# **4.4 Determinants of City Performance: Main Empirical Results**

First we performed a simple univariate, or at most, bivariate, testing of whether globalization and/or governance are highly and significantly related to city performance. In simplified chart form, we first present these results in Figures 1a through 1i, which summarize the initial empirical support for the main hypotheses we test. These figures present the results utilizing only the sample of emerging and transition economies (‘nonOECD’), as a simple way of quasi-controlling for large income differentials (indeed, the differences are even larger with the full sample, not depicted in the figures, but shown in subsequent tables below). The figures below present the differential performance that a global (vs. local) city makes on a vector of performance in services such as access to telephones [1]<sup>15</sup> (1a), sewerage (1b), water (1c), electricity (1d), overall quality of infrastructure (1e), access to telephones [2] (1f), access to cell phones (1g), access to internet in schools (1h) and quality of electricity supply (1i).

Further, by the simple sample segmentation and calculation performed for each panel of Figure 1, we can also depict here the difference that good governance can make. This is done utilizing three measures of governance, of which one is a country average (control of corruption), and the other two are at the city level (bribery in utility, and state capture).

We find that governance is significantly associated with performance, both for local and global cities. Well governed cities, whether local or global, perform better than poorly governed ones across all quality and access to service variables. The performance advantage of well governed cities holds across all three measures of governance and all service variables except access to the electricity grid in global cities.

Globalization has a more nuanced impact on city performance. We find that on balance global cities do perform better than local cities. However, the differences are not that marked, and they vary depending on the type of service. In particular, the difference between local and global cities is clear for certain services, such as quality of infrastructure, yet non-existent for access to electricity, for instance. The rest of the services rate lies in between such extremes both in terms of magnitude of its impact (often modest) as well as varying levels of significance.

Consistent with the depiction of some of the results in the various panels of Figure 1 above, we present the fuller set of average rating results for all relevant variables in the Table 2 below, for each one of the relevant samples (full sample, OECD, and non-OECD). From tables 2a, 2b, and 2c, we can clearly detect a strong positive correlation between city performance as measured by service access and the extent of globalization (both at city and country level), regardless of sample. Similarly, there appears to be a strong positive correlation between city performance/service access and city and country governance. In conclusion, more globalized cities are better performing, and better governed cities are well performing. Cities in well governed countries are also better performing.

> 15 As per table 1, access to telephones [1] is drawn from UN Observatory, 1998 and measures the percentage of the population with access to telephones. Access to telephones [2] is drawn from EOS, 2003 and captures on a scale from 1-7 the availability of new telephone lines for business.

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