Does Governance Matter? The Dynamics of Metropolitan Governance and Competitiveness

Metropolitan areas are governed by a patchwork of governmental units that contribute to the dispersion of people and the diffusion of local power. These effects are visible in nearly every metropolitan region whether they are growing or shrinking. The policy debate has focused on questions of efficiency, rather than the developmental impacts of these choices. Analysis must be structured to capture the long-term effects of governance and to avoid falsely attributing short-term economic fluctuations to changes in governance. This research examines the competitiveness of 285 metropolitan areas over nearly thirty years from 1972 to 1997 with Ordinary Least Squares (OLS) regression. The analysis confirms that governance is a significant influence on metropolitan competitiveness, but the findings do not fully support the traditional arguments regarding governance.