Henry McLaughlin
Department of Politics, University of California, Santa Cruz

Urban political economy is an approach to understanding how politics and economics intersect and affect urbanization, cities, and city-regions. Both looking at more universal political economic topics in urban contexts, and using political economy (specifically capitalism) to explain processes particular to urban settings, the field uses a variety of approaches to analyze issues such as (but not limited to) urban governance, local elections, health outcomes, housing, infrastructure, racial inequalities, redevelopment, social movements, spatial politics, and wealth distribution. It is also foundational for scholarship on globalizing cities and urban political ecology.

The study of how political economy shapes cities and urban processes appears in disciplines like geography, history, political science, and sociology, and long predates the term’s popularization. However, “urban political economy” as a keyword and specific academic approach gained increasing relevance in the 1970s. After the global urban uprisings of 1968, critical scholars sought new, more politicized and processual explanations for development, power, and social relations in cities. These Marxist scholars emphasized different aspects of urban political economy, such as urban social movements and “the production of space” (Lefebvre 1992 [1974]; 2003 [1970]), collective consumption (Castells 1977), and the “urbanization of capital” (Harvey 1978), or the way in which the city is not just the setting or outcome of capitalism, but a method of accumulating capital in itself. Overall, this initial wave of critical urban studies effectively showed that cities and urban agglomerations are not just the random accidents of history, they are not simply the result of planning and administration as had been assumed in the literature in preceding decades, nor are cities natural organisms from which we can discern apolitical, predictable patterns as “Chicago School” sociologists had analogized in the 1920s and 1930s (Parker 2003). Rather, the city is a process, setting, and an outcome of political economy all at once.

Following this discovery of politics in urban political economy, and the notion that space is effectively “produced” (Lefebvre 1992 [1974]) by social relations rather than an empty container which holds them, another key characteristic of the field has been an emphasis on social justice. In the classic Social Justice and the City (1973), David Harvey argues that uneven urban development and social injustice in cities results from spatial relations and growth imperatives under capitalism. Harvey builds on Henri Lefebvre’s (1968) notion of the “right to the city,” which asserts that all urban citizens should be able to shape their cities through democratic processes, and access its public goods and spaces equitably.

Along these lines, scholars have examined how class and race structure power relations through urban political economy. Ira Katznelson’s City Trenches (1981), for example, looks at Washington Heights-Inwood (New York City), and shows how housing and education exclusion, based on race, ethnicity, and class, shaped urban life, and how community organizing offered a potentially viable route to make political demands for basic redistribution that was being missed. Katznelson argues that the decline of unions and the separation of home and work politics (i.e., the decline of unions as shaper of daily urban life through cafeterias, sports teams, clubs, etc.) has led to class politics being siphoned off from community activism, leaving an ethnic politics separated from class that hinders the quest for basic redistributive policies. More recently, Keeanga-Yamahtta Taylor (2019) and others (e.g., Rothstein 2017) show how financial practices like redlining and predatory lending, and the privatization of public housing, disproportionately affect Black neighborhoods, reinforcing racial segregation in the US. Here, urban political economy is not just the outcome of the state and capital, but also of structural racism.

In the heterodox and eclectic spirit of this keywords database, these critical approaches show that the city is a place both produced by and central to the reproduction of capitalism, as well as a place of both structural inequalities and a crucial site for struggles for economic and racial justice. However, it is also important to recognize the lasting insights of more “orthodox” political science, a state-centric field which has historically had less to say about local politics. After World War II, as industrialized economies urbanized and governments enacted urban renewal projects, scholars became more concerned with issues of urban politics (Judd 2019). While governments (at various levels) intervene in urban economies through zoning, taxation, and welfare, they also shape development. What is unclear however, is to what extent local governments have agency when up against competing community and business interests in particular. American scholarship at this time thus centered around the “community power” debate. Whereas the marxist approaches referenced above would later emphasize the role of capital and the state in shaping urban development, this earlier debate tried to understand whether cities were ruled by powerful elites or whether power was more evenly distributed among multiple social and political forces, with both sides placing much more emphasis on agency and elections than on structure. Elite theory (e.g. Mills 2000 [1956]) argued that elites control cities, whereas pluralism (e.g. Dahl 2005 [1961]) suggested that power is distributed more evenly across the system.

Building off of this earlier debate, two schools of thought emerged in the 1970s and 1980s, also emphasizing local business’s role in urban political economy: the growth machine and regime theory. The “city as a growth machine” theory first developed by sociologist Harvey Molotch in 1976, argued that cities are not simply urbanized places where people live and work; city-place functions as means for local elites to accumulate capital. Molotch, writing with John Logan (1987), argued that places, specifically “land markets,” are created through processes of accumulation: powerful individuals and groups, potentially with otherwise divergent interests, coalesce to form “growth machines” and compete with other cities to attract capital investment. Molotch also argues that boosters’ (1993) claims that urban (re)-development will combat unemployment, housing crises, and fiscal crises is usually disconnected from local decisions, and is more influenced by by broader financial actors (e.g., rates of return and federal decision about money supply) (Molotch 1976; 1993). The discourse of development masks attempts to retrench political-economic power. 

Partially in response to urban growth machine theory’s inability to explain political coalitions everywhere, “regime theory” would emphasize the role of local governments and civil society in shaping urban political economy. Like their pluralist predecessors, scholars working with regime frameworks offered a more variegated and changing picture of urban political coalitions constituted by government and business interests, but also civil society groups and labor unions (see Stone 1989). Today, these themes continue to influence studies of urban political economy and might collectively describe the concept of “urban governance,” the way in which political and economic power is distributed among and put to use by various actors (politicians, civil servants, elites, developers, community organizations, social movements, international institutions, etc).

Urban political economy, while focused on local governments and business, also extends well beyond the ‘city’s limits’ (Peterson 1981). Cities are also shaped by political and market forces at regional, national, and global scales, as well as by ecological flows at all levels. Urban political economy scholars have to avoid “methodological cityism” (Angelo and Wachsmuth 2015) when seeking to explain urban social phenomena, as well as recognize that cities are socio-natural phenomena; we have to understand cities in their global contexts, in the shadow of global political economy and ecology.

Globalization has profoundly influenced cities, with urban economies becoming more interconnected through trade and production, and above all through finance. Many cities have, to varying degrees, become “un-anchored” from their national contexts and realigned in a new metageography a world archipelago (Beaverstock, Smith, and Taylor 2000). Cities have grown dramatically in size and in wealth in the global era, but are also forced to compete globally to attract capital and specialized labor, often leading to a “race to the bottom” in labor and environmental regulations. Urban political economy today has to consider the two-sided effects of these global flows. Saskia Saassen’s The Global City (1991) explains how post-Fordist shifts in ‘economic gravity’ away from transnational banks have concentrated financial firms and associated services in global cities like New York, London, and Tokyo. Financial institutions outsource highly specialized services while spreading their own business structures across a global archipelago of major cities, leading to 1) centralized economic control in global cities, 2) new economic orders, financial tools, and infrastructures within cities 3) new relationships between city and states, and 4) new social orders as firms rely on highly specialized, contractual labor markets and the working classes to support new professional lifestyles. Sassen ultimately shows that global cities have become more than concentrations of capital, people, and nature surrounded by a hinterland, but a concentration of financial forces (and all of the capital, people, and nature that entails) in a global network.

Urban political economy also explores how neoliberalism since the 1980s has affected cities and urbanization processes. Neil Brenner, among many others, has argued that neoliberalism shapes urban governance, prioritizing capital investment, privatization, public-private partnerships, austerity as the automatic response to crises, and the financialization of the built environment (Brenner and Theodore 2002). The neoliberal transformation of cities went hand in hand with a shift from managerialism to entrepreneurialism, as cities became more beholden to mobile capital than their own citizens (Harvey 1989), and city branding came to replace classic machine politics in the fallout of urban crises in the 1960s and 1970s (Greenberg 2008; Pasotti 2009). More recently, cities have attempted to market themselves as “innovation hubs” (Zukin 2020), leading to new growth imperatives which cater to the needs and desires of tech-workers and a broader “creative class” (Florida 2002), while neglecting the needs of the working-class and urban poor.

Another conceptualization of urban political economy in a globalizing world, Brenner’s introduction of “planetary urbanization” (Brenner and Schmid 2015) extends Lefebvre’s view of urbanization as a complete, global process. Cities are now mere points on a totalizing urban fabric, where the most crucial political struggles have now left the factory floor, and take place in interconnected cities within a common global network of finance capital. Planetary urbanization expands our understanding of the city as a discrete space, and shows how urbanization has become a global process of infrastructure, trade networks; a reterritorialization of space. For example, we might view the economic geography of production, trade, and finance which stretches from Chile to China to Silicon Valley (Arboleda 2016) as linked globally. Likewise we might see housing markets in global cities as interlinked by common financial actors and markets, disembedded from their regional contexts (Rolnik 2019). This includes not only the high-end rental markets of cities like London and New York but also the sprawling slums of megacities such as Dhaka and Kinshasa (Davis 2006).

Finally, in our era of climate catastrophe, environmental issues have become increasingly relevant for urban political economists, and the subfield of urban political ecology has emerged as an important tool for understanding the socio-natural processes which shape cities. As major consumers of resources, and producers of waste and carbon, cities are at the forefront of sustainability challenges. Renewable energy, infrastructure, and adaptation are and will be central to any discussion of urban political economy. Furthermore, all of the aforementioned issues related to social justice are exacerbated by the climate crisis – the precarity of slums in the global south, access to green spaces, unequal exposure to toxicity (Dillon 2024), and the privileging of global capital over the imperatives of a “just transition” (Gordon 2024).

(See Accumulation, Capital, Class, Critical Political Economy, Enclave, Global City, Growth Machine)

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