Discussions of the role of states in development, and in particular the role of the hands-on ‘developmental state’ in producing impressive take-offs in East Asia and elsewhere, almost exclusively focusses on the national level. But in many countries, particularly since the push for decentralization in recent decades, local and city governments play an increasingly influential role. So might we see a ‘local developmental state’ emerge in some cities or regions, even when the national state isn’t up to much? A recent paper from the Overseas Development Institute argues that this is exactly what is happening in the former drug capital of Medellín, Colombia:
‘After more than two decades of very well-publicised narco-industry and paramilitary-driven violence and chaos, Medellín has made significant economic and social progress since the late 1990s thanks to a renewed appetite for local state activism that has proved both popular and effective.’
The authors, Milford Bateman, Juan Pablo Duran Ortíz and Kate Maclean, argue that this is nothing new:
‘A ‘local developmental state’ model appears to have emerged in many of the most successful countries and regions, most notably in post-war northern Italy, Southern Germany and in several Scandinavian countries…. The core idea is that sub-national levels of government can, and should, be pro-active in building the institutional and organisational infrastructures required for growth-ori¬ented micro-, small and medium enterprises to emerge and succeed.’
Cities can promote this form of local industrial policy through local state ownership of key enterprises, local taxes, and use of local powers such as planning laws and transport policy – ‘Medellín has proved adept at using pro-poor transport policies to link communities together.’
In addition, the city of Medellín has developed its own programme of cash grants, the Medellín Solidaria programme, similar to the successful Bolsa Familia experiment undertaken in Brazil since the early 2000s.
‘Medellin has set up a network of 14 publicly-funded business support centres (the local acronym is CEDEZO, Centros de Desarrollo Empresarial Zonal). These CEDEZOs are located in the very poorest areas and are designed to support business development by the poor by offering free-of-charge business support services and technical advice to anyone with a good business idea. Working alongside the CEDEZOs is the Banco de las Oportunidades, which provides microloans up to $2,500 at a favourable interest rate (0.91% monthly) to establish microenterprises.’ [i.e. nothing like your standard microfinance lender – one of the authors, Milford Bateman, is a trenchant critic of microfinance]
Fascinating – a lot of the good things that have happened in Latin America over the last couple of decades have been incubated at city level, even though, like Bolsa Familia, they are then sometimes adopted by national governments. Cities offer natural laboratories, ideal for testing a range of new approaches to sift out what works from what doesn’t. They are also at a scale where it is much easier for relatively small organizations to engage at the city level (see this example from Bogota). And turning around a city like Medellin is a huge achievement – in a previous job in the early 90s I published ‘Born to Die in Medellin’, a bloodcurdling set of interviews with teenage assassins in the City (a translation of Alonso Salazar’s great book, ‘No Nacimos pa’ Semilla’). Wonder what the surviving ex-gangsters are doing now?
Anything else to read on local developmental states? They certainly seem a lot more plausible than Charter Cities.