In 1898, the modern city of New York was born. The consolidation of separate governmental bodies and territories into five united boroughs (Bronx, Brooklyn, Manhattan, Queens and Staten Island) was a masterful stroke of government reform that has paid dividends for generations.
It is simply impossible to imagine the rise of New York City as one of the pre-eminent global cities without the 19th century act of consolidation, its evolution over time and the strategic growth it enabled.
For London, and many other cities, there are four key lessons to draw from New York and its evolution as a global powerhouse over the past 127 years.
First, the consolidation of New York enabled the city to aggregate its market power as the financial, design and media epicentre of the US economy and, incredibly, over the past 15 years, a major hub of technological innovation.
In the end, cities and their broader metropolitan areas are organic economies with distinctive competitive assets and advantages which, if recognised and stewarded, can naturally drive inclusive and sustainable growth.
Consolidation naturally enabled New York to agglomerate, improve and sustain its special economic purpose across sectors, occupations and disciplines as they emerged. Consolidation, in short, became the economic gift that kept on giving.
Second, New York's consolidation enabled the city, for the most part, to exercise governance power efficiently and effectively. As Daniel Golliher, author and founder of the Maximum New York substack has observed, ‘administrative efficiency' was a ‘principal guiding idea behind consolidation'.
As he explains: ‘Many of the arguments for consolidation were straightforward: if you have a large area under the same political administration, you can introduce economies of scale through that administration, eliminate deleterious competition among its smaller units and manage common resources far more effectively.'
Consolidation enabled New York to join up the planning and delivery of infrastructure, transportation, housing, public safety, education, parks, libraries and public amenities without the overhang and distraction of fragmented, artificially drawn political jurisdictions. As journalist and author Robert Caro chronicled in The Power Broker, efficiency often destroyed as much as it created, with results evident to the present day.
In many ways, the city has maximised financial power by incentivising investments by corporations, financial institutions, pension funds, utilities, philanthropies and high net-worth families. They are successfully blending philanthropic and market rate capital to drive a broad variety of investments in sectors, technologies and places.
In the modern era, consolidation also enabled New York to establish general purpose economic development corporations with the agility to intervene in the market. The creation of Cornell Tech on Roosevelt Island and the transformation of the Brooklyn Navy Yard are examples of what a well-resourced and well managed public corporation can do. The New York City Housing Authority is now increasingly acting as a public asset corporation, adapting European models that use the revenues generated by the disposition of public land and buildings to finance public priorities eg, capitalising the production and preservation of affordable housing.
Third, New York's consolidation enabled the city to maximise its fiscal and financial powers in the service of city growth and livability.
As an American city, New York City raises general revenues by taxing properties, sales transactions, corporate and household incomes, tourists and imposing user fees. This has enabled local government and its vast array of contractors to deliver goods, services and benefits that a modern society demands. Devolution without fiscal powers is not sufficient to enable cities to realise their full potential.
But New York City is more than the sum of local government revenues and it has worked closely with state and (prior) federal governments as well as the private and civic sectors to capitalise a vast assortment of projects and initiatives.
In many ways, the city has maximised financial power by incentivising investments by corporations, financial institutions, pension funds, utilities, philanthropies and high net-worth families. They are successfully blending philanthropic and market rate capital to drive a broad variety of investments in sectors, technologies and places.
Finally, New York's consolidation enabled the city to unleash the network power of public, private and civic institutions and leaders to work together and continuously co-design projects, organise capital and deliver results. As author and columnist Jeremy Nowak and I argued in The New Localism: How Cities Can Thrive in the Age of Populism, cities, unlike the federal government, are powerful because they are ‘relational ecosystems', networks of institutions and leaders bound by trust and common purpose. Spend even one day in a functional city and you will be astounded by the wide assortment of public, private and civic entities that come together to solve hard problems and push remarkable solutions and projects.
Mayors play both formal and informal roles in a networked world. In New York, the Mayor is the chief executive officer of the local government, responsible for the overall management of city agencies and departments and the appointment of board members and even senior staff members to quasi-public agencies.
The exercise of less formal roles played by US mayors are arguably as important as the formal ones. Most US mayors, for instance, set the broader competitive vision for the city, in co-ordination with corporate, university and civic leadership. And they develop strategies to achieve that vision.
Mayors are then responsible for advocating for private sector investment as well as federal and state assistance in implementing this vision – in terms of spending, taxes, regulations and administrative support.
These disparate powers connect and intersect in intricate ways. When they do, a virtuous cycle emerges. Industries and enterprises grow, ladders of opportunities materialise, tax revenues generate and more services and benefits accrue to businesses, workers and residents alike.
The governance of New York City, of course, has not been static since 1898. In the past 50 years alone, dramatic changes have taken place in the city's government and governance.
The bankruptcy of the city in the mid-1970s triggered greater oversight by the State of New York, which continues in multiple forms.
The bankruptcy, along with visible urban decline, catalysed the creation of the Partnership for New York City in 1979. This business alliance, initiated by economist and investment banker David Rockefeller, has been a driving force on issues that range from economic development to affordable housing and school reform to global marketing.
-In 1989, the US Supreme Court struck down the city's central governing body, the Board of Estimate, which had empowered the presidents of separate boroughs, small and large alike. This laid the groundwork for the creation of today's City Council, a powerful legislative and oversight body which enables fair representation of the city's diverse neighbourhoods and populations.
Here is the bottom line: consolidation gave New York a strong foundation upon which to realise and exercise a disparate set of powers. That foundation has served it well for the past 127 years and is particularly needed during this period of market volatility and political upheaval.
US cities face no shortage of complex and urgent challenges in 2025 – intensifying geopolitical rifts, advancing technologies, rising costs of living, ageing societies, diminishing international migration, worsening climate change and a hostile, vindictive and mercurial federal government, to name just a few.
Against this backdrop, New York City will need all the benefits of consolidation and the full leveraging of the powers noted above to survive and thrive in the Trump era. The centralisation of power of the Trumpian kind, ironically but inexorably, leads to a decentralisation of responsibility. Some level of government or sector of society must now do the work of the nation.
With challenges intensifying, the responsibility for solving some of our toughest problems is decidedly devolving downwards – to cities and conurbations that not only act as the engines of national economies but as the vanguard of economic and social innovation.
As such, a new era of innovative problem-solving is primed to begin and it will reward those cities with the powers and cross-sectoral collaboration to get things done.
Bruce Katz is a visiting professor in practice at the London School of Economics
