Nuno Quental and Margarida Silva, Establishing a good governance system for the Porto Metropolitan

th
Region, 40 ISoCaRP Congress 2004

Establishing a good governance system for the

Porto Metropolitan Region

Abstract
In November 1998 the Portuguese voters turned down a proposal to divide the country into
eight administrative regions. The lack of defined competencies for the latter and the fear that
those regions would only add another layer of bureaucracy were presented as the major
reasons for the referendum result. The debate about decentralization, however, is not over.

A new law that comprises the voluntary creation of both metropolitan areas and urban
communities (depending on the municipalities and population involved) was approved in May
2003, and can be considered an alternative to the original proposal. In the specific case of
the Porto and Lisbon Metropolitan Areas, which were already in place but did not really
function as such, the law allows for their reshaping, including new additions.

It is to be expected that this decentralization will only be successful if these regions have
defined competencies, control over their budget and if the overall structure embodies good
governance principles, is democratic and stimulates participatory citizenship. However, very
little has been said about this, and almost nothing has been decided.

Among others, this paper will assess the following issues: which should be the competencies
of the Porto Metropolitan Area (PMA)?; which competencies should be transferred from the
municipalities and which from the central government?; what kind of precautionary control
should be attributed to each?; what kind of democratic structures should form the basis of the
PMA?; and what level of citizen involvement should be promoted? In attempting to question
and summarise these issues about PMA, this paper may provide some useful insights to the
design and management of urban regions within the Portuguese context.

Introduction
Regions are increasingly becoming the privileged spaces of economic competitiveness.
Globalization is acting more upon limited territories inside countries than between the
countries themselves. As Brenner (2003: 298) puts it, “major political-economic actors
throughout western Europe have embraced the assumption that metropolitan regions, rather
than localities or national economies, represent the natural economic zones in which
economic development must be promoted”. Regionalism has probably emerged as a
consequence of this trend, as nation states “interiorize global economic constraints in the
form of new policies oriented towards territorial competitiveness” (Brenner, 2003: 313).
Regionalism has suffered waves of ups and downs in the United States and in Europe. First,
during the high fordism years (1960s – 70s), metropolitan institutions were created by central
governments mainly as a way to coordinate welfare services and to manage the physical
Nuno Quental and Margarida Silva, Establishing a good governance system for the Porto Metropolitan
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expansion of urban agglomerations; between the early 70s and the late 80s came the first
wave of “glocalization” strategies: metropolitan institutions were abolished or downsized at
the same time local municipalities were giver greater powers; the second wave of
“glocalization” started in the early 1990s, corresponding to the current situation of regional
competitiveness, as described (Brenner, 2003: 318).

One of the best known examples is the London area. The Greater London Council was
established in 1963, only to be dismantled two decades later, in 1986, as part of the non
interventionist ideology of the neoconservative Thatcher government. The only central
government strategic guidance for London, just a few pages long, was released in 1989, and
had a very limited effect. A period of privately promoted region-wide thinking to which the
government adhered allowed for some new strategic planning. In 1997, the winning Labour
Party under Tony Blair devised a new political arrangement and set the Greater London
Authority. “For the first time in history, this included an elected mayor for the whole of
London”, which happened in May 2000 (UN Habitat, 2001a: 29).

In Portugal, metropolitan areas were first created in 1991 Porto and Lisbon, the two largest
regions by far which, apart from the fact that they are still in place, are almost non-functional.
Their competencies were never objectively defined, their budget was insignificant and
political turmoil prevented the structure from functioning properly. Moreover, they were only
seen as a new bureaucratic layer, since no citizen representation through election had been
envisaged. As will be discussed further on, a new law was later passed by the parliament in
an attempt to revert this situation. Currently, the Porto Metropolitan Region covers an area of
815 km 2; by 2001, it was inhabited by about 2,7 million people and had an unemployment
rate of 5,1% (Instituto Nacional de Estatística, 2004: 19-21).

The emergence of well defined regions as spaces of globalization and competition suggests
that regions are also the correct level to address decentralization efforts by means of a good
governance system. This is so important that the UN Habitat Centre has dedicated a whole
report to the study of “cities in a globalizing world”. “Cities are emerging as new territories of
regulation, that is, as territories relevant to address crucial issues […]. Cities are at the
forefront of competitive processes whose successful management requires an effective
capacity to govern a territory.” (UN Habitat, 2001a: 58).

This paper does not pretend to re-examine or deepen the theoretical basis under the “new
regionalism”, decentralization or governance. There is a wealth of literature to which the
reader may refer to. Instead, after reviewing the current “state of art” experience from abroad
and the specific situation of Portugal as well as its constrains, a new system of good
governance will be proposed to the Porto Metropolitan Region. This proposal will not account
for legal or political difficulties, privileging a particular ideal solution (even if many are
possible) conditioned only by major socioeconomic features.
Nuno Quental and Margarida Silva, Establishing a good governance system for the Porto Metropolitan
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Regional good governance: what is it and what is it for?

Governance has been defined as “the exercise of economical, political and administrative
authority to manage a country’s affairs at all levels. It comprises the mechanisms, processes
and institutions through which citizens and groups articulate their interests, exercise their
legal rights, meet their obligations and mediate their differences” (UN Habitat and
Transparency International, 2004: 7). To be successful, it must address three key tasks:
coordinate a more complex and fragmented government landscape, steer interdependent
activities through public-private partnerships or regional confederations and integrate and
manage networks (UN Habitat, 2001a: 57). But what precisely are we referring to when we
talk about good governance? Seven basic elements have been defined, according to Table
1. A good governance system as the one we propose in this paper must consider each of the
questions below.

Element of
Issues
governance
Who makes and enforces the rules? What are the rules and the
Institutions and laws
penalties for breaking them? Who resolves disputes?
How can the public influence or contest the rules? Who represents
Participation rights and
affected or interested citizens when decisions about public matters
representation
are made?
Authority level At what level should the authority over regional matters reside?
How are those responsible for making decisions accountable for
Accountability and
them? How can the decision-making process be made more
transparency
transparent?
Property rights and
Who owns a natural resource or has the legal right to control it?
tenure
Markets and financial How do financial practices, economical policies and markets
flows influence authority over public matters?
How are ecological and social science incorporated into decisions
Science and risk
to reduce risks to people and ecosystems?

Table 1 – Elements of governance to take into consideration

(World Resources Institute, 2003: 7).

A number of initiatives have proposed criteria to evaluate what can be called good
governance. The White Paper on European Governance prepared by the European
Commission stipulates five guiding principles: (a) openness: the institutions should work in a
more open manner; (b) participation: the quality, relevance and effectiveness of policies
depend on ensuring wide participation throughout the policy chain, from conception to
implementation; (c) accountability: roles in the legislative and executive processes need to
Nuno Quental and Margarida Silva, Establishing a good governance system for the Porto Metropolitan
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be clearer; (d) effectiveness: policies must be effective and timely, delivering what is needed
on the basis of clear objectives, an evaluation of future impact and, where available, of past
experience; and (e) coherence: policies and action must be coherent and easily understood
(Comissão das Comunidades Europeias, 2001: 11). The Global Campaign on Urban
Governance, managed by the United Nations Habitat Centre, proposes a similar set of
criteria: (a) sustainability in all dimensions of urban development; (b) subsidiarity of authority
and resources to the closest appropriate level; (c) equity of access to the decision-making
process and the basic necessities of urban life; (d) efficiency in the delivery of public services
and in promoting local economic development; (e) transparency and accountability of
decision-makers and all stakeholders; (f) civic engagement and citizenship; and (g) security
of individuals and their living environment (UN Habitat, undated).

There is evidence that local and regional governments are better at acting on these
principles than central governments. Because they are based more on local knowledge,
interest and expertise, local authorities are more likely to be effective in the services
provided. In addition, because they are closest to people, they tend to be more accountable,
to represent a broader strand of opinions and to widen the opportunities for citizen
consultation and political participation (Andrew and Goldsmith, 1998: 108, 112).

The current vision of metropolitan governance is no longer the top down bureaucratic
approach that characterized the 60s and 70s. The emerging elements of governance, which
are described in detail in UN Habitat (2001a: 59-62), include decentralization and formal
government reforms, participation of civil society, multi-level governance and process
oriented and territorially-based policies. According to Brenner (2002: 13), the metropolitan
institutions created during the 90s had several goals: (a) to coordinate the activities of
municipalities according to previously established regional priorities; (b) to create a regional
framework in which local planning policies, infrastructural investments and other projects
may be coordinated; (c) to pool fiscal resources at a regional level; and (d) to control land
uses in order to protect the environment.

It is especially important that this various of roles be taken together. Too often governments
fail to transfer the appropriate and sufficient powers to local authorities, probably because
they fear losing economic benefits and the powers that defines and supports their political
and administrative roles (Ribot, 2002: 7). Albeit in the specific context of natural resources
management, Ribot (2002: 10-16) and World Resources Institute (2003: 93) establish some
basic conditions to allow for an effective decentralization: (a) accountability of metropolitan
institutions to the public through an electoral process; locally empowered organizations, even
non governmental, should be accountable to their associates and some control mechanism
should be put in place to avoid over representation of elites and powerful interests; (b)
discretionary powers to enable local authorities to respond flexibility to local needs and
aspirations; “while power transfers without accountable representation can be dangerous,
representation without powers is empty” (p. 13); and security, so that people and institutions
are clear about their rights and are willing to invest in them. However, it is also important that
Nuno Quental and Margarida Silva, Establishing a good governance system for the Porto Metropolitan
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some complementary measures be put in place, such as minimum environmental standards

to avoid a possible excessive environmental exploitation by local authorities.

Brenner (2002: 19) presents an inspiring vision of the role of metropolitan institutions: “A key
task for progressive socio-political forces is to harness metropolitan reform initiatives in order
to enhance regional democratic accountability, to counteract racist and class-based forms of
residential segregation, to foster environmentally sustainable forms of urban development
and to promote a more egalitarian distribution of public resources and investments at all
spatial levels.” The North American landmark study “Governance and opportunity in
metropolitan America” points towards the same direction, indicating that policy makers and
society as a whole “must begin to identify and evaluate state-level policies that aim to
undermine the forces of inequality” such as spatial mismatch, concentrated poverty and
social isolation, racial and economic segregation and tax and service disparities (Altschuler,
2003). Peter Calthorpe and William Fulton (2001: 61-87) go further and define the policies
that must be integrated in order to have what they call a “regional city”: (a) regional
boundaries for urban growth; (b) common land use and transport plans; (c) regional
fair-share housing; (d) regional tax-base sharing; and (e) urban educational reform.

Current legal framework

In Portugal there are two main levels of governance: central (central government and
national parliament) and municipalities (including municipal companies). During the last
decade a continuous state decentralization effort has empowered local authorities with
substantial competencies in several domains, including control over land use through
municipal master plans, water distribution and sewage works, garbage collection, K-10
education, road maintenance and construction, cultural activities, specific tax collection, etc.
The central government must, in some cases, approve local plans or at least ratify them.
Conversely, municipalities are given superintendence or enforcement powers over several
activities that are primarily managed by the central government.

In addition to these two basic layers, there are associations of municipalities (chosen and
created by those interested) to develop specific activities such as tourism, and also
“freguesias”. Each municipality is divided into several of these “freguesias”, depending on its
area, but they have a very limited set of powers, the possible benefits of greater proximity to
citizens being ignored. Some shared services such as garbage treatment and water
distribution are managed by inter-municipal companies where central government has, in
some cases, majority vote.

The Metropolitan Regions of Lisbon and Porto, set up in 1991, are now being reshaped by a
law passed by the national parliament in May 2003 that establishes a new framework for
regional governance. This law can be understood as a different decentralization path after
portuguese voted down, in a referendum held in November 1998, the creation of
administrative regions. This law allows for the voluntary creation of metropolitan regions and
urban communities (depending on the municipalities and population involved) and, as a
Nuno Quental and Margarida Silva, Establishing a good governance system for the Porto Metropolitan
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result, the country will be completely divided into them, i.e., all municipalities will belong to
one of those structures. This “bottom up” approach may perform better than the current Porto
and Lisbon Metropolitan Regions do but that will, above all, depend on the true
competencies they will have – and that is yet to defined precisely.

Strangely, in October 2003 the central government created the Metropolitan Transportation
Authorities of Porto and Lisbon, where municipalities have a voice but are not the main
deciders. Not a single word is said about their relationship to metropolitan regions, creating
the typical conditions for an overlap of competencies.

The constitution and accountability of each of the institutions described, as well as others, is
summarized in Table 2. The judicial system is not mentioned.

Institution Constitution Accountability

President of the Chosen by citizens through
-
Republic presidential elections every five years
Chosen by the President of the
Ombudsman office -
Republic
Prime-Minister is appointed by the
President of the Republic considering
Several ministries and
Central government the result of legislative elections. The
secretaries of state
rest of the government is chosen by
the Prime-Minister.
Chosen by citizens through legislative
National parliament 230 deputies
elections every four years
Municipal chamber
Chosen by citizens through local
Municipalities (executive body) and
elections every four years
municipal assembly
An executive body and the Chosen by citizens through local
“Freguesias”
assembly of “freguesia” elections every four years
Metropolitan regions An executive body (the
and urban presidents of each
The assembly is chosen by municipal
communities constituting municipality),
deputies through internal elections
(according to the new an assembly and a council
law) body

Table 2 – Main portuguese institutions, their constitution and accountability.

The metropolitan regions are not directly accountable to citizens, nor are guaranteed the
other conditions to implement a successful decentralization policy. Specifically, according to
law, there is also no evidence that meaningful powers will be transferred to them, that they
Nuno Quental and Margarida Silva, Establishing a good governance system for the Porto Metropolitan
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will be representative of the local populace and that they fiscal and regulatory incentives will
be in place. Clearly, we are in presence of a typical “incomplete decentralization” (Ribot,
2002: 7).

A good governance system for the Porto Metropolitan Region

Being evident that the current legal system falls short in its decentralization efforts, the
authors propose an alternative model based on the application of Montesquieu’s doctrine of
the separation of powers (legislative, executive and judicial) at the regional level, on the
“community method” of the European Union (Comissão das Comunidades Europeias, 2001:
8) and on several other recommendations (World Resources Institute, 2003; UN Habitat,
2001a; UN Habitat, 2001b; UN Habitat and Transparency International, 2004; Conselho
Nacional do Ambiente e do Desenvolvimento Sustentável, 2003; Haughton, 1999; Ache,
2000; Souza, 2001).

It would be impossible in this paper to describe all the details of a new governance system,
as the task is extremely complex and requires a profound discussion. As such, the focus will
be on what we consider the fundamental building blocks of that system: (a) institutions; (b)
strategic plans and processes; (c) regulation and other mechanisms; (d) reports. Table 3
summarises the overall structure and its constituting elements as proposed.

Metropolitan assembly, metropolitan board and public administration,

Institutions citizen ombudsman, representative committee and multilevel
accompanying council
Regional sustainable development plan (similar to a Regional Agenda
21), regional land use and transport plan, sectorial strategies (education
Strategic plans and culture, health and sports, housing, poverty reduction, economic
and processes competitiveness, nature conservation, forests and agriculture, water
distribution and sewerage, waste, air, tourism), action plans and public
hearings
Regulation and Public participation and civic engagement in decision-making processes,
other access to information, access to the citizen ombudsman and regional
mechanisms tax-base sharing
State of the environment, public participation and access to justice,
Reports
health, education, economy and finance reporting
Table 3 – Elements of the proposed good governance system.

In order to enable this organizational reform competencies would have to be transferred from
the central government and from the municipalities to the metropolitan institutions: grosso
modo, all policies that exceed the scope of municipal territories and that, according to the
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subsidiarity principle, are better suited to be managed at the regional level, would be
affected. Specifically, those competencies would involve the preparation, implementation and
supervision of all regional strategic plans and processes, of regulation and other
mechanisms, and of reports, as mentioned in Table 3. Globally, the region should be given
full executive and policy powers within its mandated roles and territory. To ensure
compatibility between local, regional and national policies and projects, a multilevel
accompanying council ought to be established. A more detailed description for each element
of the governance system will be given below.

It is important to note the kind of region being considered. In Portugal there are two
autonomous regions (the Madeira and Azores archipelagos) which retain substantial powers,
including legislative ones. But there is no reason to invest in the new metropolitan regions,
particularly the Porto Metropolitan Region, such a wide autonomy from the central
government. Portugal is a small unified country that needs a governance system capable of
improving the territory and the quality of life, not a complicated structure of competing
organizations with dubious and overlapping roles that would originate further difficulties.

Institutions

Institutions with executive, legislative, judicial and advisory powers were devised according
to Table 4. The explanation follows below.

Role Legislative Executive Judicial Advisory Coordination

Metropolitan
Multilevel
Metropolitan board and Citizen Representative
Institutions accompanying
assembly public ombudsman committee
council
administration

Table 4 – Proposed institutions for the governance system.

The metropolitan assembly, likewise a national parliament, would represent the citizens of
the region through deputies elected every four years. To avoid the monopolization of
elections by existing parties, independent groups of citizens informally organized would also
be able to participate. A reasonable number of signatures should be required, small enough
to prevent the task from being prohibitive. In all cases, fairly distributed public financing
should be available for electoral campaigns. The primary role of the assembly would be the
promotion of discussion and the approval of regional strategies, plans, processes and
regulations. Contrary to what happens with Madeira and Azores, metropolitan regions should
not be given legislative powers. However, assemblies could establish regulation translating
into concrete procedures the framework created by national laws, particularly if they resulted
in a broader environmental and social protection, or create new rules when law is missing or
Nuno Quental and Margarida Silva, Establishing a good governance system for the Porto Metropolitan
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incomplete. These regulation must be mandatory and of immediate applicability in

municipalities.

The metropolitan board would be the political branch of the executive power. In much the
same way as the government, the president of the board would be appointed by the winning
party or coalition of the elections mentioned above. The role of this structure can also be
compared with that of national governments, providing the political leadership necessary to
carry on all regional policies.

The public administration complements the political quality of the metropolitan board and is
responsible for the implementation of regional policies. It could have specialized agencies
such as a Regional Environmental Protection Agency (integrating all matters dealing with the
environment) and a Regional Sustainable Development Agency (responsible for financing
projects promoting sustainable development and allocating structural funds). The leaders of
metropolitan public administration should be appointed by the board. However, just as the
European Commission, there should be a greater independence between political and
administrative levels. Public administration should be free to choose the best methods to
implement the policies adopted by the board and by the assembly. This is to avoid
administrative decisions clouded by political reasons and not by objective criteria stipulated
by strategies, laws or regulations. In Portugal, at least, there is a record of a more than
acceptable interference of the government into the public administration and even into
specialised agencies.

Citizen ombudsman: the new metropolitan regions mustn’t have specific courts, since the
national judicial system is already decentralized and, although suffering from deficiencies,
tends to work fairly. At the national level there is also an ombudsman but, considering a need
for greater proximity to citizens, a regional office – linked to the national one – would benefit
the public. The ombudsman would analyse all complaints dealing with its territorial area
provided that no satisfactory response has been given to the complainer by the appropriate
public agency. We suggest that recommendations of the ombudsman be mandatory in the
metropolitan region, local authorities and to the decentralized central administration
delegations, although the possibility of court appealing must always be guaranteed.

The representative committee integrates the various interests of society, namely industry,
commerce, environmental protection, philanthropy, cultural heritage, unions, universities, etc.
Representatives of the regions’ municipalities, members of relevant national public
administration bodies and members of “freguesias” would also have a seat. The committee
should reflect on and advice about regional policies and strategies, delivering non-binding
recommendations.
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The multilevel accompanying council aims to ensure formal and substantive compatibility
between national, regional and local policies. It would be formed by high-level
representatives (mayors, presidents, etc.) of governmental organizations from those three
layers. All strategies and plans which require central government approval would have to go
through the council first; government representatives should have, as a result, veto power,
but council decisions would be binding to the central government.

Strategic plans and processes

The regional institutions would, every ten years and after the widest discussion process,
approve a sustainable development plan according to the principles of Agenda 21, a regional
land use and transport plan and several sectorial strategies in the fields of education and
culture, health and sports, housing, poverty reduction, economic competitiveness, nature
conservation, forests and agriculture, water distribution and sewerage, waste, air and
tourism. Each political cycle of four years would be guided by action plans (with targets,
timetables and funding) aimed at implementing such strategies. Every year several thematic
public hearings would be organized in order to stimulate public participation, access to
information and civic engagement into the decision-making processes.

Regulation and other mechanisms

Region-wide rules would be laid down defining specific procedures to guarantee public
participation, civic engagement in decision making processes and access to information.
Some of these procedures, such as those associated with environmental impact
assessment, are already in place, but others, as the ones required by the Århus Convention,
need further development. In any case, the provisions must become more ambitious than
they are nowadays. The conditions regulating complaints to the citizen ombudsman and a
coherent regional tax-base sharing should also be stipulated. Most taxes should be due first
to the regional authorities, after what a portion of them would be transferred to the central
government and municipalities. A rewarding mechanism to municipalities and regions
performing better on environmental and social issues should be put in place.

Reports

As part of the overall strategy to promote access to information and citizen involvement in
public matters, regional authorities would have to publish, every four years, extensive reports
covering the state of environment, public participation and access to justice, health,
education, economy, activities and finance. In addition, every year a small update would be
released.
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Conclusion
Regional governance is deemed to carry out a fundamental role in territorial management,
“glocalization” strategies and environmental and social protection. In Portugal, only tiny steps
have been given towards a complete and coherent decentralization policy, although literature
presents useful information such as guidance principles and good governance criteria. The
authors, acknowledging the insufficient efforts of a new law comprising the creation or
reformulation of metropolitan regions, have presented an alternative model of governance at
the regional level. Its basic elements would be a new set of empowered and directly elected
bodies – metropolitan assembly and metropolitan board – complemented by a more
independent public administration, a citizen ombudsman, a representative committee (with
consultative roles) and a multilevel accompanying council (ensuring compatibility between
the various levels of governance). In addition, a framework of strategic plans and processes,
regulations and reports that would guide regional authorities was devised.

The authors believe that, taken together, the proposed structure of regional governance
would represent a significant progress for portuguese institutions. However, and since this is
such an intricate and complex matter, we welcome all comments and criticisms.

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