neighborhoods, families, and children: implications for policy and practice’, Journal of Community Psychology, 27, 615–33. O’Toole, R. (2001), The Vanishing Automobile and Other Urban Myths: How Smart Growth Will Harm American Cities, Bandon, OR: Thoreau Institute. Owens, S. (1995), ‘The compact city and transport energy consumption. A response to Michael Breheny’, Transactions of the Institute of British Geographers, 20(3), 381–6. Owens, S. (1992), ‘Energy, environmental sustainability and land use planning’, in M.J. Breheny (ed.), Sustainable Development and Urban Form, London: Pion, pp. 79–105. Pacione, M. (ed.) (2001), The City: Critical Concepts in the Social Sciences, volume I, London: Routledge. Pacione, M. (2005), Urban Geography: A Global Perspective, London: Routledge. Paivanen, J. (2000), ‘Urban compaction as a sociological issue: two case studies, Helsinki – Espoo: the impact of urban compaction on urban inhabitants’, www.arbeer.demon.co.uk/MAPweb/finland.htm. Parkinson, M., T. Champion, R. Evans, J. Simmie, I. Turok, M. Crookston, B. Katz, A. Park, A. Berube, M. Coombes, D. Dorling, N. Glass, M. Hutchins, A. Kearns, R. Martin and P. Wood (2006), State of the English Cities. A Research Study, Volume 2, London: Office of the Deputy Prime Minister. Paulsen, K. (2005), ‘Sprawl Part I: what is sprawl, and why is it bad?’, http://lawprofessors.typepad.com/ property/2005/12/sprawl_part_i_w.html. Pennock, R.A. (2004), ‘Urban sprawl and the local state’, PhD dissertation, The Florida State University. Perroux, F. (1950), ‘The domination effect and modern economic theory’, Social Research, 17, 188–206.

The continuing urban form controversy

197

Philp, M. (2000), ‘Poor? Coloured? Then it’s No Vacancy: housing discrimination rampant, says poverty report, despite fact that visible minorities are poised to become city’s majority’, The Globe and Mail, City of Toronto, Tuesday, 18 July. Platt, R.H. (2003), ‘Holly Whyte, visionary for a humane metropolis’, Land Lines, 15(1), Lincoln Institute of Land Policy, January, http://www.umass.edu/ecologicalcities/documents/hw_article.pdf. Pond, D. (2006), ‘Greenbelt politics in Ontario’, Department of Political Science, University of Toronto at Mississauga, Ontario. Pottier, P. (1963), ‘Axes de communication et developpement économique’, Revue économique, 14, 58–132. Price, K. (1999), ‘Skeletons in the closet of the suburban frontier’, Terrain.org, No.4, http://www.terrain.org/ essays/4/price.htm. Pumain, D. (2002), ‘The French urban system’, in H.S. Geyer (ed.), International Handbook of Urban Systems: Studies of Urbanization and Migration in Advanced and Developing Countries, Cheltenham, UK and Northampton, MA, USA: Edward Elgar, pp. 121–46. Pyatok, M. (2002), ‘The narrow base of the new urbanists’, Planners Network, 152, http://www.pn2007.org/ publications/2002_152_spring/pyatok.htm. Quigley, J.M. and L.A. Rosenthal (2004), The Effects of Land-Use Regulation on the Price of Housing: What Do We Know? What Can We Learn?, Program on Housing and Urban Policy University of California, Berkeley. Randolph, W. (2006), ‘Children in the compact city: Fairfield as a suburban case study’, City Futures Research Centre University of New South Wales, pp. 1–33. Ravenstein, E.G. (1885), ‘The laws of migration’, Journal of the Royal Statistical Society, 43, 167–235. Regoeczi, W.C. (2003), ‘When context matters: a multilevel analysis of household and neighbourhood on crowding and withdrawal’, Journal of Environmental Psychology, 23, 457–70. Richardson, H.W. (1977), ‘City size and national strategies in developing countries’, World Bank Staff Working Report, Washington. Richardson, H.W. (1980), ‘Polarization reversal in developing countries’, Papers of the Regional Science Association, 45, 67–85. Richardson, H.W. and P. Gordon (1999), ‘Is sprawl inevitable? Lessons from abroad’, paper presented at the ACSP Conference, Chicago, November, pp. 1–30. Rickaby, P. (1987), ‘Six settlement patterns compared’, Environment and Planning B, 14, 193–223. Rodenburg, C.A., R. Vreeker and P. Nijkamp (2003), ‘Multifunctional land use; an economic perspective’, in P. Nijkamp, C. Rodenburg and R. Vreeker (eds), The Economics of Multifunctional Land Use, Maastricht: Shaker, pp. 3–15. Rome, A. (2003), ‘ “Give Earth a chance”: the environmental movement and the sixties’, The Journal of American History, 90(2), 267–84. Rybczynski, W. (2005), ‘Suburban despair. Is urban sprawl really an American menace?’, Slate, http://www. slate.com/id/2129636/. Sager, T. (1994), Communicative Planning Theory, Aldershot, UK: Avebury. Sager, T. (2006), ‘The logic of critical communicative planning: transaction cost alteration’, Planning Theory, 5(3), 223–54. Salingaros, N.A. (2006), ‘Compact city replaces sprawl’, in A. Graafland and D. Hauptmann (eds), Crossover: Architecture, Urbanism, Technology, Rotterdam, The Netherlands: 010 Publishers, pp. 100–115. See also http://www.math.utsa.edu/~salingar/compactcity.html. Schurmann, F. (1995), ‘The world in chaos: chaos theory teaches that things come together even as they fall apart’, Pacific News Service, 27 June, http://news.pacificnews.org/news/view_article.html? article_id5a5eb36ee8bb474024d9ec8c7ae517b92. Schwanen, T. (2002), ‘Urban form and commuting behaviour: a cross-European perspective’, Journal of Economic and Social Geography, 93, 335–43. Schwanen, T., F.M. Dieleman and M. Dijst (2001), ‘Travel behaviour in Dutch monocentric and polycentric urban systems’, Journal of Transport Geography, 9, 173–86. Schwartz, R. (2005), ‘Sprawl Part I: What is sprawl, and why is it bad? PropertyProf Blog, http://lawprofessors. typepad.com/property/2005/12/sprawl_part_i_w.html. Shibley, R.G. (1998), ‘The complete new urbanism and the partial practices of placemaking’, Utopian Studies, 9, 80–102. Shoup, D.C. (2004), ‘The ideal source of local public revenue’, Regional Science and Urban Economics, 34, 753–84. Simmonds, D. and D. Coombe (2000), ‘The transport implications of alternative urban forms’, in K. Williams, E. Burton and M. Jenks (eds), Achieving Sustainable Urban Form, London: Spon, pp. 115–23. Smart Communities Network (2002), http://www.sustainable.doe.gov/. Smart Growth (2008), ‘A smart growth bibliography: a bibliography of fiscal, economic, environmental, and social impact methodologies and models’, www.smartgrowth.org/bibliographies/smartgrowth/alpha_ version.html.

198

International handbook of urban policy

Song, Y. and G. Knaap (2004a), ‘Measuring the effects of mixed land uses on housing values’, Regional Science and Urban Economics, 34, 663–80. Song, Y. and G. Knaap (2004b), ‘Measuring urban form: is Portland winning the war on sprawl?’, Journal of the American Planning Association, 70(2), 210–25. Sorensen, A. (2001), ‘Subcentres and satellite cities: Tokyo’s 20th century experience of planned polycentrism’, International Planning Studies, 6(1), 9–32. Srinivasan, S. (2002), ‘Quantifying spatial characteristics of cities’, Urban Studies, 39, 2005–28. Staley, S.R. (1999), ‘The sprawling of America: in defense of the dynamic city’, Reason Public Policy Institute, Policy Study No. 251. www.reason.org/index.shtml. Staley, S.R. (2001), ‘Urban sprawl, land markets, and market-oriented approaches to growth management in Michigan’, Written Testimony: Joint Hearing of the House Committee on Land Use and Environment And Committee on Local Government and Urban Policy, Lansing, Michigan, Tuesday, 8 May, www.rppi. org/050801.html. Stead, D., J. Williams and H. Titheridge (2000), ‘Land use, transport and people: identifying the connections’, in K. Williams, E. Burton and M. Jenks (eds), Achieving Sustainable Urban Form, London: Spon, pp. 174–86. Stefaniak, N.J. (1963), ‘A refinement of Haig’s theory’, Land Economics, 39(4), 429–33. Stoel, T.B. Jr (1999), ‘Reining in urban sprawl’, Environment, 41(4), 6–11. STPP (Surface Transport Policy Partnership) (1997), ‘Low-density development’, www.transact.org/report. asp?id533. Talen, E. (1999), ‘Sense of community and neighborhood form: an assessment of the social doctrine of New Urbanism’, Urban Studies, 36(8), 1361–79. Taylor, N. (1999), Urban Planning Theory since 1945, London: Sage. Taylor, P.J. (2004), World City Network: a Global Urban Analysis, London: Routledge. Thompson-Fawcett, M. (2000), ‘The contribution of urban villages to sustainable development’, in K. Williams, E. Burton and M. Jenks (eds), Achieving Sustainable Urban Form, London: Spon, pp. 275–85. Thoreau Institute (1996), ‘Regional planning doesn’t work’, http://www.ti.org/sa14.html. Till, K.E. (2001), ‘New urbanism and nature: green marketing and the neotraditional community’, Urban Geography, 22, 220–48. Titheridge, H., S. Hall and D. Banister (2000), ‘Assessing the sustainablity of urban development policies’, in K. Williams, E. Burton and M. Jenks (eds), Achieving Sustainable Urban Form, London: Spon, pp. 149–59. Townsend, A. (1993), ‘The urban–rural cycle in the Thatcher growth years’, Transactions of the Institute of British Geographers, 18, 207–21. Tyler, N. (2005), ‘Downtown revitalization: policies and practices’, Urban and Regional Planning, Eastern Michican University. Veizer, J. (2005), ‘Celestial climate driver: a perspective from four billion years of the carbon cycle’, Geoscience Canada, 32(1), 13–28. Vernez Moudon, A. (2000), ‘Proof of goodness. A substantive basis for new urbanism?’, Places, 13(2), 38–43. Vining, D.R. Jr and A. Strauss (1977), ‘A demonstration that the current deconcentration of population in the United States is a clean break with the past’, Environment and Planning A, 9, 751–58. Wells, H.G. (1902), Anticipations of the Reaction of Mechanical and Scientific Progress upon Human Life and Thought, New York: Harper. Wieand, K. (1975), ‘Housing price determination in urban ghettos’, Urban Studies, 12, 193–204. Williams, K. (ed.) (2005), Spatial Planning, Urban Form and Sustainable Transport, Aldershot: Ashgate. Williams, K., E. Burton and M. Jenks (2000), ‘Achieving sustainable urban form: an introduction’, in K. Williams, E. Burton and M. Jenks (eds), Achieving Sustainable Urban Form, London: Spon, pp. 1–6. Youngentob, K. and M. Hostetler (2005), ‘Is a new urban development model building greener communities?’, Environment and Behavior, 37(6), 731–59. Yu, Z. (2002), ‘Does immigration induce urban sprawl? A dynamic demographic analysis for the US’, Planning Forum, 8, 41–62. Zahavi, Y. (1974) Traveltime Budgets and Mobility in Urban Areas. Report FHW PL-8183, Washington, DC: US Department of Transportation. Zipf, G.K. (1949), Human Behavior and the Principle of Least Effort, Cambridge, MA: Addison Wesley.

8

Spatial planning and institutional design: what can we expect from transaction cost economics? F. Moulaert and A. Mehmood1

1. Introduction Prominent planners such as John Friedmann (1987), Patsy Healey (1999) and Ernest Alexander (2005) have repeatedly underscored the importance of the relationships between planning and institutions. Yet these relationships are manifold and complex, and the ways they are read and interpreted in the literature are often contradictory. Distancing ourselves from line-by-line exegesis, we note the following important views on these relationships – among many more: ●

●

●

●

Planning occurs within an institutional context. Both planning agendas and planning procedures should fit that context: otherwise they become unattainable utopias leading to disillusion and few, if any, planning outcomes. If an institutional context hampers planning agendas, it should be changed. Planners should ally themselves with other ‘public’ actors and work together towards the transformation of institutional contexts. Institutions should be transformed to benefit human development. Planners should design new institutional forms that serve this purpose. This can be done through negotiation and social transaction. Institutional transformation cannot be designed. Of course, planners should have ideas of which institutional levers are needed to implement planning agendas, but, in the end, institutional transformations are the outcome of the interaction between collective action and societal development.

These four views of relationships between planning and institutions are not an ad hoc selection, nor do they fit a systematic typology. They refer to three questions in particular: (1) In what way do institutions (not) catalyse planning agendas and agencies? (2) Can planners change or create institutions in order to make planning more effective? (3) And if they can, how should they go about it? In today’s theoretical debates within the planning domain there is a strong interest in new institutional economics (NIE) and the way this addresses the building and dismantling of institutions. Starting from the concept of transaction cost, NIE builds an argument discriminating between different types of institutions with coordination potential, addressing particularly the choice between market and hierarchy as well their hybrids. Planning theorists such as Ernest Alexander, Chris Webster and Lawrence Wai-Chung have made use of transaction cost economics (TCE) not only as a discriminant in the selection of planning institutions, but also as an approach to designing institutions (‘institutional design’). The strong and remaining interest in this approach within the planning (theory) world is rather startling, as NIE seems to be on its way back within economic theory debates. 199

200

International handbook of urban policy

This chapter will argue that although the concept of transaction can be of use in planning theory, the concept of transaction cost is not. The reason for this is that transaction cost theory views transactions in purely economic (exchange) terms and strips away their nature as a social relation, thus losing any interest in the features of their embeddedness within the social system. To develop its argument, the chapter is organized as follows. Section 2 gives an overview of different theories of institutionalism – as the study of the genesis of institutions – in social science, especially in institutional economics, but also in sociology. From this ‘history of thought’ exercise, it synthesizes the main features of institutionalisms, and underscores the complementarities between different approaches. Section 3 explains how NIE relates to this synthesis, while Section 4 looks at how it has been integrated into transaction cost planning theory. It contextualizes the TCE fashion in planning, showing how it has focused on some aspects of institutional analysis while abandoning others, and how this significantly affects its feasibility for planning purposes. It does this against the background of contemporary debates in institutional economics. The final section returns to the basic questions asked in this introduction and provides a qualified answer to them. 2. Institutionalism: from past to present In her paper ‘Institutionalist analysis, communicative planning, and shaping places’, Healey (1999, p. 113) identifies institutionalism as follows: Although there are different nuances in its use in each of these areas [sociology, economics, organizational studies, urban and regional analysis, and public policy], the term refers to the embedding of specific practices in a wider context of social relations that cut across the landscape of formal organizations, and to the active processes by which individuals in social contexts construct their ways of thinking and acting. It does not refer to the analysis of the formal structures or procedures of public institutions, as in the traditional public administration view. An institution, therefore, is not understood as an organization as such, but as an established way of addressing certain social issues, for example, in the relationships through which what we understand as family are produced and reproduced, or, on a more micro-scale, the ways in which people go about community organizing activities.

Of course, Healey is free to define institutionalism in her own way, and we fully understand that the definition she puts forward is of direct use to her own analysis of the webs of relationships within which planning practices take place. But to talk about ‘nuances’ in defining institutionalism and institutions in the various disciplines she cites does not, as we shall show, correspond to the substantive diversity of approaches in institutionalism. A brief look at economics and sociology shows the diversity of the schools, theories and methodologies addressing institutionalism, a diversity that we believe to be instructive for planners. In economics, institutionalism has evolved from the nineteenth-century German Historical School (GHS) to the neo-institutionalism, new institutional economics and evolutionary economics of today. Other significant contributions are to be found in ‘old’ US institutionalism (Thorstein Veblen, John Commons) and regulation theory, and, more recently, the ‘Théorie des contrats et des conventions’, which was mainly a French contribution, as well as a North American stream developed around contracting. In sociology, institutionalism ranges from Parson’s functionalism over Swedberg’s

Spatial planning and institutional design

201

economic sociology, which provides the basis for the embedded version of network theory, to theories of learning in anthropology, neo-institutionalist sociology and eventually actor-network theory and many others. There is no room here to develop an exhaustive overview of the development of institutionalism over the last century and a half. But some important lessons can be drawn. First, in the discussion on the history of institutionalism, one often wonders just what economics and sociology are. Our analysis starts from the middle of nineteenth century, at the very early stage of the formation of individual disciplines of social science. Predisciplinary scholars such as Roscher, Schmoller and Weber wanted to provide solutions to problems ranging from the micro scale of a community to the levels of a city, a nation, and so on. They mobilized the theoretical and methodological perspectives they needed to deal with such problems. This means that they referred more to ‘economy’ and ‘society’ and much less to economics and sociology. At the time, these disciplines were evolving and it was only in the last quarter of the nineteenth century that individual labels for these disciplines were actually used. The fact is that in those early years there was a tendency to look at the macrodynamics of society, to approach society and economy as organic systems, whose transformation was structural–systemic on the one hand, and on the other the outcome of purposeful collective action, which today we would probably call social engineering. In the history of planning thought, this approach to institutional change (and planning) would be called organicist (Friedmann, 1987; Geddes 1915; Mehmood, 2010). This organicist view of institutional change not only has a strong affinity with evolutionary economics, which arose in the early twentieth century, but also with the more developmental historical approaches of the German Historical Schools and Marx, which were looking for more general laws of the transformation of society and the economy (see Hodgson, 1994, for an overview). Second, from the beginning, methodology has been very important in institutionalism debates. The role of historical methods – whether empirical or seeking to calibrate more general laws of socioeconomic development – was to explain the tensions and complementarities between methodological individualism and collectivism, and to examine the role of culture in explaining human individual and collective behaviour. Nussbaumer (2002) gives a comprehensive overview of various methods within the GHS. He shows how the ‘old’ debates are not only quite relevant for contemporary society, but also that the fundamental issues today are not so different from those some 150 years ago. ‘Is individual behaviour set by collective institutions or are collective institutions made from individual agency through agreements, contracting, norm setting?’ was the main question addressed in the Methodenstreit (methodological individualism versus methodological holism) that took place between the second and third German Historical Schools and the Austrian School around the turn of the previous century. But it is also the question that is passionately discussed by economic institutionalists and planning theorists today. Similar methodological questions are addressed in the ‘organicism’ debates: do social organisms take primacy over individuals? To this day, the literature focuses either on the role of individual agency or on the organic reproduction of institutions at a collective level. The same tension remains in contemporary institutionalism debates: do individual agents build institutions or do institutions tell us how we can transform them or live better according to their code-systems? And, at the other extreme: is it only revolution, i.e. organized collective movement, that can change a society and its basic institutional codes?

202

International handbook of urban policy

Third, there is the role of new and renewed institutional syntheses ‘along the road of history’. These syntheses are important because they form stepping stones for furthering institutional analysis and institutional change. One very significant one is the old US institutionalism (from say 1910 to the 1930s). (Old) US institutionalism was a response to the rise of marginal analysis and neoclassical economics, which had sprung up in France, Switzerland, Germany and Britain from around the 1880s. The German Historical School reacted strongly to it, initiating a further reaction from the first generation of US economists, especially because many of the early twentieth-century US economists were partly trained in Germany. These scholars generally rejected the ontological and methodological presumptions of classical liberalism, which was the basic ideological underpinning of (neo)classical economics, although this was less the case in the Austrian School. Two authors of the old institutionalism school need special mention here: Thorstein Veblen and John Commons, because they shed significant light on the main issues in contemporary institutionalism debates within sociology and economics. Thorstein Veblen has had a significant impact on sociologists and economists alike. First, he is known for his critique on the models of rational economic behaviour. Second, he introduced the theory of institutions perceived as settled habits of thought (see Veblen, 1919). Originally the habits of thought theory was based on an analogy with the reproduction of genes, and therefore adhered to a strong biological determinism that marked the beginning of evolutionism in economics. This was immediately followed by Veblen’s social theory of habits of thought: he understood that social interaction and the reproduction of culture in human society were much more important to the comprehension of the reproduction of habits of thought, ethics, cultural/religious norms, etc. within human beings than the analogy with genes. Thus Veblen’s theory evolved from a very explicit biological metaphor of human behaviour – the mental schemes of settled habits of thought explained in a biological-analogical way – to a very social and very institution-mediated explanation of reproduction of mental schemes and cultural behaviour. Subsequently, Veblen also discussed economic ‘evolution’ and ‘cumulative causation’, two notions that played a major role in Gunnar Myrdal’s (1957) spatial analysis and Nelson and Winter’s (1982) analysis of routinized behaviour in evolutionary economics. John Commons’s economic transaction theories were considered chaotic and complex until recently, when, in the ‘post-Williamson’ period, his theoretical contributions were revalorized and gave him a place among the founding fathers of institutional economics. Oliver Williamson used the concept of transaction costs extensively in a way claimed to be derived from work of Commons, but as we shall see, their notions of transaction differ considerably. Commons has two ways of looking at institutions. One is a microeconomic or microsocial way, using transactions as the building blocks of institutions. For Commons, a transaction has three dimensions: a use value to exchange, a hierarchical dimension referring to power relations in which exchange takes place; and an economic scarcity dimension that also refers to power relations, technical aspects of resources availability in nature, and availability of production systems that can deliver (Commons, 1934). Thus a sophisticated notion of transaction emerges as a social relation including power dimensions, and as an economic relation referring to both use and exchange value; in addition it involves a scarcity relation referring to social conditions within the production and allocation systems. This definition of transaction is a sufficient challenge

Spatial planning and institutional design

203

to Williamson’s duality between ‘markets’ (exchange) and ‘hierarchy’ (other social relations involving hierarchy). Commons shows that each transaction does indeed involve hierarchy, although to different degrees (Moulaert and Nussbaumer, 2005). Commons is also the founding father of legal economics, where he held a strong voluntarist position. He suggested that institutions could be changed for the better, and proposed that by changing laws under pressure from unions and lobbies, the rights of workers and small land and property owners could be improved. The various strands in the institutionalism debates in economics in the second half of the nineteenth and first quarter of the twentieth centuries find some reflection in the different ways institutionalism re-emerged in the Scandinavian School (with Gunnar Myrdal as the main representative) and in the ‘new institutionalisms’ that came to the fore in the 1960s. Looking at the contemporary literature, there are strong commonalities between institutionalism in economics and sociology. Veblen remains the main inspirer of classical sociological institutionalism or institutional sociology. According to Zafirovsly (2005, p. 366), Veblen, as father of classical sociological institutionalism, provided ‘an adequate theory of social institutions, just as if economic institutions in terms of the individual simply cannot be drawn in terms of the underlying traits of human nature [for] human conduct takes place under institutional norms [as] the situation that provokes and inhibits action [is] in great part of institutional, cultural derivation’. Again we find here a hint of a biological interpretation of the evolution of society. In somewhat parallel thinking, institutional sociology also explains and theorizes institutions in terms of social interaction and culture rather than rational individual action. However, in sociology too and the way it looks at institutions, there is no one clear stream. Parsons (1951) claims that institutions are built through individual interactions, which then leads to the building of routines and modes of interaction. But at the same time in his functionalist framework he perceives sets of routines as determining the ground rules of individual interaction. This leads to a closed reasoning. Evolutionary economists solve this problem by looking at the hierarchy of routines at all levels between micro and macro. Sociology has known a similar evolution through developments in economic sociology and neo-institutionalism that also broke through this closed circle, thus explicitly or implicitly recognizing that transactions, both economic and non-economic, have an inherently social character and must be read as microsocial relations embedded within societal structures and/or microsocial behavioural codes reproduced within and across organizations (Granovetter and Swedberg, 1992; DiMaggio and Powell, 1983; Powell and DiMaggio, 1991; Chantelat and Vignal, 2005). Summing up, and looking ahead, we can distinguish a number of relevant concepts and explanations that must be brought together in a fully fledged ‘institutionalism’ approach. First, institutionalism is a broad family of theories or a composite theory explaining the genesis and reproduction of institutions. Second, there are different sources of institutional change: societal–developmental (in the organicist, but also in the historical–developmental and the cumulative causation tradition), human agency (collective and individual) and interaction (exchange, negotiation, reciprocity, association, etc.), cultural dynamics and so on. Third, the dialectics of developmental and agency/interaction require the theorizing

204

International handbook of urban policy

of the relationships between ‘structure’ and ‘agency’ in society. This is possible only by giving an explicit role to culture and by recognizing the bi-directional ways in which structure and agency affect each other. ‘Institutions’ are in the middle here: they are not the structural properties of social systems – as claimed by Giddens and subscribed to by Healey – but are ‘socialized structure’, i.e. a relatively enduring ensemble of structural constraints and opportunities. Institutions comprise a more or less coherent, interconnected set of routines, conventions, rules, sanctioning mechanisms and practices that govern more or less specific domains of action. Some have global significance (e.g. the balance of power principle in international relations); others are more local (e.g. family rules about domestic turn-taking) (Moulaert and Jessop, 2006). In this way, for example, institutions reflect structural power relations; they set codes imprinted by these relations, which human agency can live up to, try to transform or avoid altogether. But the mediation in agency–structure–agency dynamics also has a strong semiotic element. Relevant issues in contemporary institutionalism therefore include: developing new imaginaries that see the world differently, provide different narratives about past and present, envision new futures, and so on; the exercise of ‘political, intellectual, and moral leadership’ as a basis for overcoming social fragmentation and immobilism or, conversely, disorganizing forces committed to social transformation; the role of new imaginaries, identities and subjectivities in strategic action, organizational and/or institutional design, institution-building and social revolution. New forms and contents of intersubjective meaning and new semiotic practices may stem from deliberate strategic action, as well as the effects of new communication and discursive technologies and/or new ways of utilizing them (Moulaert and Jessop, 2006; Sum, 2006). What meaning does this synthesis of the lessons from institutionalism possess for the potentiality of NIE in planning theory and planning? The next section explains how NIE relates to this synthesis, and how transaction cost theory fits into the NIE picture. 3. Neo-institutional economics2 Neo-institutional economics, like institutionalism, does not refer to one single family. The ‘broad family regrouping’ cosily puts together: property rights economics; transaction cost economics; evolutionary economics; constitutional choice; collective action theory; public choice theory; economic contract theory; and new institutional economic history (Furubotn and Richter, 2008). But in hardcore neo-institutional economics, transactions and transaction costs, property rights and contracts are the central notions, and scholars hardly refer to path-dependence or social embeddedness, unlike the adherents of the broad family regrouping. Although there is no real agreement among new institutional economists about the definition of institutions and their precise relationship to transactions, most seem to agree that ‘when it is costly to transact, institutions matter’ to lower transaction costs (Coase, 1937). Transaction costs arise because of the complexity and dynamism of environments and the price of information. However, there are differences of opinion on how the rise of institutions other than the market are connected to comparative transaction costs. Eggertsson, in his monumental survey of neo-institutional economics, defines transaction costs as ‘the costs that arise when individuals exchange ownership rights to economic assets and enforce their exclusive rights’ (Eggertsson, 1990, p. 14). Eggertsson stresses how the concepts of information and transaction costs cover a different content.

Spatial planning and institutional design

205

He argues that a lonely person on a desert island will encounter information costs as he goes about his home production, but an isolated individual will not engage in exchange and therefore will have no transaction costs . . . When information is costly, various activities related to the exchange of property rights between individuals give rise to transaction costs. (Ibid.)

According to North, transaction costs consist of ‘the costs of measuring the valuable attributes of what is being exchanged and the costs of protecting rights and policing and enforcing agreements’ (North, 1990, p. 27).3 North’s definition of transaction costs therefore provides an easy lead into the ‘broader family’ of new institutional economics. For most new institutional economists, transaction cost economics is based on two assumptions about human behaviour. First, the actions of human beings are subject to bounded rationality: the knowledge of the decision maker is severely limited.4 This will pose a problem in an environment that is characterized by uncertainty and complexity. Second, human beings sometimes display opportunistic behaviour. These two particular aspects of human behaviour point to the significance of uncertainty in explaining human actions. ‘These uncertainties arise as a consequence of both the complexity of the problems to be solved and the problem-solving software . . . possessed by the individual’ (North, 1990, p. 25). The role of institutions must be considered in this context: they are meant to reduce the uncertainties involved in human interaction: Institutions provide the structure for exchange that (together with the technology employed) determines the cost of transacting and the cost of transformation. How well institutions solve the problems of coordination and production is determined by the motivation of the players (their utility function), the complexity of the environment, and the ability of the players to decipher and order the environment (measurement and enforcement). (Ibid., p. 34)

These observations lay the grounds for North’s explanation of institutional change and the existence of considerable differences between economic systems. The institutions that are necessary to accomplish economic change vary in their complexity. North distinguishes informal constraints, formal rules and third-party enforcement. Informal constraints (like taboos, customs and traditions) are part of the culture that underlies society. They consist of: (1) extensions, elaborations and modifications of formal rules; (2) socially sanctioned norms of behaviour; and (3) internally enforced standards of conduct. Two aspects of informal constraints are particularly noteworthy: they play an important role in the incremental way in which institutions evolve (because most cultural changes are typically incremental); and they are culturally derived: they will not change immediately in reaction to changes in the formal rules and slow down the process of change. Formal rules include political (and judicial) rules, economic rules and contracts. Political rules ‘define the hierarchical structure of the polity, its basic decision structure, and the explicit characteristics of agenda control’ (North, 1990, p. 47). Economic rules ‘define property rights, that is the bundle of rights over the use and the income to be derived from property and the ability to alienate an asset or a resource’ (ibid.). Thirdparty enforcement would involve, in principle, ‘a neutral party with the ability, costlessly, to enforce agreements such that the offending party always had to compensate the

206

International handbook of urban policy

injured party to a degree that made it costly to violate the contracts’ (ibid., pp. 58–9). This implies the development of the state as a coercive force able to monitor property rights and enforce contracts effectively. North’s intention is to develop a theory of institutional change. From the point of view of the institutional fabric in cities, this makes his theory more relevant than Williamson’s version of institutional economics, which argues that institutions are created only to reduce transaction costs. North nuances this assumption and holds a broader – though still restricted to the economic system – view of institutional dynamics. He claims that institutions are created to reduce the uncertainty that is characteristic of human behaviour. North recognizes that institutional change is path-dependent – history matters! – and does not always contribute to more efficiency even in the longer run. He views political rules as predominating over economic rules. Institutions change interactively; but he holds a mechanistic view of institutional change: it takes place in an incremental way, delivering increasing returns to institutional learning processes. In this respect, he simplifies the complexity of the relationships between structures, institutions and human agency. Williamson’s argument that institutions are created to reduce transaction costs is coherent with his explanation of opportunism and moral hazard. Williamson defines ‘opportunism’ as a condition of ‘self-interest seeking guile’: ‘opportunism refers to the incomplete or distorted disclosure of information, especially to calculated efforts to mislead, distort, disguise, obfuscate, or otherwise confuse’ (Williamson, 1985, p. 47). Opportunism is a problem because of the presence of bounded rationality, in both meanings: not all information being available; and the limited calculative potential to use the available information to check uncertainty, thereby leaving plenty of opportunities for other agents to shirk. According to Williamson, because of the conditions of opportunism and the cognitive condition of bounded rationality, economic agents will prefer to transact through the market rather than through ‘hierarchies’ because markets keep a check on opportunism through the existence of the possibility of exchanging with other partners – an implicit threat to potentially shirking parties. Why then do organizations in general, and firms in particular, exist – for don’t they offer larger opportunities for opportunistic behaviour? Williamson writes: ‘Transactions, which differ in their attributes, are assigned to governance structures, which differ in their organizational costs and competencies, so as to effect a discriminating (mainly transaction cost economizing) match’ (ibid., p. 387–8). Then Williamson explains how in these internal governance structures the governance costs should be divided over a large number of transactions to keep comparative transaction costs low. In this way, economies, especially economies of scale, but also of scope (standardization of typical internal transactions) should keep governance costs under control. This comparison of markets versus hierarchy (especially firms) as optimal allocation systems – in terms of checking transaction costs – has been criticized from several perspectives: a hollowed-out view of the firm downplaying its first role as a production system (not in the first place transacting specific assets, but producing them) instead of a hierarchical one (Lambooy and Moulaert, 1996); a static view of the cognitive and behavioural aspects of agency behaviour under uncertainty, i.e. the absence of a theory of learning (Lazonick, 2000); and a reduced understanding of the meaning of transaction as an economic exchange relation, with limited consideration of the social relations aspects this involves – see the previous section.

Spatial planning and institutional design

207

How then – and this question is highly significant to the topic of this chapter – does NIE go about the building of institutions?5 NIE sees the network-like organization as a particular institutional ‘negotiated’ arrangement for the exchange of specific assets (geographical, physical, human) whenever the advantages of ‘the’ other forms of organization (market, hierarchy) are inappropriate to facing up to the level of uncertainty and the ad hoc frequency of transactions. As to the behaviour of the contracting agents, Williamson’s two fundamental hypotheses hold: (1) bounded rationality, defined in terms of minimization of transaction cost covering the search for an appropriate institutional arrangement and the processes of negotiation towards the conclusion of contracts; (2) opportunist behaviour of agents, given the asymmetry in available information. Individual behaviour is also influenced by the structure of property rights: definition and delimitation of authorized usage, stimulating creativity, conservation and valorization of assets that should be guaranteed by the institution to be created. Communication among agents covers the exchange of information on assets and for negotiation of contracts. The interaction between the institutional structure and the environment (external institutions, structures) is not unambiguously defined. In NIE, institutions ‘at heart’ are systems of contracts with minimum social and political dimensions. But several authors also recognize the exogenous influence of the institutional framework (usages, customs, habitus) on the structure of transaction costs, with the individual agents having no power to modify this framework. Formal norms (contracts, property rights, laws and regulations) and informal norms (behavioural norms, implicit agreements) underlie the structuring of the opportunity space or set of choices available to agents as well as the social, political and economic interactions between them. As to the creation of institutions, major driving forces can be distinguished: organizational forms can change in reaction to the parameters of the institutional environment; they can be the result of ongoing transactions and negotiations or institutional agreements to check opportunism and malfeasance (Eggertsson, 1990); and/or they are the institutional expression of monitoring systems by the principal to control the (opportunist?) actions of the agents (principal–agent theory; see e.g. Alchian and Demsetz, 1972). Obviously, this methodology for creating institutions through transacting suffers from limitations similar to those recognized for TCE in the limited sense of the term. But applying TCE to the building of institutions shows the analytical boundedness of the approach even more clearly. The reduction of embedded transaction (in the sense of Commons; see Commons, 1934; and Holt, 2004, p. 1022) from a social relation (as in economic sociology and sociological neo-institutionalism) to an exchange relation (as in NIE) makes the theory particularly uninteresting for the analysis of institutional architecture and design. It starts with the use of the qualifier ‘hierarchy’, opposing it to ‘market’, as if the firm would be the privileged source of ‘power’ and ‘domination’ and the market the paradise of ‘equal opportunities’. Commons already pointed out the power relation that is present in a transaction – see Section 2 above. NIE overlooks market competition as a main source of power (exertion) in the economy and society, and recognizes power only within the context of the hierarchical firm – see especially Coase (1937) in this respect; but even on this issue not all authors are agreed and many prefer to consider even the ‘hierarchical’ firm as a ‘nexus of negotiated contracts’. For some, the uneven access to information is recognized as a source of potential opportunist behaviour and dominance over other agents. However, the consequences of these insights for improving the coordination quality of institutions

208

International handbook of urban policy

(existing or designed) are not analysed. Implicitly, the difference between a powerful and a powerless agent is determined in terms of the capacity to avoid or minimize transaction costs; but again the meaning of this insight for the functioning of an institution is not made explicit and the question about the factors informing this capacity is not asked. In brief, in NIE, power is analysed as a mode of coordination that limits, after signing a contract, the possibilities of shirking and the need for transmitting information. 4. TCE in planning approaches What then, and given all these criticisms, can TCE still offer planners, especially in terms of institutional design? To answer these questions we follow Alexander’s argument in his 1994 article; he has been a strong protagonist of the use of TCE in planning (theory) – although we believe that in recent publications he seems to have situated TCE among other relevant institutionalism theories (Alexander, 2005).6 In his earlier article, Alexander (1994, p. 341) argues that ‘the conventional rationale for planning, which identifies planning with government and is based on political theory and welfare economics, cannot encompass these phenomena [of third party government and privatization]’. Moreover, ‘It has another weakness: it fails to answer why, if economic market failures require public intervention, the collective decisions need planning’ (ibid., p. 342). Alexander turns to TCE to fill this hiatus in planning theory and analysis because TCE (in the opinion of NIE?) allows an explanation of how ‘“perfect” markets are transformed into collections of complex organizations and corporations’ (ibid.) and offers the analytical tools for understanding (other types of) planning ‘which transcend the rationale of public intervention’ (ibid.). Then Alexander moves on to the two natural arguments in favour of the pretended utility of TCE: (1) it allows one to discriminate or find complementarities between market and planning (hierarchical organization) types of coordination; (2) it can be used as a tool to design institutions (of coordination). As to the first: In markets, economic or political, coordination between actors which results in collective action (that is, market ‘outcomes’) is by spontaneous mutual adjustment.7 When collective decision-making becomes more hierarchical, and as organizations become larger and more complex, they have to engage in systematic coordination of their units to ensure their effective deployment. As the complexity and scope of concerted action grows, coordination extends to embrace networks of interdependent organizations in more-or-less hierarchical interorganizational systems . . . Although there is a wide diversity of coordination ‘tools’, there are essentially two kinds of coordination. One is anticipatory; that is, coordination through planning and control. The other is real time; that is, coordination through monitoring feedback and adaptation. Planning, therefore, is an important part of coordination, within and between organizations; this is why hierarchies need planning. (Alexander, 1994, pp. 343–4)

It is unclear to us how TCE helps to discriminate between ‘types’ of coordination – inside, outside or between organizations. As Williamson used asset specificity as a deus ex machina to explain the existence of ‘hierarchies’, Alexander uses coordinative specificity as an explanation for the existence of (more hierarchical?) planning institutions along with more decentralized coordination systems (like markets, non-hierarchical networks, etc.). According to Alexander’s reasoning, as with TCE, specificity or its absence will determine whether TCE is applicable to deciding whether or not the coordination system is efficient. However, the very reduced economic (exchange) concept of transaction is

Spatial planning and institutional design

209

useless as a discriminant between coordination systems and devices, as it is devoid of any of the social and institutional embeddedness. As to the second argument, transaction cost is seen as a tool or discriminant in institutional design – especially in deciding on the construction or transformation of existing institutions into more decentralized or centralized ones. Alexander writes: It is recognized that organizational structure is one important aspect of coordination; the same is true of interorganizational coordination structures. Therefore, the conclusion that institutional design is another – perhaps the ultimate – form of coordinative planning is inescapable . . . Institutional design then is the prescription of new or changed institutional arrangements . . . More than devising organizational structures, it involves conceiving processes that include incentives for generating needed commitment, legitimization in the specific context, monitoring and enforcement of desired action, and appropriate ways of conflict resolution. Institutional design, then, becomes a necessary supplement to coordinative planning when existing organizational arrangements or institutions have to be changed in order to achieve agreed-up goals. (Alexander, 1994, pp. 344–5)

And within the context of institutional evolution he writes Organizations adapt to interdependence in different ways, depending on the perceived transaction costs of their current and anticipated situations . . . An organization which is at the limits of its size and scope of hierarchical control might decentralize and adopt market-like control mechanisms. (Ibid., pp. 347–8)

In his later work Alexander seems to have become less expectant with regard to the capacity of TCE as a tool of institutional design. He contextualizes it within a broader picture of institutionalization theory that in addition to ‘rational choice institutionalism’ also brings on board ‘historical institutionalism’ and ‘sociological institutionalism’ (Alexander, 2005, inspired by Hall and Taylor, 1998). The Hall and Taylor division of schools of thought of institutionalism should be checked against our overview expounded earlier in this chapter. Such a reflection would probably allow an understanding of the relative analytical power of TCE within the context of the Hall and Taylor tripartite. 5. Conclusion: transaction cost in institutional design as a metaphor? While we may agree that Williamson, through his transaction cost theory, has put the contractual dimensions of economic exchange back on the agenda, and while we certainly recognize that transactions have a cost, we doubt strongly if transaction ‘cost’ should receive a central analytical status within planning theory and institutional design. The notion of transaction as put forward in TCE is the most socially disembedded of all, far removed from Commons’s tri-dimensional concept, or DiMaggio’s transaction as a social relation, or in Swedberg’s terminology a socially embedded transaction. While the concepts of embedded transaction and social relation can play an important role in analysing the architecture (and the agency leading it) of organizations, the use of the concept of ‘transaction’ is not essential. The sociology of social relations and organizations already has enough concepts and theories available to understand the agency and institutional dynamics of interaction; concepts that respond better in many respects to the features of institutional fixture or change, as we laid them out earlier in this chapter: path-dependence, the role of culture, institutions embedding human interaction, norm systems and how they work and are reproduced, etc.

210

International handbook of urban policy

It is hard to understand why a high-level planning analyst like Alexander (and his peers?) should turn to TCE as an analytical tool to discriminate between or to justify existing institutions or institutions-in-design. The existing theories of institutionalism, planning modes, systems and institutional design respond much better to the objections that leading institutionalism analysts have formulated to methodological individualism and ahistoricism in certain traditions of institutional analysis. Why then have Alexander and some other planning theorists turned to this analytically less pervasive theory? We may assume that Williamson and other members of his community of knowledge, who became entranced by the success of their theory, saw the latter develop into involved rhetorical dynamics, which often led to a colouring, simplification and decontextualization of some of the TCE concepts (see Pessali, 2006). It is probably more the rhetoric of TCE than the theory itself that seduced planners and made them a bit careless in using its concepts in their field. In any case, what planners certainly retained from TCE is the message that bureaucracy and heavy-loaded institutions are very inefficient – ‘they produce high transaction costs which could be avoided’. There is an important message there, but it is a political message: slim bureaucracies down, make them more transparent and effective, and thus avoid unnecessary frustration in policy implementation among both policy deliverers and beneficiaries. However, this is something completely different from using TCE to decide which way reorganization should go. This use can neither be analytically justified nor computationally achieved, because TCE cannot account for the ‘logic of social appropriateness’ inherent in the legitimatization of institutions – thus connecting to Alexander’s presentation of sociological instititutionalism (Alexander, 2005, p. 212). And this justification, as our analysis argues, can be provided only by institutional theories that take into account path-dependence, the social embeddedness of organizations and cultural mediation. Notes 1. We wish to thank Mrs Bernadette Williams for her valuable language advice. 2. This section is an update of a section in Lambooy and Moulaert (1996). 3. In Williamson’s transaction cost approach, ‘Transactions can take place across markets or within organizations. Whether a particular transaction is allocated to the market or to an organization is a matter of cost minimization’ (Williamson, 1975; 1985; Douma and Schreuder, 1992, p. 102). 4. According to Pessali, Williamson does not employ Simon’s concept of bounded rationality properly. Simon’s concept of ‘satisficing’ behaviour is not only based on limited information, but also on the difficulty of performing all necessary calculations to make rational decisions. Williamson, especially in his later work, overlooks the latter (Pessali, 2006, pp. 52–3). 5. This summary is based on Moulaert and Cabaret (2006), pp. 56–7. 6. See also Webster and Lai (2003). 7. Here Alexander refers to Lindblom (1965), who uses the concept of political markets.

References Alchian, A. and H. Demsetz (1972), ‘Production, information costs, and economic organisation’, American Economic Review, 62(5), 777–95. Alexander, E.R. (1994), ‘To plan or not to plan, that is the question: transaction cost theory and its implications for planning’, Environment and Planning B: Planning and Design, 21(3), 341–52. Alexander, E.R. (2005), ‘Institutional transformation and planning: from institutionalization theory to institutional design’, Planning Theory, 4(3), 209–23. Chantelat, P. and B. Vignal (2005), ‘“Intermediation” in used good markets: transactions, confidence and social interaction’, Sociologie du Travail, 47, S71–S88. Coase, R. (1937), ‘The nature of the firm’, Economica, 4(16), 386–405. Commons, J.R. (1934), Institutional Economics: Its Place in Political Economy. Madison, WI: Macmillan, vol. 1.

Spatial planning and institutional design

211

DiMaggio, P. and W.W. Powell (1983), ‘The iron cage revisited: institutional isomorphism and collective rationality in organizational fields’, American Sociological Review, 48(2), 147–60. Douma, S. and H. Schreuder (1992), Economic Approaches to Organizations, Harlow, UK: Prentice Hall. Eggertsson, T. (1990), Economic Behavior and Institutions, Cambridge: Cambridge University Press. Friedmann, J. (1987), Planning in the Public Domain: From Knowledge to Action, Princeton, NJ: Princeton University Press. Furubotn, E.G. and R. Richter (2008), ‘The new institutional economics – A different approach to economic analysis’, Economic Affairs, 28(3), 15–23. Geddes, P.S. (1915), Cities in Evolution, London: Williams & Norgate. Granovetter, M. and R. Swedberg (1992), The Sociology of Economic Life, Boulder, CO: Westview Press. Hall, P.A. and R.C.R. Taylor (1998), ‘Political science and the three new institutionalisms’, in K. Soltan, E.M. Uslaner and V. Haufler (eds), Institutions and Social Order, Ann Arbor, MI: University of Michigan Press, pp. 15–43. Healey, P. (1999), ‘Institutionalist analysis, communicative planning, and shaping places’, Journal of Planning Education and Research, 19(2), 111–21. Hodgson, G.M. (1994), ‘Precursors of modern evolutionary economics: Marx, Marshall, Veblen, and Schumpeter’, in R.W. England (ed.), Evolutionary Concepts in Contemporary Economics, Ann Arbor, MI: University of Michigan Press, pp. 9–35. Holt, R. (2004), ‘Fear prudence: Hobbes and Williamson on the morality of contracting’, Journal of Economics Issues, 38(4), 1021–36. Lambooy, J., G. and F. Moulaert (1996), ‘The economic organization of cities: an institutional perspective’, International Journal of Urban and Regional Research, 20(2), 217–37. Lazonick, W. (2000), ‘From innovative enterprise to national institutions: a theoretical perspective on the governance of economic development’, http://www.insead.edu/v1/projects/cgep/Research/Background/ InnEntNalInstitutions.pdf, accessed 11 March 2009. Lindblom, C.E. (1965), The Intelligence of Democracy, New York: Free Press. Mehmood, A. (2010), ‘On the history and potentials of evolutionary metaphors in urban planning’, Planning Theory, 10(1), (forthcoming). Moulaert, F. and K. Cabaret (2006), ‘Planning, networks and power relations: is democratic planning under capitalism possible?’ Planning Theory, 5(1), 51–70. Moulaert, F. and B. Jessop (2006), ‘Agency, structure, institutions, and discourse’, in Synthesis Papers for DEMOLOGOS, European Commission FP6 STReP Project, Newcastle upon Tyne. Moulaert, F. and J. Nussbaumer (2005), ‘The social region: beyond the territorial dynamics of the learning economy’, European Urban and Regional Studies, 12(1), 45–64. Myrdal, G. (1957), Economic Theory and Undeveloped Regions, London: Gerald Duckwater. Nelson, R.R. and S.G. Winter (1982), An Evolutionary Theory of Economic Change, Cambridge, MA: Belknap Press of Harvard University Press. North, D.C. (1990), Institutions, Institutional Change, and Economic Performance, Cambridge: Cambridge University Press. Nussbaumer, J. (2002), ‘Le rôle de la culture et des institutions dans les débats sur le développement local: la contribution de l’école historique Allemande (1843–1957)’, unpublished PhD thesis, University of Lille I, France. Parsons, T. (1951), The Social System, New York: Free Press. Pessali, H.F. (2006), ‘The rhetoric of Oliver Williamson’s transaction cost economics’, Journal of Institutional Economics, 2(1), 45–65. Powell, W. and P. DiMaggio (eds), (1991), The New Institutionalism in Organizational Analysis, Chicago, IL: University of Chicago Press. Sum, N.-L. (2006), ‘Culture, discourse, ideology and hegemony’, Synthesis Papers for DEMOLOGOS, European Commission FP6 STReP Project, Newcastle upon Tyne. Veblen, T. (1919), The Place of Science in Modern Civilisation and Other Essays, New York: B.W. Huebsch. Webster, C. and Lai, L.W.-C. (2003), Property Rights, Planning and Markets: Managing Spontaneous Cities, Cheltenham, UK and Northampton, MA, USA: Edward Elgar. Williamson, O.E. (1975), Markets and Hierarchies, Analysis and Antitrust Implications: A Study in the Economics of Internal Organization, New York: Free Press. Williamson, O.E. (1985), The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting, London: Collier-Macmillan. Zafirovsly, M. (2005), ‘The influence of sociology on economics: selected themes and instances from classical sociological theory’, Journal of Classical Sociology, 5(2), 123–56.

9

The economy of the large European city: the social nature of articulated rationality F. Moulaert and J. Nussbaumer

1. Introduction Since urban economic analysis began straddling itself on the heritage of von Thünen’s location ([1826–63] 1875) and Christaller’s central place theory (1935) – or rather the Löschian ‘crystallization’ of it (Lösch [1939] 1954) – there has been strong pressure within mainstream economics to build an urban economic theory on the foundations of neoclassical spatial economics. Rational economic behaviour would be seen to include the selection of assets and activities through market mechanisms, innovation in capital stock as led by productivity norms, and spatial agglomeration resulting from the pursuit of lower communication and transaction costs in both production systems and markets. Even though the more naïve foundations of neoclassical economics (full information, pure competition, instantaneous market adaptation) have been abandoned in contemporary economic orthodoxy, the criteria of profit maximization and optimal productivity for investment live on. Contemporary urban economic models have married these to timid expressions of the dynamics of learning, of path-dependence and of scale effects on demand and supply. The relatively recent and broadly accepted new economic geography launched by Krugman (1998) among others, and strongly defended by scholars such as Thisse and Fujita, bears witness to this ‘new’ synthesis in orthodox urban economics (Fujita and Thisse, 2000).1 In this chapter we do not evaluate the innovativeness of this ‘new’ synthesis, but examine the analytical relevance of rational economic theorizing for urban development analysis. We argue that even if the intentions of the economic agents are ‘rational’ – for example, human beings want the ‘best’ for their business and their households – in reality, and for a number of reasons (many of which bypass the confines of the economic debate on rationality and its limits), economic rationality in its many forms has only a limited transformative impact on urban economic life and its outcomes. This impact materializes in forms that could not have been anticipated by the rational logic of economic behaviour alone, as the outcomes of rational intentions are articulated within the reality of the economies and societies of which they are part. For example, the productivity pursued by rational entrepreneurs materializes only into outcomes shaped by the real opportunities and constraints of the socioeconomic context in which these agents operate. 2. ‘Pure’ and ‘real(istic)’ theory The analysis of urban life and economy has always been a challenge. This is a consequence of both the complexity stemming from the multiplicity of spheres of human behaviour within cities and the interconnection of the spatial scales at which urban entities operate. The many interrelated urban activities make a multidimensional framework 212

The economy of the large European city

213

for the analysis of the development of cities a necessity (see e.g. Jane Jacobs’s work, 1970). To some extent, it can be said that city development concentrates all the difficulties and contradictions within spatial economics (see Nussbaumer, 2002). This has made urban analysis – even in its mainstream versions – less orthodox than mainstream economics in general. For example, the early discovery of economies of scale and monopoly markets in agglomerated spaces challenged the applicability of pure market mechanisms from the very beginning of spatial market analysis (Perroux, 1983; Myrdal, 1957). Returning to the early debates of the birth of spatial economics helps in the construction of an appropriate contemporary methodology for urban development analysis. It must be noted first that spatial economics was born mainly in Germany at a time of methodological controversy; supporters of historical and empirical methodology opposed defenders of an abstract approach. But many scholars were eager to find an acceptable compromise that would integrate the advantages of both approaches. Alfred Weber, one of the first to provide an industrial location theory, came out with a two-sided methodology. He chose to start with what he called a ‘pure’ economic theory, meaning a theory based on hypothetico-deductive reasoning. But he was convinced that this ‘pure’ theory should be complemented by a realistic theory to take account of the actual outcome of human (spatial) behaviours, which themselves were to be explained with the help of history, geography and sociology. Note that Weber did not mean mere confrontation between (pure) theory and facts, but a complement of pure theory (abstract) with realistic theory (empirical and historical) into what is called in this chapter an operational theory of urban development.2 For this founding father of location theory, the actual configuration could be made clear by a combination of various explicative modes. Using Weber’s distinction, and applying it to our own problematic of city development, we show through theoretical arguments and historical examples that it is necessary and possible to escape the dead ends of positivist approaches by using the concept of ‘articulated rationality’ as a key concept in the construction of an operational theory of urban development. This concept sees the actual outcome of ‘economic’ behaviours as the result of a combination of various rationalities, each of which has a different ‘nature’ and ‘weight’ according to time and place. It simply acknowledges that economic reality is not the result of rational/maximizing behavioural logics only but also of the ways in which they materialize in concrete historical and institutional contexts. In this respect, the approach used here is different, for example, from that used relational economic geography, which situates various economic rationalities within institutionally embedded relational patterns (for a survey see Yeung, 2005), or from Amin’s and Graham’s ‘multiplex’ approach to the contemporary city recognized as ‘a set of spaces where diverse ranges of relational webs coalesce, interconnect and fragment’ (Amin and Graham, 1997). In fact the ‘real theory’ approach defended here includes history and specific institutions within it, instead of developing a theory capable only of addressing contemporary urban complexity and so implicitly arguing that contemporary cities are more complex than historical ones. From our perspective, and for example following Lefebvre (1974), complexity is historically and spatially determined in the main, varying from epoch to epoch, and from social formation to social formation. Could it be that relational theories are more absolute (i.e. time and space robust) than they actually admit? Or, in contrast, unless they take the ‘real’ versus ‘cultural’ component of actornetwork theory seriously, that they have adopted a virtual analytical style, overstressing

214

International handbook of urban policy

the cultural–institutional dynamics of urban life at the expense of its real basis (see Amin and Thrift, 2002)? 3. Theoretical premises for an operational theory of urban development We saw how Alfred Weber distinguished between ‘pure’ theory, which is normative and prescribes economic behaviour, and ‘real’ theory, which analyses the possible outcomes of rational economic behaviour within real-life situations. He cited and published examples of the economic development of German cities as the product of a mixture of behaviours (economic, social, political, culture) – see Section 4 of this chapter. Moreover, within the logic of ‘real’ theory, location and investment behaviours are path-dependent, i.e. embedded in the history of the various spheres of the city, its hinterland, its national context etc. This distinction between pure and real theory is a good starting point in our search for an ‘operational’ theory of urban economic development. Such a theory can never be ‘pure’, but should nevertheless include consideration of the status of those ‘pure’ normative elements within a ‘real’ theory. This means, for example, that if rationality is a norm of economic behaviour, it can materialize in reality only in specific ways, i.e. by using assets available in the city and its networks. These themselves are constrained or transformed by other factors too: by interaction with and/or intervention from other types of behaviour (‘economic’ behaviour by other agents, but also non-economic behaviour by some or all involved); by lack of knowledge or inhibition emanating from knowledge guided by particular socioeconomic regulations; and are catalysed by an overriding political and financial power-position warranting much higher financial returns than pure economic theory could account for. To help overcome this tension between pure and real theory we have summarized a number of key observations on their relationship. These should help us delimiting the analytical space of an operational theory of urban development: ●

●

Economic behaviour is constructed and institutionalized over time. Cities embody the physical, cultural and social expressions of a long history of economic development. In its most explicit form, this historic dimension is visible in the significant proportion of ‘ancient’ economic activities that have survived to the present day and that often still operate according to old ‘customs’ and ‘practices’ (vegetable markets, personal services, repair, cleaning, cultural and religious activities, handicraft and other artisan workshops). Even if these activities have experienced massive restructuring and re-institutionalizing, they have maintained a significant utility and function within the urban socioeconomy. In addition, many contemporary or ‘new’ economic activities are governed by norms and habits that hark back to the urban economic institutions of previous centuries (trade networking, place of reciprocity in labour and professional relations, public–private cooperation, relations between cities and their hinterlands). Today’s urban economies are rooted in their previous stages of development. Contemporary urban economic activity articulates with structures (physical, social, economic, cultural) that show a significant ‘time invariance’ (Moulaert and Scott, 1997, introduction). Analysis of the path of city development has to take account of the ‘hysteresis’ of economic relations woven throughout history.

The economy of the large European city ●

●

●

215

‘Economic’ rationality alone cannot explain consumer behaviour. In heterodox theories, consumption was introduced long ago as an endogenous variable to explain urban economic development. In orthodox theories this happened more recently (Krugman, 1996). Despite this new focus on consumption, cities are still considered too explicitly as places of production and distribution (Amin and Thrift, 2002). To integrate both consumption and demand in general into urban economic development analysis, a ‘real’ approach is needed to the scenario of social relations in which demand and consumption take place. The analysis of the consumption side can hardly be based on pure economic rationality arguments; purchasing power and cultural norms also matter a great deal. Economically speaking, consumers are budget bound, even within the generous consumer credit system of today. Therefore many can only dream of what they would like to consume – utilitarianism as the book of dreams! The late James Tobin launched the theory of the liquidity trap, showing that large parts of the population could not pursue a utility-maximizing spending strategy even if they had the calculative capacity. Low income confined them to a liquidity trap: they could barely spend their small income on subsistence goods and services, let alone on luxuries or savings for future expenditure. Utility maximization as portrayed in economic handbooks fell way beyond their scope (Tobin, 1975). Moulaert and De Cannière (1987) provide evidence of this through their case study of 1970s Belgium, where about 20 per cent of consumer households were in this position. In the case of large urban areas with their concentrations of deprived neighbourhoods, the presence of the liquidity trap should be even more explicit (Moulaert et al., 2003). But consumers are also gourmands, bibliophiles, lovers, freaks, cultural empathizers, outdoor travellers etc. It is impossible to attach this diversity of demand and these driving forces of consumptive behaviour to only a few economic rationality principles. Therefore the diversity so typical of large cities finds much of its explanation in the decentralized and often irrational nature of consumptive behaviour, an irrationality that is probably best visible in what Timothy Luke calls the ‘newfoundlands of the glocal consumption world’ (Luke, 1997). The variety in consumptive behaviours and the variables explaining them needs to be considered very seriously in order to understand the economic development of any city. The urban economy is dominated by the working of real-estate markets (Castells, 1972; Lipietz, 1974). These markets have little to do with productive efficiency or diversity of consumptive taste; they are finance-capital-led and have a tremendous effect on the physical organization of cities. They are well known as interfering with ‘rational’ behaviour in other markets. For example, they exert a huge influence on location decisions of both producers and consumers. In extreme cases, land speculation can drive real-estate prices to such heights that economic agents, to remain efficient or even viable, are forced to leave the city or particular neighbourhood and locate in more peripheral areas (Swyngedouw et al., 2002). Only a strong local public sector or persistent grassroots movements can check the expansive behaviour of the real-estate sector and prevent urban communities and neighbourhoods from being flattened by the bulldozer and overruled by the highrise economy (Moulaert, 2000; Rodriguez et al., 2003).

216 ●

●

●

International handbook of urban policy The urban economy is based on distribution, communication and transportation activities. Even if – mainly for historical reasons – these functions seldom determine the specificity of a city, statistically speaking they dominate urban life and they impact hugely on the spatial organization of cities and the physical links or cleavages between neighbourhoods and communities. Rational economic location procedures for these ‘flow’ activities are often quite different from those in other service or manufacturing industries. Urban economies are also public sector economies. At the higher tiers in the urban hierarchy, there is a concentration of very diverse public sector functions (Stanback and Noyelle, 1982). Moreover, public agents have a strong hand in educational, cultural and scientific activities that are meant to lay the foundation for innovative capacity in the urban economy. The rationales of public sector agents are often quite different from those in the private sector. They are based ideally on democratically made decisions or public administration rules; or they are influenced by norms of opportunism and corruption. The various activities relate to different rationalities and to how these rationalities are socially mediated; the outcome on urban society and economy is hard to predict. The city is primarily a social place. The current idea of the ‘knowledge city’ (Knight, 1996) as the basis of the rejuvenated future city needs to be strongly nuanced, encompassing shades of meaning, feeling and opinion. The city is first of all a place of encounter, both near and far; a place of social life, of making and breaking social relations. Therefore the knowledge-city image – today a major emblem of urban progress – should be replaced by an image of a socially encompassing city in which social innovation, cultural creation and solidarity are recognized as equally important mechanisms of urban dynamism (Peck, 2005). Moreover, the concept of the ‘future’ knowledge city is arrogant in so far as it implies that the ‘past’ city was not a knowledge city. Global urban history reveals the existence of ‘knowledge’ cities as far back as human urban memory reaches, certainly to 1000 years bc. Many of these ancient cities embodied religion and culture, as well as political, social and economic life within an urban knowledge society more encompassing than today’s envisaged knowledge city. In many respects, hard-won, precious knowledge about health care, artisan production and social organization was embedded in Ancient Egyptian, Indus, Chinese or Mesopotamian cities, but was gradually eradicated by the rise and decline of more recent civilizations and the gradual rise of the modern city.3

As argued here, the various socioeconomic activities of towns, together with their connections to other human constructs (institutional, social, etc.), reveal the need to understand the individual and collective rationalities that underlie the functions of urban development. These rationalities can be in conflict, thus opening the way for multiple choices for both individuals and collective bodies. These choices or combinations of choices cannot be anticipated and can hardly be explained and evaluated only through ‘pure’ economic rationality. The analysis and proper understanding of beliefs, routines, culture, history and place can enlighten the development paths of cities. The next sections dwell briefly on the relevance of the premises outlined in this section for the analysis of urban socioeconomic life in two different historical epochs, in two different regions. These explorations show the role of historical, institutional and territorial specificity in determining the meaning of ‘real’ as

The economy of the large European city Table 9.1

Distinctions between ‘pure’ and ‘real’ theory of urban socioeconomic development

Pure theory ● ● ●

Activities emerge and disappear according to their profitability Economic rationality is time and space invariant Consumption introduced in new urban economics: scale effects affect size of markets

Real theory ● ● ● ●

● ●

Land rent can lead to equilibria among landuse functions Maximizing location utility and land rent

● ● ●

● ●

Homogeneous agency norms among various economic functions Towards the homogeneous knowledge city

Source:

217

● ●

No activity is ever bypassed, as long as there is a use for it Economic rationality is historically and institutionally determined Liquidity trap neutralizes consumer sovereignty of poor population (J. Tobin) Irrationality and diversity of urban consumption patterns – newfoundlands of urban consumption world (Luke) Land use led by dominant norms of society Present time: real-estate markets led development Distribution, communication and transportation are dominant functions in urban life Multi-agencies, including public, not-forprofit, etc. Fragmented, multicultural and historical knowledge city

Authors.

compared to ‘pure’ theory of urban socioeconomic development. Table 9.1 summarizes the main elements of both theoretical stances and serves to inform the historical case studies. 4. Carthage: multi-ethnic network city of antiquity There is a tendency in popular literature either to idealize life in ancient Carthage – into a world of North-African dreams and fairy tales (oases with palms trees, fleets of triremes criss-crossing the Mediterranean, exotic coastal barges carrying Punic princesses, abundant baskets of commodities carried by endless caravans of ‘desert ships’) – or to consider this pre-Roman thallassian empire as a power of darkness that sacrificed young children to the gods, Baal being one of them. Over the last 20 years, there has been renewed interest in the life and history of this city, following successful first rounds of archaeological finds both in the second half of the nineteenth century and before the Second World War. International archaeological teams continue to excavate Carthage, its hinterland, its African territories and Mediterranean colonies (in Sardinia, Corsica, the West of Sicily, Iberia).4 These studies enlighten the history of urbanization in the Mediterranean from about the ninth until the second century bc. Carthage could be considered as the most real enemy that ancient Rome ever had before its decline.5 Its history is very different from that of Rome. Originally a colony of Phoenician Tyre, Carthage soon became a thalassocracy, building its power initially on sea-trade networks (which reached to Senegal according to recent evidence), and later

218

International handbook of urban policy

BOX 9.1

KEY DATES IN THE HISTORY OF CARTHAGE (BC)

Around 800: founding of Carthage Between 800 and 700: Greek colonization in Southern Italy and Sicily. Foundation of Rome (753?) Phoenician foundations in Andalusia, Malta, Sardinia and Sicily Between 700 and 600: extension of earliest Carthaginian settlement Between 600 and 500: development of Phoenico-Punic colonization in Sardinia and Western Sicily. First Punic staging-posts on the north coast of the Maghreb 509: first treaty between Rome and Carthage Between 500 and 400: Sicilian wars, consolidation of Western Sicily for Carthage Between 400 and 300: continuing wars between Sicilian Greeks and Carthage; second and third treaty with Rome. Foundation of Marsala on Sicily. Introduction of the cult of the Sicilian Goddesses (Demeter and Kore) to Carthage Between 300 and 260: Carthaginians extend control of Sicily, Romans react 260–146: Punic wars 146: conquest and destruction of Carthage on prosperous agriculture and relatively successful colonization of various parts of the Mediterranean. Rome, in contrast, initially built its strength ‘from the land’, using land armies in a step-by-step conquest of territory from Carthage’s allies: first Etruria where Carthage had at least one important trade city (Punicum), and then Magna Grecia and Sicily about 250 bc. Carthage was part of the Phoenician civilization that gave us our contemporary alphabet and the double accounting system whose principles are still used today. But more important to our argument, Carthage is also considered a precursor in the field of agronomy and shipbuilding. The first became indirectly the reason for its destruction – causing a strong Campanian agricultural lobby, led by Cato the Old at the Roman Senate, which favoured the destruction of this Carthaginian competitor. The second, military shipbuilding, became a target of Roman industrial espionage (Lancel, 1997). Let us briefly reconstruct the history of Carthage in terms of the behavioural ‘logics’ and the diversity of rationalities behind its urban development (see Box 9.1 for some

The economy of the large European city

219

key dates). There is no agreement on the formal date and circumstances of the foundation of the city.6 The generally accepted version is that political conflict in Tyre led to an important group of political leaders leaving it with a support fleet. This group founded Carthage on land initially rented from African communities. It is reasonable to assume that in the first century of its existence Carthage was just one among many Phoenician colonies, but that later it became more powerful than its mother city. All things considered, the heyday of Carthage would be between 600 and 250 bc. The pillars of Carthaginian power were diverse: in its early days a major trading post at the crossroads of the Western and Eastern Mediterranean, it soon became a colonizer of the Western Mediterranean, an explorer of Northern and Western Africa and a major and technologically advanced ship and city builder. Increasing historical evidence points to the fact that it was only after the Romans managed to copy a captured Carthaginian military ship at the beginning of the Sicilian war that they were able to construct a technologically equivalent fleet. Despite some decades of poor navigation prowess, the Roman fleet soon turned into a powerful military instrument to be feared by the Carthaginians. However, the wealth of Carthage was built not only on trade, fleet and construction. Its extensive hinterland housed one of the richest agricultural areas of the then-known world. Several nearby settlements, very wealthy according to Roman sources and recent excavations, became part of the Carthaginian urban area. And the links between Carthage, its immediate hinterland and its African territories were so close that even after the loss of all non-African colonies, the Punic kingdom in Iberia and the military fleet (burned at sea by order of the Romans around 200 bc), the wealth of the metropolis kept increasing, as witnessed by recent excavations in the so-called Hannibal quarter, believed to have been built in the last cinquantum of Carthage’s lifetime. Economically and militarily speaking, Carthage demonstrated a strategic flexibility probably unheard of in modern times. When in the fifth century it became aware of the impossibility of further penetration in Sicily and Etruria, it concentrated on the development of its African mainland. And when all colonies were lost, it created an Iberian kingdom that for a short but intensive period brought substantial wealth to the metropolis and became the bridgehead for Hannibal’s 15-year military campaign in Italy. When Rome became dominant at sea, Carthage improved its land armies, transforming its traditional Greek phalanx battle order into swift-moving intervention forces. Hannibal’s superior military strategies kept inspiring the Roman armies till long after the defeat at Zama in 202 bc. Carthage was also a network city avant la lettre. Its numerous economic agents and their strategies were based on various types of trade and modes of transport, and evolved gradually over time. Carthage had some difficulty (or no ambition?) in occupying a specific position in markets for pottery and probably also sculpture – although because of the structural plundering, sacking and destruction of the city by the Romans, it is impossible to determine whether or not Carthage had its own large-scale sculpting tradition. Archaeological finds have included Greek, Etrurian and Campanian vases and decorated pottery, and Carthage is well known as a large-scale producer of amphoras for wine and olive oil, which it processed and traded all over the Mediterranean. The Carthaginian economy was a network economy in many contemporary meanings of the term: local networks involving a hinterland of about 200 localities (according to Roman sources); regional networks on the North African mainland; maritime networks

220

International handbook of urban policy

in the Western Mediterranean and towards the ‘old’ spheres of influence in the ‘root’ cities of Tyre and Sidon to the East. These three network levels encompassed an oftencontradictory array of economic logics, representing not only different interest groups and trade activities but also intrinsic cultural and religious elements. One could argue in a provocative way that the religious and cultural eclecticism of Carthage reflected its economic complexity, and probably its political and military fragility. Carthage was also influenced by Egyptian culture and religion. But at bottom it was a Phoenician city, which adopted an African (Punic) version of the Phoenician culture, but also integrated strong elements from various Greek communities, especially the Sicilian ones, and vestiges of its Etrurian connections. From the archaeological evidence of tombs and graveyards, ‘Punic’ Carthage emerges as a multicultural metropolis (inhabitants of Greek, Egyptian, Phoenician, Numidian, Iberian etc. origin), socially stratified by religious and political factors, especially by the uneven accumulation of wealth by traders, ship-owners, latifundari, artisans and soldiers. The armies contained a hard-core Carthaginian (Punic) elite, with the addition of Greek, Numidian, Iberian, South Italian etc. mercenaries, whose victories depended on the quality of leadership and strategy, and on the thickness of the pay. This impressive though contradictory military apparatus, with its strong connections to the class of traders and shipbuilders, was tightly controlled by a complicated political–administrative system. To the extent that the sparse remaining sources allow us to judge, at the period of its decline the Carthaginian political system was more democratic than the Roman one; at least one Roman observer wrote that this hampered the effectiveness of the military power of the North African metropolis (see Lancel, 1997, ch. 4 citing Livius and Polybius). A very important dimension of urbanization in Carthage was the development of the harbour. Archaeological finds are again almost the only reliable sources in this respect, but there is sufficient evidence that the harbour was relocated a number of times throughout the history of the city, because of lack of space or tidal changes or increasing demand. Recent excavations suggest that by the end Carthage had both a commercial and a military harbour together with a sizeable arsenal and well-organized shipyards. The military harbour is believed to have been a masterpiece of architecture in Mediterranean antiquity, a reflection of the spirited innovative calibre of the Carthaginian rulers and traders, and more especially of its architects and artisans. Deliberately included in the analysis of the development of Carthage is an observation on the negative but passionate opposition of certain groups of Romans (Campania lobby, with Cato the Old as its aggressive Senate spokesman) to the Carthaginian people. In real life, politics matter, and in politics ‘passion’ is as much a driving force as socalled economic rationality. The Carthaginian case shows that urban economies develop from the unanticipated outcomes of rational behaviour; but this ‘intended behaviour’ is embodied in an amalgam of economic activities involving different use values, trade logics and economic finalities, which transform the original aim. Moreover, economic agents are also culturally, religiously and politically inspired or determined, and have to coexist in a complex urban society with agents and institutions whose logic is not primarily economic, but sociocultural, religious or political. Therefore, in practice, the urban economy in Carthage should also be considered as a coexistence in relative harmony between various ethnicities in a strongly religiously and politically codified society, active in many and various trades but with limited

The economy of the large European city

221

possibilities to pursue objectives as understood by the notion of ‘pure’ economic rationality. But, as history shows, these citizens were in one way or another at least partially rationally inspired to pursue their own objectives in life. Arguments cannot be accepted that are based on the assertion that economic rationality as a behavioural principle is only relevant to economic behaviour under capitalism; these arguments are therefore antagonistic to the use of Carthage in the application of pure theory to the analysis of urban socioeconomic development. The difference between the pre-capitalist trade economy in Carthage and contemporary urban economies is not the absence of rational economic intentions in the former, but the way in which these intentions became ‘real’ in specific places, with their own historical, institutional and technological features. 5.

The development of German cities in the nineteenth century: culture, politics and articulated economic rationality However, to develop principles for a relevant contemporary operational theory of urban socioeconomic development, valorizing both ‘pure’ and ‘real’ dimensions, we should not only look at the impact of intended economic rationality in societies bc, but also examine the extent to which urban development in modern society has responded to economic rationality. Was there more rationality in real economic behaviour in modernity than in antiquity? To this end, we shall look at the ‘real’ theory of urban development as put to the test by some contemporaries of Alfred Weber, and published in a book edited by him (Weber, 1913–22). Does economic rationality and its categories (selection through market competition, investment for productivity etc.) play a more significant role in urban development in nineteenth-century and early twentieth-century Germany than in antique Carthage, where religion, superstition, natural disasters and ‘global’ political instability are implied as playing a predominant role? We show that economic rationality, articulated to other aspects of social life, is also found in industrialized urban Germany. The case of German cities is interesting for many reasons. One is the concern of nineteenth-century German scholars for a better understanding of the development of cities. The origins of spatial economics are mainly German, especially with the precursive work of Johann Heinrich von Thünen in the early nineteenth century (von Thünen, 1826). But although von Thünen is widely known in academic circles, his work presents a model that only presumes the location of the city. Many other scholars were interested in the analysis of the location and development of cities themselves, without limiting their arguments to ‘pure economic’ factors (Nussbaumer, 2002). Many of them, following Weber’s scientific programme, integrated historical, sociological and cultural elements (see, e.g., Hammer, 1922; Christiansen, 1914 etc.). Their work shows the impossibility of building a theoretical framework focusing only on rational economic causal relations in order to explain the location of activities and the development of cities. From a location theory point of view, the city’s economy combines production and consumption activities, which are themselves at least partly dependent on entrenched political and social dynamics. Because of these interrelations, the attempt at isolating ‘pure’ economic factors as the explanation of town development proves inadequate. In other words, the German economists of the nineteenth and early twentieth centuries saw very clearly that the development of cities could be explained only by combining various logics, including non-economic ones, as understood within their societal contexts.

222

International handbook of urban policy

The analysis of this literature leads to the conclusion that cities should be analysed not in ‘pure’ economic terms, but according to a notion of activity and agency that includes social relations and shows their specificity in time and space. Such an attempt can be viable only if it is grounded in historical reality. The German literature of this period is quite instructive on that issue. Alfred Weber’s brother, Max Weber ([1921] 1947), makes a conceptual distinction between an ‘economic’ and an ‘administrative–political’ definition of the city. The economic definition perceives the city first as a market agglomeration (Marktansiedlung), with the inhabitants satisfying their needs mostly through the local market. Even within this definition, however, the dominant presence of one or more types of agent with their rationality will somehow determine the nature of any city. The presence of political or religious notables and important institutions favoured the development of ‘consumption cities’, characterized by activities aimed at promoting their well-being; whereas the presence of important production activities tended to develop ‘production cities’, manufacturing goods for other cities and localities. However, the author insists that this ‘economic’ definition of the city must be connected to the local history, meaning that the explanation of its foundation infers the presence of a garrison, of a prince, a fortress, etc. Weber’s text implies the idea that market-economic activity is superposed on the other dimensions making up the city. Even further: economic activity is dependent on the dynamics of non-economic logics, such as legislation, the consumptive power of local authorities, etc. Therefore Max Weber suggests the definition of types of cities, according to both their main activity, and their social and historical structure. In other words, ‘pure’ economic factors are definitely insufficient for the analysis of either the location of the city or the dynamics of its economic activities. Further, stipulating that account must be taken of different logics means that the explanation of city economic development involves the consideration of rationalities that both interfere and interrelate with each other. Articulated rationality then implies a process of frictions, i.e. conflicts between and combinations of the various rationalities. These frictions are part of the development trajectory of the city. Other works also expound the embedding of city market activities within historical and social dynamics. Otto Schwarzschild’s study on Berlin (1907) and other big towns offers challenging insights into urban economic dynamics. This work actually suggests that it is precisely the spread of a diverse population within a town that simultaneously promotes pockets of advantage, especially in expertise within both the labour force and among entrepreneurs. Somehow, the way local needs are satisfied, through market and institutional relations, diversifies the creation of location advantages. The character of the city – in physical and economic terms – cannot be considered as unique evidence for its foundation. Without denying the fact that the town is a centre for the surrounding agricultural activities, Schwarzschild argues the case that the central concentration of the town itself is constructed through local activities (their diversity), political decisions (building transport infrastructures etc.), and social (labour) relations. These studies suggest cumulative causality in city development. Local activities, by their diversity and dynamics, and in relation to political and social dynamics, enable a process of construction of economic advantages. In the same vein, the studies of industrial agglomeration edited by Alfred Weber (1913–22) show quite clearly that it is not only the relations between the producers that are very important for the development of

The economy of the large European city

223

strong competitive advantages, but also those between producers and institutions. The creation of training centres, the combination of competitive and cooperative behaviours, and even local culture where it favours or restrains economic behaviour are at the core of urban dynamics. Economic efficiency is dependent on the positive articulation of the various rationalities of social life. These analyses of German cities in the nineteenth and early twentieth centuries are highly relevant to our discussion on the status and progress of urban development theory. There is clear emphasis on the need to combine the contributions of the various domains of social science. Otto Schwarzschild, like other scholars of that time, uses auxiliary sciences (Hilfswissenschaft) to elaborate a scientific analysis of urban economies. At the urban scale, the reaction between economic activities and social, cultural and institutional dynamics is as obvious now as it was then to the many German scholars who had a historical sensibility. Gustav Schmoller (1901) provided good examples of the reactive relationship between the various dynamics, explaining how authorities tried to regulate economic activities, as well as how economic actors entered local assemblies in order to influence political decisions. But the 1930s, in pursuing the methodological debate (Methodenstreit), saw an increasing willingness to focus on ‘pure’ economic theories of spatial issues. In German literature, the works of Andreas Predöhl (1928) or August Lösch ([1939], [1943], 1954) are attempts to build location theories dependent on economic rationality arguments alone. Still, as Lösch himself admits, urban economics cannot be confined to such an approach. It is interesting to note, on this specific topic, that his only citation is the work of Werner Sombart (1902), member of the German Historical School, who also tried to develop a ‘realistic’ theory of the city, and who expounded the idea that an economic theory of urban dynamics can be built only through an appropriate integration of the social, historical and cultural dynamics. Only a socially transformative approach to economic rationality will enable a considered theory of the dynamics that are constitutive of urban development. Articulated rationality also includes the consideration of different temporalities. By taking account of path-dependencies, this wider concept enables us to bridge the gap between ‘pure’ and ‘real’ urban economics. 6. Articulated rationality and urban theory: the social aspects of economic theory In old Carthage, as in nineteenth-century Germany, city development depended on a specific combination or articulation of social, ethical and economic rationalities and dynamics. We have tried to show that the concept of articulated rationality enables us to escape from the temptation and dead-ends of mono-economics, enriching the understanding of (socioeconomic) development. However, this concept requires further exploration in order to build a more viable theory of contemporary urban development. We do not propose to build such a theory here, but believe that this concept is potentially important. Overemphasis on ‘pure economic rationality’ creates blindness concerning the historicism of the concept itself and the elements implicit within it. The hypothesis of rational behaviour in economics already suggests the ‘pure’ nature of economic behaviour, without understanding (and criticizing) the Weltanschauung it bears and presumes. As an analytical conclusion, we suggest that the concept of articulated rationality is a useful first step towards a method of deconstructing ideal schemes, and replacing them with one accounting for conflicts, social disharmony and power relations.

224

International handbook of urban policy

For example, the widespread application of real-estate-led development today, in which land is allocated to uses promising the highest returns (higher middle and upperclass housing, advanced producer services, high-speed transportation and communication networks), is presented and analytically defended as a market-led logic that will contribute significantly to urban development (Swyngedouw et al., 2002). But in reality there is again a big gap between this pure theory of urban development (a rationality to build and develop activities that will reinforce the ultimate goal of highest returns), and the real theory, which recognizes the conflict over land use between various economic functions and social groups, between economic and other rationales, between the development outcomes of the past and the strategies of the present. The pure theory of real-estate-led urban development, based on highest land-rent returns, overlooks the fact that the application of its basic principle excludes less profitable land uses, thereby justifying the elimination of a significant proportion of activities from the urban scene. To put it even more strongly: the application of the highest-returnfor-land principle is both completely Pareto non-optimal and class-struggle reinforcing; it leads to the displacement of lower-income classes from centrally located premises, and the closing down or degradation of their service provision, education and natural sociocultural environment. This pure theory of urban economic development then boils down to a class-bound microeconomic theory of maximization of returns on land capital, which is owned by large real-estate operators (institutional investors, private households, private and public firms). In fact, access to land is a conditio sine qua non for microrational economic land allocation to work in reality. However, given the very uneven distribution of ‘real’ land ownership, the application of this principle can only reproduce a strongly fragmented city, with increased social exclusion and fractured social harmony.7 In urban life, various functions with diverse rationales, with uneven social and economic impact, and unequal spatial reach, compete with each other over land, over public and private financial resources, over human, social and institutional capital. Because of this variety of functional rationales, because of the historical path-dependence of functions and because of the scarcity of resources, ‘real’ cities are not a reflection of idealized economic rationality. In fact, social cohesion and interfunctional harmony of some sort, not economic rationality, are the real issues that will decide the future of the urban socioeconomy in large cities. This means that the political dimension must be introduced into the analysis, with its need to harmonize (not in an ideal sense) the various rationalities and power relations. Even an adaptation of pure theory to the predominant economic logic of the epoch and the urban territory of the city does not change this conclusion. In the Carthaginian economy pure theory may have been the highest return on a boat trip from one island to the metropolis; in nineteenth-century urban Germany, it might reflect the optimal location of a cutlery factory taking into account labour and transportation costs; and in the twenty-first-century metropolis, it would follow real-estate investment with the highest potential private return. But none of these principles of ‘rational’ economic behaviour led their associated epoch-making economy onto its actual track. An operational theory of urban development should answer a number of basic questions, as argued earlier in this chapter. Analysis of the case studies of urban development in Carthage and in nineteenth-century Germany have made clear that principles of economic rationality vary over time and space, are not a modern invention, and in particular

The economy of the large European city

225

influence behavioural intent, unless the individual and collective decision makers are powerful enough to impose their own ‘agendas’. But even then, the role of both noneconomic and conflicting economic rationales, the articulations with political, social and cultural developments and institutions, as well as the time-dependence element, must all be recognized. Moreover, there are no known historical cases where the exclusive (versus ‘shared’) predominance of private economic rationales has led to a sociopolitically and socioeconomically sustainable urban society and economy. Historically, such (relative) sociopolitical and socioeconomical harmony was possible only when many development functions became integrated into urban development trajectories and when, in addition to market governance, other modes of coordination became operational. Therefore an operational theory of urban development should account for multifunctional development paths and their social, political and cultural embeddedness, along with the variety of modes of coordination that keep the multifaceted development tracks together. 7. Real, pure urban theory: the consequences for urban policy In conclusion, we distance ourselves from the customary synthesis of results and the suggested lines of future research. Instead we address the consequences of distinctive views of ‘pure’ and ‘real’ theory for a contemporary urban policy approach. Figure 9.1 leads us from two different generic concepts of economic rationality to two radically different views of urban policy. This conclusion will obviously be the start of further analysis on the nature of urban socioeconomic development policy but is not pursued in this chapter. The discussion on the consequences of the distinction between ‘pure’ and ‘real’ theory can be organized in four steps. Step 1: the nature of economic rationality In pure theory, formal rationality is presumed to be the only relevant logic for economic analysis. Competition and utility maximization are the only relevant forces influencing the economic configuration of space. In real(istic) theory, economic rationality is not denied but is considered as one of the driving forces of spatial configuration; its outcome materializes only in a contextual way. Space is perceived not only as land to be used but also as a place to live, which in turn means that other logics of existence have a meaning for its organization. Also space is organized according to non-economic needs. This is especially important for any analysis of those urban dynamics that connect to the various social behaviours, engendered by the diversity of population groups and activities in cities. The question for spatial analysis is to find the balance between the various logics or rationales. Step 2: the meaning of social space The nature of economic rationality has consequences for the meaning of space itself. Pure theory, considering (optimal) land use as the object of analysis, leads to the determination of ‘laws’ comparable to laws of physics (e.g. Lösch, 1954). Therefore the human aspects of space are left in a black hole. Social cohesion is considered a side-effect of economic forces. Social and collective appropriation of space is excluded from the analysis and is constrained anyway by competition and the necessity for utility maximization. The new urban policy – the ‘urban’ version of new economic policy – is to a large extent inspired

226

International handbook of urban policy ECONOMIC RATIONALITY

PURE THEORY: FORMAL RATIONALITY: Economic rationality enables us to determine the optimal use of land in an ‘ideal’ system led by economic competition and utility maximization

‘Clear’ guidelines for economic policy focusing on economic efficiency

Social cohesion of cities as a side effect of the dynamics of economic forces

Little influence of historical paths and social/cultural logics

REALISTIC THEORY ACTUAL ECONOMIC BEHAVIOUR: Embedded economic rationality is one of the driving forces of land use and spatial configuration, the analysis of which should be balanced by the study of the social appropriation of space

Importance of policy as a way of organizing space – importance of governance and human/institutional errors

Importance of existential and social logics for the appropriation of space

Importance of the history of cities and space – embeddedness of economic forces in cultural reality

Policy as application of universal laws; no power relations – little choice for policy initiatives

Policy as an effort to balance economic drives and existential logics, power relations and collective existence

Domain of constraints: Reality should be moulded according to economic principles only –analysis and prescription are interwoven

Domain of possibilities. What should be done depends of what has developed. Analysis opens a diversity of urban policy paths

Figure 9.1

From economic rationality to urban policy: a ‘pure’ versus a ‘real’ view

by these principles (Moulaert and Delladetsima et al., 2000; Rodriguez et al., 2003). New urban policy aims at reshaping cities in order to improve their economic competitiveness. It especially emphasizes the development of two sectors: the real-estate market and the high-technology/knowledge-intensive business services sector. Huge business centres

The economy of the large European city

227

and service facilities are supposed to attract financial capital that is presumed to have beneficial side-effects on the whole urban area. Realistic theory on the other hand considers the economic ‘use’ of land as embedded in collective, cultural and historical reality. Therefore power relations are important and cities are and must be organized according to various logics. It must be recognized too that economic activities are also dependent on the non-economic features of cities. The entire spectrum of social activities and relations has to be considered: the quality of the political process and of governance is essential both to open up and to support opportunities for economic actors; the quality of the education systems has an influence on the local labour force; social cohesion, associative life (professional, cultural, social etc.), quality of environment, artistic creativity and affordable collective facilities contribute to the quality of life. All this may not be decisive for the location and profit-making of one firm in particular, but has a basic influence on the dynamics of the whole area. There is a cumulative causality between the various spheres of social life and political guidance on one hand and urban economic activities on the other, a process mentioned by Otto Schwarzchild in 1907. As argued previously, cities are first and foremost places of interaction. The importance of these interactions implies that operational urban economic analysis should go far beyond the consideration of individual profit-making of firms, and bring into account other economic as well as non-economic rationalities. Step 3: ‘pure’ and ‘real’ urban policy Pure theory may provide strong guidelines for economic policy. In so far as it emphasizes economic efficiency as the only criterion for the analysis of spatial configuration, the choice of policy is limited by the need to let market forces work freely. Realistic theory in contrast considers that policy is designed according to the variable and articulated importance of different rationalities. As space also means a liveable environment, a balance has to be found somewhere between the necessary processes of economic forces and the political and social needs of the city. Urban analyses show the importance of this collective and social dimension for the economic development of cities. The collective dimension of space as a shared public element should be integrated into the governance of space itself. Step 4: human development and urban policy Pure theory is constrained by a view of ‘human development’, which submits to market economic efficiency. Political initiatives are directly derived from, and prescribed by, pure economic analysis. From this perspective, urban policy consists of constraints on human and social emancipation. Realistic theory tries to widen the horizon for possible action, compatible with the history of the city. Social and political logics are to be taken into account. In other words, analysis and prescription are not totally disconnected: the prescriptions are not ‘forced’ by the analysis, but chosen in consideration of the various possibilities highlighted by that analysis. In conclusion, economic rationality is definitely a driving force in the evolution of the spatial and social configuration of cities. However, it can play only an analytical role in the preparation of policy actions if it is considered in its embedded version (epoch, place and institution bound) and, therefore, in interaction with a diversity of other logics, each responding to its proper potentials and constraints. It is therefore necessary to combine

228

International handbook of urban policy

elements of the ‘pure’ theory of urban elements with those of ‘real’ theory, thus laying the foundation for an operational theory of urban development in which individual, collective and policy behaviours are analysed as expressions of ‘articulated’ instead of time-and-space-estranged ‘ideal’ rationalities. Notes 1. As Ron Martin (1999) showed, this synthesis was made in economic geography many years ago, and the ‘new’ economic geography is reworking it in a more formalized, but not necessarily more instructive, way. 2. It is interesting to notice that Andreas Predöhl, criticizing Weber, suggested that his industrial location theory was too empirical (Predöhl, 1928; Nussbaumer, 2002)! 3. At the beginning of the Iraq War, the plundering of the archaeological museum and the burning of the main library of Baghdad, under the eyes of the army of the most ‘developed’ nation in the world, show a similar kind of ‘respect’ for history. 4. Most of the information on Carthage was obtained from Lancel (1997) and Fantar (1995). 5. The first or Sicilian Punic war led both Rome and Carthage to the brink of bankruptcy. Rome could only continue and win this war thanks to private funding by Campanian traders and shipowners who raised their own war fleet when the Roman state had almost no ships left. 6. To reconstruct the history of Carthage is a very difficult job. After its conquest by Scipio Africanus in 146 bc. Carthage was plundered and fired. With the exception of a few papyrus rolls (e.g. the treatises on agronomy by Mago), its library was supposedly given away to the Numidian kings, the arch enemies of Carthage, and was never found again. There are many secondary sources from Latin and Greek historians, but these remain fragmented and sometimes politically coloured. Therefore most original sources are archaeological. But even this is a problem, as the Romans did such a thorough destruction job of their detested enemy and the city (especially the Tophet). 7. We do not deal with the philosophical and existential–economic criticisms of rational economic decision making with reference to limited information and calculus capacity. These criticisms can be found in Hollis and Nell (1975).

References Amin, A. and S. Graham (1997), ‘The ordinary city’, Transactions of the Institute of British Geographers, 22, 411–29. Amin, A. and N. Thrift (2002), Cities. Reimagining the Urban, London: Polity. Castells, M. (1972), La question urbaine. Paris: Maspero. Christaller, W. (1935), Die zentralen Orte in Süddeutschland, Jena: Gustav Fischer Verlag. Christiansen, C. (1914), ‘Chemische und Farben-Industrie’, in A. Weber (ed.), Über den Standort der Industrien, IIer Teil: die deutsche Industrie seit 1860, Heft 2. Tübingen: J.C.B. Mohr. Fantar, M.H. (1995), Carthage. La cité punique, Paris: Les Editions du CNRS. Fujita, M. and J.-F. Thisse (2000), ‘Les théories économiques de l’agglomération: de nouvelles perspectives pour l’analyse des phénomènes régionaux’, in M. Beine and F. Docquier (eds), Croissance et convergence économiques des régions: Théorie, faits et déterminants, Brussels: De Boeck Université, collection Economie Société Région, pp. 151–203. Hammer, R. (1922), ‘Der Standort der deutschen Bijouterie-Industrie’, in A. Weber (ed.), Über den Standort der Industrien, IIer Teil: die deutsche Industrie seit 1860, Heft 7, Tübingen: J.C.B. Mohr. Hollis, M. and E. Nell (1975), Rational Economic Man. A Philosophical Critique of Neo-Classical Economics, Cambridge: Cambridge University Press. Jacobs, J. (1970), The Economy of Cities, New York: Vintage Books. Knight, R. (1996), ‘Knowledge-based development’, Urban Studies, 32(2): 225–60. Krugman, P. (1996), ‘Urban concentration: the role of increasing returns and transport costs’, International Regional Science Review, 19(1–2), 5–30. Krugman, P. (1998), ‘What’s new about the new economic geography?’, Oxford Review of Economic Policy, 14(2), 7–17. Lancel, S. (1997), Carthage. A History, Oxford: Blackwell. Lefebvre, H. (1991 [1974]), The Production of Space, Oxford: Blackwell. Lipietz, A. (1974), Le tribut foncier, Paris: Maspero. Lösch, A. (1954), Economics of Location, trans. from 2nd rev. edn by William H. Woglom, New Haven, CT: Yale University Press. Luke, T.W. (1997), ‘New world order or neo-world orders: power, politics and ideology’, in M. Featherstone,

The economy of the large European city

229

S. Lash and R. Robertson (eds), Informationalizing Glocalities, Global Modernities, London: Sage, pp. 91–108. Martin, R. (1999), ‘The new “geographical turn” in economics: some critical reflections’, Cambridge Journal of Economics, 23, 65–91. Moulaert, F. and L. De Cannière (1987), ‘Income inequality and consumptive spending behavior: empirical evidence from the 1978–79 household budget survey in Belgium’, Journal of Post-Keynesian Economics, 10(2), 4–15. Moulaert, F. and P. Delladetsima et al. (2000), Globalization and Integrated Area Development in European Cities, Oxford: Oxford University Press. Moulaert, F. and A.J. Scott (eds) (1997), Cities, Enterprises and Society on the Eve of the 21st Century, London and Washington: Pinter. Moulaert, F., E. Swyngedouw and A. Rodriguez (eds), (2003), The Globalized City. Urban Restructuring and Social Polarization in the City, Oxford: Oxford University Press. Myrdal, G. (1957), Economic Theory and Underdeveloped Regions, London: Duckworth. Nussbaumer, J. (2002), Le rôle de la culture et des institutions dans les débats sur le développement local: la contribution de l’Ecole Historique Allemande, Université de Lille 1: Thèse de Doctorat. Peck, J. (2005), ‘Struggling with the creative class’, International Journal of Urban and Regional Research, 29(4), 740–70. Perroux, F. (1983), A New Concept of Development: Basic Tenets, London: Croom Helm. Predöhl, A. (1928), ‘The theory of location in its relation to general economics’, The Journal of Political Economy, 36(3), 371–90. Rodriguez, A., E. Swyngedouw and F. Moulaert (2003), ‘Urban restructuring, social-political polarization and new urban policies’, in F. Moulaert, E. Swyngedouw and A. Rodriguez (eds), The Globalized City. Urban Restructuring and Social Polarization in the City, Oxford: Oxford University Press, pp. 29–46. Schmoller, G. (1901), Grundriss der Allgemeinen Volkswirtschaftslehre, erster Teil, 4–6, Auflage, Leipzig: Duncker & Humblot. Schwarzschild, O. (1907), Die Großstadt als Standort der Gewerbe mit besonderer Berücksichtigung von Berlin, Inaugural-Diessertation zur Erlangung der Doktorwürde. Jena: Gustav Fischer. Sombart, W. (1902), Der moderne Kapitalismus, Vol. 2. Die Theorie der Kapitalistischen Entwicklung, Leipzig: Duncker & Humblot. Stanback, T. and T. Noyelle (1982), Cities in Transition, Totowa, NJ: Allanheld, Osmun. Swyngedouw, E., F. Moulaert, and A. Rodriguez (2002), ‘Urbanization in Europe: large–scale urban development projects and the new urban policy’, Antipode, 34(3), 547–82. Tobin, J. (1975), Essays in Economics. Vol. 2. Consumption and Econometrics, Amsterdam: North-Holland. Von Thünen, J.H. (1875), Der Isolierte Staat in Beziehung auf Landwirtschaft und Nationalökonomie, Vols 1–3, 3rd edn, Berlin: Verlag von Wiegand, Hempel & Parey. Weber, A. (1929), Theory of the Location of Industries, translated by Carl Friedrich, Chicago, IL: The University of Chicago Press. Weber, A. (1913–22), Über den Standort der Industrien, IIer Teil: die deutsche Industrie seit 1860, Heft 1–7, Tübingen: J.C.B. Mohr. Weber, M. (1947), ‘Die Stadt’, in Wirtschaft und Gesellschaft (Grundriss der Sozialökonomik, dritte Abteilung, Vol. 2), Tübingen: J.C.B. Mohr (Paul Siebeck). Yeung, H. Wai-chung (2005), ‘Rethinking relational economic geography’, Transactions of the Institute of British Geographers, 30(1), 37–51.

10 E-government: turning the digital divide into a digital dividend in Manchester (UK) D. Carter

Urban development and the impact of the information society New information and communications technologies are playing an increasingly important role, as a key growth sector, in the regeneration of urban economies. This sector is providing the dynamic for the emerging ‘information economy’, or ‘information society’, where convergent technologies (integrating ICT, telecommunications and broadcasting media) come together with multimedia-based teleservices (services utilizing the integration of sound, text and image) to represent a major economic change comparable to a new industrial revolution. Major industrial cities around the world, such as Manchester in the UK, currently face a similar challenge, namely how to respond to the massive economic restructuring that has taken place in urban areas while, at the same time, developing innovative and practical solutions that bring real economic and social benefits to local people. The development of the information society will accelerate the process of restructuring so that within urban areas economic growth sits side by side with extremes of poverty, unemployment and other forms of social exclusion. Up until now the main focus of discussions about the information society has been on the development of ‘information superhighways’, the infrastructure. This is clearly important but often represents a determinist model based on the ‘push’ of the technology rather than on the ‘pull’ of user needs. Many cities, including Manchester, are working hard to recreate a positive vision for themselves as centres of innovative, internationally focused economic, social and cultural activity. They share a commitment to working out policies and practices that will provide the quantity and quality of jobs and services required to make the transition to a predominantly post-industrial future without experiencing the worst excesses of social dystopia often threatened by this transition. The social consequences of the first such transition, into the industrial age, on cities like Manchester are extensively documented. Imaginative uses of the new digital technologies can provide vital tools to aid the process of urban regeneration, but the key to success is to ensure that such solutions are sustainable. Certain cities are well placed to capitalize on this both through having, or gaining, experience and expertise in using these technologies, which provide a base for the development of a ‘critical mass’ for future deployment. The priority, especially for local administrations, is to ensure that these technologies become a means for generating economic growth, employment and an enhanced quality of life through the provision of local access to e-enabled facilities and services. This is an essential part of the policy commitment to the transformation of public services where government, at both local and national level, needs to take much greater advantage of what the digital world has to offer. It is clear that strategies for e-government now have the opportunity to embrace the ‘Web 2.0’ world as a means to achieving 230

E-government

231

greater effectiveness and efficiency for public services through digital innovation driving transformation and sustainability. Partnership working is one clear way of advancing the transformational agenda with joined-up service provision across the public sector. It allows far higher levels of engagement directly with users, as the UK’s recent Varney Report on ‘Service transformation’ (HM Treasury, UK Government, 2006) made clear. Current debates about these developments are invariably optimistic ones where e-services will be able to empower citizens and provide for their full participation in an emerging ‘digital democracy’. There is a serious danger, however, that this ignores the realities of power, which can be seen to support an increasing ‘information aristocracy’ rather than an effective ‘digital democracy’. If there is not full accessibility to the new digital infrastructures and services for all citizens, then the outcome will simply reinforce existing patterns of inequalities with ‘information haves’ and ‘have nots’ in our communities. Manchester 2.0 – digital sustainability in the global knowledge economy In January 2007 Manchester City Council submitted the ONE-Manchester Partnership Digital Challenge proposal to government with plans for developing: ‘universal, affordable next generation broadband access’ which ‘is essential to connect all residents and businesses of the Manchester City-region to the social, educational, informational and economic opportunities they deserve’. This established the foundation for the creation of a Manchester Digital Strategy with a vision of creating the city-region as ‘the most advanced “next generation” connectivity in the UK, providing a sustainable base for high growth business, innovation, transformational public services and an inclusive knowledge society’. Manchester, as the ‘original, modern’ city, faces many challenges in sustaining its economic growth and in connecting the opportunities created by this growth with the needs of local residents, maximizing local benefit. Not least of these challenges is the way that ever-accelerating developments of digital technologies are creating what has been referred to as a digital ‘paradigm shift’ in the global economy. Various terms are being used to describe this – the ‘Web 2.0’ world, ‘wikinomics’ and the new ‘long tail’ economic world where millions of micro-businesses and e-traders create as much economic wealth and opportunity as the traditional large corporate companies. In many ways Manchester is well placed to be a prime mover in this world, celebrating the sixtieth anniversary of the invention of the world’s first real computer, the ‘Baby’ (on 21 June 2008) and being a real digital pioneer in the 1990s with the UK’s first public access computer communications and information system, the Manchester Host (launched with Poptel in 1991), the UK’s first Electronic Village Halls (1992) and the Manchester Community Information Network (MCIN – another UK first, 1994). The ONE-Manchester Digital Challenge proposals capitalized on this and now aim to set out a ‘route map’ for a third wave of development which will use the very latest digital technologies to support further economic growth, tackle the digital divide and create inclusive sustainability. The Digital Strategy and its proposals for a ‘Next Generation Digital City’ aim to make Manchester a world-class exemplar of how to lead this third wave around four main themes. The first is about sustaining economic growth, especially through the digital/creative sector, new micro-businesses, digital social enterprises and creating

232

International handbook of urban policy

e-traders. The second focuses on promoting digital inclusion, ensuring that all residents can access the online services, technologies and applications that they need. The third stresses the importance of continuing to transform public services through innovative uses of digital technologies. Finally the Strategy highlights the potential for promoting inclusive sustainability where digital technologies are used more innovatively to support sustainable energy communities, intelligent buildings, teleworking, improved mobility, telecare and a higher quality of life generally. Despite some encouraging trends with public awareness and use of user-generated content and social networking, the development of new services and applications remains dominated by the multinational corporate sector, leading to a pattern of ‘development from above’. If the new infrastructures and applications are to benefit a much wider spectrum of public involvement than is currently the case, there is a need for the civic commitment and public support, including financial resources, at all levels to support ‘development from below’ in applications and services, especially if the full potential of the ‘Web 2.0’ paradigm is to be realized. There is, then, a distinct ‘applications gap’ at the level of local citizens, too many of whom still sit on the wrong side of the ‘digital divide’. The most effective way of bridging this gap is by stimulating greater engagement and experimentation, empowering users to develop digital literacy and competences for themselves, and to use these to create their own content and services. The objective of such initiatives is to provide a wide range of insights that can be usefully drawn upon by others in developing alternative systems, geared to different local needs in different places. Local experimentation therefore becomes part of city-wide and region-wide ‘learning networks’ whereby the insight gained in one environment can be transferred with suitable adjustments to another. If these ‘learning networks’ can then link up – nationally and internationally – then there is the basis for a potentially powerful counterbalance to vested interests, in terms of corporate and state authority, which can be much more proactive in taking an advocacy role in relation to consumer, citizen and wider democratic interests. Developments in advanced communications need to be accompanied by a strategy for development from below that seeks to realize the indigenous potential of cities and regions. Social innovation in the community – involving local government, schools and colleges, public libraries, the voluntary sector, consumer groups and the trade unions – is a necessary counterpart to organizational innovation led by industry, commerce and government departments. One of the more relevant initiatives at a European level that is supporting this process is the concept of ‘Living Labs’. The Manchester Digital City project aims to develop its ‘Manchester Living Lab’ as a new innovation environment for next-generation connectivity development and to encourage new players and investors to enter the market and to demonstrate the social and economic validity of proposed applications and services. This approach is already well established in many other parts of Europe through the ‘Living Labs’ concept. Manchester’s ‘Living Lab’ was the first in the UK, set up in 2006, focusing on the Eastserve initiative in East Manchester, and was the only UK participant in the first wave of ‘Living Labs’ established as founder members of the European Network of Living Labs (ENOLL). This commitment to social innovation is central to the development of open and

E-government

233

accessible e-government services. The best way of providing such public e-services will vary enormously from area to area, region to region and country to country. There are, however, some good examples emerging from some of the cities that are developing work in this area, e.g. Amsterdam, Barcelona, Bologna, Helsinki and Manchester. The work is based on a number of priorities. One is affording communities greater access to learning centres – a facility sometimes called local ‘telecentres’ or ‘electronic village halls’. Another is to add to the service by providing training, advice and support systems to local people and organizations that did not have sufficient access to such facilities before. These facilities enable them to access on-line services and networks and, in some cases, to create teleworking opportunities in areas where there were none or few before. Another is the deployment of social networking applications to create mutually accessible communication routes between citizens and with decision-makers, e.g. councillors, MPs and MEPs, and online conferencing and consultation projects based on access through community facilities (e.g. access centres, libraries, schools, citizens’ advice bureaux etc.) as well as with individuals with the capacity to do this, providing a more sustainable basis for ideas of ‘e-democracy’. Perhaps the most significant, however, is the rapid growth of community-based initiatives to create user-generated content, ensuring that local organizations and people can become active content producers and social networkers. Over the past ten years many cities in Europe have been increasingly deploying many of these applications around a number of common themes and collaborative partnerships. The main motivation is enabling cities to become more, rather than less, active as centres of creative activity and sustainable economic, social and cultural growth. This is being supported by setting up local facilities to provide access to digital technologies and services, e.g. access centres, information networks and teleworking centres within cities, in order to encourage people to continue to use the city but in more flexible ways. At the same time it is important to continue to decentralize workplaces and services within the city as an alternative to transferring facilities out of the city. The overall impact of these approaches should be to support greater flexibility for people working and/or living in the city through extending opening hours of all services, including promoting the evening economy and the idea of the 24-hour city, more residential housing in city centres, improved childcare facilities and better, more integrated public transport systems. This case study aims to demonstrate how Manchester has responded to these challenges and how e-government services can play a key role in transforming the way that public institutions operate in the twenty-first-century knowledge economy. Urban regeneration in Manchester Urban regeneration is a prerequisite for tackling social exclusion and economic restructuring. Cities across the world face similar challenges in terms of finding coherent and effective policies and strategies that will support and sustain economic growth and connect the opportunities created by such growth with the needs of their citizens. The emergence of the information society has added new complexities to this process, on the one hand adding to the speed and scale of change while on the other hand providing new tools and processes that can help to mitigate the impact of that change. Manchester has experienced new economic growth developing side by side with

234

International handbook of urban policy

persistently high levels of unemployment, poverty and social exclusion. It has the thirdhighest rate of multiple deprivation (apart from Liverpool and Knowlsley) and the highest rate of child poverty in the UK. This ‘tale of two cities’ syndrome (as it has been referred to) threatens to undermine the longer-term sustainability of economic development and growth. Manchester City Council has responded to this challenge by identifying information and communication technologies (ICTs) and digital media (referred to in this chapter as digital technologies) as an important cross-cutting theme within its City-Region Economic Development Strategy and Plan. The aim is that digital technologies should be used to increase citizens’ access to skills, jobs and services, and support greater participation in civic life, including in the regeneration process itself. A major influence on this approach is the experience gained in East Manchester, where the City Council has formed an urban regeneration company (URC), New East Manchester (NEM) Ltd, a public–private–community partnership operating on a notfor-profit basis. An online community network, run in partnership with local citizens’ organizations and representatives, known as ‘Eastserve’ was established here in 2001. This has been supported by the Manchester Digital Development Agency (MDDA), set up as a new city-wide initiative in 2003 with the mission To make Manchester a leading world class digital city, having one of the most competitive broadband infrastructures in Europe, attracting and sustaining investment in ICT and e-commerce across all sectors of the economy, generating new businesses, developing new learning cultures, promoting social inclusion and providing all residents with the skills and aspirations to play a full role in the information society. (MDDA, 2005)

The objective is that the Manchester city-region can become one of the most competitive yet inclusive e-enabled urban environments in the world, based on a world-class and comprehensive broadband infrastructure that is used to promote access, skills, jobs and sustainable economic growth. Through the work of the MDDA the City Council and its Local Strategic Partnership (LSP) (Manchester Partnership, 2008) aim to ensure that local people can develop the skills required to participate fully in the emerging information society and to be able to take advantage of the new training and employment opportunities that are becoming available. The Eastserve project (2004) works with existing community-based ICT access centres, known as ‘UKOnline Centres’, across the city and related projects that promote the take-up and use of digital technologies by small businesses and social enterprises. This work builds upon national (DTI, 2000) and local (MCC, 2002) policy frameworks focusing on digital inclusion as well as good-practice examples identified through national initiatives such as the UK Communities On-Line (1999) network. These initiatives are aiming to achieve real and lasting benefits for citizens around three key issues that need to be addressed within this approach. The first is to determine how new e-services can be developed which engage citizens, drive take-up of e-government services and support the regeneration of urban neighbourhoods. The second is to identify what barriers to take-up are being identified and how these can be challenged through new working relationships being developed between city administrations, citizens and businesses. The third is to define ways in which innovation, in terms of both technologies and business models, can support organizational transformation and be sustained, which is a key element of the ‘Living Labs’ programme.

E-government

235

Challenging the ‘digital divide’ Many residents in the East Manchester area use mobile phones rather than fixed telephone lines. The initial survey work undertaken by the area regeneration partnership (in 2001) revealed that more than 25 per cent of homes no longer used landlines. This led to changes to the initial aims and objectives of the project, which had been to provide PCs to households with dial-up Internet access. This meant that a system of wireless broadband connectivity was required which then enabled households to access the Internet and online services. More than 2000 of the area’s homes now have wireless broadband Internet connections, as well as 17 local schools, eight ‘UKOnline’ community access centres and ten public access points in libraries and other centres. They all connect to a 100 Mbps licensed wireless backbone linking four tower blocks around the East Manchester area from where bandwidth is distributed over a wireless network. Schools and public buildings receive an online community service, developed by Eastserve, and relay it to other residential locations. These locations are grouped in clusters and communicate with one another wirelessly via a radio dish antenna connected to a wireless bridge. This is one of the largest community-based all-wireless broadband networks in Europe and the largest community regeneration initiative using digital technologies in the UK. Although East Manchester is one of the poorest areas in the city, the take-up of broadband in the area is far higher than the city-wide rate, and residents are using their new skills to improve their access to training and jobs. The project aims to be financially self-sufficient within two years. The initial evaluation of the impact of the project has shown that Eastserve users: ● ● ● ● ● ●

are more aware of job opportunities; want access to more training; are more likely to seek work; are more likely to take part in other educational opportunities; are more likely to be looking for new challenges; and are more interested in running their own businesses.

Plans are now going ahead to expand the network to increase the current user coverage from about 5000 households to more than 10 000 households during 2007 and then to more than 50 000 households by 2010, expanding population coverage from around 20 000 people to more than 250 000. Over 40 per cent of residents have now had basic ICT training because of Eastserve, more than double the rate of most areas in the city, and 20 per cent of these are moving on to extended courses that provide opportunities for accreditation. Digital inclusion and urban regeneration Manchester is the UK’s second-largest metropolitan area outside of London, with a population of over 2.5 million in the Greater Manchester city-region. At its core is the City of Manchester, the first industrial urban area in the world and the ‘original, modern’ city. Alongside the city’s transformation from industrial to knowledge economy is the legacy of high levels of unemployment and poverty from the experience and impact of the economic restructuring of the 1970s and 1980s. Much of this legacy is concentrated

236

International handbook of urban policy

in the traditional industrial manufacturing area of the city, in East Manchester, which was once home to more than 100 000. Its population has now declined significantly, to fewer than 30 000 people. East Manchester is a regeneration challenge of regional and national significance. An area of 1100 hectares situated immediately east of Manchester’s city centre, East Manchester presents an opportunity for regeneration on a scale and with a diversity almost unprecedented in an English city. There are unique opportunities for the renaissance of the area as a focus for the knowledge-driven economy of the twenty-first century. These opportunities have been generated by provision of a range of regeneration initiatives focusing upon East Manchester to address many of the physical, economic and social problems in the area. These, in turn, build upon the stimulus provided by a buoyant economy within Manchester and the major investment attracted through the staging of the Commonwealth Games in 2002 and related legacy projects. The strong commitment by government to the success of cities and to tackling the most acute areas of deprivation is also a key factor driving this impetus, as is the partnership generated between the local community and local and national government. A key component of any regeneration challenge in the twenty-first century is the role of technology in its many forms. Digital technologies are having an ever-increasing effect on all of our lives and are essential to the development of a strong economic base and an improved quality of life for citizens within areas facing social exclusion and multiple deprivation, areas such as East Manchester. In looking to expand this strategic approach across the whole of the city-region, Manchester City Council and its partners within the Local Strategic Partnership (LSP) have linked up with three neighbouring municipalities, Tameside, Salford and Oldham, and their strategic partnerships to create ‘ONE-Manchester’ (Open Network E-Manchester). ONE-Manchester is a new partnership that brings together the public sector, private sector and voluntary/community sector around the idea of ‘turning the digital divide into a digital dividend’ – the central theme of the ‘ONE-Manchester’ Digital Challenge bid (ONE-Manchester, 2007). This is looking at the longer-term sustainability of digital inclusion policies and practices by developing a new collaborative delivery mechanism for digitally enabled services and social networking. It intends to provide a sustainable digital development model that can be used to create social capital and community cohesion. The intention is to support national policy initiatives aimed at creating a greater ‘sense of place’ within socially excluded communities through digital inclusion and capacity building. This, in turn, aims to reinforce the transformational government agenda by providing services that are more accessible and more personalized through innovative uses of digital technologies. As this work develops, more attention is also being given to create new and more imaginative business models, especially building upon the experience of social enterprise development, including the idea of ‘digital cooperatives’ that would coordinate and support local, regional and national initiatives and realize the benefits of a ‘digital dividend’. ONE-Manchester is about taking the experience gained on innovative digital inclusion projects in which the partners are involved, such as Eastserve in East Manchester and eTameside, and using this to create an exemplar to stimulate and support digital

E-government

237

inclusion initiatives across the city-region, the region and nationally. This is based on imagining a Manchester in which people have a real personal stake in digitally enabled living and a new sense of pride in their achievements as one of the most connected and cooperative communities in the world. ONE-Manchester’s aim is to mainstream innovation by developing a dynamic collaborative platform that will enable people, both individually and collectively, to become stakeholders in a new way of social networking through the Digital Cooperative. People need to be able to share their skills and knowledge, develop new digital applications and services, and create added value in the form of a digital dividend. ONE-Manchester’s proposal is based on four core principles of social cohesion. 1. 2. 3. 4.

Creating a common vision and a sense of belonging for all communities through imaginative uses of digital technologies to help to transform lives. Ensuring that diversity is appreciated and positively rewarded through improved accessibility of digital technologies to support social networking. Engaging people from different backgrounds through the use of digital technologies that enable them to have similar life chances. Encouraging the development of strong and positive relationships between people from different backgrounds in the workplace, in education and within neighbourhoods by using digital technologies to break down barriers and promote social cohesion.

Transforming communities through neighbourhood empowerment ONE-Manchester’s idea of turning the digital divide into a digital dividend is about enabling everyone in the community, no matter how excluded and disadvantaged, to gain a stake in the knowledge economy and to use it to provide themselves with a better life, particularly in terms of work, skills and health. The first stage of ONE-Manchester’s journey of transformation is to start where people are at. In some places people are beginning to do things for themselves, making the most of the great investment that has been made in specific areas to date, such as Eastserve and eTameside, taking the lessons of the ‘digital pioneers’ who initiated digital development in Manchester over the past 20 years, and getting users involved in generating their own content and using that to develop new e-services with a mutual aid ethos. The next stage is to develop a new set of tools, building on these foundations to provide everyone with the capacity to use digital technologies to transform their lives. Whatever the technology, computers, mobile phones, digital TV, assistive technologies in the home, people want to be ‘ready’ to be able to deal with the inevitable change that they will face in the future. Whoever is working with people, in the public, private and voluntary sectors, there is an equal sense of needing to be better prepared to manage change and create a renewed sense of cooperation and partnership. There is a similar need to be able to use digital technologies as an effective tool in making this happen. ONE-Manchester is, therefore, about building on this experience and using the partners’ proven track record in delivering projects that transform people’s lives, from Eastserve to the Commonwealth Games, to create a new, imaginative and sustainable digital city-region. This starts by taking people’s real experiences of both the challenges and the benefits of using technologies in this way, illustrated through a series of

238

International handbook of urban policy

‘user journeys’ based on archetypes developed through community engagement and consultations. These will be underpinned by focusing on technology and applications that enable delivery of national–local service agreements, known as Local Area Agreements (LAAs) in each local authority area. All of this will fit together into what we see as a digital ‘matrix’, with the Digital Cooperative at the centre and a commitment to make the city-region the UK’s first ‘IP City’, with everyone, everything and everywhere connected using IP (Internet Protocol). Backing this up, the content/services access mechanism that we have called the ‘MyCommunity Gateway’, will enable users to get to relevant content/services. The ONE-Manchester partnership will start to deliver this by developing its Living Lab network across the regeneration areas of the city, strengthening and building out from East Manchester and then across adjacent areas of the Greater Manchester metropolitan area. Benefits from transformational practice In an attempt to address the challenges presented by Manchester’s industrial legacy and to ensure that economic growth can be sustained, ONE-Manchester is being developed on a multi-agency basis to develop innovative e-government applications that will support a number of thematic approaches. The overall objective is to achieve service improvement through enhanced quality and delivery of services. This will be complemented by citizen engagement through the development of new models for service delivery, and more effective citizen involvement in strategic planning and consultation arrangements. Finally we need to have in place the development of new business models that will aid organizational transformation, including public–private partnerships (PPPs) and social-economy enterprises. Social inclusion lies at the heart of this approach because large parts of the Manchester city-region are still characterized by poor-quality environment and poor infrastructure – the economic hangover from industrial restructuring. People living here cannot reach their full potential as a result of this. Educational attainment and skill levels are low. Levels of poor health remain among the highest in the UK and many residents live in areas where crime and antisocial behaviour levels are significantly above the regional and national averages. Worklessness rates here are among the highest in the UK: more than 20 per cent in Manchester, some 60 000 people, and in the core urban population of more than 900 000, 150 000 people are affected. Of the 58 priority wards being targeted by the new joint City Strategy partnership initiative with the UK government’s Department for Work and Pensions (DWP), 43 of them are in the urban core. This is why the ONE-Manchester bid is concentrating on mainstreaming digital inclusion into the three priorities, or ‘spines’, and linked into the LAA blocks: 1. 2.

reaching full potential in employment and education: reconnecting people with opportunities to work, including for themselves, and to learn; creating neighbourhoods of choice: creating improved and sustainable environments where people are, and feel, safe, where they have access to jobs, good schools, health services and amenities;

E-government 3.

239

individual and collective self-esteem/mutual respect: understanding what motivates people to behave in certain ways, what influences aspirations and attitudes, and how to best engage people in fulfilling their responsibilities towards achieving inclusion and cohesion.

Underpinning all of this is the belief that encouraging people back into work will have the biggest impact on quality of life and self-esteem, including increasing collective self-esteem and mutual respect. Alongside this we believe that health and environmental factors also need to be given a high priority in our commitment to transforming lives and communities. Sustainable communities require healthier, greener, cleaner and safer lifestyles to be encouraged and nurtured. To turn this around requires continued investment. As the recent review report of developments in the New East Manchester (NEM) Urban Regeneration Company (URC) area highlighted: The NEM rock is halfway up the hill. There is much development planned. If support is not maintained it could just as easily roll back down the hill as reach the sunny uplands at the top. It is critical that all partners realise this and continue to support NEM. (Parkinson et al., 2006, p. 25)

Based on the regeneration experience to date, the consultation and engagement undertaken with those who will be ‘affected by the bid’ and the political commitment of the civic leadership to deliver, ONE-Manchester believes that this approach can and will transform lives at three levels: 1.

2.

3.

Mobilizing resources through the geographic focus of digitally enabled neighbourhoods and dedicating these to deliver to the priority areas tailored to their specific needs. Having content that is directly relevant to the needs of local people, engaging with service providers to ensure that they are working to meet citizens’ needs, including through programmes to stimulate user-generated content. Using the Digital Cooperative as a new model of mutual aid that will provide service users with the motivation to become more active participants in the process of transformation, supporting behavioural change with improved aspirations.

In addition, Manchester is in the first phase of the UK’s ‘Building Schools for the Future – BSF’ programme, with the adjacent areas of Tameside and Salford just beginning local BSF programmes. This offers new opportunities to connect the UK’s ‘Computers for Pupils’ scheme with neighbourhood-based digital inclusion initiatives. This has great potential to create added value and considerably enhance the ability of young people to fully achieve their potential and reduce the number of pupils not engaged in education, employment or training (NEET). The additional presence of a PC in the homes of those young people eligible for equipment via ‘Computers for Pupils’ creates more opportunity for entire families to access relevant content and services and to become more engaged, for example through the Digital Cooperative initiative.

240

International handbook of urban policy

Conclusions The experience gained through the Eastserve project has been used by the partners involved in the ONE-Manchester initiative to re-evaluate and re-focus their work around the e-government and citizen engagement agendas. For Manchester City Council this has meant a greater understanding of the need to be more proactive in stimulating demand for e-government service delivery. Side by side with organizational transformation internally, the City Council is now working hard to promote take-up of e-services through awareness campaigns, improved access to training and the direct involvement of citizens in producing content for online services. Eastserve is considering new ways to achieve sustainability, including developing a major part of its activities as a social-economy enterprise that would develop a new cooperative model for service delivery with citizen stakeholders. All this experience suggests that key players in e-government, such as local and regional government bodies, need to take a more holistic approach to promoting and delivering greater access to, and take-up of, information society technologies. Further work is now needed to identify and evaluate best practice, especially in terms of identifying the most effective ways of engaging citizen involvement and then sustaining it. At the same time work is also needed on new delivery partnerships, looking not only at developing models of public–private partnerships (PPPs) but also at citizen partnerships and models of social-economy enterprises. It is felt that there is significant scope to develop and test new organizational models that will play an important role in ensuring sustainability of these developments. One of the most important recommendations to come out of this work is the provision of innovative approaches to tackling inequalities in the information society, the ‘digital divide’, for example by providing not only access to equipment, connectivity and training, but also stimulating demand by developing good-quality content and involving local citizens in generating that content. City administrations also need to learn from these results and experiences, particularly in terms of involving citizens more effectively in the ongoing organizational transformation of public services. The Eastserve project has many implications for the way that public and community services are delivered, including e-government solutions, not only in local authorities but also in other areas; for example, in East Manchester the police and health services are also now implementing changes to the way they deliver services because of the experience of the Eastserve project. This has led to policy recommendations proposed by the Manchester Digital Development Agency (MDDA), which are being taken forward through the ONEManchester partnership at local level, at regional level through the North West e-government Group (NWeGG), at national level as part of the UK Government’s Digital Challenge initiative and through European networks such as Eurocities and Telecities (Eurocities, 2008) and the European Network of Living Labs (ENoLL, 2007). In terms of defining new challenges for information society technologies and policies, the most important one is about how we engage with citizens to ensure that they can become active producers of online content and new e-services rather than passive consumers of what is there already (as outlined above). It is felt that the transformation of urban living through the imaginative use of digital technologies can make a significant contribution to the EU’s Lisbon objectives, especially as revised by the recent Report of the High Level Group (Kok, 2004), in terms

E-government

241

of jobs and growth. Cities act as motors of innovation and creativity for the economy and society as a whole, and it is anticipated that this will increasingly be the source of future jobs and growth in the knowledge economy. At the same time these technologies also provide opportunities to transform the lives of citizens, as highlighted in the EU’s Communication on the challenges to be addressed by a European Information Society Strategy up to 2010. This is why the focus on tackling the digital divide and promoting digital inclusion is continuing to be seen as a priority, highlighting the need to ensure that citizens have the capacity, skills and motivation to take advantage of these technologies and that there is a real commitment to the transformation of public services from all levels of government. Some specific lessons can be learnt from Manchester’s experience that it is hoped will be of use to similar projects being developed in other areas: first, the need to develop e-services based on the social, cultural and economic needs of neighbourhoods. This requires a combination of detailed local research and real efforts to consult with and engage local people as a prerequisite for capturing user needs and involving users in the design and delivery of the new services. Second, the stakeholders in the project, especially the public sector, need to demonstrate a long-term commitment to community engagement and capacity building, and invest as much in the development of people’s skills and confidence as in the technology being deployed. Third, there is the need to have an ongoing evaluation strategy that not only has the ability to identify weaknesses, and even failures, but also has the role of communicating these results directly into the strategic decision-making process so that the project can adapt and evolve as quickly and effectively as possible, backed up by effective project management resources. References Communities On-Line (1999), Local Connections: Making the Net Work for Neighbourhood Renewal, London: COL. DTI (UK Department of Trade and Industry) (2000), Closing the Digital Divide: information and communication technologies in deprived areas, Report by the Social Exclusion Unit Policy Action Team 15. DTI, London, March. Eastserve project (2004), www.eastserve.com. Eurocities (2008), ‘Eurocities Knowledge Society Forum – Telecities’, www.eurocities.org. European Commission (2004), Challenges for Europe’s Information Society beyond 2005. COM. ENoLL (2007), ‘European Network of Living Labs’, www.openlivinglabs.eu. HM Treasury, UK government (2006), Service Transformation: A Better Service for Citizens and Businesses, a Better Deal for the Taxpayer, Sir David Varney, London, www.hm-treasury.gov.uk. Kok, W. (2004), Facing the Challenge – the Lisbon Strategy for Growth and Employment (Report from the High Level Group), Brussels, November. Manchester Partnership (2008), www.manchesterpartnership.org.uk. MCC (Manchester City Council) (2002), Tackling The Digital Divide, Project Report, MCC, Manchester, July. MDDA (Manchester Digital Development Agency) (2005), www.manchesterdda.com. ONE-Manchester (2007), ‘ONE-Manchester’ Digital Challenge bid, www.manchesterdda.com/digital challenge/158/. The UK Digital Challenge site is www.dc10plus.net. Parkinson, M., R. Evans, R. Meegan, J. Karecha and M. Hutchins (2006), ‘New evaluated Manchester: interim evaluation of new East Machester (executive summary)’, report by the European Institute for Urban Affairs, Liverpool John Moores University.

PART FOUR THE CHANGING DEMOGRAPHIC LANDSCAPE

11 International labour migration in the EU: likely social and economic implications T. El-Cherkeh

Introduction With 56.1 million migrants, Europe has become one of the major regions of destination for international migrants (GCIM, 2005). European countries are confronted with ageing populations and declining workforces. As a result, shortages in the labour markets are likely to worsen in the future, and Europe will almost certainly have to increasingly rely on immigration to foster economic growth and to maintain current levels of welfare. Yet in various European countries migrants experience difficulties in accessing the labour markets and, moreover, face unfriendly environments. Many obstacles stand in the way of immigrants who seek employment, related to labour market rigidities, the non-recognition of qualifications and skills, or discriminatory behaviour. As a result, the labour market performance of migrants and their descendants is consistently below that of natives. Current national policies are based on experiences with earlier waves of labour immigration that turned unintentionally from temporary migration to permanent settlement. The reluctance of the societies to act upon this development with appropriate integration measures resulted in the marginalization of migrants and their offspring, who are disproportionately disadvantaged in education and labour market participation. As a consequence, public perception towards immigration tends to be generally negative in many European countries. This contributes to restrictive national policies. Liberalization is therefore highly contested, and national policy makers first consider reforms that influence the domestic labour supply before having recourse to labour migration. In October 2007, the proposal for a so-called ‘EU Blue Card’ provoked much negative reaction to the question whether – and to what extent – labour migration should be tackled as a common issue. European countries are facing similar dilemmas, and there is thus a need to introduce transparent and harmonized rules with the aim of attracting highly skilled migrants to Europe. This proposal, adopted in May 2009, now represents a first concrete step towards labour migration management at the EU level. In the first section, this chapter will provide an overview of the migration history of European countries, followed by insights on demographic trends and workforce developments in Europe. The second section will look more closely at EU policies with a particular focus on attempts to harmonize approaches in the area of labour migration. Labour migration to Europe Issues at stake According to the Global Commission on International Migration (GCIM, 2005), around 3 per cent of the world’s population – equivalent to 200 million people – are 245

246

International handbook of urban policy

international migrants. Compared to other periods in the past, this does not represent a particularly high percentage. However, international migration is becoming an increasingly important issue for Europe, as most of the EU countries have turned into immigration countries over the last 50 years or are gradually becoming destination countries for migrants. Together with the USA and Canada, Europe has become one of the most important destination regions for international migrants. Most of the Western European countries have developed since the 1950s into major migrant-receiving countries due to the influx of repatriates from former colonies and former territories (ethnic migration), as well as the inflow of labour migrants. Labourers from Italy, Greece, Portugal, Spain, Yugoslavia, Turkey, Morocco and Tunisia were recruited on the basis of temporary workers’ programmes by countries such as Belgium, France, Germany, the Netherlands and Switzerland. Although recruitment bans ended guest workers’ schemes in 1973/74, immigration continued in the form of family reunion, forced migration (flight and asylum) and other forms of labour migration. There were exceptions, however. Because of their booming economies, Ireland, Spain, Portugal and Greece continued to attract migrants from the 1980s onwards, which turned these countries into net immigrant receivers. Two recent trends in migration in the EU should be noted. First, there was a pronounced rise of labour migration from new EU members such as Poland, Lithuania, Bulgaria and Romania to Western European countries, in particular to Italy, Ireland, Portugal, Spain and the UK. Second, some new European member states, and especially the Czech Republic, Hungary, Slovakia and Slovenia, have also been experiencing large net migration gains. Relative to its population size, in 2005 Cyprus was the new EU member state experiencing the largest positive migration balance with 127.2 per 1000 inhabitants1 (Münz, 2007). The countries of origin vary significantly across different EU countries. More than 50 per cent of the foreign-born population in France, the UK, Ireland, Belgium, the Netherlands, Finland, Sweden, Denmark and Luxembourg came from another EU-15 or OECD country. By contrast, the majority of the foreign-born population in Germany and Southern European countries originate in a developing country or a transition economy (OECD, 2007a). During recent years, the order of importance of source countries has shifted considerably (see Figures 11.1 and 11.2). Whereas in 2000, inflows to and flows within Europe were mainly originating in Morocco, Ecuador, Poland, Bulgaria, Turkey and Romania, in 2005, Poland and Romania took the first two places, with increasing numbers of migrants (OECD, 2007b). There are currently approximately 40 million foreign-born people in EU countries, representing around 8.3 per cent of the EU’s total population (OECD, 2007a). As a destination region, particularly for labour migrants, Europe is likely to gain even more importance in the future when the ageing of its member states’ populations and declining labour forces are considered. Ageing populations, labour forces and labour shortages Almost all European countries are already or will in the future experience rapid ageing of their populations and decreasing labour forces. Demographically, Europe2 is characterized by low fertility and increasing life expectancy rates which tend to reverse the age

International labour migration in the EU

247

Italy France Germany USA Romania Turkey Bulgaria Poland Ecuador Morocco 0 Source:

20

40

60

80

100

120

OECD (2007b).

Figure 11.1

Top ten source countries for immigration, 2000 (in thousands)

France Russian Federation UK Turkey Ukraine Germany Bulgaria Morocco Romania Poland 0 Source:

50

100

150

200

250

300

350

OECD (2007b).

Figure 11.2

Top ten source countries for immigration, 2005 (in thousands)

pyramid. The ageing of the workforce caused by the shrinking number of young people and the growing number of older people is skewing the age pyramid. Based on EU and UN projections Europe’s total population should increase only slightly, from 472 million in 2005 to 479 million by 2025. From then onwards it is expected to decrease by as much as 17 million by 2050. The population age groups between 15 and 64 are likely to decline from 317 million in 2005 to 302 million by 2025 (equivalent to −5 per cent) and to 261 million by 2050 (−18 per cent). The population above 65 years is expected to increase from 79 million in 2005, to 107 million by 2025 (135 per cent) and to 133 million by 2050 (168 per cent). As a consequence, the dependence ratio (the population of 651 years relative to those aged between 15 and 64) is likely to increase from 26 per cent in 2005 to 35 per cent by 2025 and 51 per cent by 2050. Thus the four persons currently of working age in relation to an older person in Europe will change to two persons by 2050. Projected changes for the labour force in Europe are relatively smaller, given that only 60–80 per cent of the age group 15–64 is economically active. The current labour force of 227 million is expected to decrease after 2010. By 2025, there will be an estimated 16 million fewer people in the workforce.

248

International handbook of urban policy

Against this background, the challenge for Europe remains the change in the ratio of economically active people related to retired people. Based on an employment rate of 70 per cent, the number of employed persons in relation to a person aged 65 and above will decline from 2.7 in 2010 to some 2.2 in 2020 and to only 1.5 in 2040 (Münz et al., 2006). Ageing populations will have a considerable impact on the socioeconomic development of individual countries. Apart from the difficulty of maintaining current levels of welfare (including the financing of the pension systems), the decline in the workforce will substantially affect the potential for economic growth and productivity. Human capital is becoming a crucial factor in generating higher levels of productivity in knowledgebased societies. Indeed, European countries are recognizing the significance of skilled labour in fostering economic growth. According to the European Commission, between 1996 and 2003 employment of highskilled workers in EU labour markets increased by 2.9 per cent, whereas it decreased for workers with lower educational attainments (−3.3 per cent). Between 1995 and 2000, employment growth in high-education sectors rose by 3 per cent per year, as compared to 1 per cent in other sectors. More recent developments (2000–05) confirm this trend and show a considerable change in the occupational structure of the employment population in the EU in favour of high-skilled non-manual workers. Between 2000 and 2005, there has been a 3 percentage point increase in the share of high-skilled employment, which represents the most important rise as compared to other skill groups. Austria, Portugal, Greece and Luxembourg are countries in which such increases are most important. Moreover, people with high educational attainments have reached high employment rates. In 2004, employment rates of high-skilled workers was 82.5 per cent in EU-15 countries. At the same time, such figures trigger concerns about the availability of domestic labour. In several EU member states, employers are encountering more and more difficulties in filling vacant posts, a situation that may worsen in the future (European Commission, 2007). Table 11.1 summarizes shortages in high-skilled sectors in selected EU member states. Countries consider different policies and measures to counteract the impact of shrinking labour forces. Such measures comprise the increase of female labour force participation rates (including the provision of improved child-care facilities for parents), the promotion of better-qualified workers, later retirement ages, reforms of the educational system and immigration. To take Germany as an example for the significance of labour migration, projections of 1995 for the period 1995–2005 as regards the decline in the labour force were estimated at over 1.1 million. However, as a result of international migration, the decline was about 700 000 (OECD, 2007b). Nevertheless, labour migration to (and within) the EU is a highly controversial issue. Public concerns about the competition for jobs, welfare abuse, the sociocultural impact of diversity, in particular of migrant groups who are perceived to be culturally different, and the lack of socioeconomic integration predominate over arguments about the benefits of economic immigration in many of the EU-15 countries. Anti-immigration sentiment does also appear counterintuitive when considering the crucial role migrants played not only in the 1950s and 1960s to boost Western European economies but also today in sectors with serious labour shortages such as the care (health and elderly care), construction, agricultural, food processing, domestic, catering and tourism sectors (Boswell, 2005), which will be discussed in the next section.

International labour migration in the EU Table 11.1

249

Labour shortages in the EU

Member state

Most widespread shortages in the higher skill segment

Austria

Small and medium-sized private enterprises (though shortages generally underreported) Commercial and managerial/executive positions, IT specialists Pharmaceutical industry, production sector (metal products), machinery and equipment, transport, storage and communication sector, health and social sector, construction sectors Pharmaceutical industry, companies specializing in mechanical engineering and vehicle construction Engineering, IT, pharmaceutical industry, healthcare Technicians and associate professionals (ISCO Major Group 3), professionals (ISCO Major Group 2) Healthcare and education sectors Skilled trades, professional and managerial levels Engineering, IT, pharmaceuticals, healthcare, other production sectors

Belgium Estonia

Germany Ireland The Netherlands Sweden UK EU in general

Note: ISCO: ‘International Standard Classification of Occupations’ is an International Labour Organization (ILO) classification structure. Source:

European Commission (2007).

The migrant labour force in Europe Foreigners and immigrants (foreign-born migrants) represent a growing share in the labour force of European countries. When looking at the share of foreign-born workers, however, it differs greatly from country to country. In Luxembourg and Switzerland, the share of the total labour force is as high as 44.4 per cent and 25.3 per cent respectively. The share in Austria and Germany reaches around 15 per cent (15.5 per cent and 14.9 per cent), followed by Spain, Sweden, Belgium, Ireland, the Netherlands, France and the UK with 10.1 per cent. The increase in the share of the foreign-born workers is most noticeable in Italy and Spain. Between 2000 and 2005, the number of foreign-born workers grew in Italy from 240 000 to 1 954 000, and in Spain from 565 000 to 2 761 000, which is equivalent to an eight-fold and five-fold increase (OECD, 2007b). Recent migratory movements to Southern European countries (Spain, Italy, Greece and Portugal) represent another stream of East–West flows that originate mainly in Romania (as indicated above for Italy), Bulgaria, the Republic of Moldova and Ukraine. Next to the sharp increase of foreign workers in Southern European countries, Ireland and the UK in particular have recently experienced new immigration waves of workers due to EU expansion in 2004 and the free movement of workers. In 2004, eight countries from Central and Eastern Europe (EU-8) as well as Malta and Cyprus joined the EU, followed by Romania and Bulgaria in 2007. In response to concerns of some of the ‘old’ member states raised during accession negotiations that a massive inflow of cheap labour from the EU-8 would lead to higher unemployment rates and falling wages, the EU added transitional arrangements to the accession treaty signed by the new member states. These arrangements allow individual member states to restrict the free movement of workers from the EU-8 for a period up to seven years, split into three phases of two

250

International handbook of urban policy

years 1 three years 1 two years (the so-called 21312 rule). The end of the first phase, which ran from May 2004 to April 2006, allowed for carrying out a first evaluation of the actual inflows of workers to the UK, Ireland and Sweden. These three countries were the only ones that opened up their labour markets to workers from EU-8 countries. According to expert estimates,3 around 200 000–250 000 persons from the EU-8 countries have come every year to the EU-15 since 2004 (the figures include labour flows in the context of the free movement of workers, but also relating to bilateral agreements and seasonal work which are in force despite the transitional arrangements). Thus inflows have not been particularly high; however, the most important change relates to the redirection of EU-8 migrant flows from the traditional receiving countries Austria and Germany to the new host countries Ireland and the UK. In 2000, around 70 per cent of persons originating in the EU-8 were registered in Austria and Germany. In 2006, this share had declined to 43 per cent, whereas Ireland and the UK received slightly more than 60 per cent of migrants from EU-8 countries, amounting to approximately 110 000 to 150 000 persons per year (Brücker, 2007). The skills composition of migrants is not evenly distributed among the EU member states. In Western European countries such as Austria, Belgium and France as well as Southern European countries including Spain, Portugal and Malta, low-skilled workers from third countries (born in a country outside the EU) are comparatively overrepresented. In contrast, Ireland, Denmark and also Estonia have been particularly successful in attracting high-skilled migrants with 59 per cent, 37.8 per cent and 37 per cent respectively (see Table 11.2). This reflects the simultaneous demand for highly skilled professionals and low-skilled workers in growing knowledge-based and internationalized service economies (Münz, 2007). The new Central European member states have mainly been experiencing the inflow of medium-skilled workers. This is particularly the case for Lithuania, Latvia, Poland, Hungary and the Czech Republic. In line with the educational structure, migrants are predominantly active in the tertiary sector, including both the high- and the low-skilled ends. They are likely to be represented in large numbers in information and communication technologies, the health sector and education, as well as in the hotel and catering sector and in households. Even though the occupational structure of foreign-born workers in Europe varies from one country to another, an overrepresentation4 of foreign-born workers can be observed in a couple of sectors. When looking at the cleaning sector, over 50 per cent of jobs in Switzerland are held by migrants, and in Austria, Germany, Sweden, Italy, Greece and the UK, their share amounts to over 30 per cent. As regards the catering sector in Spain, Switzerland, Norway and Denmark, the share of migrants is twice as high as their share in the total labour force. In Italy and Greece, migrants are overrepresented in domestic work, and care of elderly people and children. The concentration of migrant workers in occupations demanding high skills is less pronounced in the receiving countries, with the exception of teachers in Switzerland and Ireland, and medical personnel in the UK (OECD, 2007b). When turning to the labour market situation of the foreign labour force, it becomes evident that the integration of foreign-born workers as well as of second and third generations (native-born children of immigrants) remains one of the main challenges for European countries. Europe is seeking to attract and retain high-qualified workers; at

International labour migration in the EU Table 11.2

251

Population aged 25 to 64 by place of birth, level of education and country of residence, 2005 (%) Born in country of residence

EU-27 Austria Belgium Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Malta Netherlands Poland Portugal Slovakia Slovenia Spain Sweden UK

Born in another EU-27 country

Born in a country outside EU-27

Low

Med.

High

Low

Med.

High

Low

Med.

High

28.1 16.5 32.7 33.9 9.9 17.0 11.0 20.8 31.3 12.4 40.4 24.1 37.0 50.0 16.7 13.1 74.7 28.0 15.3 75.7 12.3 18.4 52.8 15.7 14.4

47.6 65.8 36.2 40.2 77.2 50.5 56.2 44.6 43.5 62.2 38.9 59.0 35.9 38.1 62.4 60.5 13.7 40.8 68.2 12.5 73.9 60.7 19.1 55.1 56.2

24.3 17.7 31.1 26.0 13.0 32.4 32.8 34.6 25.2 25.4 20.8 16.8 27.2 11.9 20.9 26.5 11.5 31.2 16.5 11.8 13.8 20.8 28.2 29.2 29.5

30.7 14.0 41.8 25.1 23.6 (10.6) : 20.5 51.0 : 25.3 16.4 25.5 : (33.7) : 68.2 14.9 38.7 45.3 (15.5) (21.8) 32.2 16.6 14.8

41.0 57.7 26.5 31.8 62.2 42.2 : 47.0 28.7 : 51.3 60.8 35.5 : 43.6 : 10.9 51.2 47.4 27.9 63.9 (60.9) 33.0 50.3 56.7

28.3 28.3 31.7 43.1 14.3 47.2 : 32.5 20.3 : 23.4 22.8 39.0 : : : 20.9 33.9 (13.9) 26.8 20.6 (17.3) 34.8 33.1 28.6

36.3 45.6 48.3 38.1 15.9 26.4 10.5 28.3 47.6 : 44.4 11.0 13.1 : 12.1 7.7 50.4 33.8 (19.9) 50.5 : 30.3 43.9 23.0 20.0

37.9 41.5 25.4 29.5 54.2 35.7 52.5 44.8 27.9 : 40.5 57.9 27.9 : 62.6 65.3 26.1 44.1 58.1 25.9 : 57.5 30.0 46.1 50.0

25.8 12.9 26.3 32.4 29.9 37.8 37.0 26.9 24.5 : 15.0 31.1 59.0 : 25.3 27.0 23.5 22.1 22.0 23.6 : 12.2 26.1 30.9 30.0

Notes: Incomplete EU-27 average: education levels of natives do not include data for Bulgaria, Luxembourg and Romania; education levels of immigrants (born in another EU-27 country or outside EU-27) do not include data for Bulgaria, Germany, Italy, Luxembourg and Romania. Data in parenthesis are of limited reliability due to the small sample size. Source:

Münz (2007). Based on the European Labour Force Survey and ad hoc modules, Eurostat.

the same time, the skills and qualifications of immigrants are not made use of in an effective manner. Discrepancies in employment and unemployment rates between native-born and foreign-born workers tend to increase with level of education. While the immigrant employment rate is often comparable to that of the native-born with low education, the gap between natives and immigrants with higher levels of education persists and is even increasing. This gap exceeds 15 percentage points in Denmark, Germany and Finland. In many European countries such as the Nordic countries, Austria, Belgium,

252

International handbook of urban policy

Table 11.3

Unemployment rates (men and women, %) of foreign- and native-born populations: some selected countries

Countries

Austria Denmark Germany UK Finland Spain Source:

Native-born

Foreign-born

1995

2000

2004

2005

1995

2000

2004

2005

4.1 7.3 – 8.5 17.0 22.8

4.3 3.9 7.4 5.3 11.1 13.9

4.3 4.9 10.0 4.3 10.1 10.8

4.3 4.5 10.4 4.3 8.2 9.1

6.9 20.6 – 12.8 – 27.0

8.0 9.5 12.6 8.8 – 15.9

11.0 12.2 17.0 7.3 23.1 13.8

10.8 9.8 17.0 7.3 18.3 11.3

OECD (2007b).

Switzerland, France, Germany and the UK, foreign-born workers suffer from a notably higher rate of unemployment than the native workforce. A favourable development has however been taking place in Denmark, Spain and Ireland, where the unemployment rate for immigrants has fallen by more than 10 percentage points in ten years (see Table 11.3). Besides employment and unemployment rates, overqualification is another important factor when considering the level of labour market integration of immigrants. Different scientific studies point to a particularly high degree of overqualification in Southern European countries such as Greece and Italy affecting mainly female immigrants. In Greece, the overqualification rate for female immigrants is 53 per cent as compared to 9 per cent for native women. Examples from Northern Europe refer to high overqualification rates in Norway and Sweden. The reasons for overqualification are, however, diverse and depend on different aspects such as, for example, the form of migration, the length of stay, specific labour market features and the regulatory frameworks. While overqualification in Southern European countries may be explained by the fact that migrant workers are more willing to accept low-skilled jobs upon arrival and hope for upward mobility with time, the majority of migrants received by Nordic countries are refugees – in many cases high-qualified – who may not be able to prove their qualifications and/or have restricted access to the labour market (OECD, 2007b). Many different aspects affect the labour market integration of immigrants. Depending on the legal status, access to the labour market may be limited in terms of timing (no immediate access to the labour market for, e.g., asylum seekers) or sectors (e.g. the public sector). The non-recognition of qualifications and skills represents another barrier to the labour market, leading to a situation where immigrants often end up taking on jobs that are outside their fields and/or below their level of qualification. Even in countries that select large parts of the inflows on the basis human capital (such as Canada), problems occur where immigrants do not have a concrete job offer when they enter the country. Employers, who are often not familiar with the content or quality of degree programmes abroad, have to assess the value of immigrants’ foreign credentials and work experience themselves (Elrick, 2007). This is a difficult task for employers and, as a consequence, applications by immigrants may often not be taken into account. A third aspect that

International labour migration in the EU

253

affects the labour market integration of migrants is the command of the destination country’s language(s). Clearly, good language proficiency is a prerequisite for labour market integration, and for utilizing the qualifications and skills in the most effective manner. In recent years, the integration of (native-born) children of immigrants is receiving growing attention. Debates have been triggered over the results of the OECD’s first PISA5 study published in 2001. The study revealed that the educational attainments of children of immigrants tend to lag behind those of the children of natives, which is particularly the case for Belgium and Germany, where the substantial disadvantage is also attributable to differences in the socioeconomic background (including the educational resources at home). This picture is reinforced when it comes to the labour market outcomes of children of immigrants as compared to their counterparts (children of natives). There remain large gaps in employment rates, and in all European countries unemployment among the second generation is approximately 1.5 to 2 times higher than among children of the natives (OECD, 2007b). Different explanations have been offered with regard to the unfavourable situation of second and third generations. Apart from lower educational outcomes that affect labour market access and performance of the young generations, research results point to a lack of social networks. Personal contacts are often used to explore employment opportunities, which is a source that seems to be more limited for immigrant families than for natives. Another aspect relates to lack of knowledge about the different professions. For instance, research in Germany found that second-generation immigrants of Turkish origin tend to choose certain ‘traditional’ professions such as motor mechanic, hairdresser, medical secretary, trained retail salesperson etc. These professions offer neither particularly interesting working conditions nor opportunities for further career development, and are moreover subject to high competition. The large variety of different professions, including professions in the craft sector, job prospects in more knowledge-intensive service sectors (e.g. banking, insurance) or the public sector, are in many cases simply not known or not taken into account when considering the professional path. Finally, discrimination or prejudice has been identified as another obstacle to the successful labour market integration of the descendants of migrants. The unfavourable situation of second and third generations owes largely to the fact that many European countries did not consider integration measures during the earlier temporary workers’ programmes, assuming that guest workers would return to their countries of origin. As a consequence, the difficult situation of second and third generations has been overlooked and resulted in the marginalization of large parts of the young cohorts. This section aimed to give insights into the demographic trends and labour force developments in Europe, and into the situation of migrants in its labour markets. Economic migration and its implications are at the top of the agenda of European policy makers. However, the question on whether labour migration should be tackled at the individual national or at the supranational level is gaining momentum with the current discussions in the EU. In October 2007, the European Commission triggered controversial debates with its proposal for an ‘EU Blue Card’, a residence permit for high-skilled migrant workers, which will most likely perpetuate heated discussions during the next few years. The core question will be how to strike a balance between national interests and competences on

254

International handbook of urban policy

the one hand and the need to establish common standards, norms and approaches at the EU level in the area of labour mobility on the other hand to better meet shared goals. Against this background, the next section will look more closely at EU policies, with a particular focus on attempts to harmonize approaches in the area of labour migration. EU policies: first steps towards a common migration management According to the then EU Commissioner Franco Frattini, the USA attracts 55 per cent of high-qualified migrants and about 5 per cent of unskilled migrant workers, whereas the EU hosts 85 per cent of unskilled migrant workers and 5 per cent of high-skilled migrants. Many European countries have recently introduced new provisions in response to labour market needs. The majority of legislative measures aim to attract and retain skilled workers. A fairly easy way of retaining skilled migrants is to open up the opportunity for foreign students to remain in the receiving country for a certain period of time after successfully completing their studies in order to seek employment. Foreign graduates usually have a good command of the receiving country’s language, and furthermore, the recognition of qualifications is not an issue. Most European countries have in the meantime introduced measures in this direction; however, measures to attract skilled migrants vary considerably in their content from one country to another. Germany, for instance, has recently adopted new provisions to attract highly skilled migrants, but is a particular case in point where the efficiency of its new rules can largely be put into question. The new Immigration Act,6 which entered into force in 2005, foresees granting an unlimited settlement permit (Niederlassungserlaubnis) to highly skilled persons who are ‘scientists with special technical knowledge’, ‘scientific personnel in prominent positions’, or ‘specialists and executive personnel with special professional experience’ earning a certain annual salary. This annual salary originally corresponded to ‘at least twice the earnings ceiling of the statutory health insurance scheme’, which was equivalent to around EUR 85 550 (Özcan, 2007) in 2005. In July 2008 the threshold was lowered to an annual salary of EUR 63 600, which is still very high, in particular when it comes to young professionals at the beginning of their careers. And indeed, according to official statistics, the Immigration Act has attracted fewer than 1000 skilled foreign workers per year in 2005 and 2006. Labour migration policies, and in particular decisions on admittance, fall under the competence of the member states. National policy makers argue that policies need to take due account of the specific economic, social and political context, and cannot therefore be decided on a supranational level. Still, in recent years the necessity to set up more transparent and harmonized rules and criteria in order to render Europe more competitive as a region has been recognized in various EU fora, including at the level of the heads of states, the European Council. In 1999, the European Council in Tampere (European Council, 1999) called for a more efficient management of migration flows, which was followed by several initiatives. The first pieces of legislation at the Community level, laying down rules for entry and stay of third-country nationals, referred to the right to family reunification (European Council, 2003a), the status of long-term residents (European Council, 2003b) and qualification of third-country nationals or stateless persons as persons in need of international protection (European Council, 2004a). However, migration management aiming at the selection of migrants on the basis of human capital became more pronounced with the adoption of Directives on the conditions

International labour migration in the EU

255

of admission of students (European Council, 2004b) and researchers (European Council, 2005). With its ‘Policy Plan on Legal Migration’ (European Commission, 2005a), the European Commission took an essential step forward by proposing a framework for legislation on the admission of the following categories: highly qualified workers, seasonal workers, remunerated trainees and intra-corporate transferees. Apart from provisions with regard to the admission of the different work categories, the purpose of this legal framework is also to secure the legal status of already admitted third-country workers and to introduce procedural simplifications for the applicants. In May 2009, a new Council Directive on the conditions of entry and residence of third-country nationals for the purposes of highly qualified employment was adopted (European Commission, 2009), commonly known as the ‘EU Blue Card’ initiative. In its original proposal, the Commission explains that highly qualified migrants have to face 27 different admission systems and cannot move easily from one member state to another for work. Moreover, lengthy and cumbersome procedures in some countries make migrants opt for non-EU countries that grant more favourable conditions of entry and stay. Against this background, the new Council Directive foresees a fast-track procedure of a maximum of 90 days for the admission of highly qualified workers based on common definitions and criteria. These criteria refer, inter alia, to a work contract or a binding job offer and a salary that must be at least equal to a certain threshold at national level. This shall ensure that the admission decision does not create unfair competition and that the applicant has the means of maintaining him/herself. Successful applicants shall receive a residence permit called ‘EU Blue Card’, which will eventually lead to an EC long-term residence status and grants progressive access to the labour market (occupational mobility would be restricted within the first two years and monitored by the authorities). To foster intra-EU mobility, and notwithstanding the rules regarding the first two years of employment, after 18 months of legal residence in the first member state, the EU Blue Card holder has the possibility of moving to a second member state for work. Moreover, and with the view of obtaining an EC longterm residence status, the Blue Card holder will be able to cumulate periods of residence in different member states. A particularly interesting new feature of the Council Directive is the introduction of provisions that aim to foster circular migration and limit possible brain-drain effects. This is a concrete result of the attempts to integrate migration issues in different policy areas including external relations and development cooperation. A call for partnerships with countries of origin on migration topics can be traced back to the Tampere European Council. While the purpose of cooperation was originally to combat different forms of irregular migration by means of improved border controls and readmission agreements of irregular migrants as well as by ‘fighting the root causes’ of migration, approaches in recent years have started to include the interests and concerns of the countries of origin. In this context, migration and development have recently been put on the EU agenda reflecting on topics such as (1) improved transfer channels of remittances and enhancing their development impact, (2) supporting the efforts of diaspora organizations that contribute to the development of their countries of origin, and (3) drafting policies that allow for facilitating circular migration and brain-gain/drain circulation (European Commission, 2005b). In the Council Directive it is stated that ‘The mobility of highly qualified third-country

256

International handbook of urban policy

workers between the Community and their countries of origin should be fostered and sustained.’ This shall be reached by granting longer periods of absence from the territory of the Community. In order to reinforce the developmental impact, the adoption of provisions to ensure the circulation of workers originating in developing countries are particularly encouraged. This new Council Directive does indeed represent a milestone in tackling labour migration management at the common level. Harmonized rules for admission and the opportunity to move from one member state to another for work may well make Europe more attractive for highly skilled migrants. Increased flexibility in the reallocation of the workforce in response to fluctuating demands for highly qualified labour on European labour markets is an aspect of great importance to the member states. Finally, national interests will be ensured in so far as the member states will have the responsibility of determining the numbers of economic migrants to be admitted for work on their territory. The announcement of the Blue Card initiative has first triggered controversy – in some cases, immediate statements of refusal made by national policy makers. However, the urgent need for skilled immigration provided the grounds for compromise and thus helped to push the door open for common labour migration policies. Conclusions With current demographic trends, European countries will come to rely increasingly on the immigration of foreign labour. Discussions focus mainly on the need for skilled workers; however, the future demand for labour will most likely relate to all skills categories. National approaches and public debates are largely influenced by experiences gained with earlier policy choices, and in particular with the unexpected consequences of temporary migration schemes. Lack of recognition of permanent settlement over decades has moreover neglected to actively promote equal access and participation of migrants and their descendants in the receiving societies. At the same time, information flows on employment opportunities, growing networks and cheaper means of mobility will accelerate movements and create different and more complex migration patterns. This will necessitate legal frameworks in both receiving and sending countries that allow for higher degrees of openness and flexibility, including transparent rules. Restrictive national policies and public perception, which tends to be increasingly negative in the majority of European countries (European Commission, 2006), will not allow for taking due account of a more dynamic system of mobility. Such a system may, however, be necessary to render migration beneficial for the parties involved. Tackling economic migration at the EU level is still a highly sensitive topic for national policy makers, given that labour migration needs to be tailored to the particular national context. Moreover, European countries are competing with each other for the so-called ‘best talents’. However, ageing populations and future gaps in labour supply are likely to hamper economic growth and productivity in Europe. Thus European countries share similar dilemmas in the area of labour migration. Harmonized and transparent rules for entering the EU labour markets and more flexibility for movements within the EU are likely to attract skilled migrants, in particular if they will be able to circulate between the region of origin and Europe. It remains to be seen to what extent the ‘Blue Card’ Directive will be implemented. Nevertheless, it represents a crucial step towards common migration management.

International labour migration in the EU

257

Finally, there is an urgent need to find new ways of making use of and valuing the diversity present in many European countries. Debates are largely fuelled by misconceptions about the economic impact of migration, which has resulted in emphasizing the deficits of diverse societies and not the potentials. The need for support of the second and third generations has been completely overlooked, leading to their marginalization; many descendants of immigrants dispose of a distinct cultural and social capital which should be considered an added value. Specialized courses in both the language of the receiving country and the mother tongue (among other courses aimed at reinforcing particular knowledge) should be offered to enable greater choice in the future for both the individual and the society. Qualified migrants still experience deskilling, given that their degrees, skills and working experiences are not recognized. It would be economically much more efficient to invest in individual profilings and to offer supplementary courses accordingly in order to enable proper economic and social intergration. Equal opportunities in education and the labour market, but also the appreciation of difference, is fundamental to utilizing diversity for the individual and the society as a whole in the most beneficial manner. Notes 1. The Greek part of Cyprus only. 2. Figures for Europe relate here to the 28 European Economic Area (EEA) countries and Switzerland (EEA 1 EU-25: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, the UK; and other EEA: Iceland, Liechtenstein, Norway). 3. Available data in the UK and Ireland make it difficult to determine the exact number of migrant workers who have arrived since 2004. Even though the UK introduced the Worker Registration Scheme (WRS) to monitor employment activities of migrant workers, figures issued cannot be taken as representative for various reasons: (1) workers are required to register for each job, thus change in jobs can be recorded multiple times; (2) migrants are not required to deregister if they leave the job or the country; (3) once an EU-8 worker has been legally employed for a period of 12 months, he/she is not required to register with the WRS. 4. The share of foreign-born employment in the sector is larger than the share of foreign-born employment in total employment. 5. PISA: Programme for International Student Assessment. 6. The Act to Control and Restrict Immigration and to Regulate the Residence and Integration of EU Citizens and Foreigners.

References Boswell, Christina (2005), ‘Migration in Europe’, paper prepared for the Policy Analysis and Research Programme of the Global Commission on International Migration, September. Brücker, Herbert (2007), Labor Mobility After the European Union’s Eastern Enlargement: Who Wins? Who Loses?, report to the German Marshall Fund of the USA, February. Elrick, Jennifer (2007), Country Profile No. 8 on Canada, focus Migration (www.focus-migration.de), information service offered by the Hamburg Institute of International Economics (HWWI) in cooperation with the Federal Agency for Civic Education (Bundeszentrale für Politische Bildung) and the Netzwerk Migration in Europa. European Commission (2005a), Communication from the Commission, Policy Plan on Legal Migration, COM(2005) 669 final, Brussels, 21.12.2005. European Commission (2005b), Communication from the Commisson to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions, Migration and Development: Some concrete orientations, COM(2005) 390 final, Brussels, 1.9.2005. European Commission (2006), Migration and public perception, Bureau of European Policy Advisers (BEPA), Brussels, 9.10.2006. European Commission (2007), Commission staff document, Accompanying document to the Proposal for a Council Directive on the conditions of entry and residence of third country nationals for the purpose of highly qualified employment, Impact Assessment, SEC(2007) 1403, Brussels, 23.10.2007.

258

International handbook of urban policy

European Commission (2009), Council Directive 2009/50/EC on the conditions of entry and residence of third country nationals for the purposes of highly qualified employment of 25 May 2009, Official Journal L 155/17 of 18.6.2009. European Council (1999), Tampere European Council, Presidency Conclusions, October. European Council (2003a), Council Directive 2003/86 on the right to family reunification. European Council (2003b), Council Directive 2003/109 concerning the status of third-country nationals who are long-term residents. European Council (2004a), Council Directive 2004/83 on minimum standards for the qualification and status of third-country nationals or stateless persons as refugees or as persons who otherwise need international protection and the content of the protection granted. European Council (2004b), Council Directive 2004/114 on the conditions of admission of third-country nationals for the purposes of studies, pupil exchange, unremunerated training or voluntary service. European Council (2005), Council Directive 2005/71 on a specific procedure for admitting third-country nationals for purposes of scientific research. Global Commission on International Migration (2005), Migration in an interconnected world: New directions for action, Geneva, December 2005 Münz, Rainer (2007), ‘Migration, labor markets, and integration of migrants: an overview for Europe’, HWWI Policy Paper 3-6, Migration Research Group, Hamburg Institute of International Economics (HWWI). Münz, Rainer, Thomas Straubhaar, Florin Vadean and Nadia Vadean (2006), The Costs and Benefits of European Immigration, HWWI Policy Report No. 3, Migration Research Group, Hamburg Institute of International Economics (HWWI). OECD (2007a), Gaining from Migration, Towards a New Mobility System, OECD Development Center. OECD (2007b), International Migration Outlook, SOPEMI 2007, Annual Report, OECD. Özcan, Veysel (2007), Country Profile No. 1 on Germany, focus Migration (www.focus-migration.de), information service offered by the Hamburg Institute of International Economics (HWWI) in cooperation with the Federal Agency for Civic Education (Bundeszentrale für Politische Bildung) and the Netzwerk Migration in Europa, 2005 and updated version of May 2007.

Appendix: Explanation of terms EU-27: The current European Union, consisting of the EU-15 plus the EU-12 (see below). EU-25: The 25 member states of the European Union in 2004–06. EU-15: The 15 states that comprised the European Union before 1 May, 2004, including: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The Netherlands, Portugal, Spain, Sweden and the United Kingdom. The 15 ‘pre-enlargement’ EU member states are home or host to 94 per cent of all migrants and to 97 per cent of all legal foreign residents living in EU-27. EU-12: The 12 EU member states admitted in 2004 and 2007, including Cyprus, Czech Republic, Bulgaria, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia and Slovenia. EU-10: The Central European EU member states admitted in 2004 and in 2007, including Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. EU-8: The Central European EU member states admitted in 2004, including the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia. European Economic Area (EEA): With the 1995 enlargement of the European Union, the EEA remained in existence to enable its three non-EU members (Norway, Iceland, and Liechtenstein) to participate in the Common Market. Switzerland decided not to join the EEA, but is associated with the EU by bilateral treaties.

12 Immigration in the USA: evolving demographic contexts, geographies and policy debates D.A. Plane and L. Hoffman

Introduction Although the populations of both European countries and the USA now include high percentages of foreign-born persons (in 2005, the US percentage was 12.5 compared to the 8.01 percent estimate reported in the previous chapter for Europe), current policy issues with respect to immigration are significantly different in the American context than in that of the countries of Europe and of the European Economic Community. Although high rates of cross-border movement are found on both sides of the Atlantic, the USA is a vast transcontinental country with a single predominant language and a culture predicated on the absence of barriers to social and internal geographical mobility. Whereas the dynamic of European integration has focused attention on breaking down barriers and creating greater commonalities across ‘intra-European’ nation-state boundaries (with emerging distinctions between intra-European and extra-European immigration – from, e.g., Africa and the Middle East) much of the US public policy discourse has focused of late on securing or ‘hardening’ the nation’s external borders – especially the long southern land boundary with Mexico. Many of the interesting current and future impacts of immigration for the USA are being more widely recognized and experienced because of recent remarkable changes in the channels of diffusion of the foreign-born population across the country and throughout the national urban system. The failure of the federal government to develop a new comprehensive immigration policy has resulted in a fragmented and often contradictory set of policy initiatives being experimented with at the state and local scales. In this chapter we focus on demographic, labor force, and geographic and urban system contexts of US immigration – all of which differ from those underpinning the policy concerns raised in the previous chapter on Europe. The future course of immigration and the control of the national borders have become major and contentious issues in recent American public policy debates. A major portion of the American population is stridently demanding that something be done about immigration, but those urging swift and effective policy action are strongly split in their opinions about what governmental actions should be taken. Efforts to draft a comprehensive immigration reform bill in the US Congress stalled and failed in 2007. The US Immigration and Citizenship Service (which replaced the former Immigration and Naturalization Service (INS) as part of the creation of the Department of Homeland Security in 2003) has recently been overwhelmed by a large backlog of applications for citizenship; in fiscal year 2007 the 1.4 million petitions from legal immigrants applying to become US citizens almost doubled the number filed in 2006. The surge began, in part, in response to a pending jump in processing fees, but it is also attributable to rising anti-immigrant sentiment in some parts of the country, and to burgeoning state and 259

260

International handbook of urban policy

local legislation. Many immigrants – Latinos, in particular – now are seeking the greater security of citizenship rather than permanent resident status (Preston, 2007). Underlying the political dynamics of how immigrants are treated and how issues of conversion to citizenship are handled – including the repercussions of ‘amnesty’ (granting legal permanent residency status) for the undocumented – are the political impacts of granting voting rights to large numbers of newcomers. The recent time period of ramped-up immigration has been one when the national political discourse has become increasingly fractious and ideologically polarized, with margins in recent elections razor thin in determining Democratic or Republican control of the Presidency and Congress. Granting amnesty and suffrage to a sizeable undocumented population could significantly affect the outcome of future elections. Despite current trepidation about the magnitude and composition of incoming populations, the USA has historically taken pride in being a ‘nation of immigrants’. Since 1775, American coins have borne the slogan: ‘E PLURIBUS UNUM’ (‘Out of many, one’). It dates to the first design for the Great Seal of the USA. Although the original meaning was as a descriptor of the federal system of government – many colonies federating to form a unitary nation – it is now popularly viewed as analogous to the phrase ‘From far and wide’ in the Canadian national anthem: an embodiment of the concept of ‘the melting pot’, of strength forged from diversity, of people from many ancestries and countries of origin coming together to create nationhood. Free mobility and a lack of rootedness are defining characteristics of American culture and the American spirit. Both immigration and domestic (internal) migration have long been significant components of population change affecting major swathes of the country. For instance, rapidly growing Arizona has never experienced a time (since at least 1863, when it first achieved recognition as an official US Territory) when a majority of the resident population has been born within the state’s boundaries. During the 2000s, however, states where growth formerly was primarily due to internal movements rather than immigration – Arizona, Georgia and North Carolina, for example – have taken over from California the role of ‘crucibles’ in which immigration issues are now being most hotly contested (cf. the evidence and arguments we present to those with respect to the 1990s in Clark, 1998). Taking inspiration from a distinction recognized in political thought since its origination in the writings of Plato and Aristotle, Americans have also long prided themselves on having formed a country under ‘the rule of law’ rather than ‘the rule of men’. In the last two decades, the influx of undocumented migrants, particularly those crossing the southern land border with Mexico, has swollen to unprecedented levels. That such ‘illegal aliens’ have been able to come into the country and work on their own volition outside the formal procedures to become legal permanent residents runs counter to deeply cherished American beliefs that everyone should be made to ‘play by the rules’ and to compete, economically, on ‘a level playing field’. Anti-immigrant sentiments, which were fanned during earlier periods of US history when immigration peaked (e.g. during the mid-nineteenth century), have once again become enflamed. Confounded with fears of terrorist attacks and drug smuggling, the immigration debate has metastasized and fused into a more generic policy debate about ‘border security’. Recent policies of ‘hardening the borders’ resulting from post-9/11 measures to step up ‘homeland security’ have contributed to the dismantling of a system of informal

Immigration in the USA

261

cross-border labor circulation that had been quietly operating for generations. Formerly much of the undocumented population of the USA was constituted by the seasonal inflows – and almost matching return movements – of young, predominantly male agricultural workers from Latin America (especially a small group of ‘sender’ states of Mexico). These temporary workers came to the USA to earn money wages to remit or take back to help their families sustain traditional agrarian livelihood systems. Now when such undocumented workers successfully make the increasingly perilous journey into the USA there is greater reluctance to risk going ‘back home’. Concomitantly, there is more focus on bringing family members in for the longer term. US immigration policy has long privileged family reunification over other potential qualification criteria, such as the skill-based point systems used by Canada and some other immigrant-receiving nations (Clark, 1998). Because of the family-unification aspects of American immigration law, there are multiplier population effects to be considered when amnesty proposals are made that would bring undocumented migrants back into the mainstream of civil society The polarization of attitudes about immigration and the resultant policy impasse at the national level have exacerbated tensions between the federal and the state and local governments. The latter, hamstrung fiscally by the Reagan-era anti-tax mindset, have come to view themselves as bearing the brunt of problems attending to the failure of the federal government to come to grips with comprehensive immigration reform. A number of federal initiatives have met with resistance from state governors and legislatures who view them as yet more unfunded federal mandates and a usurpation of powers reserved to the states within the US Constitution. Magnitude and trends in immigration to the USA As vividly demonstrated in Figure 12.1, high rates of immigration have been a characteristic feature throughout much of the history of the USA. The graph shows the trend in the numbers of persons obtaining legal permanent resident status or being granted ‘Green Cards’ (so called because from the end of the Second World War through 1977 the relevant document was printed on green paper). Shown in Figure 12.1 are annual numbers of new legal permanent residents expressed as a rate per 1000 mid-year base population. The rate of legal or documented immigration has risen steadily since the end of the Second World War. The period of the Great Depression and the war years – spanning much of the 1930s and 1940s – was an anomalous one in that in-movement from abroad almost entirely halted. Important to understanding the split in Americans’ attitudes towards recent immigrants is that these decades were when the current elderly cohorts (sometimes called ‘The Greatest Generation’) grew up and came of age; it was the epoch when their images of the country were formed. So, too, the massive American postWorld War ‘Baby Boom’ generation (usually considered to consist of persons born from 1946 to 1964) were reared and came of age prior to much of the new wave of immigration that has been occurring since the 1970s. Until quite recently, in many areas of the USA, native-born members of the population simply had had little day-to-day contact with immigrants. Along with this anomalous halt in in-migration, another striking feature on the contemporary portions of Figure 12.1 is the spike at the end of the 1980s and beginning of

262

International handbook of urban policy 18.00 16.00

Rate per 000 population

14.00 12.00 10.00 8.00 6.00 4.00 2.00

2000

1990

1980

1970

1960

1950

1940

1930

1920

1910

1900

1890

1880

1870

1860

1850

1840

1830

1820

0.00

Sources: Calculated by the authors based on data in US Department of Homeland Security (2007), Table 1, and US Census Bureau (1990, 2008a, 2008b); annual data for 1880s linearly interpolated by the authors from decennial census counts.

Figure 12.1

Annual rates (per 1000 population) of persons obtaining permanent resident status in the USA, 1820–2007

the 1990s. This represents a lagged effect of the Immigration Reform and Control Act (IRCA) passed by the US Congress and signed into law in November 1986 by President Ronald Reagan. IRCA addressed undocumented immigration by (1) expanding the Border Patrol, (2) imposing sanctions on employers that knowingly recruit or hire foreign nationals who cannot provide the newly created I-9 Employment Eligibility Verification Form, and (3) granting amnesty to undocumented migrants who could prove continuous residence since 1982. It was this last provision that led to a massive wave of legalization of residency that is estimated to have included 3 million persons, 2.3 million of whom had come from Mexico and 54 percent of whom lived in California at the time of obtaining permanent legal residency status (Massey, 2008, p. 28). Although no definitive estimates are available of the magnitude of the undocumented population of the USA, some of the most widely cited current statistics come from analyses of annual data from the US Census Bureau’s American Community Survey and Current Population Survey by demographer Jeffrey Passel (2006). His methodology is based on subtracting the legal immigrant population from the total officially reported foreign-born population and treating the residual as estimated unauthorized migration. Such analysis suggests that the number of undocumented residents had reached more than 10 million by March 2004, of which almost 6 million were Mexicans. According to these residual method statistics, in recent years some 80 to 85 percent of all immigration from Mexico is undocumented. The annual estimated net increase in Mexican-born population (regardless of authorized or undocumented immigration status) stood at 495 000

Immigration in the USA

263

for both 2005 and 2006. First-quarter data for 2007, however, suggested a steep decline, with the annual rate plunging to a (still high) 288 000 persons (Passel, 2006). The very recent declines raise the question of whether elevated levels of immigration (and particularly the less selective flows of persons from Mexico and Central America, as opposed to the more high-skilled flows from Asia) are likely to continue. Regardless of whether ever more new would-be residents continue to pour in, what will be the repercussions for the country as immigrants who entered during the periods of greatest influx age and attempt to advance economically? Myers (2007) notes that trends become fixed in the popular consciousness only after a period of years, but, once in place, continue to be extrapolated indefinitely into the future. As an example, he cites studies showing Americans continuing to believe that the country was becoming more and more unsafe at that same time that (due in part to the aging of the baby boomers and the reduction in the percentages of young adults) crime rates were plummeting. So, too, he notes that the rhetoric of the immigration debate and people’s perceptions about future trends currently run counter to statistical indications of a slowdown in the rate of influx since the highest points of the wave reached during the 1990s. For the long term, it should also be noted that Mexico’s total fertility rate (TFR) has dropped enormously in the last half-century. Whereas Mexican women were having more than seven babies on average through the late 1960s (Frank and Heuveline, 2005, p. 83), by 2008, Mexico’s estimated TFR (total fertility rate) of 2.37 (US Central Intelligence Agency, 2008) stood only slightly above the approximate 2.1 rate being recorded for the USA. Of course Mexico’s substantially younger median age (26 years versus the USA’s 36.7 years) implies substantial future population momentum. Myers (2007) also makes the point that there is a tendency to think of immigrants as a group perpetually bearing the characteristics they had when they first entered the country. He argues, however, that the preponderance of evidence suggests that US immigrants show remarkable education and income gains with increased time spent in residence. Thus Myers advances the view that programs to advance the skills of immigrants can be efficacious, and that immigrants are crucially needed to replace the pending losses of labor-force-aged population due to the retirement of ‘baby boomers’. Immigrant skills enhancement programs, however, run counter to the agenda that anti-immigration forces are pushing. By denying educational and other benefits to those without proper documents, they hope to discourage additional in-movement and to force the return to home countries of those already in the country illegally. Labor force needs/elderly dependency Although less so than in Europe, an important component of the debate over American immigration centers around issues of pending labor scarcity and job competition. Unlike the European context, future absolute population declines are not expected in the USA – neither for overall nor for labor-force-aged population. Fertility is projected to remain right at or only slightly under the replacement level TFR of 2.1. Whereas Europe is projected to experience minimal population growth by 2025 and a decline of perhaps 10 million people by 2050, the most recent population projections (US Census Bureau, 2004) show the total American population rising from 302 million in 2007 to 349 million by 2025, and to 420 million by 2050. Also unlike Europe, the USA’s laborforce-aged population is expected to continue to rise. In 2007, the number of people in

264

International handbook of urban policy

the age groups from 15 to 64 years amounted to 203 million; by 2025, 15–64 year olds are expected to increase to 216 million (a 7 percent increase); by 2050 they are projected to number 251 million (24 percent more than in 2007). The American population – like Europe’s – will, however, be aging substantially in the decades ahead. The percentage growth of the elderly component of the population is, in fact, projected to be significantly greater in the USA than in Europe. This is because of the massive American ‘baby boom’ generation: persons born from the end of the Second World War in 1945 through 1964. At the peak of the boom in the mid-1950s, the US TFR crested at 3.77 – substantially above the average of 2.9 typical of today’s less developed countries (Plane, 2004; Population Reference Bureau, 2007). In 2007, persons 65 and over numbered 38 million; by 2025, however, there are expected to be 64 million over 65 (an increase of 68 percent); by 2050 there are projected to be 87 million – well more than twice as many ‘elderly’ as at present! Although the increase in elderly will be enormously significant when compared to the present age structure, this needs to be set against the backdrop that the USA is the world’s sole developed country expected to continue to have a growing labor force. Calculating from official federal labor force projections (US Bureau of Labor Statistics, 2006), by 2025 the labor force is expected to be 110.4 percent of its 2007 size; by 2050 it is expected to have swollen to 127 percent of the 2007 base. Based on the projected numbers, the elderly dependency ratio of the USA, which for 2007 stood at 19 percent, can be expected to rise to 29 percent by 2025 and 35 percent by 2050. Whereas between the present time and 2050 Europe will need to deal with the implications of an expected drop from four to two in the number of working age people for each elderly person, the USA needs to brace itself for the implications of such a ratio dropping from five to three. The pending retirement of the baby boom generation has been at the forefront of US policy debate over immigration and border control. The just cited labor force statistics (that show annual increases of over half a percent per year) are driven by population projections that are predicated on a continuance of both immigration and replacement-level fertility. Pro-immigrant groups push the view that new residents are needed to continue to fuel the American economy and to help support increased numbers of elderly. Under the American system, both the Social Security retirement system and its spin-off federal program to provide for elderly health care (Medicare) are paid for on a pay-as-you-go basis through employment payroll taxes. Thus, crucial to the fiscal viability of the system is the size of the paying-in labor force population relative to the numbers of elderly receiving payouts. Myers (2007, pp. 257–9) provides an optimistic scenario in which retiring babyboomers and recent immigrants forge a new social contract. Among other things, his recommended steps for achieving a ‘new shared social understanding’ include (1) stabilizing and processing the flow of new immigrants in a more orderly way, (2) accelerating the rate of integration of immigrants into the mainstream of US society and the economy, and (3) increasing investment in the education of the next generation. To date, these goals are far from being met. According to 2006 American Community Survey data, the share of college-educated is the same (27 percent) among the foreign-born population 25 years of age and older as it is for the native-born. However, the percentages with low educational attainment are substantially different: 32 percent of the foreign-born lack high-school diplomas, as compared to only 13 percent of the native-born.

Immigration in the USA 100

265

Internal migration Immigration Natural increase

80

60

40

20

0

–20

–40 USA total Note:

Mega metros

Major metros

AAA metros

AA metros

A metros

Micros

NonCBSA

CBSA 5 Core Based Statistical Area.

Figure 12.2

Components of US population growth, 2000–06, by Core Based Statistical Area hierarchy level

Changing points of entry and diffusion of the foreign-born Figure 12.2 shows that the geography of US immigration continues to be one of ‘topdown’ demography with respect to the national urban system. ‘Mega’ metropolitan areas – those with populations of greater than 4 million – continue to receive a disproportionate share of new entering foreign immigrants. However, such areas have strong net domestic out-migration, whereas on balance every other size class of functional urban area shown in the graph registers net in-migration. The annual net in-migration of the foreign-born to the nation’s 12 ‘mega’ metropolitan areas is almost exactly offset by net movement out of these areas to other parts of the country. Both the foreign-born and native-born subpopulations have been moving strongly downwards within the national urban hierarchy (Plane et al., 2005). Massey (2008) provides a compendium of works assessing the changed spatial patterns and the impacts of the foreign-born entering and/or moving into communities in disparate parts of the country that, for decades, had received few if any immigrants. Migrant networks serve to create channelized migration streams. Massey and Capoferro (2008, p. 26), however, note that in the 1990s ‘something dramatic happened – there was a marked shift of immigrants away from global cities and the states or regions where they are located toward new places of destination . . .’. From a pattern of five primary receiving states: California, New York, Texas, Florida and Illinois, immigration patterns have become much more broadly spread. In 1990 California and New York’s shares of all persons coming to the USA over

266

International handbook of urban policy

the previous five years stood at 35.3 and 13.4 percent, respectively. By 2005 they were receiving only 22.7 and 5.9 percent. States that were receiving few migrants in 1980, such as Arizona, Georgia and North Carolina – with only 1.1, 0.7 and 0.8 percent of all newly arrived foreign-born persons respectively – were by 2005 accounting for 3.5, 3.0 and 2.8 percent of the total of all newcomers (Massey and Capoferro, 2008, pp. 35–6). Among the reasons cited by Massey and Capoferro for the spreading out of the foreign-born population are: the flooding of the labor markets in California and other traditional immigrant-receiving states, the effects of California’s 1994 anti-immigrant Proposition 187, which denied undocumented immigrants the right to many social services, and the crack-down on border-crossers from Mexico in both the San Diego and El Paso sections that has redirected the main channel of flow to the largely unpopulated deserts and mountains of southern Arizona. Immigration enforcement and the battles in the borderlands Currently, an estimated 12 million illegal immigrants have residency within the USA (Passel, 2006). This number continues to grow as thousands of undocumented migrants annually attempt to traverse the southwestern borderlands. Despite the fact that not all of these immigrants will remain in the USA permanently, the magnitude of the influx and the ever-growing resident alien population has brought immigration policy to the foreground of US policy debates. In hopes of dampening the magnitude of the illegal immigrant flow, federal policies of border fortification have flourished in the past 15 to 20 years. These policies, initially implemented within border cities, have had little apparent success in achieving their goal of deterring the net influx of would-be unauthorized immigrants. The most immediate effect has been the shift in points of migrant entry from urban areas to remote desert terrain, which has dramatically increased the difficulty and the danger of clandestinely crossing the border. A secondary and very significant effect of increasing the difficulty of border crossing has been, ironically, to keep undocumented immigrants in the USA. Historically, unauthorized migration along the USA–Mexico border had been largely made up of seasonal/circular flows occurring primarily in the twinned urban areas of the border, most notably, San Diego, California/Tijuana, Baja California and El Paso, Texas/Ciudad Juarez, Chihuahua. However, the tendency for border-crossers to cross in places where the frontier separates two cities has been abated by border fortification policies (Massey et al., 2002). In 1993, ‘Operation Hold the Line’ was initiated in the El Paso, Texas, border patrol sector. The operation comprised the following surveillance initiatives (Cornelius, 2001, p. 663): ● ● ● ● ● ● ●

Augmentation in number of border patrol agents along urban corridors High intensity, stadium-type lighting Ten-foot high steel fencing Mobile infrared night scopes Motion sensors buried in the ground along the border Video surveillance Construction of new roads to facilitate more extensive patrolling

Immigration in the USA Table 12.1

Change in apprehensions for southwestern border sectors, 1997–2006

Sector

Increase or decrease in numbers

Tucson, AZ Yuma, AZ El Paso, TX Marfa, TX Laredo, TX Del Rio, TX El Centro, CA Rio Grande Valley, TX San Diego, CA Total Source:

267

1119 707 188 360 −2 115 −5 175 −67 050 −70 646 −84 741 −133 262 −141 767 −296 689

Percentage change 143.95 1292.81 −1.70 −40.77 −47.25 −62.36 −57.96 −54.66 −49.94 −21.68

US Department of Homeland Security (2006).

In 1995, a similar operation, this one named ‘Gatekeeper’, was implemented in the San Diego sector. The implementation of ‘Operation Gatekeeper’ is often cited as a watershed in the Mexico–USA migratory relationship. Although the effects of border fortification were not immediately noticeable, eventually it resulted in what has been referred to as the ‘funnel effect’ (Rubio-Goldsmith et al., 2007), a term that pertains to the shifting of migrant points of entry from urbanized border sectors (San Diego and El Paso) to sectors consisting mostly of unpopulated desert (Tucson and Yuma). See Table 12.1. The aforementioned shift in migratory entry points can be demonstrated by apprehension data from the US Department of Homeland Security (DHS). It is acknowledged that information on the number of border-crossers captured cannot stand in as the absolute number of migrants succeeding in entering the country, but it can be used as a proxy indicator of relative trends in clandestine migratory flow (Espenshade, 1995). By means of this proxy, the funnelization of immigrant entry points can be illustrated (Figures 12.3–12.6). The data indicate that, since 1997, shortly after the implementation of Operation Gatekeeper, only the Tucson and Yuma sectors have experienced an increase in yearly apprehensions, by 119 707 (43.95 percent) and 88 360 (292.81 percent), respectively. All other sectors experienced a decline in the number of yearly apprehensions over this period, the most notable of which occurred in the San Diego sector, where a decrease of 141 767 (49.94 percent) was recorded. The emergence of the Tucson and Yuma sectors as prominent areas of migrant flow can be attributed to the relative ‘softness’ of the border in these vast, sparsely populated regions where border surveillance efforts are more difficult than in the urbanized sectors. In fact, through analysis of data collected by the Mexican Migration Project (MMP), it is evident that efforts to harden the border have actually reduced the probability that any given immigrant crosser will be apprehended on any given attempt! The chance of being apprehended has dropped from approximately 30 percent in the 1970s and 1980s, to an all-time low of 5 percent in 2002 (Massey, 2005, p. 6). This statistic suggests that blockading urban border sectors may actually be counterproductive to border enforcement efforts. The policy has increased the costs of crossing the border because of the

268

International handbook of urban policy

Sectors: San Diego EI Centro Yuma Tucson

EI Paso Sectors: McAllen

Mexico

Marfa

Laredo Del Rio Source:

US General Accounting Office (1999).

Figure 12.3

US Border Patrol, southwestern sectors

700 EL Centro, CA San Diego, CA Tucson, AZ Yuma, AZ

Apprehensions (000s)

600 500 400 300 200 100 0

1997

Source:

1998

1999

2000

2001 2002 Year

2003

2004

2005

2006

US Department of Homeland Security (2006).

Figure 12.4

Apprehensions by US Border Patrol, 1997–2006, for sectors in Arizona and California

Immigration in the USA

269

300 Del Rio TX EL Paso TX Laredo TX Marfa TX Rio Grande Valley, TX

Apprehensions (000s)

250

200

150

100

50

0

1997

Source:

1998

1999

2000

2001 2002 Year

2003

2004

2006

2005

US Department of Homeland Security (2006).

Figure 12.5

Apprehensions by US Border Patrol, 1997–2006, for sectors in Texas

1700 Total CBP apprehensions

1600

Apprehensions (000s)

1500 1400 1300 1200 1100 1000 900 800

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Years Source:

US Department of Homeland Security (2006).

Figure 12.6

Apprehensions by US Border Patrol for all southwest sectors, 1997–2006

270

International handbook of urban policy

necessity to hire guides (‘coyotes’) in order to cross with an organized group. And they have led to a very real ratcheting up of the physical dangers. The harsh environment not only complicates border patrol operations but also exposes border-crossers to extreme risks. The ‘funnel effect’ has significantly increased the number of migrant deaths along the border as many entrants make long journeys on foot through harsh desert and through rugged mountainous terrain. Although no official record-keeping system exists, it is estimated that between 1995 and 2007, 2000–3000 bodies of men, women and children have been discovered along the USA–Mexico border (Rubio-Goldsmith et al., 2007, p. 1). From the early to the later years in that period the trend in annual migrant deaths was sharply upwards, especially along the Arizona border. Deaths recorded in Pima County, alone, rose from roughly 30 in 1998, to 200 in 2005 (ibid., p. 3). Beginning in 2004, the Arizona Daily Star newsletter began compiling a database of the bodies of border-crossers as recorded by the medical examiners of the four southern Arizona counties that lie along the border. In each year the death toll has exceeded 200: 214, 241, 216 and 237, respectively, for calendar years 2004, 2005, 2006 and 2007 (Arizona Daily Star, 2008a). Through the end of the first quarter of 2008, however, significantly fewer bodies had been brought in than during any of the four previous comparable 1 October to 31 May nine-month periods (Arizona Daily Star, 2008b). Coupled with declining numbers of live apprehensions of crossers, the statistic was fueling speculation about whether or not the number of persons attempting to cross was indeed sharply down as a result of, e.g., recent fortification efforts, buildups in enforcement personnel, new policies of imposing jail time for charging randomly selected undocumented immigrants, and the new Arizona employer sanction law. However, the report came just as an unusually cool spring was giving way to Southern Arizona’s brutally hot (above 100 °F) summer months, when the deaths from dehydration, heat and sunstroke historically have spiked. In an effort to try to reduce migrant death and injury, and to evade accusations of human rights violations, the US Border Patrol implemented the Border Safety Initiative (BSI) in 1998. The BSI was implemented through the construction of rescue beacons in areas of the border that are particularly dangerous to migrant crossers. When conditions are dire, migrants can press a button on one of the rescue beacons to inform the border patrol that they are in need of assistance. Nearby border patrol agents then detain the migrants, fulfill vital medical requirements and deport them to Mexico. Additionally, as part of the BSI, specialized search and rescue teams, known as Border Patrol Search, Trauma and Rescue (BORSTAR) units, were assigned to each sector. Due to a lack of detailed data collection by the Border Patrol on BSI activities, it is difficult to evaluate the initiative’s direct effects (US GAO, 2006, p. 28). As restrictive efforts at the border continue to escalate, it remains an open question whether the tragic consequences of the ‘funnel effect’ will be reduced. In addition to complicating surveillance and gravely increasing migrant risk, US border enforcement policies have had the ironic consequence of reducing the rate of return migration and thus increasing the size of the USA’s unauthorized immigrant population. Since the implementation of the Immigration Reform and Control Act (IRCA) in 1986, it is estimated that the rate of return migration has dropped from 45 percent to 25 percent (Massey, 2005, p. 9). The decrease in return migration is caused by the increased physical difficulty and expense of crossing the border. As a way of securing

Immigration in the USA

271

employment, migrants choose to remain for longer periods of time, or even permanently, since the personal risk associated with successfully reentering the USA has significantly increased (de Haas, 2007, p. 824). Nigel Harris (2002) touches on a paradox inherent in this consequence of exclusionary immigration policies when he comments, ‘Preventing people working so that they would not become citizens forced them to become citizens in order to work’ (quoted in ibid.). As the number of undocumented migrants entering the country continues to increase, and the number leaving decreases, the only possible outcome is that the undocumented population within US boundaries will continue to grow (Massey, 2005, p. 9). Stimulus for the organization of civil society groups US border policies have been largely ineffective in their stated purposes and have unfavorable unintended consequences. However, despite these deficiencies, border patrol funding continues to balloon. As indicated by US Customs and Border Protection (CBP) annual reports, there has been a 67.63 percentage increase in the agency’s payroll from 2004 to 2006. During this time, the number of border patrol apprehensions has decreased by about 6 percent. The lack of efficiency demonstrated here is reinforced by statistics on the cost per border patrol arrest. Since the IRCA, the cost per arrest has been steadily increasing. In the decade from 1992 to 2002 this price has skyrocketed by 46 percent, from $300 to $1700 (Massey, 2005, p. 8). The unintended consequences and lack of effectiveness of border patrol efforts has led to the perception, by some, that federal agencies and policies are incapable of managing Mexico–USA migration. As a result, the borderland has seen the formation of a number of civil society groups that aim to take matters into their own hands. These groups can be divided into two primary categories. First, there are those groups that are sympathetic to the plight of the immigrant. These groups, which are often initiated by local churches in the borderland, strive to reduce the number of immigrant fatalities by patrolling the borderlands searching for crossers in need of water, food or medical assistance. They also direct their energies towards political change through public protests. Examples of such organizations include Coalicion Derechos Humanos (www.derechoshumanosaz. net), No More Deaths (www.nomasmuertes.org) and the Samaritans (www.samaritan patrol.org). At the opposite end of the spectrum from immigrant-sympathetic groups are vigilante militia groups who also patrol the borderlands in search of immigrants. The intentions of these groups, however, are to detain border crossers and turn them over to border patrol agents. These initiatives are often sparked in response to damaged property and perceived danger that is a result of the burgeoning flow of migrants over private property in the border region. Despite such warranted concerns, civilian immigration enforcement initiatives have strong underpinnings of nationalism, racism and xenophobia. The most publicized of these organizations is the Minuteman Civil Defense Corps (www.minute manhq.com). Others include Civil Homeland Defense, American Border Patrol and Ranch Rescue (Vina et al., 2006, p. 8). Interior immigration enforcement Enforcement of US immigration law is most commonly thought of as fortification of the USA–Mexico border through the construction of border fences and high-tech

272

International handbook of urban policy

surveillance tools, as well as augmentation in the number of border patrol agent patrol hours. Immigration enforcement efforts in the interior of the country receive less emphasis. However, Coleman (2007) suggests that the most notable shift in immigration enforcement since 9/11 and the declaration of the ‘War on Terror’ has not been the continued militarization of the border region but rather the increased focus on interior policing of immigration law. Interior immigration enforcement is executed using three primary methods, the first and most common of which is to deport immigrants who have committed crimes within the USA and been detained by local law enforcement agents. These methods of interior immigration enforcement aim to bind immigration enforcement to the enforcement of criminal law. For this reason, such motives have been referred to as the ‘criminalization of immigration law’ (Coleman, 2007). A second type of interior immigration enforcement is the implementation of employer sanction laws that punish employers for hiring undocumented workers. The IRCA was the first of this type of policy (Massey, 2006, p. 3). Recently, a more severe employer sanction law has been put into effect in Arizona. This law suspends an employer’s business license for ten days on the first offense of hiring an employee lacking proper documents and revokes it indefinitely on the second (State of Arizona, House of Representatives, 2007). Finally, a third type of interior policing is the implementation of restrictionist policies, such as California’s 1994 Proposition 187 (mentioned above) or the 2004 Proposition 200 passed in Arizona that requires new stricter identification requirements for voting and denies the provision of non-federal public services to unauthorized immigrants (Proposition 200, 2004). Since 2004, seven other states have implemented similar policies (Barry, 2004). Despite requirements stated in clause 642 of the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) of 1996, ‘which permits the sharing of information between agencies and requires state and local agencies to share information with the INS [now the Department of Homeland Security (DHS)] and prohibits such information from being restricted’ (Seghetti et al., 2006, p. 26), the enforcement of immigration law by local and state governments is not executed uniformly across the interior of the USA. The unevenness of immigration enforcement can be attributed to differing state and local attitudes towards immigration that result in highly variable strategies. As Coleman (2007, p. 70) has stated, the ‘devolution of immigration law enforcement to local proxy forces has occasioned a patchwork of municipal interior immigration enforcement, as certain localities sign enforcement memorandums with the [DHS] while others do not’. Variance of policies between different localities can be exemplified by immigrant ‘sanctuary’ or ‘non-cooperation’ laws. Sanctuary laws are implemented primarily on the local level, but have also been passed on the county and state level. They prohibit local government employees and law enforcement agents from inquiring about citizenship status of criminals, witnesses or anyone in need of law enforcement service. In other words, these areas follow a ‘don’t ask, don’t tell’ policy towards immigration status (Seghetti et al., 2006, p. 26). The Congressional Research Service (CRS) identified 29 cities, 3 counties and 2 states, listed in Box 12.1, that had active sanctuary laws in 2006 (Seghetti et al., 2006). The list includes only jurisdictions that had passed explicit sanctuary laws. There are, however, many other local governments following similar policies towards immigration enforcement function but not under the auspices of formal legislation. The Ohio Jobs

Immigration in the USA

BOX 12.1

273

US POLITICAL JURISDICTIONS WITH FORMAL SANCTUARY LAWS

Cities Anchorage, AK Fairbanks, AK Chandler, AZ Fresno, CA Los Angeles, CA San Diego, CA San Francisco, CA Evanston, IL Cicero, IL Cambridge, MA Orleans, MA Portland, ME

Baltimore, MD Takoma Park, MD Ann Arbor, MI Detroit, MI Minneapolis, MN Durham, NC Albuquerque, NM Aztec, NM Santa Fe, NM New York, NY Ashland, OR Gaston, OR

Austin, TX Houston, TX Katy, TX Seattle, WA Madison, WI Counties Marion County, OR Rio Arriba County, NM Sonoma County, CA States Alaska Oregon

and Justice Political Action Committee (OJJPAC), a self-proclaimed non-partisan civil rights and advocacy organization, has compiled a list through archival research and volunteer reporting that includes some 120 municipalities (OJJPAC website). While OJJPAC defines a sanctuary city more loosely than the CRS (a number of their inclusions are being contested), this much longer list suggests that sanctuary policies, whether formal or informal, have become a widespread feature of the current immigration policy landscape. Conclusions Immigration can be viewed in part as a response to the economic and social forces of globalization as people strive to cross national boundaries to better their economic lot. At the same time, however, the evolving demographic context and geographies of US immigration are increasingly being fueled by fragmented and disparate state and local government policies reflective of discordant citizen attitudes. The failure of the executive and legislative branches to achieve national comprehensive immigration reform has exacerbated extant tensions between the states and localities and the federal government. At their twenty-fifth meeting in September 2007, the Border Governors Conference – a policy-coordinating organization comprising the governors of the four US southern border states (California, Arizona, New Mexico and Texas), together with those of the six northernmost Mexican states of Baja California, Coahuila, Chihuahua, Nuevo Leon, Sonora and Tamaulipas – issued a joint declaration. On the subject of immigration it stated: We, the Border Governors, we believe that a comprehensive solution to border security must rely on an array of measures and that physical obstacles alone are not the solution. We urge the United States Congress to enact as soon as possible a comprehensive immigration reform. The federal governments of both countries should work together to further legal immigration and to provide for a safe and secure border. (Border Governors Conference, 2007)

274

International handbook of urban policy

Regardless of an individual’s political bent, most Americans now rank immigration policy among the most crucial issues confronting the nation at present and for the future. Among the most important issues are how the nation’s policy makers will resolve current controversies over border security, how governments at all levels will work to better integrate or exclude undocumented immigrants from the mainstream of American culture and the economy, how current cohorts of immigrants will experience success or be thwarted in striving to advance themselves educationally and to participate in the country’s ongoing prosperity, and whether a nation founded on egalitarian principles can long endure harboring an underclass of ‘undocumented’ persons or ‘illegal aliens’ living in perpetual fear and excluded from participation in the normal institutions of the mainstream civil society. Although the characteristics of recent, globalization-era immigrant streams differ from those of the streams that were typical of earlier periods of American history, the volume of the current influx is not unprecedented. Much of the essential character of the USA – and, indeed, the ‘American Dream’ – reflects the ways its citizens and immigrants have responded to similar challenges of a growing population in the past. Now that immigration has once again come to occupy center stage, it will be interesting to see how the future character of the country is shaped as decisions are made, and left unmade, by long-established citizens and newly arriving, would-be residents. References Arizona Daily Star (2008a), ‘Deaths on the border’, http://www.regulus.azstarnet.com/borderdeaths/, accessed 19 June. Arizona Daily Star (2008b), ‘Deaths in desert down so far this year’, 19 June, http://www.azstarnet.com/sn/ border/244492. Barry, T. (2004), ‘Restrictionism resurgent in American politics: protect America now’, Interhemispheric Resource Center Program Policy Brief, December. Border Governors Conference (2007), ‘XXV Joint Declaration’, 27–28 September, Puerto Peñasco, Sonora, www.sos.state.tx.us/border/jdxxv.shtml, accessed 19 June 2008. Clark, W.A.V. (1998), The California Cauldron: Immigration and the Fortunes of Local Communities, New York: Guilford Press. Coleman, M. (2007), ‘Immigration geopolitics beyond the U.S.-Mexico Border’, Antipode, 39(1), 54–76. Cornelius, W.A. (2001), ‘Death at the border: efficacy and unintended consequences of U.S. immigration control policy’, Population and Development Review, 27(4), 661–85. de Haas, H. (2007), ‘Turning the tide? Why development will not stop migration’, Development and Change, 38(5), 819–41. Espenshade, T.J. (1995), ‘Using INS border apprehension data to measure the flow of undocumented migrants crossing the U.S.-Mexico frontier’, International Migration Review, 29(2), 545–65. Frank, R. and P. Heuveline (2005), ‘A crossover in Mexican and Mexican-American fertility: evidence and explanations for an emerging paradox’, Demographic Research, 12(4), 77–104, www.demographic-research. org/Volumes/Vol12/4/, accessed 12 June 2008. Harris, N. (2002), Thinking the Unthinkable: The Immigration Myth Exposed, London: I.B. Tauris. Massey, D.S. (2005), Backfire at the Border: Why Enforcement Without Legalization Cannot Stop Illegal Immigration, Washington, DC: Cato Institute, Center for Trade Policy. Massey, D.S. (2008), New Faces in New Places: The Changing Geography of American Immigration, New York: Russell Sage Foundation. Massey, D.S. and C. Capoferro (2008), ‘The geographic diversification of American immigration’, in D.S. Massey (ed.), New Faces in New Places: The Changing Geography of American Immigration, New York: Russell Sage Foundation, pp. 25–50. Massey, D.S., J. Durand and N.J. Malone (2002), Beyond Smoke and Mirrors, New York: Russell Sage Foundation. Myers, D. (2007), Immigration and Boomers: Forging a New Social Contract for the Future of America, New York: Russell Sage Foundation. Ohio Jobs and Justice Political Action Committee (OJJPAC) website, ‘Sanctuary cities’, www.ojjpac.org/sanc tuary.asp, accessed 22 March 2008.

Immigration in the USA

275

Passel, J. (2006), Size and Characteristics of the Unauthorized Migrant Population in the U.S., Internal report, Pew Hispanic Center, http://extras.mnginteractive.com/live/media/site200/2006/0307/20060307_062949_ pew_030806.pdf, accessed 6 June 2008. Plane, D.A. (2004), ‘The post-Trewartha boom: the rise of demographics and applied population geography’, Population, Space, and Place, 10, 285–8. Plane, D.A., C.J. Henrie and M.J. Perry (2005), ‘Migration up and down the urban hierarchy and across the life course’, Proceedings of the National Academy of Sciences, 102, 15313–18. Population Reference Bureau (2007), World Population Data Sheet 2007, Washington, DC. Preston, J. (2007), ‘Surge brings new immigrant backlog’, New York Times, 23 November, http://www.nytimes. com/2007/11/23/us/23immig.html, accessed 16 June 2008. Proposition 200 (2004), Arizona Taxpayer and Citizen Protection Act, 2004, Arizona 2004 Ballot Propositions. http://www.azsos.gov/election/2004/info/PubPamphlet/english/prop200.pdf, accessed 22 March 2008. Rubio-Goldsmith, R., M.M. McCormick, D. Martinez and I.M. Durante (2007), A Humanitarian Crisis at the Border: New Estimates of Deaths Among Unauthorized Immigrants, The American Immigration Law Foundation, Immigration Policy Brief. Seghetti, L.M., S.R. Vina and K. Ester (2006), Enforcing Immigration Law: The Role of State and Local Law Enforcement, Congressional Research Service, The Library of Congress, updated 14 August, http://www.ilw. com/immigdaily/news/2006,0912-crs.pdf, accessed 20 June 2008. State of Arizona, House of Representatives (2007), House Bill 2779, Forty-Eighth Legislature, First Regular Session, http://www.azleg.gov/legtext/48leg/1r/bills/hb2779c.pdf, accessed 5 April 2008. US Bureau of Labor Statistics (2006), ‘Projected labor force data: civilian labor force, 2006 to 2016; civilian labor force, to 2050’, http://www.bls.gov/emp/emplab1.htm, accessed 16 June 2008. US Census Bureau (1990), 1990 Census of Population and Housing, 1990 Population and Housing Unit Counts: United States (CPH-2), http://www.census.gov/population/censusdata/table-2.pdf, accessed 5 April 2008. US Census Bureau (2004), ‘U.S. interim projections by age, sex, race, and Hispanic origin: 2000–2050’, http:// www.census.gov/ipc/www/usinterimproj/, accessed 13 June 2008. US Census Bureau (2008a), Historical National Population Estimates: 1 July 1900 to 1 July 1999, http://www. census.gov/popest/archives/1990s/popclockest.txt, accessed 12 June 2008. US Census Bureau (2008b), Annual Estimates of the Population by Sex, Race, and Hispanic Origin for the United States: 1 April 2000 to 1 July 2007 (NC-EST2007-03), http://www.census.gov/popest/national/asrh/ NC-EST2007-srh.html, accessed 12 June 2008. US Central Intelligence Agency (2008), The World Factbook, https://www.cia.gov/library/publications/theworld-factbook/, accessed 9 March 2009. US Department of Homeland Security (DHS), Office of Immigration Statistics (2006), 2006 Yearbook of Immigration Statistics, http://www.dhs.gov/xlibrary/assets/statistics/yearbook/2006/OIS_2006_Yearbook. pdf, accessed 12 June 2008. US Department of Homeland Security (DHS), Office of Immigration Statistics (2007), 2007 Yearbook of Immigration Statistics, Table 1, http://www.dhs.gov/ximgtn/statistics/publications/LPR07.shtm, accessed 12 June 2008. US General Accounting Office (GAO) (1999), ‘Border Patrol hiring: despite recent initiatives, fiscal year 1999 hiring goal was not met’, Report GAO/GGD-00-39 to Congressional Requesters, www.gao.gov/ archive/2000/gg00039.pdf. US Government Accountability Office (GAO) (2006), ‘Illegal immigration: border crossing deaths have doubled since 1995; border patrol’s efforts to prevent deaths have not been fully evaluated’, Report GAO06-770, to Bill Frist, Majority Leader, US Senate, http://www.gao.gov/new.items/d06770.pdf. Vina, S., B. Nunez-Neto and A. Weir (2006), ‘Civilian patrols along the border: legal and policy issues’, Congressional Reporting Service, The Library of Congress, http://www.fas.org/sgp/crs/homesec/RL33353. pdf, accessed 27 March 2008.

13 Winds of change: controversies underlying the urban policy debate H.S. Geyer

Introduction Winds of change have been blowing over Europe and North America since the 1960s, and the people living there had to brace themselves on each occasion. Some winds were locally generated, such as the rude awakening of the USA, and to a lesser extent the UK, in regard to their overvalued real-estate properties and the credit crunches that were created there by defaulting home owners during 2008. However, some of the coldest and strongest economic gusts that have hit the two subcontinents in recent years have been blowing mainly from South-East Asia. Particularly cold winds of immigration and cultural change have also been blowing over Europe from Africa, Asia and Central and Eastern Europe, while similar winds have been blowing over the USA from Central America. Although some of the changes were externally induced, enforced upon the regions from forces from without, others were caused by social and population changes that have gradually been taking place in the regions since the 1970s. Whatever their cause, all these changes are real, are unlikely to be turned around, and are bound to significantly affect the lives and lifestyles of the people living in the cities in the regions in years to come. It is the purpose of this chapter to highlight some of the causes and consequences of these changes and to consider how they are likely to affect urban policy in the future. Some of the issues that will be discussed are stand-alone, others are largely stand-alone but overlapping in some respects with other themes, while others are largely overlapping. To do justice to each of the issues an unconventional ‘staccato’ approach will be followed. Each of the topics will be treated on its own merit under a separate heading but related aspects will be pointed out during the course of each discussion, and reference will also be made to other chapters on related themes in this volume. After setting the scene, we shall first look at how systems of thought and lifestyle have been shaping the population profiles of cities in Western Europe and North America, and how that has caused the influx of migrants into the regions since the 1970s. Second, we shall look at the impact of population and economic change on the international division of labour, and how social and economic conditions in the Occident are likely to affect the economic sustainability of cities in the future. Next we shall examine how changing conditions will affect the liveability and functioning of urban areas, and finally what the likely policy implications of all these forces will be for cities in the Occident. Setting the scene Levels of urbanization North America and Western Europe are highly urbanized communities, and although some of the major urban agglomerations in the developing world are now trouncing 276

Winds of change

277

those in the West in size, some of the largest concentrations of large cities are still to be found in the Occident. Comparing cities in different parts of the world is notoriously difficult because their characteristics and those of the countries in which they are located are so diverse. In fact, it is much easier to discuss the points on which they differ than it is to find similarities. To find commonalities one is forced to deal with their characteristics thematically and in broad, generalized terms, always keeping in mind the history of the areas in which they are located. As in so many things regarding the human race, size matters. This seems to apply particularly to how people see cities. Their sizes, the sizes of the countries in which they are located and the sizes of their populations tend to impress. The USA is the third-largest country in the world after Russia and Canada, and the third-largest population after China and India. Although it is the second-largest country, Canada’s population ranks only 36th in the world, half of that of France, a country smaller than eight, and less than half the size of three of the 13 Canadian provinces and territories. The USA has 50 states. Leaving aside some of the Eastern European countries, Central and Western Europe as a subcontinent also consist of 50 states, which together contain 1.8 times the population of the USA in an area just over half its size. Western Europe alone, i.e. the EU-9 of 1980, including the former East Germany, Switzerland and Austria, today accommodates a population equal to that of the USA on approximately 17 per cent of the land area of the USA. This is an area smaller than Alaska, its largest state, or equal to that of Texas, California, Montana and Pennsylvania put together. No wonder that the cities in Europe are so much more compact than in the USA. However, when compared to cities elsewhere in the world, only two cities in the EU and none in the USA rank under the first 50 most densely populated cities in the world. The honour here falls wholly on cities in the developing world. When it comes to affluence and quality of life, European and North American cities rank the highest. Twenty-seven of the 50 cities with the highest personal net earnings are found in the EU, three in the USA and two in Canada. This makes cities in these regions prime international migration targets. In 2000, 13 of the top 20 world cities were located in Europe and North America (see Chapter 4). Four years later, one American city fell out of the top 20 rankings while several others held lower rankings than four years earlier. American cities also declined in network integration over the same period. This is what world-city research has taught us. The global urban system World-city research has changed focus over time. Using attribute data, the spotlight initially fell on the hierarchical prominence of cities in terms of population (Hall, 1984), then on globally significant command functions and services – i.e world cities as ‘places’ (Friedmann and Wolff, 1982; Friedmann, 1986; Sassen, 1991; Beaverstock et al., 1999). Gradually the focus shifted to networking (Castells, 1996) and the concept of urban regions (Scott, 2001). When attention began to shift from the place attributes of world cities to their attributes as anchors in the global network of economic flows, the limitations of attribute data and the need for relational data in the analysis of world-city connectivity soon became apparent. Except for some references to supplementary lower-level services that are linked with

278

International handbook of urban policy

activities associated with command functions at a global scale and ‘glocalization’ (the link between global and localized activities), world-city research contributions by and large remained focused on ‘tip of the iceberg’ indicators. The focus remains largely focused on what is visible of the iceberg above the waterline. However, what lies above the waterline cannot be fully understood unless the properties of what lies below are also better understood. A combination of historical factors in the location of globally significant command functions and their economic networking might have played an important role in turning certain cities into world cities, but the demographic and educational profile of their local communities and especially their embeddedness in, and support from, larger economic ‘core regions’ are equally important in maintaining their world-city status. Taking work in this field further might therefore require a more deliberate attempt at going back to where the world-city research process started – an analysis of attribute data to better understand the link between the status of world cities and the labour and sectoral structure of the wider core regions in which they are embedded, i.e. the market properties of the surrounding core regions which brought about the kinds of economic activities that enabled the cities to attain world-city status. Why some of the large cities of America are now losing ground in the world-city rank against cities in Europe and newly industrialized countries is not clear. One view is that America’s self-sufficiency in advanced producer services dampens its motivation for global networking and integration. Apathy and voluntary self-restriction seem to be unlikely reasons for the losses American cities have incurred in the global urban ranking and economic integration measures, however. The growing economic impetus and gaining competitiveness of core regions outside the old industrial countries in areas that the USA previously dominated could be other reasons for their relative decline. The industrial gains that the newly industrializing countries have been making at the expense of North America and Western Europe in recent years are widely attributed to the negatives of globalization in liberal media circles. However, the role that lifestyle and systems of thought have played in these differentials should not be underestimated. The fruits of emancipation and of the good life Ageing and population change A population growth rate falling below replacement levels was observed for the first time in Germany in the early 1970s. This later became a general trend in Western Europe and the rest of the developed world (Birg, 1995) and was indicative of a paradigmatic change in the way in which people lived and especially the role that women played in it. A variety of factors, one impacting upon the other, caused the fertility rate in developed countries to fall below the replacement level. Affluence afforded people more, causing the range of their needs to expand. Globalization and the diversification of the world economy to meet the continually expanding range of needs of people are products of that. The outcome was a vicious circle in human reproduction. In a train of cause and effect, higher living standards, which brought about higher living costs, which in turn required more people, especially more women, to participate professionally to make ends meet, all contributed to a lower fertility rate. High costs of bearing and raising children, changing gender relationships, changing household structures, changing lifestyles, and

Winds of change

279

urban growth that required people to spend more time commuting between home and work than spending time at home added to the burden. In his intriguing article about the downside of slowing fertility rates, Phillip Longman (2004) reveals some startling facts. If current fertility trends were to continue, Germany could lose as many as the current East German population over the next 50 years. To raise a child in the USA to the age of 18 costs around $1.5 million, i.e. measured in direct costs and the loss of income. Slowing reproduction has positive and negative consequences. Having fewer children leaves more time for adults to enjoy the fruits of their labour. It makes available more human capital and resources for investment, which creates possibilities for economic expansion. But the benefits must be weighed against the hidden costs and longer-term disadvantages. Falling numbers among the productive worker corps and growing numbers of the elderly, who consume more than they produce and take more out of the social security system than they contribute, all add up on the wrong side of the economic balance sheet. A declining, ageing labour force means a constant loss in economic growth potential. Maintaining a country’s GDP (the output per worker in a country) means that the declining number of workers either have to constantly work longer hours to offset losses incurred in the workforce, or higher levels of productivity – i.e. delivering a higher output over the same period of time – have to be sustained. To look for answers to this dilemma one needs to ask two obvious questions. The first is whether the European and North American societies have the desire to turn this trend around. The answer to this question seems to be an emphatic ‘yes’. There does not seem to be a lack of desire. An overwhelming majority of childless Americans ‘wished they had children’ and those who had, indicated that they now ‘wished they had more’ (Longman, 2004). The second obvious question is whether higher levels of immigration would help boost fertility rates. The answer to this question seems logical. The mere fact that immigrants are usually young(ish) makes a nominal difference to host population numbers. One of the likely reasons why the North American and European populations persistently produce too few children to replace themselves seems to be psychological. People became used to the ‘good life’. They do not need to spend as much time raising children than they otherwise would have had to and consequently have more time available to enjoy the good life1 and pursue their own interests. Changing gender relations, where increasing numbers of women do not desire to be tied up in a normal marriage but wish to have a child while pursuing their own careers, is also an important factor. Feminism plays an obvious role in both. Another reason seems to be societal. According to Longman (2004): As modern societies demand more and more investment in human capital, this demand threatens its own supply. The clear tendency of economic development is toward a more knowledgebased, networked economy in which decision-making and responsibility are increasingly necessary at lower levels. In such economies, however, children often remain economically dependent on their parents well into their own childbearing years because it takes that long to acquire the panoply of technical skills, credentials, social understanding, and personal maturity that more and more jobs now require. For the same reason, many couples discover that by the time they feel they can afford children, they can no longer produce them, or must settle for just one or two.

280

International handbook of urban policy

The ethnic composition of the world population will also be affected by these factors. The National Policy Institute (2008) made some long-term projections of what the likely outcome would be if the current fertility trends in the world were to persist. In 1950, whites were 27.9 per cent of the world population, Africans 8.9 per cent. By 2060, the ratio will be nearly the exact opposite, i.e. 9.7 to 25.3 per cent, but the difference is that the white population by then will have shrunk by around 200 million, i.e. 40 per cent of the current EU population. Over the same period people of Arabic ancestry relative to whites will have increased from 1:7 to 3:4. According to the UN Report on World Population Prospects (2006), the European population will increase from 733 million currently to 777 million in 2050. For Western Europe it will remain at the current 188 million, while the Southern population will decrease from 152 million to 146 million and Northern Europe’s population will be slightly up from the current 98 million to 108 million. The US population should increase from 314 million in 2010 to 402 million in 2050. These numbers are reassuring but should be approached very cautiously because they are boosted by presumed international migration from parts of the world that will be experiencing greater population pressure over the period. Currently the fertility rates of Western Europe and North America are 1.47 per cent and 1.85 per cent respectively, and will remain below replacement levels throughout the period. To reach the UN projected totals by 2050, millions of immigrants have to be factored in. If current trends prevail, nearly one in five Americans (19 per cent) will be an immigrant by 2050, close to a 60 per cent increase on the current percentage. By 2025, the share of its immigrant or foreign-born population will surpass the peak during the last great wave of immigration a century ago and, by 2050, Hispanics (currently 60 per cent Mexican) will form 29 per cent of the US population, more than twice its share today. By the end of the projected period the white population will have become a minority population in the USA, 47 per cent of the total population (PEW, 2008; see also Rubenstein, 2007). This brings us to migration. Migration The numbers Most people living in the suburbs in European and American cities are not directly affected by immigrants but for some reason immigration has been a controversial issue there for decades. In recent years the controversy has grown to such an extent that it is probably not an overstatement to describe it as a ‘hot potato’ for many governments. It is often a theme in discussions on television and radio programmes, and regularly becomes news items in the media when literally truck-loads of would-be immigrants are discovered somewhere at a border post, or clashes flare up between locals and immigrants in cities (Green, 2003). It has also become a central theme in many political campaigns, and in some, recently, one of the deciding issues. When one ‘surfs’ the Internet it does not take long to pick up the emotion. Bloggers, politicians and researchers alike are all passionately arguing all sides of the issue, and the reason for the emotion usually boils down to the same thing: numbers. In 2003 the EU already had more than 55 million migrants, North America 40 million, and the numbers are growing by the day (Boswell, 2005). For most it has become more

Winds of change

281

than just a matter of statistics; it has become an emotional issue. Those on the right of the political spectrum call for a slowdown in migration, at least stricter control. Extremists ask for a halt and talk of ‘aliens’, ‘infiltrators’, even ‘parasites’ when referring to immigrants. Commentators, politicians and researchers on the left call for caution and greater realism. They avoid derogatory language and use terms such as ‘irregular’ versus ‘wanted’ or ‘economically beneficial’ migrants, and talk more often of ‘incorporation’, ‘integration’ and ‘assimilation’ than ‘expulsion’, ‘eviction’ and ‘closure’. Otherwise terminology and phrases such as ‘preservation of our lifestyle’, ‘highly politically contested’, ‘populist mobilization’, ‘forces for closure’, ‘counterproductive policy’, ‘economic considerations’ and ‘normative versus legal and constitutional arguments’ abound in discussions of the topic. In realistic terms, however, the factors that will largely determine the outcome of the issue are really simple. The Americans and Western Europeans do not produce enough children to replace themselves, let alone expand their populations. Over the years this has proven to have had three outcomes: the native populations of those countries are shrinking and ageing, and their economies tend to suffer, or at least become vulnerable as a result. People who become older tend to be less innovative and are either physically unable or less concerned about producing more things, better and faster. They tend to use more than they produce and they do not have enough children to make up for the discrepancies that they have created. In economic terms: the domestic output of a country can increase only if its population becomes more rather than less economically efficient, or when the number of people who produce at the same rate as their predecessors increases. The former scenario is being realized and can potentially continue through mechanization, outsourcing of labourintensive industrial processes and specialization, but the possibilities of juggling between the three are limited. Economies continuously need a fresh supply of young, eager and imaginative workers to remain vibrant. The second scenario is also possible but highly unlikely. The people in those countries could suddenly begin to have more babies and could become more productive – both methods of averting the ‘problem’ of having to deal with the migration issue – but based on current trends, neither of those scenarios is in the offing in those regions. Part of the reason for this is because for too long people in those countries have become used to the ‘good life’. The welfare-state concept is based on the premise that people who live now can reap benefits from the wealth that they create themselves, combined with wealth that was created by their predecessors. However, when the population is shrinking and ageing, and many people who could work are unemployed because the system cares for them, the mechanism tends to fall apart. More and more of the wealth that has been created is being consumed by an ageing, shrinking and physically less productive labour force. To turn the negative trend around, people have to be ‘imported’ who are not only young, productive and willing to do the kinds of work that locals are now reluctant to do, but also help them to slow down population ageing by producing more children.2 Receiving highly skilled migrants who can fill genuine gaps in current labour force profiles is obviously positive, but receiving scores of low-wage workers, or at least creating a market for illegal immigrants in those categories because significant proportions of the locals who fall in those categories are not willing or at least reluctant to do the work,3 is

282

International handbook of urban policy

not positive. It only adds to the growing burden that is created by ageing. These are the bare bones of the truths underlying the immigration issue. Although particulars of migration in Europe and North America differ, the issues themselves are very similar. Several topics dominate the migration literature: migration numbers, illegal immigration, origins and destinations, causes and consequences of legal and illegal immigration, and the assimilation of immigrant populations in host countries. In terms of immigration there are, technically speaking, four categories of nations in Europe that can be bundled into two larger groups: the old established immigration nations, old–new immigration nations, transit immigrant nations, and new immigration nations. North-Western European states (Austria, France, Germany, the Netherlands, Switzerland and the UK) are the established immigrant nations – and have been for decades. Although the discontinuation of active recruiting has made a difference in certain cases, there has been a fairly steady inflow of migrants to these countries all along (Boswell, 2005). This is largely due to their established reputation as countries with stable, diverse and strong economies. Old–new immigration nations are ‘old’ countries such as Ireland, Spain, Italy and Greece, which used to lie on the development fringe but have since started ‘refocusing’ and have reaped the economic benefits. They are now also experiencing an increasing influx of migrants. The other group consists largely of Central European countries, which, for a while, served largely as transit destinations for people from the East heading for the West. However, some of those that have joined the EU have since, to some extent, become ‘migration destinations in their own right’ (Boswell, 2005). Causes of increased migrant flows inside and to the EU are known. The removal of restrictions on former communist citizens to travel, education visas and temporary labour migration have all resulted in the creation of established communities of foreigners in many cities in Europe, but especially in large international centres in EU-15 states.4 Some people arrive as legal, others as illegal immigrants. Those who arrive as part of what is widely termed ‘the family reunification process’ could include both. Although migrants to the EU-15 come from all over the world, significant streams have been identified: Moroccans to Belgium; Iraqis and Afghanis to Denmark; Russians to Finland; Moroccans and Algerians to France; Poles and Turks to Germany; Romanians and Ukrainians to Hungary; Albanians, Romanians and Moroccans to Italy; Angolans and Cape Verde nationals to Portugal; Malians, Mauritanians and Senegalese to Spain; Iraqis to Sweden; and Indians and Pakistanis to the UK. Of these the Algerian, Moroccan and Turkish streams are the most pronounced. Significant concentrations of migrants in the EU-15 countries that originate from outside the EU are: Asia, 17 per cent; Turkey, 11 per cent; Africa and the Middle East, 39 per cent; Central and Eastern Europe, 22 per cent; and South and North America 11 per cent (Boswell, 2005). It is clear that the Muslim footprint in European cities has become significant. Large urban concentrations of Algerians in France, Moroccans in Spain, Turks in Germany, and Pakistanis in the UK exist, the last to such an extent that London is now widely referred to as Londinistan (Kepel, 2005; Leiken, 2005). In 2003 there were already 16 million Muslims living in 18 West, South and North European countries, 4 per cent of the total population and 8 per cent of the French population (The Economist, 2003; BBC, 2005). What began unintentionally as a postwar guest worker programme has now

Winds of change

283

grown into a sizeable urban phenomenon. Initially the immigrant footprint in European cities was not as pronounced. Although there were immigrant concentrations, they were geographically more diffuse and ethnically more fragmented. But urban immigrant concentrations are now huge in some cities. Muslims form a majority of the immigrant populations in Belgium, France, Germany, the Netherlands, and the UK, and their numbers are expected to double by 2025 (Leiken, 2005) while local populations shrink. Illegal immigration Legal immigration as such usually does not pose a problem, but it is a known fact that legal immigration also creates capacity for illegal immigration. Once established communities of migrants from specific originating countries have been formed in specific areas, the numbers of illegal immigrants from those countries also tend to increase. The reasons for this are simple. Intervening obstacles (Lee, 1966), i.e. the ‘unknown factors’ in host countries such as areas in which migrants can ‘blend in’ and ways of maintaining themselves until they are able to find employment, are normally higher in illegal than in legal migration. Once established migrant communities have been formed, they create havens for illegal immigrants. Due to repeated visits by relatives of immigrants and the word-of-mouth dissemination of information in the originating countries about conditions in targeted host countries, unknown factors gradually become known factors that make legal, but also illegal, entry to the host country easier.5 And, as the USA and Western European countries now realize, once the process has started it is virtually impossible to stop, no matter how strict the control.6 How many people are staying illegally in the EU is not certain. Officially, the EU suggests an influx of around 500 000 per annum (Boswell, 2005), but other estimates are much higher. Especially EU countries bordering Africa are targeted. Estimates are that around 12 million illegal immigrants currently live in the USA, a number that has been growing by at least 850 000 each year since 2000 (Ohlemacher, 2006). This is equal to 1 in every 20 workers in the country. Thousands of migrants often undertake death-defying journeys by sea and over land in an attempt to reach the USA and Western Europe. A record number of 670 illegal immigrants have been intercepted in one day on the Mediterranean sea (Mbugua, 2006). According to the Interior Ministry of Greece, illegal immigration is on the rise. In 2006, 95 239 illegal migrants were held there, an increase of 43.5 per cent on the year before, while in the first ten months of 2007, the number already stood at 95 318. (Greek News Agenda, 2007). Tens of thousands of migrants from Africa arrive in Spain every year (Govan, 2006). Migrants from Eastern Europe try to make it over land.7 All forms of transportation are used. Truck-loads, scores who have perished in the process, are discovered from time to time. The Italian government is even trying to bring back border checks in an effort to stem the flow of illegal immigrants from neighbouring EU countries (Brown, 2008). As things now stand, all indications are that illegal immigration (through human trafficking) is likely to increase in intensity in the future (Lintner, 2003). Over the longer term inner-EU migration volatility8 is likely to be high during the EU’s expansion period, but the stream from East to West should slow down once excesses and shortages have been balanced out in the labour markets (Workpermit, 2007a; 2007c; 2007e; 2007f; 2008c). For the time being, however, indications are that the Central European countries are likely to remain an unpopular destination to people from outside

284

International handbook of urban policy

the EU while migration from developing countries to Western Europe is likely to remain high (Workpermit, 2008a). Crime Much is written about the link between immigration, violence and crime. By and large, immigrants flock to the bigger cities, many of them, especially low-wage workers and illegal immigrants, end up in older, run-down parts of the cities where crime flourishes. Economic reasons are perhaps the most common explanation for crime and violence in cities worldwide but intercultural hostilities are often an aggravating factor. Gangrelated turf wars between immigrant communities and locals in North America and European cities are common in culturally mixed areas with high concentrations of immigrants. In Los Angeles, for instance, Mexican gangs such as Florencia 13 are ‘waging bloody campaigns’ in historically African-American neighbourhoods such as South Los Angeles, Compton and Harbor Gateway in an attempt to force local residents from what they now regard as conquered territory (Malanga, 2008; Kouri, 2007). In the heavily mixed-race community of Harbor Gateway in Los Angeles . . . Latinos now commit five times more violent crimes against blacks than vice versa. Though blacks make up just 9 percent of L.A. County’s population, they were the victims of 59 percent of all racially motivated attacks in 2006, while Latinos committed 52 percent of all racially motivated attacks. (Malanga, 2008)

According to Malanga (2008), there are now around 500 Mexican and 200 black gangs operating in Greater Los Angeles alone. This is causing a divide between the African Americans and Latino communities that ‘no amount of camouflage can hide’, tension that ‘has been evident for years’ although it has been ‘largely ignored by the media and political leaders’. The 1992 Los Angeles riots could serve as a case in point. Although the riots were presented by the media as white-on-black violence, the original deed was only the spark, because it soon turned into a major black–immigrant confrontation in which an overwhelming majority of the businesses destroyed were Latino and Korean. In Brussels, the militant Algerian (GSPC) and Moroccan (GICM) Islamic groups are becoming increasingly active in their quest to establish an Islamic caliphate there, while in the French riots of 2005, when more than 35 000 cars were set on fire, African and North African youths were largely responsible for the devastation. In raids where 436 gang leaders were apprehended in France, 67 per cent were of North African decent (Vermaat, 2006). In Rotterdam, Cape Verdian and Antillean gangs are flourishing and intimidating locals (Huffington Post, 2006). Turf wars are waged not only on sociocultural grounds, economics plays an important role in them too. On the other hand, the feeling among African Americans in the USA that they are losing economic ground to immigrants seems to be legitimate. Estimates are that between 1980 and 2000 immigration was directly responsible for a 7.4 per cent increase in unemployment among unskilled black males and around 3 per cent among skilled black workers. Although white low-wage jobs are also taken by immigrants, ‘the effect is three times as large on Blacks because immigrants are more likely to compete directly with them for jobs’ (Malanga, 2008). Studies in the USA have shown that migrant workers and employers tend to gain from immigration while local low-wage workers are disadvantaged. Immigrants gain from employment taken away from locals

Winds of change

285

while employers gain from the wealth transfers from local low-wage workers to employers because of the differences in payment between locals and migrants (Wolf, 2004). It must be said, however, that despite high levels of immigration, some countries struggle with both unemployment and labour shortages (Workpermit, 2007). This is a clear indication on the one hand of the mis-skilling of locals and on the other hand of their unwillingness to do some of the low-wage work that is available. Although illegal immigrants are not necessarily impoverished, they tend to live cheaply because most of their income is either saved or is sent home as remittances (Paspalanova, 2006). But many of them do struggle to make ends meet and are often forced to make a living by illegal means. Cities that have high percentages of illegal immigrants therefore also tend to experience high levels of misemployment – burglaries, car theft (Feldmann, 2008), drug trafficking and prostitution. Barry (2008) disputes the gravity of the illegal immigration–crime link. There are proportionally fewer illegal immigrants in US jails than African Americans, but this fact does not factor in the problems of the underreporting of crimes or ineffective policing in areas where high percentages of immigrants occur. The underreporting of crimes among immigrant populations and the difficulty of apprehending individuals who do not have permanent addresses are known facts. In 2004, illegal immigrants were looked for in 95 per cent of between 1200 and 1500 outstanding warrants for homicide and approximately two-thirds, or 17 000, of all fugitive felony warrants in Los Angeles alone (MacDonald, 2004). Case studies that present straightforward numbers of people incarcerated, aimed at proving a particular point, do not reflect these realities. Sanctuary policies that force law enforcement officers to turn a blind eye to illegal immigration thwart effective policing and can turn cities into safe havens for illegal immigrant criminals. To look at immigrant crime statistics at a national level seems meaningless from various angles. As a percentage of the national total, immigrant levels are too low to be meaningful. However, for understandable reasons, immigrants tend to flock together in certain areas. In such cases concentrations of foreigners and the crimes they commit in such areas could be significant. In the USA, serious crime mostly occurs in parts of the poor black and Hispanic neighbourhoods. As a police official remarked, ‘For people who live in the Trinidad area of Washington, in the Nickerson Gardens housing complex in South Los Angeles and on Magnolia Street in Boston, the citywide statistics have always been meaningless. Their neighborhoods are war zones’ (World Net Daily, 2006). The same applies to certain suburbs in European cities: the area near Hamburg’s Central Railway Station; Montreuil in Paris, the first ‘Malian city’ in France; Lambeth, Southwark and Tower Hamlets in London, Rosengård in Malmö, Sweden; Schilderwijk in The Hague, Slotervaart and Zuitoost in Amsterdam, Sint-Joost-Ten-Node, Molenbeek and Schaarbeek in Brussels, to name but a few of the best-known areas. Sociocultural indivisibilities Consequences of immigration for host countries are mixed. The positives of regular immigration are significant. By and large, people who move to a country on a keenapplicant–willing-host-nation basis contribute to the growth of their hosts’ economies and populations and in the broadening of their cultural variety. Immigrants pay more taxes than they receive in benefits. Host countries attract human capital from the rest of the world without having to bear the brunt of the latter’s education costs. In 2001 and

286

International handbook of urban policy

2002, 42 per cent of the resident foreigners in the UK had tertiary-level education against only 29 per cent of the native population (Wolf, 2004). Some refer to immigration selection as ‘trade in natural persons’, i.e. the ‘import’ of highly skilled people from abroad. They fulfil particular skilled tasks that are hugely beneficial for host countries (Vaughan, 2004). Assimilation has proven to be the hard part of the problem to solve. Host countries have been struggling with this for a long time, in some cases centuries. Current immigrant policies in Europe range from ‘assimilationism’ in France to the UK’s traditional ‘multiculturalism’. The former puts more pressure on migrants and host nations to fully integrate, while the latter is slightly more lenient and accommodating towards the foreign element in its midst. However, based on how widespread the resistance to (illegal) immigration among local communities is, the traditional view still seems to be strong that, morally, the onus rests more on immigrants to assimilate with local populations than vice versa. The American ‘melting-pot’ concept seems to reflect this sentiment: immigrants must melt into the American society and their way of life. Based more on gut feeling than on fact, one would assume that a significant proportion of the immigrant population does have a positive attitude towards assimilation. Second- and third-generation migrants in particular, one would assume, should find it easier to blend in. Having been educated locally, speaking the various dialects with the appropriate accent fluently, and understanding the local customs better and accepting them more readily, should have a great deal to do with it. But the fact remains, and must be faced, that significant proportions of certain groups are known not to attempt to blend in easily. Orthodox Jews are one of them but their numbers are normally insignificant and they are not usually confrontational. The Chinese are another group known not to blend in well because many of them create and work in their own closed employment enclaves, which makes it unnecessary for them to blend in or to make an effort to learn the local language(s). Subjects among the Muslim communities – diverse as they may be in origin – also often do not blend in well. They tend to practise their cultural–religious habits and beliefs openly, sometimes defiantly. Some groups are known to be very territorial. While the Jews and Chinese are not usually confrontational, some groups among the Muslims openly, often aggressively, defend their traditional beliefs and customs against ‘intruders’ or ‘transgressors’ in their local areas of residence, even violently against the society at large when angered.9 The strict enforcement of cultural–religious codes of conduct of some members of society on others in the public domain has been a well-known cause of friction among immigrants and locals in European cities for some time. It is a political situation that is not enjoying much prominence in the liberal media for obvious reasons, but one that has created difficulties for host countries from the highest levels of government down to the person in the street from time to time. In the European urban environment, North Africans in general, but Algerians and Moroccans specifically, seem to feature more prominently in neighbourhood violence.10 In the bigger scheme of things one could say that the numbers of Muslims who are responsible for cultural violence in city streets are relatively small, but in certain cities their presence is significant. In countries where the immigration rate is likely to remain high, protecting the ideal of peaceful cultural pluralism within urban communities is one of the main challenges

Winds of change

287

host nations, particularly local governments, will increasingly have to face in the future. Integrating social groups wherever feasible has always been, and remains, the preferred option. The UK’s traditional policy of multiculturalism used to provide space for that but also left room for spontaneous and healthy forms of social delineation. Yet, after the bombings of London’s transport network, the UK government announced a change in course from laissez-faire to full integration (Kepel, 2005). This is clearly a misdirected diagnosis of the problem. For decades the UK government used to be tolerant towards extremists in their midst, on the understanding that its tolerance towards them would safeguard the country from harmful action by like-minded people (Leiken, 2005; Kepel, 2005). Cultural delineation within the context of multiculturalism works well with moderate people but not with extremists. In this case, harbouring extremists was clearly the problem, not multiculturalism. Identifying and expelling radicals has been the first positive step in creating a healthier social environment in cities in the UK, but moving away from multiculturalism might be a step backwards. As Leiken (2005) observed, multiculturalism is a potentially strong countering measure against negative nationalism, an aspect that ‘would appeal to both libertarians and liberals’. Whether the change in direction in the UK will eventually improve the situation is doubtful. Demanding a stronger recognition from immigrants of the UK’s ‘Britishness’ – a policy approach that is now also being followed in the Netherlands, Germany and Denmark – is one thing, but combining that with a policy (in theory) of social integration everywhere, always, is quite another. It is a move towards the traditional American ‘melting-pot’ concept that has proven to be little more than a social ideal of conservatives – a theoretical mental concept – far removed from current realities. Assimilationism in France certainly has not proven to be successful in creating a peaceful integrated society there. The uprisings of 2005 that started in Paris but soon escalated to many other towns and cities in the country are a painful reminder of that. Immigrant enclaves are formed in cities everywhere in the world, whether a country follows an integrated or laissez-faire approach. Some in the French academic society see the ‘alienation’ of Muslims – the continuous linking of their religion and culture – as the problem. As a solution O. Roy (2007) suggests the ‘regularization’ of this minority group in Western society by separating their culture from their religion. Although positive, this suggestion does not seem very convincing, however. Separating the two aspects in the mind of the average European is one thing, but achieving it in practice is quite another. The core social values and cultural habits of Muslims in general, but fundamentalists in particular, are inextricably linked with their faith. Mandatory actions when entering or exiting parts of buildings, behaviour during different times of the day, the week or the year, as well as gender differences in allowed behaviour are just a few of the best-known peculiarities of this population group’s belief-system. Muslim enclaves in the cities of France, just as those in the UK and elsewhere in Europe, are therefore not monuments of failure but reflect the need of some foreign minorities to preserve their social and cultural identity in (for them) a strange environment. This serves as a reminder of the strengths of social communities as independent social agents within urban space. Just as in UK cities, social delineations in the French urban society demonstrate the sociological truth in the Copenhagen School’s claim that individuals have an inborn psychological need to achieve societal security by protecting their group boundaries (Buzan et al., 1998).

288

International handbook of urban policy

Some may regard this as fragmentation, an urban condition that usually leads to disenfranchisement. However, disenfranchisement of any part of society should not be equated with social delineation, or any other urban model of societal existence for that matter. It is the discriminatory state of mind of a society and the social malaise it breeds among negatively affected communities that needs to be overcome in the urban social fabric at large. Where people live does not necessarily determine the degree of disenfranchisement that they experience. In fact, securing a minority group’s social identity somewhere in a city that is otherwise culturally dominated by a different group could go a long way in combating the feeling of disenfranchisement among the former. This is a power relations issue that will increasingly require creative Habermasian-based communicative decision making and planning (Forester, 1989; Taylor, 1999; Healey, 1996; Sager, 1994, 2006) in countries where social diversities of cities are growing. To create a more tolerant urban society, both immigrant communities and local populations need to learn from previous experiences. Immigrant communities should realize that militant, unruly rioting and the destruction of property, for the sake of making a point, are a negative force that does not advance their cause. As the Washington Post (2006) reported, overall, the rioting in France resulted in the deepening of the resentment of locals against the immigrants and an increase in the latter’s alienation. But at the same time, local populations should take responsibility for the role that they themselves may have played in the current immigration dilemma. To some degree it is the structural labour market shortcomings created by local communities over the years that have necessitated the scale of immigration that we now see. Governments too should recognize the danger of political permissiveness in immigration policies. Social integration While immigration is still under control, immigration policy drives immigration numbers, but once immigration gets out of hand the numbers tend to shape policy. It is ‘reshaping the language and the law to dissolve any distinction between legal and illegal aliens’ (MacDonald, 2004, p. 1). The USA and some European countries may have reached that point. Due to the political sensitivity of the issue, the US federal government has been unwilling for some time to deal comprehensively with immigration. This has forced local governments to step in. City governments that still feel confident that they are in control tend to crack down on immigrants. Others officially become sanctuaries for illegal immigrants by issuing city ID cards to enable them to find employment and make it easier for them to mesh with the local population (The Economist, 2007). At the same time Central American governments are taking stern action to fight the growing problem of gang violence and crime in their midst. The ultimate outcome of this unevenness seems obvious – growing streams of illegal immigrants are likely to keep on flowing towards the USA, especially its sanctuary cities. The facts seem to bear this out (Know Gangs, 2007; MacDonald, 2004). Proponents of the ‘sanctuary city’ concept11 say that the policies are aimed at encouraging illegal immigrant crime victims and witnesses to cooperate with law enforcement officers (Faiola, 2007) and to encourage immigrants to make use of health-care and education services. They also offer a technical reason: the enforcement of immigration laws is a federal function while their jurisdiction is local. Opponents of the policy say that the enforcement of immigration laws is a delegated authority to local law enforcement

Winds of change

289

agencies and therefore not a valid argument. They say that the real reason for sanctuary policies is because illegal immigration populations in certain cites have become so large that the problem has become unmanageable. In one case 15 officials had the duty to deport 85 000 illegal immigrants in New York City alone. Law enforcement officials say that not enough jail space, too many immigrants to be deported by too few officials, and an over-elaborate and overly lenient judicial system have turned immigration law enforcement into something like the American Fish and Wildlife Service: ‘you’d tag their ear and let them go’ (MacDonald, 2004, p. 5). Spain is a case in point. Tens of thousands of illegal immigrants from Africa arrive there every year. After an initial detention period of 40 days, those whose citizenship cannot be determined are released inside Spain with an expulsion notice. Immigrants know that and deliberately ‘lose’ their documents. Most migrants choose to ignore these notices. Because the problem seems to be spinning out of control, there are cases where attempts have been made by the Interior Ministry of Spain to redistribute the problem by ‘dumping’ trapped immigrants unannounced in cities where the pressure is not as great (Govan, 2006). Deportation under such conditions is ineffective. People return as soon as they are released in their country of origin. Probable outcomes of immigration The fact should be stressed again that although problem areas are highlighted in this chapter for the sake of facing facts that are often deliberately kept under the radar screen in academic migration research, legal immigration on the whole is advantageous for host nations. Migrants are selected to fill known gaps in host nations’ labour structures. This could even be true for a significant percentage of illegal immigration. However, if a certain threshold is reached and illegal migration levels get too high for local governments and national immigration agencies to handle, the ultimate outcomes are inevitable: uncontrolled demographic change in selected areas; the creation of cultural enclaves in such areas; the blurring of definitions that causes a break down in the distinction between legal and illegal entry; and the forced sharing of social and civil services between locals and immigrants. The question whether the threshold has been reached in any particular country is certainly a matter of opinion. Those who believe the situation could still be ‘salvaged’ often tend to take a hard line. This has been the case in certain cities in America and the EU (The Economist, 2007; Reuters, 2008). But the softening of political rhetoric and the exercising of selected law enforcement to camouflage the issue in areas where there are large numbers of immigrants are usually an indication that the threshold in those areas has been reached. In certain cities in the USA and the EU this already seems to be the case, especially large international centres and cities located in areas bordering popular transit areas. Others are still hopeful that they will be able to stem the tide. As a result, national politicians suggest, and local governments apply, completely different policies under similar circumstances (Favro, 2007). On the whole, the immigrant communities in certain cities and states have swelled to numbers too large for stern action to be regarded as a reasonable option. In some countries ‘regularization’ has been attempted as a possible ‘silver bullet’ solution – the USA, Italy, Belgium and Spain – but in all cases the relief proved to be only temporary. Regularized communities simply create more opportunities for further inflows of illegal immigrants and in all the countries that have tried it before

290

International handbook of urban policy

(some more than once), the problem of unmanageable numbers of illegal immigrants simply recurred. The only ‘permanent’ solution seems to be acceptance, as is already happening in certain parts of the USA and among many in Europe. In certain states of America driver’s licences are issued to illegal aliens, free public education and medical care offered, international identification tokens such as the Mexican matricula accepted, and even city ID cards made available. In many respects this has ‘rendered national identification documents in such areas obsolete’ (MacDonald, 2004). What will ultimately follow are immigrant bills of rights, including voting rights.12 Whether these outcomes are regarded as positive or negative depends on the individual. Many large cities have a cosmopolitan atmosphere that differs from that in small towns in rural areas; some had it for years without too much opposition from locals. In fact, nations have been proud of the international character of their major cities and have used it effectively as a marketing tool to attract tourists. How easy it would be for local nations to accept the inevitable wider implications of the same phenomenon in their countries, only time will tell. Despite some negative publicity, positive responses in this regard are seen from time to time (Faiola, 2007). The concentration of immigrants in certain areas has already had a significant impact on local and national politics. Significant numbers of local, regional and national political representatives are of recent immigrant origin and their representation can only grow. The number of illegal immigrants entering the USA increased significantly since the North American Free Trade Agreement was concluded in 1994 (Favro, 2007). In the time span of little over a decade and a half the Hispanic population of North Carolina increased eight-fold to around 600 000 and in Georgia seven-fold to close to 700 000 by 2006. Immigrant communities in certain American cities have become so large and are so concentrated that Hispanic candidates could win a significant number of seats (as many as six) currently held by blacks in the US House of Representatives. The same phenomenon manifests itself in Europe. Current concentrations of Muslims in European cities have made it possible to create large and well-established ‘ethnic civic communities’ with dense networks of associations (Fennema and Tillie, 2001; Jacobs et al., 2002), many of them radically Islam-oriented (Vidino, 2005). This gives them greater leverage in organizational and spatial politics there. This phenomenon is likely to increase in scale and intensity in both Europe and North America. Culture and civic identity in macro and micro spaces The position that was taken earlier on that multiculturalism is an aspect of urban life that should be cautiously embraced, not necessarily regarded as a threat, needs further elaboration. In his controversial article, ‘The clash of nations’, in Foreign Affairs in 1993, followed upon by a book under a similar title a few years later, Samuel Huntington (1996) made several observations that subsequently proved surprisingly accurate in many respects. Two of them are relevant to this chapter: first, the seeming reluctance of some to acknowledge the re-emergence of culture as an important spatial determinant in modern politics, and second, the realization in the West that modernization no longer equates with ‘Westernization’ – never really did in the minds of many non-Westerners – and that its realistic outcome would be neither ‘a universal civilization’ nor the ‘Westernization of non-Western societies’. Not even the term ‘Westernization’ is a singular concept.

Winds of change

291

Through cultural blending it has mutated and hybridized and taken on different meanings to different communities living under different circumstances (MacIntyre, 1988). These facts are becoming increasingly apparent in the urban areas of North America and Western Europe. Although the idea of culture as a spatial determinant has been resisted and made unpopular for long, it has started to gain momentum again over the past two decades. In a PEW (2007) poll, a majority of respondents in 46 out of 47 countries showed concern for the loss of their traditional culture, while 62 per cent of Americans wanted more to be done to protect ‘their way of life’. It is therefore not surprising that 75 per cent of the people in the USA prefer stricter control on immigration, a sentiment echoed by a majority in 44 of the 47 countries polled. Culture has therefore proven to be not only popular, but also resilient and durable, and a visible social organizer with lasting effect in political space. As Perroux (1950) persuasively demonstrated, political space has rarely managed to successfully contain economic space in history. Over time the latter has always managed to overcome limits set by the former. Time has emphatically proven that this applies even more so to social space. Politics, from global to local, may bring about administrative spaces, some of which are inclusive in nature, others exclusive, some interlocking, others overlapping. Sometimes they are shaped in appreciation of social space, sometimes not, and when they are not, as history has proven over and over again, they could become the source of immeasurable tension between people. The reason for this seems clear: social space tends to take cognizance of political space but does not necessarily conform to it. When the purpose of the creation of administrative space becomes the regulation of social space, and the boundaries and rules of application of the former significantly deviate from those of the latter, the potential for social tension increases dramatically. And when an authority attempts to manage a multitude of social spaces by means of a single administrative process within one administrative space, the potential for tension also increases significantly if it does not sufficiently take cognizance of the intricacies of the social processes involved. This especially applies to areas in which affinities between the players are low. Administrative space therefore may be able to inhibit, even temporarily arrest, the free flow of activities within social and economic space, but no matter how firm the authority and how severe the penalties in case of transgressions, if their dimensions differ, social and economic spaces will seldom be successfully contained by administrative space. The fall of the Berlin Wall bears testament to this. Pressure – much of it social and economic – over a long period of time caused politicoadministrative boundaries that were enforced upon communities in the communist bloc for decades to cave in. No matter how strict the control and how devoted the enforcers, the political boundaries that were enforced upon communities during the expansion of communism in Central and Eastern Europe did not have a lasting effect on cultural boundaries on the ground. East and West Germany became reunited and what was forced to amalgamate under Soviet rule fell apart, in certain cases peacefully, as in the case of the ‘velvet divorce’ between the Czech Republic and Slovakia, but sometimes violently, as in parts of the Balkans. The steeper the friction lines between cultures that were forced to integrate, the higher the potential for violence, so it seems. As soon as the opportunity arose, administrative space in the Balkans was transformed to adhere once again to social spaces that were shaped and legitimized over centuries.

292

International handbook of urban policy

Bosnia and Herzegovina, Croatia, the Republic of Macedonia and Kosovo separated along ethnic lines, causing new relationships of supremacy and inferiority, and leaving newly formed minority groups feeling exposed, threatened and vulnerable (Kourvetaris, 1996; Roudometof, 1996). The same forces of ethnonationalism and subnationalism are at play in numerous places elsewhere on the global political map: Israel and Palestine, Catalunya, Chechnya, Tatarstan, Nagorno-Karabakh, Abkhazia, South Ossetia, Tibet, and many others in Asia and Africa. Social space therefore tends to be a dominant spatial force that cannot be ignored in political and administrative regionalization. In his study of ethnonationalism, Jerry Muller (2008) writes: Americans generally belittle the role of ethnic nationalism in politics. But in fact, it corresponds to some enduring propensities of the human spirit, it is galvanized by modernization, and in one form or another, it will drive global politics for generations to come. Once ethnic nationalism has captured the imagination of groups in a multi-ethnic society, ethnic disaggregation or partition is often the least bad answer. (Italics added.)

Ethnonationalism could be interpreted in different ways. Interpreting it in narrow, ethnic–nationalistic terms often only accentuates differences and delineations, and increases potential for tension rather than reducing it, but when it is interpreted more broadly in civic terms, it expands the lexicon, which tends to soften tones and boundaries. Defining ethnonationalism in broader democratic or ‘civic’ terms opens the door to a wider interpretation of the term ‘culture’. It leaves room for differences in interpretation and creates space for cross-cultural contact and pollination – an approach that breeds tolerance rather than divisions. Instead of referring only to areas (in a country, region or city) where specific ethnic groups with particular cultural traits dominate – although a specific ethnic dominance more often than not does occur in areas because culture and nationalism always contain an element of ethnicity – ‘culture’ now takes on a broader meaning. It includes cosmopolitan parts of cities (or regions for that matter) where ethnic variety or pluralism and social dynamism become the culture – the typical cosmopolitan ‘culture’ of the central areas of the large North American cities that Jane Jacobs (1961) loved so much, for instance. In this sense the ‘civic content’ of the interpretation of ethnonationalism prevents the latter from splintering societies ad infinitum. The logical outcome of the ‘civic’ interpretation of cultural space is for cultural differences in societies to perhaps become only more distinctively visible as patches in social space at higher levels of spatial aggregation (such as a country, a region, or a city as a whole, for instance), but not necessarily when space is scaled down to the micro level. At the local scale, where people interact on a personal level, civic blending needs to take place to allow for the coexistence of people who do not necessarily share the same cultural values and habits. People like Jerry Muller (2008) do not necessarily see ethnonationalism as a threat. To them it is a mechanism through which tension between social groupings that is unlikely to be resolved through conventional integrationist methods can be relieved. Allowing for the creation of communities in which people can ‘belong’, especially in a plural society where there is evidence of continued tension between particular factions, could lead to lasting stability. It could serve as a means of ‘consolidating society’ and allowing individuals with different social needs to form stronger relationships with communities they can identify with (Kassof and Plaks, 1995). This was clearly demonstrated in the cultural segmentation that had occurred in Eastern and Southeastern Europe in the aftermath

Winds of change

293

of the fall of the Soviet Union and between Greece and Turkey, and India and Pakistan earlier on. Referring to the ‘roadmap for peace’ in Central Europe, Kassof and Plaks (1995, p. 5) remark that ‘[w]hile there was widespread agreement that democracy was the only acceptable form of political rule, the actual practices and content of democracy varied and did not necessarily resemble the practices and content of democracy as understood in the West’. In the above-mentioned example of plural societies where cultural differences are significant, the focus was on ethnic disintegration for the sake of finding more durable peace, while in the traditional Western liberal mindset the focus is usually on ethnic integration. If an EU constitution and all the institutional structures that go along with it were eventually to become a reality, change in the spatial political landscape would require more than the current tokenism in the handling of political differences. A new approach to democracy – new governing principles – would be needed for the administration of the Union as a whole as well as for communities inside its constituent member states. In the wider European context this would mean looking for new ways of accommodating differences in the views, policies and practices between ‘traditional’ Western Europe and its new partners to the East. As the gravity point of the EU population and its inevitable effect on the balance of power gradually shifts eastward, ‘Western’ principles that are currently being enforced upon the EU as it now stands may not be acceptable for much longer.13 The main challenges will certainly lie in the protection of the ideal of cultural pluralism within communities – through integration wherever feasible and delineation wherever necessary. This will especially apply to spatial administration in the urban environment. Governments of member states in the West might soon find that, as the EU as a union of nations matures and communities internally become more diverse due to, on the one hand, national boundaries becoming increasingly porous, and on the other hand, the EU boundary continuing to expand eastwards, inflexibility of the Western component to keep on applying its own brand of liberalism (shaped within the historical framework of Enlightenment rationalism everywhere, always) may no longer be feasible. Changing conditions and interpretations of democracy will eventually demand a redefinition of the term ‘minorities’. Interesting tests in this regard lie ahead for the EU should a country such as Turkey become a ‘full member’. Countries in the EU may soon find that, in terms of Kassof and Plaks’s (1995) vision of conditions in Eastern Europe, minorities should no longer be mainly measured in population proportions but be treated as ‘equal partners’. Minority groups with significant representation in specific areas may start demanding greater official recognition and acceptance of ‘their’ unique cultural habits and lifestyles.14 If this happens, ethnolocalism is likely to increase in significance, causing social urban space to become increasingly fragmented. As cosmopolitan collections of people, cities are in many respects smaller representations of international society at large. In many cities around the world, community formation is strongly anchored in ethnonationalism or ethnosubnationalism. In the West it is more generally based upon civic association, but as we are painfully reminded from time to time, in some cases community formation in Western European and North American cities could also be based upon ‘ethnolocalism’. As in the case of macro spaces, culture that is coloured by religion, ethnicity, language and class has proven to be an equally strong social organizer in urban space. The preservation of the distinctiveness of cultures, especially foreign cultures, in the urban environment

294

International handbook of urban policy

is a function of several factors – time, the size of foreign communities and ‘fresh supplies’ of recent immigrants who help to keep the distinctiveness of such cultures alive. However, most foreign cultures tend to adapt to practical local conditions over time and get transformed in the process, but significant elements, especially the choice of cuisine, social traditions in and around the house, and religious beliefs tend to remain strong and could give a particular cultural ‘flavour’ to an urban area. Travel through Brussels, London, Los Angeles, New York, San Francisco, more cities than can be mentioned here, and you may soon find yourself in a predominantly Moroccan, Asian, African or Chinese urban community. Depending on the predominant culture of the people, defending communal space – violently if it is deemed necessary – within the limits of a city could be a common feature and is often driven by the traditional desire of a particular ethnic community to have greater authority over its own political, economic and social environment. As a result, the civic quality of particular enclaves might be quite amenable, as in the case of the ‘typical’ China and Korean towns of American cities, but it could also be quite violent and uninviting, as some Mexican enclaves in America and Muslim enclaves in European cities have proven to be. Sometimes marginalization and discrimination are given as reasons for the violent defence of ethnolocalism. In other cases it is religious disrespect, but usually it is a combination of all of the above. This has been a feature of cities all over Europe and the USA, some for many years – South Lambeth, Southwark and Tower Hamlets in London; Magnolia Street in Boston; Trinidad in Washington; Harbor Gateway and Compton in Los Angeles; Schilderwijk in The Hague; Slotervaart in Amsterdam; Sint-Joost-TenNode, and Molenbeek and Schaarbeek in Brussels – the list is endless. This discussion should in no sense be confused with the negative forces of ‘hypernationalism’ or ‘ethnocentrism’ that are prevalent among African-American, Hispanic and Moroccan gangs in certain neighbourhoods of European and American cities, for instance. Once ethnolocalism becomes uncivil and criminal it becomes a negative force that should be strongly opposed. The changing business landscape Earlier on in this chapter it was said that, since the beginning of post-Fordism, a link seems to exist between (1) certain aspects of liberal core values and the Western lifestyle; (2) high labour costs and low levels of productivity in the West relative to the peripheral core regions; and (3) the relocation of industries from the North to the South. In the next section this alleged link will be investigated in greater detail. International divisions of labour Since the sixteenth century the world has seen several international divisions of labour, all of which had, and the latest still has, a profound impact on the evolution of the industrial landscape of Western Europe and North America. The first division came during the colonization period when Western Europe (the economic core at the time) dominated the world economically. The second was brought about by the Industrial Revolution when, in the nineteenth century, through industrial research and development, mass production in Western Europe and parts of the New World, notably the USA, was taken to new heights. During this time industrial production largely occurred in the Occident, while the rest, especially the remainder of the colonized world, served as a market for produced products and a source of raw materials.

Winds of change

295

The post-Second World War period saw the end of colonialism as it used to be and the blossoming of globalization and neocolonialism. With the wave of independence of former colonial states came a greater focus on more formalized economic relationships between them and the industrialized countries. Over time, the struggle for global supremacy between the communist and capitalist blocs, and the battle for the ‘economic’ hearts and minds of the remaining less-developed section of the world, led to the end of Fordism and, with it, the evolution of the third international division of labour. Production processes increasingly became dispersed from industrialized economies to what Wallerstein (1974) called the semi-peripheral areas of the world, causing the replication of core labour markets there (Sassen, 1991). During this time outsourcing and offshoring became a prominent feature of industrial activities, and in the process the focus shifted from governments to multinational companies and the forging of formal relationships between individual companies in different states.15 Production patterns changed globally. Multinational enterprises increasingly became institutions of international production rather than institutions of international exchange. Specialist manufacturing in older industrialized countries was replaced by an integrated global production system in which labour-intensive production moved to developing countries. The newly industrialized countries were particularly benefited by this. Meanwhile the industrialized countries retained most of the multinational command functions and high-tech and high-value industrial services. In the process the ‘post-industrial’ society16 was born. Knowledge became the most prized possession and source of power, not property, and the service industry became the dominant economic activity, not manufacturing (Bell, 1973). Regionalization While the post-industrial society was busy expanding, political changes had occurred that caused a change in the international division of labour yet again. Following the collapse of the Soviet Union, unions and alliances that held the global communist–capitalist dichotomy together began to fall apart. Culturally fragmented nations and societies began to break up and look for new spatial arrangements. This introduced a new period of regionalization. Although the East–West divide of the cold war period was essentially based on global regionalization, it was only after the fall of the Berlin Wall that the concept really gained momentum among nations that were ideologically aligned. It significantly changed the world political scene. What initially started as agreements between nation states to form alliances to make a bigger impact in particular strategic areas later become an instrument for the more formal strategic repositioning of certain states within a particular group of associated countries. Europe, for instance, realized that, although it is ideologically aligned with North America, it could compete on a more equal footing with the USA and other regions globally if the nations in the subcontinent were to join forces. What tentatively started out as ‘the European Coal and Steel Community’ in 1950 has since grown in organizational unity and could, if major differences could be overcome, end up as the ‘United States of Europe’. Since Europe showed signs of success in forging a more structured and formalized unity, other global blocs have followed suit, first Africa and, more recently, South America. In global regionalization, the gradual amalgamation of states at the supranational level, as in the case of the European Union for instance, may weaken the internal unity of nation

296

International handbook of urban policy

states. But this fragmentation is perhaps an unintended consequence of global regionalization. The main objective in the creation of a European Community, for instance, was economic cooperation and the bringing together of nations to prevent another world war. However, due to the duplication of functions between state and superstate, it seems inevitable that the strengthening of supranational policy structures would eventually result in the weakening of national governments. And the more overarching decision making becomes distanced from ‘the people’, the more decision makers will feel the need to create recognizable structures for policy implementation ‘at the ground level’. In the EU, this certainly seems to be the case. Authority in government structures is visibly drifting away from national governments towards, on the one hand, the supranational or EU parliament level (whose task it is to initiate legislation and policy that will promote congruence between member states) and, on the other hand, subnational and local government layers whose task it is to implement policy. Legislation and policy that were traditionally considered at the national level are now increasingly considered and formulated by the EU parliament, while new ways are being considered for the funnelling of funds for development to subnational or local decision-making bodies. Under the programme known as INTER-REG, for instance, groups of subnational regions are being bundled together across international boundaries in North-West Europe with the intention ‘to boost trade’ between ‘parts’ of EU nations (Daily Mail, 2008). Counties along England’s south coast are paired with parts of northern France to form the ‘Manche Region’, while the ‘Atlantic Region’ links western England with Ireland, Wales and parts of Portugal, Spain, France and Scotland. Eastern England is paired with Sweden, Denmark, Germany, Belgium, Norway and the Netherlands to form the ‘North Sea Region’, In the meantime it is suggested that the name of the English Channel be changed to ‘The Channel Sea’.17 In the new evolving (regional) division of labour historical patterns of comparative advantages of countries are changing. In this environment city governments and regional development agencies are bound to play a more active role in matters such as finding development funding and the forging of development agreements across national borders, a role that was previously primarily performed by national governments. They are also bound to become increasingly involved in regional development and regional decision-making processes. Flexible production Since outsourcing and offshoring to South-East Asia became such a vital part of the industrial scene in the USA and Western Europe, one thing became abundantly clear: differences in the work ethics and productivity of workers in the West and the Far East are significant. Low-wage factory workers in South-East Asia are willing to work much harder for longer hours and for less remuneration than their counterparts in the West. This has led to the relocation of many industries or parts of production processes to the East, and as a result, has caused an increase in unemployment in the low-wage employment categories in the old industrialized countries. To remain economically competitive in a world where protectionism has become counterproductive, the industrial sector in Western Europe and the USA was forced to adjust. The transformation started with the recognition of the advantages of Kanban18 as a method of overcoming the historical limitations of ‘inflexibility’ and ‘deadlock’ that

Winds of change

297

were so typical of Fordism in the USA and Western Europe during the 1960s and 1970s. Kanban, a production approach that has enabled Japanese producers to market their products successfully in established European and North American markets, became a household term in industrial circles in the West. Although the traditional mass production processes of the Fordist period did bring about economies of scale, which allow firms to spread their costs more thinly, they also often resulted in large amounts of stock surpluses based on market forecasts that could easily be wrong. Large numbers of unskilled or singly skilled personnel were used, managed according to heavily supervised Taylorist principles by hierarchical management structures. Labour unions played an important part in formalizing the personnel structure of firms through legislative labour limitations and standardized social security packages. In flexible production, smaller amounts are produced by smaller, cross-skilled, lean and more productive workforces based on demand. Production processes are often fragmented, allowing for the flexible mixing and matching of different firms of different sizes, pitches, capacities and expertise working in one (often more than one) production chain at the same time. In industries where large numbers of standardized procedures are still necessary, robots are increasingly replacing unskilled labourers (ABB, 2008). This reduces the vulnerability of industries that so plagued the sector during the Fordist period. Although some in the USA and Western Europe have bought into flexible production, much remains to be done to make production processes more cost-effective there (Shimokawa, 2002). The advantages of a closer relationship between production management19 and plant workers, and the disadvantages of vertical integration, which rigidifies parts supply systems and complicates production processes, are beginning to be understood. But change seems to happen slowly in parts of the industrial sector still dominated by the historically socialist-oriented labour unions of America and Western Europe. In the USA, for instance, unionized factory workers in Chrysler, General Motors and Ford on average earn $71 per hour while their counterparts at Toyota earn $42 per hour. And although the former three companies were virtually bankrupt by the end of 2008, a deal was worked out between the Democrats, the companies and the labour unions (who heavily backed the Democrats during the 2008 elections) to bail out the companies without any indication that much will be done to make them more productive and efficient.20 Commenting on the situation in the USA, Shimokawa (2002) contends that longer working hours, increased productivity and the cross-training of workers are still being hampered by traditional ‘labour union rigidities’. Vital elements of the Kanban system have not yet taken sufficient hold to make them competitive enough to relocate ‘lost’ industries back to America. The same, by and large, applies to Europe. The new (regional) international division of labour that is emerging has proven to be as devastating to the lower middle class in Europe and America as the previous one. Trade agreements have been formed between core and adjacent peripheral nations that can benefit from each other in terms of their respective locational and competitive advantages. This phenomenon has had a significant impact on strategic clustering within the global economic society. Many labour-intensive mechanical production plants are moved to the nearest low-wage countries with quality labour and good infrastructure (Marin, 2005; Krempel and Pluemper, 1999). And many of those that remain and those who cannot be relocated, such as those in the agricultural sector, are kept operational by workers who, legally or illegally, infiltrate Western countries from low-wage countries. In

298

International handbook of urban policy

the process the problems of the traditional low-wage worker communities in European and American cities are being compounded. Early on during the post-Fordist period, high-tech, high-wage workers were spared the fate of the low-wage workers but this is no longer the case. Outsourcing and offshoring have also changed the mobility and spatial distribution of knowledge. For strategic reasons knowledge historically tended to be less mobile than markets, finance and production processes (Archibugi and Michie, 1995). Businesses in general do not like sharing strategic knowledge. Second, apart from other forces of agglomeration, knowledge agglomeration, for the sake of efficient local information and process networking, is also a particularly strong binding force in the clustering of certain businesses in economic space (Saxenian, 1994). This especially proved to be case in the IT and IT-related economic sectors – Silicon Valley being an excellent example. This force, combined with the other economic agglomeration forces, has been so great in economic space that spatial clustering has been regarded as a ‘structural feature’ of the social division of labour in capitalist economies (Storper and Walker, 1989). Fundamentally, the tendency of knowledge to be relatively immobile may not have changed, but due to e-business and the globalization of production networks in which multinational flagship companies link their subsidiaries, affiliates and joint ventures with their subcontractors, suppliers, service providers, and partners in strategic alliances in other parts of the world, knowledge has lost much of its former stickiness. (Dieter and Kim, 2002)

While some of the technologically advanced innovations that occur in the USA and Europe will still keep the concept of centres of ‘collective technological learning’ alive in those countries (Storper and Leamer, 2001), some complex functions that can be carried out at a lower cost in the periphery are routinely outsourced and offshored to peripheral locations.21 As a result of the continuous knowledge ‘leakages’ to the periphery (Bradford et al., 2005) the scale of advantages that were previously gained from centres of collective technological learning in the USA and Western Europe will diminish and in the process these pioneering countries will increasingly lose the knowledge advantage they previously enjoyed. The remuneration bubbles that were created in North America and Western Europe also played a role in the proliferation of knowledge-based industries to the periphery. As has happened in low-wage work, the high-wage sector in Western Europe and North America has also outpriced itself in the international market. For a long time during the post-Fordist period, capital-intensive sectors in the West were able to create labour markets that offered proportionally more opportunities for higher wages, compensating for higher effort, than labour-intensive sectors. Over time this has become a self-propelling mechanism. Industrious communities with high percentages of high-effort high-wage workers operating in open economies benefited from higher returns to capital than those that did not have the same advantage. Openness was always regarded as beneficial because trade tends to boost an economy-wide increase in effort. In such environments minimum wages tend to go up, forcing effort in local services that support higher wages to go up as well (Leamer, 1996). Because communities compete for the mobile factors of production (Siebert, 2006), especially capital and technology, this set of mechanisms used to work favourably for core regions, nationally and internationally. But knowledge levels

Winds of change

299

and quality of high-effort output in parts of the periphery have caught up with those in the First World, and those that have not are doing so rapidly. Comparable knowledge levels, higher levels of productivity and lower wages in the newly industrialized countries bring about comparable products, delivered at much lower prices and over shorter time horizons than in North America and Europe (Hadgecostas et al., 2002). While headquarter functions have often been separated from production in the post-Fordist period to cut costs (Schaeffer and Mack, 1997), product development functions are now also decentralized and integrated with subsidiaries in emerging markets for market proximity reasons but also to reduce development time and costs (Dias and Salerno, 2004). All these factors have been working to the advantage of core areas in the periphery. The result: many high-effort high-wage jobs such as software development, precision engineering and assembly, high-tech equipment testing, and the provision of financial, information and professional services have been (and continue to be) siphoned off the First World core economies by core regions in the periphery, notably India, China, Taiwan and Singapore. While such developing countries have now been benefiting for decades from being willing to do the low-wage production for multinational companies in the USA and Europe, they are now also beginning to benefit from their willingness and ability to do high-effort high-wage work as effective and at the same standard for much less than people in the First World. The threat of rising unemployment among local low-wage workers in Western Europe and the USA is being compounded by high immigration numbers. But unless the fertility rates of local populations rise, shortages rather than surpluses are likely to arise in lowwage sectors in the labour markets of the USA and Western Europe in years to come. As has been illustrated earlier, this situation (together with ageing) has already been posing significant challenges to both communities for some time. One important challenge is how to balance the largely ‘cliché-driven’ desire to attract low-wage economic activities back to old industrialized countries with the need to allow large numbers of young lowwage immigrants into the countries to do the work that the ageing low-wage components of local labour forces are reluctant to do. As it stands, large numbers of immigrants from the Third World are already needed to help to grease the labour-intensive parts of the production engines that have remained in First World countries. The trade-offs here are staggering. To maintain its current ratio of workers to retirees the USA will have to be willing to accept an average of 10.8 million immigrants annually (United Nations, 2006). If this immigration rate is kept up, it will bring the US population to a total of 1.1 billion by 2050. The realities are obvious: with or without immigration, the US economy is likely to lose steam over the longer term. The same realities stare Europe in the face. The short-term realities are equally discouraging. Despite flexible production and high levels of immigration, production processes in Western Europe and North America are unlikely to become much more cost-effective. High social cost structures have become much too entrenched in those societies22 to expect them to match the low production costs in core areas of newly industrialized countries. As a result, CEPII sees a rather bleak industrial future for the North. It predicts a further specialization in services and a continuing decline in manufacturing as a result of the rising competition from newly industrialized countries.23 ‘Nike-style’ industries that import and distribute goods that they do not manufacture will become commonplace. Otherwise only the most productive

300

International handbook of urban policy

firms, using the least labour-intensive technologies and producing up-market products that are not produced in low-cost countries, will survive. Even then Europe’s share in the sale of up-market goods in the international market will be limited. Over time the number of firms will shrink and the North’s manufacturing industry will ‘wither away’. Manufacturing jobs for the un- and semi-skilled will decline. For now, only the future of the skilled workers still seems secured (Fontagné et al., 2004). Protectionism versus free trade One often hears arguments aired for greater control over migration and greater protectionism to keep industries in the USA and Europe going. Arguments for tighter migration control in conservative circles usually revolve around the social effects aliens have on communities. Social liberals usually argue the economic case – immigrants undermining wage structures in the low-wage categories. In the spirit of the philosophy of liberalism, Ricardo’s foreign trade theory suggested that free trade is the only method through which the highest productivity of economic efforts can be assured in a country. According to his model, free trade causes specialization, which allows individual countries to consume more than they produce individually with their own resource endowments. Any form of protectionism is counterproductive in terms of the output of capital and labour over the long run. This proposition has not yet been successfully disproved. Protectionism is based on socialist political thinking, not realistic economic grounds. It reduces productivity of economic effort, which undermines trade. It engenders a dangerous form of economic sluggishness, an obesity that, once it has established itself in the economic system, becomes almost impossible to cure. Under conditions of the perfect mobility of labour, capital and commodities, price and wage differences between countries would ultimately be eliminated. But they are not perfectly mobile. In fact one of the aims of labour migration control is the protection of existing wage structures in a country. Trade unions tend to push wages up to levels above the equilibrium rate of supply and demand in the labour market, and tend to protect established production regimes – one of the surest causes of unemployment and industrial displacement in the footloose business environment of today.24 In a train of cause and effect, rising wage levels bring about uncompetitiveness, which makes trade barriers a necessity for industries to survive.25 This, in turn, deprives people of all the advantages of full international economic cooperation. In the debate about the advantages and disadvantages of immigration it is important to keep these economic fundamentals in mind. Mann (2003) uses the globalization of IT hard and software production as an example of the benefits of global trade. People around the world have been benefiting from the products. ‘More people can afford them and more businesses use them.’ This increases productivity. People in the IT sector in the USA and Europe might not have been unaffected by its trade but because of the general use of the products more people in the trade can benefit from trickle-down effects of its use. Likely impacts of winds of change on the urban environment in the Occident Urban growth patterns The urban analysis (Urban Audit, 2003–07) that was done for Europe for the period 1996–2001 has revealed some interesting information about current urban growth

Winds of change

301

trends. Countries such as Finland and Ireland that have been focusing on the technologically advanced economic sectors – mostly service-led activities – have been experiencing exceptional growth. Due to their growing prosperity, cities in countries such as Ireland, Finland, Spain, Portugal and Greece are experiencing some of the highest population growth rates in the EU in recent years. The Nordic countries generally, but also Spain and Greece, have all been experiencing an exceptionally high influx of migrants. This has caused the Urban Audit cities of Ireland, Finland and Spain to grow at a faster rate than their national populations, while many cities in Central and Eastern Europe are showing signs of decline. Although similar trends of differential urban growth patterns are also visible in the USA, the driving forces behind these migration patterns differ. Those in the EU are largely employment driven while the high levels of migration to cities in the ‘sun belt’ of America are often environment driven. Cities with younger populations tend to grow the fastest. Large cities that attract large numbers of immigrants such as London, Dublin and Madrid fall into this category. The highest percentages of immigrants from Central European states are found in large Western European cities. Smaller centres generally tend to attract more people from their surrounding regions. In the EU, inner cities or large metropolitan areas tend to be either stagnant or waning whilst their suburbs are growing, sometimes at a high rate. This is a clear indication of urban sprawl taking place, a phenomenon that has been occurring for some time now all over Europe (European Environmental Agency, 2006; Caruso, 2001). There is a direct relationship between city size and economic output. Generally, the GDPs of cities with populations of more than 1 million are 25 per cent higher than those of the EU as a whole and 40 per cent higher than their national averages. The GDPs of smaller cities tend to taper off with decreasing size. Those with populations under 100 000 tend to have GDPs that are lower than their national averages. The service sector provides most of the employment, as much as 90 per cent in the five largest cities of Europe. Because large cities tend to grow faster, they are also the strongest providers of employment. There is an anomaly here, however. Because of their growth they attract more migrants and therefore also suffer from higher-than-average unemployment rates. As the percentages of migrants from less-developed countries in Western European cities increase, the Todaro theory (1982) of the ‘bright lights syndrome’ increasingly becomes relevant. It confirms that people, especially those originating from developing countries, tend to overestimate the availability of employment opportunities in cities. They also tend to overestimate their ability to compete successfully in what often prove to be very competitive employment markets. This situation often results in the ‘over-urbanization’ of cities caused by the ‘premature urbanization’ of underqualified urban migrants. The impact of industrial change The changing industrial environment has had a major impact on the employment culture in Europe and the USA. In flexible production, many of the participating companies in the production chain are relatively small and their command profiles flat. This allows individuals much more authority but also more responsibility in their personal work settings. In this environment the political leverage that labour unions historically enjoyed through the support of large numbers of industrial workers, who were often used as

302

International handbook of urban policy

‘voting cattle’, has largely fallen away, leaving them with much less political influence than in the past. Where more than 50 per cent of the workers were union members in the 1950s, the percentage has dropped to less than 12 per cent by the mid-1990s. Temporary employment is on the increase and forms a large percentage of employment overall. Women are also heavily represented in this employment category (Dearden, 1995). Wages vary greatly and are based on productivity and skill levels. Following the people, businesses in cities in general have been drifting outwards towards the urban fringes in the USA for decades. The same trends are now visible in Europe. Although urban sprawl as a process is likely to continue, high fuel prices together with urban densification and integration policies are expected to pull many small and medium-sized businesses back into the cities. Since more industrial firms are following a more cautious and flexible approach to production, the changing industrial profile of countries has already had a profound impact on urban form. As Michael Robinet (2002) wrote, ‘The economics of production and site location 50 years ago may make little sense in today’s fluid environment.’ One could easily deduct three, even four decades from the statement above and it would still be accurate. Large numbers of large industrial sites are no longer as necessary as in the past. Industries operating as ‘automated lines’, production ‘modules’ or ‘complexes’ in flexible production systems (Chudakov and Shchetinin, 1986) require different urban environments in which to operate effectively. City governments and planners must be flexible in their approach to entrepreneurs’ requests and be willing to provide the variety of stand types and locations required by the business sector. The establishment of industrial and commercial service parks closer to residential areas, central business districts and other business nodes inside the city, offering many smaller stands or even a variety of spaces in the same large industrial buildings, illustrates a part of this new trend. Sometimes large old industrial buildings stemming from the Fordist period are converted to provide appealing, modern and architecturally attractive spaces for industrial use or for the provision of commercial or professional services as part of the new flexible structural economic make-up of cities. The impact of immigration on the business culture in inner-city areas The point has been made earlier that immigrants – a large percentage of them illegal – are necessary to keep the wheels of the industrial and agricultural sectors of North America and Western Europe lubricated. The increase in the number of immigrants from less-developed countries and their associated informal economic activities are therefore bound to continue to make a bigger impact on the urban environment in the inner urban areas of America and Europe in the future. In response to a question, a friend once replied: ‘the informal economic sector is not a big thing in American cities’ (at the time I thought that the addition of the word ‘yet’ to the answer would have been appropriate). In the bigger scheme of things this statement might still be accurate. But is it going to remain so? Certainly not. Are informal economic activities – Third World styled – already taking off in American and European cities? You bet. In parts of certain cities of America that are attracting large numbers of immigrants the informal business sector has already become a ‘big thing’. Informal trading activities, stalls, cottage industries, restaurants and the like have already taken on sizeable proportions there, and in certain cases they are welcomed, even

Winds of change

303

appreciated (The Economist, 2007; Reuters, 2008; Faiola, 2007). This is in all probability not because local governments would have wanted them there, but because they have no choice. One government official honestly admitted that a part of his city, New Jersey, has been dying slowly for years and that ‘it would have been impossible to keep it going’ without those immigrants and their informal-styled business activities (Faiola, 2007). In countries such as Spain and Greece the informal sector – the ‘black economy’ as is it is called there – already involved up to one-quarter of the labour force as long as a decade ago (Dearden, 1995). Urban economies in Europe and the USA originally started informally, but soon the location of many became fixed and eventually turned into formal business. The informal urban sector remains a strong component of the lower end of urban economies all over Europe, however. Informal business markets that are weekly held in towns and cities form a significant part of the urban economic markets there. This tradition is now also changing. Formal businesses facing the central market areas of small towns where informal markets are regularly held used to benefit from the extra feet that were attracted by such markets. But conditions are gradually changing. The increase in immigrants has caused a change in the number of informal markets, their locations and character in recent years. What formerly consisted mainly of local people – often traders originating from local farming communities, selling their wares to urban communities, are now not the only traders. The increase in the number of informal traders from the Pacific Rim and Central and Eastern Europe in Western Europe, and Mexicans in the USA, is changing the environment. Many of the new markets in American cities are taking on a distinctive Mexican character, to such an extent that broad avenues in American cities are now ‘peppered with signs in Spanish and malls catering to Latino shoppers’ (Huus, 2007). The impact of immigration on the social character of cities Immigration is also strongly associated with changes in the social character of cities in the Occident. In the USA, stand-alone metropolitan cities are officially designated as ‘metropolitan statistical areas’. ‘Consolidated metropolitan statistical areas’ are metropolitan areas that show commuting relationships with other units. By 1995 these two groups already accommodated approximately 80 per cent of the US population (Frey, 2002). However, there are also other classifications. One such distinction is between so-called ‘high immigrant’, ‘high domestic migration’ and ‘high out-migration’ metropolitan areas. Early indications of domino effects in urban growth process are evident in particular metropolitan areas. As central cities receive new immigrants, a large percentage of them targeting traditional African-American neighbourhoods, the latter are displaced. African Americans who previously lived in inner-city areas and who can afford it move to particular suburban areas, and people who previously lived there move on to other suburban destinations or even ex-urban destinations. In the process, migration that is driven by the upward mobility of one population group triggers that of another (Frey, 2002). Does class or cultural delineation play a role in this dynamic? Certainly. Is it something that should be opposed? Enclaves that spontaneously evolved from the need of certain immigrant groups to create areas of particular recognizable cultural characteristics such as the Chinese, Koreans, Mexicans and Muslims in European and American cities should, in the spirit of healthy multiculturalism, not necessarily be regarded as a

304

International handbook of urban policy

problem. Hard as it may seem, even areas in which turf wars are waged between different cultural groups could be seen as a sign of the slow process of sociocultural urban transformation. In such cases poverty could be an aggravating factor and should be combated wherever it manifests itself, but alleviating it may not necessarily stop the violence. As part of a silver-bullet solution some suggest the integration of higher and lower income groups in the city. Compact cities are the answer, so these people believe. But at the same time we learn that urban sprawl has been winning the race, almost everywhere in the USA for a very long time, but also in Europe more recently. New urbanists who try to turn this around, especially in the USA, are fighting an uphill battle. Even in places where planners use extraordinary authoritarian techniques to try to force people to stop sprawling, they find ways to continue exercising their right to choose (see Chapter 7). The reason why urban densification is unlikely to solve the problems in the areas described above seems obvious. For most people buying a house is the single biggest investment they will make in their lives. ‘Why make it in areas that are risky?’ they are bound to ask. And in cases where developers dare to venture into central city areas they are often accused of creating ‘gated islands’ which tend not to spatially integrate but displace the people who previously lived there. How conventional ‘open’ urban development would solve problems such as urban poverty, crime and ‘inaccessibility’ is not clear. What one does see in cities in the developing world is that wherever higher and lower income groups live together in integrated, ‘open’ residential areas, the same situation tends to repeat itself all too often. The criminals roam the areas freely, especially at night, while all the others barricade themselves behind high fences and burglar bars for fear of possible attacks from the outside. They are simply confined to their homes. Those who leave their houses, especially at night, do so at their own peril. If they leave by car they might still stand a chance, but if they were to be caught outside on foot, particularly at night, they stand virtually no chance. There are plenty of examples of areas of this description to be found in cities in developing countries all over the world – Rio de Janeiro, Buenos Aires, Mexico City, Mumbai, Johannesburg; the list is endless. It is therefore not surprising that people try to protect their investment in risky areas by gating them. Whether gating occurs in a conscious, pre-planned manner such as in many new gated developments in inner-city areas, or individually by owners in ‘open’ residential areas, the outcome is the same. There is no reason to believe that people who live under comparable circumstances in European and American cities would argue differently. Some people living in European and American cities might find comfort in the fact that the examples given above are far removed from the conditions under which they believe they now live. However, the spatial properties of criminal behaviour could change fast. In South Africa, organized crime cartels that are based in one part of a city regularly target particular suburbs in raids in other parts of the same city, even suburbs in other cities far away. If irregular immigration continues at the rate that it does at present in parts of Europe and America, and all indications are that it will, then similar experiences could befall people who thought they were safe in the USA and Europe soon too. What are the alternatives? One that we do know is working is to ‘throw money’ at the problem, and ‘lots of it’. This we have seen happening in a city such as Singapore. It provided enough schools of good quality, improved infrastructure and housing, and above all, is maintaining them all well. To make sure that homes are as safe as possible and are

Winds of change

305

continuously improved, the government realized that housing should be designed in a defensive manner and that a scheme should be devised that would enable occupants to become home owners. It was argued that, by and large, people tend to look after their own property better than someone else’s. This assumption proved to be correct. Some might argue that Singapore is a special case, that it has the means to ‘spend’ the problem to death, and that the European and North American local governments do not have that luxury. But then, again, the scale of the problem in European and North American cities is not as big as it often is in the developing world. To solve the problem, ways will simply have to be found to redistribute wealth in cities more vigorously to provide more and better schools, housing and infrastructure in poor areas. And we are not talking of merely ‘static’ redistribution. There are methods of redistributing wealth in a ‘dynamic’ way (Killick, 1981), ways in which everything is not simply given to the poor but ways that will allow beneficiaries the opportunity to earn their gifts in a dignified and sustainable manner. The Singaporean government has proven this to be a lasting solution. The South African government has also been doing the same, but with limited means. Experience has proven that big iconic development projects to ‘trigger’ wide-scale gentrification in central city areas do not always work. Many failed examples of ‘grand projects’ of this kind can be found everywhere in the world. Jane Jacobs (1961) proved her case beyond any doubt in this regard. Incremental, phased, but dedicated and continuous change is necessary in which the people in the areas are involved – change that they feel has something in it for them too, physically and in monetary terms. For this to happen, a ‘Third World’ poverty alleviation approach is necessary in parts of North American and European cities, one in which the local poor can be involved visibly and tangibly in the improvement of their urban environment and in the continuous maintenance of improved areas. Much has already been achieved in this regard in certain cities, but much more needs to be done. To think that forced social integration will solve equity related problems that are often blamed on urban modernism only seems to be a practical solution to ideological activists slanted towards socialism. ‘Forcing’ people into areas chosen by local government officials by means of draconian urban planning measures goes against the grain of what people want: to be able to exercise their right to choose where and how to live the best they can. Practice has proven this over the centuries and policies going against the grain will not change that, no matter how authoritarian. Conclusions Urban form is the outcome of the locational choices that people make within the limits of their abilities and convictions, and the limits set by government. Some of the most controversial policy issues that cities in the Occident currently face are related to how people spatially react to social, economic and environmental changes occurring round them. While cities in America have now been sprawling for many decades and there are few signs that counteracting policies have been able significantly to slow down, let alone reverse, the trend, urban sprawl seems to be gaining momentum in many parts of Western Europe as well. There should be no surprise here. Up until now, agglomeration forces – some economic (Isard, 1972), others social (Buzan et al., 1998) – have proven to be enduring determinants of urban morphology. It is these forces that have brought

306

International handbook of urban policy

about the modernist urban structures. Breaking these structures down by mixing up and densifying land uses that respond differently to different kinds of agglomeration forces, as some idealists would like to do, is going to be a hard sell. Much of this idealized outcome simply goes against the spontaneous forces that are shaping our cities. Whether economically punctuated sprawl should be allowed to continue or turned around has become a very emotional issue for most. Search the Internet using terms such as ‘urban sprawl’, ‘new urbanism’, ‘urban integration’, ‘urban fragmentation’, ‘urban densification’, ‘urban deconcentration’, ‘global warming’, ‘concentrated deconcentration’, ‘polarized development’, ‘edge cities’, ‘neotraditionalism’, ‘smart growth’ or ‘gated communities’, and you can find literally millions of references of indexed views, blogs, articles and studies that passionately argue for and against each concept. Dig a little deeper in the literature and you will soon find that matters such as ‘immigration’, ‘foreigners’, ‘multiculturalism’, ‘assimilation’ and ‘culture’, all issues that have been dealt with extensively in this chapter, more often than not also feature strongly in arguments offered on both sides of the same debate about urban form. Some defend urban sprawl and the modernist urban structure on social, economic and environmental grounds, while others, using different arguments, find reasons to condemn the concepts on the same grounds. However, the reason why sprawl, moulded in a modernist cast, continues to be such a powerful force seems logic. Urban development trends are the outcome of the systems of thought that drive a society’s behaviour. The fruits of the systems of thought about how people in the ‘West’ should live and the expected benefits that this lifestyle will bring are reflected in the urban development trends. But looking a little deeper, it is clear that the cumulative effect of these systems of thought has caught up with urban communities in North America and Western Europe. It has brought about two contradicting realities: first, the inability of large sections of local communities to keep up with the costs of maintaining the kinds of lifestyles that the systems of thought have created; and second, the difficulty of dealing with the inevitabilities that this cumulative effect has brought about in urban communities. On the one hand, the nations of North America and Western Europe have now been ageing and shrinking for more than three decades. High living costs fuelled by the ‘American dream’ (a dream that is as vigorously followed in Europe as it is in America), feminism and costly (and escalating) social security systems, to name but three obvious factors, are making it very difficult for the average person, especially the lower-income earner, to make ends meet. Many urban inhabitants in the Occident have to hold down more than one job to survive. This, plus the after-effects of people being enabled to buy more than they could afford for years, has had a significant impact on the sustainability of urban economies. Not only is the potential of the people in the countries to produce more, better, faster, gradually diminishing, but the sustainability of their urban areas is also undermined by the habit of many to keep on living above their means, in overvalued houses, on credit and without the inclination to save. Nothing has demonstrated this more clearly than the credit crunch of 2008 and the threatening subsequent recession.26 Some were quick to blame the financial meltdown on the ‘greed’ of ‘Wall Street’, but realists know that the meltdown eventually had to come. Millions in ‘Main Street’ had been living the American dream for years based on easy credit allowed by liberals and conservatives in consecutive governments over decades in America and Europe. These systems of thought were shaped and became entrenched during a period when

Winds of change

307

things were still easy. The ‘West’ was still the ‘North’, the undisputed economic core of the world, while the rest was simply seen as ‘the periphery’ – the undeveloped ‘South’. But things have changed radically. Global economic gravity forces have become increasingly fluid. Post-Fordism, augmented by a high-cost First World and increasingly competitive low-cost peripheral core regions, is causing gravity forces to shift rapidly. Add the unwillingness of many locals in the low-wage categories to do the kinds of work that are currently on offer to the ageing of the populations of North America and Western Europe, and the millions upon millions of workers in the periphery who are eager to get to those countries to do the kinds of work that locals are reluctant to do, and one finds all the reasons why the average city dwellers of North America and Western Europe will have to brace themselves for much higher levels of immigration and cultural diversity than they have been experiencing, and complaining about, until now. Unless the well-established systems of thought in the Occident are radically amended (and judged on the outcome of the 2008 US elections and the general political mood in Western Europe this is unlikely to happen), the current economic vicious circle will continue to spiral downwards. Factors such as low birth rates, which lead to shrinking and ageing workforces, which produce less, and at higher cost, because their civil overhead costs are high and because they require more from their expensive health and social security systems than the systems were originally designed to provide for, are all working towards a further loss in economic momentum in the Occident. This, together with a fluid global investment market that favours countries with younger, more productive workforces, and which offer multinationals more locational freedom and greater production and tax advantages, make the continuation of the industrial downward spiral of cities in the Occident much more likely. These are the reasons why many more cold winds of change can be expected to blow over North American and Western European cities in the years to come. Public policy measures aimed at patching up and maintaining dysfunctional educational, social security, health and industrial production systems are likely to cause more cold winds to blow over the Occident, but changing them fundamentally could well turn them into a useful windbreak in the future. Notes 1.

2. 3. 4. 5. 6.

In his report, Longman (2004) writes that there has been a ‘dramatic increase in obesity and sedentary lifestyles’ in America. This has caused a rise in disability rates among economically active people, a concomitant increase in medical expenses and a rise in the demand for nursing homes. Life expectancy in the USA is already dropping as a result. The same applies to Europe, where an ‘alarming rise in obesity presents a panEuropean epidemic’. In Italy, 35 per cent of the children are overweight, while among European men, ‘the percentage who are overweight or obese ranges from over 40 percent in France to 70 percent in Germany’. It is estimated that the EU now needs 56 million immigrants to make good losses in its human capital through ageing (Workpermit, 2008b), i.e. ageing of the native as well as the immigrant population. Some say this is a fallacy. Their assertion is that immigrants undercut local low-wage workers by working for salaries below the minimum wage levels. Cities such as London, Paris, Amsterdam, Berlin, Munich, Zurich, Vienna, Rome, Brussels, Barcelona and others serve as an added force of attraction to migrants on their way to Western Europe. Globalization also plays an important role. The global information network informs people better and keeps them informed more effectively. This has a positive effect on people’s mobility (Zelinsky, 1971) and makes the decision to migrate easier. It should be noted, however, that network migration theory does not completely explain the flow of illegal immigrants to host countries. Push and pull factors usually underlie the whole process (Paspalanova, 2006). Continuing global stresses, such as water shortages and drought in developing countries, for instance (Dow et al., 2005) will keep the stream of potential migrants to developed countries high.

308 7. 8. 9.

10. 11. 12.

13. 14. 15.

16. 17. 18. 19. 20. 21.

22.

23.

International handbook of urban policy This is a cause of brain drain in these countries (Workpermit, 2007b). The Netherlands, for instance, has become a labour-exporting country. More migrants left the country (mostly to Belgium and Germany) during 2006–07 than arrived (Workpermit, 2007b). To allay fears, one argument that is often offered is the safety that lies in differences between the groupings within the Muslim communities (Ross, 2006). But experience has shown that, in the West, Muslim groups that otherwise would differ from one another in religious interpretation normally stand together when they feel their religion or ability to practise it is threatened. The other argument is that only a minority – the extremists – in such communities are responsible for the atrocities and therefore are not a cause for great concern. This is not very reassuring if one considers that the deeds of such minorities would not have been possible had there not been a supporting social base. North African immigrants are known to keep powerful attachments to their native cultures. The idea of a sanctuary city originated in the 1980s when churches gave aid to unauthorized migrants from Central America who fled from civil war (Now Public, 2007). The hunger strike of the 240-odd illegal migrants in a church in Brussels to demand the right to stay in the European Union (Reuters, 2008) and the many marches held by Hispanic immigrants who claim more rights and privileges in the USA are an early sign of this line of thinking among immigrants and proimmigrant groups. For now they may still work because new member states are still trying to make themselves as ‘presentable’ to their Western partners as possible. But once they have become settled member states and do not need to be as presentable as they now need to be, power relations may change. For now, politicians try to keep the growing number of attacks by Muslim men in Muslim-dominated areas on women who prefer not to wear headscarves (many of whom are not Muslims themselves) under the political radar, but sweeping these matters under the rug will not be possible in the long run. Some of the relationships were exploitative in nature, resulting in what Fröbel et al. (1980) called the ‘new’ international division of labour. However, Fröbel’s new industrial division of labour could be viewed from a profit maximization point of view or from a cost minimization point of view from within the product cycle theory. Fröbel tends to disregard the latter for obvious ideological reasons. According to Aoyama (2003), Bell (1973) and Touraine (1969) pioneered the concept of postindustrialism. The current UK Labour government is happy with the proposal, but the Tories see it as ‘bringing the super state in through the back door’. Kanban is a production process popularized by Toyota and subsequently adjusted and refined by Nissan and Honda. In the West industrial management structures tend to be elitist. Vague references were made to making cars more fuel-efficient and looking at ‘alternative’ energy sources, but nothing was ever mentioned about slimming down labour remuneration packages or improving worker productivity. This does not factor in discoveries and innovations that occur in developing countries independently from developed countries. Japan, the first country outside the ‘West’ to successfully negotiate the learning curve in areas where forces of knowledge agglomeration tended to be strong, is an example of this. Many others – China, India, Korea, Taiwan and Singapore, to name just a few in the Pacific Rim – have subsequently followed the example set by Japan. Excessive paternalism in labour legislation and in the provision of social security in parts of the EU – remnants of a union-dominated industrial environment of a bygone era – forms an important part of the region’s industrial cost baggage. It not only causes inequalities between traditional and new member states within the EU, but also undermines the competitiveness of such countries relative to others, causing what critics call ‘social dumping’ (Dearden, 1995) in countries that are less burdened. The same issues are more or less constantly debated in American society as well. More socialist-oriented members of the Congress, even presidential candidates during the run-up to the presidential elections of 2008, pushed strongly for the costly concept of ‘universal’ social security. Through the expansive and expensive food chain of the social security network at large, every paternalistic move in this direction ultimately adds to the cost structures of production processes in the industrialized countries and in the end makes them less competitive in the global industrial environment. More responsibility should ultimately be given to individuals to provide for their own medicare and social security and larger degrees of cross-skilling should be allowed in the industrial and service sectors if those societies are to stand a chance of lowering costs. It is estimated that as many as 40 million employment opportunities could be lost to America alone over the next two decades through offshoring. Workers are advised to start specializing in ‘personal services’ since ‘impersonal services’ are likely to be lost (Blinder, 2006). In 2004, China overtook Japan as the third-largest single exporting country. In terms of the total amount exported by individual countries at that stage, Germany ($915 billion) and the USA ($619 billion) were still ahead of China ($593 billion), but with an enormously willing population and its exports growing at 35 per cent in 2004

Winds of change

24. 25. 26.

309

alone, it should just be a matter of time before China will reel in the other two industrial giants as well (Kotabe, 2007). Reactions to this are automation, or outsourcing, or, in extreme cases, the closing down of businesses and replacing of goods formerly produced with cheaper imported goods (Rivoli, 2005). The USA has a good record in this regard. Tariff rates have been reduced from 40 per cent in 1946 to 4 per cent today (Hufbauer and Grieco, 2005; Cline, 1999). Due to the real-estate crisis in the USA in 2008, a crisis whose ripple effects were felt in financial institutions all over Western Europe as well, house values have now been falling to more realistic levels for the first time in many years in North America and Western Europe.

References ABB (2008), ‘Flexible production to meet customer needs’, http://www.abb.com/cawp/seitp202/8f3b1f92df92a 4eac125742e003cf105.aspx, 28 April. Aoyama, Y. (2003), ‘Sociospatial dimensions of technology adoption: recent m-commerce and e-commerce developments’, Environment and Planning A, 35, 1201–221. Archibugi, D. and J. Michie (1995), ‘The globalisation of technology: a new taxonomy’, Cambridge Journal of Economics, 19, 121–40. Barry, T. (2008), ‘Truth about illegal immigration and crime’, Americas Program, Center for International Policy (CIP), 18 January, http://americas.irc-online.org/am/4903. BBC (2005), ‘Muslims in Europe: country guide’, Friday 23 December, http://news.bbc.co.uk/2/hi/ europe/4385768.stm#sweden. Beaverstock, J.V., R.G. Smith and P.J. Taylor (1999), ‘A roster of world cities’, Cities, 16, 445–58. Bell, D. (1973), The Coming of Post-industrial Society: A Venture in Social Forecasting, New York: Basic Books. Birg, H. (1995), World Population Projections for the 21st Century: Theoretical Interpretation and Quantitative Simulations, Frankfurt: Campus Verlag. Blinder, A.S. (2006), ‘Offshoring: the next industrial revolution?’, Foreign Affairs, 85(2), 113–28. Boswell, C. (2005), ‘Migration in Europe’, paper prepared for the Policy Analysis and Research Programme of the Global Commission on International Migration, Migration Research Group, Hamburg Institute of International Economics. Bradford, S.C., P.L.E. Grieco and G.C. Hufbauer (2005), ‘The payoff to America from global integration’, in C.F. Bergsten (ed.), United States and the World Economy: Foreign Economic Policy for the Next Decade, Washington: Peterson Institute for International Economics, pp. 65–109, www.petersoninstitute.org. Brown, S. (2008), ‘Italy arrests 400 in illegal immigrants swoop’, Yahoo! News (Reuters), 15 May, http://www. javno.com/en/world/clanak.php?id5148575. Buzan, B., O. Waever and J. de Wilde (1998), Security: A New Framework for Analysis, Boulder, CO: Lynne Rienner Publishers. Caruso, G. (2001), ‘Peri-urbanisation: the situation in Europe. A bibliographical note and survey of studies in the Netherlands, Belgium, Great Britain, Germany, Italy and the Nordic countries’, report prepared for the Délégation à l’Aménagement du Territoire et à l’Action Régionale (DATAR), Ministère de l’Aménagement du Territoire et de l’Environnement, France. Castells, M. (1996), The Rise of Network Society, Oxford: Basil Blackwell. Chudakov, A.D. and D.D. Shchetinin (1986), ‘Flexible production systems’, http://adsabs.harvard.edu/ abs/1986RMTME. . . . . . .39C. Cline, W.R. (1999), ‘Trade and income distribution: the debate and new evidence’, Peterson Institute, Policy Brief 99-7, September, http://www.petersoninstitute.org/publications/pb/pb.cfm?ResearchID594. Daily Mail (2008), ‘EU wipes England off the map as Gordon Brown flies the flag of St George over Downing Street’, 23 April. Dearden, S.J.H. (1995), ‘European Union social policy and flexible production’, International Journal of Manpower, 16, 3–13, http://www.emeraldinsight.com/Insight/ViewContentServlet;jsessionid557411557DA 63722B1F831B6B8F631F4D?Filename5Published/EmeraldFullTextArticle/Articles/0160161001.html. Dias, A.V. and M.S. Salerno (2004), ‘International division of labour in product development activities: towards a selective decentralisation?’, international Journal of Automotive Technology and Management, 4 (2/3), 223–39. Dieter, E. and L. Kim (2002), ‘Introduction: Global production networks, information technology and knowledge diffusion’, Industry and Innovation, December, FindArticles.com. 17 August 2008, http://findarticles. com/p/articles/mi_qa3913/is_200212/ai_n9159490. Dow, K., E.R. Carr, A. Douma, G. Han and K. Hallding (2005), Linking Water Scarcity to Population Movements. From Global Models to Local Experiences, Stockholm: Stockholm Environmental Institute. The Economist (2003), ‘West Europe’s Muslims and the Iraq war’, 3 April, http://www.economist.com/ PrinterFriendly.cfm?Story_ID51683148.

310

International handbook of urban policy

The Economist (2007), ‘A haven indeed. One city devises its own immigration policy’, 2 August, http://www. economist.com/world/na/displaystory.cfm?story_id59587843. European Environmental Agency (2006), ‘Urban sprawl in Europe – the ignored challenge’, EEA-Report No. 16/2006, Copenhagen. Faiola, A. (2007), ‘Looking the other way on immigrants: some cities buck federal policies’, Washington Post, 10 April, http://www.washingtonpost.com/wp-dyn/content/article/2007/04/09/AR2007040901471_2.html. Favro, T. (2007), ‘US cities offer very different ways of dealing with illegal immigration’, 31 May, City Mayors Society, http://www.citymayors.com/society/us-illegals.html. Feldmann, B. (2008), ‘Eurostat: statistics in focus. general and regional statistics’, 82/2008, http://epp.eurostat. ec.europa.eu/cache/ITY_OFFPUB/KS-SF-08-082/EN/KS-SF-08-082-EN.PDF. Fennema, M. and J. Tillie (2001), ‘Civic community, political participation and political trust of ethnic groups’, Connections, 24(1), 26–41. Fontagné, L., M. Fouquin, G. Gaulier, C. Herzog and S. Zignago (2004), European Industry’s Place in the International Division of Labour: Situation and Prospects, European Consortium for Trade-Policy Analysis, CEPII, Paris. Forester, J. (1989), Planning in the Face of Power, Berkeley, CA: University of California Press. Frey, W.F. (2002), ‘A history of recent urban development in the United States’, in H.S. Geyer (ed.), International Handbook of Urban Systems: Studies of Urbanization and Migration in Advanced and Developing Countries, Cheltenham, UK and Northampton, MA, USA: Edward Elgar, pp. 365–91. Friedmann, J. (1986), ‘The world city hypothesis’, Development and Change, 17, 69–83. Friedmann, J. and G. Wolff (1982), ‘World city formation: an agenda for research and action’, International Journal of Regional and Urban Research, 3, 309–44. Fröbel, F., J. Heinrichs and O. Kreye (1980), The New International Division of Labour: Structural Unemployment in Industrialised Countries and Industrialisation in Developing Countries, Cambridge: Cambridge University Press. Govan, F. (2006), ‘Illegal migrants “dumped on city streets” in Spain’, Telegraph, 28 August, http://www. telegraph.co.uk/news/1527464/Illegal-migrants-’dumped-on-city-streets’-in-Spain.html. Greek News Agenda (2007), ‘Illegal migrants rescued’, 31 October, http://www.greeknewsagenda.gr/newslet ter/archive.php?msg5249. Green, P.S. (2003), ‘World briefing Europe: Poland: 76 illegal immigrants caught’, New York Times, 18 March, http://query.nytimes.com/gst/fullpage.html?res59405E5DF153IF93BA25750C0A9659C8B63. Hadgecostas, G., J. Lill, L. Savage and C. Savage (2002), ‘Globalisation and the effects it has on people’, http:// www.socsci.flinders.edu.au/global/glob1002/2002book/globalisation%20website/converted/cultureclub.html. Hall, P. (1984), The World Cities, London: Weidenfeld and Nicolson. Healey, P. (1996), ‘The communicative turn in planning theory and its implications for spatial strategy formations’, Environment and Planning B: Planning and Design, 23(2), 217–34. Hufbauer, G.C. and P.L.E. Grieco (2005), ‘The payoff from globalization’, Peterson Institute of International Economics, Op-ed in the Washington Post, 7 June, http://www.petersoninstitute.org/publications/opeds/ oped.cfm?ResearchID5524. Huffington Post (2006), ‘Why so many blacks fear immigrants’, http://www.huffingtonpost.com/earl-ofarihutchinson/why-so-many-blacks-fear-i_b_14472.html. Huntington, S.P. (1996), The Clash of Civilizations and the Remaking of World Order, London: The Free Press. Huus, K. (2007), ‘Turmoil in Tulsa: the illegal immigration wreck’, MSNBC, 17 July, http://www.msnbc.msn. com/id/19466978/. Isard, W. (1972), Location and Space-economy: A General Theory Relating to Industrial Location, Market Areas, Land-use, Trade, and Urban Structure, Cambridge, MA: MIT Press. Jacobs, D., K. Phalet and M. Swyngedouw (2002), ‘Social capital and political participation among ethnic minority groups in Brussels: a test of the civic community argument of Fennema and Tillie’, paper presented at the ECPR, Turin, March. Jacobs, J. (1961), The Death and Life of Great American Cities, New York: Vintage. Kassof, A.H. and L.B. Plaks (1995), ‘Ethnonationalism: fears, dangers, and policies in the post-communist world’, project on ethnic relations – USA, http://www.per-usa.org/ethnonat.htm. Kepel, G. (2005), ‘Europe’s answer to Londonistan’, http://www.opendemocracy.net/conflict-terrorism/lon donistan_2775.jsp. Killick, T. (1981), Policy Economics: A Textbook of Applied Economics on Developing Countries, London: Heinemann. Know Gangs (2007), ‘Illegal immigration, sanctuary cities and gangs’, 6 April, http://www.knowgangs.com/ blog/aug06/illegal.php, http://www.libertypost.org/cgi-bin/readart.cgi?ArtNum5183054. Kotabe, M. (2007), ‘Emerging markets’, in D. Keillor (ed.), Marketing in the 21st Century, Volume 1, New World Marketing, New York: Praeger Publishers, pp. 25–48. Kouri, J. (2007), ‘Illegal alien gangs flourishing in America’, News With Views, 16 January, www.newswith views.com/Kouri/jim95.htm.

Winds of change

311

Kourvetaris, G.A. (1996), ‘Ethnonationalism and subnationalism: the case of former Yugoslavia’, Journal of Political and Military Sociology, Winter, http://findarticles.com/p/articles/mi_qa3719/ is_199601?pnum517&opg5n8734200. Krempel, L. and T. Pluemper (1999), ‘International division of labor and global economic processes: an analysis of the international trade of cars with world trade data’, www.mpi-fg-koeln.mpg.de/~lk/netvis/globale/. Leamer, E.E. (1996), ‘Effort, wages and the international division of labor’, University of California at Los Angeles, www.papers.ssrn.com/sol3/papers.cfm?abstract_id53739. Lee, E.S. (1966), ‘A theory of migration’, Demography, 3, 47–57. Leiken, R.S. (2005), ‘Europe’s angry Muslims’, Foreign Affairs, July/August, http://www.foreignaffairs. org/20050701faessay84409/robert-s-leiken/europe-s-angry-muslims.html. Lintner, B. (2003), ‘Illegal migration in the 21st century’, YaleGlobal, 10 January, http://yaleglobal.yale.edu/ display.article?id5704&page52. Longman, P. (2004), ‘The global baby bust’, Foreign Affairs, May/June, http://www.foreignaffairs. org/20040501faessay83307-p60/phillip-longman/the-global-baby-bust.html. MacDonald, H. (2004), ‘Crime and the illegal alien. The fallout from crippled immigration enforcement’, Backgrounder, Center for Immigration Studies, June. MacIntyre, A. (1988), Whose Justice? Which Rationality?, London: Duckworth and Co. Malanga, S. (2008), ‘The rainbow coalition evaporates’, City Journal, Winter, http://www.city-journal. org/2008/18_1_blacks_and_immigration.html. Mann, C.L. (2003), ‘Globalization of IT services and white collar jobs: the next wave of productivity growth’, International Economics, Policy Briefs, No. PB03-11. Marin, D. (2005), ‘A new international division of labor in Europe: outsourcing and offshoring to Eastern Europe’, Discussion Paper No. 80, University of Munich. Mbugua, N. (2006), ‘Tough life of illegal immigrants in Germany’, 09-13, http://www.afroarticles.com/articledashboard/Article/Tough-life-of-illegal-immigrants-in-Germany/3113/. Muller, J.Z. (2008), ‘Us and them, the enduring power of ethnic nationalism’, Foreign Affairs, March/April, http://www.foreignaffairs.org/20080301faessay87203-p70/jerry-z-muller/us-and-them.html. The National Policy Institute (2008), ‘Global white population to plummet to single digit – black population to double’, http://www.nationalpolicyinstitute.org/2008/04/18/global-white-population-to-plummet-to-singledigitblack-population-to-double/. Now Public (2007), ‘ “Sanctuary cities” embrace illegal immigrants’, 4 May, http://www.nowpublic.com/ sanctuary_cities_embrace_illegal_immigrants. Ohlemacher, S. (2006), ‘Number of illegal immigrants hits 12m 5 percent of all workers in the US’, Associated Press, AP Worldstream, 3 August, http://www.breitbart.com/article.php?id5D8G6u2ko8&show_article51. Paspalanova, M. (2006), ‘Undocumented and legal eastern European immigrants in Brussels’, Doctoral thesis, Social Sciences, Catholic University of Leuven, Leuven. Perroux, F. (1950), ‘The domination effect and modern economic theory’, Social Research, 17, 188–206. PEW (2007), ‘World publics welcome global trade – but not immigration’, http://pewresearch.org/pubs/607/ global-trade-immigration. PEW (2008), ‘U.S. population projections: 2005–2050’, http://pewhispanic.org/reports/report. php?ReportID585. Reuters (2008), ‘Hunger strikers battle against ‘Fortress Europe’, 21 May, http://en.epochtimes.com/news/85-21/70892.html. Rivoli, P. (2005), ‘Tangled threads of protectionism – Part I. Production quotas have hurt more than helped US and European textile industries’, YaleGlobal, 3 May, http://yaleglobal.yale.edu/display.article?id55669. Robinet, M. (2002), ‘Flexible production crucial to OEM future – supplier insight’, Brief Article, Automotive Industries, July, http://findarticles.com/p/articles/mi_m3012/is_7_182/ai_89816497. Ross, L.R. (2006), ‘Europe’s divided Muslims’, Foreign Affairs, January/February, http://www.foreignaffairs. org/20060101faletter85166/liat-radcliffe-ross/europe-s-divided-muslims.html. Roudometof, V. (1996), ‘The consolidation of national minorities in Southeastern Europe’, Journal of Political and Military Sociology, Winter, http://findarticles.com/p/articles/mi_qa3719/is_199601/ai_n8745854. Roy, A. (2007), ‘Eviction rate of Chinese illegal immigrants in France on Rise’, Network Europe, 9 September, http://networkeurope.radio.cz/feature/eviction-rate-of-chinese-illegal-immigrants-in-france-on-rise. Roy, O. (2007), ‘Islamic terrorist radicalisation in Europe’, in S. Amghar, A. Boubekeur and M. Emerson (eds), European Islam: Challenges for Society and Public Policy, Brussels: Centre for European Policy Studies, pp. 52–60. Rubenstein, E.S. (2007), ‘A statistical review of the condition of whites in the United States’, in N. Stix (ed.), The State of White America – 2007, The National Policy Institute, Release Date 18 April, pp. 9–43. Sager, T. (1994), Communicative Planning Theory, Aldershot, UK: Avebury. Sager, T. (2006), ‘The logic of critical communicative planning: transaction cost alteration’, Planning Theory, 5(3), 223–54.

312

International handbook of urban policy

Sassen, S. (1991), Cities in the World Economy, Thousand Oaks, CA: Sage. Saxenian, A. (1994), Regional Advantage: Culture and Competition in Silicon Valley and Route 128, Boston, MA: Harvard University Press. Schaeffer, P.V. and R.S. Mack (1997), ‘The conceptual foundations of the new international division of labor’, Journal of Planning Literature, 12(1), 3–15. Scott, J. (ed.) (2001), Global City-regions: Trends, Theory, Policy, Oxford: Oxford University Press. Shimokawa, K. (2002), ‘Transfer and transformation of the Japanese production system for the new paradigm for the global age’, Tokai Gakuen University, International Motor Vehicle Program, MIT, The Hosei Journal of Business, 38, 13–26, http://nels.nii.ac.jp/els/110000063156.pdf?id5ART0000406734&type5pdf& lang5en&host5cinii&order_no5&ppv_type50&lang_sw5&no51236953932&cp5. Siebert, H. (2006), ‘Locational competition: a neglected paradigm in the international division of labour’, The World Economy, 29(2), 137–59. Storper, M. and E. Leamer (2001), ‘The economic geography of the internet age’, Working Paper 8450, National Bureau of Economic Research, Cambridge, MA. Storper, M. and R. Walker (1989), The Capitalist Imperative. Territory, Technology, and Industrial Growth, Oxford: Blackwell. Taylor, N. (1999), Urban Planning Theory since 1945, London: Sage. Todaro, M.P. (1982), Economics for a Developing World, Harlow, UK: Longman. Touraine, A. (1969), La Société Post-industrielle, Paris: Denoël. United Nations (2006), Report on World Population Prospects, http://esa.un.org/unpp/index.asp?panel54. Urban Audit (2003–07), http://www.urbanaudit.org/CityProfiles.aspx. Vaughan, J.M. (2004), ‘Some lost jobs never leave home. Skilled foreigners flow in to fill them’, The Washington Post, 2 May, http://yaleglobal.yale.edu/display.article?id54391. Vermaat, E. (2006), ‘Out of Africa: illegal immigrants, crime, terrorism, polygamy and AIDS’, 29 August, http://www.militantislammonitor.org/article/id/2314. Vidino, L. (2005), ‘The Muslim Brotherhood’s conquest of Europe’, Middle East Quarterly, 12(1), Winter, http://www.meforum.org/article/687?gclid5CJHen-7npZMCFQ4vlAod9kCroA. Wallerstein, I. (1974), ‘The rise and future demise of the world capitalist system: concepts for comparative analyses’, Comparative Studies in Society and History, 16, 387–415. Washington Post (2006), ‘Europe’s Muslims. A year after the French riots, their alienation is growing’, Wednesday, 25 October, p. A16, http://www.washingtonpost.com/wp-dyn/content/article/2006/10/24/AR 2006102401148.html. Wolf, M. (2004) ‘A matter of more than economics’, The Financial Times, 13 April, http://yaleglobal.yale.edu/ display.article?id53701. Workpermit (2007a), ‘Almost 60 percent of Irish work force growth from Eastern Europe’, 19 November, http://www.workpermit.com/news/2007-11-19/ireland/irish-labor-market-third-quarter-growthnew-european-union-immigration.htm. Workpermit (2007b), ‘Emigration increasing in the Netherlands – more skilled workers needed’, 4 May, http:// www.workpermit.com/news/2007-05-04/netherlands/emigration-increasing-skilled-workers-needed.htm. Workpermit (2007c), ‘Economic growth, skills shortages remain strong in new EU states’, 28 September, http:// www.workpermit.com/news/2007-09-28/europe/world-bank-report-new-european-union-states-strongeconomy-skills-shortages.htm. Workpermit (2007d), ‘Germany losing 20 billion a year due to skills shortages’, 21 August, http://www.work permit.com/news/2007-08-21/germany/germany-losing-20-billion-economy-skills-shortages.htm. Workpermit (2007e), ‘Germany struggles with unemployment, labor shortages’, 2 August, http://www.work permit.com/news/2007-08-02/germany/germany-struggles-with-unemployment-labor-shortages.htm. Workpermit (2007f), ‘Irish immigration expected to slow by 50 percent’, 29 October, http://www.workpermit. com/news/2007-10-29/ireland/irish-immigration-cut-in-half-2008.htm. Workpermit (2008a), ‘Czech Republic failing to lure non-EU skilled labor’, 29 January, http://www.work permit.com/news/2008-01-29/czech-republic/foreign-worker-project-failing-attract-non-european-unionskilled-labor.htm. Workpermit (2008b), ‘Europe needs 56 million immigrant workers by 2050’, 14 January, http://www.workper mit.com/news/2008-01-14/europe/eu-needs-56-million-migrants-2050.htm. Workpermit (2008), ‘Ireland – immigration drives population increase’, 7 January, http://www.workpermit. com/news/2007-01-07/ireland/immigration-driving-population-increase.htm. World Net Daily (2006), ‘INVASION USA. ‘Illegal immigration sparks “race war” in cities, prisons Hispanic, black gangs battle amid shifting demographics’, 23 August, http://www.worldnetdaily.com/news/article. asp?ARTICLE_ID551644. Zelinsky, W. (1971), ‘The hypothesis of the mobility transition’, The Geographical Review, 61, 219–49.

Index Ackerly, B. 171, 174 Acs, Z. 48, 62 Adams, D. 11 Alchian, A. 207 Alexander, E. 199, 208, 209 Algeria 282, 284, 286 Allen, J. 185 Alonso, W. 156 AlSayyad, N. 164, 165 Amin, A. 213, 214, 215 Anas, A. 114, 161, 163, 166, 167 Anderson, S. 134, 136, 142 Andrew, M. 173, 175, 179 Aoyama, Y. 308 Archibald, D. 186 Archibugi, D. 298 Arrow, K. 135 Ashworth, G. 166, 171 Asia 28, 29, 56, 58, 59, 70, 71; see also individual countries d’Asprement, C. 114 Atlas, R. 170 Audirac, I. 152 Audretsch, D. 62 Australia 54 Austria ageing population 38 employment growth 66, 248, 251–2 immigration 249, 250, 251–2, 282 knowledge-based investment 54 labour shortages 249 population distribution by birth 251 population growth 34, 65 regional innovation performance 68 urbanization progress 29, 31 Baldassare, M. 169 Baldwin, R. 105 Banister, D. 152, 155, 157, 164 Barker, K. 136, 138, 147 Barro, R. 114 Barry, T. 272, 285 Barter, P. 183 Bartlett, C. 75 Batley, R. 7 Bayer, A. 35 Beard, T. 173 Beaverstock, J. 16

Belgium ageing population 38 commercial property regulation 144, 145 crime and immigration 282–3, 284, 285 employment growth 66 immigrant employment rate 251–2 immigration 246, 249–53, 282–5, 289–90 immigration and regularized communities 289–90 knowledge-based investment 54 labour shortages 249 planning controls 144 population distribution by birth 251 population growth 34, 65 production growth 67 regional innovation performance 68 unemployment 38 urbanization progress 29, 31 world city network connectivity 90, 91, 92 Bell, D. 295, 308 Bellamy, E. 168 Bendixson, T. 157 Bengs, C. 25, 26, 27, 30, 31 Bento, A. 142, 143, 149 Benton-Short, L. 43 Berry, B. 15, 27, 158, 188–9 Bertaud, A. 140 Birg, H. 278 Blinder, A. 308 Boarnet, M. 183, 191 Bock, S. 70 Bollens, J. 156 Bontje, M. 31, 160 Boswell, C. 248, 280, 282, 283 Bourne, L. 178, 191 Bradford, S. 298 Breheny, M. 177, 179, 182, 183, 191 Brinkley, I. 53, 54 Brown, S. 283 Brücker, H. 250 Brueckner, J. 140, 142 Bruegemann, R. 160 Bryson, B. 169 Budd, L. 4 Bulgaria 29, 32, 246, 247, 249 Bunting, T. 154 Burchell, D. 14, 167

313

314

Index

Burge, G. 139 Burgess, E. 156 Buttenheim, H. 153 Buzan, B. 287, 305 Cairncross, F. 60 Canada 16, 28, 29, 54, 178, 252 Carey, E. 188 Carter, D. 230–41 Caruso, G. 157, 160, 175, 301 Castells, M. 75–6, 77, 78, 101, 215, 277 Cavailhès, J. 172 Champion, A. 157, 158, 179 Chantelat, P. 203 Cheshire, P. 131, 134–5, 136, 138, 139, 141, 142, 143, 146, 149, 172, 173, 175 China 56, 58, 59, 70, 71 Christiansen, C. 221 Chrystal, A. 124 Chudakov, A. 302 Church, A. 16 Churchman, A. 169 Clark, C. 157 Clark, M. 163, 170, 171, 173, 182, 183, 187 Clark, W. 153, 154, 260 Claydon, J. 11 Cline, W. 309 Coase, R. 204, 207 Cohen, G. 60 Cohen, J. 48 Coleman, M. 272 Collinicos, A. 9 Commons, J. 200, 202–3, 207, 209 compact cities 152, 160–61, 163–87 and ageing infrastructure 188 and city migration of professionals 178, 188, 189 criticism of 187–8 definition 163 energy use and global warming 183–7 energy use and high density 180–83 and high urban density 180–83, 189–91 ideology and control 172–7 intra- and inter-city migration 178–80 land-use control measures 172 and natural environment 170 and need for containment 167 and new regionalism 166–7 origins of 163–7 overcrowding and health 169–72 and population diversity 170, 188, 189 production processes and sustainability of firms 177–8 social activism and authoritarian policies 173–5

urban form controversy and bridging the divide 152, 160–61, 163–87 and urban poverty 174–5, 176, 177, 179, 188, 189, 304 see also land markets and regulation; spatial planning and institutional design; sprawled cities; ‘urban’ headings Conroy, M. 60 Coombe, D. 182 Cornelius, W. 266 Cornick, P. 153 Coronil, F. 190 counter-urbanization 26, 30–31, 158 Cox, K. 4, 77 Crane, R. 183, 191 Crewe, L. 16 Crilly, M. 171 crime 282–3, 284, 285, 287, 288–9, 304–5 Cullingworth, B. 10, 13 Curry, J. 60 Cyprus 29, 35, 246, 251 Czech Republic ageing population 38 employment growth 66 immigration 246, 250 population distribution by birth 251 population growth patterns 32, 34, 65 production growth 67 regional innovation performance 67–8 urbanization progress 29, 39 Daniels, T. 14 Darby, C. 152, 171 Day, K. 165, 170, 171 De Long, J. Bradford 26 De Ridder, K. 183 De Vries, J. 161 Dearden, S. 302, 303, 308 Demsetz, H. 207 Denmark ageing population 38 employment growth 66 immigrant employment rate 251, 252 immigration 43, 246, 250, 251, 252, 282, 287 knowledge-based investment 54 population distribution by birth 251 population growth patterns 32–3, 38, 65 production growth 67 regional innovation performance 68 urbanization progress 29, 31 Dias, A. 299 Dickinson, R. 186 Dieleman, F. 154, 161, 167 Dieter, E. 298 Dillman, D. 26

Index DiMaggio, P. Dixit, A. 114 Dow, K. 307 Doxiadis, C. 156 Durack, R. 165–6, 191 Duranton, G. 105 e-government and digital dividend in Manchester 230–41 Building Schools for the Future – BSF programme 239 community-based initiatives 233, 234, 236–7 Digital Cooperative 237, 238, 239 digital divide initiatives 232, 233, 234, 235–9 digital inclusion and urban regeneration 235–8 digital sustainability in global knowledge economy 231–3, 239 Eastserve project 234, 235, 237–8, 240 and EU Lisbon objectives 240–41 learning networks 232, 233 Manchester Digital Strategy 213–14 Manchester Living Lab 232, 234, 238 neighbourhood empowerment and community transformation 237–8 ONE-Manchester 231, 236–7, 238–9 partnership working 231 and social innovation 232–3 transformational practice, benefits from 238–9 unemployment 238–9 urban development and impact of information society 230–31 urban regeneration in Manchester 233–4, 235–9 Web 2.0 world 230, 231–2 see also knowledge and ICT infrastructure Eade, J. 4 Ecuador 246, 247 Edvardsson, I. 39 Edwards, J. 7 Eggertsson, T. 204–5, 207 El-Cherkeh, T. 245–58 Ellis, C. 152, 168 Elrick, J. 252 Eltges, M. 42 Engle, R. 142 Espenshade, T. 267 Estache, A. 62 Estonia 29, 38, 249, 250, 251 Etherington, D. 9 Europe commercial property regulation 144, 145 crime and immigration 284, 285 culture and civic identity 291–2, 293

315

deindustrialization 64 ethnonationalism 292–3 EU Lisbon objectives and e-government 240–41 FDI 46 ICT performance 55–60, 61, 63 illegal immigration 283 immigration and assimilation 282–3, 284, 286, 287, 290, 294 Information Society Strategy 241 INTER-REG programme 296 international labour migration, see international labour migration in EU knowledge investment 51–5 lagging European cities 63–5 Living Labs 232–3 manufacturing industries 64 migration 280, 282, 283–4 Muslim immigration 282–3, 284, 286, 287 political involvement amongst immigrants 290 regionalization effects 296 trade patterns 55–7, 58, 59 transport use 160–61 urban development from international perspective 63–71 urban growth patterns 300–301 urban sprawl 4–5, 159, 160 see also individual countries Europe, differential urbanization trends 25–45 ageing population 35, 38, 64 birth rate 30, 31, 35, 38, 64 coastal zones 42 counter-urbanization 30–31 economic development 40–41, 42, 48, 51–63, 70 education levels 37 employment opportunities 36–7, 38, 40–41, 66 ESPON programme 30 Eurocities 42 future development 42–3, 70–71 housing provision 35, 41 and infrastructure 31, 40, 41, 51, 64 migration 30, 31, 33, 34, 35, 36–8, 39, 40–41, 43 and population growth patterns 31–9, 43, 65–6, 280, 301 production growth 67 regional innovation performance 67–8 single-person households 37 sustainable urban growth 68–9 theoretical background 26–8 traffic pollution 35 unemployment rates 37, 38, 70

316

Index

Urbact 42 urban history 25–6 urban policy issues 41–2 urbanization progress 28, 29–30, 31, 32–41 see also individual countries European Urban Knowledge Network (EUKN) 42 Evans, A. 172, 173 Evans-Cowley, J. 60 Ewing, R. 153, 154, 167, 191 Fainstein, N. 5, 16 Fainstein, S. 5 Faiola, A. 288, 290, 303 Falconer Al-Hindi, K. 165, 166, 171 Favro, T. 289, 290 Feagin, J. 4 Feldmann, B. 285 Fennema, M. 290 Fetchenhauer, D. 70 Fielding, A. 30, 31, 158 Fields, G. 25, 26, 27 Finland employment growth 66 immigrant employment rate 251 immigration 246, 251, 282 knowledge-based investment 53, 54 population distribution by birth 251 population growth patterns 32–3, 65 production growth 67 regional innovation performance 67–8 urbanization progress 29, 31, 301 Fischel, W. 135 Florida, R. 62 Fontagné, L. 300 Forester, J. 173, 288 France ageing population 38 commercial property regulation 144, 145 crime and immigration 284, 285, 287, 288 emigration 247 employment growth 66 exclusion and poverty 50 immigrant employment rate 252 immigration 36, 37–8, 246, 249, 250, 252, 282, 283, 286, 287 immigration and assimilation 286, 287 knowledge-based investment 53, 54 Muslim community 287 population distribution by birth 251 population growth patterns 38, 65 production growth 67 regional innovation performance 67–8 urban sprawl 160

urbanization progress 6, 29, 30, 31, 34, 36, 39, 49 world city network connectivity 90, 91–2 Frank, R. 263 Frey, W. 303 Friedmann, J. 27, 76, 77, 156, 199, 201, 277 Frost, M. 16 Fujita, M. 105, 212 Fulton, W. 159, 164, 165 Furubotn, E. 204 Gafficken, F. 8 Galster, G. 153–4, 191 Gappert, G. 74 Garde, A. 165 Geddes, P. 201 Geerts, B. 186 Gerber, E. 14 Germany ageing population 38 cities in 19th century and articulated economic rationality 221–3, 224–5 commercial property regulation 145 crime and immigration 285 emigration 247 employment growth 66 high-skilled immigration 254 immigrant employment rate 251, 252, 253 immigration 36, 43, 49, 246, 248, 250, 251, 252, 253, 254, 282, 283, 287 Immigration Act (2005) 254 knowledge-based investment 53, 54 labour market 248, 249 population distribution by birth 251 population growth patterns 38, 65, 179, 278, 279 production growth 67 real house prices 138 regional innovation performance 67–8 unemployment 38 urbanization progress 29, 30, 31, 34, 36, 39, 47, 49 world city network connectivity 88, 90, 91, 92 Gertler, M. 62 Geyer, H. 26–7, 40, 41, 152–98, 276–312 Gibbs, J. 26 Giddens, A. 9, 204 Gillette, K. 168 Glaeser, E. 48, 129, 137, 138, 144, 145, 147, 149 Goicoechea, A. 62 Gordon, P. 157, 158, 161, 165, 179, 180, 183 Gordon, R. 146 Gore, A. 185, 186

Index Gottdiener, M. 161 Govan, F. 283, 289 Graham, S. 62 Granovetter, M. 203 Greco, P. 309 Greece employment growth 66 high-skilled employment increases 248 illegal immigration 283, 303 immigration 249, 250, 252, 282, 283, 301, 303 knowledge-based investment 54 overqualification of immigrants 252 population distribution by birth 251 population growth patterns 32, 38, 65 production growth 67 urbanization progress 29, 31, 301 Green, P. 280 Grubesic, T. 61 Gyourko, J. 149 Hadgecostas, G. 299 Haig, R. 156 Hall, P. 76, 83, 121, 183, 209, 277 Hammer, R. 221 Harris, C. 156 Harris, N. 271 Harvey, R. 153, 154 Hasic, T. 191 Havik, K. 55, 56–7, 59, 63 Haynes, K. 50 Headicar, P. 158, 159, 160, 173 Healey, P. 173, 199, 200, 204, 288 Heid, J. 162 Heijdra, B. 114 Heikkilä, E. 25–45 Heinig, J. 12 Held, D. 75 Henderson, J. 40 Henderson, V. 51 Hess, G. 153, 154, 155, 183 Heuveline, P. 263 Hickman, R. 152, 155, 157, 164 Hill, D. 6 Hirschfield, A. 170 Hodgson, G. 201 Hoffer, E. 184 Hoffman, L. 1111 Hohenberg, P. 25, 26, 27–8, 30, 31, 39, 186 Holden, E. 182, 183, 191 Hollis, M. 228 Holt, R. 207 Horner, D. 171 Hoskins, W. 148 Hostetler, M. 164, 170

317

Høyer, K. 191 Hoyt, H. 156 Hufbauer, G. 309 Hungary ageing population 38 employment growth 66 immigration 246, 250, 282 population distribution by birth 251 population growth 65 production growth 67 urban population decline 32, 35 urbanization progress 29, 39 Huntington, S. 290 Hurd, R. 155, 156 Hymer, S. 76 ICT, see knowledge and ICT infrastructure Ihlanfeldt, K. 139, 149 India 46, 56, 58, 59, 140, 282 international labour migration in EU 245–58 ageing populations, labour forces and labour shortages 246–9 and circular migration proposals 255–6 common migration management, moves towards 254–6 and differential urbanization trends 30, 31, 33, 34, 35, 36–8, 39, 40–41, 43 domestic labour availability 248, 250 EC ‘Policy Plan on Legal Migration’ 255 education levels and employment 248, 250, 253 EU Blue Card 245, 253–4, 255–6 and family reunification 254 and high-skilled employment 248, 249, 250, 252, 254, 255 immigrant children integration 253 immigrant employment rate 251‒2 integration of foreign-born workers, challenge of 250–52, 253 labour migration to Europe 245–56 and language proficiency 253, 254 migrant labour force in Europe 249–54 migration from new EU member states 246, 249–50 negativity towards 248 and OECD PISA study 253 population distribution by birth 251 qualifications and skills, non-recognition of 252–3 student and researcher admissions 255 see also Europe Ioannides, Y. 26, 40, 41 Ireland employment growth 66 immigration 36, 246, 249, 250, 252, 282, 301

318

Index

knowledge-based investment 54 labour market 252, 249 population distribution by birth 251 population growth patterns 38, 65 productivity growth 54, 67 single-family house occupancy 160 urbanization progress 29, 31, 32, 33, 36, 301 world city network connectivity 88, 90, 91, 92 Irwin, E. 135, 136, 172 Isard, W. 305 Italy ageing population 38 emigration 247 employment growth 66 home building industry corruption 146 illegal immigration 283 immigration 246, 249, 250, 252, 282, 289–90 immigration and regularized communities 289–90 knowledge-based investment 53, 54 overqualification of immigrants 252 population distribution by birth 251 population growth patterns 38, 65 production growth 67 unemployment 38 urbanization progress 29, 30, 31, 36, 39, 49 Jackson, R. 13 Jacobs, J. 62, 77, 92, 94, 169, 177, 192, 213, 290, 292, 305 James, P. 153 Japan knowledge economy investment 52, 53, 54, 70 R&D spending 71 trade patterns 56, 58, 59 urbanization progress 4, 6, 49 Jenks, M. 152, 166, 183, 191 Johnson, D. 63, 157 Johnstone, C. 10 Jones, M. 9 Judd, D. 5 Kaskinoro, H. 25–45 Kassof, A. 292, 293 Kearney, A. 170 Kenney, M. 60 Kenworthy, J. 157 Kepel, G. 282, 287 Kiehl, M. 30, 31 Killick, T. 305 Kim, L. 298 Kim, S. 25, 40 King, R. 5

Knaap, G. 136–7, 172, 175–6, 191 Knight, R. 74, 216 Knoke, D. 80 knowledge and ICT infrastructure 46–73 agglomeration economics 48, 49 and clusters 63 e-government, see e-government and digital divide in Manchester European urban development from an international perspective 63–71 and exclusion and poverty 50 and FDI 46, 50, 54, 69 human and physical capital 49, 64 ICT in economic growth, role of 60–62, 63 ICT and networking 61, 62–3 ICT performance in EU 55–60, 61, 63 institutional factors 62 knowledge investment 53–5 knowledge-city, reservations about 216, 217 labour availability 62 lagging European cities 63–5 metropolitan regions, emerging role of 47–51 and policy support 70–71 and productivity 51–3, 63 R&D and innovation 49, 50–51, 54–5, 57, 60, 62–3, 70–71 specialization and diversity 48–9 and sustainable urban growth 68–9 and unemployment 49 and urban infrastructure 50 urban seedbed conditions 62–3 Köhl, J. 156 Kok, W. 240 Korea 47, 49, 54, 70, 71, 148 Kotabe, M. 309 Kotval, Z. 60 Kouri, J. 284 Kourvetaris, G. 292 Krause, N. 169 Krempel, L. 297 Krugman, P. 105, 106, 113, 178, 212, 215 Kuklinski, J. 80 Kultalahti, O. 38 Lambooy, J. 206, 210 Lancel, S. 218 land markets and regulation 120–51 alternative anti-sprawl policies 142–3 ‘big box’ retail shops, restrictions on 146–7 building height restrictions, social costs of 133, 137, 140, 144 clustered deconcentration policies 143 commercial property regulation 143–4, 145

Index and demand specification 134, 136, 142 distributional effects 141, 143 evidence on effects of 133–44 and fuel use 132, 143 greenbelt policies 125–7, 129, 135–6, 137, 141, 142 hedonic models and open space valuation 133–5 house price studies 134, 135, 137–40 and infrastructure 124 intervention, need for 122–4 land consumption costs 126–8 land-use restrictions, costs of 137–40 macroeconomic outcomes 147, 172 market failure, reasons for 123–4, 131–2, 133 new urbanism, see new urbanism NIMBYism 135, 139, 147 non-residential land use regulation 143–4, 145 and open spaces valuation 135–6, 141 optimal land-use policies 124–33 planning-induced amenities, valuation of 133–7 policy analysis, simple economic framework for 125–31 public goods provision 123, 129–31, 132, 133–5 and regional labour markets 147 and taxation 127–8, 129, 132, 142–3, 144 urban growth boundaries 129, 138–9, 142 welfare economics versus planning 120–22, 124, 125–8, 131–44 see also compact cities; sprawled cities; ‘urban’ headings Landecker, H. 170, 175, 190 Latin America 28, 29, 58, 59; see also individual countries Latvia 29, 250, 251 Law, C. 17 Lawless, P. 8 Lazonick, W. 206 Le Clercq, F. 161 Le Corbusier 168 Leamer, E. 298 Lee, C.-M. 142, 148 Lee, E. 283 Lee, N. 53, 54 Leeson, G. 29, 31 Lefebvre, H. 213 Leiken, R. 282, 283, 287 Levine, M. 15 Levitas, R. 9 Lewis, C. 6 Lewyn, M. 176

319

Linacre, E. 186 Lintner, B. 281 Lipietz, A. 215 Lipsey, R. 124 Lithuania 29, 38, 246, 250, 251 Loane, S. 63 Longman, P. 279 Loomis, A. 165 Lösch, A. 22, 212, 225 Lowry, I. 156 Lubuele, L. 161 Luginaah, I. 169 Luke, T. 215, 217 Lukermann, F. 78 Luxembourg 29, 33, 36, 246, 248, 249 Lynch, K. 165 McCarthy, J. 12 McConnell, V. 134, 135, 136 MacDonald, H. 285, 288, 289 McGreal, S. 12 MacIntyre, A. 291 Mack, R. 299 McKibben, B. 185 McMorrow, K. 55, 56–7, 59, 63 Magnusson, L. 70 Malanga, S. 284 Malecki, E. 40, 61, 63 Malmberg, A. 62, 70 Malone, P. 15 Malpezzi, S. 154 Malta 29, 35, 250, 251 Mann, C. 300 Marcuse, P. 77 Marin, D. 297 Marshall, A. 105 Marshall, S. 156, 187, 189 Martin, R. 8, 228 Marvin, S. 62 Maskell, P. 62, 70 Massey, D. 27, 101, 262, 265, 266, 270, 271, 272 Mayer, C. 139 Mbugua, N. 283 Meen, G. 173, 175, 179 Mehmood, A. 199–211 Merrifield, A. 16 Mexico border death toll 270 migration to US 261, 262–3, 266–73, 280, 290, 303 urbanization 47, 49, 50 Michie, J. 298 Mieszkowski, P. 161 Mills, E. 161

320

Index

Mitrany, M. 169 Mohan, G. 4 Moldova 249 Monson, A. 183 Monson, D. 183 Morocco 246, 247, 282, 284, 286 Morosini, P. 178 Mort, F. 16 Moulaert, F. 199–211, 206, 210, 212–29 Muellbauer, J. 139 Muldur, U. 64, 70 Muller, J. 292 Mumford, L. 186 Münz, R. 246, 250, 251 Myers, D. 263, 264 Myrdal, G. 202, 203, 213 Nagar, D. 169 Neary, P. 105 Nell, E. 228 Nelson, R. 13, 70, 202 Netherlands ageing population 38 commercial property regulation 145 crime and immigration 284, 285 employment growth 66 exclusion and poverty 50 greenbelt 148 house prices 135, 138, 142 immigration 43, 246, 249, 282, 283, 287 Internet hybrid network (SURFnet6) 61 knowledge-based investment 53–5, 69 labour shortages 249 land price differences 139 land-use restrictions 42, 137, 138, 142, 143, 147 population distribution by birth 251 population growth 34, 65, 160 productivity growth 54, 67 Randstad 34, 41, 47, 52, 53–5, 63, 69, 86, 88, 147 regional innovation performance 68 transport use 160‒61, 183 unemployment 38, 54 urbanization progress 29, 31, 41, 47, 69, 160 world city network connectivity 88, 90, 91, 92 Neuman, M. 160, 161, 163, 164, 165, 168, 169–70, 171, 179 new economic geography 105–19, 212 agglomeration or convergence, reasons for 109–13, 114 equal real wage condition 112–13, 118–19 equilibrium conditions 107–9, 112 excess demand functions 116–17

income effect 113 model set-up 106–7 number-of-goods effect 113, 118 price-index effect 114, 115 new urbanism and community identity 165–6, 171–2, 177 and energy use 157, 159–60, 181 and global warming 183–7 history of 163–6 and mixed land issues 181–2 opposition to 165 and sustainability 168–9 see also ‘urban’ headings Newman, P. 157 Nijkamp, P. 46–73 North, D. 205–6 Norway 65, 66, 67, 250, 252 Noyelle, T. 216 Nussbaumer, J. 201, 203, 212–29 Oatley, N. 7, 16 O’Brian Caughy, M. 166 Ohlemacher, S. 283 O’Kelly, M. 61 O’Toole, R. 180 Ottosson, J. 70 Owens, S. 159, 163, 167, 177, 182, 184 Özcan, V. 254 Pacione, M. 3–21, 158 Paivanen, J. 173 Panebianco, S. 30, 31 Parkinson, M. 177, 239 Parsons, T. 200, 203 Paspalanova, M. 285 Passel, J. 262–3, 266 Paul, C. 48 Paulsen, K. 154 Peck, J. 216 Pennock, R. 154, 161, 173 Perroux, F. 156, 213, 291 Persky, J. 4 Peterson, A. 148 Peterson, G. 6 Phillips, J. 14 Philp, M. 188 Plaks, L. 292, 293 Plane, D. 259–75 planning, economic impacts of, see land markets and regulation Platt, R. 170, 171 Pluemper, T. 297 Poland ageing population 38 emigration 246, 247, 282

Index employment growth 66 immigration 250 national development policy and spatial planning case study 96–100 polycentricity rethink 99–100 population distribution by birth 251 population growth 65 production growth 67 regional development and territorial cohesion 96–9 unemployment 38 urbanization progress 29, 32, 35–6, 39 Pond, D. 173 Porter, M. 63 polycentricity 88–96, 99–100; see also world cities Portugal birth rate decline 38 high-skilled employment increases 248 immigration 246, 249, 250, 282 knowledge-based investment 54 population distribution by birth 251 urbanization progress 29, 31, 301 Pottier, P. 156 poverty 7–8, 12, 19, 50, 174–5, 176, 177, 179, 188, 189, 304 Powell, W. 203, 209 Pred, A. 26 Predöhl, A. 223 Price, K. 158 Price, M. 43 Puga, D. 41, 43, 105 Pumain, D. 157, 158 Pyatok, M. 165, 171, 179, 190 Quigley, J. 137–8, 139–40, 141, 142, 143, 172 Randolph, W. 170, 178 rational economic theory, social nature of articulated rationality 212–29 Carthage: multi-ethnic network city of antiquity 217–21, 224–5 city as social place 216, 227 and consumer behaviour 215, 217 economic legacy 214, 217, 222–3, 224 economic rationality, nature of 225 and ‘flow’ activities 216, 217 German cities in 19th century 221–3, 224–5 human development and urban policy 227–8 knowledge-city, reservations about 216, 217 and location economics 222 and new urban policy 225–7 operational theory of urban development, theoretical premises for 214–17

321

‘pure’ and ‘realistic’ theory 212–14, 217–23, 224 ‘pure’ and ‘realistic’ theory, and consequences for urban policy 225–8 and real-estate markets 215, 217, 224 social aspects of economic theory 223–5 social space, meaning of 225–7 spatial market analysis 213 urban economies as public sector economies 216, 217 Rauhut, D. 33, 39 Reed, H. 76 Regoeczi, W. 169 Richardson, H. 27, 153, 156, 157, 158, 161, 165, 179, 180, 183 Richter, R. 204 Rickaby, P. 159 Rivoli, P. 309 Robinet, M. 302 Rodenburg, C. 167 Rodriguez, A. 215, 226 Romania 29, 32, 38, 246, 247, 249, 282 Rosen, S. 134 Rosenthal, S. 62 Ross, L. 308 Rossi-Hansberg, E. 26, 40, 41, 147 Roudometof, V. 292 Rouwendal, J. 135, 141–2 Roy, O. 287 Rubenstein, E. 280 Rubio-Goldsmith, R. 267, 270 Russia 4, 43, 247, 282 Rybczynski, W. 160 Sager, T. 173, 288 Sala-i-Martin, X. 114 Salerno, M. 299 Salingaros, N. 163, 188 Sassen, S. 4, 76–7, 80, 83, 94, 277, 295 Saxenian, A. 298 Schaeffer, P. 299 Schmandt, H. 156 Schmidt-Thomé, K. 25, 26, 27, 30, 31 Schmoller, G. 223 Schön, K. 42 Schurmann, F. 189, 190, 191 Schwanen, T. 154, 182 Schwartz, R. 175, 176 Schwarzschild, O. 222, 223, 227 Scott, A. 16, 38, 83, 214 Scott, J. 277 Seghetti, L. 272 Shchetinin, D. 302 Sheppard, S. 131, 134–5, 136, 138, 139, 141, 142, 143, 146, 149, 172, 173, 175

322

Index

Shibley, R. 169 Shimokawa, K. 297 Shleifer, A. 26 Short, J. 77 Shoup, D. 182 Siebert, H. 298 Simmonds, D. 182 Singapore 70, 71, 304–5 Sklair, L. 76 Slovakia 29, 246, 251 Slovenia 29, 246, 251 Smith, B. 11 Smith, M. 4 Sohn, J. 61 Sombart, W. 223 Somerville, C. 139 Song, Y. 136–7, 172, 175–6, 191 Sorensen, A. 190 Spain ageing population 38 commercial property regulation 145 employment rate 66, 252 illegal immigration 283, 289, 303 immigration 37–8, 246, 249, 250, 252, 282, 283, 289–90, 301, 303 immigration and regularized communities 289–90 knowledge-based investment 53, 54 population distribution by birth 251 population growth 65 production growth 67 urbanization progress 29, 31, 32, 35–6, 160, 301 spatial planning and institutional design 199–211 German origin 221 institutional syntheses, new and renewed 202 institutionalism, evolution of 200–204 institutionalism and sociology 203 and neo-institutional economics (NIE) 204–9 NIE and institution building 207–8 and opportunism 205, 206–8 organicist view 201 and transaction cost economics (TCE) 199, 204–6, 207, 208–9 see also compact cities; sprawled cities; ‘urban’ headings sprawled cities 153–63 alternative anti-sprawl policies 142–3 definition 153–5 and household growth 156–7 infrastructure provision 162–3 market-driven urbanization 155–61, 162 and migration 157–9

mindless planning accusations 176 and mobility 159–61 social and economic gravity forces 155–7, 161–2 spontaneity 161–3 and technology advances 161 and urban poverty 176, 177 wastefulness of 162 see also compact cities; land markets and regulation; spatial planning and institutional design; ‘urban’ headings Srinivasan, S. 154 Staley, S. 161, 162, 183, 190, 192 Stanback, T. 216 Stead, D. 183 Stefaniak, N. 156 Stegman, M. 6 Stiglitz, J. 114 Stoel, T. 191 Storper, M. 298 Strange, W. 62 Strauss, A. 158 Swank, J. 138 Swanstrom, T. 5 Swedburg, R. 203 Sweden commercial property regulation 145 crime and immigration 284, 285 immigration 246, 249, 250, 252, 282, 284, 285 knowledge-based investment 53, 54 labour market 66, 249 overqualification of immigrants 252 population distribution by birth 251 population growth 32–3, 65 productivity growth 54, 67 regional innovation performance 67–8 urbanization progress 29, 31 Switzerland CERN acceleration facility 60 employment growth 66 immigrant employment rate 252 immigration 249, 252, 282 land use and urban sprawl 154, 155 population growth 65 production growth 67 world city network connectivity 90, 91, 92 Swyngedouw, E. 215, 224 Talen, E. 14, 170 Taylor, N. 173, 190, 288 Taylor, P. 74–102 Third World 4, 7, 18, 29, 43; see also individual countries Thisse, J.-F. 40

Index Thompson, G. 77 Thompson-Fawcett, M. 191 Tiebout, C. 123 Till, K. 165, 166, 170, 171 Tillie, J. 290 Tobin, J. 215, 217 Todaro, M. 301 Touraine, A. 308 Townsend, A. 158, 179 Turkey 47, 49, 246, 247, 282, 293 Turok, I. 9, 30, 31, 40 Tyler, N. 152, 167, 178, 188 UK ageing population 38 Building Schools for the Future – BSF programme 239 car ownership 160 central government–local government relations 8–9 city network connectivities case study 82–3 commercial property regulation 144, 145 Community Development Project 7–8 crime and immigration 284, 285 decentralization 179 e-government, see e-government and digital dividend in Manchester education levels 286 emigration 247, 253 gated settlements 170 house prices 134–5, 138, 141, 142, 146, 147 immigrant employment rate 251, 252 immigration 37–8, 43, 246, 249, 250, 251, 252, 282, 283, 286, 301 knowledge-based investment 53, 54 labour market 66, 249 land price differences 139, 140 land-use control 136, 137, 138, 172 mega-city processes in UK space-economy 92–6 multiculturalism 286, 287 New Labour’s CORA approach 10 population distribution by birth 251 population growth patterns 33, 34, 38, 65–6 postwar urban planning 10–11 poverty 7–8, 50, 177, 179 production growth 67 public–private partnerships 15–16 regional innovation performance 68 single-family house occupancy 160 sustainable development 18 terrorism 287 Third Way 9–10 Town and Country Planning Acts 10–11 and trickle-down effect 10

323

Urban Development Corporation, Docklands 20 urban policy 7–11 Urban Programme initiatives 7, 8 urban sprawl 159–60 urban tourism 17 urbanization progress 4, 15, 16, 29, 30, 31, 39, 47 Varney Report on ‘Service transformation’ 231 White Paper on policy for inner cities (1977) 8 world city network connectivity 88, 90–96 Ukraine 249, 282 Ullman, E. 156 Urban, D. 105–19 urban form controversy and bridging the divide 152–98 brownfield development 157, 172, 178, 181, 188 compact cities, see compact cities congestion 156 conservation planning 166 coving 190, 192 deconcentration 156, 157–9 digital inclusion and urban regeneration, Manchester 235–8 environmental migration 158 gated settlements 170 and global climate change 152 home-working 182 immigration and social housing 161–2, 188–9 industrial clusters 178 information society impact 230–31 see also e-government and digital dividend in Manchester knowledge agglomeration and business clustering 298 low-density housing 157, 161 new urbanism, see new urbanism polycentricity 188, 189–90 and population growth patterns 179–80 social and cultural behaviour, effect of 183 spatial planning and institutional design, see spatial planning and institutional design sprawled city, see sprawled city suburban employment growth 179 sustainability, meaning of 168–9 transport use 160–61, 182–3 urban crime solutions 304–5 urban fringe residential development costs 172–3 urban utopia and resistance to change 176–7 urban variety as alternative approach 187–9

324

Index

urban policy debate, controversies underlying 276–312 affluence, effects of 278–80, 281 ageing and population change 278–80, 281–2, 299 business landscape, changing 294–300 crime and immigration 284–5, 304 culture and civic identity 290–94 e-government, see e-government and digital dividend in Manchester employment patterns and industrial change 302 ethnonationalism 280, 292–3 flexible production 296–300, 301–2 and global regionalization 295–6 illegal immigration 283–4, 290 immigration and ‘bright lights syndrome’ 301 immigration and inner-city business culture 302–3 immigration, probable outcomes 289–90, 299 immigration and regularized communities 289–90 immigration and social character of cities 303–5 industrial change, impact of 301–2 international divisions of labour 294–5, 297–8 Kanban production approach 296–7 low-wage economy and unemployment 299 migration 280–90 migration problems, perceived 280–81 Muslim immigrants in Europe 282–3, 290 political involvement amongst immigrants 290 protectionism versus free trade 300 and rational economic theory, see rational economic theory, social nature of articulated rationality social integration and immigration 288–9 socio-cultural indivisibilities and immigration 285–8 and urban ethnicity 294 urbanization levels 276–7, 300–301 wealth redistribution 304‒5 world cities, see world cities urban sprawl, see sprawled cities urbanization, policy context of 3–21 agricultural policies 7 and capital 3, 4, 5 Community Development Corporations 19–20 cultural industries and urban reconstruction 16

equalization policies 7 growth constraint policies 6 ideology and urban policy 5, 7–20 immigration policies 7, 50 industry support 6 Local Exchange Trading Systems 20 and market capitalism 5 non-urban policies 6–7 policy challenges 18–20 property-led regeneration 15–16 and state involvement 3, 4–5 sustainable urban development 17–18 tax relief on mortgage interest 6 transport policies 7 trickle-down effect 10, 12, 15 urban policy forms 5–7 urban poverty resolution 19 urban space restructuring 4–5 urban tourism and downtown redevelopment 17 US air pollution 183 city migration of professionals 178 commercial property regulation 144, 145 Community Action Program 12 Community Development Black Grant (CDBG) 12 compact cities 167, 170, 171, 304 culture and civic identity 291, 292 deconcentration, reasons for 188–9 Department of Housing and Urban Development 11–12 emigration 247 empowerment zones 12 Endangered Species Act 139–40 enterprise communities 12 exclusion and poverty 50 federal involvement 11–12 flexible production 297 gated settlements 170 growth management strategies 14 Head Start project 7 house price studies 134, 135, 136–8, 139–40, 146 ICT accessibility and city size 61 infrastructure provision and urban sprawl 162 inter-state highway programme 7 knowledge investment 52, 53, 54, 70 land-use restrictions 13–14, 137, 139–40, 142, 144, 147 metropolitan statistical areas 303 migration 280 Model Cities Program 12 New Deal programme 11, 12

Index new regionalism 167 new urbanism 136–7, 164, 167 No Child Left Behind Act 13 political involvement amongst immigrants 290 polycentricity 189–90 population growth 263, 279, 280 property-led regeneration 15–16 public–private partnership 14–16 R&D spending 71 retail displacement and market forces 167 smart-growth movement 14 suburban employment growth 179 sustainable development 18 taxation 6, 12 trade patterns 56, 58, 59 and trickle-down effect 12, 15 Urban Development Action Grant (UDAG) 12 urban migration 159 urban policy 11–15 Urban Renewal Communities 12 urban sprawl 156–7, 162, 167, 180, 302 urban tourism 17 urbanization progress 4, 11–15, 16, 19, 28, 29, 49, 301 voter approval for growth management 14 War on Poverty programme 12 Workfare Act (1996) 13 world cities 278 US immigration 254, 259–75, 280, 286, 287 border death toll (Mexican) 270 border patrol apprehensions 271 Border Governors Conference 273 Border Safety Initiative (BSI) 270 civil society groups, stimulus for organization of 271 and crime 284, 285, 288–9, 304 and education levels 264, 290 and ‘funnel effect’ 267, 270 Green Cards 261 homeland security, recent 260–61, 263, 272 illegal immigration 261, 262–3, 266–73, 282, 290, 303 Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) (1996) 272 Immigration and Citizenship Service 259–60 immigration enforcement 266–71 immigration, history of 260, 261–2 immigration law devolution 272–3 Immigration Reform and Control Act (IRCA) (1986) 262, 270, 271, 272 interior immigration enforcement 271–3 labour force needs and elderly dependency 263–4

magnitude and trends 261–3 metropolitan areas, in-migration 265 Mexican Migration Project 267–70 migrant diffusion 265–6, 267, 270 migrant networks and migration streams 265 Operation Gatekeeper 267 Operation Hold the Line 266 and regularized communities 289–90 return migration 270–71 sanctuary laws 272–3, 288–9 and unemployment 284–5 and vigilante militia groups 271 van den Bergh, J. 70 van der Knaap, G. 25, 26, 30, 32, 41, 43 Van der Straaten, J. 135, 141–2 van Geenhuizen, M. 46–73 van Hemert, P. 46–73 van Kempen, R. 77 van Oort, F. 62 Vaughan, J. 286 Veblen, T. 200, 202, 203 Vermaat, E. 284 Vermeulen, W. 46–73, 120–51 Vernez Moudon, A. 165, 167, 175 Vidino, L. 290 Vignal, B. 203 Vining, D. 158 Von Thünen, J. 221 Wai-Chung, L. 199 Wall, R. 25, 26, 30, 32, 41, 43 Wallerstein, I. 295 Walls, M. 134, 135, 136 Walsh, R. 142 Warf, B. 8 Watkins, C. 11 Weber, A. 213, 214, 221, 222–3 Weber, M. 222 Webster, C. 199 Weiwel, W. 4 Wells, H.G. 157 West, S. 134, 136, 142 Whimster, S. 4 Whitehead, M. 10 Wieand, K. 176 Wild, T. 26 William-Ellis, C. 121 Williams, K. 164, 182, 190 Williamson, O. 202–3, 206, 207, 208 Wolf, M. 285 world cities 74–102, 277–8 basic concepts 75–7 connectivity map 84–5, 87

325

326

Index

and contemporary globalization 75–6, 79–80 evidential crisis in literature 77–8 interlocking network model 80–81 mega-city regions 83–96 network 78–83 network connectivities 81–3, 88 polycentricity 88–96, 99–100 POLYNET project 83–96 spatial planning case study, Poland 96–100 see also compact cities; sprawled cities; ‘urban’ headings

Worsley, P. 76 Wyly, E. 43 Yang, X. 114 Yeung, H. 213 Youngentob, K. 164, 170 Yu, Z. 156 Zafirovsky, M. 203 Zahavi, Y. 156 Zifou, M. 152