The Great Recession and the Future of Cities

This paper describes the serious fiscal crisis faced by cities around the world following the Great Recession of 2008. Five years later, the after-effects of this major crisis continue to be felt and limit economic opportunities in cities. Section 1 summarizes how the crisis was triggered and how it unfolded in the US, then spread to the rest of world -- highlighting the links between financial sector and housing sector. Section 2 discusses the impact of the crisis on urban revenue and expenditure, and the stimulus programs and recovery plans devised as a short term response by cities around the world. Section 3 then discusses longer term strategies to ensure the financial, social and environmental sustainability of cities. The authors make the point -- and back up our assertions with specific examples -- that urban decision-makers must take a long view and find ways to create opportunities for their citizens, making sure that their decisions are financially sustainable in the long term. Today's decisions should not lock cities out of options tomorrow, and cities must be managed with flexibility so as to adapt to unforeseen new circumstances. The authors also argue that, while there has been a lot of talk about "smart cities" and new technologies among urban specialists and urban planners, it is ultimately the focus on basic economics (sustainable financing, providing good services to consumers and incentives for providers), good governance and good institutions that will create sustainable, dynamic and livable cities.

Bibliographic Details

Main Authors:	Dethier, Jean-Jacques, Morrill, Curtis
Language:	English en_US
Published:	World Bank, Washington, DC 2012-11
Subjects:	ACCESS TO CAPITAL, ACCOUNTING, ACCOUNTING SYSTEMS, ADVANCED ECONOMIES, AUTONOMY, BAILOUT, BALANCE SHEET, BANK LOANS, BANK POLICY, BANKING CRISIS, BANKING INSTITUTIONS, BANKING SYSTEM, BANKRUPTCY, BANKS, BID, BOND, BOND ISSUERS, BONDS, BORROWER, BORROWING, BORROWING CAPACITIES, BORROWING COSTS, BUDGET DEFICITS, CAPACITY BUILDING, CAPITAL FORMATION, CAPITAL MARKETS, CENTRAL BANKS, CENTRAL GOVERNMENTS, COMMERCIAL BANKS, COMMODITY PRICES, CONSUMER CREDIT, CREDIT MARKETS, CREDIT QUALITIES, CREDITORS, CREDITWORTHINESS, CURRENT ACCOUNT, CURRENT ACCOUNT DEFICITS, CURRENT EXPENDITURES, DEBT, DEBT CRISIS, DEBT OBLIGATIONS, DECENTRALIZATION, DEFAULTS, DEFICITS, DERIVATIVE, DERIVATIVE PRODUCTS, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DEVELOPMENT AUTHORITIES, DEVELOPMENT FINANCE, DEVOLUTION, DOMESTIC CAPITAL, DURABLE, DURABLE GOODS, ECONOMIC ACTIVITY, ECONOMIC CRISIS, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC OPPORTUNITIES, EMERGING MARKETS, EMPLOYERS, EMPLOYMENT, ENVIRONMENTAL DEGRADATION, ENVIRONMENTAL SUSTAINABILITY, EQUITY MARKETS, EQUITY RATIO, EUROPEAN CENTRAL BANK, EXCESS LIQUIDITY, EXPENDITURE, EXTERNAL SHOCKS, EXTERNALITIES, FEDERAL RESERVE, FINANCIAL CRISIS, FINANCIAL DEREGULATION, FINANCIAL INSTITUTIONS, FINANCIAL INSTRUMENT, FINANCIAL MANAGEMENT, FINANCIAL MARKET, FINANCIAL MARKETS, FINANCIAL SERVICES, FINANCIAL STABILITY, FINANCIAL STRESS, FINANCIAL SUSTAINABILITY, FINANCIAL SYSTEM, FINANCIAL SYSTEMS, FISCAL AUTONOMY, FISCAL DEFICITS, FISCAL FEDERALISM, FISCAL POLICY, FLOW OF CAPITAL, FORECLOSURES, FOREIGN CAPITAL, FOREIGN DIRECT INVESTMENT, FOREIGN INVESTMENT, GOVERNMENT FUNDING, GOVERNMENT INVESTMENTS, GOVERNMENT SPENDING, GOVERNMENT SUPPORT, HEDGE FUNDS, HOLDINGS, HOUSEHOLDS, HOUSING, HOUSING PRICES, HUMAN CAPITAL, INFORMAL ECONOMY, INFRASTRUCTURE DEVELOPMENT, INFRASTRUCTURE INVESTMENT, INFRASTRUCTURE INVESTMENTS, INSTITUTIONAL BARRIERS, INSURANCE, INSURANCE COMPANIES, INSURANCE COMPANY, INTEREST RATE, INTEREST RATE POLICY, INTEREST RATES, INTERGOVERNMENTAL TRANSFERS, INTERNATIONAL BANK, INVESTMENT BANK, INVESTMENT CLIMATE, INVESTMENT CORPORATIONS, INVESTMENT DECISION, INVESTMENT DECISIONS, INVESTMENT FUND, INVESTMENT PROJECTS, INVESTMENT SPENDING, INVESTMENT STRATEGIES, JOB OPPORTUNITIES, LABOR UNIONS, LAND PRICES, LARGE CITIES, LEGAL CONSTRAINTS, LEGAL FRAMEWORKS, LEGISLATION, LIQUIDITY CRISIS, LOCAL CAPITAL EXPENDITURES, LOCAL ECONOMIES, LOCAL ECONOMY, LOCAL GOVERNMENT, LOCAL GOVERNMENTS, LOCAL INFRASTRUCTURE, LOCAL PUBLIC FINANCE, LOW INTEREST RATE, LOW-INCOME BORROWERS, MARKET STABILITY, MARKET VALUE, METROPOLITAN AREAS, MICROFINANCE, MIGRANT WORKERS, MONETARY FUND, MONETARY POLICY, MONEY MARKET, MONEY MARKETS, MORTGAGE, MORTGAGE DEBT, MORTGAGE MARKET, MORTGAGE SECURITIES, MORTGAGES, MULTINATIONAL, MUNICIPAL DEVELOPMENT, MUNICIPAL GOVERNMENTS, MUNICIPALITIES, MUTUAL FUNDS, NATURAL RESOURCES, ONLINE SYSTEM, PENSION, PENSION FUNDS, PRIVATE CAPITAL, PRIVATE INVESTMENT, PRIVATE INVESTORS, PRODUCTIVITY, PROPERTY TAXES, PUBLIC DEBTS, PUBLIC FINANCES, PUBLIC INVESTMENT, PUBLIC INVESTMENTS, PUBLIC SERVICES, PUBLIC TRANSPORT, PUBLIC TRANSPORTATION, RATING AGENCIES, REAL ESTATE, REAL PROPERTY, RECESSION, RECESSIONS, REINVESTMENT, REINVESTMENTS, REMITTANCES, RESIDENTIAL MORTGAGE, RETURNS, REVENUE SHARING, RISK MANAGEMENT, RISK MANAGEMENT STRATEGIES, SAVINGS, SECONDARY MORTGAGE MARKET, SECURITIES, SHORT-TERM FINANCING, SOCIAL CAPITAL, SOCIAL SERVICES, SOCIAL WELFARE, SOVEREIGN DEBT, START-UPS, SUBNATIONAL FINANCE, SUBNATIONAL GOVERNMENTS, TAX, TAX COMPLIANCE, TAX RATES, TAX REFORM, TELECOMMUNICATIONS, TRADE UNIONS, TRANCHES, TRANSITION COUNTRIES, TRANSPORT, TREASURY, TREATY, UNEMPLOYMENT, UNION, URBAN AREAS, URBAN CONGESTION, URBAN DEVELOPMENT, URBAN ECONOMIES, URBAN GOVERNMENTS, URBANIZATION, VILLAGES, WEALTH EFFECT,
Online Access:	http://documents.worldbank.org/curated/en/2012/11/16963182/great-recession-future-cities https://hdl.handle.net/10986/19882
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