Metropolitan regions are the driving economic entities of the 21st century, supplanting the states and, given the gridlock in Washington, D.C., perhaps even the federal government. Who says? Not only our own Ed Risse, who has long contended that “New Urban Regions” are the fundamental economic building block of modern civilization, but Bruce Katz and Jennifer Bradley with the Brookings Institution.
Katz and Bradley have outlined their thinking in an article, “Metro Connection,” published in Democracy Journal, which everyone interested in regional economic development needs to read. I don’t agree with many of their activist-government proposals, but I do believe they have captured a critical reality that very few Virginia policy makers have integrated into their thinking, and their essay does confront readers with the vital question, how should states redefine relationships with their metropolitan regions, and how can states make them more economically competitive in a global arena?
“In the global economy,” their argument goes, “metros matter more than states.” Metropolitan regions are the crucibles where value-added economic activity and innovation take place. Metro regions are where industry clusters arise, allowing major corporations, vendors, suppliers, academia and other key players to interact and innovate. Metro also regions account for a disproportionate amount of exports and wealth creation.
Trouble is, metros don’t have a place in the federal or state constitutions. They are economic and social entities, not legal or political ones. Economic and political power need to be aligned. “We need a new way of thinking about governance and the economy that accounts for the economic power, informal structure, and diversity of America’s metros,” the authors write. What they advocate is “home rule turned on its head, with metros driving state priorities and investments, rather than states deigning to grant localities some independent powers.”
This is what I mean by “fundamental change” in governance structure. Virginia needs to rewrite its constitution to allow its New Urban Regions to create a metropolitan level of government. The idea would not be to create new powers for government, but to redistribute power, as Ed so often argues, to the level of impact.
So far, I’m with Katz and Bradley 100%. Then they veer in an unfortunate direction. They see the states taking over from a gridlocked Washington, D.C., as drivers of economic policy. Instead of investing in subsidies and tax breaks to lure business (they’re right, a bad idea), states should be investing — even issuing bonds — to help turn key industry clusters into export powerhouses (unfortunately, an equally bad idea). They see robust state government leading the economic transformation that the federal government no longer seems capable of doing.
In Bacon world, state, regional and municipal governments would focus on those key functions that only they can fulfill, performing these jobs as efficiently as cost effectively as they can. From an economic perspective, that means ensuring that citizens acquire the education and skills they need to compete in a global marketplace, developing the infrastructure needed to support economic activity, and keeping taxes as low as is feasible. Towards those ends, states, regions and municipalities must reform the regulatory and funding structures that have perpetuated Virginia’s dysfunctional human settlement patterns. More efficient land uses and transportation systems will make everyone more economically competitive, not just a select few beneficiaries of industrial policy, and will create more livable regions that attract the human capital that feeds innovation.
But never mind all that. The critical first step is to recognize the economic primacy of the metro (or New Urban Region) and begin the conversation on how to align governance with economic realities. A productive debate on the proper role of government in building regional economies will ensue.
