Can Local Governments Prevail?

A new award will recognize creativity in urban policy.
September 24, 2008 AT 3:00 AM
By Stephen Goldsmith  |  Contributor
Professor of practice at the Harvard Kennedy School and director of the Innovations in American Government Program

Have local governments ever faced a more daunting set of circumstances? Even before the stock market upheavals and unprecedented government bailouts of last week, anyone who dared to think about local governance understood the grim picture that greets local officials every day. Income disparities seem to be widening, unemployment is accelerating, municipal debts are being repriced, infrastructure deficits are increasing and tax revenues are declining.

Recent changes at Fannie and Freddie have created serious anxiety among housing directors across the country. And the prospect of already underfunded public pension funds becoming even more unfunded -- due to the turmoil in the stock market and financial institutions -- feels like piling on or unnecessary roughness. Perhaps even a personal foul.

In the midst of this gloom, Harvard Kennedy School's Ash Institute for Democratic Governance and Innovation announced the 2008 winners of the Innovations in American Government Awards on September 9. It came as no surprise, and is somehow comforting, that four of the six winning programs are from either state or local government.

It was particularly reassuring when Shaun Donovan, commissioner of the New York City Department of Housing Preservation and Development, accepted an award for the city's "Acquisition Fund." According to Donavan, the Acquisition Fund "is a key element of [Mayor] Michael Bloomberg's $7.5 billion New Housing Marketplace Plan to provide affordable housing for 500,000 New Yorkers, the largest municipal affordable housing plan in the nation's history."

The Acquisition Fund is a complex solution that involves public, private and not-for-profit participants -- major financial institutions, philanthropic organizations, and Enterprise Community Partners, a nonprofit. Established in 2006, the fund creates a private-sector lending market to address the critical public-sector challenge of affordable housing, leveling the playing field for developers seeking to acquire property prior to assembly of a project's permanent financing. The fund provides affordable-housing developers with faster access to equity and predevelopment capital by providing low-interest capital at higher advance rates and lower recourse levels than are available from conventional financial institutions, and it can respond faster than typical government funding cycles.

Local officials across the country, and the Innovations Awards program, are searching for other creative solutions to seemingly intractable public problems. In fact, Harvard is now soliciting applications for a $100,000 Innovations Award in Urban Policy. A review of recent Innovations Award winners suggests that certain management factors and trends that distinguish the best programs that address issues particular to local governance:

o Local engagement and citizen empowerment: Initiatives that enhance a sense of community, increase citizen participation and harness emerging technologies to redefine the interaction between citizen and state.

o Collaborative relationships: Partnerships that align the interests of stakeholders across sectors, channel investments, and coordinate activities to maximize impact.

o Adaptability: Programs that are designed to evolve with changing circumstances, build public trust, encourage dialogue, and allow leaders to focus on tackling new issues.

o Building toward independence: Solutions that help communities flourish by allowing individuals to develop the skills and assets they need to realize their self worth and full potential to solve local issues; dependence on the government to fix all public problems is no longer a sustainable idea.

The Innovations Award in Urban Policy will recognize the unique brand of innovation that can, and must, be practiced at the local level in this new age of networked governance. Programs must demonstrate that they are novel, creative, scalable, and transferable. The Harvard Kennedy School will award $100,000 to the most innovative management and leadership idea that has, or promises to, improve government services and the quality of life in our country's local communities. All levels of government are eligible to apply. The deadline to apply is October 15. It is our hope that this award will be a catalyst for widespread innovation throughout the country.

We hope you will apply or suggest a program for nomination. To apply, and for more information, visit