September 1, 2024
By Luis Quintero and Mac McComas | Research sponsored by Alex. Brown Realty, Inc.
Good governance is a pivotal determinant of urban growth and prosperity. This report explores different dimensions of local governance and their implications for economic development, exemplifying how cities can achieve sustainable growth through effective public administration. We examine the role of governance and policymaking on key factors that affect city vibrancy, which we generally capture by looking at population growth, public schools, public safety, tax policies, fiscal management, and leadership quality in shaping the economic landscape of cities.
First, we focus on aspects of governance like government structure and fiscal management. Different forms of government reveal how administrative structures impact urban efficiency and growth. Sound fiscal management, reflected in favorable bond ratings, is essential for cities to undertake necessary infrastructure projects and maintain financial health. Lastly, visionary leadership can catalyze significant urban transformations, as illustrated by the case study of Karl Dean’s tenure as mayor of Nashville.
Then, we explore dimensions that are largely determined by governance like education and safety. High-quality education systems not only enhance individual prospects but also attract families and businesses, fueling local economies. Effective public safety measures reduce crime, thereby lowering business costs and increasing urban desirability. The relationship between tax policies and population movement underscores the delicate balance required to fund essential services without driving residents away. This
report provides an important reference of why good governance is important for a vital city and how to achieve it.