Washington is broken. Mired in partisan gridlock, the federal government is barely able to pay its own bills let alone deal with the nation’s long-term problems. From our struggling economy to our failing schools to our broken immigration system, we face a deficit of leadership. It’s no wonder the American people have no faith in our political system.
But all hope is not lost. The genius of our founding fathers’ federalist system is that the central government isn’t our sole repository of political authority. Instead, the federal, state, and local governments have always shared power in a balance that has shifted back and forth over time.
In the post-New Deal, post-Great Society era, the federal government has expanded, taking on more of the duties that had once been assigned to state and local governments. For years, the long-term trend has been one of centralization. But in the twenty-first century, change will come not from the top down but from the bottom up. City governments are smaller, nimbler, more entrepreneurial, and more accountable to their citizens. Today, they are not only developing new policy solutions to the nation’s most pressing problems, but revolutionizing the very structure of government itself.
Eliminating carbon emissions in Seattle
In 1998, the United States became one of only four UN member nations not to ratify the Kyoto Protocol on climate change. But while the federal government failed to act, city governments across America did not stand still. In 2005, Seattle Mayor Greg Nickels signed on to the protocol, calling on mayors from all 50 states to join Seattle in reducing carbon emissions 5.2% by 2012. As of 2009, more than 1,000 mayors representing over 86 million residents had signed on to the U.S. Mayor’s Climate Protection Agreement.
The movement to adopt the Climate Protection Agreement was more than just rhetoric: in 2006, Seattle adopted a detailed Climate Action Plan to meet the emissions reduction targets of the Kyoto Protocol, and in 2008, Seattle met the Kyoto targets, four years ahead of schedule. But Seattle did not stop there. In 2011, under the leadership of Mayor Mike McGinn, the Seattle City Council unanimously voted to adopt a new and more ambitious Climate Action Plan. With this, the city of Seattle would attempt something unprecedented: eliminate carbon emissions completely by 2050.
Three years later, the process is well underway. The Seattle city government has retrofitted city buildings and helped Seattle residents retrofit their homes and businesses energy efficient technology and building materials. It became the first city government in the country to require energy audits for all buildings so that when people or companies make purchasing decisions, they can factor in the cost savings from energy efficiency. It created a new financing mechanism so that homeowners could benefit from long-term energy efficiency investments, even if they go on to sell their homes.
But as former Mayor Seattle Mike McGinn noted in an interview with the HPR, “If you’re going to get to carbon-neutral, you can’t just tinker around at the margins. You’re going to have to fundamentally re-envision the way cities function and the way people get around from place to place.” For Seattle, this means developing a comprehensive approach to transportation that includes everything from buses to biking to rail cars to walking to car-sharing. It means creating more sitting spaces, making Seattle physically greener, and granting more permits for the construction of micro-apartments so people can live near where they work. In realizing its ambitious goals for environmental sustainability, Seattle is reimagining the very structure of the city of the future, and its city government’s role in saping that future.
Rethinking education in New Orleans
On the eve of Hurricane Katrina in 2005, New Orleans already had one of the worst school systems in the country. Abysmal test scores and graduation rates were just the beginning of the story: the local school board was not only bankrupt, but also corrupt enough to warrant a federal intelligence-gathering operation which involved a long-term rental on the floor above the school board offices. In an interview with the HPR, the Cowen Institute’s Debra Vaughan recalled, “After Katrina, there were questions as to whether the school board was even going to be able to open the schools at all.” The district was in crisis, and the state-led Recovery School District (RSD) came in to take over the school system and turn things around.
Just over five years later, the RSD’s groundbreaking reforms have made New Orleans one of the nation’s most rapidly improving school systems. In 2005, 61 percent of students in New Orleans attended a failing school; today, that number has fallen to just 6 percent. I repeat: 6 percent. Graduation rates have jumped by more than twenty percentage points, and since 2007, the percentage of students in New Orleans who are reading and doing math at grade level has doubled.
In order to accomplish this incredible turnaround, New Orleans implemented nothing less than a complete restructuring of how schools districts in America operate. Instead of a top-down model where the central office dictates how every school will operate, New Orleans embraced a decentralized approach that granted schools increased autonomy in exchange for increased accountability. Today, 91% of students in New Orleans are enrolled in charter schools, public schools that have been given independent control over their staffing, scheduling, and budgeting decisions. According to Neil Wagner, the director of NYU’s Wagner Innovation Labs, “What’s going on in New Orleans is undoubtedly the most radical re-think of education going on right now in America.”
As Louisiana Superintendent of Schools John White explained in an interview with the HPR, “The modern school system is in many ways a manifestation of a federalist approach that grew out of the Great Society and is primarily program-driven … We have seen increasing demands on school systems that have an archaic control structure that has proven wholly ineffective at addressing the issues students are facing in their schools.” After Katrina, the RSD turned that system on its head. “Given the opportunity to start from scratch, we created a system that put less power in the hands of bureaucrats and more in the hands of those who are in close proximity to the problems we face, like teachers, principals, and students,” White explained. Given the persistent struggles many big city school systems have faced for decades, New Orleans’ new approach may fundamentally alter the face of urban education in America.
Embracing the innovation economy in Boston
As Bruce Katz of the Brookings Institute has wrote, “The default proposition in the post-New Deal era is that the restructuring of a national economy as complex and diverse as America’s would be led by the national government.” However, it is in fact the complexity and diversity of the American economy that make the very notion of a national economic strategy obsolete. In a global economy, cities cannot simply follow a generic economic roadmap to success; instead, each city must tailor its economic development strategy to its own unique comparative advantages.
Boston has drawn praise from across the country for embracing the new innovation economy. As of 2010, Boston’s Suffolk County had the largest average establishment size of any similarly sized county in the US. Boston’s big-business economy was the stagnant economy of the past, not the high-growth small business economy of the future. In 2010, former Boston mayor Tom Menino launched an initiative to change that by “transforming 1,000 acres of the South Boston waterfront into an urban environment that fosters innovation, collaboration, and entrepreneurship.”
Playing to Boston’s advantages, Menino chose an area that would be desirable to firms and entrepreneurs: sitting on prime waterfront real estate, the Innovation District was easily accessible by public transport, within walking distance of Boston’s downtown area, and contained the largest tract of underdeveloped land in the city. As Harvard economist Ed Glaeser explained in an interview with the HPR, “Menino then worked hard to press the Innovation District’s advantages, cutting back on regulatory barriers to entrepreneurship and expanding the supply of affordable living and work space.” Boston brought in MassChallenge, the world’s largest startup accelerator, to provide shared office space and early financing for new startup companies. Through a partnership with Boston Global Investors, District Hall was built as the first public innovation building in the world, where entrepreneurs can gather in workspaces, classrooms, and assembly halls to discuss new ideas. Finally, Boston placed an emphasis on expanding the stock of affordable housing including studio and micro apartments in the area.
Just four years later, the Innovation District has already grown into a burgeoning national success story, adding over 5,000 new jobs and more than 200 new companies. Boston’s model shows that by developing and implementing comprehensive economic development plans, cities can shape the economy of the future. As Bruce Katz put it, “In a world in which people live, operate, communicate, and engage through networks, metros have emerged as uber-networks.” Cities, not nations, have become the new units of economic development.
Transforming government in Baltimore
Seattle, New Orleans, and Boston have developed bold new strategies to address a variety of issues. But the CitiStat program, which began in Baltimore in 1999, is transforming the way that government functions. Historically, government agencies have been process-oriented, monitoring inputs such as hours worked and dollars spent. Under this model, there is little accountability, and therefore little incentive for improvements in program performance, customer service, and cost efficiency. Under the CitiStat model, government agencies shift from a process-oriented approach to a results-driven approach. Developed as a cost-saving program for the Baltimore city government, CitiStat has become a philosophy of governance that is sweeping the nation.
Today, dozens of cities and towns have created their own versions of CitiStat, though all of these programs have a few things in common. CitiStat departments increase personal accountability by requiring city agencies to collect and share a variety of different performance metrics, from violent crime rates to program participation numbers to permit issuance wait times. During periodic meetings with the CitiStat Department and the Office of the Mayor, each agency must explain sub-standard performance and propose actionable solutions that can be carried out immediately.
As NYU’s Neil Kleiman explained, “Technology has enabled cities to collect more advanced metrics which shape performance-driven policies and allow more sophisticated data analytics. Every year you’re going to see exponentially more cities adopting CitiStat, and it’s a hell of a lot easier now than it was even 10 years ago.” In Baltimore, CitiStat has saved the city hundreds of millions of dollars, while simultaneously improving the quality of city services across almost every city department. And across America, the CitiStat model of governance is making governments more responsive to the needs of their citizens.
Cities and the future
America’s cities are driving innovation in the public sector. As former New York Mayor Michael Bloomberg explained in a speech the Economic Club of Washington, D.C, “As a result of the leadership vacuum, cities around the country have had to tackle our economic problems largely on our own.” But is this merely a temporary solution to a short-term problem? What makes cities uniquely positioned to succeed in the 21st century?
As the Brookings Institute’s Bruce Katz and Jennifer Bradley observed in their book The Metropolitan Revolution, “The federal and state governments, at their core, establish laws and promulgate rules. In so doing, they reflect the curse of the twentieth century Weberian state: highly specialized, overly legalistic, prescriptive rather than permissive, process oriented rather than outcome directed.” Inherently, this hierarchical, bureaucratic environment is not conducive to innovation.
Local government, on the other hand, is by nature more entrepreneurial. Whereas Washington tends to be occupied with budgets, finance, regulation, and oversight, cities actually have to get things done. Cities innovate because they must: cities governments are themselves governed, as as Rochester Hills Mayor Bryan Barnett put it, by “absolute accountability.”
Seattle Mayor Mike McGinn explained, “The mayor is the executive who is closest to the voters, so he really occupies a unique position in our system of government. There’s an expectation for direct accountability for things like quality of life, law and order, well-functioning government, that you don’t find anywhere else.”
While the federal government stands still, local governments are forced by their very responsibilities to voters to get results. As Mayor Barnett observed, “I think ultimately power and decision-making and all things related to governance are essentially being driven down to local government.” And indeed, in the 21st century innovation economy, smaller and nimbler, local governments are the entrepreneurs that will find new solutions to problems left unanswered by a paralyzed Washington D.C.