Lecture by William Tompson, Senior Counsellor and Deputy Head of the Regional Development Policy Division of the OECD
On September 30, 2015 the Center for Russian Studies at RANEPA hosted William Tompson, Senior Counsellor and Deputy Head of the Regional Development Policy Division of the OECD. For 7 years he worked as a senior economist at the Economic Department of the OECD. He is author of “Khrushchev: A Political Life” (Macmillan / St Martin's, 1995) and "The Soviet Union under Brezhnev” (Longman, 2003), "The Political Economy of Reform: Lessons from Pensions, Product Markets and Labour Markets in Ten OECD Countries" (OECD, 2009) and a series of articles and books on the Soviet and post-Soviet politics and economics. He was the lead author of the OECD Economic Survey of the Russian Federation in 2004 and 2006, the Economic Survey of the Czech Republic (2010), and the first OECD Economic Survey of Ukraine (2007).
The lecture, entitled "The Metropolitan Century", focused on understanding the causes, consequences and opportunities of urbanization. By the end of the 21st century 85% of the world’s population is expected to live in cities. By the end of the «Metropolitan Century», then, the process of urbanization is going to be completed. The urbanization of up to 5 billion people over the coming decades means that decisions in organizing cities taken today and in the near future will create new urban forms that will last for a very long time. The durability of urbanization choices means that, if we get things wrong, we risk locking in urban forms that may be socially, economically or environmentally undesirable. If we build sprawling, car-based cities for the next five billion urban dwellers, the environmental consequences will be disastrous. On the other hand, the emergence of entirely new cities, or the development of large new tracts within existing cities, offers unprecedented opportunities for reform and innovation.
During the lecture Professor Tompson raised 3 main questions:
- What makes cities more productive?
- How can policy affect cities’ productivity?
- What might this imply for Russia?
William Tompson analyzed the reasons which make cities more productive. Well-functioning cities require a combination of a multitude of factors. First point is that large cities are more productive. Such cities tend to attract people with higher human capital, they concentrate more productive firms and sectors, and there are well-functioning transport hubs and good opportunities for rent extraction. At the same time cities with fragmented governance structures exhibit lower levels of productivity: doubling the number of municipalities within a metropolitan area is associated with 6% lower productivity. Professor Tompson underlined the importance of defining the city. In most countries of the world it is impossible to compare cities because most of the data is organized around the city as an administrative unit, the municipality. To do serious comparative analysis, it helps to define cities based on actual settlements patterns and commuting flows rather than administrative boundaries.
In many countries the governance structure of urban areas is inadequate, as administrative borders do not correspond to the economic area. Political administrative fragmentation may affect the economic growth of metropolitan cities. Good governance of urban agglomerations is essential for their functioning. Special attention should be given to co-ordinating transport, land use and the ease of doing business at a metropolitan scale.
The last part of the lecture was devoted to the third question, what might this mean for Russia? What is the potential of metropolitan governance to improve urban performance? The greatest problem in Russia consists in coordination between different municipalities. Much of the finance is received from the federal government and using the municipal budget funds outside the municipality is illegal. Also it is very important to develop internal connectivity. For example HSR may contribute to improving the economic development of parts of the country. There are lots of cities of the same size in Russia and the potential from agglomeration benefits from connecting up proximate cities in the particularly different regions of Russia is great, especially for highly skilled individuals.