Globalization, Sub-national Governments and Urban Crises in the Developing World

Abstract

This chapter highlights an inherent and serious contradiction that the gathering momentum of globalization has unleashed for many nations in the developing world. On the one hand, these nations have witnessed significant acceleration in their GDP growth in recent years, which induced rapid increases in the pace of urbanization and urban population growth. On the other hand, governments at regional levels have accumulated huge debts owing to privatization and sales of state-owned enterprises and assets, declining fiscal revenues, unsuccessful reforms, corruption and inappropriate accounting practices. Many regional governments in these countries are finding it difficult to service their debts, which force them to impose austere fiscal measures. This has an adverse impact on the provision of local goods and infrastructure in the urban areas. In most of the developing world there has emerged a widening gap between demand for and supply of local goods and infrastructure in urban areas, e.g., urban water supply, roads, basic public health facilities, primary schooling, housing and so on. This is despite the fact that large cities, which are the focus of globalization, accumulate urban wealth and business infrastructure. Richardson (2004) discusses the implications of globalization for cities at the receiving end. His findings are that large cities, on balance, benefit from globalization even in developing countries, although in some cases at the expense of widening regional disparities.