3 - Private regulation, governance and the rise of the parastate

Summary

Much of the writing on governance arrangements in London starts with the common- sense assumption that power and responsibilities lie with formal organizations, and that governance practices reflect how powers and resources are distributed between these organizations (Gordon 2018; Travers 2002). Discussions tend to focus on public/private partnerships and/or the networks of actors operating in different sectors, but still working within a clearly defined public sector context, which is taken to be relatively open and subject to systematic analysis.

Such approaches assume that formal actors, operating through hierarchies or command- based structures, use “imperative coordination in pursuit of substantive collective goals set from above … [and] prioritise the effective pursuit of successful policy goals” (Jessop 2016: 167). In other words, the process of policymaking is still thought to operate within traditional organizational structures; that is, policymakers establish objectives and programmes of action, such as the London Plans discussed in Chapter 2, these are delivered by executive arms of the state incorporating a range of actors and, while at times delivery is coordinated through networks with private or voluntary sector groups, the primary responsibility for public policy rests with governments.

This common- sense approach fails to recognize the structural shifts that have occurred in the organization and management of the state itself and how these directly impact the governance of megacities. As noted in Chapter 1, the London model is driven by priorities that increasingly rely on private sector resources, legal codes and knowledge practices. In a growing number of policy fields, what were formally state- run activities are now conducted, managed and delivered by private companies and the range of professional organizations that shape their conduct, in line with nationally and internationally recognized norms and rules.

This is happening on an unprecedented scale, to the extent that it is increasingly unclear who is governing and what is governed, and for what purpose. Critical writers have highlighted the expanding role of the private sector in the delivery of urban projects or in forming alliances with public sector elites. However, the context we describe is one of a more structural set of interactions in which some of the separations between the public and private sectors have effectively dissolved away.