Cities and states are becoming increasingly powerful actors on the world stage

“And together we shall rule the world!” Anne Hidalgo and Sadiq Khan, mayors of Paris and London respectively, meet last spring. Image: Getty.

“No matter how far away, no matter how small in size, no matter how few competences, and indeed, no matter how poor, every single region has at least one unique jewel it can share with the others.” – Vaira Vike-Freiberga, former president of Latvia.

“Sub-national presence on the international scene has become a fact of life in an interdependent world.” – Ivo Duchacek, who created the ‘paradiplomacy’ concept  in 1984.

“Global cities are increasingly driving world affairs– economically, politically, socially and culturally. They are no longer just places to live in. They have emerged as leading actors on the global stage.” – Ivo Daalder, president of the Chicago Council on Global Affairs in 2015.

Almost everything in nature is self-organised, and a substantial part of what human beings do is organising their behaviour. Over the last centuries, we have organised the world so that sovereign states serve as the main compass. When asked what are the largest world economies, we think about countries. Who are the most powerful? A handful of sovereign states come to mind.

I propose a different way of reshuffling the cards. Instead of looking at foreign affairs in a state-centric way, one should also contemplate other actors such as cities and states (or cantons, counties, departments, districts, krays, länder, oblasts, okrugs, prefectures, provinces, regions, republics, territories, or zones).

Picking a different unit of analysis diversifies our understanding of the world, adding realism and density to our everyday life and choices. Any future institutional framework for foreign affairs should be deeply rooted in the principles of multi-level and multi-stakeholder governance in order to allow for interaction, synergy, and complementarity between all levels of governments –and to encourage ownership of the challenges and the opportunities of foreign affairs.

History countersigns this view. When we look back at the last 400 years, we notice that new actors emerge on the world stage in a cyclical way. Sovereign states, as we know them today, are a fairly recent political construction, dating back to the 17th century. Yet, they alone no longer monopolise the status quo of the international system, even if they still certainly play a vital role.

International organisations rose as a full global actor in the late 19th century. They were followed by multinational companies in the mid-20th century, international non-governmental organisations (iNGOs) in the 1980s, and by terror groups, religious communities, a transnational civil society, or by celebrities in more recent times. All have authority and capacity to mold world dynamics and shape rules while they dispute space and resources among themselves to enlarge and protect their constituencies.

Cities and states are the brand new international actors. If the international community has always been aware of the economic sway of some states (such as California or Texas), or of regions using foreign policy to leverage their internal autonomy (such as Quebecor Catalonia), today the phenomenon is much more widespread.

The international tentacles of “mega cities” or “global cities” have also been grasped in the past, but the list of cities that are no longer nested in a national urban system only but participate directly in global governance is much wider. Virtually no state or major city in the United States, Canada, Germany, Brazil, China, Japan, Mexico, France, and several other countries in Asia, Latin America, Europe, or North America has shied away from harnessing the opportunities opened up by an international presence. North Rhine-Westphalia, Guangdong, São Paulo (state), and Île- de-France are richer than most countries in the world and have established well-staffed and dynamic structures to defend their interests abroad.

Sub-national entities can thus be regarded less as a territory but as a space where global flows– capital, information, people, goods, services– crisscross and solidify. The startling reality is that among the thirty largest economies in the world ranked by gross domestic product (GDP), twelve are sub-national (regional or municipal). A 2001 study by the McKinsey Global Institute shows that six hundred urban centres generate about 60 percent of global GDP.

An alternative view of the world's largest economies. New York metro is bigger than New York state because it includes chunks of Connecticut and New Jersey. 

This trend goes hand in hand with the global urbanisation of the planet. Concentrated into just 2 percent of the world’s surface, urban areas now hold over half of the world’s population. And UN Habitat estimates that, by 2050, over 75 percent of the world’s population will live in cities.

According to the UN agency: “The 100 years from1950 to 2050 will be remembered for the greatest social, cultural, economic and environmental transformation in history – the urbanisation of humanity. With half of us now occupying urban space, the future of the human species is tied to the city.”

Currently, over 80 percent of global economic output is already generated by cities. This phenomenon only bears comparison to that great growth of cities that accompanied the industrial revolution in the 19th century. As Harvard economics professor Edward Glaeser has said: “Cities are our species’ greatest invention.”

Aware of their economic potential and strains and faced with gridlock in the national capitals, mayors and governors have gone a long way toward filling the vacuum of effective decision-making and effective action by exercising political and economic power at their level. It is the states and cities that are the engines of growth at the ground level, where the transition from policy to practice becomes most visible.


In countries around the world, sub-national governments have now to meet the needs of their constituencies and face constant scrutiny. Processes of decentralisation of government – the downward transfer of resources, responsibilities, or authority from national to sub-national governments– is a powerful global tendency. As pointed out by Michael Storper: “City- regions are the principal scale at which people experience lived reality. The geographical churn, turbulence, and unevenness of development, combined with the sheer scale of urbanisation, will make city- region development more important than ever– to economics, politics, our global mood, and our welfare”. With the exception of the classical strongholds of sovereign countries – the military, border security, monetary policy, and justice – decentralisation is touching all segments of power.

This offers some challenges to the practice of foreign affairs. If the international portfolio of national states is still dominated by issues of war and peace, trade matters, and monetary stability, there is a tendency and pressure for foreign ministries to diversify their agendas and to include human- scale themes – such as environmental and social issues, cultural exchanges, infrastructure, education, or healthcare and epidemics.

This enlargement of the field of foreign policy into non-military and non- diplomatic issue areas is gradually becoming a characteristic feature of global interdependence. Yet, these are fields that usually fall under the legal competence of sub-national governments. And local authorities wish not to relinquish their rights and duties. If national foreign policy is outward looking to the external environment, then sub-national foreign policy looks more inward to the domestic base.

A balance is possible to strike if we view the international activities of sub-national governments as one element in an increasingly complex multilayered diplomatic environment wherein policy-makers seek to negotiate simultaneously with domestic as well as foreign interests. Chinese provinces, Brazilian states, or German länder smoothly carry out hundreds of international cooperation programmes on issues that directly relate to the welfare of their citizens.

International protocol and norms represent another barometer of the new weight that sub-national actors carry in the global arena. Emblematically, when the governor of California visited China in2013 and Mexico in 2014, he was received with pomp by Premier Li Keqiang and by President Enrique Peña Nieto respectively. Or when Brazil’s President Dilma Rousseff led a mission to the United States in 2012, she held meetings not only with President Barack Obama but also with then Governor Deval Patrick of Massachusetts. Led by economic imperatives and by constitutional rights, sub-national governments have landed on the moon of foreign affairs, signalling a fundamental challenge to some of the core logics of the modern international system.

As witnessed before in ancient history, once again local spaces – cities and states – are the cradles of change, the place where new lifestyles form and new ways of organising work, economy, and politics are being born. But how has this situation come about? Doesn’t orthodox International Relations theory claim that foreign affairs are under the exclusive purview of central governments? Why is this type of sub-national activity becoming more prevalent and growing at a rate that far exceeds the growth of international activity by the traditional representatives of sovereign states? How could foreign policy be used as an instrument to deliver domestic services, such as healthcare, infrastructure, or better education?

The international activism of sub-national governments is rapidly growing across the world, discreetly transforming diplomatic practices and foreign policy instruments. But the full import of this development and its potentially far- reaching consequences is as yet not well grasped.

Rodrigo Tavares is founder and CEO of Granito & Partners. This is an extract from his book “Paradiplomacy: Cities and States as Global Players”, published by Oxford University Press Inc. It is © 2016 Oxford University Press.

 
 
 
 

Worried Guildford will be destroyed by Chinese trains? Then you might not be very nice

A South West Train at Waterloo. Image: Getty.

Despite the collapse of everything else that more-or-less worked in 2008 Britain, before the Hunger Games years began, some things remain constant. One of the things that’s near-mathematical in its constancy is that, when a new train contract is let, people on both sides of the political spectrum will say extremely stupid things for perceived partisan advantage.

This week saw the award of the contract to run trains to the south west of London, and unsurprisingly, the saying stupid things lobby was out in force. Oddly – perhaps a Corbyn-Brexit trend – the saying of egregiously stupid racist lies, rather than moderately stupid things, was most pronounced on the left.

As we’ve done to death here: rail in Great Britain is publicly run. The rail infrastructure is 100 per cent publicly owned, and train operators operate on government contracts, apart from a few weird anomalies. Some physical trains are owned by private investors, but to claim rail isn’t publicly run would be like claiming the NHS was the same as American healthcare because some hospital buildings are maintained by construction firms.

Every seven years or so, companies bid for the right to pay the UK government to operate trains in a particular area. This is the standard procedure: for railways that are lossmaking but community-important, or where they are within a major city and have no important external connections, or where there’s a major infrastructure project going on that’ll ruin everything, special measures take place.

The South Western England franchise is not one of these. It’s a profitable set of train routes which doesn’t quite live up to its name. Although it inherited a few Devon and Dorset routes from the old days, its day job involves transporting hundreds of thousands of Reginald Perrins and Mark Corrigans from London’s outer suburbs and Surrey, Hampshire and Berkshire’s satellite towns to the grinding misery of desk jobs that pay a great deal of money.

(If your office is in the actual City of London, a fair trek from the railway’s Waterloo terminus, then you get the extra fun of an extra daily trip on the silliest and smelliest Tube line, and you get even more money still.)

Anyway. The South Western concession went up for auction, and Scottish bus and train operator First Group won out over Scottish bus and train operator Stagecoach, the latter of which had run the franchise for the preceding 20 years. (Yes, I know 20 isn’t a multiple of 7. Don’t ask me to explain, because I can and you wouldn’t enjoy it.)

First will manage the introduction of a bunch of new trains, which will be paid for by other people, and will pay the government £2.2bn in premiums for being allowed to run the service.

One might expect the reaction to this to be quite muted, because it’s quite a boring story. “The government does quite a good deal under which there’ll be more trains, it’ll be paid lots of money, and this will ultimately be paid back by well-paid people paying more train fares.” But these are not normal times.


First Group has decided for the purposes of this franchise to team up with MTR, which operates Hong Kong’s extremely good metro railway. MTR has a 30 per cent share in the combined business, and will presumably help advise First Group about how to run good metro railways, in exchange for taking a cut of the profits (which, for UK train franchises, tend to be about 3 per cent of total revenue).

The RMT, famous for being the least sensible or survival-oriented union in the UK since the National Union of Mineworkers, has taken exception to a Hong Kong company being involved in the railways, since in their Brexity, curly sandwich-eating eyes, only decent honest British Rail has ever delivered good railways anywhere in the world.

“A foreign state operator, in this case the Chinese state, is set to make a killing at the British taxpayers’ expense,” the RMT’s General Secretary Mick Cash said in a press release.

This is not true. Partly that's because a 30 per cent share of those 3 per cent profits is less than 1 per cent of total revenues, so hardly making a killing. Mostly, though, it’s because it’s misleading to call MTR “state-owned”. While it’s majority owned by the Hong Kong government (not the same body as the central Chinese state), it’s also partly listed on the Hong Kong Stock Exchange. More to the point, this a really odd way of describing a transport authority controlled by a devolved body. I wouldn’t call the Glasgow subway “UK-state owned” either.

So this fuss is intensely, ridiculously stupid.

There’s an argument – it’s a bad argument, but it exists – that the entire UK rail system should be properly privatised without government subsidy.

There’s an argument – it’s a slightly less stupid argument, but it exists – that the entire UK rail system should be returned to the public sector so we can enjoy the glory days of British Rail again.

The glory days of British Rail, illustrated in passenger numbers. Image: AbsolutelyPureMilk/Wikipedia.

But to claim that the problem is neither of these things, but rather that the companies who are operating trains on the publicly run network are partially foreign owned, makes you sound like a blithering xenophobe.

In fact, if you think it’s reasonable for a Scottish company to run trains but not for a Hong Kong company to run them, then that's me being pretty bloody polite all things considered.

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