Alfonso Martínez Cearra & Javier Font

Bilbao Metropoli-30




INET 2000: The Internet Global Summit

10th Annual Internet Society Conference

Yokohama, Japan, 18-21 July 2000














  1. introduction.
  2. the impact of the internet on urban governance.
  3. two key success factors: social capital and rationality.
  4. models of electronic urban governance.

    4.1. Quantum leapers

    4.2. Wishful thinkers.

    4.3. Shared Enligthenment.

    4.4. Rediscovering community.

  5. conclusions.
  6. references.







The explosion of the Internet seems to be a universal phenomenon pushing for increased community participation, public-private partnership, citizen information, transparency, and accountability. In spite of the strong growth of virtual communities, cities and metropolitan areas still are the routine environment of an increasing number of human beings. While there is a growing research corpus on governance of virtual communities, the implications of the Net for urban governance are often neglected.

A quick search for the term "electronic governance" on the Net shows its very different understanding across world regions. In some urban areas, electronic governance involves genuine teamwork by government, business firms, universities, and the third sector to meet technological, economic, and social challenges, taking advantage of the opportunities offered by the information society. In other cities, electronic governance means the mere reorientation and streamlining of government’s functioning from bureaucracy oriented to citizen-customer oriented by using the latest information technologies. According to this meaning, electronic governance becomes a synonymous of electronic government, with scant involvement of civil society.

The analysis of the Internet’s impact on different models of urban governance offers a great opportunity to answer the following questions:

In order to answer these questions, the paper analyzes the impact of the Internet on different systems of urban governance around the world. This international comparative assessment includes evidence from cities in Europe (Bilbao, Bologna, and Helsinki), North America (Austin and Ottawa), Latin America (Monterrey), and Asia (Bangalore, Jaipur, Kuala Lumpur, and Singapore). So far most of the available research on the relationship between cities and urban governance is restricted to the global metropolises (Sassen, 1991; Hall, 1996). This analysis focuses on smaller cities, which do not enjoy great competitive advantages linked to their size. The theoretical framework for this research draws on new institutionalism and social capital theory.



    A major breakthrough in the 1990s has been the quick transition from city government to urban governance. This concept of urban governance takes into account not just the institutions of city government but also the process through which these institutions interact with civil society and the consequences of this mutual influence between government and society (Stoker, 1998).

    On the one hand, this focus on urban governance is the result of the rapid penetration of business sector thinking in the public sector. Looking at citizens as customers and the emphasis on market-based criteria for public service production and delivery has downplayed the previous distinction between the public and the private spheres of urban society (Pierre, 1998:5).

    On the other hand, there is a growing demand for greater citizen participation in urban democracy. From community-wide strategic planning in many US and European cities to participatory budgeting in Porto Alegre and other Brazilian cities, there is a wide range of success stories in this domain.

    The explosion of the Internet apparently reinforces these two driving forces for urban governance. The Net offers a great potential for strengthening consumer choice and citizen participation. Thus, Singapore’s IT2000 Master Plan launched the Government Shopfront, which allows citizens to purchase products and services delivered by 19 public agencies over the Internet ( Austin City Connection aims at building a strong telecommunity based on civic participation, continuous interaction between citizens and the municipal government, and public universal access through Austin Free-Net (Griffin, 1999).


    Nevertheless, most of the Internet applications to improve urban governance draw on the citizen-customer paradigm rather than on the citizen-owner dimension. The Theory of the Efficient Citizenship states that performance improvement in the public sector should not only meet the customers’ needs but foster citizen participation as well (Schachter, 1997). Hence, the role of citizens in urban governance should be proactive enough to define "the basket" of services delivered. This role goes far beyond the reactive behavior of choosing among an externally predetermined supply of urban services.

    So far Internet applications for urban governance have been highly mimetic of business sector developments. In an age that is very skeptical about the efficiency, effectiveness, and innovation of government, this mimetic approach offers a powerful symbolism.

    From a new institutionalist perspective, mimetism to the business sector is a key feature of institutional change and adaptation in contemporary urban governance (Williamson, 1996). Institutional change is often seen as a process of incorporating mythic or symbolic elements into an organization’s tasks, culture, and outputs (Lowndes, 1996). Compliance with these myths becomes much more important than their actual impact on performance, participation, and citizen satisfaction (DiMaggio and Powell, 1991; Meyer and Rowan, 1991).

    New Institutional Economics cautions against the "contagion of legitimacy", which results in institutional change driven by demands for similar urban Internet strategies rather than for effectiveness (Zucker, 1991, p. 105). Given the bureaucratic culture of many public bodies and the difficulties of involving citizens in the decision-making process, many cities faced a real temptation of only showing a token commitment to electronic governance. A small dose of cyberhype could suffice to secure city governments the needed legitimacy from the new source.


    The Multimedia Super Corridor (MSC), which aims at accelerating Malaysia’s entry into the Information Age, illustrates some of the challenges and risks of this mimetic behavior. This megaproject links Kuala Lumpur City Center with the new international airport. MSC is by far more visionary than Singapore IT2000 and attempts to override it by creating the next Silicon Valley. MSC is therefore partly explained by the continuous benchmarking with Singapore carried out by the Malaysian government and their somewhat troubled relationships of neighborhood. Due to this purpose, MSC embodies many mimetic and reactive features.

    Unfortunately, MSC does not fully take into account the specific context of Kuala Lumpur and the need to adapt its model of governance to the new developments. As a result, during the recent currency crisis in Asia, the Malaysian government did not pay enough attention to multinational companies’ interests and imposed strict monetary controls (BusinessWeek, March 22, 1999). Many of these firms are partners of the Malaysian government in the MSC. Moreover, some top advisors to MSC, such as Bob Bishop, Chairman Emeritus of Silicon Graphics World Trade Corporation, regret the dearth and weak involvement of venture capitalists and business angels in the megaproject (Bishop, 1999). However, their main criticism is the lack of a creative and open social environment, as well as of a bold community leadership. This criticism implies that intangible factors such as social capital and a rational approach to deal with conflict are deeply needed.



    According to the World Bank, social capital are the norms and social relations embedded in the social structures of societies that enable people to coordinate action to achieve desired goals (World Bank, 1999). Recent research in Italy and the U.S. supports the importance of social capital to enable community actors to act together more effectively to pursue shared objectives (Putnam, 1996). However, in cyberspace there is scant evidence of the causal links between social capital and governance.

    Given this scant evidence, is the Net changing the existing strong links between social capital and governance coming from the manufacturing era?. There seems to be a twofold relationship between social capital and the Internet. On one hand, the Internet offers a tremendous potential to strengthen social capital in the cities through the creation of virtual community networks and the expansion of existing civic structures. On the other hand, taking advantage of the Net to foster urban governance is highly dependent on the stock of social capital already available in the city.

    Moreover, city Internet strategies and programs greatly vary in their approach to the power-rationality dilemma. While all city strategies attempt to combine power and rationality, there are substantial differences in their focus. In some cities, such as Bologna, Internet strategy emerges from strong political power. Thus, the greater the power, the less the rationality in defining and implementing the Internet strategy (Flyvbjerg, 1998). One of the privileges of power is its freedom to define reality and suppress conflict without any rational constraints. Although effective collaboration in electronic urban governance requires enough power to implement final decisions, those decisions should be mainly based on rationality (London, 1995).

    In Bologna, city officials began speaking about the virtues of "virtual democracy" in 1994. They soon launched the civic networking scheme "Internet for Bologna and Emilia" (IPERBOLE) with the goal of providing every citizen with the access to the Internet (Tambini, 1998). These political leaders of the city shared a real concern about preventing the emergence of an IT illiterate underclass and creating a space for non-commodified civic communication on the Net (Tambini, 1998: 85). As a result of this belief, access to the Internet became a citizen right granted by the city. This right was fully consistent with the ruling political party’s (PDS: ex Communist Party) strong commitment to public information.


    In spite of the relatively high stock of social capital available and its strong civic traditions, the City of Bologna took a state-centered approach. Instead of partnering with private Internet providers, the IPERBOLE project angered them by making free public provision in this largely privately operated medium. Moreover, third sector and community organizations did not actively take part in the project.

    The bold political leadership of the Bologna City Council and the relatively weak engagement of business and civic groups resulted in a controversy about the political ideology of IPERBOLE’s contents. Thus, IPERBOLE faced similar problems to public broadcasters, regarding the balance in political ideology and representation. Amidst accusations of bias and selectivity in political content, IPERBOLE was forced to exclude partisan ideological content. This solution drew on the policy followed by TV public broadcasters. The distinction between ideological and general information is, however, harder on the Internet than on TV. There is usually more information on web pages and it is provided by the political actors themselves, rather than by impartial presenters (Tambini, 1998: 100).

    In contrast, Ottawa’s National Capital FreeNet, formally opened in 1993, was led by a civic partnership engaging universities (Carleton University), business firms (Gandalf Technologies and Sun Microsystems) and public sector institutions (Regional Municipality of Ottawa). This broader partnership extremely helped to avoid the risks of politicization encountered in the Bologna experience. Being a community effort, there was hardly any pressure to monitor the political ideology of the contents provided. Paradoxically, it seems that the following rule applies to city electronic networks: the lesser the politicization, the greater the political discussion.

    Bologna’s IPERBOLE therefore embodied a power based approach to electronic urban governance. A democratically legitimized power (the political leaders of the Bologna City Council) attempted to define the reality, ignoring existing civic networks and business providers. Even if IPERBOLE has become a world-known awarded best practice (Bangemann Challenge, 1997; Dubai International Award, 1998), it still lacks substantial community empowerment.

    In order to overcome this weakness, the new political leadership of the municipality (right-wing) set up a specific portal for the third sector. Being consistent with its pro-market ideology, it also started to engage private providers in the next phase of the project

    Nevertheless, strong political leadership does not always imply a power-based approach to electronic governance and a temptation to replace governance with government. Some other cities, such as Singapore or Helsinki, designed and implemented extremely rational strategies to create an IT-literate society and develop a high-tech infrastructure. As a result of the lack of antagonistic political confrontation in the local environment, power yielded to rationality.

    For the last decade, Helsinki has led all international rankings of Internet hosts and users per 1,000 inhabitants. Helsinki City Council also pioneered electronic government by providing a full range of services, such as benefits claims or orders of homecare for the elderly. Helsinki’s long experience in operating freenets resulted in a great proportion of Internet users among its population. The progress made by Helsinki in this field is partly based on a strong partnership of the public sector with powerful international industrial groups headquartered in the area, such as Nokia.




    Taking into account the stock of social capital and the degree of rationality in their approach to electronic governance, these four models emerge:

    4.1. Quantum leapers.

    Departing from a relatively disadvantaged position and lacking large stocks of social capital, these cities have emerged as leading international or regional cybercenters. Going beyond political voluntarism, these cities designed and implemented pragmatic strategies to position themselves as hubs in leading Internet applications to higher education (Monterrey), software development (Bangalore), or electronic commerce (Singapore).

    After its early edge in software back in the 1980s, Bangalore faced stiffer competition, both at home and overseas. This competition was pushed by Bangalore’s growing labor costs, traffic congestion, fragile phone lines, air pollution, and red tape. As a result of these weaknesses, Bangalore suffered a series of setbacks, such as Microsoft’s decision to set up its new Indian campus in neighboring Hyderabad (Global Tech Ventures, January 1999).

    In order to secure its global leadership in software development, Bangalore’s public authorities partnered with venture capitalists and other international business partners to promote Internet start-ups and to meet its most urgent infrastructure needs. These start-ups are taking advantage of the recent liberalization of Internet service provision. One of the fruits of this partnership is the new Singapore-backed "International Tech Park" on the outskirts of the city.


    Bangalore has also managed to launch the IT.Com trade fair, Asia’s largest annual IT event, which drew more than 50,000 business visitors in 1999 (Dataquest, 1999). As part of this event, Bangalore hosted the National Conference of Electronic Governance, which decided to set up a National Institute of Smart Governance. This new institution will focus on using latest information technology to build a transparent and accountable government.

    Bangalore’s strong IT base has also been fundamental to launch leading initiatives to streamline government processes, such as the online single window for all clearances, incentives and permissions for the software industry.

    In a nutshell, Bangalore’s quantum leap into the leading ranks of global information technology challenges the conventional notion that the so-called developing cities must follow the same path of development of Western industrial nations, moving from an agricultural base to manufacturing and finally to high-tech services (Northrup et al., 1996). It also defies traditional geography by showing that in cyberspace Bangalore is closer to Sillicon Valley or Boston’s Route 128 than to any other Indian metropolis (Mitchell, 1999).

    Nevertheless, their governance models greatly differ, due to the differences in civic responsibility and overall social capital. In Silicon Valley there is a widening gap between IT literate and illiterate residents. For instance, 37% of Bay Area Hispanics use a computer on a frequent basis, compared to 59% of non-Hispanic whites (Joint Venture: Silicon Valley Network, 2000). This emerging digital divide pales in comparison with the unbearable tensions among computer professionals, new immigrants and the socially excluded in Bangalore. While computer professionals’ earnings average $ 10,000 per year, the average per capita income in Bangalore is only $ 400. Hence, although Silicon Valley, Boston and Bangalore may be the same place in cyberspace, they are not the same place from a political and social perspective (Northrup et al., 1996).


    4.2. Wishful thinkers.

    These cities share with the quantum leapers their relative dearth of social capital and their long-term orientation in defining their Internet strategies. Instead of taking a rational approach to electronic governance, wishful thinkers basically rely on power to achieve the desired goals. While visionary power is a great resource to overcome major roadblocks to electronic governance, it sometimes fails to adapt to the local context and to secure local ownership of the desired goals.

    With different degrees of success, cities such as Jaipur or Kuala Lumpur illustrate a strong political will to transform a reality, with scant attention to existing or future constraints. As long as political leadership endures and major international trends are positive, these cities’ strategies to become intelligent communities thrive. Nevertheless, Kuala Lumpur’s experience illustrates how easily international financial turmoil or internal political conflicts seriously harm these strategies.

    In spite of the substantial gap in economic development, the case of Jaipur, the city capital of the Northern state of Rajasthan in India, shares many common features with Kuala Lumpur’s. Lagging behind major Indian IT centers, such as Bangalore and Hyderabad, Jaipur recently launched a highly ambitious and mimetic strategy to attract Internet-related activities. It provided investors with an information technology park, high-speed data communication facilities, and training programs. Simultaneously, Jaipur created a government communication network to improve quality, efficiency, and transparency in service delivery (Chauhan, 1999).

    Given this mimetic approach, Jaipur’s competitive advantage is mainly based on lower labor costs and a less congested infrastructure. Jaipur and Rajasthan’s present strong political leadership did not go beyond this obvious niche to identify innovative opportunities. Its strong power-based approach to electronic governance did not allow Jaipur to engage local and international partners in creative thinking and implementation. This partnership seems particularly necessary in Jaipur, given its recent history of political changes and a prevailing anti-incumbent mood. It is dubious that a future BPJ state government will honor the same strategy designed by the ruling Congress party. In this case, Jaipur’s ambitious strategy will merely be wishful thinking.


    4.3. Shared Enlightenment.

    In spite of other shortcomings, these cities enjoy a great stock of social capital and adopt a mostly rational approach to electronic governance. Their stable and balanced power relationships favor partnership and innovation. This stability does not allow any actor to define reality according to its individual interests and to ignore other players’ concerns.

    Quite diverse cities, such as Austin, Helsinki or Ottawa, incarnate this model of urban governance. In Austin, government, universities, and the business communities set up a solid partnership in the early 1980s, which was fundamental to attract main research and development projects, such as the Microelectronics Computer Technology Consortium (MCC) and SEMATECH (Henton et al., 1997). As a result, high-tech industry flourished, creating more than 30,000 jobs since 1990 (Carlson, 1999). Only four companies, Dell, Motorola, AMD, and Applied Materials, are responsible for more than 20,000 of these jobs. Unemployment rate for Austin metropolitan area in 1999 was only 2.2 %, one of the lowest in the US (Miller, 1999). Economic development greatly based on a huge increase in social capital, provided by strong community involvement in improving infrastructure and job training, as well as protecting the environment.

    As in many other places, the early Internet in Austin was closely linked to a vibrant community spirit and collaboration. In 1995, Austin Freenet achieved 501c(3) status for its activities to provide Internet access for individuals and to post useful information in electronic bulletin boards (Peterson, 1999). Austin Freenet and other community groups, such as Austin Learning Academy (ALA), set up the Austin Access Model, a framework to increase neighborhoods’ access to the Net and to build social networks oriented to common problem solving. This Austin Access Model is based on these five principles: universal access, equitable access, community empowerment, community production of contents, and learning opportunities adapted to different profiles (Griffin, 1999).

    Being concerned with the growing wealth gap, the City of Austin has supported this framework and devoted some of its human resources to an initiative originated from not-for-profit efforts.

    In this environment of public-private partnership and community participation, the Enlightenment’s ideals about the rule of rationality become true and knowledge remains as the key source of power.

    4.4. Rediscovering community.

    As the "Shared Enlightenment cities", these cities enjoy a relatively high stock of social capital. Their power-based approach to electronic governance makes sometimes difficult to take full advantage of the existing social capital and implement prevailing rational strategies.

    Bilbao embodies a city revitalization process closely linked to community strengthening. During the late 1970s and the 1980s Metropolitan Bilbao (population 932,618), the economic capital of the Basque Country and Northern Spain, experienced a severe decline. As a result of major manufacturing restructuring, Bilbao lost 80,000 manufacturing jobs and 70,000 inhabitants.

    Facing this challenge, the main political, business, and community leaders launched a civic strategic conversation to diversify the economic base of the city and to link its image to the arts. This civic strategic conversation greatly helped to increase the social capital required to take full advantage of the investment in physical infrastructure and human capital. The expanded social capital, untapped by the emerging collaborative leadership, has been fundamental in securing extremely high self-financing rates for the Guggenheim Museum (70 %) and the Metro (90 %).


    In spite of these great successes, Bilbao still needs to apply rational and collaborative approaches to other flagship projects, closely related to the new economy. To this end, Bilbao Metropoli-30, a public-private partnership devoted to urban revitalization, recently drafted a new city strategy for the next decade (Bilbao Metropoli-30, 1999). This strategy bases on five pillars: leadership, people, knowledge and innovation, networking, and quality of life. Behind Bilbao’s strategy there is a clear understanding that community engagement is vital to take full advantage of the opportunities provided by the information society.

    The implementation of Bilbao’s new strategy implies a change of leadership patterns. Thus, inclusive and network-based collaborative arrangements replace the traditional top-down power structures of the manufacturing era. Community leadership becomes facilitative and focuses on win-win and long-term solutions. This is a sharp contrast to the confrontational and short-term oriented models of leadership, still predominant in most Southern European cities.


This analysis of the implications of the Internet for electronic urban governance highlights the following issues:

  1. Although the Net favors mimetic approaches of cities committed to develop electronic urban governance initiatives, it fails to establish a new universal paradigm based on genuine collaborative leadership of government, business, universities, and community organizations. Apart from certain similarities in their political discourse, there are very few common traits in the wide range of electronic governance initiatives launched by cities, such as Bologna, Kuala Lumpur, or Ottawa.

  2. Many electronic urban governance projects do not tackle effectively the risks of a digital divide between a qualified minority of Internet users and the mainstream IT-illiterate population. This digital divide supports the emergence of segregated cybercities, made up of globally interconnected Net users with shared goals and interests. Thus, the emerging "software cybercity" only integrates IT-literate citizens of Bangalore, Dublin or Seattle. As a result, the cybercity intensifies the segregation originated by traditional cities and excludes major social groups.

  3. The preexisting stock of social capital greatly influences the impact of the Internet on urban governance. Those cities with relatively large stocks of social capital are more likely to develop network-based models of electronic urban governance. However, in certain cities, such as Singapore, a rational, innovative, and long-term approach to electronic governance effectively makes up for the smaller preexisting social capital.

  4. While rational approaches to electronic urban governance offer innovative solutions, power-based approaches are more likely to result in mimetic institutional behavior and token commitment.










( report.htm)

( 24putn.html).