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Public Sector and Governance

Making cities competitive – What will it take?

Megha Mukim's picture

Cities are the future. They are where people live and work. They are where growth happens and where innovation takes place. But they are also poles of poverty and, much too often, centers of unemployment.

How can we unleash the potential of cities? How do we make them more competitive? These are urgent questions. Questions, as it turns out, with complex answers – that could potentially have huge returns for job creation and poverty reduction.

Cities vary enormously when it comes to their economic performance. While 72 percent of cities grow faster than their countries, these benefits do not happen uniformly across all cities. The top 10 percent of cities increase GDP almost three times more than the remaining 90 percent. They create jobs four to five times faster. Their residents enjoy higher incomes and productivity, and they are magnets for external investment.
We’re not just talking about the “household names”among global cities: Competitive cities are often secondary cities, many of them exhibiting success amidst adversity – some landlocked and in lagging regions within their countries. For instance, Saltillo (Mexico), Meknes (Morocco), Coimbatore (India), Gaziantep (Turkey), Bucaramanga (Colombia), and Onitsha (Nigeria) are a few examples of cities that have been competitive in the last decade.
So how do cities become competitive? We define competitive cities as those that successfully help firms and industries create jobs, raise productivity and increase the incomes of citizens. A team at the World Bank Group spent the last 18 months investigating, creating and updating our knowledge base for the benefit of WBG’s clients. In our forthcoming report, “Competitive Cities for Jobs and Growth,”* we find that the recipe includes several basic ingredients.

In the long term, cities moving up the income ladder will transform their economies, changing from “market towns” to “production centers” to “financial and creative centers,” increasing efficiencies and productivity at each stage. But economic data clearly shows there are large gains to be had even without full-scale economic transformation: Cities can move from $2,500 to $20,000 in per capita income while still remaining a “production center.”  In such cases, cities become more competitive at what they already do, finding niche products and markets in tradable goods and services. Competitive cities are those that manage to attract new firms and investors, while still nurturing established businesses and longtime residents. 
What sort of policies do competitive cities use? We find that leading cities focus their energies on leveraging both economy-wide and sector-specific policies. In practice, we see how successful cities create a favorable business climate and target individual sectors for pro-active economic development initiatives. They use a combination of policies focused on cross-cutting issues such as land, capital markets and infrastructure, while not losing focus on the needs of different industries and firms. The crucial factor is consultation, collaboration and partnerships with the private sector. In fact, success also involves building coalitions for growth with neighbors and other tiers of government.

Voice from the field: how can we help the Caribbean fulfill the promise of PPPs?

Brian Samuel's picture
From Sept. 29 to Oct. 1, 2015, our first “PPP Boot Camp” was held in Barbados. This is the first of the boot camp-style workshops we are delivering to Caribbean government officials to help them increase technical capacity in public-private partnerships. The boot camp series aims to offer the depth and breadth that’s been missing from the PPP market in the Caribbean.

How we made #OpenIndia

Ankur Nagar's picture

open india

It has been a season ripe with new ideas and shifts in the open data conversation. At the Cartagena Data Festival in April, the call for a country-led data revolution was loud and clear. Later in June at the 3rd International Open Data Conference in Ottawa there was an emphasis on the use of open data-beyond mere publishing.

Mulling on these takeaways, a logical question to ask may be: what would a country-focused data project that aims to put data to use look like?

Have you tried Open India?

A few months earlier, inspired by the “Digital India” vision, a small but agile team led by the India Team at the World Bank was working on Open India.  It’s a live, open platform for engaging with and tracking the why, what, and how of the World Bank Group’s work in India, within the context of the development challenges that India faces. At the heart of this process was data from this vast country and equally important “design thinking” to solve a clear problem.

Here is a glimpse at the journey of this in-house startup. We hope it will add to the evolving data conversation, and help make the case for design to be a part of it.  These are our lessons-learned from our journey as World Bank intrapreneurs.

Open India: Take on India’s Development Challenges
Open India: Take on India’s Development Challenges with the Wo... - The Open India app connects the dots between every public and private sector activity of the World Bank Group in India, against the context of the vast development challenges that the country faces. Use this app to track the World Bank Group’s work in your state and the development issues of your interest, and provide your ideas and feedback.

Posted by World Bank India on Friday, October 16, 2015

Pitch like a startup

India has become one of the fastest growing economies in the last decade, but remains home to a third of the world's poor. Its development challenges are massive: there is a huge infrastructure gap, it is urbanizing at an astonishing pace, and the population is set to cross 1.5 billion. The World Bank Group's Country Partnership Strategy offers an analysis and a plan to tackle these challenges. It covers a portfolio of over $25 billion, and provides a clear results chain to track the strategy’s progress.

Doing development differently: what does it mean in the roads sector?

David Booth's picture

There is no sign that the revival of interest in adaptive and entrepreneurial approaches to development work is going tail off soon.

That’s why the demand is growing for indications of how the broad principles, as summarised in the Doing Development Differently Manifesto, apply to the various sectors where interested practitioners are found.
Fred Golooba-Mutebi and I have just published an ODI working paper that begins to fill that gap for one particular economic infrastructure sector, road construction and maintenance. The country is Uganda. The purpose of the study was to revisit a 2009 paper on the political economy of reform in the sector, which was followed by the launching of a DFID-funded programme called CrossRoads.

Transforming livelihoods through good governance and seaweed farming

Alice Lloyd's picture

​A tourist eyeing the gorgeous azure waters around Zanzibar, Tanzania, might think about taking a frolic in the waves, but for local fishers, the sea means business--the seafood business.

Islamic finance: Strong standards of corporate governance are a 'sine qua non'

Nihat Gumus's picture

Proper corporate governance practices in financial institutions should provide added value by enhancing the protection of depositor and investor rights, facilitating access to finance, reducing the cost of capital, improving operational performance, and increasing institutions’ soundness against external shocks. Ensuring strong corporate governance standards is thus essential to the stability and health of all financial institutions, worldwide.
Good governance is an important priority for Islamic finance, an aspect of international finance that has enjoyed a stage of significant growth over the past decade. The volume of financial assets that are managed according to Islamic principles has a value of around $2 trillion, having experienced a cumulative average annual growth rate of about 16 percent since 2009 (Graph 1).

Graph 1: The Size of Islamic Finance Assets (USD Billion)

Banking has traditionally been the leading sector in the realm of Islamic finance, but the share of other products and institutions within the total realm of Islamic financial assets has been steadily increasing,  as well (Graph 2). For instance, the Sukuk sector – which focuses on securitized asset-based securities – has seen considerable growth over the past six years and, as of 2014, amounted to more than $300 billion. Similar momentum is driving the growth of the Islamic Funds and Takaful (Islamic insurance) sectors. From 2009 to 2014, the assets under management of Islamic Funds has increased from about $40 billion to about $60 billion, while the amount of total gross contribution to Islamic insurance has surged from $7 billion to more than $14 billion.

Graph 2: The Size of Islamic Finance Assets by Sector 2014 YE (%)


The sunny side of PPPs: Rooftop solar, public-private partnerships, and the promise of a brighter future

John Kjorstad's picture
In 1899 American Ada Blenkhorn—inspired by a disabled nephew—wrote the popular folk song Keep On the Sunny Side. As legend would have it, Blenkhorn’s nephew always wanted his wheelchair pushed down the “sunny side” of the street. Not for the first time, sunshine was linked to optimism and the lyric stuck with working-class audiences.

What does it take to be a good citizen?

Alice Lloyd's picture

Recently I was asked what does it take to be a good citizen? 

As I was coming up with my list, I realized that the basic rules of being a good citizen were taught to me at a young age – in kindergarten, actually.  Here’s my partial list:
  • Share everything.
  • Play fair.
  • Don't hit people.
  • Put things back where you found them.

Breaking down the doors: Bringing contract deals into the open

Georg Neumann's picture
 Department for International Development - Supplying medicines (CC BY 2.0)
Photo: Department for International Development : Supplying medicines (CC BY 2.0)

Fighting corruption was at the center of the 16th International Anti-Corruption Conference in Putrajaya, Malaysia that ended in September. Not surprisingly, Open Contracting, an approach to bring deals between governments and businesses into the open, was identified as a key tool in fighting corruption in the Putrajaya Declaration that emerged from the Conference.
Government contracts are one of the government activities most vulnerable to corruption. As contracts cut across sectors, every service a government provides can be affected by it. Life saving medicines, and schools buildings, and infrastructure projects such as roads, ports, bridges, estimated at US $1 trillion worth, provide opportunities for agreements behind closed doors that can harm societies in the long-term.

Driving change in challenging contexts: four issues to address

Verena Fritz's picture
During war, markets help people survive. Salad traders in Garoule market, Mali.
© Irina Mosel / ODI

Recently, I participated in an ODI-organized conference on ‘Driving change in challenging contexts’. The ongoing refugee crisis in Europe as well as the adoption of the SDGs is bringing efforts to revive and accelerate development in challenging contexts to the forefront of political attention.

​Progress in such contexts is inevitably difficult. But actual practices are also still far from the possibility frontier of what could be done. Four issues stand out: