Creating an Emerging Global Cities Index

The Capstone project examines the factors which contribute to positive economic activity in cities, and argues that it is important to focus on policy decisions and governance at the city level in addition to socioeconomic conditions.

The team developed the City Economic Capacity (CEC) index by evaluating theoretically important local policy and contextual variables that could influence economic growth. The CEC index is positively associated with economic performance, as defined by 2012 metropolitan area GDP per capita. Most importantly, the research finds that city government can directly influence the CEC variables we used in our analysis. The student team complemented the CEC data analysis and findings with case study research of 10 global cities; the case studies help identify city-specific governance characteristics, namely aspects of legal authority, fiscal capacity, and operational capacity, which position cities higher on the CEC index.

The case studies show that none of the cities studied would have achieved its CEC score without the policy decisions their current and former leaders made. The research demonstrates that livability and quality of life variables become increasingly important for sustaining economic performance as a city develops. Secondly,  business conditions that have traditionally been considered to be necessary for economic performance begin to matter much less once a city is considered to be economically developed. Moreover, both the quality of governance and effectiveness of local policy significantly affect the economic performance of a city, while the existence of democratic governance structures and accountability become increasingly important for city-level economic performance as cities develop and grow.