Jessica Seddon, Visiting Fellow at IDFC Institute, discusses the many roles played by cities and advises some caution on "proprietary cities".
"It (Economic Survey) offers two proposals that join long-standing calls for stronger local leadership but add some provocative twists. The first, “competitive sub-federalism” involves devolving additional financial powers and resources to municipalities, arming them with additional information, and benchmarking their progress for all to see...
The second, “proprietary cities”, tests the lengths people are willing to go to for more orderly cities. A proprietary city is a community created and provisioned by a private developer under an arrangement in exchange for some kind of land tax. It’s essentially a mega land acquisition justified by the idea that the private developer has an incentive to innovate in infrastructure, services and (in some formulations) the regulatory environment to make the place clean, safe, attractive and economically vibrant enough to generate taxable value...There are a few non-trivial loose ends to clean up before proprietary cities’ incentives would line up with national interests.
Cities have served many roles throughout history; the economic growth that proprietary cities reward is just one of them."
Read the full article here.