Municipal structural adjustment: For an institutional analysis of global development finance.

Abstract

In this paper I examine climate-aligned development finance initiatives (DFIs) that foster private-sector investment in 'sustainable' urban infrastructures. I am concerned with the ways in which they work to create the institutional preconditions for such investment. I develop the notion of Municipal Structural Adjustment (MSA) as a lens for examining the fields of intervention and modes of policy-making through which these initiatives seek to reform municipalities' governance structures, innovate planning tools and introduce financial instruments. Empirically, this paper focuses on initiatives that get implemented in Mexican municipalities. It builds on a historical exploration of the ways in which development interventions have addressed municipal-scale institutions, as well as on expert interviews with development officers, DFI staff, municipal officials, planners and consultants to analyse these actors' efforts to reform urban bureaucracies. I delineate three interrelated modalities of institutional adjustment that I take to characterise MSA: (1) the superimposition of DFIs' planning schemes with government legislation and their gradual institutionalisation; (2) the burial of decisions in the development of infrastructure deals and (3) the infiltration of municipal authorities, coupled with interventions in the organisational architecture of urban bureaucracies. In contrast to earlier Structural Adjustment Programmes in which development actors enforced a clear package of reforms by holding national governments hostage to conditionality-laden policy measures, these modalities highlight how DFIs institutionalise change through subtle, vested and protracted mechanisms. To place them in the lineage of Structural Adjustment Programs indicates that MSA is a deeply political process, embedded in a political economy of structural domination.