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Transit Stud Rev (2010) 17:320–331

DOI 10.1007/s11300-010-0145-3

Metropolitan Governance: Which Policies

for Globalizing Cities?

Claudia Silvia Ambruosi • Giulia Maria Baldinelli •

Emanuela Cappuccini • Federica Migliardi

Received: 15 November 2009 / Accepted: 5 February 2010 / Published online: 6 May 2010
 Springer-Verlag 2010

Abstract Today, for the first time in history, half the world’s people live in cities.
This puts metropolitan areas to the test, especially in developing countries, where
the greatest part of urban growth is occurring. In order to meet the new challenges
linked to urbanization, today’s growing cities need appropriate metropolitan gov-
ernance. The present paper wants to investigate this issue, through the definition of a
general model of metropolitan governance, which can be adapted to every urban-
ization context according to its own specificities. Considerable emphasis will be
given to concrete examples to test the consistency of our model. In particular, since
water and sanitation supply is one of the key challenges affecting metropolitan
areas, we will apply our model to urban water management. Furthermore, an
important focus will be given to the contribution that Information and Communi-
cation Technologies can provide to the implementation of the model.

Keywords Urbanization  Metropolitan areas  Governance  Water management 


JEL Classification R50  H70  Q25  O30

C. S. Ambruosi (&)  G. M. Baldinelli  E. Cappuccini

LUISS Guido Carli University, Rome, Italy
G. M. Baldinelli
E. Cappuccini

F. Migliardi
Politecnico di Torino, Turin, Italy

Metropolitan Governance 321


In 2007, around half of the population in the world lived in predominantly urban
regions and the number will rise to 57.2% in 2025.1 The growing speed of
urbanization primarily affects developing countries. With 600 million people living
in cities and metropolitan areas, China is the largest urban nation in the world (see
Footnote 1).
Economic analysis has repeatedly identified the economic benefits of urbaniza-
tion (the so-called ‘‘agglomeration economies’’). Cities are generators of wealth,
employment and productivity growth, so that they are often considered the engines
of their national economies. As globalization progresses, cities increasingly
compete with one another to attract innovative investments and knowledge
activities. That is why the pursuit of competitiveness in urban regions has become a
major local and national policy objective.
The urban transformation that is now underway raises, however, several
problems: first, the question of environmental sustainability. This is a typical
negative externality and the consequence of current consumption and living habits,
which lead to an overuse of natural resources, ecosystem destruction and over-
dwelling; second, inequalities and threats to social cohesion, due to inadequate and
insecure housing and services, limited access to employment opportunities and
income, in particular in suburban areas, where the slums growth rate is higher than
in the general urban context (Véron 2006).
Addressing such issues requires appropriate metropolitan governance. The aim of
this paper is to identify its main features, according to a governance model.
First of all, some preliminary definitions will briefly be presented. Secondly, the
principles on which a good governance model should be based will be introduced.
Particular attention will be given to the case of China, where the deregulation
process, currently underway, has triggered a decentralization phenomenon, which
gives urban areas much more autonomy and responsibility. Thirdly, the proposed
model will be applied to urban water management. In the end, attention will be
focused on the role of Information and Communication Technologies (ICTs) in the
implementation of metropolitan governance.

Preliminary Definitions

A distinction has to be underlined between the concepts of urban areas and

metropolitan areas.
An urban area is a space of continuous urban development. It becomes
conurbation when two or more urban areas grow together (for example the Osaka–
Kobe–Kyoto conurbation).
According to the OECD definition, metropolitan areas are identified as large
concentrations of population and economic activity that constitute functional

Urban and Rural Areas, United Nations-Department of Economic and Social Affairs-Population
Division (2007).

322 C. S. Ambruosi et al.

economic areas, typically covering a number of local government authorities

(OECD 2006). In other words, a metropolitan region is a functional space, identified
on the basis of different criteria, such as population size and density, economic
activity, labor markets, service provisions.

A Possible Model of Metropolitan Governance

Governance implies a broader notion than government. While the concept of

government includes principles such as constitution, legislature, executive and
judiciary powers, governance rather concerns the interaction between these formal
institutions and those of civil society (Oakerson 2004).
Governance means also combining in a balanced way two different activities:
leadership and management.
The role of management is about maintaining and administrating an already
existing system, by taking care of operational details. Good management means:
accessibility to information, processes and institutions, which is granted to those
who are directly affected by decisions; transparency towards the citizens, who are
facilitated in acquiring knowledge about the activity of decision makers; respon-
siveness, required by the single stakeholders who, thanks to the possibility to gather
information and to monitor the managers’ choices, expect decision makers to serve
their interests.
These three elements are crucial to achieving an effective and efficient
management activity, regarded as honest and accountable.
Nevertheless, effective metropolitan governance requires the capability of
developing a comprehensive strategic planning as well. A city-wide vision, going
beyond each single issue, is essential to achieve policy coherence and to fulfill not
only short-, but also mid- and long-term expectations. This is what leaders do. Their
function is changing and transforming an existing system or creating a new one.
Good governance relies, in fact, on inspired political leadership, which grants the
society the possibility of solving peacefully disputes and conflicts. This must be
pursued through inclusiveness, which legitimates leadership by means of the largest
participation possible.
The Grand Pari, the call for proposals launched by Nicolas Sarkozy to plan a
post-Kyoto Paris of the Future, is an example of the attempt to identify a new way to
submit short-term choices within urban boundaries to a long-term city vision. A
second example of leadership can be drawn from Johannesburg’s experience. Since
the end of apartheid, this city has tried to develop an urban policy in order to
achieve peaceful conflict resolution and socio economic equity. The last step has
been the launching in 2002 of Joburg 2030, an agenda of modernization aiming at
transforming the metropolis into a ‘‘World Class City’’, a centre of business and
financial services (Gugler 2004).
Leaders, however, must work in conjunction with managers, because their
functions are strictly complementary. Good governance, in fact, needs both
somebody who ‘‘does the right thing’’ and, at the same time, somebody who ‘‘does
things right’’.

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How to implement such a model? There is no ‘‘one size fits all’’ solution.
However, it is possible to identify some general principles, which can suit every
urbanization context.
First of all, the importance of an integrated approach to metropolitan governance
should be underlined. Objectives and institutional frameworks should meet the
needs of the people. This requires a cross-sectoral attitude rather than one based on
sectoral division and participation of a wide range of stakeholders (not only public
authorities, but also private sector and civil society) to the definition, implemen-
tation and monitoring of urban policies.
Furthermore, in order to pursue an effective public policy in metropolitan areas,
it is crucial to define the most efficient allocation of functional responsibilities
among various levels of government. The principle of subsidiarity, for example, can
be useful to prevent functional duplication and inefficiency, by ensuring that
services are delivered by the government level closest to the service user himself.
Subsidiarity can be applied in two different connotations: horizontal and vertical
Horizontal subsidiarity implies a wide cooperation among different actors
operating in the same urban context. The typical form of this kind of interaction is
subsidiarity between private and public sector (PPP, Public Private Partnership).
Nevertheless, an enlargement of this participation to a Local Partnership is
desirable, with the involvement of the largest number of stakeholders possible.
An efficient example of such a subsidiarity can be found in Germany, in the city
of Duisburg. Here it is possible to find a highly developed cooperation system which
includes not only public and private actors, but also the third sector, which consists
of non-profit activities. Furthermore, it is interesting to underline that subsidiarity,
in this case, has spread beyond the city boundaries and has included the entire
region of Nordrhein-Westfalen, enhancing urban subsidiarity and elevating it to the
regional level (European Commission 2009).
On the contrary, the Johannesburg experience provides evidence of how difficult
the implementation of a real local partnership can be. The City has always held
several external stakeholder forums, focus groups, social surveys and large scale
public meetings to solicit the views of citizens on the city scale strategic planning.
Indeed, local participation is a legal obligation of local government in South Africa.
However, it has been shown that true consensus sometimes is lacking (Winkler
2008). This is especially true for service provisions issues. A study on water and
sanitation service delivery in Phiri and Stretford Extension 4 (2 Johannesburg
slums) found that 40% of the respondents were not consulted about the installation
of pre-paid water meters, and that of those consulted up to 37.5% did not agree, but
this was not taken into account (Hansen 2005).
As far as vertical subsidiarity is concerned, the case of China is particularly
China has undergone, during the last two decades, a deep transformation, due to
market economy development, deregulation and sustained urbanization process.
The Chinese governance system has switched from a unitary structured model,
hierarchically organized, where functional responsibilities were merely delegated
from the centre to the local governments, to a more decentralized model where most

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of the cities are fully responsible for the delivery of social and infrastructure
The risk of a strict subordination of each function to the central government’s
supervision, throughout a pyramidal scheme, is connected with the replication of
functions imposed by such a governance system. The organization of the central
government administration is duplicated at the provincial level and, subsequently, at
the municipal level.
In the last years, however, cities have become more focused on issues directly
affecting the administration within their own municipal boundaries. According to
this trend, county level cities deal directly with provincial governments, which are
the immediately superior government level. This interaction concerns policy
direction, approvals and financing.
The result of such an approach has proved to be extremely beneficial in terms of
economies of scale, minimization of duplication of service providers at different
government levels and adequate supply to enterprises and citizens (Kamal-Chaoui
et al. 2009).
Vertical subsidiarity approach is typical of OECD countries and many others;
China has adopted it, learning from their mistakes and aiming at rationalizing and
reallocating functional responsibilities, applying both a bottom-up and a top-down
Nevertheless, the efficiency of vertical subsidiarity, although supported by
numerous examples in the western world, does not have to be considered the
absolute and necessarily most efficient governance solution. In order to eliminate
inefficiencies China has developed, for example, a ‘‘small city based’’ urbanization
strategy in the region of Jiangsu. This region has been the first one to understand the
importance of integrating economic spillover benefits of each municipality and the
effects of a competitive regional administration.
In conclusion, in order to grant the effectiveness of urban policies, it is
fundamental that all decision makers—leaders and managers, public and private
actors—are accountable to the public, the ultimate beneficiary of the entire urban
governance scheme.

Urban Water Management

Today water and sanitation supply is one of the key challenges affecting
metropolitan areas. As a consequence, applying the governance principles, so far
described, to urban water management is a useful test for ensuring consistency to
our metropolitan governance model.
The pressure on the world’s water resources has been increasing during the last
decades, as the quality and quantity of fresh water deteriorates. Unsustainable water
management practices such as over-consumption and water pollution, combined
with climate change and pre-existing water scarcity situations could result in severe
impacts on both nature and society.
Ineffective drought and water resources management mechanisms put aquatic
ecosystems under higher stress. Indeed, the lack of adequate water use planning has

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led, over the decades, to heavy over-exploitation of rivers and reservoirs in case of
drought. This has put at risk the survival of the associated fauna and flora and
reduced the availability of resources for agricultural municipal and industrial uses.
Inappropriate water management negatively impacts the status of water bodies,
thereby compromising the ability of supplying communities with good quality and
sufficient quantity of water, in order to support lives in rural and urban areas.
The urbanization process caused several changes in landscape and territorial
organization, generating new needs as far as resources exploitation and, in
particular, concerned water management.
The expansion of urban areas has been modifying nature across the centuries:
wide spaces, previously occupied by river beds, have been sacrificed in favor of
urban development, which concentrated in valleys, safe from floods, and the outflow
of wastes polluted water basins.
The continuous widening of urban areas has caused the incorporation of rural
spaces into cities and the inflow of large quantities of future inhabitants, generating
a further from farther circuit.
In developing countries, for example in China or in India, this is the core of the
problem. Megalopolis such as Beijing, Shanghai, Delhi and Mumbai are undergoing
a process of rapid expansion, occupying more and more spaces and causing the
transformation of industrial suburbs and peripheral districts into residential areas
(Shiva 2004). The consequence of this process is the contamination of water layers,
in a much more rapid way than what happened in western countries in the ninetieth
In order to prevent such a catastrophic impact of urbanization on water resources,
different approaches have been proposed during the last decades. In particular, a
prevention strategy has been considered, although often regarded as unrealistic and
utopian. It implied an attempt of complying with nature instead of contrasting it,
adapting water consumption demand on behalf of industry and citizens to the real
availability of water resources, instead of forcing the development of a wide and
unsustainable supply.
Identifying effective ways to implement such a strategy is far from easy. A
possible approach is based on technological solutions, which require innovative
agreements and alliances among different economic sectors and levels of
government (for example between agriculture and urban areas or public and private
sector). Therefore, new institutional mechanisms are needed. Citizens must become
active actors of the supply system, adapting their behaviors and decisions to water
resources availability and leaving their role of passive exploiters who merely expect
from the government the satisfaction of their needs.
Nowadays the key word is ‘‘combined management’’ (Massarutto 2008).
In the past, when financial aid was allocated in each sector (agriculture, industry
and services), these sectors could manage it as they preferred. Now with 6 billion
people in the world and a perspective of 9 billion by 2030, this is no longer possible.
The combined approach is based on the same principles characterizing the
previously described metropolitan governance model. In particular, it implies that
every sector provides to its needs by itself, leaving the government the task of
controlling that the principles of solidarity among different social levels,

326 C. S. Ambruosi et al.

environmental sustainability and vertical and horizontal subsidiarity are respected

and valid for every citizen.
This kind of management has been improved in Europe thanks to the directive
2000/60/EC called Water framework directive (Wfd). If in the past the satisfaction
of the human needs was the independent variable and the water resources quality
was the result, the point of view has now turned upside-down: a good ecological
condition represents the minimal unbreakable goal. Specific water uses are admitted
only if compatible with this objective.
Combined management means also that there has to be interdependence among
all the components of the water system. This new kind of management means a new
form of governance in which water is the main character of a system which involves
all society levels: at each level water represents an essential resource on which all
the human activities are based. Although most European countries dispose of
abundance of water, the majority of sources are polluted by human activities.
Starting from this point in the Directive 2000/60/EC Member States have set out
some guidelines for water policy. The proposition affirms that by 2016 all water
sources must reach a good ecologic level. This definition includes chemical
(concentration of substances dissolved in water), biological (attitudes to house
specific vegetable or animal species) and morphological (concerning both fluvial
landscape and river as form of transport preservation) parameters. By the same date,
another goal has to be reached: the uncontaminated state of groundwater.
For this reason each human activity has to be adapted and differentiated
according to the various water uses: for example, dumping of waste could be
diversified depending on the places where the waste itself is produced. Some
exceptions are admitted only in specific cases: in particular, in the case in which it
would be possible to demonstrate that the expenses for implementation to reach the
goals are out of proportion. Anyway, in this specific case an improving of the
process is called for, compatibly with the costs required. With the aim of reducing
human pressure on the ecosystem, the Wfd established a policy of demand control,
based on the ‘‘polluter pays’’ principle that each member country will have to
guarantee that the costs of water services will be supported by the people who profit
from them.

ICT Coordination and Innovation Influence on Metropolitan Governance

The implementation of the governance model, whose principles have been

described so far, finds an extremely efficient tool in ICTs.
First of all, ICT systems allow horizontal and vertical integration and
coordination between all the different players involved.
A form of governance based upon ICT coordination is also crucial to reach
transparency (and thus governants’ accountability) and, in the best circumstances,
people participation in decision-making processes, and to carry on long-term
forecasts, fundamental to prevent future crises of the whole structure.
In conclusion, the application to real cases of such principles will certainly lead
to performance improvements in governance practices and, in particular, to

Metropolitan Governance 327

enhancements of competitiveness and efficiency. In any case, efficient and

competitive governance is achievable only through significant investments and
development-driven policies aimed at creating and maintaining ICT innovation
standards, one of the most important concepts at the base of current competitive
urban environments.
We will now focus on ICT coordination and the related ICT innovation,
presenting an outstanding case study: the Estonian capital, Tallinn.

ICT Coordination

ICT Governance is the system by which the current and future use of ICT is directed
and controlled. It involves evaluating and directing the plans for the use of ICT to
support the organisation and monitoring this use to achieve plans. It includes the
strategy and policies for using ICT within an organisation.2
Information Technology Governance (ICT Governance) is a subset discipline of
corporate governance focused on Information Technology Systems and their
performance and risk management. The rising interest in IT governance is partly
due to compliance initiatives, for instance Sarbanes–Oxley in the US and Basel II in
Europe, as well as the acknowledgment that IT projects can easily get out of control
and profoundly affect the performance of an organization.
Drawing on the Estonian case, we are going to define the Estonian Government
structure and the correspondent ICT Coordination Management which are both
based on the same decentralized structure (ICA 2006).
Pursuant to the Government of the Republic Act,3 the Estonian Government
includes 11 Ministries, 25 Boards and Administrations and 10 Inspections. An
additional 15 County Governments are parts of the Central Government structure,
whereas other 227 Local Governments are, by Constitution, independent from the
central administration.4 All ministries are relatively independent. This governmental
organisation shapes the framework for co-ordination of IT-systems: in Estonian
urban areas a decentralized coordination has been established, in opposition to a
strong and tighten central management of ICTs.
The management of public ICT Systems as well as the implementation of
Information Society policies have been assigned to the Ministry of Economic
Affairs and Communications (MEAC),5 whose duties concern the regulation of state
ICT-policy activities and Administrative Information Systems Development Plans
(main ICT aspects treated: budgets, legislation, projects, audits, standardisation,
procurement procedures and international cooperation in the field).
Official Definition of Corporate Governance of ICT by AS8015 (Australian Standard for ICT Corporate
This act includes the competencies and policy areas of all the ministries.
Hereby, a list of Estonian Ministries: Ministry of Education and Research, Ministry of Defence,
Ministry of Environment, Ministry of Culture, Ministry of Economic Affairs and Communication,
Ministry of Agriculture, Ministry of Finance, Ministry of Internal Affairs, Ministry of Social Affairs,
Ministry of Foreign Affairs.
The institution of reference is the Department of State Information Systems (RISO).

328 C. S. Ambruosi et al.

Then, the MEAC chairs the Estonian Informatics Centre (EIC), an implementing
body in charge of developing PC networks, managing data communication in public
administration, as well as administrating and developing nationwide ICT initia-
tives,6 whereas, at a regional level, ICT development is coordinated by IT councils:
they are in charge of organizing the elaboration of counties’ IT strategies.
Finally, the Estonian Informatics Council is the Governmental Committee able to
ensure the coordination between public and private sectors, by advising the
Government of the Republic on Information Society issues. Therefore, this non-
hierarchical ICT coordination structure ensures that all the necessary decisions can
be taken at the user nearest level, according to the principle of subsidiarity.

Principles of Information Society Development

In Estonian urban environments, the development of the Information Society is

grounded on a Declaration of Principles, adopted by the Estonian Parliament in
1998. Moreover, the current governmental Development Plan concerning ICTs (the
follow-up of the previous Plan related to the period 2004–2006), is included in the
document ‘‘Estonian Information Society Strategy 2013’’. According to this paper,
the crucial goals established for the next 5 years are the following:
• Every member of the society will have the possibility to use all benefits of the
Information Society
• Wide use of ICT is the engine of economic growth of Estonia
• Public sector is citizen-centric, transparent and effectively functioning.
Therefore, the main objectives of Estonian ICT policy in the coming years
consist in providing more citizen-oriented and service-based governmental Infor-
mation Systems (RISO 2006).

The Silicon Valley of the Baltic: ICT Innovation

In practical terms, this means stressing the importance of ICT Innovation both at the
public and at the private level, thus providing citizens innovative privileges, such as:
• Free WiFi Internet access from every location (there are about 1160 free WiFi
Nets in Estonia, accessible even from local petrol stations)
• Usage of electronic ID-cards as authentication devices on Internet and key of
access of an impressive range of cutting-edge M- and E-Services (Mobility and
Online Services). Nowadays in Estonia, about 80% of the population use these
identity documents for online payments or to carry out a lot of different
activities: e-Banking, e-Tax Board (online taxes declarations), e-Parking,

Moreover, it is important to remind that all ministries and boards have persons (IT-managers)
responsible for co-ordinating IT developments of the competency and policy area of the ministry.

Metropolitan Governance 329

Moreover, every Estonian citizen, besides e-voting, can be involved in decision-

making processes and monitoring in real time Parliamentary Sessions, its
procedures, decisions and approved expenditures. Furthermore, it is not so well-
known that, since 2007, Estonia is the third Country in the world (after Maldives
and Sweden) to boast an impressive high-tech virtual Embassy in Second Life (the
most famous 3D World), that Skype (the Software VOIP most diffused in the world)
has been co-founded by Estonian engineers and that, by 2011, Estonia will be the
first country in the world allowing mobile political elections.
Anyway, this dissertation is far from being exhaustive: as a matter of fact there
would be much more to say about the transparency of media and political sectors
and the fast-paced ICT innovation progress of Estonian cities.
In conclusion, metropolitan governance can take great advantage from ICT
Coordination and ICT Innovation Policies, which are vital for little and marginal
countries of recent independence such as Estonia, as well useful for every developed
By way of explanation of such importance it is relevant to introduce a quotation
that can be applied to whole Countries, as Estonia, but suits even more metropolitan
realities and urban areas, as the Estonian medieval capital, Tallinn.
For small countries it’s crucial to be visible in the overchanging world. Using
the words of Noam Chomsky—we should always be aware that one can’t
stand still on a moving train. (Margus Laidre, Estonian Ambassador in UK and
Northern Ireland)


Our research has focused on various aspects of metropolitan governance according

to a political, social and technological approach. First of all, we underlined the need
for both leadership and management, complementary activities to achieve the
implementation of sustainable urban governance. Then we identified the subjects
responsible for the accomplishment of these functions. Vertically speaking, we
found out that the principle of subsidiarity is probably the most effective criterion to
develop a good policy in metropolitan areas. As an example of the effectiveness of
such a strategy, the implementation of the EU directive 2000/60/EC has proved to
be better at the service user closest level. From a horizontal point of view, the
fundamental importance of the involvement of all stakeholders has emerged.
All these elements are interrelated. Developing a metropolitan strategic vision
(leadership) requires that decisions are taken at the appropriate geographical scale
(vertical subsidiarity). In this context, empowering the inhabitants of cities and of
their neighborhoods (horizontal subsidiarity) is the best way to ensure that this
geographical scale will not be remote from citizens’ local concerns. The case of
Duisburg, Germany, presented above, is a good example of how this balance can be
achieved. On the contrary, the case of Johannesburg is much more problematic.
Fostering stakeholders’ participation, especially of the poor and of those operating
on their behalf, is the only way to counterbalance the strategic planning of GDP

330 C. S. Ambruosi et al.

growth-oriented cities, and to tackle the old apartheid legacy as well as the new
challenges linked to urbanization. However, despite efforts by the city government,
a real, local partnership seems far from being implemented.
The model we have defined in this paper does not, however, have to be
considered as a universally applicable solution. Its key principles must be adapted to
each single metropolitan context, which is unique in its needs, its history and its
present political condition.
Finally, we have focused our analysis on the case of Tallinn to demonstrate that
ICTs can also play a crucial role in the implementation of the principles of our
governance model. Technology provides transparency of administration, exchange
of information, rapid access to services and possibility of permanent connections
among the citizens. This can be a tool for enhancing the participation of citizens
within the cities, as well for reducing the physical and social distances between the
city centre and the suburbs. Nevertheless, the power of technology in connecting
institutions and people can turn out to be a weapon which weakens social cohesion
and disaggregates local communities.
This further demonstrates the need for public action to avoid the loss of
significance of public spaces in e-cities and underlines the importance of a good and
coherent urban governance that is inclusive but at the same time effective.


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