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Local government consolidations are often proposed by a wide range of interests, often out of the belief that they will produce more efficient (less costly) governments. Much of the academic literature supports this view. However, the evidence indicates that material savings routinely fail to occur from such amalgamations. The claimed $300 million annual savings in Toronto's megacity quickly became higher costs and a larger bureaucracy.

As in the Canadian provinces of Ontario and Quebec the Australian state governments of New South Wales (Sydney is the capital), Victoria (Melbourne is the capital) and Queensland (Brisbane is the capital) have been aggressive in forcing municipalities to merge over the last two decades. Often these attempts have met with opposition from residents. A forced amalgamation in Montreal was so unpopular that a new provincial government established mechanisms to "demerge." Despite formidable barriers, 15 cities chose independence.

Sometimes amalgamations are proposed for much smaller jurisdictions than 2.5 million population Toronto or even the 1990s merger that created the 90,000 population city of Melbourne, which is the core city of the Melbourne metropolitan area.

In July, the New South Wales government announced intentions to amalgamate three jurisdictions ranging with a total population of 35,000. The city of Armidale-Dumaresque, Uralla Shire and Gyura Shire are located in the "New England" region of New South Wales, one-half way between Sydney and Brisbane. The amalgamation would have replaced the local governments with the New England Regional Council, a mega-jurisdiction of 5,000 square miles (13,000 square kilometers), a land area approximately equal in size to the area of the states of Delaware, Rhode Island and the province of Prince Edward Island (Canada) combined.

The proposal met with determined opposition, from citizens and from the local governments. For example, the Uralla Shire Council submittal to the state Local Government Boundaries Commission, cited pitfalls of local government consolidations, relying on both Australian and international research. The Armidale Express reported that two former Guyra Shire council members mobilized that community against the amalgamation. There were substantial concerns. One was an interest in preserving historic communities, and the nearly universal aversion to moving city hall farther away. Errors were claimed in state government analyses that led to the amalgamation proposal and fiscal concerns were raised.

In the end, the Local Government Boundaries Commission recommended against the proposed amalgamation. Minister for Local Government, Barbara Perry made the announcement on November 17. Uralla, Guyra and Armidale-Dumaresque will not be forced to amalgamate.

The decision brought immediate positive responses from local leaders. Uralla Shire Mayor Kevin Ward said that he couldn't be happier with the decision. Guyra Shire Mayor Hans Heitbrink said that the decision not to merge the three councils speaks volumes about the spirit of the communities who fought to save their separate local government areas. Armidale-Dumaresq Mayor, Peter Ducat, spoke of the stress that the decision will relieve for council staff and the community.

Nobel Laureate economist Paul Krugman caused a stir on ABC's This Week, expressing the following view to Christina Amanpour on the recommendations by the leadership of the US Debt Reduction Commission:

"Some years down the pike, we're going to get the real solution, which is going to be a combination of death panels and sales taxes. It's going to be that we're actually going to take Medicare under control, and we're going to have to get some additional revenue, probably from a VAT."

He later clarified his statement to be less provocative, noting that health care costs had to be better controlled and that there is a need for "several percent" more revenue, which might "most plausibly" come from a value added tax.

He went on to say that "And if we do those two things, we’re most of the way toward a sustainable budget." That is a very tall order. Any serious examination of government costs makes it clear that there is no such thing as a sustainable budget. The unit costs of government services routinely rise, frankly because in government competitive influences are largely absent. When government encounters financial difficulty, it looks for ways to cut services and raise taxes --- that is, ways to reduce customer service or to charge more for what it does. Regrettably, in government, the answer to every question seems to be "more money."

On the other hand, when companies in competitive markets run into fiscal difficulties, their survival requires that they find ways to attract customers and look for ways to lower their prices without cutting service.

Sustainability and government budgets are more often than not an oxymoron, except perhaps for the special interests who live off them (whether of the Right or the Left).

The National Association of Realtors has just published its quarterly median house prices and the trend continues downward in Miami. At the end of the third quarter, the median condominium price had dropped to $82,900 in Miami, about the same as the list price for a BMW-7 sedan. This places condominium prices at 77 percent below the 2007 second quarter median of $367,000.

While Miami has experienced perhaps the most substantial condominium bust in the nation, other metropolitan areas, such as Atlanta, Seattle, Los Angeles, San Diego, Chicago and Portland (Oregon) have seen huge decreases and a spate of spate of distress auctions and conversion of units to rentals.

A recent article in The Wall Street Journal noted that condominiums have experienced an even greater market decline than detached housing. The over-building of condominiums may have been spurred by rose predictions from urban planners about the demand for central city housing being far greater than the supply. For example, the developer of City Center Las Vegas indicated that they built too many condominium units, at least in part in response to information received an urban planning symposium.

Photograph: Condominium Conversion to Rentals in Portland (by author).

According to many economists, including the well-respected Robert J. Samuelson, the federal government's effort to fund high-speed rail lines is like trying to fit a round peg into a square hole. If one really breaks down the numbers, the Obama administration's goals of reducing green house gas emissions, traffic congestion, and oil consumption with these rail lines are idealistic to say the least, and this idealism may cost states more than their budgets can handle right now.

The administration wants to build rail lines in 13 urban corridors throughout the nation, 12 of which span distances of less than 500 miles. High-speed rail in these areas would compete with car and air travel, but statistics indicate that this would not save a significant amount on energy costs. Assuming daily air passengers, about 52,934 people in the 12 corridors in 2007, switched to high-speed rail, the result would amount to only a 2.5% drop in air passenger totals. Driving is even less likely to decrease seeing as 85% of the 140 million Americans drive to work each day. If you take the example of the Northeast corridor with 45 million commuters, only 28,500 of which take Amtrak, high-speed rail will not divert enough drivers to cut the amount of energy costs that the administration claims it will.

However, they use high-speed rail models from Europe and Asia to justify spending upwards of $10.5 billion on this infrastructure of the future. The problem with this is that the successful high-speed rail lines, the most successful of which are the Paris-Lyon and the Tokyo-Osaka lines, are located in densely populated urban areas. The United States became heavily suburban in the past half century and the percentage of the metropolitan population living in central cities dropped to 32% in 2000. As a result, jobs spread out to the suburbs and more Americans are even working from home. Rail service to big core cities will be even less useful as this trend continues.

Washington will end up footing most of the bill for these high-speed rail projects, especially in states like California that have massive budget woes and few interested private investors. In fact, California is asking for $19 billion for its now $42.6 billion project. That’s almost twice as much as the administration has paid for all the high-speed rail projects in the nation combined (currently $10.5 billion). If this starts happening in every state waiting to get high-speed rail, even if it is on a smaller scale, the federal government will have little money to address the country’s more pressing needs, such as education.

Some state governments are starting to wise up. Not wanting to waste money on unfruitful high-speed rail lines, they are simply rejecting federal money for these projects because they would not be able to spend the funds on things they really want, like better roads. Obviously, the federal government won't be able to force high speed rail on Americans for long.

There is no doubt the Obama administration has good intentions for high-speed rail, but good intentions don't always translate to success. Rather than try to wedge its idealistic vision of a new transportation infrastructure into the realities of recession-ridden America, it should evaluate what the country truly needs.

New Jersey governor Chris Christie reaffirmed his decision to cancel the "access to the regional core" tunnel across the Hudson River from New Jersey to New York. Christie had suspended his previous decision pending discussion of alternatives with the US Department of Transportation.

In the final analysis, according to Christie, none of the alternatives would have capped New Jersey's liability at its present level, which assumed a project cost of $8.7 billion. Christie told the Moorestown Community House, "No more blank checks from the taxpayers of New Jersey, not on my watch."

Current estimates for the project have range from $9.8 billion to more than $12 billion, which would require New Jersey to pay an additional $1.1 billion to $3.3 billion, since under the funding agreement approved by former governor John Corzine, New Jersey was responsible for any cost overruns. In fact, based upon the experience with other projects (such as Boston's Big Dig), New Jersey could have seen its bill run to another $10 billion or more.

Christie's decision is unprecedented. This may be the first time in decades that a major infrastructure project already under construction has been cancelled because its costs had spiraled out of control. Such cost performance has been the rule, rather than the exception. Major research by Oxford University professor Bent Flyvbjerg, Nils Bruzelius (a Swedish transport consultant) and Werner Rottenberg (University of Karlsruhe and former president of the World Conference on Transport Research) covering 80 years of infrastructure projects found routine under-estimation of costs and over-estimation of ridership and revenue (Megaprojects and Risk: An Anatomy of Ambition ).

Saturday October 16 marked my third day in Accra, Ghana representing AdFarm and Praxis Strategy Group at the National Food and Agriculture (FAGRO) show. We began the day with a deep dive into grower issues as panelist guests on an agriculture-focused radio program hosted by 90.1 Rite FM.

The panel included John Dziwornu, National Secretary of the National Association of Farmers and Fishermen; Myself (Colin Clarke of AdFarm); Tony Mensah-Abrampah of Praxis Africa;  Jaques Magnee, commercial director for Raanan Fish Feed; and Andy, a farmer member of a Ghanaian Mango Cooperative.

As a panelist on the 2+hour radio program it served as a great opportunity to learn about the challenges faced by farmers. I was pleasantly surprised to find much common ground among North American and Ghanaian farmers. The similarities were stark:

When asked if farmers are difficult to work with, Andy of the Mango Cooperative answered, “Farming is a difficult job – we want to complain, so let us complain!” I loved Andy’s candor. He was brutally honest and very animated. Tremendous passion for his work as a farmer.

There was much discussion about lack of access to financing for Ghanaian farmers and the expense of finance options today. Farmers are commonly required to pay up to 22% interest on operating loans… if loans can be secured at all. Another farmer who joined the discussion stated the need for an insurance program that will protect farmers in case of crop loss so loans can be repaid. He stated instances where he has bore the entire expense of bringing a crop to harvest, then having NO market for his crop or losing his crop to a weather issue. There are many variables working against the farmer and very little assurances outside of some subsidies on crop inputs (fertilizer for example).

My observation is the entire agricultural structure in Ghana is in its infancy. There is need for farm safety nets (insurance programs), there is need for grower education programs on production, there is need for market access expansion, there is need for improved import laws, and there is incredible need for ag infrastructure that will allow farmers to expand production and deliver their crop to market.

An interview with Davies Korboe, Chairman of farmerdavies inc. and 2010 National Farmer of the Year reinforced many of these points. Davies is a highly diversified farmer raising a mix of crops and livestock. He would be considered a large farmer in Ghana, but even as a large farmer he is facing the same issues with financing, insurance, market access and infrastructure. He sees great opportunity for Ghanaian agriculture, but many issues to overcome.

Our final meeting of the day was with Philip Abayori, a farmer and President of a prominent Farm and Fisherman Association. A brilliant man, he has an amazing outlook for Ghanaian agriculture. He states there are 12 MILLION hectares of productive land in Ghana and less than 2% in active production today. He describes the different growing regions suitable for different ag industries: forestry, aquaculture, production agriculture and livestock. He envisons programs where farmers and industry professionals from each track can work together towards sustainable, well-managed production. He has great faith in the capabilities Ghanaian farmers.

My outlook towards agriculture in Ghana is one of opportunity. As we hear the “experts” tell us there is no more land available to feed the next 3 billion people I am encouraged to see places like Ghana with 12 million hectares waiting for production. Are these areas of the world forgotten? Places like Ghana can do their part to feed the world while strengthening the country’s agrarian economy at the same time. There is so much good to be done.

So where do you want to start?

Dr. Colin N. Clarke is a senior strategist for AdFarm. Follow him on Twitter @colinnclarke or on Facebook at Facebook.com/cnclarke

The New York Post editorialized (October 8) against what it called "Another TWU Fare Hike," blaming the union for the fares that will now rise to $2.50 for a ride. The editorial writer goes on to say of MTA chief Jay Walder, "It's not his fault that straphangers get whacked while the MTA's unionized workers -- whose blue collars come with fur trim -- don't have to make a single sacrifice to meet the MTA's shortfall."

In response, I posted the following comment to the New York Post site:

Not his fault? Well, perhaps not personally. But surely it is the responsibility of the MTA and those in Albany who have skewed law labor and regulation to create this untenable situation. It is about time that public officials, such as those who run the MTA, be held account for what they have given away to the unions. The unions could not have taken it without the agreement of the MTA and other local and state political officials.

The way the Post tells it, you might think that the Transport Workers Union (TWU) had engineered a coup and had forcibly taken control of the Metropolitan Transit Authority. It fact, it was all quite legal. Interests such as the TWU have used their political influence to obtain the expensive contracts that place the riders a distant second, after the employees and the taxpayers an even more distant third. The MTA was not compelled to sign overly expensive labor contracts. Albany was not compelled to insulate transit unions from the economic reality faced by everyone else, including private sector union members. Washington was not compelled to give transit labor unions job protections that would be the envy of European public sector unions. These protections are a considerable factor in driving expenditures up 100% (inflation adjusted) over the past 25 years, while ridership has risen only 40%. The appointed and elected representatives did so willingly, and to the detriment of the people, whom they were supposed to represent.

The Post rightly complains about this, but places the blame in the wrong place. If the MTA, state and federal officials who have so skewed transit economics in favor of unions, had instead served the riders and taxpayers first, then New York and the nation would have much more transit services, its fares would be lower and there would be much more ridership.

The Post also errs in saying "Only in New York could such a perverse equation come to be." In fact, the situation is no different in most metropolitan areas of the nation. Transit agencies have routinely avoided efficiency measures that would have increased transit ridership and reduced costs (such as competitive contracting or competitive tendering of services), raised fares and cut services.

As the process has unfolded over decades, the TWU and other local transit unions simply responded to the incentives that were established by the elected and appointed officials. This has contributed, along with extravagant and in rail transit expansions, to rendering transit financially unsustainable. The problem is that the public interest in transit has been hijacked by special interests.

A more appropriate headline for the editorial would have been "New York Political Leadership Forces Another Fare Hike."

The 30th World Food Day finds more hungry people on the planet than ever before. According to the Food and Agriculture Organization (FAO) of the United Nations 1 billion people live in chronic hunger. UN Secretary General Ban Ki-moon’s official message on this year’s theme “United against Hunger” reflects today’s global reality. “For many people, today is not World Food Day. It is another No Food Day.”

The future holds a seemingly unceasing series of challenges as food production will have to increase 70 percent by 2050 to feed a looming population of nine billion people. Here in Accra, Ghana, however, the mood is hopeful. The Honourable Kwesi Ahwoi, Minister of Food and Agriculture proclaimed that “a lot is happening here. The country is moving forward and we are not going back.”

Ghana is considered the gateway to Africa based on its strong agrarian roots and stable political environment. Agriculture is the dominant sector in Ghana’s economy. The sector plays a critical role in reducing poverty and achieving economic growth employing about 60% of the labor force and contributing about 40% to the Gross Domestic Product (GDP). It also accounts for over 57% of the country’s foreign exchange earnings.

This week at the 2nd National Farm and Agric Show in Accra (FAGRO) the suggestion that some parts of Africa might be turning the corner seems at least conceivable. At the show farmers, associations of farmers and fisherman, agribusinesses from all sectors, and NGO and governmental agricultural development organizations have come together to share Ideas, showcase and promote agriculture products and learn about improved modern and innovative methods of farming.

Farmers at the World Food Day ceremonies and the farm and agric show are confident they are up to the task. A placard carried by a farmer in the audience said as much – Aid Cannot Feed Us For Life. Rather fair prices and ready markets for what we also produce. Talking with farmers and processors who produce everything from nutmeg and tilapia to pineapple juice and dehydrated oyster mushrooms confirmed the prevailing sentiment that farmers are eager to access new technologies and reach new markets.

Linking African producers to markets is not exactly a new idea. International aid and finance organizations have invested significant resources to provide technical assistance to help farmers use good agricultural practices and to shore up supply chains. ACDI/VOCA, for example, is improving Ghana’s agricultural sector by increasing competitiveness in domestic, regional and international markets through the USAID-funded Ghana Agricultural Development and Value Chain Enhancement (ADVANCE) program. Policies and programs like the USA’s African Growth and Opportunity Act (AGOA) offer incentives for Ghana and other African countries to continue their efforts to open their economies and build free markets.

Significant challenges remain of course if Ghana and other African countries are going to truly turn the corner on combating hunger and malnutrition at home while penetrating new markets on the continent and elsewhere on the globe.

Philip Abayori, Chairman of the FAGRO Advisory Board, explains that irrigation systems are vastly underutilized for production while post-harvest storage and distribution systems are entirely inadequate. So much that, in some cases, up to 40 percent of the harvest is lost to spoilage.

At the other end of the market, particularly in foreign markets, there is a lack of information and the necessary infrastructure according to John Dziwurnu, National Secretary for the Ghana National Association of Farmers and Fishermen. Producers need to know what consumers want before they can grow to their requirements; then they must be able to ship them to points of distribution where adequate storage and quality control is in place that will enable products to reach consumers in top condition.

Find out more about Delore's and Colin Clark's visit to Ghana at the AdFarm Blog.

Delore Zimmerman is publisher of NewGeography.com and President of Praxis Strategy Group.

China Daily ran an article on the continuing urbanization of Beijing. In Build upward or outward: City’s growth dilemma, Daniel Garst notes that Beijing is not as centralized as other urban areas, with its multiple business districts and comparatively low density in its inner areas. He indicates a preference for the urbanization of Shanghai, with its stronger center (both Pudong and Puxi), but suggests that it would be a mistake to replace the historic low density development with the high rises that would be necessary to change Beijing's urban form.

Actually, Beijing's form is not that unusual for Asian urban areas. Tokyo has multiple office centers rather than a single dominant center and has comparatively low residential densities, even within the Yamanote Loop. Bangkok, Manila and Jakarta are similarly multi-centric. Chinese urban areas like Shenyang, Xi'an, Wuhan, Suzhou and Changsha are closer (but smaller) replicas of Beijing than Shanghai. Garst also misunderstands the dynamics of traffic congestion in his belief that roads and metros (subways) would be less congested with a more centralized form. In fact, higher densities routinely produce more intense congestion, not only on the roads but also on the rails and buses, a point recently made by Michael Matusik on this site.

However, Garst may be onto something with respect to a suggestion that Beijing's growth should be directed to new satellite towns, in which residents work rather than commuting to Beijing. This is good theory, but there is an important caveat, which we outlined in a comment at China Daily on the article.

Satellite cities are not a reasonable answer unless they are so far from the Beijing urban area that commuting to Beijing is not possible. The idea of self-contained satellite cities, where people live and work in them has not worked anywhere. There are good examples of failure in London, Cairo, Stockholm, etc. So long as the large urban area can be reached, people will commute there.

Cairo provides a useful example. Egyptian planners have long decried the continuing commute pattern into the urban area from the new towns of 6th of October and 10th of Ramadan, which are within commuting distance. On the other hand, the new town of Anwar Sadat, more remote from the urban area, has been more successful in keeping its residents in its labor market.

Locating new satellite towns far enough to make commuting infeasible will be a real problem for Beijing. There just is not enough territory in the provincial level municipality. That means the new towns would have to be in the province Hebei, which along with the province level municipality of Tianjin surrounds Beijing.

Short of remote new towns and forcing population and economic growth away from Beijing, the key to minimizing traffic congestion will be to minimize work trip distances by achieving a dispersion of comparatively lower density employment to match the lower density suburban dispersion. Economists Peter Gordon and Harry W. Richardson have found that "suburbanization has been the dominant and successful mechanism for reducing congestion." in the United States. This applies no less to Beijing.

Photograph: Forbidden City, Beijing (by author)

One of the starkest impacts of smart growth policies is the huge differentials in property prices that occur on virtually adjacent properties on either side of an urban growth boundary.

The extent to which regulatory restrictions can drive up prices is illustrated by the differences between the values of undeveloped lands just a few steps from each other, but across the urban growth boundary. Research from more than a decade ago in Portland indicated that land on which development is permitted inside the urban growth boundary tended to be 10 times as valuable per acre as land immediately outside the urban growth boundary, on which development was not permitted. In Auckland, New Zealand, recent research found virtually adjoining undeveloped land value differences at 10 times or more as well. Research in the London area by Dr. Timothy Leunig of the London School of Economics indicates that this difference can be as much as 500 times.

Recently (February), I examined tax assessment records for all parcels in Portland's Washington County that abut the urban growth boundary to see if value differences exist. The properties had to be 5 or more acres and be undeveloped. Research was conducted based upon Internet information in February 2010. Property along 25 miles of the urban growth boundary from Cedar Hills to Hillsboro to southwest Beaverton was included in the analysis.

A sample was also taken of more remote developable parcels of more than 5 acres, on which development would not be permitted. These parcels, which were from one to five miles outside the urban growth boundary, had a value of approximately $8,500. Thus, the developable land inside the urban growth boundary was 21 times as expensive as the more remote land.

These data indicate the impact of urban growth boundaries on the price of raw land, which is inevitably passed on to buyers of new housing. Without an urban growth boundary, it would be expected that land on both sides of an urban growth boundary would have similar values. Further, land would be expected to drop in value beyond the urban fringe, but not by the drastic amounts indicated in Portland, Auckland and London.

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Photograph: (By Author)