Cities are widely regarded as engines of economic growth. Their ability to attract and retain talent and financial capital drives productivity and the well-being of societies. But cities across sub-Saharan Africa and Asia, two of the world’s most populous and rapidly urbanizing regions, are unable to provide basic services to most of their residents. Countries with greater levels of urbanization have traditionally enjoyed greater prosperity, but the rise of poor megacities in recent years has cast doubts on this relationship.
By 2040, over half the world’s poor earning less than $1 per day are expected to live in cities. To realize their full economic potential, cities must offer quality public amenities, modern urban infrastructure, and widely accessible basic public services such as water and sanitation.
What factors prevent cities from better serving residents? And what can city governments do improve the status quo?
The following five factors are crucial:
- Effectiveness of functional assignments: the extent to which local governments’ de facto responsibilities match legal authority, such as planning and executing capital investments. When cities are responsible for delivering solid waste management services, for instance, central government entities must not interfere in operating the landfill.
- Dynamic local political leadership: the level of political space available to local leadership, and their dynamism and responsiveness in responding to the citizens’ demands. Regardless of the type of service, local government executives require complete support of local councils and the bureaucracies to deliver services effectively.
- Administrative autonomy: local authorities’ powers to hire and fire key local staff, approve their own budgets, and determine their own administrative structures. In many countries, central governments prevent local authorities from making key financial decisions and offering necessary skills trainings and tools.
- Financial autonomy: the ability to set service fees, transparency of annual budgeting, powers for raising capital for public investments, and adverse effects of dependence on fiscal transfers. Local governments are often denied adequate powers to set and collect user fees on services they deliver, preventing them from cross-subsidizing low-income residents by charging higher revenues generated from wealthier residents.
- Accountability to and participation of citizens: the responsiveness to the electorate’s needs through institutionalized systems for participatory planning, complaint handling, and performance management. Since local governments must answer to their electorate, the electorate’s support must be obtained on annual spending, setting standards of service delivery, and providing robust systems for redressing complaints.
In a recent study, we applied this framework to study water delivery, sanitation, and solid waste management services in 42 cities across 14 countries in Africa and Asia. We found that regardless of service type or city size, cities are weakly empowered to deliver services, as indicated by the average score of 12.88 out of 25. Despite the well-documented economic potential of cities, most national public policy systems do not give local governments much scope to improve service delivery.
Comparing the relative magnitudes of these five factors shows that local governments have relatively high political empowerment but lack meaningful local citizen participation. And despite being assigned to deliver public services, they lack commensurate administrative powers to manage service delivery units and do not have necessary fiscal autonomy to raise own-source revenues.
There is also considerable cross-country variation. Top scorers such as the Philippines and Indonesia have undergone governance reforms, whereas low scorers like Pakistan and Kenya have experienced complete or partial abolishment of local governments.
In Indonesia, democratic reforms in the post-Suharto era transferred key powers to local governments, enabling the emergence of new political leaders, including the current president and former mayor of Jakarta, Joko Widodo. Given Indonesia’s highly diverse populations and their previously fractious relations, decentralization helped maintain political stability and sustain economic growth.
This sample of countries represents various administrative traditions, social circumstances, and political and economic systems, which explains variations in scoring. But while this high-level study documents the lack of city autonomy, follow-up studies should distill key determinants of change by analyzing a larger sample of cities.