Impact of Investing in Cities and Local Governments

Background

As stated in the 2024 Democracy, Human Rights, and Governance (DRG) Policy, the U.S. Agency for International Development (USAID) seeks to optimize and align its investments to maximize impact and contribute to democratic development. Democratic systems have intrinsic value given their superior track record in upholding human rights and justice, respecting individual dignity, enhancing equality and inclusion, providing spaces to productively address conflict, delivering better public goods and services, and producing more prosperous communities. Through work such as the Making Cities Work (MCW) indefinite delivery, indefinite quantity contract (2014-2024), USAID works to improve urban governance and advance democratic outcomes. These investments enable USAID to address the challenges and opportunities presented by the unprecedented pace of global urbanization and advance USAID’s implementation of its DRG Policy.

Link Between Investing in Cities and Democracy

Urbanization promotes democracy by catalyzing coordinated public action, increasing the demand for democracy, and fostering the development of civic capital. As demonstrated under MCW, USAID can
make progress toward desired democratic benchmarks (citizen participation, local economic development, service delivery, etc.) through investments at the municipal level. This is supported by the link in academic literature between local government capacity-building programs, fostering democratic practices and resourcing decentralized democratic institutions to promote transparent and accountable governance and improve local delivery of goods and services. Urbanization raises demands for infrastructure and services, prompting a call for a decentralized system to manage these needs. Programs that address supply and demand challenges in tandem can provide local bureaucracies with support to promote accountability and transparency while maintaining quality public services.

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