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The Boring Secret of Great Cities

Christopher Flavelle writes editorials on health care, energy and environment for Bloomberg View. He was a senior policy analyst for Bloomberg Government and chief speechwriter for the leader of the Liberal Party of Canada.
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Plenty of things make a city great: well-paid jobs, good roads and public transit, high-quality schools, attractive parks and cultural goodies like celebrity chefs and art galleries, to name a few.

But what creates those qualities in some cities and not others? A new report from the Organization for Economic Cooperation and Development across industrialized countries points to maybe the unsexiest topic in public policy: the structure of municipal government.

Sure, you've probably never argued over drinks with friends about the optimal size and responsibilities of county government. And that's exactly the problem. If the OECD is right, the overpowering boringness of metropolitan governance bodies is a big part of what keeps more big cities from succeeding. It's hard to worry about (let alone fix) something that's too dull to argue over.

That neglect comes at a pretty high cost. In its report, "The Metropolitan Century," the OECD says you can't expect a well-functioning city without "effective governance arrangements that fit the situation in a city and its surrounding areas." So long as people live in one area, work in another and go out in a third, the patterns of their lives don’t reflect arbitrary jurisdictional lines drawn decades (or, for some cities, centuries) earlier.

The result is a "mismatch between functional boundaries and administrative boundaries," as the latter fail to keep up with the former. Some metropolitan areas adapt, either by merging small local governments or by creating new ways to coordinate across those governments -- what the report calls, collectively, metropolitan governance bodies. Others don't, allowing bureaucratic and planning friction to persist and fester.

The results of that decision can be profound. Start with the economy: The report found that doubling the number of municipalities per 100,000 residents in a metropolitan area is associated with a drop in labor productivity of 5 percent to 6 percent. Labor productivity may sound dull, but that's what creates the disposable income and tax revenue to fill celebrity restaurants and fund high-quality schools.

And in cities with metro-wide governance bodies, the labor force is larger. From 2000 to 2010, metro areas with governance bodies had population growth rates that were a quarter of a percentage point higher, on average, than those that didn't. Symphonies and art galleries do better when there are more people to fill them.

A coordinated government also changes the physical structure of a city, by reducing sprawl. From 2000 to 2006, cities with metropolitan governance bodies saw an increase in population density of more than half a percentage point. In other metro areas, density declined by 1.1 percent.

That change in sprawl in turn affects the climate. Metro areas with governing bodies have less air pollution than those that don't -- something the OECD report attributes to better coordination of transportation and land-use policies. (Which raises the question: Could the integration of local governments become a cause for climate activists?)

"Government structure isn't everything," Rudiger Ahrend, an OECD economist in Paris and the report's lead author, told me by phone. But with a good structure, "you'll be more resilient. You'll be quicker to change. You'll bounce back. Over time, you'll make better decisions."

So what's in the way? Strong local identities, the cost of reform and "vested interests of politicians and residents," the report notes diplomatically.

The cost of those vested interests sometimes bursts into view -- such as last year's shooting of Michael Brown in Ferguson, Missouri, one of 90 municipalities in St. Louis County. That governing structure means towns of as little as 800 people have their own police forces, many relying on revenue from traffic tickets to fund their operations. That, in turn, led to distrust of police, fueling the riots and debate that followed Brown's death.

But for the most part, the crazy quilt of city and county government avoids public attention, being too boring to bother discussing. The OECD says that's a mistake. The numbers say they're right.

(Corrects change in air pollution in ninth paragraph.)

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Christopher Flavelle at cflavelle@bloomberg.net

To contact the editor on this story:
Stacey Shick at sshick@bloomberg.net