Who wants their city to become a world city? Comment on “Expanding the international trade and investment policy agenda: The role of cities and services”

In proposing a role of economic diplomacy on behalf of cities, Cote, Estrin and Shapiro (2020) take it as read that promoting a city in the ranks of world cities, of key centers of corporate headquarters, business services, and new technology, is a good thing for that city. A city, however, is made up of heterogeneous actors, and in any particular city that grows in this way many of those actors will become worse off. Moreover, if we consider the problem from the standpoint of a national economic system, or of the global system as a whole, the growth of world cities may be due not so much to the conduct of mutually beneficial trade as to the appropriation of monopoly rents. Business policy researchers should identify the stakes for the likely winners and losers, and also take market structure issues into account. Policies based simply on promoting a city’s growth and international standing make inequality within and between a country’s cities worse, and implicitly embrace the growth of market power as a worthy objective.