Ari-Veikko Anttiroiko & Ilkka Kainulainen
A Draft, February 10, 1998
ANALYSING THE CHANGE IN LOCAL GOVERNMENT
- Perspectives of the Regime Theory and the Growth Machine Thesis
Introduction
The development of cities is framed by the range of profound changes taken place on global scene. Characteristic dimensions of this development are globalization, economic restructuring, the development of communication and information technology, and certain postmodern or 'deconstructive' tendencies. These changes have brought about a new environment for urban governance, and increased the need to match the city management and service provision with changed conditions and a new informational mode of development.
In order to identify and analyse the contextual changes and their impacts on urban governance, we need an approach which provides tools for understanding how the local aspects of development relate to contextual factors. That is, ultimately, about how decision-making, service provision, and every life at local level are matched with the most outstanding tendencies. The theory arsenal which meets these requirements can be named 'the urban political economy'. It includes such theories as regime theory, growth machine thesis, regulation theory, fiscal crisis theory, local state theory etc. What is common to all of these theories is the emphasis on contextual aspects in analysing the changes of and challenges to local governance and urban policy. (see e.g. Vogel 1992; Castells 1989; Sassen 1991; Stoker 1990, 1995; and Anttiroiko 1996a, 1996b)
In this web article we discuss the ideas developed within the regime theory and the growth machine thesis. The focus is on policy choice in the urban setting in Finnish context. The concepts of 'the growth machine' and 'the urban regime' provide the starting-point for discussing the development, power relations and management of cities.
City as a growth machine
There are structural features which challenge the traditional modes of urban governance. One of the most important of them is the business dominance. According to Mickey Lauria (1995), low income populations are a drain on local revenues, and on the other hand, the basic feature of a capitalist economy is the private control of production. We can fairly say that population at large is dependent upon private investments and profit for employment. This, in turn, explains why the state and local governments must facilitate accumulation in order to advance the material interests of citizens. Moreover, in the information age economic activities are more and more based on 'the space of flows', as urban sociologist Manuel Castells (1989, 347; 1996a) puts it, which means that the real challenge to urban government is to cope with the requirements and demands of the new informational mode of development.
Cities affect in a variety of ways the factors of production that are widely believed to channel the capital investments that drive the urban growth. They can, for example, decrease corporate overhead costs through their policies. The members of local business community, notably the business people in property investing, development, and real estate financing, are major participants in urban politics. Again, because so much of the growth mobilisation effort involves government, local growth elites play a major role in electing local politicians controlling their activities, and even scrutinising administrative detail. (Logan & Molotch 1996, 297, 300-301) 'Parochial capital' is not, of course, the only thing that matters. There is need to attract more mobile investments or 'metropolitan capital' in order to promote the growth in the locality. As Harding (1995, 42) puts it, the allies rentiers need to pursue their objectives are found in the other agents - investors of metropolitan capital, politicians, local media, quasi-public agencies and auxillary players - involved in the growth machine. Growth machine tries to legitimise the gains of its members and disarm critics by espousing an ideology of value-free development which claims that economic growth is good for all.
The concept of growth machine defines modern cities as engines of economic development for business interest. Individuals and institutions in the growth machine profit from the intensification of land use. In this process the idea of growth machine expresses certain important internal determinants of urban policy. (see Harding 1995 and Mayfield 1996)
Yet, the growth machine thesis has its limitations which relate to its emphasis on business community and land use decisions in particular. This is too narrow view if we wish to study, let's say, the urban governance in the Nordic welfare states like Finland. Another point is that our focus is more on city management than on business interests or community power relations as such. Thus, our study is based on the regime theory and informed by the ideas derived from the growth machine thesis. It should be noted that these theories have much in common, especially because the regime theory, too, explores the informal decision-making process and arrangements where business elites often exercise political power. (cf. Mayfield 1996)
The regime theory
Originally urban regime theory focussed on urban politics abstracted from historical epochs connected to changes in the structure of the world economic system. The theory appears to have gained a dominant position in the american literature on local politics precisely because it dispenses with the stalled debates on conventionally conceptualised tensions like those between elite hegemony and pluralist interest group politics, between economic determinism and political machination, and between structural determinants and local choices. It provides a conceptual framework that views these, on the one hand, as false dualisms and, on the other hand, as theoretically driven historical and/or empirical questions. Urban growth coalitions are viewed as only one of the political coalitions that may arise in cities. In addition, it is assumed that they need to be hegemonic for an extended period of time to be considered a corporate controlled regime. Respectively, entrepreneurialism is viewed as only one of the possible leadership approaches that local politicians and government bureaucracies can pursue. Thus, regime theory asks how and under what conditions do different types of governing coalitions emerge, consolidate and become hegemonic, and how they devolve and transform. The recent transference of urban regime theory to contexts outside of the United States as well as its use in comparative cross-national research attests to its dominant position in urban political scholarship. (Lauria 1995) Our primary intention is to apply this theory to the urban governance in the context of restructuring the corporatist 'post-welfare society'. This is a significant aspect to be taken into account when applying the theory to the Nordic cities and their governance relations.
According to Stoker (1995, 54), regime theory holds substantial promise for understanding variety of responses to urban change. It emphasizes the interdependence of governmental and non-governmental forces in meeting economic and social challenges. This is why it pays attention to the problem of cooperation and co-ordination between government, business community, and the third sector or civil society.
Some regime theorists, Clarence Stone (1989) in particular, argue that cities are able to accomplish important public purposes by assembling coalitions of political, business and community elites. This has some important implications. It questions the elitist argument that if actual decision-making appears to be democratic, important issues will be effectively kept off the agenda by the real wielders of community power (Wolman 1996, 168-169). It may, indeed, be said that local politics has its relevance and that it can make a difference, though many academics who have studied the impacts of global economic restructuring and the changes in urban governments are pessimist about the ability of local government to shape its own destiny in the face of sweeping changes. (Wolman 1996, 172) In this the regime theory differs from elite theory: any group is unlikely to be able to exercise comprehensive control in a complex world (Stoker 1995, 59).
One of the attractive features of regime theory is that it addresses the questions which are widely discussed within more conventional approaches such as neo-pluralism. In short, the regime theory tries to shed light to following type of questions (Stoker 1995, 57):
Regimes and the social complexity
But what, actually, we mean by the urban regime? According to Stone (1989), the regime is an informal yet relatively stable group with access to institutional resources, and which has a significant impact on urban policy and management. It is not a coherent organisation or association, but an informal group of influential persons who derive their power from different sources, who share some policy objectives like that of promoting the growth in their city, and who can gain some economic, political or social rewards from their involvement. The regime is formed as an informal basis for coordination and without an all encompassing structure of command. (Stoker 1995, 59; Anttiroiko 1996a, 66)
An important point to be made here is the view that the politics in different cities seem to be dominated by various types of governing coalitions or regimes. There are pluralist regimes in which strong political leaders bring together a mixed set of private actors. Elitist regimes are run primarily by cohesive business elite. Corporatist regimes, which we may assume to be relevant in the context of Northern countries, combine both strong political leaders and a relatively unified business elite. And lastly, there is a category labelled as the hyperpluralist regime in which any governing coalitions can hardly be identified. One assumption is, that the direction of change within urban governance is towards more pluralist models, though new elites which are able to manage with the informational mode of development may emerge. (Stoker 1995, 62)
The social complexity is central to this perspective. The urban policy is dependent on institutional arrangements, business interest mediation, and some degree of popular control. What is essential is the fact that all the key institutions and actors are involved in an extremely complex web of relationships. The social control and effective management is limited to particular aspects of local development and policy choices. This, in turn, limits the capacity of local government as an agency of authority at local level. Other kinds of limits are determined by the higher levels of government. This is to say that the autonomy of Finnish cities is constrained by two principal factors, those of limited economic resources and local economic conditions, on the one hand, and the political control of the state authorities and European Union, on the other hand. (cf. Gurr & King 1987, 56) This makes it easier to understand why in most of the western countries there can be said to be two groups which dominate the urban regimes, the business elite provided it has structured itself to have a single voice, and the political force which operates within wider institutional and corporatist setting (cf. Stoker 1995, 63). The social complexity, thus, shapes not only local authorities and city management but also the governing coalitions within the urban setting.
The relevance of city politics
The theory we are dealing with reflects new trends of theoretical discussions. It is concerned more with the process of government interest mediation than with the wider relationship between government and ordinary citizens. Stoker (1995, 54-56, 60) argues that regime theory takes as given a set of government institutions subject to some degree of popular control and economy guided mainly but not exclusively by privately controlled investment decisions. There are, indeed, both elitist and pluralist aspects in this type of theory formation. And as said before, the regime theory holds that local politics matters, at least to some degree.
According to Pratchett and Wilson (1996, 3), the political system has become increasingly differentiated and fragmented. Elected local government may even be more and more marginalized as an element of local governance. This means that in the future it will be no longer possible to equate local politics with the politics of local government, since many of the most important decisions will be taken within quite different forums. Local authorities are working alongside other public, private and voluntary sector organisations not only in providing services for a locality but also in making the strategic decisions and affecting the local conditions and development.
Thus, these premises imply that local politics has a relevance. Diversity of interests and resources create the pre-conditions for politics. Politics as such is inevitable in a divined yet interdependent society. And, local government, even in the present state of fragmentation and differentiation, must be defined based on this particular point: it serves as a site for political activity. (Stoker 1996, 192, 194)
There are, however, some important reservations to be made. There is growing tension between communities and neighbourhoods viz. globalisation and other pervasive tendencies. Community politics is important for an exploration of new forms of democracy because it suggests the possibility of the direct involvement of people in collective decision-making and, accordingly, offers prospects for participatory democracy. And furthermore, it provides some visions for the politics outside formal state structures. (Cochrane 1986, 52) On the other hand, it is widely accepted that the conditions of 'community politics' are more and more determined by contextual forces. This development has increased the importance of cities and regions as efficient instances of growth machines with a certain degree of popular control.
The 'global cities' are one of the most outstanding examples of how the globalizing world economy shapes the life of cities (Sassen 1991). As Manuel Castells (1989) has described the situation, the more the economy becomes interdependet on a global scale, the less can city government act upon the basic mechanisms that condition the daily life of citizens. In brief, the challenge is to match 'the power of places' with 'the space of flows'. Moreover, the more our societies are becoming structured around an opposition between the Net and the Self, i.e. between global networks of instrumental exchanges and our self-images and identities, as Castells (1996b, 3) claims, the less can city government take the legitimation and effectiveness of its mediating role for granted. These points are important in order to understand the impacts these driving forces have in the process of restructuring of city government (see on the changing directions which emerged in the 1980's, e.g. Dente & Kjellberg 1988; Moore 1990; and Pickvance & Preteceille 1991; and on more recent discussions, e.g. Pratchett & Wilson 1996).
References
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