<1ls D DEV7ELOP \IlENT1 t~~~~~~ - -- --- -tr W J - r tO~~~~~O -~~ = ----_-_-_-= {.; P u T T I N G K N O W L E D G E TO W O R K F O R D E V E L O P M E N T NOv E BE R 2 0 0 3 29668 ., .. _ ..-, !'~~~~~~~ , - I;z 41 -,, 1~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~` 401~~~~~~~~~~~1 W O R L D B A N K I N S T I T U T -  \110'T n sHIS ., 1. Editorial Board SWAMINATHAN S. AIYAR ECONOMIC TIMES OF INDIA, NEW DELHI, INDIA MICHAEL COHEN NEW SCHOOL UNIVERSITY, NEW YORK, USA PAUL COLLIER his issue of Development OUTREACH looks at THE WORLD BANK, WASHINGTON, DC, USA the "unknown" quality of cities in the face of JOHN GAGE rapid decentralization, democratization and SUN MICROSYSTEMS, PALO ALTO, CALIFORNIA, USA globalization in the developing world. The role of JOSEPH K. INGRAM cities in the development agenda cannot be underes- THE WORLD BANK, GENEVA, SWITZERLAND timated. As engines of economic growth in many KWAME KARIKARI cities aso face ire probems-a raid riseSCHOOL OF JOURNALISM AND COMMUNICATIONS, countries, cities also face dire problems-a rapid riSe THE UNIVERSITY OF GHANA, LEGON, GHANA in the numbers of urban poor, environmental degra- VIRA NANIVSKA dation caused by increasing air pollution, and city- INTERNATIONAL CENTER FOR POLICY STUDIES, KIEV, UKRAINE to-city migration that is changing the political land- PEPI PATRON scape of both developed and developing countries. CATHOLIC UNIVERSITY, LIMA, PERU Of these three challenges, the rapidly increasing J. ROBERT S. PRICHARD numbers of urban poor is perhaps the most startling. TORSTAR, TORONTO, CANADA In Africa, urbanization is growing at well over 6 per- RAFAEL RANGEL SOSTMANN cent per annum, twice as fast as the growth rate in MONTERREY TECH UNIVERSITY SYSTEM, MONTERREY, MEXICO Latin America or East Asia. Such rapid population ADELE SIMMONS CHICAGO METROPOLIS, CHICAGO, IL, USA growth is overwhelming city managers and making VIVIENNE WEE sustainable poverty reduction difficult. While urban CENTRE FOR ENVIRONMENT, GENDER AND DEVELOPMENT, SINGAPORE migration is increasing the labor force and leading to Development OUTREACH is published three times a year by the World economic growth, such growth is not reflected in Bank Institute and reflects issues arising from the World Bank's many of life ofurban migrnts who lie withoutlearning programs. Articles are solicited that offer a range of quality of life of urban migrants who live without viewpoints from a variety of authors worldwide and do not represent secure shelter, access to basic services, or voice in official positions of the World Bank or the views of its management. the political system. How do city managers and urban SUNETRA PURI planners cope with this scenario? While most alarm- EDITOR-IN-CHIEF ing inAfrica, the situation is repeated in every region MARY MCNEIL of the world. EXECUTIVE EDITOR As James Wolfensohn points out in his introduc- ANNA LAWTON tion, in the next 25 years, two billion more people MANAGING EDITOR will move into the world's cities and towns. Mayors, TIM E. CAMPBELL and other city officials therefore have an integral role GUEST EDITOR to play in the pursuit of global poverty alleviation. In MOIRA RATCHFORD this issue we hope to capture some of the innovative PUBLICATION DESIGN strategies and actions now being undertaken by the PHOTO CREDITS Cover: Nigel Sandor/lIlustration Works; Pages 4-5: The World Bank/ Julio Etchart; Page 6: The World world's urban leaders. We look forward to your com- Bank/Alan Gignoux; Page 8: The World Bank/Alan Gignoux; ments and suggestions as they move ahead. Page 11: Zuma Press/Ruaridh Stewart; Page 12: Getty/Peter Rogers; Page 14: Michael Foley; Page 16: Michael Foley; Page 18: Michael Foley; Page 19: Reuters/Sergio Moraes; Page 22: Stone/Keren Su; Page 25: American Planning Association; Page 26: Sergio Sade; Page 27: Paranacidade; Page 29: Photodisc; Page 30: The Image Bank/Grant Faint; Page 33: Athens: Taxi/Jerry Driendl; Istanbul: Photodisc/Andrew Ward; Pages 36-37: Emmanuel Koro. This magazine is printed on recycled paper, with soy-based inks. O ISSN 1020-797X © 2003 The World Bank Institute Mary McNeil W O R L D B A N K I N S T I T U T E EXE CUT I VE ED I TOR Promo-nt knowledge -nd o--nv irase. r r world World Bank Institute wWw.worldbank.org/wbi Frannie L6autier, Vice President www.worldbank.org/devoutreach The World Bank devoutreach@worldbank.org 1818 H Street NW Washington, DC 20433, USA I t t , 1E31 ~~T HE WO R LD B AN K  V O L U M E F IE E \U BER T H R E EcA& N O V E M B E R 2 0 0 3 - _I i"4 $} - 1n' PAG I I PAG E . I'AGE 13 SPECIAL REPORT: UNKNOWN CITIES 22 Forward Thinkin- in Nanjing: An Interview with Jiangsu Partv Secretary Li Yuanchao 2 Cities and Citizens JEFFREY SOULE JAMES D. WOLFENSOHN This is a case study of how a major metropolis, Nanjing, changed its mind about becoming a new Shanghai. 3 Urban Air Pollution Management 26 Decentralizing City NIanagement: FRANNIE A. LtAUTIER A Successful Experiment 4 Unknown Cities: Nletropolis, Identity LU8OMIR FICINSKI DUNIN and Governance in a Global WVorld An urbanized state in Brazil steps in to fill a void-in capacity Guest Editorial strengthening, assistance, and associations-in the regulatory system of cities. TIM E. CAMPBELL An overview of the special report, which probes some of the 29 Glocalization: A New Balance of Power new ground laid for city regions by the shrnking nation state and the quickening pace of exchange around the globe. URI SAVIR Cities are starting to play a new role in diplomacy, peace- 8 The New Urban Planning making, and peace-building that are left undone by the nation JEFFREY D. SACHS state. This article argues for new fundamentals based on urban 32 International Implementation of Cities planning in the quest for discovery of the secrets of creation Iplomacy and the mechanisms to spread national wealth. Diplomacy DIMITRIS L. AVRAMOPOULOS 12 Urban Development Needs Creativity: The article outlines the founding stages of diplomatic relations How Creative Industries Can Affect among cities, to make both urbanization and globalization work Urban Areas for all citizens. SHAID YUSUF AND KAORU NABESHIMA The origins of wealth in urban places are illustrated by the 35 Index of Articles: Development OU'TREACH creative industries behind the rapid economic progress of 2001-2003 cities in East Asia. i6 Our City, Ourselves: Place as a Factor 36 VOICES FROM THE FIELD in Urban Economic Development Harare Loses Status of Cleanest City FRANCESCO BANDARIN in Africa Cities are rediscovering the cultural and historical roots EMMANUEL KORO of identity, which often form the foundations for regional Once proudly known as the Sun Shine City, Harare is now economic strategies. plagued by refuse collection problems. I9 Learning from the Poor: Housing and 38 KNOWLEDGE RESOURCES Urban Land NMarkets M. VITOR SERRA 39 BOOKSHELF The secrets to housing the poor are recapturing and rationing one of the most important resources under municipal control: land. 40 CALENDAR OF EVENTS  .. > a relationships. If we can build a sense of hope and love in comn- munities. we will have a chance to alleviate poverty and bring about peace. We cannot build these conditions statistically. To do so requires people. commitment, and passion. There are now in the world many associations of cities and of mayors, of sister cities' programs. and others, all seeking to foster knowledge shari nr and understanding of how to better handle the f . ' BY JAMES D. WOLFENSOHN human condition. as wellas serve the needs of people in cities. The IO : B EOR E SPTEX IER 11 T . many people in the United States one thing that distinguishes the Glocal Forun-an international thought thal the re were two worlds: the rich world and the devel - NCO that has entered into a partnership agreement with WB1-is oping vorlc, separated by a wall. Then, t he World Tracle Center that it recognizes the relationship between development, hope, and (ollapsing conveied the i mage of that "wall" comiing down. The peace. That is what is special about t}is group. The Glocal Forum is inmage of terror traversi ng borders and intrudinig in Wall Street. not about just exports and imports. important as they are; it is not . made us aw-are that there are not tuo worlds. There is only one about charity. It is about peace. about hope. and about individulals. world. which is linked by trade. finance. crime, drugs. trade. It is about partnership. and commitment of rich to poor, of banking. and migration. I'he education of our chilCten in the developed to developing. of city to city. We need to understand developed world ca inot just rest with education about European that if we want enduring peace and hope for ourrworld. then insti- and Americarn history. As adults, we need to know about Islam. tutions like the Glocal Forum need our support. We should think about India. about China. and about Africa. We need to under- of our cities as part of a global family, and we should think that stand that our planet has changed. We need our children to be peace will come only if we give that family love and commitment. trained for a different, inore diiverse and rich world. Ourleaders must lookatthe futurebecauseinthenext25years James D. Wolfensohn is President of The World Bank the world will grow from six billion to eight billion people. seven billion ofwshoni will live in the current physical space we call the Adapte. from Keynote Address2 Second Glocalizaton Conference. developing world. In 50 years, there will be eight billion out of ninie. Europe. as we know it today. uill be smaller and older. We are beconing increasingly aware of the fact that we are not just citizens ol Etur ope. or of a siingle cotntry, but that we are planetary FIGURE I-Burden e citizens and that we have to think in terms of global considera- (disability adjusted .d . tions. - At the World Bank. we conducted a study of 6o.ooo people L3tin Arreiica - who live in pov'erty in 6o countries. We didl not collect statistics. Europe r Central As, S We collected stories of individuals who relate to hope. opportuni - Middie East & N AlF,L : , ty. equality. and freedom from corruption. These stories reveal a 7 SubSaharan Atrica picture of people who want a chance for their children. a chance ___________-___ for women to be safe from physical abuse. a chance to express - ' - their views. They want a sense of community. the oppottunity to _ live together in peace. These are not statistical issues. These are * human requirements. These poor people used to live in rural areas. but arc nowv surfacing in ever increasing numbers in cities and towns. The issues that aflect them cannot be dealt with by , I Monitored levels of pollution . . . . _Q:lilillm;wit;l;F1:23=3; - - ~~~~~~~~~~~~WHO guideline national or federal administrations. Energy ption p.p. In the next o5 years. two billion more people wvill move into cities and townis. whlose administration will not be by prime ministers ancd presidents. but by mayors. The delivery of servic- es will occur in local comnmnities. The voices of poor people will i he heard in local communities. The help will be created in com- nmnities. not at the level of national or federal governments. It jlust stands to reason thal engaging the administrations of cities and towns in the pursuit of poverty alleviation will leverage . .. . the people who know how to deliver the services, who can inter - face with comnunities and build a passion for development. A few extira billion dollars in aid, or the miniscule improvement in F- trade conditions, w-ill not be effective if they are not accompa- nied by passion and commitment to development and human i .--- .--- - - - s . I _.t,.. :  | A' r~i THE ROLE OF THE INTERNATIONAL COMMUNITY U rba n Ai r P o l ution The international community should be conriirw;d ;.-. %".:.rk together and assist countries to achieve devel-ir-!!cw g .j L, k assuming the following roles: M a n ag e m e nt 1. Advocacy role: Raising awareness and le.jrmr,r Ir,:,n, pI P Fr experience to leapfrog development. The Role of the International 2. Knowledge creation and sharing role: Explorin,g an,d mentingtherelationshipbetweenpolicy,techraaIl. rr :rr - i' CommUnity al. and cultural aspects of pollution managemerir 3. Brokering role: Coordinating activities at Ic,h.al ir:g'.inal arid A global levels and promoting public-private rwnerdiipr ic BY FRANNIE A. LEAUTIER resolve problems. URBAN AlR POLLUTION is a serious problem worldwide. It is 4. Financing role: Assistingthe development ir,d irrplcnirrrira- especially serious in the many mega-cities of Asia. The gravity of tion of actionplans to manage air quality in dese 1.-. p rn . in. r!es nr the urban air pollution problem is largely attributed to the com- and cities. plex and multi- sectoral nature of everyday air polluting activities 5. Skills building role: Helping countries get the sd ;Is r X n,- di r,-' as well as the inadequate actions of governments. The lack of effectively manage air quality problems through itC'IL-Li al .1:'I, - actions by governments is further due to poor information and tance,trainingprograms,twinningarrangemerrl an, Sir \1 .. weak understanding of the air pollution problems and, in addi- In addition, the international community dn te ad' arn . tion, lack of institutional capacity and coordination among gov- and support sustainability of the private sec or. an.] F.r. r * ' ernmentagencies inthevarioussectorscontributingto airpollu- environmental, social, and corporate responsibt!Ir tion. Driven by the Millennium Development Goals (MDG), the As for partnership programs that help counr,et r*rdirL h -t1 ruit international community is fighting global development prob- capacities of collaboration among different ru.,ld, ti,- lems including air pollution and other environmental problems. Cities Alliance formed in 1999-a partnership L.ri ner ri I hr l N Habitat, theWorld Bank, and others-provides f knlrrdl.- e.!'!,: - WHY CARE ABOUT AIR POLLUTION? izontal city-to-city cooperation maximizing de% ti. ppirin Jri l'- The health impacts of air pollution are very serious and, current- tance from multi-laterals and bilaterals. Anothe r f- ail.|!r !i Tl,, ly, second only to the impacts of water and sanitation in urban CleanAir Initiative forAsian Cities, whichwas jo:'-,rrh laiiri hr ll areas. Asshown in Figure s, airpollutionimposesaheavyburden in 2ooi by the World Bank and ADB and ,l-er rirjrrl, l on the health of urban populations throughout the developing (Visit: www.citiesalliance.org and www.world barrk or, g world. Every year, there are an estimated 0.5-i million prema- cleanaiar/caiasia/index.htm). ture deaths by airpollutionworldwide. The World Bank uses a variety of tools to acl-.L-:rv is, rw.ail aim focuses on i) promoting information disseminatr r- ri e g \\ t bJ ic. AIR POLLUTION CONTROL Opendiscussionlistserver); 2) providingair qu,Iin n-, irvi-, merit Because air pollution disproportionately and negatively affects training; and 3) developing pilot studies (diesel pd,liir,..r rl,d- - the poor, the international development community is targeting tionstrategiesforcities). BycarryingouttheseauIer l, l irvhe i;-rld , air pollution as one of its efforts to achieve the Millennium Bankpromotesrealactionsandinvestmentsonrl r- r-r.:.rk. B Development Goals (in this case, Goal #7: Ensure Environmental _ ___ Sustainability). The World Development Report 2003 Sustainable Frannie Leautier, Vice President, The World Bank Institute. Development in a Dynamic World (World Bank !oo3) identifies the £ impact of air pollution on the quality of life and links it to pover- Based on keynote speech the author made at the Regional ::r..: .:r 8-R_srj .Air Qualty in Asian and Pacific Rim Cities, Hong Kong, DE-:r--r _, ,.Y:- ty reducetion. ArQaiyi sa n References URBAN AIR QIUALITY MANAGEMENT Lvovsky, Kseniya, Gordon Hughes, David Maddison, Bart cr- 3r, L-.F While the international community has recognized air pollution Pearce 2000. Environmental Costs of Fossil Fuels: A Rap:; 4.-OT,eCT as one of the environmental problems that need to be resolved, Method with Application in Six Cities, Environment Depa i1-ri s 51.iu j(i solutions to air pollution, do not come easily, and results are not 78, The World Bank. visible within the length of a political cycle. IFC 2002. Developing Value: The Business Case for Sust,- 3{,c, r, Figure a shows that countries in Asia like China and India Emrgn Mark Inteationa Finance Corporation. face extremely high pollution exposure levels that call for imme - Century, The World Bank. .r diate action. This figure also shows that as economic develop- World Bank 2003. World Development Report 2003: Susi;rI-Al-i ment and income increase, air pollution exposure decreases. Development in a Dynamic World, The World Bank. i The pollution exposure in high- income countries is much lower, B-oks available at: http://publications.worldbank.org/econ, ,. - providing hope that solutions can be found. - -.- ,.-. x~~~~~~~~~~~~~~~~",  -~~~ a. - 'v - S ¢ I- ,~~~~~~~~~- - n -- 'V S A -wl + 4o- trB Z SLW -~~~~~~~~~ f . '' _' - S ~ ~ ~ ~ ~ ~ ~ ~ ~ S ,~~~~~~~~~~ '.  mt1 1*1 l U S l :I1- M etropo , "Unknown Cities" aims to cap- M etro po lis, ure" different perspectives on what cities are becoming under this strik- ingly new, open environment. Three Id en tity an d perspectives are singled out here. the eco- nomic process, internal reform, and external Governance in relations. Urban economic process a Global W orld ONE DEFINITION of the unknown city refers to urban economic processes, that is the economic evolution within Giwsi>\'/ Edi/or-ial/ cities, a transformation that is inextricably tied to political and social change, as cities awaken to the possibilities and challenges presented by democratization and decentraliza- tion. Jeffrey Sachs and Shahid Yusuf with Kaoru Nabeshima i. -Y TIM E. CAMPBELL identify some of the trends and conditions for success in .t >-,, iV this struggle. Sachs, viewing the urbanization of the planet as z :#;; 'r"*+t-;s* 5 his. issue prohbLss ome ofthe newground "goodnews,"posesmanyasyetunansweredquestionsabout ;k' gF:;X lai I;-br I o% re.gions by the shrinking the mechanics in the transmission of wealth and the deliv- Mg, < 1b.,^^ - --s. ri ri-r ..n .rt, rd nhe quickening pace of ery of services from prosperous coastal areas to the interior. ^ % ,,bi@ ' | , ex, Igr~-,JI,e-,r, bkt.,ness, financial affairs, Sachs outlines a way forward, as much as by inquiry as by ;and.. : d euln3r,il d,:s-taking place among policy prescription, to explore opportunities, questions, , .~ei~esan *.:.1 di- . .ri Cities are thrust into new and constraints cities and nations face in their quest for cre - I, lewit3E'eiurI I Id p.-Ir l, Ia rerms with the waves of ating wealth and extending it to all citizens. Shahid Yusuf PO tprinlizal, n . democratization, and and Kaoru Nabeshima narrow the economic focus on cities ; globi r2dtI1n-.,: ua.Iin ,li- er tie globe. The authors- byexaminingthe creative industries-visualarts, communi- roughNJ' lialtl froi,: AuTilde rli, BaInk on the front lines of cations, video and computer games, and literary produc- ur bj r, d e ei:..p nmint- 1i1,I- X rat, ^ e of the new roles cities tions-that successful cities in Asia have mobilized to propel j': are asiunung as thie% creawe . local identity, strengthen their growth forward. Yusufs work has examined the many rXg.onalc eteirence. 3FiJ-.'pe fl4Ii[ItI strategy, and even play a experiences of fast growing cities, pinpointing the role of role iin InlertIa[ional pe..i. e ssties. Many common features these industries as a contributor to, and bellwether of, suc- :'K.;Y underlie the urb3n searc,h t.r new roles. President cessfulfactors inurban economic expansion. ^, ,--Wo[fenr'hn iLwles; ,out -,'er keyfar-i:orinhisopeningtothis Francesco Bandarin examines another, broader and editiotn-ti-he nearnei, t lC, e.. Lo he rmors difficult issues for more subtle aspect of this drive forward: cultural industry A: .,,,8nauons i,:v re-..h e. Itk. po: err%. AI [i, ind sustained peace. as a platform for identity. The cultural source of identity is ',t 'I Another coninmrn theneS t> that fir from shrinking back perhaps one of the most important, and least understood, from prez turv. oif glubal izat ion. - it ,e, are e rge rl% sir ppi ng areas of urban development precisely because it is so cul- ijitovoidscreated bythedecl!n : f riat otialboudcaries. StlI turally rich, rooted in local history and tradition, and &hir d rheme: one seen it', .ariS, iS that cities are trickyinapplication.Yetacitythatfindspride andasource -. easingh. re brg i. ot ear i .:.tl-wr lor knowledge exchange of strength in its own past, coupled with those attributes >. :^ and iuspirit.u AJ li.: i the.e i e aswell as urbanairpol- that Yusuf and Nabeshima identify as so important, the Ut IitIon ma .agemrnI ccr., e .l t.r Frarnnie Leautier, the World openness and transparency of innovation, are the keys to Bank fnstinite's Vte Pie. c i -t Id firpit:.lt.:rs lor the continued learning and innovation needed for cities to work of WBI and di-e Bark, compete in a globalized world. Interestingly. these same N ,0 E M B E R 2) 0 I 5  qualities, broadly speaking. differentiate the successful, sus- strategy. Nanjing changed direction as a result of its soul- tainable cities of all ages. searching planning effort. The city now sets its sight on pre- serving more of its cultural past and developing institutions of Cities and inward reform learning, objectives which are bothhome-grown and authentic. Partly because the largest fraction of cities is built by the A SECOND PART OF THE DEFINITION of 'unknown' is about poor themselves, the unknowns about shelter and land use in how cities will respond to these challenges in terms of the the global world depend greatly on the poor themselves. Vitor structure and internal dynamics of governance and manage- Serra shows that some of unknowns about shelter are at least ment. The term governance refers to the mandate and form of becoming visible. Gaining control over the single most pow- managing urban affairs, and the mechanisms of participation erful asset of cities-its urban land and largest tax base-is the and accountability. Lubomir Ficinski describes the growth of fulcrum over which cities will be able to leverage their drive to a new intermediating agent for urban governance, financially feasible realities. The key obstacle still-property Paranacidade, at the level of the state in Brazil. Paranacidade rights and property markets-is only partially within city con- has developed one unique, but by all appearances a replicable, trol: much of the issue is a matter for nations to resolve. model for an engine of governance. This institution began by offering assistance to the cities and towns, later extending it to Outward looking cities associations of cities in the state. Tracing its roots to Bank assistance in the i97os. but adding much of their own imagi- THE THIRD ASPECT of the meaningof 'unknown' refers to the nation and ingenuity, Ficinski, one of the chief architects and external relationships cities are now forging with other cities directors of Paranacidade. suggests that the model can be and regions around the world. This outward looking process is scaled up and expanded for application not only elsewhere in fostered by what Uri Savir calls a failure of states in the era of Brazil, but in Latin America and Africa as well. globalization. Both Savir and Dimitri Avramopolous make Still another aspect of this internal management is illus- compelling, if contentious, points about the new role of cities trated by the development strategy of the city of Nanjing. in diplomatic affairs. Calling the city as this Millennium's Cities around the globe-more than 75 of them-have only socio-political unit that is gaining in power, Savir asks responded eagerly to the idea of city development strategies, a what other national or supranational power has the ability to new tool of Bank assistance which encourages cities to assume connect in cultural and political ways as effectively as cities? a kind of corporate strategic stance, to take a longer, strategic The very concept of citizen takes on new meaning in global view of its problems and economic prospects, along the lines cities. Avramopolous, former mayor of Athens, offers evi- suggested by Sachs. In this feature interview, the governor of dence for the veracity of this proposition. Eager responses and Jangsiu Province exemplifies this effort. While Nanjing once I rapid progress was made between Istanbul and Athens when a sought to emulate Shanghai's modernization in its growth disastrous earthquake provided a pretext for cooperation. :@- , , 6 vp ttcO BKS4 - 6 Development Outreach WO'(RLD BANK [NETI LU.TE  Tensions in the Middle East, post-conflict Africa, and South ' Working with knowing cities Eastern Europe. have extended this opportunity. I On another, less diplomatic plane, cities are already WHAT DO THESE IMPULSES for new identities and roles sig- engaged in widespread, sometimes high volume, exchanges nify for nations and international development assistance with other cities in the areas of governance, management, and agencies? Much of the fate of nations, and therefore the role of technical matters. AWBI study of Seattle revealed that that city international development assistance agencies, hinge alone had hosted 159 delegations in 2002 involving 700 visi- increasingly on the coherence of action and effectiveness of tors and somewhere in the neighborhood of 3.ooo participants performance by cities with growing autonomy operating in the from Seattle (Blanco, 2003). Interestingly. the motivations are global trading environment. National institutions and multi- not simply in the commercial domain, as is sometimes sup- lateral donors should be ready to respond to cities that feel a posed. The rule of law, governance, administrative techniques need for new and higher professional standards in gover- were cited as much or more as business reasons for visits. nance, management. and planning; national and internation- Environmental, services, and other technical matters also rep - al agencies can also help cities meet a need for new tools to resented motives for cities to visit Seattle. We have little doubt liberate the energies of the poor; stronger control over the that this volume of exchange could be multiplied a hundred-, cities' most fundamental asset, land; for new sensitivity to the perhaps a thousand-fold, between and among cities. idea of culture as the defining dimension of urban pride. Most City congresses provide more evidence of this external of all, they can facilitate the exchange among peer cities. The exchange. City exchanges are becoming more visible, more authors in this issue have explored many of these angles, sug- coherent, and more effective as subjects and actors in the gesting some of the tools and techniques nations and cities development scene. The first three world Competitive Cities might employ, and pointing to modalities of assistance that Congresses held at the Bank beginning in 1999 doubled in size WBI might offer, to help reduce the unknowns of urban devel- and private sector sponsorship each year. The predecessor to opment in the Millennium of an urbanized world. Ak the WCCC. the Inter-Armerican Congress of Mayors, complet- ed its ninth consecutive year with over 400 city officials from Tim E. Campbell, Lead Specialist, The World Bank Institute, and Latin America in attendance last June in Miami. An equal Development OUTREACH Guest Editor number preparing for the fourth consecutive Asian Pacific Cities Summit in Brisbane this year. Next year in Paris, sever- al thousand participants will witness the merging of diverse international city organizations into a single unified voice for cities, the World Union of Local Authorities and Cities. The World Bank City Management and Urban Dlevelapment pragramr . . 0 = U~~~~~~~~~~~~~~~~~~~~~~~~~~I pleased to present Trends in the knowing Urban and City Management Strengthening Urban THE ARTICLES IN THIS ISSUE show that contrary to shrink- Web-Based Course Management in India ing back, rejecting, or criticizing globalization, as street November 2003-February 2004 January 12-16, 2004 demonstrations and some international NGOs would have us Mayors in East-CentralIndia think. many cities are embracing the process of change and Europe's Major City Southeast Europe moving quickly to create new identities in the political and Governments Managing I.T. Decentralization and Urban institutional space that has been created with globalization. Opportunities Management Program November 24, 2003 April 26-30, 2004 This is partly because the ebbs and flow of power leave many Ylr.: ie,j;; Vienna, Austria potential, but undefined, roles for cities. It is also because Urban and City Management Fourth Central American democratization creates new incentives to incorporate public Distance Learning Course Fir Core Course: Gesti6n Urbana inputs into city decisions. To take full advantage of these Newly Elected Mayors and y Munidpal opportunities, the entropic effects of the constant pulling in City Offidals: Gesti6n Publica Mai 200- Decem-ber 2 4. 9 & 11. 200(J UuW..at aIi Cry. Guatemila different directions by cities, provinces, and national min- loIo.o;t:, C-atemata aca istries must be overcome. Washingmwo DC From one, only slightly exaggerated. perspective, this view of cities moves us closer to the idea of city state of ages past, particularly the emergence of metropolitan cities-the 5oo to 6oo cities now onthe planet thathave more than a million peo - ple-as they seek out and assume new roles in the development process this century. In this urban transition, cities and their a place in the development of nations, represent many unknowns, far more than have been touched on in these pages. = 7 _6 Muchis left unanswered, evenunquestioned, about inter-gen- w w r I d h a n k o r g w b i / u r h a n erational poverty. economic growth. services, corruption, and the competing demands across local boundaries and sectors. o N V) VE Nt B E R 2 0 0 i 7  *;- . - l s - - , I t __~~~*. 'F I ..~~~~ _ - jI ;' i t"~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ * - ''.~ .% ' 5 '~~~~~~~ Y 41~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~ ~. te ...  The New Urban Planning BY JEFFREY D. SACHS the cases of the ex-Soviet republics. has made "planning" a taboo word in economics during the last 20 years. However, it THE PROCESS OF URBANIZATION, taking place around the is dangerously incorrect to conclude that all planning is world with such dynamism, is one of the most promising adverse to economic development. This is particularly true in aspects of global economic development. The world has just the case of urban planning, which includes carefully laying out crossed the point at which 50 percent of humanity lives in the underlying infrastructure systems of water, sanitation, urban areas. By around 2020, more than half of the population public health, transport, and energy that make cities viable. of developing countries will be urban. This is good news. The major coastal cities in Africa, for example, have yet to Urban areas have outperformed rural areas during the last fulfill their potential as their region's engines of growth. First century on almost every dimension of economic development, and foremost, those cities need urban planners, rather than whether the rate of innovation, speed of demographic transi- macroeconomists. The cities lack effective infrastructure sys- tion, levels of education, health, life expectancy, infant mor- tems; energy reliable enoughto attract foreign investors; a port tality, or access to clean water and sanitation. authority that can maintain the dredging needed for effective Although urbanization opens up countless opportunities shipping operations and a port-based export center; and a for economic development, the process also creates chal- public health system needed to rid the urban area of malaria or lenges that can prevent the uirban promise from being ful- other epidemic diseases, which are major blockades to foreign filled. Many urban areas in the world are not functioning well, investment in many of Africa's potentially leading cities. especially where cities are growing not because they are them- These infrastructure systems cannot be put in place by selves economically dynamic, but because their rural hinter- market forces alone. They are necessarily planned compo- lands are in such distress. In those cases, impoverished rural nents of effective urbanization that are prerequisites for func- people flood to cities to find work and emergency income sup- tioning urban and regional markets. Without the infrastruc- port, but often become a part of an extreme urban poor. And ture base, these major cities-such as Dar es Salaam of course, with the high densities of urban populations, envi- (Tanzania), Accra (Ghana), and Dakar (Senegal)-will contin- ronmental risks-disease contagion, urban blight, chemical ue to perform economically far below their potential. This is a pollution-pose another profound challenge. point seldom understood by macroeconomists; sound macro- The urban applied research and policy agenda is therefore economic advice for achievement of development must to make the urbanization process work more effectively, so include provisions for the urban planning in key cities, in that urban areas become true engines of growth and livable order to ensure the effective buildup of the underlying infra- environments for the rising proportion of humanity that will structure systems. be in cities in this century. In addition to planning, urban areas need development strategies tailored to the geographical and demographic Research and policy areas specificities of their local areas. In this regard, China's eco- nomic development has been spectacularly successful. As is EFFECTIVE URBANIZATION has three distinct policy dimen- widely known, the Chinese created special economic zones sions urban planning, urban development strategy, and and special port cities to take advantage of their coastal loca- urban governance. Each has its own research agenda as well as tions in order to develop bases for export-led development. practical policy implications. Their strategic view was looking to target foreign investors in The first of the policy dimensions is urban planning. The combination with domestic suppliers, in order to make major failure of the communist centrally planned economies, as in inroads into world markets, first in light manufacturing and NO V E MB L R 2 ( 0 3 9  now in much more advanced technolo- nance. There are differentiated and innovation exist in Brazil, Malaysia, and gies. General measures of macroeco- complementary roles of governments at many other countries. Local participa- nomic stability. social peace. and ade- the local, regional, and national levels, tion, as well as the role of NGOs and civil quate predictability of policies and but there is no doubt that effective society. all play a role and need to be property rights were all important, but urban governance requires enough engaged for an urban development the Chinese clearly did more. They autonomy so that local government can strategy to be successful. framed, and successfully implemented, provide the necessary tailored infra- a development strategy designed to inte- Three additional grate their major coastal urban areas into __ problems the world economy. Their specific devel- -. opment strategy included the use of NONE OF THESE THREE DIMENSIONS export processing zones, industrial As an example of empirical of urban policy-urban planning. devel- parks. science parks, and tax incentives, research, the Earth Institute at , opment strategy and urban governance- to attract international business. - can solve the problems alone, since it is The Chinese experience actually fol- Columbia University has established the interconnection of the three that lowed directly upon the successful the "21st Century Cities Project.'" gives the best chance of success. In addi- urban-based development strategies * tion, however, there is another set of that had been pioneered earlier in Hong The intellectual energies and obstacles that can prevent urban areas Kong, Singapore, Pusan (Korea). resources of the Project will be __ from becoming dynamic poles of growth Penang (Malaysia), and many other - even if these three dimensions are man- urban centers of Asian exports. All of dedicated to understanding the aged well. these urban areas had conscious and interconnected dynamics of 7 The first problem is physical isola- articulated development strategies. tion. There is a big difference between an Policymakers understood the impor- infrastructure, economic bases, urban area in the highlands, like La Paz tance of taking advantage of the coastal and risks due to natural hazards in (Bolivia), or one in the center of Asia, like and regional location. In addition, the Kabul (Afghanistan) and Ulan Bator urban governments understood the selected cities around the wDrld (Mongolia), and urban areas on or near necessity of providing urban services including Accra (Ghana), Kampala . the coastline. like Shanghai (China), including basic infrastructure, physical Santo Domingo (Dominican Republic), security, and connections with the ports (Uganda), Delhi (India), and others in and San Pedro Sula (Honduras). Physical and airports to make the urban environ- d Africa, Asia, and the Americas. - isolation is a huge barrier to investments ment attractive for domestic and foreign - and dynamic growth. Very few examples investors. The goal is to bring together w of effective strategies have been devised Researchers have not spent enough the interconnected knowledge of for development of places like Kabul or time understanding which incentives are 0 Ulan Bator, since they face tremendous most important. and in what combina- hydrologists, energy specialists, civil challenges of high transport costs to the tion. What role is played by tax holidays? - engineers, agronomists, public health international trade routes. By export processing zones? By special - - The second issue is the lack of an ade - industrial parks? By government grants specialists, development economists, quate technological base to get started in of urban land for development? In what clmatologists, and in some cases export-oriented manufactures and serv- ways should these various instruments be . . ices. Why is it that so many of Africa's combined? In truth, the frequent oppo- seismologists, to help these cities to leading coastal urban areas, like Dar es sition over the years of the IMF and become major poles of growth for Salaam, Maputo, Beira. Mombasa. World Bank to the use of many of these - Dakar, Accra, and Abidjan, are not instruments has been on the level of ide- their countries and regions. . dynamic manufacturers and export ology rather than evidence. zones as are comparable coastal urban Of course, a large part of the devel- - areas in other parts of the world? opment strategy must use market mech- Indeed. one of the great challenges of anisms, including tenure rights for local African economic development strategy land construction, a mortgage market structure and development strategies. is how to get these great urban centers, for urban construction of residential Using China as a case of highly suc- some with rich traditions and human housing, and microfinance for urban, cessful urban development, success capital, oriented to become dynamic small-scale entrepreneurship or even indeed depended ongrantingan impor- exporters of manufactures and services. urban housing finance. tant measure of autonomy to urban gov- Economic development is a techno- The third aspect of successful urban- ernments for them to design specific logical catch-up phenomenon. Cities ization, related to the first two, is the solutions to the urban challenge that can catch up and become regional need for appropriate urban-level gover- they face. Similar examples of local growth poles by integrating the local Io Development Outreach c h II INIIIT TE  economy and the international econo- may be increasing in frequency and lishing solid economic bases in manufac- my, thus putting them in the global pro - severity as a result of long-term anthro- turing (including export-oriented manu- duction svstem and facilitating the pogenic climate change-perhaps includ- facturing) and services, especially in the import of technology from abroad. The ing a growing number of extreme hurri- large coastal urban areas. While many of integration of these technology-defi- canes in the Caribbean in recent years. Asia's coastal urban areas are highly suc- cient regions into the global technolog- There is a strong connection between cessful poles of growth. most in sub- ical network requires a two-part strate- these physical environment risks and Saharan Africa and many in the Americas gy. First, world-class technology must are not. The urban agenda of the coming be brought in (even if only for a small years is to make a breakthrough towards proportion of the country), so that the successful development in these lagging city joins the global production system. areas, and to do so in an environmentally Secondly, part of production must be sustainable manner. oriented towards exports. since they The developed world could and provide foreign exchange to purchase should play an important role through imported technology that is unavailable creative new policies. For example. an from the local economy. "international enterprise zone" strategy One can identify many barriers to cre- could offer tax and other incentives to ating an effective, integrated interna- multinational firms to operate in the tional base in cities such as Dares Salaam major cities of the least-developed or Accra, for example. As already noted, countries. Such a scheme could greatly these places need a much more effective benefit, for example, a selected number planning process to establish the infra- PHILIP of urban agglomerations in the least- structure. The ports do not work very developed countries desperately in need well, the physical infrastructure is unre- of foreign investment and job creation. liable, and so are the power systems. In general, new global strategies to There are few, if any, physical spaces for make the cities in the poorest countries good industrial parks that have been set work effectively should be explored. aside by government. There is too little Second, there need to be strategies to attention to the human capital invest- meet the Millennium Development Goals ments needed to ensure a skilled work- pertaining to cities. These strategies force. There is too much malaria trans- must include serious plans for the scal- mission. And most importantly, there - ing-up of infrastructure for provision of has simply been too little attention to the water, sanitation, public health, and edu- potential role of these cities in national cation. Improvement of the conditions of and regional growth. During the 2o years mmar.... slum-dwellers requires implementation of the structural adjustment era, from of well-thought-out strategies to make roughly 1980 to 2000, none of Africa's _- basic infrastructure work more effective- urban coastal areas became a self-sus- j ly and to create jobs while integrating taining pole of growth for their respective 4 cities with the global economy. countries or regions. - Finally, a global strategy should The third kind of risk includes physi- . include a globally-networked research cal risks that go beyond the question of strategy as well. Satellite mapping and geographical isolation. These are the risks imagery, remote sensing and geograph- of physical changes in the environment ic information system (GIS) data can that undermine cities' development, provide great insights into the dynamics including risks of extreme weather of urban areas over time. The research events, coastal erosion, and the collapse .... agenda is fascinating and crucial for of various marine ecosystems such as the global development, and it will attract coral reefs due to long-term climate leading minds worldwide. It's time to change, and destruction of fisheries. urban areas that have failed in achieving give a major push forward to research on Many of the urban areas live at least part- sustaining long-term economic growth. urban sustainable development in the ly on the basis of the marine ecosystems. poor countries of the world. A^ Coastal pollution has worsened. particu- Conclusions late pollution from diesel fuel and leaded Jeffrey D. Sachs, Director, The Earth gasoline in the atmosphere is leading to TO CONCLUDE, urban economic devel- Institute at Columbia University continued public health problems, and opment requires improved planning, the incidence of extreme weather events strategies. and governance, and estab- N O V E M B E R 2 0 *) 3 II  Urban Development Needs Creativity How Creative Industries Can Affect Urban Areas BY SHAHID YUSUF AND logical advances and of scale economies (Henderson 0ooo; KAORU NABESHIMA Glaeser and others 199i). This experience of the advanced nations is being replicated in countries now moving up the THE CLOSE CORRELATION between urbanization and rising ladder of development. In the emerging economies where incomes has long been noted. It has been ascribed to the incomes are rising most rapidly, growth is frequently the out- transfer of labor from agriculture into industrial activities that come of success in building competitive and outward-orient- are induced by agglomeration effects to concentrate in cities, ed manufacturing industries in urban areas. Whether we take which have been among the principal beneficiaries of techno- 4 Brazil or Chile or China or Malaysia, the story is the same. The FL. A.~ ~~A 12 Development Outreach WXORLD BADK INSTiTUF  share of the agricultural sector is shrinking in step with the and sustain a high level of efficiency in the provision of infra- expanding economic role of the urban-industrial economy structure such as communications and social and protection where an ever-increasingshare of the population now resides. services. Such baseline capability is strikingly evident in Singapore. For the increasingly footloose high-tech producers Urban trends and suppliers of services, the quality of such inputs is a prime determinant of competitiveness in a demanding global envi- WITHIN THIS B ROAD OVERALL TREND, some other tenden- ronment. For example, Singapore's superb Changi airport dra- cies have recently become noticeable in the emerging matically improves the mobility of those workers in the high- economies. There are four such tendencies we would like to tech manufacturing and services industries whose business point to and explore. calls for frequent short- and long-haul trips. Likewise, a state- First is the rising contribution of services to GDP in the of-the-art telecoms system and convenient internet access is a economy as a whole and in particular, to output and employ- ment in urban areas (see Figure 0). A second and still debated trend concerns the relative economic growth rates-and _ _ dynamism-of cities in different size classes (Glaeser and oth- ers 1992. Zu and Henderson 200o, Markusen and others 2001). The third tendency of note, whose dimensions and tra- jectory are subject to considerable controversy, is the increas- ing significance of creative industries. Products and services 120.0% produced by creative industries are those most frequently 100.0% seeking protection from infringement by means of patents, 80.0 copyrights, or trademarks. Such industries include softwareofwa publishing, design, music, video, movie-making, and elec- 60.0% tronic games. They in turn are closely linked to suppliers of 40.0% ICT-based hardware, and heavily dependent on a range of 20.0% IX _ mainstream services such as finance, legal, accounting, man- 0% agement, headhunting, advertising, and marketing. MIore than 50 percent of consumer spending is now on outputs from creative industries in G-7 countries (Ryan 2003). This trend will be equally true for the middle and higher income economies of East Asia. Globally the creative industries are estimated to account for 7 percent of world GDP (see Table 1 for the size of creative industries in the U.S.). While creative industries produced close to 8 percent of GDP in the United States in 2001. their combined output is still less than 3 per- cent of GDP in Singapore (MDA 2003) and 3.3 percent in Japan. suggesting that there is a considerable room for future expansion (Ryan 2003). This shift toward creative industries, and the implied income elasticity of demand for their prod- ucts, is likely to persist (Bresnahan, Gambardella, and . Saxenian 2001). Creative industries, being among the most skill intensive and IT intensive of the fast growing subsectors will continue to gravitate towards those urban areas perceived as being most desirable by their select and globally footloose - body of knowledge workers. Hence, a fourth and related ten- dency is for the economies of urban areas better supplied with human capital to grow faster (Moretti 2003). This has been observed for some time and it does jive with the growth liter- ature that documents a causal relationship running from increasing supplies of skills to economic expansion. Urban policies and institutions FOR CITIES ASPIRING to become the hubs of their regional economies, three local and one set of national conditions must be satisfied. At the local level there is first the need to achieve * N * OV e M B E R 2 0 ) 3 13  initiative as well as the readiness to test cient functioning of markets. TABLE 1: THE SIZE OF CREATIVE permissible limits whether defined by Metropolitan governments can voice INDUSTRIES IN 1999 (billions) law or by social norms. The innovative- demandsforsuchpolicies,butitislarge- Global Us ness of Tokyo, San Diego, Boston or ly up to the center to introduce and Advertising 45 20 London derives both from the protec- enforce them. In East Asia for example, Design 1 - 140 - 0. s tion afforded by individual rights (but- most countries have successfully pursued Film 57 17i tressed by independent judiciaries) and macroeconomic stability, steadily dis- Music _ . *-t-, -70: . 25 from a culture where the boundaries of mantled barriers to trade and encouraged Publishing 506 137 permissible expression are not tightly the inflow of foreign investment. These .- RI&D . ;: ' 7 ,' - 5_ 243 delineated and fixed but are somewhat have created an environment conducive Software 489 325 fuzzy and subject to slow change over to urban industrialization. However, they ..:Videc Gamnes - n: - tt7 -. ~. ... 5 ' time. Inotherwords, individual creativ- need to sustain the ongoing efforts to Other 311 138 ity thrives more in environments where strengthen financial and other market -- ., eS , , ; ,' the perceived room for maneuver is institutions, regulations governing the greater. markets, and the legal system to further Hong Kong was ranked high on support economic changes leading to indices of international competitiveness urban development in the direction by the business community because described above. As an illustration, even TABLE 2: ESTIMATED SOFTWARE individual freedom was well protected though most East Asian economies have PIRACY RATES AND LOST and market institutions were developed adopted the rules defined by TRIPS, REVENUE IN 1998 (billions) and effectively regulated. The remark- enforcement of intellectual property able transition within the space of a rights is not yet at par with that in the Countries Piracy Rate Lost Revenue decade from a light manufacturing pow- high-income countries (see Table 2). ow.- "ita A ixerhouse to one of the world's leading National policies, when bolstered by East Asia 49 2955 providers of business services occurred measures implemented by metropolitan *t.3 t in part because of the opportunities pre- authorities can facilitate the growth of Japan 31 597 sented by the opening of China. But of clusters of high tech and creative indus- p... 2s.l.&i9 ^ ~equal importance was the strength of tries alongwith supporting casts of pro- Thailand 82 49 market and legal institutions, which ducer services. However, these actions ' :~3~~yp~ .-.sb 9~.'iI~Ž rendered the environ- ment hospitable to advanced service indus- tries. In principle, the L IIIL U l persistence of such an powerful asset for firms that depend on a institutional environ- continuous exchange of information for ment in conjunction their survival. As Figure 2 shows, inter- with Hong-Kong's cos- net use is high and rising in economies mopolitan social mores , * that are focusing on producer services could also provide the V ' 17DUf1Mu. and the creative industries. basis for creative indus- ; 'E L L U L A second attribute of the dynamic tries that are currently at - AX A ND megacity is the nature and plenitude of an early stage of devel- social and cultural amenities that affect opment and await anSECR ETARIAL the quality of the urban environment. infusion of skills, wbich Umli7^1I Quality as exemplified by green spaces. we discuss below. H U ZA SIIH 4W recreational facilities, restaurants and Local attributes need _ shopping. as well as by schools and to be reinforced by j medical care, has acquired priority. national policies which Third is an institutional milieu that maintain macroeco- - protects individual rights and is tolerant nomic stability, promote toward diversity (Florida 2oo2). Almost openness to trade and , . T - j by definition, creative activity requires foreign direct invest- freedom of thinking and expression and ment, uphold property, p wide scope for experimentation. Such including intellectual freedoms exist within a framework of property rights, and sus- .! rules, but the nature and flexibility of tain the institutions that IF this matrix deeply influences individual contribute to the effi- 14 Development Outreach WORLD BANK  can only have their desired effects if they lead to the concen- t 1992. "Growth in Cities." Journal of Political Economy 100(6): 1126-1152. tration of critical masses of skilled workers in a few strategi- Henderson, Vernon. 2000. "How Urban Concentration Affects Economic Growth." cally situated urban centers. Although the physical infrastruc- Policy Research Working Papers 2326. Washington DC: World Bank. ture for an efficient modern city is highly capital intensive, as Howkins, John. 2001. The Creative Economy. London: Penguin Press. is the plant and equipment for high-tech manufacturing, the Leman, Edward. 2002. "Can Shanghai Compete As a Global City?" The China performance and growth of high-tech and creative industries Business Review 29(5): 7-15. as well as producer services largely depends upon the ready MDA. 2003. Media 21: Transforming Singapore into a Global Media City. availability of skilled workers. Silicon Valley, Boston, Tokyo, Osaka-Kyoto, and Taipei-Hsinchu Park are all hosts to world- Moretti, Enrico. 2003. "Human Capital Externalities in Cities." NBER classunivesitysystes an reserch nstittes,generting Working Paper 9641. Cambridge, MA: National Bureau of Economic class university systems and research institutes, generating Research. pools of knowledge workers. However, such pools of skilled workers generatedglocale aorkers.Ho ere , eough. Fors an ulrba Ryan, P. 2003. "The Creative Economy: Creative Clusters Key to Knowledge- workers generated locally alone are not enough. For an urban Based Economy (Including Japan)?" Marubeni Economic Report Tokyo: area to grow and sustain its momentum, domestic and inter- Marubeni Corporation Economic Research Institute. national circulation of these workers is also needed. For Zu, Chun-Chung and Vernon Henderson. 2002. "How Migration Restrictions instance. 25 percent of the population in Shanghai is from Limit Agglomeration and Productivity in China." NBER Working Paper 8707. other provinces; increasingly these are highly trained profes- Cambridge, MA: National Bureau of Economic Research. sionals and managers, rather than low-skilled migrant work- ers (Leman 2002). And one-third of scientists and engineers in Silicon Valley are foreign born (Ryan 2oo3). This brings us back to the characteristics of the urban environment that will serve as attractors for the type of knowledge workers that will help build innovative and competitive industries. Conclusion THE EXPERIENCE from across the U.S., Western Europe. and East Asia is unequivocal in this regard: highly skilled workers have become increasingly mobile, and as their range of choic- es have multiplied so have their expectations. Workers and the companies which hire them are coming to view strategic loca- tion and the efficiency of urban services as a baseline UNDERSTANDING requirement. But that alone is insufficient. The workforce of REGULATIONS the high-tech and creative industries is also looking for an urban milieu well endowed with recreational amenities and f ' This publication is the first in a with world class education and health services. They are series of annual reports moreover, drawn most strongly by a culture where tolerance of regulations that enhance business for openness and some experimentation is underpinned by activity and those that constrain it. a legal systerm that credibly protects individual rights. JLI New quantitative indicators on business regulations and their enforcement can be compared across more than 130 countries, and over time. The indicators Shahid Yusuf, Economic Adviser, Development Research Group, are used to analyze economic outcomes and identify what reforms have worked, where, and why. The report offers The World Bank. answers to these critical questions: Kaoru Nabeshima, Economist, Development Research Group, . Which countries regulate the most? The World Bank. . Is regulation an outcome of efficient social choice, or has it persisted because of inertia and a lack of capacity for reform? . What are the main obstacles to regulatory reform? . What are the best regulatory models? . What is the impact of laws and regulations on References business activity? Topics covered in the 2004 edition include: starting a Bresnahan, Timothy F., Alfonso Gambardella, and AnnaLee Saxenian. 2001, business, hiring and firing workers, enforcing contracts, "Old Economy' Inputs for 'New Economy' Outcomes: Cluster Formation in the getting credit, and closing a business. Whether you are New Silicon Valleys." Industrial and Corporate Change 10(4): 835-860. looking to promote economic growth or you are seeking investment opportunities, you will find Doing Business in Chapple, Karen, Ann Markusen, Greg Schrock, Daisaku Yamamoto, and Pingkang 2004 an essential reference for effective, informed decision- Yu. "Gauging Metropolitan 'High-Tech' and 'I-Tech' Activity." Forthcoming, making. Economic Development Quarterly. Copies can be ordered by visiting the Doing Business website at http://rru.worldbank.org/doingbusiness/ and clicking on Florida, Richard. 2002. The Rise of the Creative Class: And How It's the link for "Now Available: Doing Business in 2004 "" Transforming Work, Leisure, Community and Everyday Life. New York: Basic Books. Glaeser, Edward L., Hedi D. Kallal, Jose A. Scheinkman, and Andrei Shleifer. l NO)\'BEMER 2v03 15  Our City Ourselves Place as a Factor in Urban Economic Development BY FRANCESCO BANDARIN survival. Life is but misery and deprivation. And yet. in spite of the critical situation, the new government indicates among Kabul, Spring 2002. Just weeks after the fall of the Taliban its priorities the conservation and reconstruction of one cul- regime and at the end of two decades of war and civil unrest, tural symbol of the city, the Gardens created in the XVIth cen- Kabul looks at itself. The predominant landscape is made of tury by Emperor Babur, the founder of the Moghul Empire. ruins. Hundreds of buildings levelled by years of crossfire. Babur was from Kabul, and he created here his summer The major urban infrastructures, roads. waterways. public Palace, on a slope overlooking the city. Later emperors buildings, chopped and torn into pieces. Monuments and enriched his tomb. With the famous Kabul Museum, obliter- museums devastated and ransacked. Groups of homeless peo- ated by the wars and the destructive fury of the Talibans, the ple wander around the ruins and squat wherever possible for Gardens were the most important cultural icons of the city. -~~~~~~~~~~~~~~~~~~~~~- ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~. ... .A~~~~~~~~~~~~~~~~~~~~~~~~~~~L KABUL'S ROYAL PALACE i6 Development Outreach WORLD BANK INSTITu rE  Their restoration, supported by the Agha Khan Foundation, * ture and strong interests triggered by land speculation. com- symbolizes the hopes for a rebirth of Kabul and provides its mercial development, building renovation. In many parts of people with an essential ingredient of their development the world, the urban structures inherited from the past have effort: the sense of identity and continuity. simply vanished, under the pick of private or public develop- ers. The traditional urban fabric of Kyoto has been severely Cultural heritage at the core of alterered by street widening and building substitution. The development settlements of the Kathmandu Valley. an awesome group of intact urban historic centers until 3o years ago, have been PRESERVING THE IMAGE OF THE PAST cannot alone solve turned into a disfigured and anonymous metropolitan tangle. the dramatic social and economic problems of cities, but can Important historical cities such as Historic Cairo or the Casbah become the pivot of an urban development strategy. Many of Algiers are threatened by lack of maintenance and social cities in the developed and the developing world have transformations. The development pressures are affecting the learned this lesson and are defining a new development last remaining parts of historic Bejing. How many time urban models based on the conservation of their cultural identity. managers regret, at a later stage. the loss of important parts of Bilbao and Turin, as an example. were cities associated the urban fabric or of important historic buildings? Often with an image of industrial decline. Both have now complete- these destructions are opposed by groups of concerned citi- ly renovated their image: the first with the creation of a major zens, easily overruled by the force of the interests at stake. cultural attraction-the new Guggenheim Conserving the past and turning into a Museum: the second by restoring its his- development factor requires therefore toric centre and its magnificent royal not only strong political awareness and palaces and by attracting contemporary firm commitment, but also specific plan- artists and performers to enrich the ning and urban management discipline. museums and to give the city a new look. -V While the political and technical chem- Curitiba, in the State of Parana in - istry depends very much on local condi- Brazil is not known for its artistic charac- ± -. t r E tions and traditions, one can sum up in ter: and yet. a careful and consistent three words the key elements of this conservation policy has strengthened its _ Si)'.. development strategy: conservation, val- image as a "quality" place, a place people _ orisation, education. like and want to invest on. This year, St. Petersburg used its 3ooth anniversary to K - -. Conservation: a challenge present to the world its restored monu- for decision makers ments and museums, alongside with its new image of a world tourist destination CONSERVING A CITY requires the and dynamic city. And this pattern is not preservation of the historic fabrics and of limited to urban centres, but may con- the traditional building processes. cern entire regions. Modernity has invariably impacted on In the Yang-Tse river delta in China, both elements, mostly because of the one of the fastest growing regions in the increase of circulation and parking space world, cities like Suzhou or the Canal for cars and the widespread diffusion of towns have built their image on their historic gardens and concrete as a basic building material. The result has been a structures. The entire region of the Loire valley, in France. is rapid and dramatic growth of the uniformity of our urban land- organising its development strategy on its recent World scape. A proper conservation strategy requires attention not Heritage listing. a designation that triggered the mobilisation only to the monumental areas or buildings, but to the entire of its institutions, its entrepreneurs and its people. Pride is a urban fabric. Too often monuments are singled out as examples force, and therefore it is a powerful factor in development, as of the past, while the urban fabric that was formed during histo- much as other essential inputs: skills, capitals, technical and ry as an integral part of that built environment is wiped out even managerial innovation. Pride and the sense of identity can before attempting to adjust it to modern needs. Furthermore, a trigger many positive changes: they will attract political atten- proper conservation strategy has to include policies to preserve tion and public investments, they can generate the mix of ini- the social structure. Cities are places ofpersonal and familynet- tiatives that can attract visitors and tourists, and start a virtu- works that are an essential part of the social stability, and they ous cycle of investment and income generation. Furthermore, are a source of jobs. Disruptingthe social fabric is often the fac- the sense of identity is strongly associated to the tquality of life, tor triggering the decay of the physical structures. These poli- and is an increasingly important location factor of many new cies are not easy: they have to be decided and implemented productive structures. against powerful transformation trends and interests: high- rise Building on the past to ensure a better future is not, how- building, invasion of cars, commercial developments. They ever, an easy task. In every city, there are strong forces push- requires strong political will and vision. technical skills, and the ing for the transformation of the physical and the social struc - * support of all institutional levels. NOVE'MBER 2003 17  - Iwu - -.._ _ _ THEURYA PUNJ --E!AI 11A L- J~~i ,^~~ ~_ _ _' L~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ and~~~~~~~~~~~~~~~~~~ priat setr lies Thi is wh h hleneo osrato aor lyoa F %; managers, as it spans beyond political and financial time Valorization: a challenge for the public frameworks, and often beyond carriers and even our own and private sectors lives. This is why the challenge of conservation has to rely on a consistent effort to educate all the partners involved-first and CONSERVATION is often seen as an expensive choice: restor- foremost, the population involved in the process. One cannot ing and maintaining monuments and buildings requires but emphasise the importance of public consensus in the investments, preserving traditional architectural forms is development of an urban conservation strategy. Secondly, -albeit rather incorrectly- considered an extra burden to education is the essential tool for transmitting the values to families and local administrations. While it is true that a con- the future. Young people are the basic resource of every con- servation strategy requires commitment of resources, for servation strategy: creating the sense of identity and pride is technical skills, assistance schemes, and controls, a wide the most effective investment a city can do for its own future. experience shows that on the medium terms these costs can be matched by economic development linked to tourism, com- Conclusions mercial uses, and higher land values. The public and private actors play different but complementary roles in this strategy. IDENTITY, PLACE, PRIDE. VALUES, FUTURE-these are the The public has the task to set up the objectives and the regula- products of urban historic conservation. A city with no past tory and incentive tools. The private sector has to adjust its and no beauty is a non-place, a place that exists today but can strategy and understand the opportunities offered by the disappear tomorrow. A city rooted in its past is a place where choice of a higher quality standard of the built environment. people want to remain, to invest, to grow their families and to Sustainability requires a well thought system of goals, tools see their future. It is a cradle for social, human, and econom- and practices, shared by all. ic development. Education: the long-term view Francesco Bandarin, Director, World Heritage Centre, UNESCO CONSERVATION MAKES LtTTLE SENSE if it is not done for| the long term. The long term is a difficult dimension for urban i8 Development Outreach WORLD BANK INSTIrUTE  Learning from the Poor Housing and Urban Land Markets BY M. VITOR SERRA THE POOR. WORLDWIDE, resorttoall sorts of means to house themselves in the face of a housing industry and poli- cies that fail to provide them with affordable options. In the last fifty years, as rural to urban migration expanded across all regions, the prac- tice of self-help housing resulted in IV vast housing settlements which have IA, baffled governments and society. At times, urbanization itself was put to blame for exacerbating this problem. However, a better understanding of the long-term urbanization process-and of its increasing pace in the last centu- ry-has shown it to be universal, unavoidable and even desirable. Also, 4 throughout this period, except for a few enlightened cases, public policies with - respect to these housing settlements have swayed from open hostility, phys- ical removal, and open denial, to, at ,lr best, piece-meal and reluctant intro- duction of a few urban services. Very - often, sheltering the poor was looked at as if it were a problem of insufficient commercial housing supply to be resolved via complex financing schemes and granting of subsidies. In most cases, such approaches have proved ineffective. In the last decade, public policies with respect to the housing settlements of the poor ,' changed significantly. Increasingly, governments as well as multilateral E and bilateral organizations are learn- V ing lessons-on the importance of good governance, and on allowing housing F- markets to work unimpeded-as the poor make efforts to house themselves. . N O1 V F M 3 E R 2 103 19  The housing of the poor * nalities. In fact, there is also evidence that processes such as gentrification and filtering-the movement of the housing Self-help and informality. It is common knowledge that the vast stock across income groups-which are part of the develop- majority of the urban poor. and indeed the very poor, live in ment of cities everywhere, are also common to informal set- dire physical conditions, of which vulnerable and crowded tlements. In this sense, informal settlements tend to emulate dwellings and a deficiency, or absolute lack of urban services the formal city of which they are part not only physically but are the most apparent features. Indeed, the living conditions also in its social transformations. of the poor are tough and varied. They may simply live in the Negative externalities. However, as a number of analysts streets, sometimes in such large numbers that communities have pointed out, many informal settlements carry a number are formed such as in central Bombay; they may squat on pub - of problems related to the way they were originated and devel- lic land, commons, or land with undefined or disputed prop- oped. Squatters chose locations which are environmentally erty rights, frequently as permanent solutions, as in the rap- * sensitive, such as the shores of bodies of waters, or risky, such idly expanding cities of most of the as hilly slopes and rights-of-way for developing world; they may settle in public services (transmission lines, gas legal or illegal land subdivisions on the pipelines, or transport corridors). Also, peripheries of cities where they gradu- * informal settlements develop in a hap- ally build their houses and may eventu- hazard way, without definition of proper ally obtain provision of urban services; THE HOUStNG OF rights-of-way for vehicular circulation they may rent rooms in subdivided for- - and infrastructure. These ubiquitous mal housing which were previously THE. POOR MAY BE SEEN negative externalities indicate, on the inhabited by higher income groups, in AS AN IMPORTANT one hand, the lack of will or power of the center of large cities; or they may governments to enforce environmental occupy precariously functioning and EXPRESSION OF HUMAN legislation and, on the other, the lack of large high-rise housing complexes, INGENUITY AND mechanisms of collective action or the conceived and implemented through presence of some level of regulation to governmental programs more common EFFORT, REFLECTING -- guide the development of informal set- in but not unique to non-market STRATEGIES TO COPE - tlements. economies, as can be observed in many large cities of Asia and Latin America. WITH AN ENVIRONMENT The nature of housing Of the above types, squatters and THAT IS NEGLIGENT, policies for the poor peripheral subdivisions constitute the vast majority of housing for the poor and IE N(Yt HOSTILE Learningfrom thepoor. All formulators of are frequently termed informal settle- policies increasingly agree that the ments due to their lack of property titles design of more appropriate urban poli- and their non-conformity to municipal cies for the poor requires that a set of urban plans, norms, and regulations. elements be culled from the experience A solution, not a problem. Despite its of the poor themselves. This must physical conditions, the housing of the poor maybe seen as an include the acknowledgement of the role played by sweat important expression of human ingenuity and effort, reflect- equity; the acceptance of the gradual nature in which the ing important strategies to cope with an environment that is housing and the settlements of the poor grow, guided by the negligent, if not hostile, to the needs of the poor. These strate - changes in family structure and in the short -term fluctuations gies, pursued individually or in groups, are the means through and long-term increases in family income; a clearer defini- which the poor, rationally. strive to fulfill their housing pref- tion of property rights; the creation of mechanisms to support erences in a least- cost manner, within the limitations of their collective action and control externalities; and the creation of budget. Given the prevailing levels of income and other con- poor-specific financing mechanisms, which take into account straints, informal settlements can therefore be said to be the need for loans of small amount, poor credit records of solutions, not problems (in the classic expression of John borrowers, and the short-term fluctuations of their incomes. Turner). Governance. They also agree that attention ought to be paid The housing of the poor is not static. There is plenty of evi- to three basic governance issues: i) decentralization of dence that gradualism and sweat equity-the use of their own responsibilities to local governments; ii) introduction of pri- labor in constructing their houses and settlements-given vate sector participation in the provision of urban infrastruc- time, transform the housing of the poor into acceptable hous- ture; and iii) the increasing participation of civil society in the ing solutions. Markets are quite active in informal settle- definition and implementation of housing policies for the ments; realtors are not uncommon; renting of smaller spaces po6r. Finally, most parties would also agree that the role of or of full houses, is normal practice. Housing units are fre- central governments remains extremely important in "scaling quently bought and sold, though these carry a discount due to up" local experiences. The Cities Alliance is conducting a the lack of property titles and the presence of negative exter- study in which it evaluates important "scaling up" efforts that 20 Development Outreach WORLD BANK INS FtrTUTE  are being attempted in Brazil, Chile, Mexico, Mauritania, * Landpoliciestopromotetheaccessoflandtothepoor. Landis Morocco, South Africa. Tunisia, Thailand, and Vietnam. the initial step in the gradual process of self-production of housing. The means by which it is developed or partitioned A broad and country-specific set of and, then, acquired, whether legally or illegally, has profound solutions consequences for city development in years to come. In most developing cities, the poor locate either by squatting in public There is no single solution to the problem of providing hous- or private land. or buying land plots in informal subdivisions ing for the poor. Most countries ought to adopt a number of at the periphery, as seen in most of Latin America; by negoti- approaches in order to satisfy different sub-markets; for ating fractions of lots that are subdivided increasingly, as seen example, the segment of households with incomes high inmuchofAsia;bybuyingsecond(orthird)storyroofslabsin enough to jump the frontier between informality and formal- existing slums, as again seen in the large cities of Latin ity. squatters or slum dwellers who require the continued America; and by making use of various governmental pro- gradual improvement of their homes, or new poor house- grams of provision of access to land, among them the classical holds, whether these be migrants or existing urban dwellers. sites-and-services projects. The emphases to be given to each of the above will, of course, All of the above have consequences, both at the level of the depend on the country's level of income, rate of urbanization individual families as well as at the level of the city, which are and proportion of poor. not completely understood. This makes the proposing of land Formal housing solutions. Ideally, the formal, commercial policies particularly difficult. However, in general one would housing sector produces a diverse range of commercial housing think that the overall desirable policy goal would be to solutions (including land parcels) that respond to the price increase the supply of affordable land with minimum negative demands of all types of households, including the poor. structural consequences for city development. And to do this However, historical experience demonstrates that the range of one would have to resort to the appropriate use of regulation, solutions is, in fact, very limited. The housing industry operates land taxation, and local governmental investments. To begin above both the capacity and the willingness to pay of the poor with, this would rule out invasions and squatting as unaccept- (this being one of the reasons why the poor house themselves). able. It would also suggest that governments should be more Measures that contribute to lowering the average costs of lenient with informal land subdivisions, reducing standards housing production would then permit the poor, at the margin and requirements of installation of infrastructure accepted of the formal housing markets, to jump the frontier of formal- here, as well as, the principle of gradual housing and urban ity to be served by a supply of low-cost formal, finished hous- improvement. In such a context, there seems to be ample pos - ing units. Such an approach seems to make sense in highly sibility of negotiation with local developers, in order to avoid, urbanized, middle income countries with few extremely poor via land readjustment practices the worst consequences of citizens. Chile has lead the world in taking this approach with this type of development, such as the coordination of main a consistent, long-term, and successful formal housing pro- road layout. Asimilar type of reasoningcan be applied to cases gram which was, more recently. complemented by a set of mentioned above. Finally, one should say that the current programs directed to the informal sector. ethos is not sympathetic to making use of governmental pro - Slum and squatter upgrading. These are measures oriented grams, and few are indeed found that are exemplar. The World to the improvement of existing informal settlements, the so- Bank Mauritania Urban Development Project is such an called upgrading of slums or urban areas. They consist of a exception. number of initiatives aimed at correcting negative externali- Land policies is an area in which much and urgent research ties in these settlements, planning their future growth, pro- is needed in order to better clarify important issues. The fol- viding urban services, rectifying and/or providing property lowing are of particular interest: (i) urban and land regula- titles, and providing technical assistance and micro-credit to tion; (ii) expansion of trunk infrastructure; (iii) the conces- improve individual housing units. The frontier of slum sion of financing and subsidies to land purchase and cost upgrading practice in many countries lies on the methods and recovery of governmental programs: (iv) land taxation; and (v) means through which investment and operation costs are to land titling. There are important examples of such research be recovered, communities are to be involved in the upgrad- led by the World Bank in both India and Brazil. The Lincoln ing process and governments are to finance these actions. Institute of Land Policy is also active in this field in particular Decentralization of responsibilities and revenues to local gov- with respect to land taxation. ernments have played an important role in making Brazilian municipalities-with little support from the central govern- Vitor Serra, Lead Urban Specialist, The World Bank ment-become an important innovator in terms of slum and squatter upgrading, with hundreds of small and large experi- ences being attempted by municipalities all over the country. Two of the world's largest metropolitan area programs of upgrading are currently being implemented in Brazil: the fre- quently cited Favela-Bairro, in Rio de Janeiro, and the Recife Pro-Metropole. N ( V E M B E R ! 9 2 1 Zl  forwarrd thgiukiug ¼~~ -| . w~~~~~~~.. ->. . -- - . I-.,, . 4 * ; * J' F _ _ _ __ . _ _ _ __  a idVAIolAllll; An Interview with Jiangsu Party Secretary 1 Li Yuanchao ___ ___ __ S . N _- - Afli BY JEFFREY SOULE E*- 4, X W IHE CAPITAL OF JIANGSU PROVINCE, Nanjing is an important educational, cul- , - tural and transportation center in the V lower Yangtze area of Eastern China, a ;*- region rich in agricultural, industrial and cultural I;. resources. Nanjing's policies and programs will influ- ence other cities in both the region and the nation due - t i4 -_ to its historical and current prominence. Entering Nanjing for the first time, visitors are struck by its wonderful sense of human scale. Its man- a- ageable street widths, trees, and abundance of historic features throughout the city contribute to an attractive 4 quality of life. Embraced by thickly forested mountains on one side and the grand Yangtze on the other, the set- ting for the ancient city has been celebrated for cen- turies. The city also has a wealth of cultural institutions: government agencies, museums, colleges and universi- ties. Nanjing has established a framework for growth that protects the core historical city and provides opportunities for growth and development in adjacent districts. A public transit system is under construction that will provide a variety of options for residents and visitors in addition to automobiles. Nanjing's abun- dance of energetic and well-educated young people interested in staying there complete the dynamic pic- ture of a city with a unique character. How Nanjing is planning for its future to take advantage of these resources can become a new model for hundreds of - Chinese cities-showing how a truly Chinese city can benefit from its long Chinese city planning history and be even more economically successful. Nanjing offers a sophisticated and humane alternative to the idea that V 1 "modern" cities are simply wide streets, skyscrapers and colossal public squares. It is a city that celebrates being urban. being human, being part of Chinese histo - ry and embodying variety. Appointed in 2001 as Party Secretary of Nanijng, and now recently elevated to Party Secretary of Jiangsu Province, Li Yuanchao's leadership in shaping this city's ~~~~~~~~~~~~~~~~~~~~~~~~~~~.. :  future and the very foundations of planning is critical. As the He Xi New District, for example, is directly adjacent to the Old American Planning Association's (APA) representative in City and represents a compact development concept. China and Southeast Asia. I was asked by Secretary Li to serve on behalf of APA as advisor to him and the city in 2001. Mr. Li You had an opportunity to visit the US shortly afteryou moved to very graciously accepted my suggestion that he share his views Nanjing. How did that visit influenceyourideasforplanningin the on city planning and the way Nanjing is charting its future. city of Nanjing? When talking with some foreign friends, I realized that the Secretary Li, you came to Nanjing as Party Secretary a little over reason that Nanjing attracts international attention is not the two years ago. At that time, Shanghai and Beijing were largely modern skyscrapers in the city but its long-standing history, viewed as a certain tpe ofitymodelinChina. Whatdidyouthink human scale, culture and beautiful urban environment. This about the way Nanjing should develop at that time in terms of the has confirmed my belief that in the process of globalization, a future? city has to hold tightly to its distinctive features and character- A model city development strategy should reflect the city's istics in order to enhance and maintain its international com- own pattern, area circumstances, and distinctive characteris- petitiveness. A strategy combining preservation and develop- tics. As for China, we should also learn from successful experi- ment together is the core mission of city planning. What I have ences of other countries, integrate them with our own features, realized is that Nanjing can use its distinctive features to attract andestablishasuitable modelforourselves.Ageneralfeelingis both domestic citizens and international friends to invest, that Beijing is the capital and the political and cultural center of reside and pursue their career in Nanjing. In this way conser- the countrywhile Shanghai is a major economic center develop- vation and local identity become a strong economic resource. ing into an international metropolis. These two cities have brought us good experiences and useful models during their In our conversations, you have characterized Nanjing as a green development. Nevertheless, Nanjing has its unique character- city and a cultural city. You have outlined a strategyfor Nanjing to istics, and cannot completely copy an existing model of city create a homegrown development strategy. How do you see the role development from any other city. of planning to make that vision a reality? Nanjing has a history of being the capital for six dynasties There are four crucial aspects for managingthe city: 1) eco - and a major city for ten dynasties. The State Council has drawn nomic development, 2) city design, 3) people's living stan- special attention to the development of Nanjing as a waterfront dard. and 4) cultural continuity. Although our GDP has dra- city that incorporates its historical features as an old capital city matically increased for the past one decade, the annual GDP and its natural features of mountains, waters, and forests. When per capita of Nanjing is still behind a high standard of living- taking full consideration of historical, practical, economic, and $3,ooo. There are three major factors that influence a region- cultural factors, we have come up with the idea of concentrated al or city leader's decision during the period of change from development in several distinct districts adjacent to the ancient under-developed stage to advanced. First is to support and core. Byimplantingthisprinciple,Nanjingeanpresentitsindi- improve the aspirations of the citizens. Nanjing has advanced viduality in a much wider range. Otherwise, the city would grow a goal for development, "enrich the people and empower the out from the main city, resulting in formless sprawl and a loss of city," focusing on the improvement of people's daily life and both efficiency and identity. The general plan of Nanjing also the employment situation. The second one is to elevate the emphasizes open space. In our city plan, all the resources such level of modern infrastructure including a more convenient as mountains, waters, city, and forests are integrated, forming transportation system, advanced communication technology, an ecological urban system where city and nature are embraced. and ability for people to have consumer goods such as auto- The overall direction for the development of Nanjing is to mobiles, personal computers and air-conditioning among implement the strategy of "one reduction and three concentra- others. The third one is to retain the city's individuality. Our tions" and to establish "one city and three districts." "One vision is guided by these three ideas: ancient capital. cultural reduction" is to reduce the population in the old town. The old city, and green city. town has a population of 1.53 million overall and 3o,ooo per square kilometer, one of the most crowded areas in the country. You and the city entered into a partnership with APA to advise and The primary concern for assist in achieving the goals you Nanjing is how to remove setfor the city. What ledyou to this industries and the population _ partnership when many cities are from the historic core city to solely relying on consultants and showcase the historical and cul- The American Planning Association advocates design competitions? tural legacy from the Tang, - . Although the making and Ming, and National Republic _ _ w _ _-pnM.'IT"1m " I'.4I implementation of city plan- eras. Industries in the old town citizens in decisions about their environmets. ning in developed countries area will be moved to several , cannot wholly suit China's cur- developing districts where new Visit: www.planning.org- rent situation, we can take les- residential and civic develop- sons and experiences of urban ment will also be located. The design and city planning during 24 Development Outreach WORLD BANK INSTITUTE  (\A .1. 1N) \D R NOVEMBER 2003 8-12 East Asian Seas Congress 2oo3 Kuala Lumpur. Malaysia 3-7 ICLEI World Congress 2oo3 congressGpersea.org Local Governments Implementing Sustainable Development 10-12 World Summit on the Information Society, Athens, Greece Part l www.iclei.org/worldcongress Geneva, Switzerland 5-7 2nd Airnet Annual Conference www.geneva2oo3org Rome, Italy JANUARY 2004 www.irr-neram.ca or http://airnet.iras.uu.nl 7-9 Children and the Mediterranean Conference 28-30 Euromed Civil Forum Genoa, Italy Naples, Italy EUROMED@lynkeus.com info@medlab.org www.medchild.org and www.lynkeus.com DECEMBER 2003 29-30 Meeting of Science and technology Ministers: Science and Innovation for Economic and 2-6 Africities Summit Social Priorities Yaounde, Cameroon Paris. France www.pdm-net.org/africites www.oecd.org 3-4 Development Marketplace FEBRUARY 2004 Global Competition Washington, DC 12-13 OECD Global Forum on Competition www.developmentmarketplace.org Paris, France dminfo@worldbank.org www.oecd.org DEV E L O P N EN T Outreach Subscription Order Form SUBSCRIBERS FROM DEVELOPING NAME COUNTRIES WILL CONTINUE TO RECEIVE THE MAGAZINE FREE OF CHARGE. TITLE ORGANIZATION __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ SUBSCRIPTION FEE APPLIES TO READERS IN THE FOLLOWING DEVELOPED COUNTRIES: ADDRESS Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Japan, Kuwait, Luxembourg, CITY AND STATE OR PROVINCE Monaco, Netherlands, New Zealand, Norway, Oman, Portugal, Spain, Sweden, Switzerland, COUNTRY United Arab Emirates, United Kingdom, United States, and Vatican City. ZIP / POSTAL CODE PHONE t-.- v r k i . FAX ,,-, >Sg ' ~~~~~~~E-MAIL 6 -Development Outreach? - Please do not send cash. Make checks payable to IBRD (Development OUTREACH). for 2004, for just $18 ; :, Check no. in the amount of $Jut-___ is enclosed. (three. issues.per ~ Mail order to: :-caleb&dr.Ayar,--January - :-c r..e;r-- January- - - *. - Editor, Development OUTREACH December)-- - The World Bank * -- -~- ~ . - . 1818 H Street, NW, Room J2-003 Washington, DC 20433 USA  B0OKS1 [III 1.1 QUIET REVOLUTION: the Nazis' systematic campaign of physical and cultural DECENTRALIZATION AND obliteration, from NewYork and Rome to Kyoto and Cairo, W - THE RISE OF POLITICAL we see the city as an expression of the best and worst within us. PARTICIPATION IN LATIN AMERICAN CITIES, by Tim LEADERSHIP AND INNOVATION IN SUBNATIONAL Campbell. University of Pittsburgh GOVERNMENT: CASE STUDIES FROM LATIN 3 Se A , < Press. 2003. AMERICA, by Tim Campbell and Harald Fuhr, eds. World Bank, 2004. SKU 15707. Quiet Revolution traces the growth This book documents dramatic reforms implemented at the and effects of decentralization and local level by city leaders during decentralization in Latin democratization in Latin America throughout the 198os America and Caribbean states in the 1980s and 9ggos. and 1990S. Based on first-hand accounts from mayors, Ratherthan focusing on best practice, this book features local officials, and neighborhood leaders, the book the process of innovation. More than a dozen case studies focuses on those cities and towns that made the most of document in detail the discovery, application, and their new intergovernmental arrangements. The author implementation of a new way of doing business at the local argues that the reforms, which are vital to long-term level. The book is based on a World Bank study of selected sustainable growth in the region, are in danger of being cases of more than 2o innovations. smothered by current policy responses from national and To order: www.worldbank.orglpublications or international institutions. Campbell's research, Email: books@worldbank.org conducted over a ten-year span, counters conventional wisdom about the role of development banks in the AWodd A WORLD WITHOUT WALLS: process of state reform and offers timely insights into [ without Walls FREEDOM, DEVELOPMENT, similar events taking place in other parts of the world. b FREE TRADE AND GLOBAL v&rllxhiii4rIL . .iix r1- 4i tI at rr kdle .In patr u level and to begin influencing the thc C lllull tIlL.l 1- 1w I, \xlIL ''i lt:Iil 1, ll.iltLL,l ( l 1L)lC1lS. d (I i()1t tiS i> the. ,11.,1_.4/i C rIlr It C\ CI[llllC lit .CXC.rII,ii kI.development of a management cul- T LI 'I( I LT IC I ITX xICL ' [ 'Ill iNI \Li II' .1 1 N AI .l .n II. 1T relch tl,e ture. Despite the changes and L lpcrtr tl.riul{li lit the xx l I; . Ill C-1 IrI) IiLk 14 ill (,i vtoic iS, turnover in the state governments No Ilen li1d4i ld/IllL ,il CL L I IlililiK dLL ClI)}illilt lihk and in the mayors' offices, the more l I( tICt 1K>E k1LTI II I I the' I,I y.I/iilI I' C i 'i ) h\X I" I [iL I111 i:Jielle .1- permanent technical staff are aware ClIi. tIOW F'>, inLIIthe LI.lti ad IxCVI:I_fLItEI tilC thexxJLK1111 Mid IIiCLIC. that cities still have deficiencies in _ .t.-r_;1ftc:.i!c2.1 _ =rr%Y_l*rtt1r7t terms of urban and social structure and need to continue streamlining rx --. their management. Lubomir Ficinski Dunin is a civil engineer, architect, and urban planner. From 1994 into 2002 he was the Secretary of State of the Secretariat of Urban Development and rz E HUAlAN DEVELOP MENT Wt NC? cr Paranacidade's CEO. 28 Development Outreach WXO RLD BANK INS FITUTE  I)F; EN ERXL lnr I(N, -IAt'IT'. R I:li B INo.. E'r.Br Y.ANF ITiANPR-Ft ENCY. Y. the possibility of modifying and giving more flexibility to the the use of all resources for urban development programs and status quo in matters concerning urban and regional develop- projects in the State; and using effectively and efficiently the ment. At that time a new loan proposal, the Parana Urban resources for technical, administrative and financial strengthen- Program, was under discussion with the Inter-American Bank ing of the municipalities. of Development (IDB). SEDU agreed with the Bank on the Paranacidade is also pursuing a program of studies and set- importance of institutional reform as a prerequisite for the ting up a database for urban programs and municipalities. new municipal development program. As a result, on July 3o, Paranacidade is a flexible institution which can delegate man- 1996, a collaborating entity was created, which was able to agement and facilitate participation in any type of contractual ease the management of the public administration. This col- agreements between local governments and the private sector. laborating entity, Paranacidade, is an innovative concept. The new institution is described as a "non-profit corporate legal Decentralization entity of public interest, classified as Autonomous Social Service," which operates under contract to the state to provide THIS NEW INSTITUTIONAL ARRANGEMENT allows for "institutional and technical services to municipalities in decentralization, capacity building programs, controlled debt Parana and to collect and invest financial resources in the state capacity of local governments, and transparency of the urban urban and regional development process." Paranacidade development process. In Parana we think of decentralization as resembles a U.S. quasi public corporation. decentralization of power-a transfer of functions and respon- As an autonomous social service entity, Paranacidade sibilities from the highest to the lowest level, from state level to cooperates with the governor's office, but is attached to and municipal level. Paranacidade is participating in this effort by supervised by SEDU. It has a management contract from the supporting the Municipal Associations. All municipalities in State to implement urban and regional development policies, ParanA belong to an association that brings together on a vol- provide technical and institutional assistance to the munici- untary basis municipalities from a particular region. The asso- palities of Parana. and manage a Public Urban Development ciation was basically used as a policy instrument for ensuring Fund (FDU). that the government serves the region's interests. As an Since the 1980s, there have been a number of investment pro- adjunct, it provides a number of related services. grams in Parana. For the last twentyyears, the State has obtained As a result of an agreement with SEDU and Paranacidade, financial resources from international banks and has lent these the associations were outfitted with a small body of technical resources to local governments, so they could implementprojects staff to provide support to municipalities unable to hire spe- and programs which they could not otherwise afford. These loans cialized personnel on account of their size, or because of scant tomunicipalitieswererepaidtothestate,andin1988thegovern- resources. The urban program further extended these new ment decided that it would functions of the associa- repaythe loans to the inter- tions enabling them to national banks, and would analyze projects valued constitute a revolving fund up to $2oo.ooo. monitor financed by the payments the bidding process, and from the municipalities. - follow up on works. The This revolving fund is -= association receives a fee managed by Paranacidade, for these services. and today it has over $150 Thus, the process of million. L decentralization began Since its creation with functions formerly Paranacidade has acceler- - I performed by the state ated the urban develop- - -Tf' being transferred to the ment process by: facilitat- associations. The associ- ing relations and acting as a ations, in partnership buffer between the munic- with the state, became ipalities and Federal and centers for formulating State institutions; allowing the regional develop- for greater coordination in ment programs that they N OC V E M I E R 2 0 0 3 27  ecentralizing City Management A Successful Experiment BY LUBOMIR FICINSKI DUNIN FT URBAN ISSUES IN PARANA are notverydifferent f . from those in most countries around the world. >%- They relate to providing services such as trans- t i most c portation, health, water and sewage. education. and others, which create an enabling environ- ment for the municipalities to prosper. What may be different is the way the State of Parana faced such issues through its State Secretariat of Urban Development (SEDU). which succeeded the State Secretariat of Municipal Development (SEDM). The present situation is a result of many years of effort. The process began in the eighties, and V my lengthy career in Parana's urban develop- ment sector is associated with this process. In retrospect, Parana's success in urban develop- ment was possible thanks to our efforts to create an enabling institutional arrangement. decen- tralize assistance to municipalities, give capacity building the highest priority, link the debt _ capacity of municipalities to their ability to bor- -' ; row for projects and activities, and ensure that - 1 . the entire process leading to projects and activi- * ties was transparent. - , i The key factors in ParanA's urban development were: institutional arrangement, decentralization, _ - . capacity building. debt capacity. and transparency. Enabling institutional arrangement ARCHAIC. SLOW. AND BUREAUCRATIC organi- : -_ _ _ zational state structures are a major constraint to 5 performing tasks and meeting daily challenges in many countries. In i995 SEDU started to study 26 Development Outreach WORLD BANK IN.STI UTE  urbanization. Therefore, other than competitions for major planning projects, we have also invited . you. on behalf of the American Planning Association, along with Mr. Liu Taige. former Commissioner of Singapore Ministry of Construction, to be our Senior Counselors of city t gN planning. Many of your suggestions have proven ,.- ;.. greatly beneficial to the city of Nanjing. In addition, i' we are making an effort to discuss with the APA fur- - ther cooperation in developing an international planning institute called the Nanjing International t Institute of Planning (NIPP), which will serve as a base for training and exchange programs of urban . _ planning between China and the U.S. What would you like to tell other leaders and decision makers are the value of planning for making day-to- -4 day decisions about cities? Along with rapid economic development, urbanization in China is accelerating dramatically and improving people's living standard. The cur- - w -_ rent city construction in China is a rare, special Im tpr phenomenon for Chinese as well as world history. It 44: embodies not only large scale and high speed con- p . ' struction but also the requirements for economic ew development, systematic communication, struc- .P F - tural improvements, and social stability. ' . . Meanwhile, we have to pay particular attention to .. ,f-1 . issues of development vs. preservation, economy SL - - - vs. environment, and economic development vs. cultural development. Therefore, under a rapid developing urbanization, we have to very carefully coordinate all such complexities. The process of making deci- of cities anywhere. While Nanjing, like other Chinese cities, sions about city development and balancing long-term efforts may value the ancient patterns of the historic city, it struggles with short-term decisions and administration is the essence of to find a way to address the problems of a burgeoning econo- city planning. my, demands for improved quality of life and attention to the China has entered the era of urban economy; major eco- environment. The role of planning in achieving this balance nomic promotion and production factors are in its cities. has attracted hightened attention. As Li Yuanchao has pointed Planning serves as a valuable urban resource to manage this out, while China pursues a market economy, development and process. As far as our country is concerned, urban resources the management of the process need to change accordingly. include urban capital, urban land, and urban planning. Under Issues such as coordination among the various departments, the current market economy, most of the city capital as well as the legal authority to enforce its plans and codes, enhanced urban lands no longer belong to the government. Only plan- ability to analyze options for the city, broadened scope and ning is a prerogative of the government. City planning is a good more participation in the development process need to be means for the government to coordinate the use of all kinds of considered. Planning needs to look at the big picture of the land, distribute construction projects in an overall scale, and region, the city. and the neighborhoods, and based on the realize sustainable development of economy and society. It also vision of the city, make it clear what the impact of selecting serves as guarantee for city's overall long-term benefits. different alternatives will be in the long run. With the leader- ship of Li Yuanchao and efforts underway to elevate the Conclusion and prospects for Nanjing's process and quality of city planning, Nanjing is positioned as future a leader among Chinese cities. C In APA's work throughout China, we have seen first hand Jeffrey Soule, American Planning Association's representative in the result of development influence by ill conceived and out- China and the South East Asia. dated international planning models. The scale of streets, the Li Yuanchao, Party Secretary of the Jiangsu Province. emphasis on individual buildings over good urban design and Interview with Li Yuanchao translated by Rime Sun the separation of land uses are not good models for the future N O *V E M B E R 2 0 0 3 25  The Handbook on Public Sector Performance Reviews to m'et 1 - in the edited by Anwar Shah, World Bank to meet in; ; nthe Andean Region MAKING THE PUBLIC SECTOR RESPONSIBLE, February 5-6,2004 RESPONSIVE AND ACCOUNTABLE Lima, Peru Including tools for: Private and public sector * Implementing citizen-centered governance institutions in the housing sector. a Measuring and evaluating government perfoFmance in the deliverv of local public services * Governing for results and designing governments Leading Experts and for performance CoLactPradiongExperts fromLaind * Implementing decentralized public management Cno oaCt Practtionersfrom Latn * Understanding governance approaches to Kenroy Oowers --!;lillElWm;RRNlS j managing conflict 202.473 3586 * Rooting out corruption and malfeasance kdowers@ if c.org Oeveloping MBS market,*Reforming bureaucracy kdowers@ifc.org Developing MBS mlarket, *Ensuring accountability when there is no mortgage insurance, and bottomline low-income housing policy. * Learning newer approaches to public sector R evaluations 's'r a Tracking the success of health, education. e. *s JF {5Z$Lb t and infrastructure investments , * -'-;I: > @.l-z,; '- | * Learning about better practices in tax, 4S --Xtt£t*.'; ir i'.X 4s PMJ;P C-:ji G -x; i ;;, I expenditure. and transfer policies , -~~ *t~~'i ~~'~' ~ ~ ~ * And much morel |- | >i~a ~ ~ Volumes 1-3 available on the internet library at -¶st* ,- ,<. www.decentralization.org and on CD-ROM. l'> -s *_*wwr-> ,.,..! -' g K 4Contact Theresa Thompson at Tthompson@worldbank.org __________________________________________________________________ Volumes 4-6 will be coming soon! The Global Development Learning Network is a partnership of more than 60 distance learning REDEFINE THE GEOGRAPHY OF centers and other public, private, non-governmental organizations around the world committed to YOUR DEVELOPMENT BUSINESS development learning and development dialogue for lasting poverty reduction. -. s: I U ., f*~~~~~~I, M 10 1 ' ~ 'I I I h1tp wj~..gdlnl.rg 3 Communicate with your directly to your clients in the field at Mark your preseneo in counterpairts quickly and lower costs, and participants can local, regional, and global Tost-effuctively. immediately apply new knowledge development dialegues. Through a combination of and skills in their work. Leverage More than 30,000 people customized distance learning GDLN Centers' national and regional participate in GDLN events every technologies and methods, GDLN networks to mobilize local knowledge year. 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These provide affordable, development agencies, public and from the public and private fast, and high-impact alternatives private sector organizations, civil sectors, non-governmental to traditional meetings and courses. society and non-governmental organizations, foundations, and organizations, and training institutions academia around the world Rethink capacity building around the world. make GDLN a uniquely diverse and technical assistance. learning community. Through GDLN, you can deliver learning and training activities World Bank Institute ia : *r '1818 H Street, NW MSN J2.202 GDLN in action: Interactive videoconlerences C *A"_ with participants *rAfit AgDLNwordan in .4fghanistan and Latin America Email G.9tLDworldbankorg http://www gdtn.arg  Why do some countries do better than others? Do aid agencies make a difference? The MDG challenge: Can partnerships provide the answers? UNDP's Development Effectiveness Report (DER) 2003 attempts to analyse UNDP's DEVELOPM ENT development performance by examining F the notion of development effectiveness. E FFECTIVE NESS -- The DER covers two components: The first DEPORT u N deals with country performance, drawing REPORT 2 0 D P upon empirical evidence and situating Partnerships for Results UNDP contributions to that end. The second part deals with global concerns and the role of donor countries in development 3 Capacity effectiveness. It focuses on the need for * Ownership Policies stronger partnerships between developed w and developing countries and presents strategies for meeting the Millenium Development Goals. [ , . f ,, .'' '~~~0t, N E-.lls t...l; Off.,. Copies of the DER are available at the Evaluation Office, UNDP I UN Plaza, Room 460, New York, NY 10017 The electronic version is available at www.undp.org/eo/