Can our fragmented metropolitan regions work together?

America’s metropolitan areas are the engine of our productivity, wealth and competitiveness, and as new federal funds flow to them, advocates want them to work together for greater prosperity. But the regions will have to overcome their historical and deep-rooted political, economic and racial conflicts.

It is striking how important the metros in our metropolitan areas are to our economy. According to the Brookings Institution, the 192 largest American metropolises are home to 78% of our population and produce 84% of our GDP. Productivity, innovation and growth depend on healthy cities and metros.

But metropolitan economies are uncomfortable in a fragmented government landscape. There are a large number of local governments across the country. In 2017, the Census Bureau had 90,075 local government units in the United States, including cities, counties, school districts, and special purpose organizations for water, transportation, and other services.

This means that each metropolitan regional economy contains dozens, if not hundreds, of separate governments. A analysis in Governing magazine showed the San Francisco-Oakland area with 69 separate general-purpose governments, while Dallas-Fort Worth had 219 and the Kansas City area (which straddles a state line) had 252.

Pittsburgh is the most fragmented major region in the country per capita, with 463 general-purpose governments, or two governments for every 10,000 people. And even small American regions are fragmented. The Grand Forks, North Dakota area “is home to just over 100,000 residents but 125 local governments.”

Fragmentation is a legacy of America’s Anti-City Bias, reinforced by state governments that control the formation and growth of cities. Metropolitan development after the Second World War relied on this bias. Downtowns were surrounded by white suburbs propelled by housing subsidies, freeway construction and loss of public transportation, and structural racism that kept blacks and other minorities from moving to the suburbs.

We are now faced with divided and unequal regions, which depend on the forces of the city for their economic prosperity, but also where independent suburban governments do not pay their fair share to solve common problems. Can this structural problem be overcome?

Urban expert and lawyer Bruce Katz hopes so. Katz, a champion of cities and their importance to the nation, is the founding director of the Nowak Metro Finance Lab at Drexel Universitywhere he and his colleagues work to encourage regional cooperation for greater economic prosperity and equity.

They helped the Federal Economic Development Administration (EDA) with its “Building back better the regional challenge”. As part of President Biden’s U.S. bailout, the billion-dollar challenge chose 60 communities (out of 529 applicants) to “develop and strengthen industrial clusters across the country” while seeking to increase equity and well-paying jobs.

What did they learn fof their “community of practice” in an economy still reacting to the COVID-19 pandemic and also facing the disruptions of global competition and conflict? They approve The recent presentation of Treasury Secretary Janet Yellen in a speech at Davos of a “modern supply-side economy” that “prioritizes labor supply, human capital, public infrastructure, R&D and investments in a sustainable environment and sees regional cooperation emerging on a variety of key issues.

Yellen’s speech and President Biden’s economic development policies emphasize manufacturing innovation, linked to national security fears of competition from China. Biden’s focus on national infrastructure includes many traditional roads, bridges and ports, but also seeks to build greener power generation and smart grids while investing in advanced technologies.

Regional collaborations under the EDA program seek to link education and workforce strategies to specific industry clusters, with a particular focus on tackling economic inequality. They also hope to cross jurisdictional boundaries to support capital investment, cooperation in transport and logistics, and fairer jobs and public procurement.

Hopefully the regions can cooperate and coordinate. But American metropolitan economic development has long lacked regional coordination, reflecting our fragmented and conflicted metropolitan governance.

Many regions have separate Workforce Development Councils for each major city and suburb, not funding programs across political boundaries. Workforce councils often lack coordination with community colleges and four-year universities, which in turn often do not cooperate with each other, let alone with industries, unions, or community organizations.

A recent study of workforce development reform in four states “presents a sobering vision of the difficulty of building coordinated systems of labor and education in the United States,” a phrase that could have been written many times over the past few decades.

Economic development strategies share this fragmentation and inefficiency. Too many cities and states still believe that offering deep corporate tax subsidies is the best way to create growth, even for highly profitable companies. Good Jobs First, which tracks subsidies to private industries, says state and local governments, believe Amazon has received over $4.1 billion in grants over the past ten years.

Fragmentation runs deep in American regional politics, and the federal government cannot force cities and suburbs to work together. And much of this fragmentation reflects racial division, due to decades of housing segregation – go to these maps based on census data to see this segregation region after region.

So we rely on incentives for cooperation, not on building power among excluded groups in divided regions, or among workers through a stronger labor movement. But without countervailing power, not just incentives, past regional efforts have not created the cooperation or political will necessary for equitable prosperity.

Hopefully this time will be different and the high quality advice provided by defenders like Katz and others will be truly listened to and put into practice.

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