Shaping the Playing Field

Abstract

This chapter looks at the conditions under which cities compete within nations and also globally. Those conditions vary across nations because of differences in geography as well as differences in political cultures and institutions. The chapter explores four factors that shape competition: (1) national fiscal regimes, including the presence or absence of equalization payments across jurisdictions (cities, states, etc.); (2) housing markets, notably the impact of regulatory regimes on costs; (3) transportation infrastructure and the formation of transport hubs; and (4) the spatial mobility of brains and talent and the economic and social consequences of the concentration of human capita in selected cities. The chapter ends by exploring the relationship between social cohesion and urban competiveness. The sorting populations across cities is a double-edged sword, a potential source of wealth creation but also of social divides.