Metropolitan Resilience in a Time of Economic Turmoil

Metropolitan Resilience in a Time of Economic Turmoil

EDITED BY MICHAEL A. PAGANO
Copyright Date: 2014
Pages: 200
https://www.jstor.org/stable/10.5406/j.ctt5hjjdx
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  • Book Info
    Metropolitan Resilience in a Time of Economic Turmoil
    Book Description:

    Cities, counties, school districts, and other local governments have endured a long-lasting period of fiscal challenges since the beginning of the Great Recession in 2007. Metropolitan governments continue to adjust to the "new normal" of sharply lower property values, consumer sales, and personal income. Contributors to this volume include elected officials, academics, key people in city administrations, and other nationally recognized experts who discuss solutions to the urban problems created by the Great Recession. Metropolitan Resilience in a Time of Economic Turmoil looks at the capacity of local governments to mobilize resources efficiently and effectively, as well as the overall effects of the long-term economic downturn on quality of life. Introducing the reader to the fiscal effects of the Great Recession on cities, the book examines the initial fraying and subsequent mending of the social safety net, the opportunities for pursuing economic development strategies, the challenges of interjurisdictional cooperation, and the legacy costs of pension liabilities and infrastructure decay. Contributors are Phil Ashton, Raphael Bostic, Richard Feiock, Rachel A. Gordon, Rebecca Hendrick, Geoffrey J. D. Hewings, David Merriman, Richard Nathan, Michael A. Pagano, Breeze Richardson, Annette Steinacker, Nik Theodore, Rachel Weber, and Margaret Weir.

    eISBN: 978-0-252-09601-3
    Subjects: Economics, Political Science, Sociology

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Preface and Acknowledgments
    (pp. vii-x)
    Michael A. Pagano
  4. PART ONE: OVERVIEW
    • Cities and the Great Recession: Lessons in Dynamic Change and Adaptation
      (pp. 3-18)
      MICHAEL A. PAGANO

      The Great Recession has had a powerful effect on metropolitan regions and on local governments. The real-estate bubble burst in 2007, putting many owners under water (the mortgage exceeded the market value of the home) and the stock markets plummeted in 2008, wiping out hundreds of billions of dollars in investments. Consequently, the unemployment rate in the nation soared quickly to over 9 percent and has declined ever-so-slightly over the last several years and appears stuck at around 7–8 percent, well above the pre–Great Recession levels of 4–5 percent. Job loss in 2008 and 2009 wracked cities...

  5. PART TWO: WHITE PAPERS
    • Building the Local Social Safety Net in an Era of Fiscal Constraint
      (pp. 21-50)
      MARGARET WEIR

      Despite the complex funding responsibilities and administrative arrangements for the social safety net, municipal government engagement with that net is crucial to the health and well-being of all residents. This chapter introduces the strategies local governments use to build safety nets for their residents. They construct such nets by serving as 1)connectorsto federal and state benefits and resources; 2)system buildersamong the diverse public and private local organizations that administer policy; 3)program innovators; and 4)advocatesin state and national politics for a stronger safety net. By building effective public bureaucracies to administer social programs and...

    • DISCUSSANTS:
      • Low-Wage Work and the Fraying of the Social Safety Net
        (pp. 50-54)
        NIK THEODORE

        Redistributive programs for the poor have never ranked highly on the policy agendas of U.S. cities, where variants of public choice theory have long held sway. Inspired (knowingly or not) by a selective reading of Charles Tiebout’s “pure theory of local expenditures,” which argues that residents, as voter-consumers, will relocate to jurisdictions that provide them with their preferred bundle of public goods, local politicians have been reluctant to increase the share of municipal budgets devoted to pro-poor programming.¹ While Tiebout’s argument was initially conceived to theorize the provision of public goods in general, it has since been applied with particular...

      • Social Safety Nets: Subsidies and Place
        (pp. 54-57)
        RACHEL A. GORDON

        As a social scientist, I think about the interlocking contexts that surround families and children. The safety net is one of these contexts. We know a good deal about the extent to which that net truly supports families—as well as where it sags or breaks. In reading Margaret Weir’s contribution, however, I realized that the sociology and developmental literatures don’t discuss how living in a particular municipality matters for children and families’ well-being. One longstanding interest of mine is how children and families’ well-being depends on the fraction of people in their community who are like them. In some...

    • Resilient Economic Development: Challenges and Opportunities
      (pp. 58-80)
      RAPHAEL W. BOSTIC

      The question of what makes and keeps local and regional economies and societies resilient is an important one. In an increasingly global and competitive world, the market and other forces that influence a local and regional economy can change quickly, altering the competitive balance in ways that can significantly disrupt local economic dynamics. Many have noted the important role that public policy can play in shaping how a city or region responds to these changes, both in the short and long run.¹

      Events since the turn of the millennium have only increased interest in this issue. Hurricane Katrina and the...

    • DISCUSSANTS:
      • Economic and Policy Cycles and the Great Recession
        (pp. 80-86)
        RACHEL WEBER

        The problems facing cities in the wake of the Great Recession of 2008—punishing public and private debt, constrained budgets, record unemployment, rising health care and pension costs, and deteriorated infrastructure—are numerous and overwhelming. Such problems are the result of bad economic development decisions and fiscal mismanagement, but also of changes outside of the purview of administrators. In 2001, median household incomes in the United States had dropped to approximately $50,000, their lowest level since 1996 (adjusted for inflation).¹ Middle-income jobs have rapidly disappeared, only to be replaced by low-wage temporary and part-time work.² More than half of the...

      • An Interrelated International Urban Economy
        (pp. 86-88)
        GEOFFREY J. D. HEWINGS

        The practice of urban economic development in metropolitan economies has undergone a series of transformations. The “smokestack chasing” of the 1970s and 1980s morphed into more sophisticated incentive-based approaches that persist today.¹ In the interim, an era of growth center formation was followed by one of cluster-based approaches, some consideration of optimal portfolio theory (wherein the urban region’s mix of industries was treated rather like a stock portfolio, with attention to the risk and return trade-off), then attraction of the creative class until today, when the orientation seems directed toward sustainability and resilience. Many of these approaches have similar roots,...

    • How Cities Collaborate While Competing in the New Economy
      (pp. 89-112)
      RICHARD C. FEIOCK

      Five years after the onset of the “Great Recession,” its aftereffects continued to limit the economic opportunities of cities. Yet the Great Recession also unleashed forces to reshape the way that metropolitan regions are governed. By accelerating both competition and collaboration, this restructuring creates the potential for metropolitan regions to be more resilient.

      Competition and collaboration are often assumed to reflect conflicting values. Thus, in conventional urban theories, these two offer alternative paths for organizing metropolitan areas: one based on competitive markets for public goods with tax and policy competition for residents and tax base; and the other based on...

    • DISCUSSANTS:
      • Collaboration and Competition within the Chicago Metropolitan Region
        (pp. 112-117)
        REBECCA HENDRICK

        Many scholars agree that the Great Recession has unleashed forces that will alter the financial landscape of local governments permanently. This will be especially true for Illinois if the state government transfers its pension obligations for local government employees to the local governments in order to help resolve the state’s fiscal crises. The question posed by our panel in the context of metropolitan resilience is whether this new landscape of increasing costs and limited resources provides enough incentive for local governments in the United States to collaborate in ways that fundamentally alter how services are provided and regional problems are...

      • A Nuanced Perspective of Local Governance Possibilities
        (pp. 117-121)
        ANNETTE STEINACKER

        Metropolitan resiliency during hard times will depend on cities’ ability to provide services to their residents and to raise revenues to pursue their goals. As Richard Feiock points out in his chapter, one way to increase the ability of cities to achieve both goals is through cooperation with each other, which may be achieved through various governance structures. To assess the value of this framework, additional consideration of the conditions under which cooperation will occur and the outcomes that can be achieved is needed. These nuances are developed in this note. Finally, empirical data on the frequency of the nine...

    • The Legacy Costs of Earlier Decisions
      (pp. 122-141)
      RICHARD P. NATHAN

      By definition, a legacy is something handed down from the past. This chapter focuses on four types of financial strategies in government that involve acting now and paying over time. Because they are so intertwined, the chapter considers the consequences of financial legacy strategies at both the state and local levels. At the end of the chapter the implications drawn and conclusions reached about how to deal with the problems financial legacy strategies can cause are viewed broadly (from national, state, and local perspectives) in terms of the formidable challenge of instilling fiscal discipline, accountability, and transparency in U.S. public...

    • DISCUSSANTS:
      • Legacy Infrastructure Costs: Is the Cure Worse than the Disease?
        (pp. 141-145)
        PHILIP ASHTON

        In this response to Richard Nathan’s analysis of legacy costs, I focus more closely on the practices of managing legacy costs. Nathan’s prescriptions for managing those costs are mostlyprocedural—he advocates more transparent decision making, greater scope for expert analysis, and tighter controls on the budgetary process. As the problems facing U.S. states and local governments in the wake of the 2008 financial crisis and Great Recession have become more compelling, I argue we need to assess thecontentof a short list of commonsense “fixes” that have emerged within policy communities and public discourse. These include, on the...

      • Pension Costs and Durable Public Infrastructure
        (pp. 145-152)
        DAVID MERRIMAN

        Richard Nathan has written an engaging and accessible general overview of issues related to “legacy costs” of government actions. His essay is dotted with colorful historical anecdotes and engaging facts. Nathan’s sharp writing style, wit, wealth of knowledge, and historical experience stimulate thinking about many issues.

        Nathan focuses on financial strategies that involve acting now and paying over time. He reminds us that “there is nothing intrinsically wrong with funding pension systems over time and amortizing revenue-producing capital assets” but notes that this may not work “so well in practice when the financial arrangements needed to accumulate pension-system investment income...

  6. PART THREE: SUMMARY
    • Conversations With Local Policy Officials: A Synthesis
      (pp. 155-172)
      BREEZE RICHARDSON

      The 2012 UIC Urban Forum began with opening remarks from Chancellor Paula Allen-Meares, who welcomed the audience and restated the commitment of the University of Chicago at Illinois to “a national discussion of the vital issues facing urban areas.”

      It has now been four years since it was recognized that, “for the first time in human history, more than half of the world’s population live[s] in cities.” That same year, 2008, also marked the start of the Great Recession, understood to be the worst economic downturn since the 1930s, which placed significant economic pressures on urban centers. And so it...

  7. PART FOUR: POLICY EXPERIMENTS
    • What Now?
      (pp. 175-178)

      The authors of the white papers (and the chapters in this book), the discussants at the UIC Urban Forum panels, and the moderators identified, debated, and discussed a broad range of possible policy experiments for the future resilience of the metropolitan region. Drawing on suggestions and recommendations, we offer the following synopsis of possible policy experiments

      Strategies for strengthening the social safety net include improving take-up of federal social benefits, especially in immigrant communities;

      building coherent regional systems for delivering services;

      strengthening the role of metropolitan planning organizations and community development financial institutions in creating regional systems for services;

      devising...

  8. List of Contributors
    (pp. 179-189)
  9. Back Matter
    (pp. 190-190)