Saturday, 23 November 2013

Cities 3: Why are cities so over-regulated

Why are our cities in such poor shape? 

The answer lies in the architecture of their governance. Cities have become a major vehicle of rent-seeking and privilege preservation. Zoning and the arbitrary use of public land has become a major vehicle for rent distribution. Laws and institutions—based on open transparent processes and clear property rights—have not been created to deal with this problem. In Pakistan centralized administration, opaque processes and inadequate city administrations have heightened rent-seeking activity stifling city economic growth while accelerating speculation. Some of these are:
  1. City management is an almost part-time activity of the centralized civil service. Professional and autonomous city management cannot be structured and implemented without a civil service reform. The current structure does not allow community participation and catastrophically places cities in hands of junior civil servants who are temporarily in position transitioning to a higher position in a monolithic federal bureaucracy. Spurred by donors, city management is viewed as providing physical infrastructure, such as sanitation and roads. Social, cultural, and learning activities are an important part of a city. Pakistani cities offer little in the way of entertainment, community or leisure space. There are practically no libraries, community centers, theatres or sporting facilities (except for the élite).
  1. Most cities are not administratively cohesive. Cantonments, federal and provincial government, and other administrative structures operate often to undermine city functions and even take over city space to the detriment of city development. Federal and provincial governments own vast amounts of inner city land which is arbitrarily developed without consultation with the City. Examples abound: arbitrary offices, leisure clubs, and training academies that the Punjab government and various federal agencies have built up in Lahore without consultation.
  1. The public service pay and pension system which relies on perks based on urban land seriously impedes city development. City centers are dominated by housing for civil servants, judges and army officials. Land that should be available for mixed use, high rise development is blocked because of this. Reform that would monetize this perk and make this land available for mixed-use, high-rise construction have an investment potential of 50% of GDP over 10 years (Planning Commission/ CDA estimate). This suggests that the opportunity cost of the perk system is huge.
  2. Unlike other countries, because of the perk system real estate development has become a public sector enterprise business and not a commercial activity. Officials are rewarded for government service by a gifts of land and hence like to keep land development as a public sector activity (CDA, DHA).
  3. The unintended consequence of this form of city development is the serious lack of public, community, entertainment and commercial spaces. This lack accentuates exclusion especially of the youth and the poor not only from the city but also from globalization and modernity. The only form of public space that the zoning has favored or unable to curtail is that devoted to religion.