Building capacity where it counts

PUBLIC SECTOR

- MARIANA MAZZUCATO RAINER KATTEL

After years of underinvestment, governments around the world are struggling to keep pace with growing demands.

The consequences are now widely evident, as underfunded and unprepared public agencies falter whenever crises strike. The problem is not “slimming” government down, but rather rendering it more capable, strategic, outcome-oriented and a good partner in solving the greatest problems of our time: providing adequate housing for all, strengthening climate resilience and ensuring that technology makes all our lives better, not just a few “bros” richer.

Nowhere is this more evident than in cities. Once seen mainly as centres of service delivery, they are now at the front lines of modern governance. They are also where vulnerabilities are most acute: where climate shocks hit first, where inequality is concentrated, where jobs are created or lost, where democracy is either fortified or allowed to erode and where innovation emerges most rapidly. As they expand, diversify and gain political significance, municipal governments must therefore enhance their capacity to anticipate challenges, embrace diverse perspectives and act swiftly.

Yet investment in city governance is often treated as less important than investing in infrastructure, security or new technologies. That is a mistake. Strengthening municipal governments is not a bureaucratic exercise; it is a strategic imperative for addressing urgent problems and bolstering democratic resilience. To achieve this, public-sector capabilities must be well-defined, measurable and able to withstand shocks.