**1. Introduction**

The demand for infrastructure and utility services such as water, energy, gas and public transport in low-and-middle income countries is increasing alongside shifting demographics, the effects of climate change as well as economic, fiscal and political volatility. Most imminently, acute and population growth is occurring in urban areas, and more specifically, in secondary cities where populations are growing at a faster rate compared to other cities. The implication of this growth is that there is greater stress on available resources [1]. These shifts are accompanied by increased demand for infrastructure and utilities for which prompts cities in particular to explore opportunities to create new investment instruments using municipal assets as collateral [2]. This process of financialization is the capacity to create and monetise new asset classes. One effect of this shift is the occurrence of 'corporate neoliberalism' which is described by Crouch as an economy where key industries are dominated by small numbers of large corporations due to the privatisation of public industries and outsourcing public services [3]. This paper will explore the governing arrangements,

enabling factors and approaches that a city within this complex, social political milieu underwent as an example of where governance of essential services can aid in delivering public purpose. While the paper does not propose a model for utilities, it highlights governing arrangements that place community engagement, stakeholder management and social infrastructure at the heart of delivery.

There is a subset of cities, also described as entrepreneurial cities, that have been able to convert their wealth into freedom from financial market dependence and/or utilise financialization as leverage for more borrowing [2]. The work on entrepreneurial cities is not exclusively limited to cities that have converted wealth into freedom from financial market independence. Jessop and Sum define an entrepreneurial city in capitalist societies as having three properties related to (1) changing forms of competitiveness, (2) changing strategies to promote interurban competitiveness in both economic and extra-economic fields, and (3) entrepreneurial discourses, narratives and self-images [4]. In public utilities' sectors, the entrepreneurial city has come to be associated with reforms in service delivery with privatisation as the most common reform. There have also been cities that have expanded municipally owned water corporations through corporate models that retain an entrepreneurial and local profile in the domain of the public sector [5]. This perspective, is described as "urban entrepreneurialism," is both a response to gaps in revenues and costs, which then drives commercial development alongside delivering public purpose. One explanation for this is the observation that capital mobility, in some ways, pushes urban governments to compete with other urban areas to attract investment and to minimise risk. In the water sector, this shift in cities coincides with political rhetoric towards public-private partnership and infrastructure investment to support development [6].

Given the trends towards corporate neoliberalism, what aspects of governance mitigate the adverse effects of financialization whilst still encouraging investment that is in alignment with public purpose? This paper emerges from a larger body of working examining adaptive governance in the water sector in Medellin, Colombia. This paper showcases governance features that emerge in a city and share characteristics of an entrepreneurial city where financial gains are aligned with public purpose. The background provides information related to pathways for delivering public goods and where a case study on Medellin could contribute a perspective on delivering public purpose through governance. As this case study emerges from a wider piece of work on governance, the methods' section describes the means by which the data was collected, analysed and justifications. The results include literature synthesis on the Medellin and results of interviews on the system for public service delivery. Using this case study to illustrate how a city approaches, the paper discusses the implications of adaptive governance for aligning economic trends with delivery of public purpose. In order to understand the wider context for delivering public goods, the following Section 1.1 discusses different pathways for delivering public goods.

#### **1.1 Pathways for delivering public goods**

Delivery of public services has taken various forms ranging from state-level provision to various forms of privatisation. From the mid-twentieth century, public-private partnerships (PPP) between a city, regional and/or national government and private entities, facilitated by a multilateral organisation such as the World Bank, marked a shift towards involving the private sector in delivering public goods. The shift often required measures to encourage privatisation, and subsequent financialization of the sector through a form of a public-private partnership between the state and a private provider [7, 8]. The importance of public purpose has arisen alongside this trend particularly, in identifying ways to meet

**205**

**2 Methods**

utilities.1

*Adaptive Governance as an Avenue for Delivering Public Purpose in the Wake of Financialization*

Understanding the role of the private sector in the wider governance of cities is a critical component of designing a governance system that delivers the kind of output end-users need and want with respect to essential services. In the smart city discourse, this is explored further in an exercise to map stakeholders and vendors from the private sector stakeholders in a smart city showing that to deliver aims in alignment with public purpose, inclusion of the following is critical: openness in the meaning of open participatory communities, balanced approach in terms of the social and technology

While the PPP is arguably the most common model for public services delivery, the partnership model has a variety of different forms and demonstrate several pathways for delivering public goods. Crouch argues that in the process of privatisation and outsourcing of public services, there has been less competition, political intervention by firms and increased inequality which is in direct contrast to neoliberalism's claims. He coins this term as 'corporate neoliberalism' [3]. While the private sector has had increasing visibility in the delivery of public services, Mazzucato explores in detail the role of the state in delivering public purpose through investment in infrastructure, technology, research and development through patient capital, which in turn enables private sector participation. This model examines the close relationship between the public and private sector of the US and UK histori-

In reviewing different cases, there is a predominance in the literature on the failure of public-private partnerships (PPP) related to the governance of public

where financialization through reforms over the last three decades have originated,

<sup>1</sup> The aim of the wider study from which this chapter is drawn, was to identify a case for further depth where the governing arrangements enabled delivery of public purpose despite wider trends towards financialization. Water was selected as a sector to explore given the debates on water as a human right and its characterization as a public good. Cases reviewed having these different models of service delivery in the water sector in cities such as Cochabamba, Bolivia and Porto Alegre, Brazil as well as other larger cities in Latin America [13], Europe, South Asia, Middle East and Africa [14] that have taken steps to reform the delivery of water through public reform, privatization and/or an evolution towards mixed models of delivery. Other cities reviewed include those such as Istanbul [15], Mumbai [16] and Johannesburg [17] which have experimented with mixed models. Review of these cases highlighted a multi-country study investigation comparing cities 'governance' challenges in the provision of public services in cities of different scales such as Jakarta, Dhaka, Johannesburg, Sao Paulo, Mexico City, Riyadh, Istanbul and Singapore and the ways in which governance enabled or inhibited successful provision [18]. Further in depth case studies included scholarship on Bangalore [19], South Africa [17], the

Netherlands WMD [6] and a review of different examples in Sub-Saharan Africa [20].

The literature review identifies PPPs as the dominant theme likely as it is

components, trust in terms of transparency of services and integration [11].

cally and articulates pathways for how this might be achieved [12].

public needs. This pathway has been described as a form of smart urbanism and smart citizenship whereby community participation, commons, and ideals beyond the market account for the right to the city, entitlements, or in order to avoid reversion to pragmatic, instrumental and paternalistic discourses [9]. There one argument that places an importance of context in relation to urban processes and the role of politics in delivering essential services. This originates from an extensive review of 23 case studies which explores how local authorities, SME's, corporations, utility providers and civil society are engaged in creating smart cities and the ways in which urban services are being optimised for public good through information

*DOI: http://dx.doi.org/10.5772/intechopen.89270*

and communication technologies [10].

#### *Adaptive Governance as an Avenue for Delivering Public Purpose in the Wake of Financialization DOI: http://dx.doi.org/10.5772/intechopen.89270*

public needs. This pathway has been described as a form of smart urbanism and smart citizenship whereby community participation, commons, and ideals beyond the market account for the right to the city, entitlements, or in order to avoid reversion to pragmatic, instrumental and paternalistic discourses [9]. There one argument that places an importance of context in relation to urban processes and the role of politics in delivering essential services. This originates from an extensive review of 23 case studies which explores how local authorities, SME's, corporations, utility providers and civil society are engaged in creating smart cities and the ways in which urban services are being optimised for public good through information and communication technologies [10].

Understanding the role of the private sector in the wider governance of cities is a critical component of designing a governance system that delivers the kind of output end-users need and want with respect to essential services. In the smart city discourse, this is explored further in an exercise to map stakeholders and vendors from the private sector stakeholders in a smart city showing that to deliver aims in alignment with public purpose, inclusion of the following is critical: openness in the meaning of open participatory communities, balanced approach in terms of the social and technology components, trust in terms of transparency of services and integration [11].

While the PPP is arguably the most common model for public services delivery, the partnership model has a variety of different forms and demonstrate several pathways for delivering public goods. Crouch argues that in the process of privatisation and outsourcing of public services, there has been less competition, political intervention by firms and increased inequality which is in direct contrast to neoliberalism's claims. He coins this term as 'corporate neoliberalism' [3]. While the private sector has had increasing visibility in the delivery of public services, Mazzucato explores in detail the role of the state in delivering public purpose through investment in infrastructure, technology, research and development through patient capital, which in turn enables private sector participation. This model examines the close relationship between the public and private sector of the US and UK historically and articulates pathways for how this might be achieved [12].
