4 COMPETITIVE CITIES FOR JOBS AND GROWTH 101715 COMPANION PAPER 4 A USER’S GUIDE TO IMPLEMENTING CITY COMPETITIVENESS INTERVENTIONS Drilon Gashi and Joanna Watkins December 2015 2 TABLE OF CONTENTS Background and Acknowledgements 5 Introduction 6 I. The City Wedge Framework 7 Three Points of Leverage 8 1. “Growth coalitions” formed with private sector firms and civil society 8 2. City government internal scope and capacity 9 3. Inter-governmental relations 10 Using the City Wedge to Identify Key Actors for Implementation 11 II. Applying the Framework: Evidence from Six Cities 12 III. Organizing to Deliver 19 Common Implementation Structures 19 Economic Development Agencies 19 Delivery Units 21 Public-Private Boards for Economic Development 23 Common Implementation Problems 24 Coordination and Accountability Failures 24 Lack of Economic Development Strategy Viability 25 Limited Cooperation with the Private Sector 26 Limited City Mandate to Tackle Local Challenges 27 An Implementation Checklist for City Leaders 29 References 32 3 4 BACKGROUND AND ACKNOWLEDGEMENTS Interest in studying city competitiveness has sky- This paper draws on a prodigious body of existing rocketed in the last few years, although the topic itself research from a range of fields. The summary findings is far from new. Mayors and city leaders have long worried of the overall research are presented in the framework paper about the obstacles to job creation, competitiveness, and “Competitive Cities for Jobs and Growth. (World Bank economic growth that plague their cities. 2015a)” This paper is part of a broader research initiative This paper is framed as a User’s Guide to help city offi- called the “Competitive Cities Knowledge Base,” man- cials and city competitiveness practitioners in imple- aged jointly by the Trade & Competitiveness Global Practice menting interventions. This guide aims to support cities (T&C) and the Social, Urban, Rural and Resilience Global in identifying collaborative configurations of actors from Practice (SURR) of the World Bank Group. Its objectives the public and private sector along with the management are to create a knowledge base on competitive cities and to approaches that can help leadership implement interventions improve the understanding of job creation at the city level to support the city economy. as a foundation for a community of practice on this topic for World Bank Group staff, academia, donor partners, and This paper was prepared by T&C Competitive Sectors consultant practitioners. Drilon Gashi and Joanna Watkins, senior public sector specialist with the Bank Group’s Governance Global Practice. The authors The Competitive Cities Knowledge Base seeks to bring received significant support and guidance from Austin Kilroy, a robust body of knowledge to our clients on what has Stefano Negri, Megha Mukim and the broader Competitive Cities worked elsewhere and what has not and on how to organize team. The co-task-team leaders of the Competitive Cities Knowl- for delivery in different contexts. edge Base project are Austin Kilroy and Megha Mukim. Overall guidance on the project has been provided by Stefano Negri, Sameh Our approach utilizes different methodologies to Wahba, and Somik Lall and Ceci Sager as senior advisors. tackle these questions based on best practice, data availability, replicability, and simplicity. In many The team would like to acknowledge gratefully the European Com- cases, we leverage new and existing data sources to shed new mission, the African, Caribbean and Pacific Group of States (ACP) light on some unresolved questions; in others, we conduct secretariat and the governments of Austria, Switzerland, and Nor- primary research where available data were inadequate. We way for financing this study through the Bank Group’s Competitive look at global and regional trends, comparing different typol- Industries and Innovation Program (CIIP). ogies of cities—by income, sector, and region—and buttress these findings with econometric deep-dives and case studies in selected countries and cities. 5 Introduction approach to structuring such public-private interactions (Sivaev and others 2015, 4, 6). City governments around the world have become increasingly important in facilitating job creation 2. City government, in this context, refers to a city and economic growth through program and policy government’s ability to impact economic development, interventions (McGill 2007, 75; Smoke 2013, 57). Cities which depends on its internal administrative scope, are where people live, where the jobs are, and where growth is financial autonomy, and capacity in terms of human re- happening. Cities generate 80 percent of global GDP (World sources and internal management processes. Proponents Bank 2012). But while cities concentrate economic activity of decentralizing economic decision-making suggest and wealth, they also are centers of poverty, inequality, and that, compared to higher tiers of government, municipal informality. In Africa 90 percent of new urban dwellings are government can better satisfy the unique preferences of in slums (Potsiou 2010). its local population, and that cities are more in tune with their specific advantages and better able to foster local Two global trends—globalization and decentraliza- collaborative networks (Kim 2008, 12; Katz and Bradley tion—have made cities key actors on issues of eco- 2013, 5, 7-9).1 nomic development. Global cities compete with one an- other for investment and economic growth. This competitive 3. Inter-governmental networks refers to the interde- environment, and the central role cities play in generating pendent relationship cities have with national and re- economic growth, mean that city governments stand to ben- gional governments in pursuing economic development. efit from expanding their focus beyond traditional functions: A city’s public and private sector leaders often need to planning, housing, transport, and broader service provision leverage the support of higher-tiers of government or (Moretti 2014). Economic growth has increased the power of neighboring jurisdictions to approve or finance major city governments, expanded the finances available to them, infrastructure projects. Cities can benefit from national- and increased both their effectiveness and accountability. ly sponsored initiatives. Moreover, cities collaborate with However, new roles in economic development and metropol- different regions to strengthen economic linkages and itan area governance are increasingly shared with the private collaborate in complementary industrial sectors. sector while critical national government input continues. This User’s Guide offers end users—government The focus of this User’s Guide is implementation: ex- officials, city leaders, and key stakeholders—advice ploring strategies to get things done drawing on insights from on a portfolio of options to be considered and inter-governmental frameworks, public sector management customized, designed to improve economic outcomes approaches, instructive case studies, and stakeholder engage- and drive job growth. It offers lessons from cities that ment. The guide aims to support cities in identifying collab- overcame common implementation problems, and a practical orative configurations of actors from the public and private checklist for cities implementing programs to improve sectors, as well as the management approaches that can help competitiveness. The guide builds on a number of existing leadership implement interventions to support city econo- guides to describe in more detail the three distinct avenues mies. Based on an assessment of the most frequent network and actors for impacting economic development (Clark and configurations in driving rapid economic growth, the guide others 2013, 11).2 offers a framework to help city governments identify points of leverage for unleashing growth—referred to here as a “city This guide does not offer a one-size-fits-all prescrip- wedge.” tion to implementing city competitiveness interven- tions but recognizes the myriad shapes and sizes of a city’s in- A “city wedge” encompasses the economic develop- stitutional and stakeholder configurations. Through city case ment initiatives of public-private growth coalitions, studies and process guidelines, this guide offers a pragmatic city government, and inter-governmental networks. way forward to confront the challenges of turning grand strat- Grouping various initiatives this way enables city leaders to egy into results on the ground. understand the levers for economic development at their dis- posal. How a city uses these levers can vary depending on cir- This User’s Guide is divided into three sections. Sec- cumstances. The key is to utilize all three points of leverage, tion I introduces the city wedge framework and its compo- discussed further below, opening opportunities and avenues nent parts. In Section II, the framework is applied to six cities: to strengthen cooperation in achieving common goals and Bucaramanga, Colombia; Coimbatore, India; Kigali, Rwanda; tackling common problems: Gaziantep, Turkey; Changsha, China; and Tangier, Morocco. The narrative explores the important drivers and relationships 1. Public-private growth coalitions refers to collabora- behind interventions targeted at improving competitiveness. tion between public sector agencies and diverse external Section III provides guidance to city leaders on how to over- stakeholders, including civil society, in planning and come common challenges during implementation, and orga- implementing interventions to foster improvements nize to deliver. It also provides an implementation checklist— to the business climate and the strategic visioning of eco- identifying principles that cities can utilize throughout the nomic development. Public private dialogue (PPD) is one implementation process. 6 I. The City Wedge Framework at the city level is more often led by the private sector in place of or in cooperation with, the local government, or by higher The institutional and legal frameworks of six second- tiers of government at the state and national level. This is ary cities were investigated to ascertain the range of particularly true in administratively centralized countries. institutional actors involved in carrying out success- The graph below illustrates the point, plotting the six cities ful economic interventions. These cities are: Bucaraman- in terms of the actors that led economic development. Only ga, Colombia; Coimbatore, India; Kigali, Rwanda; Changsha, in Changsha, China was success largely dependent on local China; Gaziantep, Turkey; and Tangier, Morocco. They were government intervention. The others break out as follows: selected based on their impressive economic performance compared with national and regional benchmarks, land- • Central government interventions (Tangier, Kigali). locked geography, lack of significant natural resource endow- ments, and location in middle-income economies.3 • Private-sector initiative, backed by government support (Bucaramanga, Gaziantep). A characteristic common to five of these six cities is that their governments generally do not proactively • Private sector takes the lead in typical economic develop- lead economic development. The economic growth agenda ment functions (Coimbatore). Figure 1: Who led local economic development efforts in each city? National Government Tangier Kigali Bucaramanga Gaziantep Public Sector Private Sector Changsha Coimbatore Local Government 7 Three Points of Leverage ciety, collaborate in strategic planning and implementation.5 Public-private dialogue (PPD) is an approach to structuring City economic success is often the product of multiple, interactions between stakeholders to support competitive- complementary interventions. Here we identify a “city ness objectives. Different aspects of public-private collab- wedge”—cities utilizing three points of leverage to impact oration on competitiveness are outlined below (Sivaev and economic development: 1. catalyzing public-private growth others 2015). coalitions; 2. applying the city’s internal scope and capacity, and; 3. leveraging regional and national relations. The points • Economic development in cities is seldom led by of leverage are illustrated in Figure 2. city governments. For cities in centralized countries or those with narrow administrative scope and limited Figure 2: Three main points of leverage capacity, economic development is usually led by the private sector or higher-tiers of government. • Opportunities exist for cities to collaborate with local networks and stakeholder groups to more strategically improve competitiveness outcomes. 3 1 This may take the form of a growth coalition with rep- resentatives from the public, private, research, and civil Leverage Catalyze a society sectors, created to share tasks and implement regional and public-private initiatives that spur job creation and economic growth. The national Growth relations Coalition private sector often leads such initiatives. Cities can maxi- mize results when their governments and businesses work together and when firms “fill governance gaps and build delivery capability for cities (Moir and Clark 2014, 38).” 2 • This collaboration is intended to bring stake- Apply city scope and holders together to define problems and work on capability solutions. A coalition can collectively work to address specific government and market collective action prob- lems by defining and analyzing relevant problems, dis- cussing and agreeing on specific reforms, and working to implement suggested solutions (Sivaev and others 2015). 1. “Growth coalitions” formed with public sec- tor agencies and private sector firms • Growth coalitions for city competitiveness typi- We investigated the formation of growth coalitions at the cally pursue private sector development, improve- city level,4 where public sector agencies and diverse external ments to the business climate, poverty reduction, and stakeholder groups, including the private sector and civil so- the strategic visioning of economic development more broadly. Box 1: Oslo Improves its Economic Outlook, Box 2: Bilbao Stands Out Among Cities Worldwide, even though City Government has Narrow with Significant Powers Devolved from Central Administrative Maneuverability Government Norway’s national government plays the dominant In ten years Bilbao went from a city faltering due to industri- investment role in Oslo, yet metropolitan bodies have al decline to one with GDP per capita rates significantly high- emerged as drivers of strategic economic activity and er than the rest of Spain. The city economy grew 18 percent regional knowledge partnerships. Oslo Teknopol (cre- in ten years and the population started to increase after years ated by Oslo City and Akershus County Council) is the of decline. Bilbao’s use of its wide-ranging financial and ad- non-profit development agency for the wider region and ministrative powers (Basque county provinces set, adminis- the key driver of collaboration with businesses, research ter and collect all direct taxes) and its close collaboration with and higher education. Oslo Teknopol is also linked to newly established public-private bodies helped recover the national and local government agencies. The city’s higher city’s assets and successfully support start-ups and R&D in education institutions set up the Oslo Knowledge Part- new technology clusters. The city established two economic nership, which links the city government and leading development agencies—Bilbao Ria 2000, a public corpora- universities and positions the city as an international tion set up to redevelop the riverfront and brownfield land, knowledge center (Clark and others 2013, 149-151). and Bilbao Metropoli-30, a non-profit economic develop- ment partnership to plan the city’s economic revitalization (KPMG 2014, 34, 39-42, 50-53). 8 2. City government internal scope and capacity This depends on the degree to which the government The capacity of a city government to facilitate economic has a talented and qualified workforce, and its ability to development depends on its internal administrative scope, access such talent. It also depends on the city govern- financial and human resources, and effective internal man- ment’s internal capabilities for planning, budgeting and agement practices.6 Key elements include: monitoring implementation. • Utilizing the powers a city government possesses. • Understanding the various interventions a city Municipal governments vary significantly in their influ- government can use to drive economic develop- ence over policy levers related to economic development ment. Examples include: improving infrastructure and and their ability to raise revenue.7 Furthermore, a city’s connectivity for residents and businesses; proactively institutional and structural context plays an important attracting foreign investment; supporting the growth role in determining the range of possible interventions it of local businesses and the creation of new businesses; can pursue. charting a future for the city economy that identifies ar- • Developing a city government’s capacity to effec- eas of growth and stimulates the most promising sectors tively implement programs and public policies. by supporting development of needed skills. 9 3. Inter-governmental relations • Proactive city leaders—either from the govern- Cities have an interdependent relationship with the national ment or private sector—lobby higher tiers for government, regional governments, and neighboring jurisdic- economic development support. This may be in tions. A city’s public and private sectors often need to lever- pursuit of funding on major infrastructure projects or age the support of higher levels of government to support other types of program assistance, such as to support major infrastructure projects with funding, implementation, local enterprises. or to ensure the city is included in national initiatives and • Cities can also collaborate horizontally, either with major projects. Below we summarize how these relationship other local governments within the same metropolitan take shape. area or with cities in neighboring regions or countries, • A city’s government and private sector may take to plan and strategize more effectively and create or the lead on economic development initiatives, but strengthen linkages with regional industry clusters. frequently must leverage support from higher • Metropolitan economic development is not tiers of government or neighboring jurisdictions. always a task of city government, in terms of a National and regional governments provide public ser- city’s functions and its spatial reach. Economic vices and economic development support to cities as part planning, strategy, and implementation are not always of their overall policy frameworks. They play a number within a city government’s remit, and even if they are, of important roles in supporting the new growth and in- they may not be coordinated on a regional basis (Slack vestment strategies of cities (Clark and others 2013, 37). and Cote 2014). This increases the need for cities to work with higher levels of government. Box 3: Pittsburgh is Able to The city wedge framework enables cities to identify Garner State Government opportunities across their three points of leverage. These three avenues are represented in the middle of the Support for Innovation following figure (3), as the levers for influencing policy on city economic development. Surrounding the three levers are the A group of the city’s prestigious four drivers of city competitiveness. The four drivers of universities, led by Carnegie Mellon city competitiveness that impact firm-level perfor- University (CMU), partnered with mance are: institutions and regulations; infrastruc- State Representative Tom Murphy ture and land; skills and innovation; and enterprise to create Ben Franklin Technology support and finance. 8 Partners (BFTP) to channel state support to high-tech jobs. Rep. Murphy lent his support after recognizing CMU’s efforts to link Figure 3: Three points of leverage and four drivers of competitiveness universities and economic growth. CMU created the Robotics Insti- tute, home to 500 scientists and researchers, to explore the applica- Institutions & tion of robotics to health, defense, Regulations and commerce. BFTP was run much like a venture capital firm, support- ing innovation in the city economy. The partnership helped create an estimated 80,160 jobs since 1989. BFTP eventually became Innova- 3 1 Leverage Catalyze a tion Works, an investment and Enterprise regional and public-private support vehicle, offering office national Growth Infrastructure Support & relations Coalition space and support to startups and & Land Finance of course venture capital invest- ment. This has led the creation of a 2 Apply city scope and lab to support software and gaming capability entrepreneurs and another to support physical product start-ups with investment, mentorship, and networking (KPMG 2014, 256, 258, 266). Skills & Innovation 10 Using the City Wedge to Identify Key Actors some city governments are more capable of making economic for Implementation development-related interventions (e.g. Changsha), other cities depend heavily on private sector activity (e.g. Bucara- The Competitive Cities team defines a “competitive manga, Coimbatore, Gaziantep), while still others rely on the city” as a city that consistently helps its firms and in- national government (e.g. Changsha, Bucaramanga, Tangier). dustries create jobs, raise productivity, and increase In many cities, as in our case studies, a combination of all the incomes of citizens. Ideally, a city’s proactive engage- three avenues were utilized. ment on competitiveness includes all three points of leverage mentioned above: public-private coalitions or private sector Broadly speaking, our findings suggest the following engagement; city government pro-activeness; and leveraging relationships between the actors leading compet- of higher-tier national or regional government support. Cities itiveness and the levers they utilize to implement seeking to raise their level of competitiveness should start by initiatives: identifying how to engage on these three fronts. The follow- ing questions can guide policymakers and stakeholders 1. City governments appear to exercise a greater degree of con- through this process: trol over institutions and regulations (improving business climate, in particular), and infrastructure (municipal • How is our city doing? Conduct a city economy diagnos- infrastructure and lower level schooling/social infra- tic [Please see the City Competitiveness Snapshot and Growth structure), than over skills and innovation and access to Pathways Paper]. finance. Thus, cities with similar institutional structures should organize to deliver on initiatives in institutions • What can our city deliver? What are the roles and and regulations and infrastructure. responsibilities of the city public sector agencies and external stakeholder groups [Please see following section on applying 2. In the areas of skills and innovation and access to finance the city wedge framework]? and enterprise support, city governments should leverage the private sector and higher-tier governments to tap into funding • How can we organize to effectively implement and technical assistance. Linkages between industry and interventions directly or partner with others? academia and between skills and business sector needs [Please see the section in this User’s Guide on “Organizing to should involve the input and strategic guidance of the Deliver”]. private sector and academia. Once a city has conducted an economic diagnostic of 3. Where available, city governments should also leverage its needs, it may also utilize public-private dialogue existing national economic plans to enhance workforce skills as a prioritization tool for city competitiveness.9 PPD and generate innovation grants and enterprise development and other mechanisms for public-private collaboration can support for firms. Major infrastructure support from the bring key city stakeholders together to ensure consensus on national government is also critical, and as shown below, the city’s problems and their shared strategic priorities to lobbying for such support can come from both the city address them. Section III offers guidance on how to improve government and the private sector. internal management practices to facilitate implementation. The following section will present the different pro- The application of the city wedge framework can as- cesses in which city actors have carried out compet- sist cities in mapping each of their key actors against itiveness interventions, such as approaches on lobbying policy interventions for competitiveness. Cities can for infrastructure improvements or methods to spur invest- make use of the mapping exercise to identify gaps and op- ment attraction. The examples of city interventions illustrate portunities for proactive interventions on their main points their achievements and potential lessons for other cities. of leverage. The case study findings demonstrate that while 11 II. Applying the Framework: The particular city actors involved in the areas of competitiveness varied, but the private sector was al- Evidence from six cities most always as active as the city government. In terms The six cities examined in this study exhibited of institutions and regulations, business climate improve- varying levels of involvement of public and private ment initiatives were implemented by the municipal govern- city-level actors and other government actors in ment, but in two cases (Gaziantep and Kigali), this happened supporting economic success. The analysis in this section after the national government had spearheaded countrywide presents the competitiveness interventions undertaken by reforms. Interestingly, private sector organizations or leading these cities in the four areas outlined below, institutions and firms led investment attraction efforts. regulations, infrastructure and land, skills & innovation, and en- terprise support & finance.10 The content is organized in tables All six cities pursued interventions that included the for each of the areas, with the actors differentiated for each input of key stakeholders (even if the intervention city—depending on whether the city government or growth was not always carried out in partnership). Gaziantep coalition led an initiative, or leveraged the effort through developed industrial parks based on industry need. Morocco’s other government actors. national government prioritized a new port in Tangier, while ensuring the local capacity to manage and target growth The findings below suggest the myriad of ways that opportunities. Lastly, Coimbatore’s educational institutions cities—utilizing their three points of leverage—can stood out because of their direct linkages to the city’s private initiate, fund and implement competitiveness-re- sector and therefore to industry needs and new growth areas. lated interventions. No single way exists to organize investment attraction, provide finance support, or develop workforce skills. Findings from the case studies reveal ways that cities have carried out these interventions successfully, starting from different institutional and country contexts. 12 Table 1: Competitive City Interventions in Institutions and Regulations City government led City government led Growth coalition led KIGALI, Rwanda, upgraded its one-stop GAZIANTEP, Turkey, improved its busi- COIMBATORE, India, permitted the shop to target obstacles faced by foreign ness environment by reducing red tape and private development of a private economic investors, while cleverly leveraging a improving regulatory practices. zone (Coimbatore case study annex in Ku- well-designed and well-marketed master lenovic and others 2015, 32–33). The de- plan to attract investors (Kigali case study How they did it veloper formed a pipeline of clients during annex in Kulenovic and others 2015, 6, construction, built the zone gradually as 12, 15).c City leaders tenants came in, and then customized • Differentiated Gaziantep from facilities and services to their needs. other cities on what usually are key How they did it constraints: the city provided land City leaders (including industrially serviced land) How they did it • Created the Kigali Investors’ Forum, at a relatively low cost and created a • Staff members of the developer, a private sector forum, to collaborate one-stop administrative process in the KgiSL,11 undertook an extensive, with government to identify specific OIZs (special economic zones) for systematic analysis of market trends reforms. expedited permitting. and players in the offshoring world • Diagnosed constraints with a Doing • Rationalized the municipal bureau- and, in particular, the activities of Business assessment (through the cracy: the city’s mayor slashed the multinational corporations (MNCs) in World Bank) and through the Kigali municipal administration from 2,700 India. Observing that some compa- Investors Forum, highlighting the to about 100 employees as part of nies had run out of room to grow in following constraints: inefficiency and the streamlining of bureaucratic places like Bangalore and Chennai, lack of interagency coordination on procedures, limiting opportunities for the developer made targeted pitches construction permits. corruption and political patronage. positioning Coimbatore as a viable • Established a one-stop shop in 2010 alternative, given its highly educated, that brought together all agencies What they achieved English-speaking workforce that is needed to approve construction available at significantly lower cost permits. In 2011, the city also created Gaziantep’s exports have increased tenfold than in Tier 1 cities. an electronic platform for construc- since 2002, with $6.2 billion exported annually by 2013, and the city exports tion permits with support from the products to 164 countries. What they achieved International Finance Corporation and African Development Bank to The zone has been able to attract Cogni- further reduce red tape. The city based What cities can learn zant, Dell, and Bosch among its tenants, the project on a similar one that was amassing 20,000 jobs. A competitive business location is achieved successful in Nairobi, Kenya, and paid by combining several interrelated, mutu- for it from its municipal budget. ally reinforcing activities. Furthermore, What cities can learn strong political will to implement radical Market-driven industrial development, What they achieved reforms can help turn the local business with appropriate guidance and support Investors now handle all approval needs climate around in a relatively short time. from the city government, allows for more in one place and receive a construction customized and overall successful projects, permit within 30 days. The city is now avoiding new construction that sits empty. 34th worldwide in dealing with construc- tion permits, according to Doing Business d KGiSL stands for K Govindaswamy Infor- surveys. mation Systems Private Limited. It is now a conglomerate of companies, but it started out as a cotton-trading venture by Shri.K Govindas- What cities can learn wamy Naidu in 1932. Business climate reform was targeted at the constraints that offered the most effect e Indian cities are classified according to a indicated by the private sector and then three-tier system, as Tier-1, Tier-2 and Tier-3 was facilitated by coordinating effectively cities. The classification is based on city pop- with the national government. ulation with the most highly populated cities classified as Tier-1 cities and the least populated c Data also from Doing Business 2015 indicators classified as Tier-3 cities. (database), World Bank, Washington, DC (ac- cessed February 27, 2010), http://www.doing- business.org/data/exploreeconomies/rwanda. 13 Table 2: Competitive City Interventions in Infrastructure and Land City government led Inter-governmental coalition Growth coalition/Inter-governmental coalition GAZIANTEP’S organized industrial TANGIER , Morocco, leveraged national BUCARAMANGA , Colombia, successfully zones (OIZs) have each been developed investment in a large new port to attract lobbied for infrastructure upgrades that with specific sectors or sizes of firms in foreign investors in automobile manufac- were most needed by the city economy mind, from the type of infrastructure pro- turing and supplier industries, which pay (Bucaramanga case study annex in Kule- vided to the sizes of plots (Gaziantep case higher wages than previous local averages novic and others 2015, 13). It built a local study annex in Kulenovic and others 2015, (Tangier case study annex in Kulenovic private sector coalition to persuade the 42–43). This strategy may have set them and others 2015, 6, 25, 32). national government to fund the infra- apart from less successful industrial zones structure. in Turkey and elsewhere. How they did it • Morocco’s government funded the How they did it How they did it construction of a new seaport facility, • The city chamber of commerce iden- Tanger-Med, 35 kilometers from Tangier • The city’s first two OIZs were more tified connectivity as a constraint in City. The new port would have capacity generic, initially servicing small and a 2004 study. Transportation was a to accommodate large container ships medium enterprises (SMEs) and key constraint to the growth of local and provide landside access for an ex- eventually larger producers. The first firms. panded volume of commerce (which was few OIZs featured smaller land par- • The study was used as a supporting limited in the old port). cels for tenants, helping to formalize document to lobby the national • Major upgrades were also made to SMEs and to facilitate upgrading their government. The results of the study northern Morocco’s road and rail operations. Later OIZs catered to could be linked to concrete infrastruc- connectivity. The highway and rail large carpet-making firms as well as ture needs. For example, the airport connections enabled rapid intermodal intermediate and smaller firms that reconstruction and expansion in par- transfer of containers, bulk cargo, produced related products. ticular aims to support the tourism and motor vehicles and quick access • The process for implementing OIZs sector as well as health services and from the port to nearby regional is the same throughout Turkey, but precision manufacturing exports. population centers, offering market Gaziantep has benefited from greater access for manufacturing and logistics interaction with target firms and industries. What they achieved greater collaboration from public • City stakeholders worked hard to agencies. The municipality and gov- The national government responded by attract specific investors, including providing new investments, including the ernor’s office closely collaborated in Renault, combining efforts of the na- forming the OIZs. In addition, regula- construction of new highways (the Ruta tional investment promotion agency, tions aimed to avoid speculation: title del Sol highway) and a new airport (Palo AMDI, with the city’s local economic deeds for land are transferred only Negro Airport). Furthermore, the 2012 Bu- development entity, TMSA. One of after the tenants begin operation. caramanga Regional Competitiveness Plan the key dealmakers was the public included planned upgrades for all modes of sector offer to set up a dedicated What they achieved automotive training center to provide transportation in Santander State. sufficiently skilled workers, with skill Gaziantep has five OIZs at full capacity, needs identified through industry What cities can learn with the fifth under construction, and a working groups. City needs can sometimes seem like a wish sixth now being planned. The sixth zone is planned to be as large as all previous zones list for higher-tier government. Bucara- combined. What they achieved manga backed those requests with a study Tanger-Med is now one of the largest and linked that study to the industry intermodal facilities on the Mediterranean What cities can learn Coast and Africa’s biggest container port sectors that could benefit most. It identi- fied the value proposition for the national Gaziantep avoided the build-it-and-they- with an annual capacity of 3.2 million government’s infrastructure investment. will-come approach and built industrial 20-foot equivalent units (TEUs).13 The port parks as they were needed. This approach has led to a rapid increase in investment in was facilitated by close collaboration be- the Tangier-Tetouan region—for example, tween public agencies and target firms. Renault initially employed 5,500 at the site, supporting up to 30,000 additional jobs in the region indirectly. What cities can learn Large-scale national infrastructure invest- ment initiatives can unlock new growth potential for a city, if leveraged well. Tangier enjoyed maximum benefits from the new port development because it was well connected and governed by a dedicated agency that un- derstood and targeted growth opportunities 14 to benefit local companies. Table 3: Competitive City Interventions in Enterprise Support and Finance City government led Growth coalition/Inter-governmental coalition Growth coalition led CHANGSHA developed a system of BUCARAMANGA’S chamber of com- COIMBATORE’S private sector stepped measures to attract new industries and di- merce helped the city succeed by actively up to bridge the gap when the regional versify the local economy. The city offered and continuously assisting firms trying investment promotion body did not fully incentives to favor specific industries, de- to receive national support, including represent the interests of the city (Coim- veloped relationships with investors, and assistance in selecting and applying for batore case study annex in Kulenovic and improved communication between firms funds (Bucaramanga case study annex in others 2015, 22, 30–32). and government officials. Kulenovic and others 2015, 15–16). How they did it How they did it How they did it • KG Group—a private conglomerate • The city government offered attrac- • The chamber convened 70–80 offering information technology, tive incentives to investors, including business, academic, and government information technology enterprise preferential tax policies, funding leaders to adapt and seek new growth solutions services, business process (such as tax credits for high-tech areas to help the city survive in the outsourcing services, real estate research and development activities) global economy. development, and higher education— and locational advantages in industri- • The national government, meanwhile, was the developer of a large office al parks (colocated input suppliers and created regional competitiveness park in the city. To attract investors, component producers). commissions (RCCs) to serve this it pitched Coimbatore to MNCs as a • The Changsha government’s atten- purpose—Santander Competitivo viable alternative to Bangalore and tiveness and coordination stood out in Bucaramanga’s case. The new RCC Chennai, with their growing labor to investors. Industrial park orga- did much of what the chamber of and land costs and lower potential nizing committees and independent commerce had done before: identify- for growth. The city was presented as management structures provided ing national sources of support (for one with a highly educated, En- support to tenant firms (for example, technology development, training, glish-speaking workforce with engi- addressing labor supply needs by con- funding, export assistance, and so on) neering skills and practical training. ducting regular recruitment events). and submitting timely applications • KG performed typical economic • Changsha also supported firms for its members. development functions: analytics for through an intergovernmental coor- • The chamber offered its assistance business recruitment; industry and dination mechanism known as the and office space to help operationalize firm identification; and targeting, Leading Group for an Open Economy, the RCC. The RCC’s full-time staff of business expansion, and investor a committee to coordinate among four was paid by public and private aftercare. KG also organized a dinner various government departments, in- funding and led by an executive between prospective investors and dustrial park organizing committees, director. the Coimbatore business community, and top-level officials and keep them showcasing the city’s entrepreneurial aware of progress and problems. What they achieved and collaborative spirit. The RCC and chamber of commerce What they achieved What they achieved provide a mechanism for firms to leverage Automobile industrial output doubled national programs and support, partic- KG Group has been able to attract between 2008 and 2012, reaching $4.95 ularly to fund activities outlined in the Cognizant, Dell, and Bosch to its special billion. Currently, firms in this industry RCC’s regional competitiveness plan (such economic zone, amassing 20,000 jobs. include Bosch, GAC Fiat, Hitachi, and Liz- as funding to support nationally targeted Cognizant, which employs 10,000, is look- hong Automobile Design. A new Volkswa- sectors). The initiative involves working ing to add space to employ up to 60,000 in gen plant is under construction; that plant with SENA, the national learning agency, the next three to five years. will increase car production to 300,000 by on worker training programs and with 2016. ProExport, the national export promotion What cities can learn agency, to provide export assistance to KG Group filled the role conventional- What cities can learn local firms. ly played by an economic development Changsha’s combination of tools—indus- agency because Coimbatore lacked one. KG trial parks, preferential tax policies, local What cities can learn Group worked to shepherd new invest- supplier links, and coordinated govern- The chamber of commerce assisted its ment, doing so with extensive, system- ment support—has been a “dealmaker” in members and the city by identifying atic analysis not only to find and recruit bringing investors to the city rather than national support and funding schemes and investors but also to provide a menu of to competitors with similar endowments. submitting timely applications on behalf economic development support. of its members. 15 Table 4: Competitive City Interventions in Skills and Innovations Growth coalition led City government led Inter-governmental coalition led COIMBATORE’S private sector growth CHANGSHA, China, improved the quali- CHANGSHA attracted talent (highly is directly linked to its thriving collection ty of vocational training programs by stim- skilled individuals) from within China by of vocational training institutions that ulating competition among schools and identifying the needs of firms, leveraging produce a workforce with skills relevant strengthening links between schools and national programs, and engaging in ad- to industry needs (Coimbatore case study businesses (Changsha case study annex in ditional recruitment efforts domestically annex in Kulenovic and others 2015, 9–10, Kulenovic and others 2015, 22–23). and abroad (Changsha case study annex in 28–29). Kulenovic and others 2015, 21–22, 24). How they did it How they did it • Competition was stimulated among How they did it • Coimbatore’s higher educational vocational schools. The municipal City leaders institutions were created by the city’s government encouraged competition • Formed a “Leading Group” on family-owned firms and thus are by having schools publicize student talent attraction composed of civil shaped directly by current industry national exam scores and employ- servants from multiple municipal needs, in addition to helping to devel- ment rates, and it allowed for private departments. Establishing the group op future potential in new areas. They as well as public competitors. enabled the city to coordinate tasks offer practically oriented technical • Incentives and links were strength- among municipal departments and curricula developed in consultation ened between schools and businesses. with higher-tier government—and, with for-profit companies. The government provided funding most important, to solve implemen- • Local engineering students spend to schools on the basis of enrollment tation problems along the way. Key part of each school day on the shop numbers, and it offered tax credits initiatives were to identify the talent floor as well as in class. This regime to firms for sending participants to needs of existing and emerging is distinct from schools elsewhere in worker training programs. Perfor- firms, to leverage available national Tamil Nadu. Students graduate with mance data on vocational schools programs and funding schemes for relevant applied skills and extensive were distributed among businesses. talent attraction, and to engage in manufacturing experience. Funding was provided for training recruitment efforts domestically and • Coimbatore’s engineering schools offices and fairs. abroad. produce engineers and managers as • Attracted national talent using the well as shop supervisors and machine What they achieved 1,000 Talents program, which provid- operators. The city has 10 universi- ed compensation packages for highly ties, 60 engineering colleges, and 30 Changsha’s firms have stated that labor qualified Chinese nationals willing polytechnic and industry training has been relatively easy to find, and this to resettle within China. Changsha’s institutes that prepare graduates with fact has allowed for both continuous and leading firms, Sany and Zoomlion, technical skills and specialize in fun- new investment. recruited high-level talent through damental disciplines such as physics the program. and mathematics. What cities can learn • Used diaspora networks to attract new applicants from targeted indus- Vocational training abounds in city efforts What they achieved to improve skills. Changsha ensured that tries, offering them jobs and incen- tives to start their own businesses in Coimbatore’s colleges produce “150,000 this training was effective. Its methods are Changsha. employable graduates every year,” accord- replicable: some barriers to entry ensure ing to a leading city conglomerate. About quality and incentives spur competition 1 in 10 of India’s engineering colleges are among schools. What they achieved located in Coimbatore, putting it on par Some 10,000 professionals were attracted with or above many cities that are larger in through national programs from 2009 size, including Pune and Jaipur. to 2011, and the city has set aside Y30 million to fund future talent attraction What cities can learn programs. The city recruited 102 “high-lev- el talents” and 17 start-ups in two years Cities’ growth can be rooted in training from municipal programs. institutions that produce a workforce with practical skills to meet current needs and What cities can learn be relevant to growth in new areas. This directed training is achieved efficiently Cities must be aware of and capitalize on through the private sector’s involvement national programs for talent attraction in devising curricula, sponsoring intern- and to the extent possible use the logic of ships, and as in Coimbatore, even running those programs to devise local initiatives. universities or university departments. Talented individuals need assurances and incentives to relocate, and as Changsha discovered, they can be attracted to a good opportunity or even to start their own business. 16 Inter-governmental coalition led TANGIER readied its workforce for expanding automobile produc- tion in its region, facilitating the learning of skills that could apply to the automotive industry, as well as TO aerospace (Kulenovic and others 2015). How they did it • Morocco ensured its nationally targeted sectors had an adequate supply of skilled workers. Sector priorities set by the Office of Professional Training and Employment Promotion (OFPPT) closely adhered to those in Morocco’s Emergence plan, which targets key sectors. OFPPT works closely with the National Agency for the Promotion of Employment and Skills (ANAPEC), and together the two agencies offer an online tool for job seekers, an innovative program to commercialize entre- preneurial ideas, and customized training programs. • Private industry provides feedback on the specific skills it needs through special institutional mechanisms—Organs de Gouvernance. These exist at both the national and local level, and the feedback is channeled to OFPPT, ANAPEC, and univer- sities. ANAPEC conducts studies on sectoral workforce needs in which it collaborates with training institutes, universities, as well as human resources managers and sectoral professional associations. • IFMIA, the Institute for Training in the Automotive Industry Trades, is operated by Renault next to its plant and serves to fill the talent pipeline in automotive production. IFMIA was tasked with training for jobs within Renault as well as for components suppliers. It was funded by numerous national agencies but operated by Renault, and it taught skills such as stamping, welding, riveting, assembly, hydraulics, pneumatics, electrics, materials handling, servo systems, mechanics, robot- ics, forklift operations, sanding, painting, and logistics. What they achieved Maintaining and enhancing the 5,500 direct jobs and 30,000 indi- rect jobs supported by Renault at its site in Tangier has improved the city’s position in the automotive sector, helped solidify Renault’s commitment to its Tangier location, and opened the way to auto industry growth. A Nissan plant is expected to be built in the area (a sister plant to the Renault one) and Delphi Automotive and Lear Automotive already employ 4,900 and 2,500, respectively. What cities can learn Tangier’s workforce development programs closely aligned with its targeted sectors, which is critically important to establishing local capacity and enhancing the attractiveness of those sectors to increased foreign and domestic investment. The city made use of investment attraction strategies to draw several producers after Renault and provide the skilled workers those producers and local suppliers need to meet growing production needs. 17 The city wedge framework is being used in several World partmental coordination and management problems one- Bank Group projects to help identify the role of public sector by-one, with fine-tuned modalities for each. In Rwanda, the institutions in creating an enabling environment for econom- framework is mapping the initiatives of job creation to the ic development—distinguishing between the municipal or responsible institutions, and then recommending institution- local level and higher tiers of government. For example, in al forms that can support successful implementation. Finally, Malaysia, the framework helped identify the optimal location in Burundi, the framework is supporting a team in identify- for particular service delivery functions within a government ing the most effective institutions, public-private networks, administration, including what levels ought to have planning and institutional channels to facilitate job creation as part of versus implementation roles. In Cape Town, South Africa, a new World Bank lending operation. the framework is being used to identify and address cross-de- 18 III. Organizing to Deliver Common Implementation structures Many city governments find it difficult to determine Cities can use several types of structures, formal and the best structure and process for implementing informal, for implementation of economic develop- policies to achieve competitiveness. How can a city work ment functions. Below we highlight the following alterna- effectively within the limits of its government structures? tives: economic development agencies; delivery units; and, How should the city partner with the private sector and other public-private boards.17 Each approach to implementation leaders? How can these partnerships be managed? How can has a different degree of institutionalization and varying the city collaborate with the national government to get economic development functions, and the approaches are not support and resources? The challenges associated with imple- necessarily mutually exclusive. mentation can make or break a competitiveness strategy. Economic Development Agencies The narrative below highlights the implementation Economic Development Agencies are city agencies structures cities often use, the common problems that possess a wide range of economic development they face, and how they have overcome them. It also functions. Economic development agencies (DAs) can be includes an implementation checklist for city leaders. defined as “legal, non-profit structures generally owned by The first part reviews the alterative implementation struc- the public and private entities of the territory (Clark and oth- tures that city’s utilize to organize economic development, ers 2010, 28).” DAs can fit into one or more of the following such as economic development agencies, delivery units, and typologies: development and revitalization agencies; productivity public-private boards. The second part identifies the common and economic growth agencies; integrated economic agencies; inter- implementation problems cities face including: coordination nationalization agencies; and visioning and partnership agencies. and accountability failures; lack of economic development The following are the common characteristics of DAs, along strategy viability; limited engagement with the private sector; with a few steps outlining how a city could create a DA. The limited mandate to tackle local challenges. The case findings figure on the next page details the start-up process for Invest present the processes by which certain cities responded to Toronto. these challenges. The third part contains a set of key imple- mentation principles—an implementation checklist—to both What are the common characteristics of DAs? (Clark diagnose and guide the management and oversight of city and others 2010, 15-16, 36) competitiveness interventions. The checklist provides the key elements of the implementation process that need to be in • Spatial Scale: Some cover a wide geographic area of place in order to avoid and overcome the common problems a several thousand square kilometers while others can cities face. cover a narrow area of less than one square kilometer. This analysis is based on a review of relevant litera- • Budget and Staff: DA staff numbers vary greatly, rang- ture and both primary and secondary case examples. ing from about 10 to 2,000. DAs may have long-term Drawing out applicable lessons on implementation at a budgets (funded by national or international bodies) or sufficient degree of granularity required a two-step process. receive funding only for the individual projects they run. First, we began with an extensive review of existing research and reports drawing on insights from public administration, • Accountability relationship: DAs can be accountable urban management, political science, organization psycholo- either to their local communities or national or interna- gy, and other fields. Second, we conducted an analysis of over tional bodies. 85 cases. This included the six primary case studies outlined • Common Functions: DAs can have some but rarely all above and a few case profiles conducted by our team, around of the following functions: branding and international 30 secondary cases of “turnaround cities,”14 16 development promotion; investment attraction and retention; busi- agency case studies from the Organization for Economic Co- ness start-up and growth; human capital development; operation and Development,15 and a PricewaterhouseCoopers real estate, urban realm, and infrastructural develop- qualitative survey of 44 cities.16 An analysis of these cases ment; social or green development initiatives; partner- reveals a range of factors which influence implementation. ship facilitation, planning and visioning; and urban service provision or management. 19 How does a DA get established? Properly setting up a DA When should a DA be established? The following are a list of may take months or even years, with the initiative coming from key factors (Clark and others 2010): actors at the local, national, or international level. The following are four distinct phases (Clark and others 2010: 106-107): • Something specific needs to be done to respond to a crisis in the local economy. • Promoting the idea: Involves creating stakeholder buy-in through prior consultation, whether it is through • Local partnerships in the city exist, but more needs to formal or informal networking and meetings or public be done to increase local development activities. events. • External activities—an infrastructure invest- • Establishing the DA: Includes such organizational ment, increased trade or tourism, hosting a ma- activities as appointing a board of directors and chief ex- jor event—present a major opportunity to capture ecutive, recruiting operational staff and administrative local economic benefits. teams, purchasing or renting premises, and acquiring an information and communication technologies system. • New tools or incentives become available which would be useful for local development. DAs are usually • Starting the activity: Once the DA is established, rel- able to achieve a legal or fiscal status that allows them evant actors—including the city public sector agencies, to utilize new powers for asset management and public the private sector, and national and regional govern- infrastructure interventions that may have otherwise ment–come together to begin developing and imple- been unavailable to the local government. menting a strategy. • Opportunities arise with a new political climate • Consolidation: Outlining a process for constantly eval- (clear and accepted political mandate) that promises a uating and recalibrating the activities to ensure that the stable support program. organization addresses initial challenges and maintains direction and focus. • External organizations are ready to invest if pre- sented with credible “joint venture vehicles” (DAs). Figure 4: Toronto’s process for starting up its Invest Toronto DA (Clark and others 2010, 107-108) Phase 1 Dec 2008/Jan Phase 1 (continued) Phase 2 Feb/Mar/Apr Future Apr/May 2009 2009 2009 US mission US mission Define ideal ED/IA system Initial Business and Strate- Stakeholder consultations Data and evidence Define core functions for gic Framework for Board Establishment of External Map existing ED/IA system Invest Toronto: Working Group Determine gaps and over- “who does what” Back office and support laps Determine preliminary or- functions ganizational design options and draft budget 20 Delivery Units Delivery units (DUs) are implementation structures Box 4: Baltimore’s CitiStat established near executive power in order to drive improvements in performance. DUs have a mandate to Then-Baltimore Mayor Martin O’Malley initiated use the authority of the chief executive to lead “the political CitiStat in June of 2000. CitiStat set three objectives: to and technical coordination of government actions, strategic improve agency performance; increase agency account- planning, monitoring of performance and implementation, ability for performance and resource utilization; and and communication of the government’s decisions and improve the quantity and quality of services provided to achievements (Shostak and others 2014, 3; Watkins 2014, citizens. 1).” These structures can be located at either the national or subnational level, and are increasingly being used by state The essential features that define the CitiStat and local governments. They are a relatively new addition to process involve: the institutional landscape of the public sector, pioneered in the last decade in the United Kingdom and the United States. ü The collection of timely and accurate intelli- gence on operational performance (weekly data). Most DUs focus on a limited number of high profile objectives, which may encompass economic develop- ü Organization and analysis of this intelligence ment interventions. Depending on the degree of political by a small analytical unit (3-5 people). commitment to a particular set of objectives, a DU may be a good technique for a mayor to employ across a range of ü Regular, structured performance meetings for outcomes. senior management (agency heads, the CitiStat Office and the mayor) to review performance on What do DUs typically do? (Watkins and others 2010, 2) mandated goals and objectives and solve problems. • Focus political pressure for results by being physi- ü Strict accountability through relentless follow cally located in the office or having the direct authority up and assessment, determining (through meet- of the chief executive of the city government. ings) whether policy adjustments, strategic changes, performance measures, or resource decisions were • Provide a simple and direct mechanism for moni- required (while avoiding blame-shifting, obstruc- toring performance on government priorities. tion and/or repeated failure). • Signal key government delivery priorities within CitiStat changed the performance paradigm by clarify- and outside of the public sector. ing performance objectives and expectations, with the objectives jointly determined by respective agencies and • Provide a signal that government is being held the Office of the Mayor (with a strong enforcement role). accountable, by holding the unit and individual govern- Through biweekly monitoring and tracking of agency ment departments accountable to meeting priorities. performance goals and objectives, the city improved performance on city goals as well as state and federal • Support innovation and coordination across gov- expectations, with positive implications for state and ernment, and a forum to involve government actors in federal funding) (Henderson 2003, 12-13, 15, 21-22). solving common problems. There are a variety of DUs that cities can utilize. Some are more institutionalized than others, and are built to last across administrations. Others operate more like a project implementation task force unit. Box 4 on the next page de- scribes a delivery unit in Baltimore known as CitiStat. 21 When is a DU the right intervention? The following is a list • Is greater understanding needed on how policy of critical issues to consider (Shostak 2014, 4-7): is actually implemented at the center? DUs can play an important role in “systems learning,” capturing • Are results politically significant to the govern- and disseminating lessons learned from “what works” ment? DUs must have the sponsorship of the center of in implementation across government sectors. This may government. Thus, the unit must sit within the Office of involve understanding the skills, motivation, and incen- the Chief Executive, and be able to collaborate with the tives of frontline workers (e.g. nurses, social workers, and relevant public finance agency (commonly the Ministry service specialists), and in learning what ensures that of Finance or Economy at the national level). DUs require they effectively implement government priorities. access to information and decision makers in order to unblock barriers. • Do routines exist to help drive improvement? Regular reporting, senior problem-solving sessions, • Does the center of government already effectively delivery planning, tracking progress and dashboards are monitor and manage for results? A DU could add examples of routines that help drive a culture focused value if no other body within the center of government on results. A DU provides momentum to these efforts has a similar focus. DUs have the unique characteris- to support policy implementation and reform, and these tic of being meant for the implementation of policy as routines help identify lagging performance and the need opposed to developing or funding policy. DUs are meant to “unblock delivery obstacles.” to work on the achievement of results, and to work with those responsible for results in order to improve perfor- • Do mechanisms exist to manage cross-depart- mance. mental work? Public service outcomes, such as achiev- ing job growth or improvements in tertiary education, • Does the government have established priorities? often require government departments to work together. Does it know what is being achieved? DUs aim to DUs can support work across these departments within make use of data in a way that benefits citizens. Most existing inter-governmental coordination arrangements. DUs focus on selected priorities that are citizen facing— public services such as health, education, and transport. The right delivery implementation structure for a A DU requires frequent and reliable data in order to particular city depends on a few key issues: achieve clarity on what results look like and when results are expected, and then to measure the results achieved. • Existing vs. New Structure: Certain tasks can be One important data point involves determining whether implemented through the existing institutional architec- public perceptions support the objectives and perfor- ture and do not require a new structure. A clear under- mance of government initiatives. standing of the institutional landscape is necessary. • Are roles and responsibilities for getting results • Political capital & timing: If a new structure is need- clear? Is there a need for additional, internal ed, how much time is required to set it up, and what is accountability arrangements in government? It the feasibility—political and otherwise—of doing so? is crucial that the prime purpose of a DU be established. How close will this structure be to the city executive? One purpose is reviewing underlying accountability relationships and incentives within the city govern- • Resources: What functions should the DU fulfill? ment. This requires an understanding of individual Should it have a comprehensive role or serve merely to departments at the city level as well as their collective monitor or facilitate implementation of certain tasks? impact on delivery partners. Some DUs accomplish this by employing performance contracts or agreements between departments, subordinate agencies, depart- ment heads, and the chief executive. A lead department can be assigned to coordinate efforts involving multiple departments. 22 Public-Private Boards for Economic Development • Public-private boards should engage the private Public-private boards are typically informal bodies sector while remaining accountable to residents. that have a majority private sector membership. This Board composition should reflect the needs of the city alternative often involves more private sector input than residents (as represented through government) as well Development Agencies or Delivery Units. (DAs can also be as the critical input of businesses, which typically can private-sector led, but generally not to the degree of pub- provide up-to-date information on business needs and lic-private boards.) Public-private boards can often function future growth sectors. Accordingly, these boards usually informally, sometimes simply serving as a platform for infor- include local authorities (heads of local governments mation sharing and consultation (OECD 2015, 4). within a metropolitan area), as well as representatives of the area’s business community (business associations The following will outline the main components and leading firms). of these structures, utilizing the Local Enterprise Partnership (LEP) example from the United Kingdom • Public-private boards require support and fund- (Larkin 2010). ing. The degree of support will depend on the scope of activities a city sets out for a board. • Public-private boards can be assigned certain powers or missions by government agencies, and • Identify how a public-private board will cooperate these may include developing strategies for transport with local government authorities. Often times, the and housing strategy, and drafting spatial plans for a mayor or city manager serves as the chair of the board to city’s metropolitan area. Other designated tasks could ensure the necessary high-level support. This can also en- include overseeing skills funding allocations, or even able the board to serve in an advisory role to government exercising borrowing power to fund new investment. instead of being seen as a competing entity. Table 5: Summary of Three Types of Implementation Structures for City Economic Development Economic Development Agencies Delivery Units Public-Private Boards for Economic (DAs) (DUs) Development (PPBs) Purpose Tailor-made city agencies for eco- Established near executive power Informal bodies that often have nomic development, spanning a to drive improvements in per- a majority private sector mem- range of potential functions from formance; most DUs focus on a bership and serve as a platform urban development to business limited number of high profile for information sharing, consul- support and strategic planning for objectives aligned with an election tation, and strategic planning for the city or metropolitan economy. mandate. economic development. Geographic Varied: From an entire metropoli- Varied: can be located at nation- Can function at the city or met- Coverage tan area to a few city blocks. al or subnational level, and are ropolitan level. Though usually increasingly being used by state informal, boards can be delegated and local governments. Typically certain powers by city agencies. address a limited set of objectives that cross institutional boundaries. When to use it Typically used to address a crisis in Usually created when govern- Often formed when government the local economy requiring target- ments give particular political and private sector actors realize ed responses; when an external ac- significance to achieving results, the mutual need benefit of coor- tivity (infrastructure investment, when no central government en- dination between the public and increased trade, or hosting a major tity oversees performance of line private sector and across adminis- event) presents a local economic ministries towards key objectives, trative and territorial divisions. development opportunity; or and when inter-departmental when new tools and/or incentives coordination is required to achieve become available to a city. objective. Budget and Staffing: 10 to 2,000 Varies significantly. Can be staffed Require separate support and Staff using existing resources or through funding depending on the scope Budget: either long-term budgets contracting-in needed skills (e.g. of activities a city sets out for such or based on project funding. Malaysia’s Delivery Unit) a structure Accountability Answerable as public entities Employ performance agreements Engage the private sector while re- to their local constituencies or and other techniques to create clear maining accountable to residents. national government. expectations between lead minis- ters and senior executives and the mayor, governor, or prime minister. 23 Common implementation problems Coordination and Accountability Failures One of the most commonly cited governance prob- The implementation of any municipal public pro- lems or constraints, irrespective of the functional gram—whether designed to improve economic out- area of government, is the lack of coordination comes or not—is a dynamic process driven by complex between roles and responsibilities within govern- interactions between agents and the institutional ments.18 The prevalence of “coordination failures” has and structural environment in which they work. The been noted as a key feature of local economic development key variable is not which policy objectives are being sought as well.19 OECD case studies of city development agencies, but rather the ability of the government to implement agreed including in Toronto and Leicester, offer examples of cities policies. City leaders often face a range of difficulties in addressing coordination failures. This was also observed in implementing city competitiveness interventions—whether the competitive cities project case study in Changsha, and providing a better public transport service or more effectively is well documented in the frequently cited Baltimore case targeting specific industry clusters. described above in Box 4 (Clark and others 2010, 130). Box 5 A number of underlying weaknesses in public below summarizes the Toronto case. management systems or governance contribute Baltimore set up a “PerformanceStat”/Delivery Unit, to policy implementation failures. To identify which CitiStat, to overcome silos between government challenges most seriously impede implementation of departments, and solve problems in coordination and un- competitiveness interventions, we examined findings from derperformance more generally. PerformanceStat is defined the above case studies, using both primary and secondary as “a focused effort to exploit the power of purpose and sources, to develop a list of the most significant problems motivation, responsibility and discretion, data and meetings, cited: analysis and learning, feedback and follow-up (Brookings • Coordination and accountability failures 2014).” Baltimore Citistat’s process has the following essen- • Lack of viable economic development strategy tial features, as highlighted in Box 4 above: the collection of • Limited cooperation with the private sector timely and accurate intelligence; organization and analysis of • Limited city mandate to tackle local challenges this intelligence; regular, structured performance meetings for senior management; and, strict accountability to both The inability of governments and city leaders to follow up on the process with necessary strategic changes and respond to these problems often leads to poor service maintain accountability towards obstructions and repeated and policy outcomes. However, cities have proactively failures (Henderson 2003, 21-22). Government entities at all responded to these issues, utilizing approaches and processes levels in the United States and around the world have em- that can be instructive to their peers. ployed the PerformanceStat strategy to improve government performance.20 Two big lessons drawn from the application of PerformanceStat are that it only works if the analytical team is set up and empowered, and if the mayor (or unit executive head) sticks to a demanding schedule of review meetings. Box 5: How Invest Toronto and Build Toronto Work Toronto incorporated two new economic development Invest Toronto agencies to fill in gaps in its growth initiatives. Gaps were identified in investment promotion, whereby several Invest Toronto identified 6 priority areas, and divided up government agencies at the city, provincial, and nation- tasks for each among the CEO, Board and ED divisions. al level, as well as a number of business associations, had overlapping and contradicting agendas. The city responded The structure is accountable to City Government, and by organizing several functions into two new bodies: Invest reviews performance with internal key performance Toronto, an outward-facing organization focused on attract- indicators (KPIs) and through annual reports to City ing investment and tapping into international markets, and Government. Build Toronto, an inward facing organization tasked with Build Toronto property development, brownfield redevelopment and job creation (Clark and others 2010, 105, 293-294). See Box 5 Build Toronto is led by a 12-member board of directors above for more on these agencies. with a staff of 30 to 35 organized around a primary focus on real estate development and maximization of land Changsha utilized “Leading Groups”21 as inter-agen- value. cy mechanisms to implement specific initiatives and/ or coordinate tasks among various departments. The It is also accountable to the city government and to meet- process of Leading Groups includes creating a clear pur- ing key financial and non-financial performance metrics. pose-driven objective, a practice of escalating problems up a chain of command if they cannot be solved at a particular See Clark and others (2010, 304-305, 309-310). tier, and meetings at each tier of the chain of command to solve problems. Leading groups are created around clear pur- 24 pose-driven objectives such as attracting foreign investment, monitors similar to those employed by Compstat in New York recruiting talent, and building the electronics industry. City; quality of life monitors, etc.). Evaluation follows, and incorporates performance information, which feeds into the The purpose and composition of a Leading Group for any par- subsequent strategic plan. Budgets should therefore corre- ticular objective is outlined in a brief document (three to four spond to strategic plans, incorporating the same information pages), and ratified by government decision at the relevant from the strategic plan in a different way, and for different administrative tier. Junior- or working-level officials submit purposes. Budgets allow as well as oblige spending on certain any problems they have in achieving their purpose to the line items (input budgets), and on resources to attain speci- Leading Group’s office, which attempts to solve the problem. fied output levels (output budgets) (Van Dooren and others If it cannot, it moves the problem to a “Vice-Leading” Group 2010, 81-82). (led by the Vice Mayor), which meets quarterly. If the problem remains unsolved, it is moved to a “Small Leading Group” Cities have devised long-term strategies, which set in which the Mayor gathers department heads to attempt out roles for the public and private sectors, research to solve it. Finally, if there is still no solution, the problem institutions, and other actors. Local government often goes to a “Full Leading Group,” held semi-annually, which is lacks the inclination or resources to think and plan long term authorized to tackle intractable problems and make a policy (Moir and Clark 2014, 38). Cape Town’s economic develop- change if necessary. ment plan was designed in a way that ensured that the local government would not be solely responsible for maintaining The process provides inter-agency coordination and and leading economic development efforts. The Cape Town a means of keeping higher level officials aware of Economic Development Partnership (EDP) identified six progress or problems in achieving key government membership categories as stakeholders, including govern- objectives. While departments can volunteer problems to ment (city, provincial and national), business, labor, civil the structure, the Leading Group mechanism is intended to society, knowledge-based institutions, and local economic catch problems as part of a regular routine of reporting. This partnerships. One Cape 2040 is the city’s long-term strategic reporting takes place in weekly, monthly, and quarterly inter- framework, led by the EDP, which, besides promoting dia- vals with a range of recommended actions at each interval, as logue and partnership, identifies specific economic activities. outlined above (Kulenovic and others 2015). Competitive cities manage to achieve continuity Lack of Economic Development Strategy Viability in their economic development trajectories across A long-term strategy lacks viability if not under- electoral cycles. In doing so, they overcome the inherent pinned by a realistic financing envelope and opera- difficulty in relying on a new administration to continue the tionalized through annual plans. For long-term strate- initiatives of its predecessor. New administrations naturally gies to be relevant, they must be framed in terms of business look to put their stamp on a city by launching initiatives (and and economic cycles rather than short-term electoral cycles (Moir and Clark 2014, 38). Certain cities have found ways of making these plans more credible and long lasting. Lagos en- Box 6: From Strategy to Implementation: Lagos’ sured that a budget framework supported its policy goals, and Plan several cities in a recent OECD study, including Cape Town and Boston, took steps to improve the content and endurance The achievements of LASEEDs were coordinated at the of their economic strategy by involving the private sector. highest level by a biennial Lagos State Economic Sum- mit (Ehingbeti). In addition, a State Executive Council Lagos’ State Economic Empowerment and Develop- was formed as a senior policy making body, and held ment Strategy (LASEEDs) set out goals in infrastruc- weekly meetings with 42 government staffers, including ture, employment, security, and health and revenue political and civil service leaders. The Council initiated enhancement (Filani 2012, 18-19). 22 The initiatives of reforms encompassing state and local offices and ensured the Lagos State Government were underpinned by budget top-level political support from the Governor. Lagos’ planning, and performance was monitored through the second democratically elected state governor, Babatunde creation of government agencies that could coordinate objec- Fashola, established an Office of Transformation in order tives across different departments (Filani 2012, 19-20; Kuris to institute a process reform approach across all govern- 2014, 10-11). See Box 6 for how Lagos turned its strategy into ment offices. State offices were assisted in the creation of reality. service charters and mechanisms to set goals and ensure accountability. Governor Fashola stated: “The ministries Strategic plans should set out major objectives and now each have their own service charter, drawn up by targets for resources, activities, outputs, and out- them, about what they hold themselves accountable to do comes. Thus, the policy cycle (policy preparation) should in- within a time frame.” Government efforts are ongoing; form the financial cycle (budgeting). Strategic plans then need the initial pilot government offices involved those which to be implemented and monitored through some sort of mon- were deemed to have the highest impact on citizens’ lives itoring arrangement,23 and can be supplemented by special- (Filani 2012, 19-20, 42; Kuris 2014, 5-6, 10-11). ized monitoring instruments within policy sectors (e.g. crime 25 undoing the preceding administration’s initiatives). Eco- tutions outlines the principles and process of pub- nomic development interest groups, however, have used two lic-private collaboration (Sivaev and others 2015). techniques to combat this issue: (i) Establish an economic While PPD is a flexible approach that allows for adaptation advisory board to provide feedback, consultation, and help to various conditions and objectives, the process begins with hold the city to account; and (ii) Establish a legal mandate for mission scoping and stakeholder mapping, and continues to strategic planning. diagnostic and design stages. Ultimately the design of any particular PPD and its implementation varies greatly, and Cities have set up economic advisory boards as may take any shape as long as it meets its outlined objectives public-private structures to strategically advise and and reflects local conditions (Sivaev and others 2015). lead economic development at the city-level (Clark 2013, 37). The following are examples of cities that have Oslo created two new institutional structures: Oslo instituted such structures: Amsterdam (the Amsterdam Teknopol, as a non-profit economic development Economic Board); Boston (Boston World Partnerships); agency, and Oslo Knowledge Partnership, to promote Manchester (the Greater Manchester Local Enterprise research-based knowledge. Oslo recognized its relatively Partnership); and Oslo (Oslo Teknopol) (Clark 2013, 37, narrow maneuverability at the city level vis-à-vis the na- 42-43). These public-private structures are relatively un- tional government. To overcome this, the city government usual—indeed the OECD finds that less than one tenth of partnered with the private sector and research institutions governance bodies include members from the private sector at the metropolitan level to create two separate institutions. and other city interest groups (OECD 2014, 88). Such Boards The City of Oslo and Akershus County Council created Oslo allow for decision-making on economic development initia- Teknopol, the city’s non-profit development agency, as a tives to be made in consultation with economic stakeholders, strategic economic development body. Oslo Teknopol is aiming to build a citywide consensus on strategies, programs, now one of the leading drivers of collaboration in the city, and projects. Thus, newly elected administrations will find it bringing together business, research, and higher education, more difficult to abolish initiatives that are backed by key city as well as local and national government agencies. The agency actors.24 created a mechanism for the city to bring its leaders togeth- er to stimulate innovation and coordinate efforts to attract Limited Cooperation with the Private Sector talent and foreign investment(Clark 2013, 149-150; Oslo Economic interventions by city governments are Teknopol). Kunnskap Oslo, or Oslo Knowledge Partnership, is more likely to be successful if they benefit from a collaborative initiative by the City of Oslo and more than 30 shared information, understanding, and cooperation partner institutions from research and higher education. It with the local private sector and other local economic seeks to promote Oslo as an international knowledge center, development organizations. The relationship between and highlight advanced research in life sciences, technology, public and private sector leaders becomes more important environment, and society. In addition to promoting the more when city governments have limited scope for economic targeted use of research-based knowledge, the Partnership development, and seek to increase their influence by coop- works to attract talent to research and higher education erating with the private sector. The private sector can offer (Clark 2013, 150; Oslo Business Region). expertise about growth sectors, reducing the risk that erro- neous assumptions could lead cities to design the wrong mix Boston stimulated interaction with its local private of commercial and residential property. The private sector sector through Boston World Partnerships (BWP), can provide support to initiatives to improve the business cli- which became a strategic partner to its city govern- mate. Private companies can strengthen a city’s international ment. BWP brings the business expertise of an expanded linkages. And, crucially, the private sector is vital to job cre- global reach and inherent market awareness, helping inter- ation and can help ensure that a link is established between nalize these competencies in city operations. Chaired by the young graduates and prospective employers (Clark 2013, 45). mayor, Boston World Partnerships (BWP) is comprised and financed jointly by the public and private sectors. It started Several cities, however, do not have a strong, collab- out with a $1 million grant from the Massachusetts state orative public-private coalition, and recognize that government and $400,000 from Proctor & Gamble. The they need to improve upon their existing collabora- senior board includes Boston’s former Chief Economic De- tion. Birmingham, England, realized it needed to develop velopment Officer and senior representatives from Harvard “Team Birmingham”, a coalition of its public and private Business School and firms such as Bain Capital Ventures. The sector leaders. Yokohama recognized that its key public and mayor and key business and academic leaders form a broad private actors were estranged from one another. Barcelona group of stakeholders equally invested in the city’s success. found that its effort to bring together public and private city BWP focuses on marketing efforts to promote the city’s leaders exposed disagreement between them on public and established clusters and a “Connector” program of business private sector priorities (PricewaterhouseCoopers 2005, 89, leaders supporting one another by providing access to ven- 97, 169). ture capital and new potential employees and collaborators. The ultimate goal is to promote Boston’s vitality globally. The Public-Private Dialogue (PPD) work of the World BWP helps ensure that the right business environment and Bank Group and other international financial insti- spatial conditions are available to the city’s growing firms. 26 Much like Oslo Teknopol, BWP’s purpose is geared more to- by national government initiative, and applied universally wards creating productive relationships within the business (although, as we will see, the United Kingdom is an excep- community, and between business and government, “rather tion to this rule). Cities can best utilize such powers when than generating one-off opportunities for sales and transac- they are tailored to their particular needs and capabilities. tions (Clark 2013, 42-43).” Another way for a city to increase local authority is to apply its intergovernmental leverage, either by cooperating with Limited City Mandate to Tackle Local Challenges other local governments or strategically lobbying the national Several cities cite the challenge of lacking the ade- government. quate authority and resources to meet the demands of their city. A qualitative survey by PricewaterhouseCoo- The United Kingdom has taken a unique approach to pers revealed this sentiment among city managers in Toronto devolution by offering an array of policy measures to and Montreal, in Canada, Brisbane, Australia, and Manguang cities, recognizing the differences between cities and avoid- and Tshwane in South Africa (PricewaterhouseCoopers ing a one-size-fits-all approach. The national government 2005, 99, 133, 137, 157, 159). The issue is particularly salient requires cities to improve their local governance arrange- among cities in the United Kingdom, which is considered one ments as a prerequisite for devolution of administrating and of the OECD’s most administratively centralized countries financing powers (Bolton 2013, 5). The City Deals program (Katz 2014; RSA, 15). City governments have responded to offers cities new powers—and funding—over service deliv- this issue through national-level decentralization schemes, ery functions such as transport and business development for example in the United Kingdom. The problem is that (OECD 2015, 82-84). Box 7 discusses the Manchester’s City the devolution of responsibilities and resources from high- Deal arrangement and the program’s rollout nationwide. er to lower tiers of government is typically driven solely Box 7: The United Kingdom’s City Deals Incentivizes Cities to Improve Local Government Arrangements The United Kingdom’s national government offered to Manchester’s City Deal earned the city a revolving devolve new powers to its cities through City Deals, infrastructure fund, allowing the city to earn back a which provides them greater authority over transport, portion of additional tax revenue generated from local infrastructure, business development, education, and investment in infrastructure and the resulting gross planning issues. The program required cities to estab- value added increases. Other measures include creating a lish stronger governance arrangements (e.g. an elected City Apprenticeship and Skills Hub to place apprentices mayor, greater coordination among local authorities). with SMEs, and strengthening of the Business Growth Each city in the country is eligible to negotiate such a Hub, which integrates trade, investment, and businesses deal. advice. Notable achievements for the GMCA include: major refurbishment of the Bolton and Rochdale railway Greater Manchester agreed to a City Deal in 2012 after stations as part a city region transport investment pro- it had united the metropolitan area’s 10 local authori- gram; raising an annual “Revolving Infrastructure Fund” ties into a Combined Authority, the Greater Manchester worth £30 million; and permission for the building of up Combined Authority (GMCA), in 2011. The GMCA de- to 7,000 new homes by 2017. veloped a Greater Manchester Strategy and established Transport for Greater Manchester (TfGM) as GMCA’s Manchester is one of eight British cities to have made executive body for transport functions. GMCA, TfGM such deals. All participating cities improved their local and other Greater Manchester institutions set out clear- governance arrangements as a prerequisite. An addition- ly defined roles based on agreements between the area al 20 cities were negotiating such deals with the govern- local authorities. ment throughout 2014. See RSA (2014, 15, 31); Greater Manchester Combined Authority; Smith (2012, 2 26); Wilcox and others (2014, 11). 27 Manchester needed first to create a Combined Au- Bucaramanga has worked collectively—mainly within thority before it could receive a City Deal offer. The nation- the private sector—to satisfy city needs by tapping al government required the city to collaborate within its into higher-tier government resources and funds. metropolitan area and its 10 local authorities. The Greater Bucaramanga Chamber of Commerce competitiveness initia- Manchester Combined Authority was established in 2011, tives were among the most targeted and well-organized of the and allowed the city to match its political geography with its case study cities, and are outlined in Box 8. The Chamber’s functional economic area. GMCA works with its constituent proactive and targeted agenda made it well placed to eventu- authorities in a set of powers and responsibilities in economic ally tap into expanding national government support. development and transport (Smith 2012, 2). Box 8: Bucaramanga’s Chamber of Commerce Reaches Out to National Government The Chamber’s initiatives were targeted, organized and they Forum identified economic priority areas: accessing gave Bucaramanga a mechanism through which it could ac- the growth potential of individual industry sectors cess an expanded menu of support—adapting to the national and creating a competitiveness commission (headed government’s competitiveness agenda. The Chamber’s initia- by local nominees). tives are summarized in the points below: • The Chamber adapted to the newly established a na- • The Chamber established an Investment Promotion tional competitiveness agenda for cities, and offered Agency in 1986 to attract foreign investment and sup- to co-locate the new nationally mandated Santander port local firms’ export efforts; Competitivo regional competitiveness commission (RCC) within its premises. • More recently, based on a study conducted by the Cham- ber, it identified infrastructure as an impediment to the • The new RCC allowed for new formal channels for city’s competitiveness and lobbied the national govern- the Chamber to access national level support, such ment using the study to justify its requests; as accessing support and funding on targeted pro- ductive industry sectors and working with national • In 2006, the Chamber convened 70-80 of Santander’s agencies to support workforce development (Kule- leaders from the business community, academia, local, novic and others, 2015). state and national government representatives, and labor unions in a “Regional Competitiveness Forum”. The 28 An Implementation Checklist for City Building consensus and preparing the Leaders groundwork: City leaders are increasingly focused on ensuring that the policies and programs they develop are properly implement- • Create a shared analysis and understanding of ed. The process outlined here enables city leaders to identify problems and challenges to achieve a clarity of the steps and the network of actors they will need to influ- purpose both within city government and as a result of ence (through cooperation with the private sector, neighbor- a public-private dialogue. ing jurisdictions, and higher tiers of government) to deliver on agreed priorities for fostering competitive cities. • Activate personalized leadership, with senior leaders owning the objectives through the involve- This User’s Guide presents the city wedge framework in order ment of key executive government offices and through to first frame the points of leverage that cities have at their the formation of a representative board with leaders disposal to implement well-designed programs. City leaders from public, private and research sectors. implement interventions by maximizing their own scope and capacity, cultivating a collaborative relationship between the • Gather a dedicated, diverse, and capable team to public-private-research sectors, and leveraging collaboration drive the program. and support from intraregional networks and higher-tiers of government. These three points of leverage make up the city • Ensure that a public-private coalition underpins wedge, and in cities it is these three configurations of actors the city’s engagements on competitiveness, with that impact competitiveness, whether in workforce develop- tasks shared among the different actors and a significant ment, access to finance, enterprise development, streamlin- degree of private sector ownership (this could be through ing institutions and regulations, or improving infrastructure. joint public-private boards or through the cooperation Evidence from the six primary competitive cities case studies between distinct bodies). suggests that this framework is applicable, and that cities utilize each of these three avenues to varying degrees. Calibrating for successful implementation: When competitiveness interventions fall short, it is often due • Develop a realistic timeline, which draws on the to pitfalls in a city government’s program or policy imple- insights of those responsible for implementation. mentation. This guide identified four common challenges relevant to cities: 1) coordination and accountability failures; • Ensure that activities and interventions are suffi- 2) lack of economic development strategy viability; 3) limited ciently resourced (through city government resources, cooperation with the private sector; and 4) city lacking scope utilizing private capital sources, and through accessing to tackle local challenges. The paper then presented the ways higher-tier funding). in which cities have responded to these challenges. In addi- tion, it has presented three common organizing structures • Assess the political dimensions of program, and that cities are already pursuing for implementing economic in some cases disentangle particular reforms from development strategies, 1) economic development agencies; specific politicians or parties. Include private and other 2) delivery units; and 3) public-private boards for economic stakeholders in the program to offset it being excessively development. identified with a particular politician or party. In light of the findings on the common problems cities face • Adapt the sequencing and level of ambition of the in implementing their programs and policies, how can city program to respond to the capabilities of government leaders prepare to successfully implement a competitiveness departments, taking into account the specific concerns intervention? The checklist below is meant to provide support of leading officials. If capabilities are insufficient, consid- to cities in order to improve implementation. It builds off er targeted interventions. of existing organization readiness assessments and prob- lem-driven approaches which emphasize the importance of • Ensure leaders and teams articulate a compelling strong foundations and adaptability during implementa- vision. Display empathy for governmental challenges tion.25 and work hard and in collaboration to address them. • Gain personal accountability of key officials critical for progress. Ensure that there is sufficient accountability from the top down (within government), and also from the bottom up, supporting a process with private sector and civil society buy-in. 29 Monitoring and adjusting implementation This guide does not provide a city with ‘the’ answer, but, as a city confronts challenges, it offers a process and set of ana- lytical guideposts to determine the relevant questions to ask • Establish standards for the ongoing monitoring and steps to take. Cities will be most successful at nurturing of execution and performance. This will require firm growth when utilizing all of their points of leverage, developing meaningful outcome measures for programs, working in concert with the private sector and other levels of agencies, and the community. government. Implementation of policies and programs will be • Set-up the protocols for reviewing performance successful when a city ensures it has the necessary struc- information. A number of countries have introduced tures, processes and feedback loops in place. data-driven reviews to improve program performance. • Routinely report on progress to determine whether programs are achieving desired results. • Build and maintain the capacity for ongoing qual- ity improvement. • Manage evolving situations in order to make mid- course corrections. 30 Notes 12 Indian cities are classified according to a three-tier system, as Tier-1, Tier-2 and Tier-3 cities. The classification is based on 1 Bruce Katz and Jennifer Bradley emphasize the advantages city population with the most highly populated cities classi- of cities as opposed to the federal government: cities are able fied as Tier-1 cities and the least populated classified as Tier-3 to think more long-term than higher government tiers; cities cities. are results and action oriented, as opposed to process orient- 13 Twenty-Foot Equivalent Unit, a standard linear measure- ed; cities make up organic communities of stakeholders at the ment used in quantifying container traffic flows. For exam- local level, and not “hardened silos”; cities are more attuned ple, one 20-foot long container equals one TEU, while one to their specific assets, attributes and advantages, instead of forty-foot container equals two TEUs. prescribing one-size-fits-all solutions; and, lastly, cities and metropolitan areas must create networks to achieve common 14 “Turnaround cities” refers to cities from the U.S., OECD goals and community trust, and go beyond partisan calculus. countries and beyond that used innovative solutions to recov- See Katz and Bradley (2013, 5, 7-9). er from economic hardship. See: Kodrzycki and others (2009); KPMG (2014); Clark and others (2013). 2 Stakeholder mapping is a useful tool for identifying relevant actors and their remit and interests in specific programs and 15 See Clark and others (2010). policies. See, for sources and templates for carrying out a 16 The qualitative survey includes top city officials noting their stakeholder analysis, Cities Alliance (2007, 9, 107-109); Herz- internal challenges. See PricewaterhouseCoopers (2005). berg and Wright (2006: 33-38, 66). 17These implementation structures were the most prevalent 3 For further details on the case studies, see Kulenovic and among the case studies and relevant literature reviewed for others (2015). this section. 4 Growth or reform coalitions are formally defined as “a (for- 18This may often result in staff from disparate government mal or informal) political mechanism and process utilized and departments failing to implement a policy, or for several formed by state and business actors, initiated by either, which conflicting policies to be pursued at once. Resulting inaction enables them to work cooperatively to address specific state regarding a particular policy may lead to a blame game within and market collective action problems through the pursuit and the involved implementing bodies, or two or more agencies implementation of a specific economic reform agenda, while may actually be pulling in opposite directions, creating an retaining their independence from each other. See Peiffer atmosphere of confusion, distrust and leading to a scaling (2012, 7). back of the desired initiatives. See Tavakoli and others (2013, 5 However, we do not always observe a coalition in practice, 16-17). and certain stakeholder groups may lead competitiveness 19 Coordination becomes even more important when the pub- interventions in place of the public sector. lic and non-public sector is involved; this is often the case in 6 Our focus here is the range of policies that city-leaders can a “local development system”—the network of public, private hope to influence, compared to those are pre-determined by and non-governmental actors partners working collaboratively higher levels of government. for local economic growth, social cohesion and employment generation. See Clark and others (2010, 130). 7 Cities are part of distinctive intergovernmental administra- tive, financial and political systems, and the administrative 20 City examples include Cincinnati, Louisville, and Somer- scope and capacity of city governments varies greatly from ville. For more, see Clark (2015). one city to the next. Competitive cities project’s Mayor’s 21Leading Groups are a commonly used mechanism through- Wedge Framework analyzes a city government’s scope—gov- out China. ernment powers and functions—as well as capacity—its abil- 22The strategy originated from the 10-point plan by former ity to perform its functions well—in order to provide a lens to governor Asiwaju Tinubu. analyze the institutional context of city government. 23Models to guide this process include Balanced Score- 8 For further information on the four drivers of city competi- card (BSC), European Foundation for Quality Management tiveness, see World Bank (2015a). (EFQM) and others. For more see Van Dooren and others 9 The Competitive Cities team has developed an economic (2010, 82). diagnostic tool for cities that has been successfully piloted in 24 See, for a more detailed exposition, the case study of Rosa- several South African as well as Malaysian cities. See Sivaev rio, Argentina in Steinberg (2002, 20). (2015). 25 This checklist builds on previous frameworks and approach- 10 Proactive initiatives in “finance” were not observed in our es, including a recent paper by the UK Institute for Govern- case study findings. Kigali did extend finance to its credit-con- ment and other related literature. See Panchamia and Thomas strained small and medium enterprises, but it did so through (2014); Hanleybrown and others (2012) identify five condi- offering land titles and thus is included in the “Institutions & tions for collective impact, which include: common agenda; Regulations” category. shared measurement; mutually reinforcing activities; continu- 11 KGiSL stands for K Govindaswamy Information Systems ous communication; backbone support in channeling change; Private Limited. It is now a conglomerate of companies but Kohliand others (2011). started out as a cotton-trading venture by Shri.K Govindas- 31 wamy Naidu in 1932. 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Smith, Rachel. 2012. “Combined Authorities: Stronger together?” Centre for Cities, London. Smoke, Paul. 2013. “Metropolitan Cities in the National Fiscal and Institutional Infrastructure.” In Bahl, Linn, and Wetzel (Eds.). “Financing Metropolitan Governments in Developing Countries.” 57-84. 33 Funding for the companion papers and the main report was provided by CIIP Competitive Industries and Innovation Program Financed by in partnership with www.theciip.org Find the companion papers and the main report at www.worldbank.org/competitivecities