96680 v2 Metropolitan Governance in Brazil METROPOLITAN GOVERNANCE IN BRAZIL: Inputs for an Agenda and Strategy May 2015 1 METROPOLITAN GOVERNANCE IN BRAZIL: Inputs for an Agenda and Strategy May 2015 Metropolitan Governance in Brazil Contents Executive Summary 13 Introduction 23 Part 1. Analytical Framework 29 Part 2. The Brazilian Case: Characteristics and Evolution 35 Part 3. Economic and Spatial Dynamics of Selected Metropolitan Areas 43 São Paulo: late and state-driven modernization of metropolitan governance 59 Recife: Metropolitan pragmatism and the challenge of connecting institutions, plans and projects 66 Belo Horizonte: limits, potential and resistance surrounding metropolitan innovation 70 Case Studies’ concluding remarks 74 Part 5. Financing 77 Part 6. Recent Developments - The New Statute of the Metropolis 83 Part 7. Final Observations 91 Annex 1. Metropolitan Models, Pros, Cons and Examples 101 Annex 2. Information of Selected Metropolitan Areas 104 Annex 3. Profiles of 15 Metropolitan Regions 109 BOXES Box 1. Reducing social and regional disparities in Brazil 24 Box 2. Why metropolitan governance? 25 Box 3. Urban Community of Marseille 31 Box 4. Two-tier model - Madrid 32 Box 5. The role of the central government in other countries 38 Box 6. Washington Metropolitan Area Transit Authority (WMATA) 62 Box 7. Incentives towards affordable housing – an international perspective 74 Box 8. Planning experiences in three metro cities 87 Box 9. No metropolitan governments in the US 88 4 Metropolitan Governance in Brazil Tables Table 1. Metropolitan Agencies in Brazil 23 Metropolitan Regions (2013) 39 Table 2. Number of Municipalities included in Consortia established by 2011 40 Table 3. Structure of Revenues and Spending (percent), Belo Horizonte and São Paulo Metropolitan Regions, 2009 80 FIGURES Figure 1. Share of urban and rural population in Brazil 43 Figure 2. Selected MRs of Brazil 44 Figure 3. GDP and Population Growth, Metropolitan Regions, 2000-2010 45 Figure 4. Ranking of Brazilian MRs by contribution to national GDP growth, 2000–2010 46 Figure 5. Ranking of MRs by 2010 income: GDP per capita in MRs/RIDE vs. average for Brazil 47 Figure 6. Poverty and income distribution indicators in Brazil (2001-2013) 48 Figure 7. Selected core cities in MRs with increasing inequality and rising Gini coefficient 49 Figure 8. Selected core cities in MRs with improved inequality patterns (lower Gini coefficient) in 2000-10 but not enough to compensate for 1990-2000 trend 49 Figure 9. Belem growth in formal housing units and municipalities with worst level of water, sanitation, and solid waste services in 2010 53 Figure 10. Belem municipalities with worst level of water, sanitation and solid waste services (2010) 54 Figure 11. Percentage of commutes greater and less than one hour across the 15 MRs 56 Figure 12. São Paulo growth in formal housing units (2000-2010) and municipalities with worst level of water, sanitation and solid waste services in 2010 60 Figure 13. Subnormal agglomerates (2010) 61 Figure 14. Recife growth in formal housing units (2000-2010) and municipalities with worst level of water, sanitation and solid waste services in 2010 67 Figure 15. Subnormal agglomerates (2010) 68 Figure 16. Belo Horizonte growth in formal housing units (2000-2010) and municipalities with worst level of water, sanitation and solid waste services in 2010 71 Figure 17. Subnormal agglomerates (2010) 72 5 Metropolitan Governance in Brazil This material is a product of the staff of the International Bank for Reconstruction and Development (The World Bank). The fin- dings, interpretations, and conclusions expressed in it do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. 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All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street, NW, Washington, DC, 20433, USA; fax: 202-522-2422; email: pubrights@worldbank.org. © 2015 The International Bank for Reconstruction and Develop- ment / The World Bank 1818 H Street, NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org Email: feedback@worldbank.org All rights reserved 6 Metropolitan Governance in Brazil Abbreviations and Acronyms BH Belo Horizonte BNH Banco Nacional da Habitação (National Housing Bank) CAF Comitê de Articulação Federativa (Committee for Federal Articulation) CETESB Companhia Ambiental do Estado de São Paulo (Environment Company of the State of São Paulo) CONDEP/ Agência Estadual de Planejamento e Pesquisa de Pernambuco (State Agency of Planning and Research of Per- FIDEM nambuco) FGTS Fundo de Garantia por Tempo de Serviço (National Pension Fund) FPM Fundo de Participação dos Municípios (Fund of Municipal Participation) CONISUD Consórcio Intermunicipal da Região Sudoeste da Grande São Paulo (Inter-municipal Consortium of the Sou- theast Region of Greater São Paulo) DNER Departamento Nacional de Estradas e Rodagem (National Department of Highways) EMPLASA Empresa Paulista de Planejamento Metropolitano (Metropolitan Planning Company for the Greater São Paulo Metropolitan Area) FGTS Fundo de Garantia por Tempo de Serviço (National Pension Fund) FUNDEB Fundo de Manutenção e Desenvolvimento da Educação Básica (Fund for the Development of Basic Education) GDP Gross Domestic Product IBGE Instituto Brasileiro de Geografia e Estatística (Brazilian Institute of Geography and Statistics) ICMS Imposto sobre Circulação de Mercadorias e Prestação de Serviços (State Value-Added Tax) IPEA Instituto de Pesquisa Econômica Aplicada (Institute of Applied Economics Research) IPTU Imposto sobre a Propriedade Predial e Territorial Urbana (Municipal Property Tax) ISS Imposto sobre Serviços MR Metropolitan Region MRBH Metropolitan Region of Belo Horizonte MRSP Metropolitan Region of São Paulo MTE Ministério do Trabalho e Emprego (Ministry for Labor and Employment) OECD Organisation for Economic Co-operation and Development ONG Non-governmental organization PAC Programa de Aceleração do Crescimento (Growth Acceleration Program) PDDI Plano Diretor de Desenvolvimento Integrado (Participatory Metropolitan Master Plan) PLAMBEL Planejamento da Regiao Metropolitana de Belo Horizonte (Planning of the Metropolitan region of Belo Horizonte) PMCMV Programa Minha Casa Minha Vida (My House My Life Program) PNAD Pesquisa Nacional por Amostra de Domicílios (National Household Sample Survey) PPP Public Private Partnership RSLs Registered Social Landlords RIDE Região Integrada de Desenvolvimento Econômico (Integrated Economic Development Region) RIDE DF Região Integrada de Desenvolvimento do Distrito Federal e Entorno (Integrated Development Region of the Federal District) ZEIS Special Zones of Social Interest (Zonas Especiais de Interesse Social) 7 Metropolitan Governance in Brazil Foreword In less than fifty years, Brazil evolved from a predominantly rural society and economy to a highly urbanized country in which 85 percent of its people now live in urban areas and more than 90 per- cent of the country’s GDP is generated in the cities. This rapid urbanization process was characte- rized by a lack of planning and an enduring framework of inequality, resulting in high degrees of concentrated poverty in the urban areas. Much of this urbanization has taken place in metropolitan regions (MRs). MRs have grown more rapidly than the rest of the country, both in population and in GDP terms. In 2010, per capita GDP was higher in MRs than in the rest of the country and metropolitan economies accounted for 70% of GDP. At the same time, half of the Brazilian poor and 90 percent of the people living in subnor- mal conditions were found in metropolitan regions. MRs present diverse realities. To begin, there are differences between core and peripheral areas in each region, with peripheral areas characterized by lower access to basic infrastructure and ser- vices, mobility, jobs, affordable land, and housing. There are also important differences between MRs, e.g in terms of scale and wealth. Over 19.7 million people lived in the São Paulo MR (one in ten Brazilians) while only 2.1 million people lived in the Belém MR. The São Paulo MR produces almost 1/5 of Brazil’s GDP and, in 2012, generated 1/4 of Brazil’s tax collection; in contrast, the Recife MR makes up 64% of Pernambuco’s GDP but represents only 1.6% of the Brazilian economy. Finally, there are large differences in the racial composition of the MRs with residents of the North and Northeastern cities of predominantly self-identifying as pardos (mixed origin) while residents of the South and Southeastern cities have larger populations that call themselves brancos (white). After years of discussion, the recent approval of a new framework for metropolitan governance in Brazil – the Statute of the Metropolis – creates the opportunity for debate and evolution regarding several key issues. These include: a) placing metropolitan matters at the forefront of the develo- pment arena in Brazil; b) reviewing what has been learned about inter-municipal governance and service delivery; c) estimating resource mobilization needs for metropolitan development; d) coor- dinating metropolitan land use with transport and housing; e) including metropolitan concerns in any revision of fiscal federalism; and f) promoting environmental sustainability, social inclusion and resilience to disasters and climate change plans at the metropolitan scale. The World Bank can be a partner in addressing these issues. In responding to Client demand, the Bank has been providing a range of support to Brazilian states and cities and especially their lo- w-income populations in the areas of infrastructure, social services, slum upgrading, institutional development, river basin management, local economic development, environmental protection, water and sanitation, and transportation. In the future, we hope that this support can increasingly be delivered at the metropolitan level and through metropolitan structures. This work is part of the Bank’s knowledge generation and dissemination agendas. It is aimed at enriching and building a discussion space among our nework of Clients and Partners. 8 Metropolitan Governance in Brazil © Mariana Ceratti 9 Metropolitan Governance in Brazil Acknowledgements The principal authors of this report were Alessandra Campanaro (Senior Urban Specialist, GSURR), Jeroen Klink (Professor, University of ABC) and Mila Freire (Consultant), with consulting support from Leonel de Miranda Sampaio, Ana Akaishi, and Jaclyn Sachs (Urban Analysts). Peer reviewers were Judy Baker (Lead Economist, GSURR), Fernanda Magalhães (Senior Urban Specialist, Inter-American Development Bank) and Victor Vergara (Lead Urban Specialist, GSURR). Additional inputs and revisions were provided by Catalina Marulanda (Lead Urban Specialist, GSURR), Emanuela Monteiro (Urban Specialist, GSURR), Alexandra Panman (Junior Professional Associate, GSURR) and Beatriz Eraso Puig (Extended Term Consultant, GSURR). Translation services were provided by Antonio Ribeiro de Azevedo Santos (Consultant) and design was done by Carlos Eduardo Peliceli da Silva (Consultant). Administrative assistance was provided by Sara Gey Feria (Program Assistant, GSURR) and Karina Marcelino (Program Assistant, LCC5C). Task team leaders for the study over time were Alessandra Campanaro, Catalina Marulanda and Josef Leitmann (Lead Disaster Risk Management Specialist, GSURR). This report received final contributions and was approved by the managerial team composed by Paul Kriss (Program Leader, LCC5C), Anna Wellenstein (Practice Manager, GSURR) and Deborah Wetzel (Country Director, LCC5C). 10 Metropolitan Governance in Brazil © Mariana Ceratti 11 Metropolitan Governance in Brazil © Joaquin Toro 12 Metropolitan Governance in Brazil Executive Summary Brazil urbanized at a very rapid pace: the share As of today, contrasts across metropolitan re- of people living in cities dramatically increased gions are still significant. in the past 40 years, growing from 56 percent in 1970 to 84 percent in 2010. Since the turn of the In this process of spatial change and inclu- century, Brazil’s real GDP per capita has grown sion, what role has metropolitan governance by 32 percent, while official poverty rates have played? Would inequality and access to basic fallen from 25 percent to less than 9 percent. services be improved with a more aggressive Urbanization led to concentration of economic metropolitan collaboration? What can be lear- activity and population in selected areas, mostly ned from metropolitan governance in Brazil around state capitals where infrastructure and and elsewhere? This report is a contribution economic growth acted as a magnet to private to this discussion. Drawing from literature and investment and job creation. Metropolitan areas1 data from Brazil, the report reviews the main were formed through aggregation of municipali- concepts related to metropolitan governance, ties of different sizes and levels of specialization, presents international examples, and discusses linked by connectivity, labor flows and economic ideas relevant to the Brazilian case. The report exchanges. The metropolitan areas in Brazil to- is organized in seven sections: (i) principles and gether account for half of the population, about framework for metropolitan governance; (ii) 60 percent of national GDP, and most of the cou- metropolitan evolution in Brazil; (iii) economic ntry’s economic and urban growth. and spatial dynamics of 15 selected metropoli- tan regions; (iv) case studies of three metropo- The rapid economic development of the last de- litan areas (São Paulo, Recife e Belo Horizonte); cade led to deep spatial transformation. Cities (v) financing; (vi) the new framework for me- grew rapidly, but access to services was biased tropolitan governance in Brazil – the Statute against the periphery where the new migrants of the Metropolis (Estatuto da Metrópole); and were settling. Restrictive federal land use poli- (vii) observations and suggestions for the short cies, lack of resources and insufficient planning and medium terms. lead to unresponsive supply of affordable hou- sing in the proximity of labor markets. Low and Analytical framework middle income households settled in the outs- The literature on metropolitan governance kirts, mobility became difficult and commuting discusses criteria and modalities for efficient, times long. Economic geography dictates that equitable and accountable public service pro- during the early phase of urbanization, diffe- vision. While there are large variations across rences in income and services across regions countries and metropolitan regions, and it is are likely to increase. Core cities typically have well accepted that there is no one-size-fit-all higher incomes and better services than peri- model, some basic modalities for metropolitan pheral areas. As mobility increases and edu- governance can be defined, notably: jurisdic- cation and health levels improve, both income tional fragmentation (or fragmented one-tier and access to services become more equally model), amalgamation (or one-tier consolida- distributed. This convergence process is under- ted model), two-tier government model, special way in Brazil, but it will take time to complete. purposes agencies, and voluntary cooperation. 1. The Brazilian Observatorio das Metrópoles defines metropolitan areas as “conurbanated areas that are functional and integrated under the influence of a core city”. 13 Metropolitan Governance in Brazil The most typical model in highly decentrali- work for metropolitan governance, i.e., it did zed countries is jurisdictional fragmentation, not lay out cooperative mechanisms to mana- where local governments are responsible ge metropolitan regions or specific resources for delivering and financing public services. to finance them. Amalgamation and two-tier models enlarge the size of the jurisdiction and enable greater The discussion of metropolitan coordination efficiencies in service delivery, at the cost of has been quite active since early 2000s. The merging several local governments. Horizon- new millennia brought the approval of the tal collaboration can take the form of volun- City Statute (Estatuto da Cidade , in 2001), the tary agreements or special purpose agencies creation of the Ministry of Cities (in 2003), and that execute specific function on behalf of lo- the approval of the Law of Public Consortia cal governments. (in 2005), the later responsible for legalizing contractual arrangements among local gover- nments for the delivery of services. The long The evolution of metropolitan debate about metropolitan governance has governance in Brazil resulted, more recently, in the enacting of the Statute of the Metropolis in January 12, 2015. The model of metropolitan governance in The Statute lays out basic principles aimed at Brazil has evolved since the 1970s. Several improving coordination at metropolitan level, metropolitan areas gained legal status in the outlining responsibilities and proposing mo- 1970s when the central government created dalities for metropolitan governance. nine metropolitan regions (MRs). Their func- tion was mainly to channel investment for in- Tension between state governments and frastructure in support of the industrial policy municipalities, lack of resources and conti- of the country. Financing was provided by na- nuing regional inequalities have increased tional financing institutions such as the Natio- the complexity of metropolitan governance. nal Housing Bank ( Banco Nacional da Habita- The Constitutional arrangement in Brazil pre- ção, BNH) and the Transportation Department. cludes the use of governance models existing The 1988 Constitution transferred the power in other countries and described in this re- to create metropolitan regions from the cen- port. The provision of services at a metropo- tral government to the state governments, in litan scale tends to either be the outcome of line with the decentralization trend. Munici- inter-municipal cooperation or upper-level palities were granted full federal status and (federal or state) policy decisions, as is the made responsible for providing and funding case in education and health. Health is the basic services at the local level. Investment sector with the largest number of coopera- for infrastructure became scarce due to the tion agreements, as states and the federal go- fiscal crisis and several adjustment plans were vernment encouraged consortia among local necessary to control inflation. Per constitutio- governments to speed the implementation of nal amendments in 1995 and 1996, pro-poor the National Health System. Other municipal national policies were implemented in sectors agreements have been promoted by the fede- such as education and health, with state and ral government, such as inter-municipal con- local roles clearly defined, including the share sortia, which are increasingly being used for of revenues to be allocated to these sectors. a wide range of services. The new Constitution did not provide a frame- 14 Metropolitan Governance in Brazil © Joaquin Toro Economic and spatial dynamics of the 1990s. Higher wages in the core cities at- selected metropolitan regions tract skilled workers. However, while the abso- lute number of high-income skilled workers in MRs are engines of economic growth, but so- MRs increased from 2000 to 2010, their share in cio-spatial disparities persist. MRs have gro- total employment decreased. By 2010, half of wn more rapidly than the rest of the country, the Brazilian poor and 90 percent of the people both in population and in GDP terms. In 2010, living in subnormal conditions were found in per capita GDP was higher in MRs than in the metropolitan regions. Socio-spatial disparities rest of the country. In terms of concentration of persist, both in terms of income and access to high paid jobs, core cities concentrate a higher basic services. share of people earning more than 10 minimum wages and with higher education degrees. Ba- The provision of basic services is gradually im- sed on Census data from 2000 and 2010, Gini proving in metropolitan regions, but inequali- coefficient values estimated for the core cities ties between the core and the periphery persist. of São Paulo, Vitoria, Recife, Rio de Janeiro and Although data show a clear trend of improved Porto Alegre demonstrate a consistent increase service provision in urban areas, particularly in in income inequality during 2000-2010. While the Southern and Central-West Regions, access some improvement was observed in Campinas, to basic infrastructure (particularly sewage) re- Manaus, Brasília, Goiânia, Belém and Curitiba, mains deficient, primarily in peripheral muni- it was not enough to compensate for the exa- cipalities. Growing and new population cannot cerbation of income inequality that occurred in afford the prices of land serviced with infras- 15 Metropolitan Governance in Brazil tructure or close to the core city. Lack of ade- quate land use planning and absence of pro-ac- tive slum prevention characterizes most of the MRs, especially in the periphery. Housing units have grown in areas with relatively poor infras- tructure, and slums have grown in the outskirts of metropolitan areas, aggravating mobility issues in already congested urban areas. This indicates the low elasticity of land supply for housing and shelter and shows the dynamics of the informal markets to answer a very clear de- mand for affordable land and shelter that is not adequately being addressed. Case Studies: São Paulo, Recife and Belo Horizonte Three selected case studies - São Paulo, Recife and Belo Horizonte - offer an in-depth, qua- litative look at metropolitan governance in Brazil and reflect the absence of a unique one- size-fits-all model of metropolitan governan- ce. The experiences show distinct approaches to metropolitan governance currently in place in these three MRs, which have taken an active role in shaping their institutional and policy structure. They exemplify the dynamism of metropolitan governance, whether led by the state or by municipalities, and offer an oppor- tunity to extract lessons that could be of use in other MRs. São Paulo presents a compelling case due to the sheer scale of its challenges, the number of metropolitan initiatives that have taken place, as well as its experimenta- tion with inter-municipal consortia and other forms of metropolitan governance. Recife’s historic legacy of metropolitan planning sheds light on innovative participatory planning ini- tiatives. Belo Horizonte is an interesting case study for demonstrating how civil society can contribute to metropolitan institutions. 16 Metropolitan Governance in Brazil © Joaquin Toro 17 Metropolitan Governance in Brazil Financing ments, Concession Contracts, etc.); (iii) defines arrangements for metropolitan governance; In the comprehensive literature on Brazilian and (iv) defers to states, through specific regu- metropolitan governance, financing of metro- lating laws, the responsibility of detailing such politan structures and/or services is rarely ad- arrangements. In particular, the Statute of the dressed. The discussion often revolves around Metropolis reaffirms the central government’s the best form that metropolitan committees responsibility to define a general policy fra- can assume or who can mandate policies or mework for metropolitan areas.. States would investment decisions that have impacts at the continue having the responsibility of creating territorial level. However, the definition of fun- metropolitan areas, and establishing the guide- ding mechanisms, which is central to ensuring lines and criteria for MR creation. However, and that metropolitan policies and investments can within the proposed governance structure, they be implemented, is often lacking. At present, are now obliged to develop integrated plans for there is no legal or institutional framework metropolitan development. Cities, on the other for metropolitan regions to access resources. hand, shall articulate their master and land use This topic is beyond the scope of this work, and plans with the integrated state and metropoli- therefore the report is limited to summarizing tan plans. By Constitution, cities will continue secondary sources of relevant fiscal data. Ho- to be autonomous and free to enter into any wever, an in-depth review of this issue is ne- metro arrangement they choose. cessary to advance the metropolitan agenda in Brazil. The existence of reliable and predicta- Althought the proposed legislation is a wel- ble financial resources is an essential feature come development in Brazil’s metropolitan of any metropolitan arrangement that aims at policy, it does not fully address a critical as- planning and implement development projects, pect, which is the financing of the metropoli- including infrastructure and long-term spatial tan agenda. The principles are a solid point of development. departure from the past and reflect the preoc- cupation of the country to improve service de- The New Statute of the livery, reduce poverty and accelerate growth. Metropolis The proposed development of a national policy framework for metropolitan areas is commen- Following several years of discussion, in Ja- dable and very useful. While the statute opens nuary 2015 the Statute of the Metropolis2 was the possibility of financial support from the enacted. This new law presents an opportunity central government, its actual provisions are to review metropolitan issues in Brazil and look not so clear about it, as the original article on at the most appropriate models and typology. It: the creation of an specific fund for integrated (i) sets up general principles and guidelines for urban development was vetoed. At the state le- the planning, management and implementation vel, the idea of using criteria for the establish- of metropolitan-related matters of common so- ment of new MR is practical, and used widely in cial interest; (ii) encourages collaboration and the US and Europe. Experience shows that it will partnerships for shared metropolitan manage- be better to keep the number of criteria small ment and governance across the various tiers to reduce the bureaucracy in establishing new of governments, through existing instruments governance modalities. The mandatory prepa- (such as Public Private Partneships – PPPs, Con- ration of metropolitan plans is another positive sortia, Urban Operations, Cooperation Agree- development. Integrated plans are useful and 2. Law no. 13.089/ January, 2015. 18 Metropolitan Governance in Brazil © Joaquin Toro 19 Metropolitan Governance in Brazil urgent to define land-use and other regulations are unlikely to be a reality in Brazil, as they to manage the location of new settlements. Fi- would require approval of the merged munici- nally, information on metropolitan and regio- palities that would be losing their authority and nal economy will be the basis of analysis and taxing powers. The present system of one-tier or good policy. Therefore, attention should be gi- jurisdictional fragmentation is likely to continue, ven to: (i) the definition of data and diagnosis on with local governments taking care of provision economic and social patterns of metropolitan of services at local level, and re-distribution and areas as an input to the long-term planning and equity being the function of the central govern- to forecast investment needs; (ii) the collection ment via national norms and policies. Voluntary of data on expenditures by sector and by MR; associations have been successful, in line with (iii) the analysis of the effectiveness and effi- what has happened around the world. Special ciency of spending. purpose agencies to coordinate transport servi- ces and infrastructure, as in the case of São Pau- Final Observations lo and Recife, will have an increasing role to play in extending urgent infrastructure and services. Brazilian MRs are not exploiting the opportuni- ties brought by agglomeration economies3, as The analysis of the Statue of the Metropolis, the evidenced by strong inequalities between the experience of MRs in Brazil and the internatio- core city and the rest of the MR. While strategic in nal experiences, point to a number of priority terms of concentrating opportunities of economic areas for the short and medium term. development and addressing social deficits, MRs traditionally lack an appropriate institutional Short term: framework to guide the planning, management, and finance of their development trajectory. Me- A. Raise the profile of the metropolitan is- tropolitan efforts across levels of government in sue. The Statute of the Metropolis provides an the past decade have been significant – but yiel- opportunity to position the metropolitan matters ded insufficient results. Consequently, the eco- – planning, participation, tools and governance nomic dynamism that is concentrated in MRs has structure – at the forefront of the discussions. It not translated into proportionally better urban would be important for the discussion to include development and housing conditions. Metropo- the identification of key services or inequalities in litan areas are still characterized by intense so- service delivery at metropolitan level, and extend cio-spatial disparities and mismatches between to include issues of economics, competitiveness, land use, the availability of infrastructure, and investment climate and comparative advantages. the degree of accessibility. B. Focus on what has worked. A critical Much has been discussed on whether some for- review of what has been learned with the vo- ms of metropolitan government should be im- luntary collaboration among municipalities is posed as a way to promote forced collaboration urgent and could bring a great deal of ideas. or integration. The federal status enjoyed by Consortia that are effective in providing servi- Brazilian local governments is not compatib- ces at metro or regional level could evolve into le with some forms of metropolitan governan- wider special purpose agencies. ce such as amalgamated or two-tier structures. C. Estimate financing needs and strategies in While these solutions are effective in handling metropolitan areas to mobilize resources. There redistribution in the provision of services, they is a persisting gap which needs to be filled in the 3. Agglomeration economies refer to the the benefits that firms and workers enjoy as a 20 result of proximity (WDR, 2009) Metropolitan Governance in Brazil © Joaquin Toro discussion around economic and financing as- understand if the establishment of a common pects. A multi-source infrastructure fund to leve- framework for the MRs – as set forth in the new rage investment financing should be considered Statute of the Metropolis – is the best option or in the future. This would require defining criteria, if the definition of guidelines for flexible metro- terminology, financial partners, and schemes to politan structures would be more appropriate prepare project finance. in the Brazilian context. D. Instill the need to coordinate land use with F. Include metropolitan concerns in any re- transport and housing in all city and state plans vision of fiscal federalism arrangements that and help cities to raise land-based revenues to may be discussed in the coming years. The finance infrastructure and social development. fiscal federalism in Brazil has been a source of Planning visions for transit and land-use integra- debate in recent years. If eventually a revision tion are crucial, and so is the adequate funding is undertaken by the government, it would be for successful execution. Transit and land-use in- appropriate to include metropolitan finance is- tegration can yield the income needed to expedite sues into the debate. and support the process. G. Address sustainability. Promoting sus- Medium term: tainability, reducing greenhouse gas (GHG) emissions, and preparing resilience plans are E. Evaluate whether a common framework the focus of the international community dea- for all metropolitan regions or flexible struc- ling with cities and metropolitan areas. tures would be more efficient. It is important to 21 Metropolitan Governance in Brazil © Joaquin Toro 22 Metropolitan Governance in Brazil Introduction 1. Brazil urbanized at a very rapid pace: the line with the decentralization trend, the 1988 share of people living in cities dramatically in- Constitution transferred the power to create creased in the past 40 years, growing from 56 metropolitan areas from the central govern- percent in 1970 to 84 percent in 2010 (see Fig- ment to the state governments. Municipalities ure 14). Since the turn of the century, Brazil’s were granted full federal status and made re- real GDP per capita has grown by 32 percent, sponsible for providing (and funding) basic while official poverty rates have fallen from 25 services at local level. Investment for infra- percent to less than 9 percent5. This urbaniza- structure became scarce due to the fiscal crisis tion process led to concentration of economic and several adjustment plans were necessary activity and population in selected areas, most- to control inflation. Per constitutional amend- ly around state capitals where infrastructure ments in 1995 and 1996 national policies were and economic activity acted as a magnet to pri- implemented in critical sectors such as edu- vate investment and job creation. This process cation and health, with state and local roles resulted in the emergence of a number of met- clearly defined including the share of revenues ropolitan areas. The Southeast and South cap- to be allocated to these sectors. Metropolitan itals (Rio de Janeiro, Sao Paulo, Curitiba, Belo authorities seemed to lose importance. Horizonte) were the first to grow, followed in the last 20 years by cities in the North (Manaus), in 4. The rapid economic development of the the Center West (Brasilia and Campo Grande) last decades led to deep spatial transforma- fuelled by agro-industry boom and derived de- tion. Cities grew rapidly but access to services mand, and in the Northeast (Petrolina) as con- was biased against the periphery where the sequence of the development of the São Fran- new migrants were settling. Restrictive federal cisco valley (World Bank, 2006). land use policies lead to unresponsive supply of affordable housing in the proximity of labor 2. These metropolitan areas – defined as areas markets. Low and middle income households whose economy passes over the city bound- had to settle in the outskirts. Mobility became aries – comprised cities of different sizes and difficult and commuting times long. specialization, linked by connectivity, labor flows and economic exchanges. Several gained 5. In the last decades, access to services has legal status in the 1970s when the central gov- improved considerably, but residents in the ernment created nine metropolitan regions periphery of the large metropolitan areas still (MRs). Their function was mainly to channel show limited access to sewerage, water and investment for infrastructure in support of the sanitation. Economic geography explains that industrial policy of the country. Financing was during the early phase of the urbanization pro- provided by national financing institutions such cess, differences in income and services across as the National Housing Bank (Banco Nacional places are likely to increase (World Bank, 2009). da Habitação, BNH6) and the Transportation De- Core cities will have higher incomes and better partment (Klink, 2008). services; the periphery will be in a worse situa- tion. As the mobility factor increases and edu- 3. In the following years, the model of metro- cation and health levels improve, both income politan governance changed considerably. In and access to services become more equally 4. Instituto Brasileiro de Geografia e Estatística (IBGE) 5. World Development Indicators (World Bank). 23 6. The National Housing Bank was created in 1964 to finance public housing. After its closure in 1986, Caixa Econômica Federal took over its functions and resources. Metropolitan Governance in Brazil © Joaquin Toro Box 1. Reducing social and regional disparities in Brazil Brazil’s population and activity are highly concentrated; territorial disparities have decreased since 1965 but are still high compared with OECD standards. Most unsatisfied needs are con- centrated in lagging regions, but there is been a process of convergence with the poorest regions moving towards the average performance. Key issues to enable a sustained regional growth include: (i) overcoming a multi-dimension fragmentation of policies; (ii) dealing with sub-national government’s financial and political autonomy to achieve policy coordination; (iii) shifting from addressing needs to identify local assets for endogenous growth; (iv) build- ing institutional capacity at sub-national level and increase civil society participation; and (v) improving monitoring and evaluation. Source: OECD, 2013 24 Metropolitan Governance in Brazil distributed. This convergence process is clearly ness, and based on national and international happening in Brazil but will take time (OECD, experiences, identify some factors that could 2013). The existing metropolitan framework in improve the collaborative framework across Brazil has attempted to deal with these differ- tiers of public decision-making. ences and promote growth. The new Estatuto da Metropole revisits some of the above questions 8. The audience includes policy makers and and suggests a way forward toward better spa- scholars interested in metropolitan gover- tial integration in rapidly growing urban places. nance in general and in Brazil in particular. While metropolitan governance should remain 6. In this process of spatial change and inclu- flexible to adapt to the changes in economic sion, what role has metropolitan governance activity and urban concentration, some basic played in Brazil? Would inequality and access guidelines are helpful to guide the ongoing re- to basic services be improved with a more ag- vision of metropolitan legislation and to foster gressive metropolitan collaboration? What can some consensus on such issues as the relation be learned from metropolitan governance in between metropolitan areas and local govern- Brazil and elsewhere? ments, funding for metropolitan areas, and ways to improve the vertical coordination us- 7. This report is a contribution to the above dis- ing metropolitan regions as an effective instru- cussion. Drawing from literature and data from ment. Brazil, it reviews the main concepts related to metropolitan governance, presents examples, 9. The report is organized in seven parts: and discusses some ideas relevant to the Bra- zilian case. The objectives are to take stock of 1) Analytical Framework, reviews the an- the alternatives currently in place, summarize alytical framework for metropolitan gover- the ongoing discussion about their effective- nance – drawing from Bahl et al. (2013) and Box 2. Why metropolitan governance? The need for collaborative policies at spatial level is anchored in the foundations of economic geography. Accepting the inevitability of urbanization for countries to grow – as density is the prerequisite for the economic transformation to industrialization - the World Bank’s World Development Report 2009 argues that governments may be concerned about the disparities in income and welfare as production concentrates in selected places. The solution would be “to promote economic integration to reduce those disparities” (World Bank, 2009). Such integration requires institutions and regulations to provide basic services and certainty to all; infrastructure to ensure spatial connectivity and enable people to move and access la- bor markets, education and cultural facilities) and spatially targeted interventions, such as slum upgrading and incentives to innovation. Such interventions will enable the convergence of living conditions across the space, so that everyone can take advantage of the benefits of urbanization. Source: World Development Report: Reshaping Economic Geography, 2009. 25 Metropolitan Governance in Brazil © Joaquin Toro Slack (2007) – and discusses the criteria that 4) Selected Metropolitan Experiences, de- helps associate metropolitan forms of man- scribes the characteristics of three selected agement to particular urban management metropolitan regions: São Paulo, Recife and objectives, such as efficiency, redistribution Belo Horizonte. and accountability in the provision of urban services. 5) Financing, summarizes issues of Metro- politan financing. 2) The Brazilian Case: Characteristics and Evolution, reviews the evolution of metro- 6) Recent Developments, The New Statute of politan governance in Brazil drawing from a the Metropolis, discusses the new Statute of voluminous literature produced by Brazilian the Metropolis (enacted in January 12, 2015). think thanks and international institutions. 7) Final Observations, closes the report with 3) Economic and Spatial Dynamics of Se- some final remarks. lected Metropolitan Areas, presents an over- view of the spatial developments in Brazil, and the picture of unequal service provision and income levels. 26 Metropolitan Governance in Brazil © Mariana Ceratti 27 © Joaquin Toro Metropolitan Governance in Brazil 28 Metropolitan Governance in Brazil Part 1. Analytical Framework 10. Large metropolitan areas have clear advan- enable higher tiers of the government to play tages in terms of economies of scale, agglom- a redistributive function using transfers based eration economies and attraction for private on needs and fiscal capacity. Accountability is investment. They also draw people looking for best served by having many local governments better jobs and living conditions. Demand for (home rule), as small governments are easier housing, infrastructure and social services in to control by the taxpayers. Eventually, the best these areas may become too great too soon, and governance model will be chosen according to without a rapid response, congestion, pollution the criteria that countries value the most, in- and social problems may erode the benefits of cluding the independence of local governments the large economic area. The existence of slums or home rule, a fundamental piece in the Bra- and other places without access to basic ser- zilian case. vices is the proof that urbanization may get out of hand at least until the governments can fill 13. For discussion purposes let us consider the gap (Bahl, Linn and Wetzel, 2013). five types of metropolitan governance models (Bahl et al, 2013). Annex 1 contains a detailed 11. The choice of a particular metropolitan explanation of the pros and cons of the models model depends on the type and size of the gov- and examples. ernment, as well as the criteria considered im- portant for service delivery. Both Slack (2007) (a) Jurisdictional Fragmentation (or and Bahl et al (2013) emphasize three criteria: fragmented one-tier model) occurs efficiency, equity, and accountability. Efficiency when small governments provide all deals with the capacity of the government to services. It is the most frequent mo- provide public services at the lowest cost and del for managing metropolitan areas, with potential to internalize externalities. Equi- especially when local autonomy and ty relates with the possibility to provide services home rule are important principles to lower income constituencies via cross-sub- for the local authorities. It is fou- sidization or targeted transfers. Accountabil- nd in Brazil, Europe, United States, ity refers to the proximity of taxpayers to the Switzerland, Canada, India and other government. Correspondence between expendi- countries (Slack and Chattopadhyay, ture decisions and revenues collection is also 2013). Local authorities are responsi- required to ensure accountability. ble for the provision of services, have tax powers and financial autonomy. 12. The challenge when defining a metropolitan Central and state governments inter- governance structure is to find the balance be- vene to ensure quality and social po- tween economic efficiency, equity and account- licies, monitor overall development ability (Bahl et al, 2013). The first two criteria policies and enforce the provision of – efficiency and equity – are served better by global goods such as safety and en- large government units. These allow for econ- vironment. omies of scale, provide a larger tax basis, and 29 Metropolitan Governance in Brazil (b) Amalgamation (or one tier consoli- a combination of tax and spending dated) happens when higher levels policies. On the financing side, tax of government (in general provin- rates are generally levied at uni- ces or states) have decided to mer- form rates across the region and the ge more than one low tier of gover- contribution of the lower tier to the nment for purposes of efficiency or upper tier depends on the size of the redistribution – sharing financing tax base. The larger the tax base, the across the local governments per- larger is its contribution to the upper mits cross subsidization across ju- tier (Slack, 2007). Madrid Metropo- risdictions with different tax base. A litan Area (see Box 4), Greater Lon- well-known case of amalgamation is don Authority and Greater Toronto the City of Toronto, now made of 14 Authority are examples of two-tier districts amalgamated in two phases metro models. It is unclear whether with the objective to reduce adminis- this alternative would ever work for trative costs. Cape Town District is Brazil, but it could be one of the al- also the result of the amalgamation. ternatives for the medium-term. The objective was to promote the in- clusion of low-income areas separa- (d) Special Purposes Agencies are for- ted according to racial divide since med to deliver services that spill the time of the Apartheid. The boun- over municipal boundaries in a me- daries of the City of Madrid were for- tropolitan area. This form of coope- med by amalgamation too; between ration is used in countries with a his- 1948 and 1954, the city integrated tory of strong and autonomous local 13 municipalities of its periphery. government. In the US, for example, Amalgamation would be difficult in one third of local governments have Brazil. Brazilian local governments special districts or school districts value their status of federal entities providing education, transportation, and may resist against the idea of gi- water and waste management. The ving up part of the home rule to be boards of the special districts are part of a wider metropolitan struc- responsible for the management of ture. these services as well as taxing and price setting. Separate districts can (c) Two-tier Government Model, inclu- be established such as a region-wide des an upper tier body (district or transit district or hospital district, metropolitan area) that provides ensuring that professionals without services characterized by economies political influence and with more of scale and externalities (transpor- professional expertise do the deli- tation, land use planning and solid very of services. Dedicated revenues waste disposal), while low tier lo- from user fees can be used to finance cal governments take care of the capital expenditures (Bahl and Linn local goods such as local parks or 1992). In Brazil, many states use firefighting. Redistribution is achie- special purpose agencies to provide ved at the upper level by means of 30 Metropolitan Governance in Brazil water services, sanitation, transport nments had to show approval of the and planning services. needs and solutions in a regional plan by a regional entity, as a pre (e) Voluntary Cooperation among local -requisite for obtaining grant fun- governments is a popular alternati- ding from the federal government ve. It involves “minimal” government for road and transport infrastructu- restructuring when city governments re and wastewater treatment. In the feel the need to enter into agree- Netherlands and in the EU, regional ments with other cities. Voluntary development councils (association cooperation takes the form of con- of municipalities) were created as a sortia (Brazil), urban communities requirement to access the EU deve- (France, see Box 3), inter-municipal lopment grants. In Brazil, thousands authorities (Spain and Belgium), and of consortia have been signed since core cities (the Netherlands). These the consortia law was approved in bodies can levy taxes, user charges 2005 (Abrucio et al, 2011 and Arret- and/or collect contributions from che, 2013). the municipalities. This type of vo- luntary cooperation is in general encouraged by fiscal incentives from state and federal governments. In the US, for many years local gover- Box 3. Urban Community of Marseille In France, nearly all-urban areas have been administered by urban communities (OECD 2006). The best-known case is the Urban Community of Large Marseille. It began in 1992 with three municipalities – Marseille, Marignane and Saint-Victoret – that created a public corporation (the Communauté de Communes Marseille Provence Métropole) focused on roads and traffic. Five years later, 17 other cities had joined, leading to the creation of the Urban Community of Marseille in 2000. It is a metropolitan organization with responsibility over regional econom- ic development, transportation, land use and housing, crime prevention, waste disposal and environmental policies. The member localities have adopted tax-sharing agreements whereby the Communaute Urbaine collects a common tax on business, thereby eliminating tax compe- tition among the local municipalities. Source: Slack (2007) 31 Metropolitan Governance in Brazil Box 4. Two-tier model - Madrid The metropolitan region of Madrid was created in 1983, taking over the province of Madrid. It includes an upper government (Comunidad Autónoma de Madrid , CAM) and 179 municipalities. More than half of the population is concentrated in the City of Madrid (3.2 million people). The CAM is responsible for global tasks such as spatial planning, housing, and economic development. It shares responsibilities with the central government for health, education and environmental protection. The largest spending item is health followed by education, and the largest source of revenues is the personal income tax followed by the value added tax (shared with the central government). The City of Madrid takes care of traffic, streets maintenance, public lighting, and solid waste management. Housing policy and spatial planning, among others, are shared tasks with CAM. The City’s largest spending item is in the areas of environment and mobility. The Property Tax, the Land Value Increase Tax and the central government transfers are the main sources of revenues. CAM collaborates with the municipalities in several ways: shares information, helps mediate disputes, helps with contractual arrangements for the delivery of public services, and establishes cooperation funds to promote social services and employment. There are also special purposes agencies that deliver services in transport, water and land. Some examples are: • Madrid Regional Transportation Consortium (Consorcio Regional de Transportes de Madrid, CRTM). Created in 1986, CRTM coordinates the public transportation systems, including the subway, the Municipal Transport Company, the suburban rail and buses, and the light rail. It manages the delivery system, sets fares and ensures a sustainable financial framework. It operates with great autonomy from the CAM, bringing together public and private transport services providers. • Canal de Isabel II Gestion SA, was created in 2008 to manage the water sector. It oversees water production, wastewater treatment, and conservation of rivers. The CAM and 111 regional municipalities are the company’s shareholders. It is the succession of a former entity – Canal Isabel II created in 1851– that is now the official holder of the concessions, provides authorizations and defines the service planning. • Arpegio. It is a company owned by the CAM, responsible for land management. Its activity is complementary to the private sector, putting on the market land at affordable prices. A voluntary horizontal cooperation agreement widely used in Madrid is the Mancomunidade, to which municipalities delegate some functions, such as the provision of public services or the promotion of economic development. It is a very flexible instrument that allows incorporating new objectives with time. In addition, the region has been able to develop strong linkages with the social and economic groups, including trade unions and business associations, thanks to their participation in regional entities and consultation bodies. Some authors argue that Madrid’s metropolitan model is one of the most accomplished in Europe. The two-tier government system has allowed the CAM and the municipalities to provide efficient delivery of public services and promote the development of the metropolitan region. Nevertheless, there are conflicting interests between CAM and the City of Madrid in terms of overlapping responsibilities and uncoordinated initiatives. Source: OECD Territorial Review Madrid 2007 32 Metropolitan Governance in Brazil © Joaquin Toro 33 Metropolitan Governance in Brazil © Joaquin Toro 34 Metropolitan Governance in Brazil Part 2. The Brazilian Case: Characteristics and Evolution 16. Coordination at the metropolitan level for 14. According to the definition of the Statute of land use, transport and housing was limited. the Metropolis, a metropolitan region is an ur- The dimension of the future urban growth was ban agglomeration that constitutes a metropo- difficult to predict and negative attitudes to- lis, an “urban space with territorial continuity, wards new migrants were the norm as illustra- that given its population and political and so- ted by the destruction of slums and forced re- cioeconomic relevance, has national influence moval of slum dwellers from the slums (World or influence over a region that, at minimum, Bank, 2006, 2011). The speed at which urbaniza- constitutes the area of influence of a regional tion occurred between 1970 and 1990 was coin- capital, according to the criteria defined by the cident with financial crisis, economic decline, IBGE”. According to the 2010 Census, Brazil has and a shift of governance authority over urban 36 MRs and 3 Integrated Development Regions matters to the states. (RIDE). Together, they account for almost half 17. The 1988 Constitution changed the nature of the country’s population (IBGE, 2010), about of the metropolitan governance in Brazil. First, 60 percent of its GDP (IBGE, 2012), and most of the power to create metropolitan regions was its economic and urban growth. MRs have been transferred from the central government to defined to help collaboration in regional po- states. States were given the power to establish licies. Out of these areas, 157 are considered “metropolitan regions formed by adjacent mu- functional and integrated following the OECD nicipalities in order to integrate the organiza- concept of metropolitan regions8. tion, the planning and the operation of public 15. The 1968 Constitution authorized the fede- functions of common interest” (Article 25). Up ral government to establish MRs, which were to 2012, 44 new MRs were created by the sta- supposed to develop long-term plans and be tes, in addition to the nine MRs created by the run by secretariats. They were seen as an im- federal government in 1973 (Arretche, 2013). portant tool to execute investment projects in On the other hand, the 1988 Constitution gave infrastructure, transport, housing and sanita- local governments the full status of federal en- tion. Financial resources were channeled from tities. As a result, mayors can challenge state the National Pension Fund (Fundo de Garantia policy initiatives and states need the municipal por Tempo de Serviço, FGTS) through the Na- agreement to be included in a particular me- tional Housing Bank (BNH) and the National tropolitan body. Some argue that this situation Department of Highways (DNER). Funding was weakens the capacity of the metropolitan areas conditional to the preparation of integrated to effectively coordinate the base and bridge the metropolitan development plans (Azevedo and central policies with the local implementation Mares-Guia, 2004). (Wetzel, 2013). 7. The MRs are: Belem, Distrito Federal, Belo Horizonte, Campinas, Curitiba, Florianopolis, Fortaleza, Goiana, Manaus, Porto Alegre, Recife, Rio de Janeiro, Salvador, São Paulo, Vitoria. 8. OECD methodology describes urban areas as “functional economic units,” overcoming the constraints tied to administrative boundaries and enhancing the capacity for comparison across regions and countries. Because data on urban areas are generally disaggregated according to administrative boundaries, urban areas or metropolitan regions, as they are referred to in this paper, are defined as aggregations of these administrative units (municipalities). Redefining “Urban”: A New Way to Measure 35 Metropolitan Areas, OECD Publishing, 2012. Metropolitan Governance in Brazil 18. The new millennium brought a new vigor to ble 2). The largest part have been targeted to the metropolitan debate in Brazil. After being help cities implement joint programs in health elected, President Lula enacted legislation that and education. Some are paradigmatic, like the impacted urban issues – the so called City Sta- Consortium of the Greater ABC Region in São tute9, which strengthened, through a number Paulo, a true consortium that was created from of instruments, local governments’ authority the bottom up and lead by mayors and civil so- over land use. In 2003, the Ministry of Cities ciety trying to produce a sustainable solution was created. In 2005, the Law of Public Con- for a region in crisis. sortia was enacted10. In 2007, the Committee for Federal Articulation (Comitê de Articulação 20. A new framework for metropolitan gover- Federativa, CAF) was created within the Pre- nance – known as the Statute of the Metropo- sident’s Office with the purpose of promoting lis – was enacteds in January 2015 (Law No. better coordination for the planning and imple- 13.089/2015). It includes principles to facilitate mentation of strategies between the central and the formal collaboration and constitution of me- municipal governments. The National Housing tropolitan regions in Brazil. It also provides ge- Program (Programa Minha Casa Minha Vida, neral guidelines for the planning, management PMCMV) was launched in 2009 to improve ac- and implementation of so-called public interest cess to affordable housing. The program repre- functions in metropolitan regions and urban sented years of dialogue and efforts to conso- agglomerations created by states. Moreover, (i) lidate the interventions of government levels, it gives general norms for the integrated urban private sector and the beneficiaries themselves. development plans that are to be developed in formally constituted MRs; (ii) it incentives the 19. Brazil has good examples of horizontal use of existing collaboration instruments; (iii) collaboration across municipalities and some it sets general guidelines and criteria for inter- success in vertical coordination (e.g. Belo Ho- federative governance – to be further regulated rizonte). Metropolitan forms vary according through specific and complementary state laws to the economic context and the needs of the (see Part 6 for more details). lower tiers of governments (Arretche, 2013). In the Greater ABC Region11, the need was to mana- The Brazilian angle ge water resources and cope with the aftermath 21. Tension between state governments (that of the collapse of the automobile industry and have the power over metro governments) and its impact in job creation and social welfare. municipalities (who are autonomous entities), In the São Paulo Metropolitan Area, improving lack of resources and continuing regional ine- transit is probably the core challenge faced by qualities have increased the complexity of me- authorities, followed by the challenge of provi- tropolitan governance in Brazil. A particular ding services to a very large population (more concern is that getting municipal adherence to than 19 million) and trying to bridge the gap policies and getting local legislative chamber that still divides the population of the core city approval is not easy and often requires “fine- from those in the periphery in terms of income grained strategies” (Arretche, 2013, page 57). and wellbeing. Since the Law of Public Consor- This raises the question of the value of imposing tia was approved in 2005, more than 19,000 vo- state policies (that are accepted reluctantly by luntary agreements have been signed (see Ta- 9. Law no. 10.257, July 2001, know as Estatuto da Cidade. 10. Law no. 11.107, April 2005. 11. Currently refers to seven cities in the state of São Paulo: Santo André, São Bernardo, São Caetano, Diadema, Mauá, Ribeirão Pires, Rio Grande da Serra, but originally referred 36 only to three smaller cities south of São Paulo: Santo André, São Bernardo do Campo, and São Caetano do Sul. Metropolitan Governance in Brazil © Joaquin Toro the lower tiers) compared with the efficiency of funds for metropolitan objectives would add to collaborative approaches based on agreed fra- the already high portion of revenues allocated meworks and consensual objectives. to education and health. The practices found in other countries of compulsory participation of 22. Indeed, the Constitutional arrangement municipalities in new metropolitan structures in Brazil precludes the application of some of would not be possible in the short run. Amal- the governance models described in Part 1. For gamation or annexation seems to be politically example, the two-tier model that would seem costly since it would require the agreement of the one that best combines local autonomy municipalities and this is would be unlikely. Fi- with upper-level redistribution function is not nally, both states and the federal government realistic in the short run. At present there are may see the existence of another layer of go- no independent upper-tier metropolitan level vernment as a fourth power that would raise bodies (States act as such for national policies) problems and competition for funds and for po- and it is unlikely to change since it would re- wer (Arretche, 2011). quire new funding, a sensitive matter at present (Rezende, 2011). New taxes are strongly resisted 23. In these circumstances, the provision of in Brazil and further use of municipal and state services on a metropolitan scale in Brazil tends 37 Metropolitan Governance in Brazil to either be the outcome of inter-municipal coordinate public policies. State representati- cooperation or upper-level (federal or state) ves are now part of the new CAF. Finally, the policy decisions as is the case in education and Statute of the Metropolis also reaffirmed that health. In the short-run, the alternative is to cooperation among states and municipalities promote the mechanisms that render municipal towards integrated urban development will be collaboration possible. The cases of Belo Ho- supported by the central. rizonte Metro governance and the Greater ABC Region, analyzed in Part 4, show interesting The role of the states examples. In the first case, the state govern- 25. As of 2011, twenty-four states had consti- ment was the main leader of the collaboration; tutional articles on the creation of metropoli- in the second case, collaboration happened wi- tan bodies. Many of them deal with the criteria thout any upper-level leadership. for their creation and the representation of the The role of the federal government municipalities and civil society. However, the status of municipalities as full members of the 24. While the power to create MRs has remained Brazilian Federation is seen as an impediment at the state governments mandates, the cen- for states to deal with metropolitan issues (Ar- tral government has been quite active in this retche, 2011). Getting municipalities to join a gi- area. First, tthe creation of the Ministry of Cities ven legislation adds actors to the decision pro- focused the political attention on the questions cess and often requires special incentives for of land use in the urban space and the issue of municipalities to agree to participate. This si- millions living in slums. Second, the approval tuation explains the reluctance of state gover- of the Law of Public Consortia provided a sta- nments to create metropolitan bodies for they tus to the consortia so that they could borrow may end up being another layer of contention and offer guarantees on their own (Klink 2008). and competition for resources and not really Third, the CAF provided an independent forum bridging policy making at state and federal le- of discussion. A working group under CAF was vel with local authorities. formed in 2007 to develop proposals to improve the management of metropolitan regions and Box 5. The role of the central government in other countries Other countries depict similar interest of the central government towards cities and metropolitan areas. Switzerland has approved a constitutional amendment allowing the federal government to intervene in cities and metropolitan issues. New coordination structures have been created including a Tripartite Agglomeration Conference, and policies have been designed to help urgent projects to improve metropolitan public transport, railway, and projects in city neighborhoods to advance the quality of life of the residents. In Australia, India and South Africa similar initiatives show the in- terest of the central government to promote inter-municipal co-operation. In the United States and Canada, the federal government has no formal role in local government and the only intervention in metropolitan issues is through financing assistance to fund infrastructure (Slack and Chattopad- hyay, 2013). 38 Metropolitan Governance in Brazil Table 1. Metropolitan Agencies in Brazil 23 Metropolitan Regions (2013) Metropolitan MRs Observations Institutions Metropolitan Council 23 All except Salvador. It is the executive body of the MR Metropolitan Fund 6 Belem, Belo Horizonte, Recife, Maceio, Steel Valley (MG), Greater Vic- toria Metropolitan Agency 4 Steel Valley, Campinas, Santos and BH Companies Salvador – Conder Recife – FIDEM São Paulo – EMPLASA Metropolitan parliament 2 Natal and Maringá Source: Ribeiro e Santos Junior (2010, p 62-64) 26. As direct managers of MRs, state govern- of executive functions. Recent efforts from the ments could use metropolitan agencies to pro- State Government of Rio de Janeiro to develop mote collaboration, innovation and effective an institutional model for metropolitan gover- policy changes at metropolitan level. Howe- nance are woth notice. Through the Decree N. ver, many states seem to neglect this potential 44.905, dated August 11, 2014, the Metropolitan (Gouvea, 2005). Most state constitutions include Chamber for Governmental Integration (Câma- a reference to metropolitan regions but without ra Metropolitana de Integração Governamen- details or objectives. In some cases, the admi- tal do Rio de Janeiro) and the Executive Group nistrative boundaries of the MRs do not meet for Metropolitan Management (Grupo Executi- the criteria of density and linkages between the vo de Gestão Metropolitana) were created. The core city and the other municipalities. States first has deliberative power, and is composed by also face the lack of interest of member cities. the Mayors of each municipality within the MR Looking at the five typical institutions in a me- and chaired by the State Governor. Its main role tropolitan government in Brazil – Metropolitan is to collectively collaborate for metropolitan Council, Metropolitan Fund, Metropolitan Agen- public policy formulation, including the deve- cy, Metropolitan Parliament and Companies12 – lopment of an institutional governance model Ribeiro and Santos Junior (2010) find a great va- and integrated planning system. According to riation across states (see Table 1), although all the proposed model, the Executive Grup will agencies had a metropolitan council in charge hold attributions similar to those of a Metropo- 12. The Metropolitan Council is the most important agency. It includes the cities’ Mayors litan Agency. and state representatives. The Metropolitan Fund includes resources up to BR$ 3 million and finances analysis and studies. The Metropolitan Agency is created to focus on a particular project and get civic participation. Companies are special purpose agencies that serve the metropolitan area with a specific mandate, mostly for planning. The 39 Metropolitan Parliament is supposed to approve laws within the metropolitan area. Metropolitan Governance in Brazil Table 2. Number of Municipalities included in Consortia established by 2011 Inter With With Federal With Private Sectors Total Municipalities States Government Sector Health 1.906 1.167 558 588 4.219 Social Security 222 867 660 558 2.307 Education 248 1.116 767 571 2.702 Culture 161 385 206 213 965 Tourism 351 275 138 151 915 Child assistance 149 513 321 287 1.270 Urban Development 255 420 247 105 1.027 Transport 295 428 207 129 1.059 Housing 106 720 428 159 1.413 Jobs/Employment 114 358 164 216 852 Sanitation and waste management 343 387 231 144 1.105 Environment 387 467 225 191 1.270 Total 4.537 7.103 4.152 3.312 19.104 Source: Abrucio, Sano and Sydow (2011) Inter-municipal co-operation municipalities included in consortia negotiated among municipalities and with states, federal 27. The Law on Public Consortia (2005) rec- government and private sector entities. Health ognized the capacity of the municipalities to is the sector with largest number of agreements, choose their partners for association and con- as states and the federal government encour- ferred a legal status to these agreements, grant- aged consortia among local governments to ing them the capacity to receive funds, borrow speed the implementation of the National Health and extend guarantees. Consortia were autho- System (SUS). Other municipal agreements have rized to carry project work, planning, implemen- been promoted by the federal government. This tation, and regulation. The national Framework is the case of the consortia for Food Security and Laws on Solid Waste (201013) and Basic Sanita- Local Development. At the moment, there are 40 tion (200714) explicitly refer to instruments of consortia in the 26 states including 580 munici- collaborative and shared governance such as palities and representing 11 million inhabitants. public consortia. Table 2 depicts the number of 13. Law no. 12.305, August 2010. 14. Law no. 11.445, January 2007. 40 Metropolitan Governance in Brazil 28. State governments have participated in of Environment had organized 16 in solid waste voluntary arrangements, especially in the ed- collection and disposal (Abrucio et al, 2011). ucation and health sectors. In the state of Pará, the Secretary of Regional Integration is part of 30. Similar arrangements exist with the private the consortia in water, health, sanitation, sol- sector, notably in health, education, assis- id waste, safety, mobility and environment. In tance and social development. The Consortium 2011, 12 consortia with state participation had of the ABC Region was the first case to show the been signed (Abrucio et al, 2011). In Ceara, the benefits of coordination to discuss questions of state government, through Secretariat of Cities, economic development and restructuring. At is supporting the implementation of a World present, the cases of Belo Horizonte and Recife Bank financed program in the South of the state animate the debate (described in Part 4). These (Cariri region). The program supports key eco- experiences, particularly that of the Greater nomic clusters – the tourism sector being one ABC Region, helped to create from the end of of them – , including investments in general ur- the 1990s a coalition in support of the territori- ban upgrading of the city centers. It also aims al associations in which metropolitan manage- at strengthening coordination and improving ment is a central question. institutional capacity of the 9 municipalities to collectively handle aspects, such as solid waste. Similarly, the state of Mato Grosso together with the Municipal Association of the state has established 15 consortia in agro-industry and family agriculture businesses. 29. There are also inter-state consortia. One example of state association is the consortium © Mariana Ceratti between Ceará, Piauí and Maranhão, that led to the creation of the Sustainable Regional De- velopment Agency to help implement tourism projects in 19 cities between Barreirinhas (MA) and Acarajú (CE) – called the Emotions Route – in addition to some training institutions on tourism and hospitality. The Health Pernam- buco-Bahia consortium was created in 2009 to manage the Emergency Care of the Hospital in Petrolina. In 2008, Sergipe and Alagoas began talking about formalizing consortia to promote the development of the region of the low São Francisco Valley and six working groups have been created to jointly prepare this integrated region plan. There are also tri-partite consortia between municipalities, states and the federal government. For example, by 2011 the Ministry 41 Metropolitan Governance in Brazil © Joaquin Toro 42 Metropolitan Governance in Brazil Part 3. Economic and Spatial Dynamics of Selected Metropolitan Areas 31. This section describes general trends on represent 60 percent of the national income, economic, demographic and social conditions 80 percent of the headquarters of major enter- of the selected MRs in Brazil. The analysis prises, 70 percent of municipal taxes, 46 per- uses data collected through the 2010 and 2000 cent of municipal revenues and 42 percent of Population Census, formal employment data municipal investments (Rezende, 2011). MRs from the Ministério do Trabalho e Emprego, or have grown more rapidly than the rest of the MTE, and information available in the Brazil- country, both in population and in GDP terms. ian relevant literature and official reports. De- The fastest growing regions have been Fortale- tailed information on three selected MRs –São za, Salvador and Curitiba (with average annual Paulo, Belo Horizonte and Recife – are provid- growth rates above 3 percent) mainly due to the ed in Part 4. These three MRs were chosen for influx of people in the periphery (at 3 percent the size of their economy and the relevance of compared with 1.37 percent in the core). As ex- their metropolitan experience. pected, the large capitals of São Paulo and Rio de Janeiro have grown slower – 1.85 and 1 per- 32. Brazil has undergone massive urbanization cent respectively (see Table A2- 3, Annex 2). in the last 80 years (see Figure 1), leading to the emergence of a number of MRs. This pro- Figure 1. Share of urban and rural population cess, known as metropolização in Portuguese, in Brazil involves the expansion beyond the jurisdic- tional boundaries of a core municipality to in- corporate surrounding municipalities, forming 100% % Urban metropolitan urban agglomerations linked to- 90% % Rural gether by economic and residential commuting patterns. This section describes the main devel- 80% opments of Brazilian Metropolitan sector using 70% the 15 urban agglomerations categorized by the Observatório das Metrópoles (2005) using crite- 60% ria comparable to OECD methodology. Figure 2 50% shows a map of the selected MRs (Belém, Distri- 40% to Federal, Belo Horizonte, Campinas, Curitiba, Florianópolis, Fortaleza, Goiânia, Manaus, Por- 30% to Alegre, Recife, Rio de Janeiro, Salvador, São 20% Paulo e Vitória). 10% 33. In 1960, Brazilian MRs represented 21 per- 0% 1940 1950 1960 1970 1980 1990 2000 2010 cent of the country’s population (15 million), and this share grew to 25 percent in 1980, 45 percent in 2000, and 60 percent today. MRs Source: IBGE (2010) and own elaboration. 43 Metropolitan Governance in Brazil Figure 2. Selected MRs of Brazil15 R . B. D E G U YA N A VENEZUELA French SURINAMEGuiana ATLANTIC COLOMBIA Boa Vista (Fr.) BRAZIL OCEAN RORAIMA AMAPÁ Macapá ECUADOR Belém São Luis Santarem Manaus Fortaleza AMAZONAS Teresina MARANHÃO CEARÁ RIO GRANDE DO NORTE PARÁ Natal PARAÍBA João Pessoa PIAUÍ PERNAMBUCORecife ACRE Rio Porto Branco Velho Maceió Palmas ALAGOAS PERU RONDÔNIA TOCANTINS Aracaju MATO BAHIA SERGIPE GROSSO Salvador F.D. Cuiabá BRASILIA ATLANTIC BOLIVIA GOIÁS Goiânia MINAS GERAIS OCEAN MATO Belo Horizonte ESPÍRITO SANTO Campo GROSSO Grande Vitória DO SUL PA C I F I C SÃO PAULO RIO DE JANEIRO Campinas OCEAN PA R AG UAY São Paulo Rio de Janeiro 0 200 400 600 800 Kilometers PARANÁ Curitiba CHILE SANTA CATARINA Florianópolis BRAZIL METROPOLITAN REGIONS RIO GRANDE MAIN CITIES ARGENTINA DO SUL Porto Alegre GSDPM Map Design Unit STATE CAPITALS This map was produced by the Map Design Unit of The NATIONAL CAPITAL IBRD 40189 World Bank. The boundaries, colors, denominations U R U G UAY STATE BOUNDARIES JULY 2013 and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. INTERNATIONAL BOUNDARIES Source: IBGE (2010) and own elaboration. 34. The renewed economic growth during the parities persisted, both in terms of income and period 2000-2010 – an average GDP growth of access to basic services. As it often happens, 6 percent a year – was felt in major metropol- local governments lag in their response to the itan areas, as they have been engines of eco- demand for basic services associated with the nomic growth. Economic activity attracted fur- influx of population in the core and periphery. ther population. Figure 3 shows how population growth related to GDP growth in the 15 metro- politan areas chosen for this analysis. By 2010, half of the Brazilian poor and 90 percent of the people living in subnormal conditions16 were found in metropolitan cities17. Socio-spatial dis- 15. Table A2- 1 in Annex 2 shows the population for the 15 selected MRs. 16. Subnormal conditions or slums are defined as situations where households do not have land title, they lack access to water and sanitation, experience overcrowding, and use temporary materials to build their shelter. 17. Based on IBGE, 2010. 44 Metropolitan Governance in Brazil Figure 3. GDP and Population Growth, Metropolitan Regions, 2000-2010 14 12 10 8 6 4 2 0 a ba ria a m lis s s te re fe lo iro or DF au na ez ni lé ci on eg au ad iti po tó ne iâ al an pi Re Be a Al riz P r Vi lv Go nó íli Ja rt Cu m M o Sa Ho o as Fo Ca ia Sã de rt Br or Po lo o Fl Ri Be Annual Population Growth (%) GDP (%) Source: IBGE (2000, 2010)(see Table A2- 1 and Table A2- 3 Annex 2) 35. These 15 metropolitan areas represent ing to the hegemony of the Southeastern Region more than one-third of the total Brazilian pop- in terms of population and economy. ulation and all experienced population growth during 2000–2010. The Center-West region reg- 36. More than half the population of these MRs istered the most dramatic changes, with Brasília typically lives in the capital city, 80 percent being RIDE DF (Região Integrada de Desenvolvimento concentrated in few large centers in most cases. do Distrito Federal e Entorno) nearly doubling Outliers in this trend are Porto Alegre and Campi- in population, and Goiânia growing at almost nas, having only one-third of the total MR popula- 25 percent. Manaus, Fortaleza, Belo Horizonte tion. This denotes a pattern of population distribu- and Florianopolis also registered growth high- tion where small cities provide residence to a large er than 20 percent. Most of the demographic population commuting to the core center (see Table growth followed the improvement in econom- A2- 2, Annex 2). ic conditions and employment. São Paulo and Rio de Janeiro continue to be the largest MRs in terms of production and population, contribut- 45 Metropolitan Governance in Brazil © Mariana Ceratti 37. The selected 15 MRs represent a little more than half of the national GDP, their share hav- ing slightly declined during 2000–2010 from 54 to 51 percent, probably due to the relative in- crease of the remaining regions. A large share of Brazil’s population and GDP remains concen- trated within the Southeastern Region of the country where the most populous (and richest) cities, São Paulo and Rio de Janeiro, are locat- ed. São Paulo region contributed to 18 percent of the nation GDP growth during the ten-year period (Figure 4), followed by Rio de Janeiro with about 7 percent contribution. The contri- bution of the North and Northeast was smaller in line with the relative size of their economy. Figure 4. Ranking of Brazilian MRs by contri- bution to national GDP growth, 2000–2010 20% contribution to national GDP growth (%) São Paulo MR 18% 16% 14% 12% 10% 8% Rio de Janeiro MR 6% RIDE DF Belo Horizonte MR 4% Campinas MR Porto Alegre MR Curitiba MR Salvador MR Fortaleza MR 2% Goiânia MR Vitória MR Florianópolis MR Recife MR Manaus MR 0% Southeast Middle-West South Northeast North Brazil’s Regions Source: IBGE (2000, 2010). 46 Metropolitan Governance in Brazil Figure 5. Ranking of MRs by 2010 income: GDP per capita in MRs/RIDE vs. average for Brazil RIDE Distrito Federal São Paulo MR Campinas MR Vitória MR Curitiba MR MRs / RIDE Porto Alegre MR Manaus MR Rio de Janeiro MR Belo Horizonte MR Salvador MR Florianópolis MR Recife MR Goiânia MR Fortaleza MR Belém MR 0 10000 Média 30000 40000 50000 Nacional GDP per capita (in R$ 1,00) - 2010 Source: IBGE, 2010. 38. In 2010, per capita GDP was often higher in 40. In terms of concentration of highly paid MRs than in the rest of the country. Ten out of jobs, the core cities concentrate a higher share the 15 MRs in this study outperform the national of people earning more than 10 minimum wa- average of GDP per capita in 2010, with Brasília, ges20 and with higher education degrees. The followed by São Paulo and Campinas as the top difference is especially high in the Southern and three (see Figure 5). Belém, Recife and Fortale- Central-West Regions where the demand for high za, Goiânia and Florianópolis, lagged behind in skilled manpower may be higher. This result was terms of per capita GDP. confirmed by similar analysis carried out by the Ministry of Cities and Cities Alliance (2010), con- 39. While nominal per capita income grew well firming that core cities are richer and earning above 10 percent a year, and real growth ranged gaps are larger between the core and the rest between 3 and 7 percent18, income and wage of the MR. In poorer MRs, the gap between the levels grew slower, with the exception of Salva- highest and lowest wage earners is more narrow dor, Fortaleza, Rio de Janeiro and Goiânia which (OECD, 2013). performed better than the average19. A more de- tailed analysis would be needed to understand whether there has been a substitution of labor for capital in the overall metro system or wheth- er the lower levels of income and wages earned may be weighting in the average growth rates. 18. In line with IBGE estimates for the extended consumer price index (IPCA). 20. Based on IBGE Census data on monthly nominal income in 2010. 19. The State of the City report shows a similar result (POLIS et al., 2012). 47 Metropolitan Governance in Brazil Figure 6. Poverty and income distribution indicators in Brazil (2001-2013) 30% 0.60 25% 0.58 20% 0.56 Poverty index 15% 0.54 Gini 0.525 10% 0.52 8.9% 5% 0.50 4.0% 0% 0.48 2001 2002 2003 2004 2005 2006 2007 2008 2009 2011 2012 2013 Gini coefficient Extreme poverty line (. Accessed on Paulo, pp. 259-288 august 20th 2012. Reis, R.C. de., 2011. Alternativa Política no con- MkKinsey Global Institute, India’s urban awake- texto federativo. Integração no Grande ABC ning: Building inclusive Cities, sustaining Paulista. Blucher Acadêmico, São Paulo. economic growth. Available at www.mck- Rezende, Fernando. 2011. Em busca de um novo insey.com/insights/urbanization/urban_ modelo de financiamento metropolitano. In awakening_in_india Fernanda Magalhaes, ed. Regiões Metropo- Observatório das Metrópoles, 2009. Arranjos litanas no Brasil: um paradoxo de desafios Institucionais para a Gestão Metropolitana. e oportunidades. Washington, DC: Banco Relatório de Pesquisa. UFRJ, Rio de Janeiro. Interamericano de Desenvolvimento OECD. 2013. OECD Territorial Reviews. Brazil 2013. OECD Publishing. Available at http:// dx.dor.org/10.17887/9789264123229-en 99 Metropolitan Governance in Brazil Rezende, Fernando and Garson, S. 2006. Financ- Ter-Minassian, Teresa. 2012. Reform Priorities ing metropolitan areas in Brazil: politi- for sub-National Revenues in Brazil, IADB, cal, institutional and legal obstacles and Policy Brief, IDB-PB-157. emergence of new proposals for improving coordination. Revista de Economia Contem- Vogel R. and Imbroscio, D. 2013. Governing Me- poranea, Vol 10, no 1. Jan/April/ tropolitan Regions in the United States. In Slack and Chattopadhyay eds. Governance Ribeiro, Luiz Cesar de Queiroz. ed. 2009. “Hierar- and Finance of Metropolitan Areas in Fe- quização e Identificação dos Espaços Urba- deral Systems. Oxford University Press. P. nos” Conjutura Urbana. 291-323. Ribeiro and Santos Junior, 2010. As grandes cida- Wetzel, D. 2013. Metropolitan governance and des e questão social brasileira: reflecçõoes finance in São Paulo. In: Bahl, R.W; Linn, J.F sobre o Estado de excepção nas metrópoles & D.L. Wetzel (Eds.). Financing Metropoli- brasileiras. University of British Columbia. tan Governments in Developing Countries, Lincoln Institute of Land Policy, Cambridge, Sansom, G., Dawkins, J., Tan, S., 2012. The Massachusetts, pp. 309–338. Australian Model of Metropolitan Gover- nance: Insights from Perth and South East World Bank, 2013. Metropolitan Pollution Mana- Queensland, UTS: Centre for Local Govern- gement: Taking Stock. Washington, D.C. ment, University of Technology, Sydney. World Bank, 2011. Planning, Connecting, and Fi- Santos Júnior, de O. A., Montandon, D. T., 2011. nancing Cities Now: Priorities for City Lea- (Eds.) Os Planos Diretores Municipais ders. Washington, D.C. Pós-Estatuto da Cidade: Balanço crítico perspectivas. Letra Capital, Observatório World Bank, 2009. World Development Report: das Cidades,Rio de Janeiro. Reshaping Economic Geography. Washing- ton, D.C. Silva, G., Fonseca, M. de L., 2013. São Paulo City Region. Constitution and development dy- World Bank. 2006. Brazil—Inputs for a Strategy namics of the São Paulo Macrometropolis. for Cities: A Contribution with a Focus on International Journal of Urban Sustainable Cities and Municipalities. Report No. 35749- Development, Forthcoming. BR. Washington, DC: Latin America and the Caribbean Region, Finance, Private Sector Slack, E. 2007. Managing the Coordination of and Infrastructure Management Unit. Service Delivery in Metropolitan Cities: The Role of Metropolitan Governance, Policy Research Working Paper, The World Bank Slack, Enid. and Rupak Chattopadhyay.2013. Governance and Finance of Metropolitan Areas in Federal Systems. Oxford University Press. 100 Metropolitan Governance in Brazil Annex 1. Metropolitan Models, Pros, Cons and Examples Governance Model Examples 1. Jurisdictional Fragmentation United States: the municipalities and special districts (Fragmented one-tier government provide services. model) Copenhagen: 45 municipalities in charge of service de- General-purpose governments op- livery and taxation. National capital region has health erate in the metropolitan area with responsibilities but no tax authority. independence to choose public ser- vices, taxes, user charges and debt Paris: 8 million people; 80 municipalities; public compa- financing arrangement. Service de- nies responsible for service provision livery is mostly with lower tier of government. Home rule heavy. Stockholm: 65 municipalities and 5 counties. Pros: close and accountable to con- Mexico City: metropolitan area includes the Federal Dis- stituencies trict and its 16 delegations. The Federal District has the functions of any district but has no taxing powers. Cons: may prevent economies of scale; too small to enable coordina- São Paulo: 18 million people; includes 39 municipal gov- tion; may augment regional differ- ernments without overlapping metropolitan government. ences in welfare. Coordination is attempted by agreements among munici- palities and state government. 101 Metropolitan Governance in Brazil Governance Model Examples 2. Amalgamated (One-tier consoli- Toronto: Single metro government that provides all kinds dated government model) of services. The province established Greater Toronto Services Board to oversee regional transit. Area wide metropolitan government provides general services. In theo- Tokyo: 12 million people. Below the metropolitan level ry, the metro government should be there are 23 special wards, 26 cities, five towns and one elected and have powers to regulate village. The wards carry out service delivery delegated services and financing. by Tokyo metro government. Pros: Greater coordination & equal- Cape Town: amalgamated 61 LGs local governments ization. to guarantee more equitable services. Provides water, sewerage and drainage services. Social services shared Cons: it reduces the power of local with province. constituencies to influence the local budget, often brings inter-govern- Istanbul: (73 local governments) – local government must mental conflict with other levels of transfer 35 percent of their resources to the metropolitan governance. region to finance its services. In addition, 10 percent are transferred to the metro authority to finance transport investment. 3. Two-tier government model Community of Madrid: Community of Madrid with 179 municipalities and extensive powers. Upper-tier provides regional ser- vices to promote efficiency (e.g. Greater London Authority: created in 1999 as senior level transportation and solid waste dis- of governments. Mayor elected. Responsibility of trans- posal); lower tiers provide local port, economic development, land use planning, environ- services. mental protection; 80 percent budget spent on transport; 63 percent financed by central government grants, 20 Pros: helps finding the balance be- percent user charges and 10 percent property tax. The 23 tween efficiency and equity, and ac- independent boroughs provide education, health and oth- countability. er services. Cons: duplication of efforts may result in higher costs; need for co- ordination may lead to delays and inefficiencies. 102 Metropolitan Governance in Brazil Governance Model Examples 4. Special purpose agencies Copenhagen Regional Transportation: coordinating body is a joint regional government/municipal agency. Service delivery is the responsibil- ity of a separate public company or Great Vancouver Regional District: consolidates all the state agency. functions provided by special districts – solid waste, wa- ter, and capital expenditures. Finance comes from user Pros: Firm can run at efficient lev- charges. Municipalities are represented. els, pay better to its staff, and can make use of debt finance. Water boards in the Randstad (Netherlands): responsible for flood control, water quality, and wastewater treat- Cons: accountability to the local ment. Athorities democratically elected. government is weakened although municipalities can have representa- Lausanne and Stockholm: city-owned companies provide tives in the governance bodies. services in housing, real estate management, port opera- tions and water utilities. Profits go to the city. Bogota: a special agency takes care of the metro trans- portation. Operations fully financed by user charges and a surcharge in the gasoline tax. 5. Voluntary Cooperation Stockholm: several mechanisms from federation to join provision of services. Voluntary cooperation between lo- cal governments to establish an Metropolitan Vancouver: 21 municipalities (see above). area-wide body with no permanent, Created in 1967. Member municipalities are free to leave independent institutional status. the arrangement Common model in regions where home rule is important. Marseille: communities around Marseille formed a spe- cial entity with 11 municipalities Pros: Easy to establish, respond to the needs of the local governments, Bologna: 48 municipalities signed the Accordo per la Cit- have flexibility. tà Metropolitana (ACM) that includes the mayors and is chaired by the governor. Cons: May lack legal approval and decisions are not binding. Brazil São Paulo: Greater ABC was formed bottom up by 6 may- consortia are a good model. ors to deal with the impact that the decline of the auto- motive industry had on employment and income levels. Source: Bahl, R. (2013), Slack (2007) 103 Metropolitan Governance in Brazil Annex 2. Information of Selected Metropolitan Areas Table A2- 1: Population rate increases in MRs/RIDE (2000–2010) Population Average Region of Population Population growth annual MR State Brazil (2000) (2010) 2000–2010 population (%) growth (%) Belém Pará 1.795.536 2.101.883 17,1 2,8 North Manaus Amazonas 1.645.832 2.106.322 28,0 2,1 Fortaleza Ceará 2.984.689 3.615.767 21,1 1,1 Northeast Recife Pernambuco 3.337.565 3.690.547 10,6 1,8 Salvador Bahia 3.021.572 3.573.973 18,3 8,1 Cen- Brasília/DF RIDE-DF 2.051.146 3.717.728 81,3 2,5 ter-West Goiânia Goiás 1.743.297 2.173.141 24,7 2,4 Belo Horizonte Minas Gerais 4.349.425 5.414.701 24,5 2,0 Campinas São Paulo 2.338.148 2.797.137 19,6 0,9 Southeast Rio de Janeiro Rio de Janeiro 10.894.156 11.835.708 8,6 1,0 São Paulo São Paulo 17.878.703 19.683.975 10,1 1,7 Vitória Espírito Santo 1.438.596 1.687.704 17,3 1,6 Curitiba Paraná 2.726.556 3.174.201 16,4 2,4 South Florianópolis Santa Catarina 816.315 1.012.233 24,0 0,6 Rio Grande do Sul 3.718.778 3.958.985 6,5 2,8 Source: IBGE (2000, 2010) 104 Metropolitan Governance in Brazil Table A2- 2: Characteristics of MRs/RIDE covered in this work No. of Percent of No. of municipalities Region of Area of MR/ metropolitan MR/RIDE metropolitan where 80 percent Brazil RIDE (km2) population in municipalities of population capital city lives Belém 2.537 5 68,2 2 North Manaus 101.475 8 85,6 1 Fortaleza 5.795 15 67,8 3 Northeast Recife 2.774 14 41,7 5 Salvador 4.354 13 74,9 2 Brasília/DF 55.402 23 69,0 4 Center-West Goiânia 7.315 20 59,9 2 Belo Horizonte 14.420 34 48,6 5 Campinas 3.645 19 38,6 15 Southeast Rio de Janeiro 5.327 19 53,4 5 São Paulo 7.947 39 57,2 8 Vitória 2.331 9 19,4 4 Curitiba 15.419 16 55,2 6 South Florianópolis 7.466 22 41,6 4 Porto Alegre 9.803 32 35,4 10 Source: IBGE (2010) 105 Metropolitan Governance in Brazil Table A2- 3: 2010 GDP and income considerations of MRs/RIDE covered in this work Average Average annual GDP per nominal GDP of MR nominal growth Standard Region of capita income MR/RIDE rate GDP per deviation Brazil (in R$ 1,000) capita 2000-2010 of income (in R$ 1.00) (in R$ (%) 1.00) Belém 23.272.889,91 11.072,40 13,8 997,65 307,1 North Manaus 51.396.052,61 24.400,85 14,7 939,09 283,8 Fortaleza 50.605.704,49 13.995,84 12,4 757,56 253,6 Northeast Recife 61.443.178,05 16.648,80 11,4 956,72 352,3 Salvador 75.605.692,03 21.154,52 11,6 1.072,05 307,4 Brasília/DF 160.213.432,06 43.094,45 13,2 1.113,91 416,7 Center-West Goiânia 35.970.632,66 16.552,37 10,9 1.070,50 267,3 Belo Horizonte 120.833.976,49 22.315,91 12,9 1.141,16 448,9 Campinas 98.485.073,81 35.209,24 9,8 1.675,17 404,0 Southeast Rio de Janeiro 275.189.465,11 23.250,78 9,6 1.317,32 566,7 São Paulo 701.848.590,74 35.655,84 10,5 1.510,48 574,9 Vitória 51.867.295,93 30.732,46 12,0 1.559,62 678,8 Curitiba 94.994.579,70 29.927,08 12,6 1.130,10 331,3 South Florianópolis 18.718.092,08 18.491,88 11,2 1.488,81 440,5 111.653.655,67 28.202,60 10,5 1.287,95 329,7 Source: IBGE (2010) 106 Metropolitan Governance in Brazil Table A2- 4: Households with Access to Basic Services (percent) Region of Brazil/ Access Acesso a tratamento de esgoto Access Households to direct Access to to piped Access to Use of Use of in subnormal MR / solid waste bathroom water general septic other agglomerates collection (2010) (2010) network tank drain (2010) Municipality (2010) North Belém 58,8 68,7 97,8 9,5 21,3 69,3 32,2 Manaus 57,8 53,3 95,4 10,8 14,1 74,9 7,5 Northeast Fortaleza 70,0 63,7 97,1 21,6 12,8 65,6 3,8 Recife 80,7 80,0 98,2 28,0 15,1 56,9 17,3 Salvador 90,7 72,5 97,9 56,0 12,0 32,0 6,9 Center-West Brasília/DF 72,5 72,0 98,9 20,1 16,3 63,4 0,3 Goiânia 74,9 83,9 100,0 14,2 16,5 69,4 0,0 Southeast Belo Horizonte 87,1 86,7 99,8 60,0 6,7 33,3 2,6 Campinas 92,3 95,7 100,0 81,5 8,1 10,4 0,9 Rio de Janeiro 69,7 89,1 99,9 66,5 12,2 21,3 6,3 São Paulo 89,8 93,1 100,0 69,4 12,8 17,8 4,7 Vitória 93,3 91,0 100,0 69,3 6,0 24,4 9,3 South Curitiba 77,0 78,3 98,8 31,0 30,3 38,6 1,3 Florianópolis 74,1 87,8 100,0 21,3 58,8 19,9 0,8 Porto Alegre 69,5 93,9 99,7 48,1 36,7 15,2 1,2 Source: IBGE (2010) 107 Metropolitan Governance in Brazil Table A2- 5: Percentage of commutes greater and less than one hour across the 15 MRs More than 1 Region of Brazil Metropolitan Region/RIDE 1 hour or less hour Belém 86,1 13,9 North Manaus 83,9 16,1 Fortaleza 88,1 11,9 Northeast Recife 83,3 16,7 Salvador 80,4 19,6 Brasília/DF 80,7 19,3 Center-West Goiânia 87,6 12,4 Belo Horizonte 80,0 20,0 Campinas 90,6 9,4 Southeast Rio de Janeiro 71,4 28,6 São Paulo 75,0 25,0 Vitória 85,0 15,0 Curitiba 86,1 13,9 South Florianópolis 92,0 8,0 88,7 11,3 Source: IBGE (2010) 108 Metropolitan Governance in Brazil Annex 3. Profiles of 15 Metropolitan Regions To visualize the data click on the link: http://documents.worldbank.org/curated/en/2015/05/24569601/ 109 Banco Mundial – Brasil World Bank – Washington, DC SCN Quadra 2 – Lote A – Ed. Corporate Financial Center – Cj. 702/703 1818 H Street NW Brasília, DF 70.712-900 Washington, DC 20433 Fone: +5561 3329-1000 Phone: +1 202 473-1000 E-mail: informacao@worldbank.org E-mail: informacao@worldbank.org