Fostering Equitable Economic Growth in Cities

Programme Overview

In 2016 Cities Alliance established a four-year Joint Work Programme (JWP) focused on fostering equitable economic growth (EEG) in cities. A key objective of the JWP-EEG is to understand the links between the provision of public goods and services, and EEG trajectories in secondary cities, and subsequently recommend ways whereby public goods and services can be provided in a manner that maximises EEG.

The JWP-EEG brings together members from a variety of institutions which reflect the types of partnerships needed to promote EEG. We have worked with local governments, city stakeholders and development partners to produce global knowledge, facilitate policy dialogues, support city-level diagnostics, and help frame policy recommendations. The JWP-EEG programme is funded and chaired by the United Kingdom’s Department for International Development (DFID), and implemented by the Cities Alliance Secretariat.

The Equitable Economic Growth Challenge

The urgent need to promote equitable economic growth (EEG) was highlighted by the adoption of a range of global commitments, including the Sustainable Development Goals (SDGs) for 2030 and the Paris Agreement of 2016. At the city level, Habitat III and the adoption of the New Urban Agenda underscored the crucial role that can be played by cities.

There is consensus in the international community that cities are engines of economic growth, knowledge generation and innovation, and can spearhead efforts to promote EEG. However, urbanisation has not always lead to increases in productivity or EEG, and even in cases where it has, not all in cities have been included.

Cities Alliance prepared two foundation documents that underpinned the JWP-EEG, which summarised research demonstrating that sustained economic growth is correlated with urbanisation, but that urban economic growth in the majority of cases is far from equitable. It was posited that economic growth and equality can be complementary, and that inequality reduces aggregate demand, which often takes the steam out of economic expansion. Inequality hinders human capital formation, as access to, for example, educational opportunities is nearly always restricted for those living in poverty, which further impedes growth. Inequality stunts social capital formation, compromises social harmony, and corrodes citizenship. Marked inequality is bad for the economy, and bad for business; “equality is better for everyone”.

The importance of public goods and services

International experience demonstrates that a pre-condition for urbanisation benefits to be captured is the presence of strong city and local-level management which can equitably provide municipal goods and services (see Equitable Economic Growth in African Cities report). Equitable access directly improves the social and economic well-being of citizens and facilitates decent and productive employment. It also enables a vibrant and productive private sector that supporting investments, job creation and the commercial strength of formal and informal businesses. To achieve equitable access, effective and efficient city administrations are required, who can deliver effective provision, as well as inclusive distribution and fair pricing.

The Joint Work Programme Approach 

The JWP sought to address the EEG challenge through a series of programmatic outputs falling under three components; policy dialogues, knowledge products and the Campaign Cities initiative. The three components play a complementary and mutually reinforcing role, feeding information and strategies from the global level, through to national and local levels.

The programmatic work is underpinned by the proposition that the pathway to achieving EEG is to focus on improving access to public goods and services for the urban poor, and to integrate this approach with efforts towards jobs and the informal economy.

The establishment of the JWP-EEG was timely. Efforts by governments and donors to promote EEG in cities in the past had been limited. Urban development strategies were often dominated by short-term economic needs and driven by political imperatives, which jeopardised achieving long-term equitable, inclusive and sustainable growth. Indeed, CA was well positioned to assume a leading role in investigations concerning how the challenge of EEG can be addressed.

The JWP EEG benefits from a diverse membership, including the UK Department for International Development (DFID) (Chair), the United Nations Capital Development Fund (UNCDF), UN-Habitat, Women in Informal Employment, Globalizing and Organizing (WIEGO), the Commonwealth Local Government Forum (CLGF), the Ford Foundation, the Institute for Housing and Development Studies (IHS) at Erasmus University Rotterdam and the World Bank.