With the recent awarding of the Nobel Prize in Economics to two specialists in Economic Governance, Elinor Ostrom and Oliver Williamson, the topic is now all the rage as a popular discussion point. I’ve got to admit that I have only discussed it a couple of times at dinner parties since the announcement, but that is a couple of times more than it had been mentioned in popular discussion beforehand.
I must say however that it is a topic that has interested me for many years. The necessity for a governance framework to underpin the economic sustainability of any new community is, to the trained eye, almost obvious. Sadly, such a framework is almost non-existent or at best quite poor in most new urban projects.
Until now, that is!!
Lately we have seen a number of urban projects (both brownfields and greenfields) requiring the establishment of a governance system or delivery mechanism as one of the priority orders of business.
We have seen numerous examples of a strong emphasis on governance in urban developments. Good examples are the delivery mechanisms for Chatswood in NSW, Docklands in Victoria and Milton Keynes in the United Kingdom.
A working definition of Urban Governance has been provided by The Governance Working Group of the International Institute of Administrative Sciences (1996):
Governance refers to the process whereby elements in society wield power and authority, and influence and enact policies and decisions concerning public life, and economic and social development.
A number of key points are noted in this definition. Firstly, the definition states that governance relates to public life, and economic and social development. This is clearly limiting the definition. Noted however that the definition does not restrict itself to public entities – it refers to “public life”. Hence governance must be that which relates to a wider life than the closeted private life.
It also refers to “elements of society”. In this regard, governance bodies can consist of public or private entities, or a combination of these. In addition, more recently, governance has also involved a range of affected stakeholders. In relation to public infrastructure, this includes the community.
The role of the governance body is to “influence and enact policies and decisions”. As such the role of governance usually rests with the Board of Directors/Commissioners or the highest level of management.
Ultimately, economic and social development are enhanced by the presence of strong governance structures and systems. The options for these governance structures are many and varied, but ultimately depend upon the objectives of the parties involved.
One thing is for sure, however. If there is no governance, the project will certainly fail.
Economic Governance – The New Black
April 9th, 2010 by Brian ColeSubscribe to the comments for this post with RSS: 
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