The application of analytic hierarchy process to implement collaborative governance process: The allocation of the urban structural funds in the city of Madrid

Local governments dispose of powerful tools like development funds that can be distributed among its different constituents to compensate economic disequilibrium originated by a complex array of factors. But it is always one of the hardest decisions to assign handouts to people who could think its own expectations are not being taken properly into account. Each stakeholder has different criteria to evaluate his needs, and to demand a particular investment effort. Since resources are very limited in local levels, city hall governments are pulled apart by those conflicting demands. The challenge of addressing them at the same time can be modelled as a multi-criteria decision-making. The aim of this paper is to show that the analytic hierarchy process (AHP) could work out the most acceptable distribution of the funds among the different city districts and neighbourhoods. The application of the model in Madrid shows that AHP: (a) allows to incorporate opposing demands; (b) increases the transparency of the decision-making process; (c) eases the decentralization of governmental decisions; (d) enhances the legitimation of the final outcome; and (e) it is a scientific approach with great potential to be applied in similar domains where hard political decisions are needed.