Federal systems don’t preclude national urban policies

But successfully formulating these policies depends on the view of federalism followed in any particular country.
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Originally posted at Citiscope on May 8, 2017.

Both in the lead-up to and following on the heels of October's Habitat III conference on  sustainable cities, there has been a renewed interest around the world in promoting national urban policies. 

This interest stems from an increasing recognition of the importance of such policies for multiple purposes at multiple levels of government. These include, for instance, long-term strategic planning by central governments and their role in financing infrastructure. But they also include attempts to fight poverty, inequality and climate change, as well as to facilitate policy coordination among ministries or agencies.

As OECD Secretary-General Ángel Gurría put it during a Habitat III side event, national urban policy “provides a framework so governments and other stakeholders can ‘get cities right.’”

Still, what exactly constitutes that framework remains open. The United Nations’ lead agency on urban issues defines a national urban policy as “a coherent set of decisions derived through a deliberate government-led process of coordinating and rallying various actors for a common vision and goal that will promote more transformative, productive, inclusive and resilient urban development for the long term.”

But beyond this neat definition is a recognition of the diversity of national institutional arrangements and the challenge of figuring out how to actually implement a national urban policy without offering a one-size-fits-all approach — something that proponents have clearly been keen to steer around.

[See: Since Habitat III, an uptick in interest around national urban policies]

As momentum picks up for the elaboration and implementation of national urban policies in various countries, the question is increasingly arising: Can federal systems, too, adopt such a framework?

Certainly a federal system could make formulating a national urban policy more complex, simply because such policies often involve three or more levels of government. Likewise, well-established state, provincial or municipal capabilities could complicate the formulation of a national urban policy even further.

So is a national urban policy possible under a federal system? As it turns out, such policies and federalism are, in fact, compatible. But formulating these policies successfully within such a context depends on the view of federalism followed in any particular country.

Key examples
Despite the apparent challenges to a federal role in cities within specific national contexts, multiple examples show that a federal system doesn’t preclude a national urban policy.
In Australia, for instance, national urban policy seems to have succeeded under a federal system. Within a country that is demographically 90 percent urban, few policies are not de facto urban policies. So with the appointment of a federal minister for cities and the built environment in 2015, commentators asked: Does the federal government finally ‘get’ cities?

[See: Six months after Habitat III, is the New Urban Agenda gaining political traction?]

The question had a long backstory. Following a failed 2011 attempt to institute a national urban policy and years of federal disengagement in cities, the Australian government inaugurated a Smart Cities Plan in 2016, formulated around investment, policy and technology.

The policy is based on metropolitan strategic planning, infrastructure funding and on the British “City Deals” approach, bringing together all levels of government to “deliver better outcomes through a coordinated investment plan for our cities”. In the City Deals approach, introduced in the United Kingdom in 2012, the national government works directly with large cities through individual arrangements, reflecting the unique needs of each city by devolving powers and financial tools, and strengthening local governance.

While the Australian approach is interesting, it is just over a year old. For now, the test — and lesson for other countries — is whether it will survive a change in government.

Brazil, on the other hand, is a decentralized federal system that is unusual in its recognition of the importance of cities. In 2001, a law known as the Statute of the City (Estatuto da Cidade) was approved, setting out the rights and obligations of cities in the Brazilian federation. The government also created the Ministry of Cities, a federal institution to deal with matters related to urban development and a long-standing demand by the urban reform movements. Since 2003, the ministry has helped Brazil’s numerous municipalities implement the Statute’s directives and acted as a national voice for cities.

Another example is Belgium, which is also highly urbanized. Dating from 1999, the country’s national urban policy — the Big City Policy (Politique des Grandes Villes) — supports Belgian cities most affected by deprived neighbourhoods through contracts between the central government and individual cities. These contracts include horizontal coordination between federal sectors and vertical coordination between other stakeholders (at the European, national, regional, local and neighbourhood level). In 2001, the Belgian authorities created the Urban Policy Service to implement the national urban policy. Belgium’s regions also have their own regional urban policies.

[See: Can the New Urban Agenda heal India’s urban-rural divide?]

Other examples of federal countries with national urban policies include Germany, Mexico and Switzerland. 

Contentious proposition
Despite these positive examples, scepticism continues to flourish over the prospect of a national urban policy being instituted in a federal system. One of the major arguments against this idea rests on a conceptual view of federalism that imagines a constitutional impediment to such policies. Another barrier could be simply that while federal urban policy is possible, it's unnecessary.

An alternative viewpoint, however, comes from a more pragmatic approach. This stance makes the case that a federal government can play a substantial role in urban policy if it is prepared to mobilize the fiscal and policy levers at its disposal, in addition to the political consequences of doing so. This pragmatic approach — in contrast to a more theoretical position — was raised in the 1970s by urban scholar Patrick Troy (in reference to the Australian case).

[See: Joan Clos: New Urban Agenda ideas ‘are now trickling down’]

Here, Canada provides an instructive example. In the 1970s, then-Prime Minister Pierre Trudeau created the Ministry of State for Urban Affairs, establishing a federal urban policy. But that move came about only after a change of mind from the Trudeau, who initially took a more cautious approach to federalism: At first, the prime minister saw any deviation from the constitutional roles of the provinces as a possible cause of friction and instability.

This interest in Canada began in earnest in the 1960s, considered a watershed in federal-municipal relations. But in fact, discussion over national urban policy in Canada has come up time and again. Multiple federal governments have attempted to institute such a policy, although each initiative eventually has fizzled away.

Over the years, one argument often cited in this perennial discussion has to do with Canada’s unique federal system. As “creatures of the provinces”, Canada’s cities can be formed, dissolved, amalgamated or otherwise altered and their power expanded or restricted only by provincial governments. As a result, Ottawa cannot stoke provincial resentment — particularly from Quebec — about jurisdictional intrusions.

Instead, the federal government must seek to enhance federal policy capacity and visibility in Canada’s cities, the country’s key locales of economic, social and cultural interaction. Given significant pressure from the opposition, Trudeau’s move created the most successful foray into national urban policy in Canada thus far. However, such efforts collapsed among intergovernmental tensions — thus highlighting the need for consensus among the collective stakeholders involved in crafting national urban policies in federations.

[See: After Habitat III, we need to institutionalize our urban policy dialogues]

A similar discussion has taken place in Australia, also a highly federalized country. Despite Australia being a truly urban nation, politicians, scholars and jurists have argued that the federal government has no authority to intervene in urban affairs. As in Canada, several short-lived advances over the years — such as key urban and housing development initiatives in 1972, when both the Labour and left-wing parties agreed to create a cities portfolio within the Commonwealth ministry — have made the case for a federal presence in urban issues.

In the United States, there is no national urban policy per se, although there certainly has been interest in the issue. Nonetheless, the federal government had been largely removed from national urban policy since the 1960s. That said, easing the approach to federalism actually has allowed for some steps toward an urban policy.

Following years of disengagement in urban affairs, President Barack Obama renewed a federal role in city life, driven by an approach that officials called a “new wave of federalism”. In 2009, the White House launched an Office of Urban Affairs to mobilize federal resources in a coordinated fashion toward cities and to collaborate with local communities through sustainable investments.

[See: Why are U. S. mayors missing Habitat III?]

While the Obama-era programmes did not amount to a national urban policy, the change in orientation was unquestionable — although it now appears that the Trump administration is dismantling these advances.

Flexibility and consensus-buildingDespite the uncertain situation of the United States, interest in national urban policy is clearly rising. Importantly, this growing attention is being accompanied by a strengthening body of international guidance on the issue.

Before Habitat III, for instance, UN-Habitat and Cities Alliance published a global overview of national urban policies, while the OECD published a compendium detailing European efforts toward such policies. Both studies highlighted the diversity of national experiences, including those with federal systems. The policy paper on national urban policy prepared for Habitat III likewise recommends flexibility in the institutional form of such policies.

[See: Habitat III struggled to deliver — but nonetheless, a new global urban agenda is upon us]

By the same token, considering how consensus can be forged around the need for a national urban policy would greatly facilitate this process. Germany’s national urban policy, launched in 2007, is a notable example of such consensus-building. There, prior consensus-building allowed the national urban policy to more easily fit within the complex federal context and to encourage power-sharing among members of the federation.
How did Germany approach this process? To build consensus and support for the policy through engagement of a broad range of stakeholders, Germany authorities created a National Urban Development policy board. This body included representatives of a broad range of stakeholders including all levels of government, architects, planners, engineers, chambers of commerce, property owners, tenants, craft associations, the construction industry, retailers, civil society groups and academics. This example is instructive for other countries heading down a similar path.

There is also a global initiative already underway that deserves attention: the National Urban Policy Programme of the OECD, UN-Habitat and Cities Alliance. This is a global knowledge-sharing platform on national urban policies and best practices aimed at supporting capacity development. Given the buzz over national urban policy since Habitat III, the time is ripe to demystify the advent of these policies in the context of federal systems.