Lessons in urbanisation

In 1999, the United States spent $250 billion in non-defense public capital. The federal government share was $45 billion, while states and local governments spent over $200 billion. Much of this money was spent on roads, schools, water supply and sanitation systems. Close to 80% of this was spent in urban America. Because over three-quarters of Americans live in its cities and towns.

But it wasn’t always like this. There was a time when cities were few in number, with sparse populations, and minimal infrastructure. Consider the following description of American cities in the 1850s: “Wells and ponds have become visibly polluted, and groundwater levels are receding…overflowing cesspools fill alleys with stagnant water and fecal waste..”

Every developed country had cities that fit the above description barely a century ago. Every one of them has built the infrastructure of their cities only over the past 100 years, often out of crises of plagues or fires. There are lessons to be learnt from how they came to terms with urbanisation, how they managed the transition, how they invested in their cities, and possibly most importantly, what they are thinking today, as they stand at a different crossroads from us in India.

India is just coming to terms with its urbanisation. Unfortunately, we are still to come to terms with infrastructure’s social welfare benefit. We tend to treat good roads and sanitation systems as “luxury” goods, and have the same suspicion of these as we have of money in general. We therefore have to walk the painful journey in the same manner that we did with economic prosperity: we will eventually realise that what is bad is not infrastructure per se, but infrastructure that is not equitable, that does not promote sustainable development, and that people don’t have a choice in determining.

Looking specifically at the urban infrastructure lessons that these developed countries have to offer, there are a few that stand out. While these stories are similar across many countries in North America and Europe, data in America is easier to come by (another lesson in itself).

• The period of greatest change was between 1850 and 1910, when population in these cities exploded, and the core infrastructure of cities was built. Driven by a variety of factors, this period of rapid change happened at the tail-end of over 50 years of experimentation on urban systems. This cascade of change is driven by a critical mass of knowledge about urban management.

• Local governments bore the brunt of infrastructure spending. Federal government did invest in public capital, but these were more by way of ports, waterways and large public buildings. State government intervention came in bursts, at first catalysing municipal expenditure, and later when municipalities went through a series of fiscal crises – first in the 1870s, then in the early 1900s.

• Much of the early investment was in water and sanitation systems, roads and public transport. A great deal of concurrent technological innovation was accompanying the build-out of these infrastructure assets.

• Cities raised funds through a range of innovative financial structures. Public-private partnerships were widely used, as were municipal bonds. Municipal debt rose 6-fold within a few decades until the 1870s, triggering the first national urban crisis as large chunks of municipal debt defaulted. More recently , financing structures have increasingly moved toward benefits-based, user charges.

• The location and nature of infrastructure was driven substantially by power and wealth. There was very little equity in the decisions: upper income areas and central business districts received large chunks of investment, while slums and low-income areas took decades to catch up.

• There was a clear evolution in what qualified as urban infrastructure; at the beginning were only “hard” infrastructure assets like roads and water systems. But within a few decades, large cities began to realise that they needed to create public spaces as well. Central Park in New York was created in 1850s, many other cities followed suit. By 2000, such “soft” spending totaled $6 billion across the United States, over 3% of total infrastructure spend.

• City decision-making moved from moneyed business leaders to popularly elected politicians, who actually ensured a greater degree of balance in spending decisions, in the early stages. By 1930, city politics was at the center of an emerging new and potent “machine” politics in America.

It is also instructive to see how these countries define their urban vision now, in the 21st century.

The UK’s recent White Paper on Urbanisation says, “Our vision is of towns, cities and suburbs which offer a high quality of life and opportunity for all. We want to see good design and planning which makes it practical to live in a more environmentally sustainable way, with less noise, pollution and traffic congestion.” The central vision is one of “people shaping the future of their community. Real, sustainable change will not be achieved unless local people are in the driving seat right from the start. Successful cities are founded on participative democracy. People make cities, but cities make citizens.”

If we can marry the lessons from the 19th century with the vision for the 21st century, we could actually build the infrastructure that our cities need, WITH the participation of the people for whom these roads and water and waste systems will be built. That is a lesson worth learning.