Impact of Investing in Cities and Local Governments

MCW aims to provide access to short- and long-term technical services, training, and capacity-strengthening in areas related to improving urban and local governance. The MCW outcomes consist of technical assistance in five functional areas: improved urban and local government public service delivery, greater autonomy, transparency, responsiveness, and accountability of urban and local governments, enhanced ability to adapt to climate change, improved environmental management practices, and expanded pollution control systems, better urban and local government disaster preparedness, response, and recovery, and strengthened urban and local government finance, creditworthiness, and borrowing. The goal of this research is to aggregate what USAID has learned across the MCW TOs and complement USAID-specific learning with broader learning from academic research about urban governance. Given the sunsetting of the agency's Urban Policy, this study will support USAID in making the case for long-term and sustained investment of resources to address development issues inherent to cities and local governments. The end products will consider the importance of working in urban areas and consider how urban governance work links to Democracy, Human Rights, and Governance priority outcomes. The study team conducted a literature review of writing from peer-reviewed academic journals, professional journals, government reports, and reports from engaged non-governmental organizations in public university library catalogs, Oxford Handbooks Online, Global Health, Sage Encyclopedia of World Poverty, JSTOR, Project Muse, Google Scholar, and Google. The team used specific key terms (democracy, infrastructure, decentralization, local governance reform, local governance, and sanitation services) and employed a snowball search to review an article's references and citations along with looking at what other related articles an author with relevant writing may have published. The team scanned abstracts and downloaded articles/writing that appeared relevant for review and summary. The team identified 35 sources (including books) relevant to this program review. The study team included 15 of the 18 MCW TOs in the program review and excluded three TOs due to their limited relevance to the IDIQ's core functional areas. Findings are structured according to functional area. Due to the relative lack of activity under functional areas 3 and 4, the team combined these findings sections and added a fifth findings section on a cross-cutting issue (sectoral integration) that was not an explicit functional area as the IDIQ was designed, but it is a common theme across TOs of interest to USAID. To develop the final report, the study team conducted a desk review of publicly available TO documentation as well as six 45-minute key informant interviews with stakeholders and implementers involved with MCW TOs. The literature review and program review revealed several key findings. In the area of improved urban and local government public service delivery, the study found that investments in urban infrastructure, such as transportation and sanitation systems, can have a significant impact on public health and economic development. The study also found that greater autonomy, transparency, responsiveness, and accountability of urban and local governments are critical for effective public service delivery. In the area of climate change, the study found that urban and local governments can play a critical role in reducing greenhouse gas emissions and adapting to the impacts of climate change. The study also found that investments in environmental management practices, such as waste management and pollution control, can have a significant impact on public health and environmental sustainability. In the area of disaster preparedness, response, and recovery, the study found that urban and local governments can play a critical role in reducing the risk of disasters and responding to disasters when they occur. The study also found that investments in disaster risk reduction and management can have a significant impact on reducing the economic and social impacts of disasters. In the area of urban and local government finance, creditworthiness, and borrowing, the study found that investments in financial management systems and capacity-building can have a significant impact on improving the financial sustainability of urban and local governments. The study also found that greater autonomy and transparency in financial management can help to reduce corruption and improve the accountability of urban and local governments. The study also found that sectoral integration is a critical cross-cutting issue in urban governance. The study found that investments in sectoral integration can have a significant impact on improving the effectiveness and efficiency of urban governance, and that greater coordination and collaboration among different sectors can help to achieve better outcomes in areas such as public service delivery, climate change, and disaster preparedness and response. Overall, the study found that investing in cities and local governments can have a significant impact on improving public health, economic development, and environmental sustainability. The study also found that greater autonomy, transparency, responsiveness, and accountability of urban and local governments are critical for effective public service delivery and that investments in sectoral integration can help to achieve better outcomes in areas such as public service delivery, climate change, and disaster preparedness and response.