You might still think of Medellin, Colombia, as a drug capital, but it's actually turned into a model for urban renewal, says Nobel laureate economist Joseph Stiglitz of Columbia University.
"Medellin now has a well-deserved reputation as one of the most innovative cities in the world," he writes in an article for
Project Syndicate. "The tale of the city's transformation holds important lessons for urban areas everywhere."
Drug lords ruled Medellin in the 1980s and 1990s, and inequality was severe, Stiglitz says.
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"The problems of the city's poor neighborhoods have not been erased, but the benefits that the infrastructure improvements have brought are brilliantly evident in the well-kept houses, murals and soccer fields perched near gondola stations."
The city has fixed up buildings and cleaned up the streets, he notes. "The belief [is] that if you treat people with dignity, they will value their surroundings and take pride in their communities. And that faith has been more than borne out."
Medellin won a Harvard University prize for urban design last year, and education has improved, Stiglitz says.
All this provides a lesson for cities around the world. "Without planning and government investment in infrastructure, public transportation and parks, and the provision of clean water and sanitation, cities won't be livable," he writes.
"And it is the poor who inevitably suffer the most from the absence of these public goods."
In the United States, deficient planning has led to economic segregation, and "poverty traps have formed in cities without public transportation, owing to a shortage of accessible jobs," Stiglitz writes. "We need to create urban areas in which individuals can flourish and innovate."
Urban development must be environmentally, socially and economically sustainable, he argues.
"One of the biggest obstacles to achieving sustainability is inequality," he writes. But some cities show that inequality isn't inevitable, he says. "Cities, like San Francisco and San Jose, are comparable to the best-performing economies in terms of equality of opportunity."
Many national governments now suffer from political paralysis, so forward-thinking cities represent a "beacon of hope," Stiglitz remarks.
He acknowledges there are limits to what cities can do. But they can make sure affordable housing is available, Stiglitz writes. "And they have a special responsibility to provide high-quality public education and public amenities for all."
U.S. policymakers, concerned about strained public finances in places like Detroit and Puerto Rico, are moving to keep closer tabs on the ability of states and cities to raise money in the $3.7 trillion municipal bond market.
Meanwhile, the Treasury Department's concern about the fragile state of many cities' finances has led it to form a unit that will monitor the municipal bond market, especially borrowers with financial problems.
Some experts applaud the move. It is "an excellent idea, given the critical issues confronting many governments, including financial distress and pension funding issues," Howard Zucker, a partner at Hawkins Delafield & Wood law firm, tells
The Bond Buyer.
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