Academic journal article Economic Perspectives

Can Alternative Forms of Governance Help Metropolitan Areas?

Academic journal article Economic Perspectives

Can Alternative Forms of Governance Help Metropolitan Areas?

Article excerpt

Economic development theorists are increasingly promoting the development of strong regional economies as the key to successfully attracting and maintaining economic activity when global competition and technological change are making business location choices increasingly far-flung.(1) At the core of healthy regions are metropolitan areas that offer the amenities and services that businesses demand. One school of thought suggests that while metropolitan areas are particularly critical to regional economic success, current growth patterns are leading to urban sprawl and the inefficient delivery of public goods and services that will ultimately undermine the economic prospects of entire metropolitan regions. Yet deconcentration of economic activity is entirely rational given the present rules of the economic development game. Research has shown that any town will receive a tax benefit from securing commercial development even if that development has negative spillover effects on the region.(2) However, since there are no political and economic structures to promote the region's interests over those of individual towns, the pattern of uncoordinated growth continues. The most frequently suggested solution to this problem is some form of centralized metropolitan or regional government that can coordinate growth and help the entire region to share the benefits of economic growth.

In addition to the potential benefits of coordinated regional growth, supporters of consolidated metropolitan governments usually suggest that economies of scale in the production and distribution of public goods are available to larger government units.(3) These efficiencies lower the cost of government while providing the types of uniform governmental services that should appeal to businesses when making locating and operating decisions.

The issue of metropolitan governance is of particular interest to the Midwest. Central cities in the region have been experiencing population declines. Recent economic and population growth in metropolitan areas has been achieved largely by the spread of activity into more distant suburbs, resulting in a pattern of uncoordinated land use. Such development is occurring in metropolitan areas across the nation, but it is more noticeable in the industrial cities of the Midwest, where central cities historically had high densities of both economic activity and population. While newer metropolitan areas can be designed to accommodate the infrastructure that is needed to promote commerce, midwestern cities are often left with an aging infrastructure that was designed to support the commerce of the early 1900s, not that of the 1990s. Given this disadvantage, promoting a healthy and integrated region is arguably more critical to the Midwest than to other regions.

The Midwest is an appropriate arena in which to examine the issue of metropolitan governance, for it is home to some of the most extreme examples of both consolidated and fragmented government in the nation. From the relatively tightly knit structure of Unigov in Indianapolis to the highly fragmented structure of overlapping governments in Chicago, the full range of government types is available.

This article will address the question of whether there are advantages to changing some aspects of metropolitan governance. It will further assess some midwestern experiments in metropolitan government.

How have metropolitan areas in the Midwest changed?

Population movement in the early 1900s tended to be from rural areas to the central city. Today, population is still moving from rural areas to metropolitan areas, but at the same time, the population within metropolitan areas is spreading out of the central city into the surrounding suburbs and outskirts. Thus in many midwestern cities, while metropolitan population has grown, the population of the central urban areas has declined (see table 1). This is the most significant dynamic influencing midwestern metropolitan areas. …

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