https://doi.org/10.32575/ppb.2022.4.5
This article analyses the role of urban marketing in the governance of local governments in Ecuador in line with the Organic Code for Regional, Autonomous and Decentralized Organization (COOTAD). The governance debate demonstrates the potential that local governments may have to assume the competence to attract Foreign Direct Investment (FDI). It also highlights the importance of urban marketing in the construction of Ecuador's branding or of Ecuador's image and its economic positioning in the regional and international sphere. The paper arrives at the conclusion that local government is coordinating commercial and institutional agendas to ensure economic, socio-political and technological development in Ecuador.
Keywords: public administration, governance, urban marketing, local government, FDI, PPPs
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For centuries, countries have been working to create and maintain a strong national reputation for producing quality products. Furthermore, companies in a country need to recognise that their national government functions as the final arbiter on issues of brand and contribute to and comply with its strategy, while countries should collaborate with other companies and even competitors to promote the nation's reputation. A country of origin represents the country or countries of manufacturing production, design, or brand origin. Ideally, the government should never miss an opportunity to acknowledge and promote its country's products, which represent the population and their culture's image or the national characteristics.[1]
Public policies should be sustainable over time, while also responding to changing external conditions. In Ecuador, public policies since the period of Socialism in the 21[st] century have been established in such a way as to be able to be properly enforced, to further the general welfare of the population, and to produce efficient outcomes. It is important to emphasise the role of the Republic's Constitution (2008) in taking charge of the construction of national policies orientated towards public investment, with the aim of promoting the reform of the State and the free market economy and presenting a new image of the country with urban marketing as an asset.
Overall, governance and meta-governance according to Jessop, is constantly replacing traditional, hierarchical models of public administration of States with market driven models. In Public Management, urban marketing should be seen as a new dimension that is not exclusively to the advantage of the private sector in attracting Foreign Direct Investment. Following this trend, urban marketing can also be applied to local governance. Social cognition studies such as those by Lynch (1960)[2] indicate that social representations tend to be connected to specific areas of the city.
In this sense, urban marketing can be approached as an articulating axis to guide the policies of local governments and their development. More specifically, in the context of the period of Twenty-First Century Socialism,[3] the construction of a paradigm of "equitable socioeconomic development" has allowed the emergence of public policies that are located inside a normative frame of a constitutional State governed by rights, with the configuration of a constitution of rights, which proposes a National Development Plan for attaining "Well Being".
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Local governments in Ecuador seek to execute public projects with private participation in their investment and work, following the methodology of National Management for Results. Moreover, local governments are considered to be key actors for international expansion, since they incorporate the experience of private entities in order to create, develop and operate a public infrastructure and offer a service. A determining factor is the competitiveness that Ecuador may have in international markets, as well as its ability to significantly improve its branding, to allow it to commit itself to achieving the goal of effectively allocating its resources. In addition, it is important to consider the advantages of Ecuador being under the umbrella of the United Nations (UN), and the United Nations Conference on Trade and Development in Latin America and the Caribbean (UNCTAD) as an intergovernmental body to allow it to comply with international guidelines such as the Sustainable Development Goals (SDG) 2030. To understand the central justifications for projects at the local government level, it should be borne in mind that the objective of this work is to highlight urban marketing and governance for the internationalisation of Ecuador as an inclusion strategy in world trade after the period of Socialism of the 21[st] century.
The paper is divided into two sections. The first includes a theoretical discourse of governance, and of how through political actors the dynamics of creating projects for the development of Ecuador in the social, economic, political, cultural and technological aspects shall be facilitated. The second section investigates the role of urban marketing in the quest to attract Foreign Direct Investment, which is possible through the construction of a "country Ecuador brand".
Finally, the article seeks to make a contribution to the research objectives of this journal. We hope that it will contribute to the analysis of financial management, focusing on the field of public finance of local governments, and its relationship with other types of corporate finance at the level of public-private investments. It will allow a better understanding of the opportunities of local government environments for better financial management that allows economic, socio-political and technological development at both the local and national levels.
This study describes New Public Management and the urban marketing approach, as well as explains the local characteristics of the social, political and economic background of Ecuador. It is also exploratory in nature, because it analyses the current and future trends in Ecuador. Naturally, however, public policies cannot be predicted or confirmed immediately. For this research, the methodology was determined by the methods used: primary and secondary databases, questionnaires and data analysis.
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Governance models refer to the art of governance that involve non-state actors.[4] Each governance model implies a specific type of public administration that is consolidated through changes framed in a policy of modernisation of the public administration. This process requires hierarchical governance guaranteeing the authority of the State.[5] The fact that governance models are not one hundred percent pure in reality, causes the processes of modernisation of public administration to each have their own particularities. In the Ecuadorian case, the instruments developed to modernise the public administration sought to leverage elements of two different governance models: the statist and the liberal democratic models; this means that the design of the policy includes inconsistencies in relation to the objectives of each governance model. Levi-Faur (2012) underlines the relevance of urban and educational issues, which are now increasingly coming to the fore. The development occurs considering that education and urban governance are sectors directly administered by the government, where the State has an influential role in directing and controlling the entire development process.[6]
According to Kooiman (1993), governance "is a process of political-social interaction, which means establishing a so-called tonality; creating the socio-political conditions for the development of new models of interactive government in terms of co-management, co-direction and co-orientation". Regarding the role of the government in this process, it is suggested that it be thoroughly re-evaluated, because the capacity of the State is frequently overestimated in governance.
First of all it should be pointed out that States have an authority that no other actor possesses; they choose the rules of the game of the process, and how to structure the conditions that shape such rules depends on the mechanism implemented for governing.[7] Technological governance recommends that authorities establish objectives for large-scale systems, and that technical experts and coordinators implement these social goals in the design and administration of such systems.[8] Recapitulating the history of the evolution of industry, considering the four moments of paradigmatic change or "industrial revolutions" throughout history up to the present, we find that in the first revolution, at 1.0, steam generation was introduced, along with the first mechanical looms; revolution 2.0 saw the advent of mass production, electric power and the first assembly lines, while 3.0 involved the introduction of a higher level of automation and more advanced electronics and IT. At present, the social events that we are experiencing are characteristic of the 4[th] industrial revolution, with the spread of cyber-physical systems, intelligent industry and products, artificial intelligence, the Internet of Things, hyperconnectivity and Big Data. In the field
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of government management, digitisation is the main driver of e-Government, or electronic government, which suggests a rather negative view of governance issues, as it is regarded as an accountability tool. At this stage, before delving into the details of this work and its links to urban marketing, it is essential to acquire a general understanding of government, governance and good governance. The process currently taking place is seen as a shift from government towards governance, and eventually towards good governance. At a conceptual level, as shown by González et al. (2018), the concept of governance began to consolidate in the 1980s, linked to the new scenario and the emerging new ways of understanding the developments of the time.
In real terms, in most developing countries, such as Ecuador, it is the government which directs these dynamics, which is why governance and good governance depend on it to a great extent. In a broader sense, the question of who provides governance is the key concern. This is true of developing countries, especially in Latin America, where the States provide public service, as this is the area where governance should materialise.
In this way, governance in local instances connotes a sense of direction in the capacity and integrated quality of government action. However, it is difficult to assign a single definition to governance, as this term has changed from being descriptive to being analytical. "Governance is itself the object of a theoretical debate in which the diversity of traditions and currents in the social sciences is reflected".[9]
According to the Constitution of the Republic of Ecuador of 2008, referring to Article 1 of the Organic Code of Territorial Organization, Autonomy and Decentralization (COOTAD), the model of administration, decentralisation and development of the Decentralized Autonomous Governments is determined in the area of planning, in addition to other State regulations at the national level:
Art. 1 - Scope - This Code establishes the political-administrative organization of the Ecuadorian State in the territory: the regime of the different levels of decentralized autonomous governments and the special regimes, in order to guarantee their political, administrative and financial autonomy. In addition, it develops a model of compulsory and progressive decentralization through the national system of competences, the institutions responsible for its administration, the sources of financing and the definition of policies and mechanisms to compensate for imbalances in territorial development.
Decentralized Autonomous Governments are legal entities of public law with political, administrative and financial autonomy. Local governments, then, have the capacity to formulate and execute public decisions and, above all, they can generate strategic links with other public or private actors. In March 2019, 5,675 authorities were elected at the levels of provincial government (23 provinces), cantonal (221 cantons) level, parochial
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(823 parishes) level and in the special regime of the Galapagos (CNE 2019). These local government authorities are the bodies which carry out public policies in their territory. Central government administers management strategies, but the local government, in its scope of action, adjusts political decisions in a more operational and technical way in order to adapt them to the demands of the citizens. This is a governance process where dialogue and negotiation occur with private actors, in addition to the different groups that have a direct relationship with local governments due to their interest in investing.
In this context, urban branding, as a form of soft power, centres around concepts like values, norms and rules in public administration. Until a decade ago, neoliberal institutionalism and international regime theory were the dominant approaches in this field. Given the limits of these approaches, constructivism now suggests itself as a more fruitful avenue of thinking in which place branding may find its theoretical place. In central government, organisations are not necessarily the most important reform tools for promoting "whole-of-government";[10] meta-governance[11] emphasises the significance of government and maintains the integrity of the national system and social cohesion. Moreover, urban marketing could be combined with public diplomacy for local governments under the central government umbrella.
Several approaches and theoretical contributions have emerged in recent years about the concept of urban marketing. These have been developed since the late 1980s, when Ashworth[12] in his book Selling the City. Marketing Approaches in Public Sector Urban Planning first analysed the phenomenon of urban tourism to begin to understand tourism in the city and adopt urban studies and develop theoretical critiques.[13] Several successive
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investigations have concluded that branding in cities supports their development and evolution.[14] In addition, it is widely argued that the application of urban marketing depends to a great extent on the construction, communication and management of the image of the city.[15] This is the case for intermediate-sized cities (ECLAC 1998) of international rank, which can position themselves in the global city system as centres of attraction based on the quality of urban life as their main competitive advantage.[16] The relationship between local governments and urban marketing can be understood as an opportunity for and advantage of having an image of a country and a specific city. The mechanisms through which that image is developed can result in a favourable reputation for Ecuador. According to Prats "local governance must be understood, essentially, as urban governance".[17] This is echoed by Ornés Vásquez, who argues that it should be possible to "identify and recognize the different needs of the locality and its translations in a city-brand, the result of a collective agreement and commitment, which it must not only seek to position the city abroad through its image, but also guarantee the strengthening of the local identity".[18] In this sense, the participation of local governments is at the level of the "city-brand", which in turn can also have impacts at a higher level in relation to the country brand.
A local example in relation to urban marketing in the sense of the projection of a specific image or brand of the city can be found in Cuenca, which has positioned itself as an international destination of excellence for elderly people to retire to. Research by Cabrera-Jara highlights the importance of the role of urban marketing by the local Cuenca authorities in the positioning of this city as a "promised city" for North American retirees through the exploitation of its tourist attractions and sustained real estate development. For local governments of developing countries, a positive association with the governments of other countries along with entering new markets and joining international organisations, should be seen as milestones in this process of projection and reputation building. In this manner, to ensure its economic position, Ecuador, like other South American countries, seeks to increase the influence of FDI in its development. Successfully doing so involves not only attracting large amounts of money, but also benefiting in areas such as technology, employment, exports, qualification and, in general, competitiveness.[19]
Ecuador has passed Executive Decree of Law No. 793, which includes regulatory amendments related to tax matters for the application of the Organic Law of Incentives for Public-Private Associations and Foreign Investment (2015). The purpose of this is to establish incentives for the execution of projects, and, in general terms, to promote productive financing, national investment and foreign investment in Ecuador. In addition to this, Ecuador also has a specific law: the Organic Law for the promotion of production,
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attraction of investments, generation of employment, and fiscal stability and balance (2018). For Keeble (2019), this law appears to be a great attraction incentive for foreign investment in the country. The Constitution of the Republic of Ecuador and the corresponding legal framework establish that the management of international cooperation is the responsibility of subnational governments. In this context, the latter have already had experience working with international cooperation agencies, through which contributions have been made to local development processes. An example of this is the work carried out with the United Nations Conference on Trade and Development (UNCTAD) and its investment promotion agencies.
Investment promotion agencies are the institutions responsible for promoting foreign investment in a specific area. These types of institutions can be government non-profit organisations, or even private entities run by boards of directors that can include government officials and business managers. Therefore, one of the main activities of an investment promotion agency is the positioning of the country in the international market, a task that implies the construction of a favourable image, and with this, the creation of a "Country Brand". It is important to note that the United Nations offers support for the promotion of investment for the sustainable development of cities, and that local governments are essential entities to ensuring the achievement of the 2030 SDGs. In the field of Public-Private Partnership participation, the most relevant of these goals are goal 8: decent employment and economic growth; goal 11: sustainable cities and communities; and goal 17: partnerships to achieve the goals. This economic context will allow us to conclude that the country has many attractions for foreign investors, which, with appropriate policies, can be transformed into opportunities. In addition, Ecuador has abundant non-renewable natural resources such as unexplored minerals. Its renewable resources such as bananas and green plantains, natural flowers, fish, shrimp, abaca, cocoa, among others, constitute an attractive economic profile for the regional and international market.
"Every country wants to sell its unique identity and secure its place on a map. The leading actor in this process is undoubtedly the government. Through its good governance and or meta-governance, as well as its global persuasion efforts, it will be able to build an image that is consequently reflected in opinions, ideas, and ultimately investment decisions. Country branding thus offers business opportunities to promote business activities with a positive balance for Ecuador and should be assumed by the central government and local governments. The political sphere is fully aware that the government at all levels is the only entity that can sell this brand."[20] Doing Business rankings 2019 places Ecuador, according to ease of doing business, in rank 123 worldwide and 21 in Latin America and
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the Caribbean. In third place, after Mexico and Puerto Rico, is Colombia, and, according to Pro Colombia, the Investment Promotion Agency Invest in Bogotá, which coordinated and executed the Movistar Arena Bogotá or El Campín stadium project. This project was built by the company 'TuBoleta' and the Chilean group 'HLR' in 2017, under the umbrella of the Public-Private Association, with the advice of Investment Promotion Agencies (IPAs) of the United Nations. The aforementioned project is considered to be a positive example of successful FDI and the achievement of objectives 8, 11 and 17.[21] What happens in this neighbouring country of Ecuador is not far from the State policy of the government period (2017-2021), which constituted the promotion of investments through the Strategic Committee for the Promotion and Attraction of Investments. Currently, Pro Ecuador is the institution that has the task of promoting Ecuador through consular offices. Products such as bananas and plantains, shrimp, natural flowers, among others, are being consolidated on the international market.
A brief socio-economic review of Ecuador, in relation to governance and urban marketing, allows us to conclude, in the first instance, that the national government and local governments, whether provincial or municipal, are implementing multiple and independent changes in terms of managing their resources. These changes aim at the objective of creating opportunities for their citizens, reducing poverty, improving the population's living conditions and therefore staying in power or seeking re-election.
This "Rethinking of Public Administration and the importance of urban marketing" concludes with a general perspective on the political action of Ecuador in adopting public policies, and specifically the decision-making process of local governance. To achieve this, the role of urban marketing and governance was presented to operationalise its definition and the governmental practices of local governments. The analysis of the different components and characteristics of urban marketing and governance in Ecuador could contribute to the search for spaces for consensus regarding foreign investment issues, as well as to decision-making in the country's politics. For this reason, it is expected that this document will be a small contribution to the dialogue environment necessary for the governance and urban marketing of Ecuador. There are two processes, image building and branding, which are experiencing greater growth in urban marketing for the development of the city. Territory, infrastructure, educated people and a consistent system of governance are considered elements of one product in terms of place branding. Thousands of places are seeking to attract business, while global economic forces make developing a good brand more important than ever. Consequently, in case of the Puerto de Posorja and Port of Santo Domingo de los Tsáchilas projects, a valuation of their intangible
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assets is taking place, while new processes of political and social participation are being put in place by local governments. Finally, urban marketing, described as a whole, can be considered a promising option for the construction of an image of Ecuador that ensures development in all its concepts, for the strengthening of the image of the city promoted by local governments. This image should be the one that reflects the integrated quality in the country hand in hand with governance and good governance.
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5. EC Dp World. "Desarrollo Local Posorja". Online: https://bit.ly/2VIYzcb
6. EC Gobierno Autónomo Descentralizado Provincial de Santo Domingo de los Tsáchilas (GADPSDT) (2020): APP Puerto Seco Santo Domingo. Online: https://bit.ly/34R4EaA
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Stefany Mercedes Cevallos was born and raised in Ecuador. Studied sociology and political sciences applied with international relations at the Pontifical Catholic University of Ecuador, Faculty of Humanities and Social Sciences. She completed two master programs. One master's degree is in social development and the second one is in international relations. Former public servant. Presently researching in public management and urban marketing and working in urban planning and design. Creating orienteering activities for the international community. ■
NOTES
[1] Drucker 1964.
[2] Lynch 1960.
[3] In the first decade of the new century in Ecuador, former President Rafael Correa deeply frustrated with neoliberal economics with other countries and the region founded the ideology of the 21[st] century socialism with new constitutions. These were characterised by an intensification of the process of transformation of the state structure and the relations between the state and society, continuing with the nationalisation of sectors of the economy, the centralising of the political apparatus of State administration.
[4] Levi-Faur 2012a.
[5] Kooiman 1993: 388.
[6] Peters 2012: 26.
[7] Bell-Hindmoor 2009.
[8] DeNardis 2014: 8.
[9] Fontaine 2010: 106.
[10] "WOG is, to a great extent, about lower-level politics and getting people on the ground in municipalities, regions, local government organizations, civil society organizations, and market-based organizations to work together. WG needs cooperative effort and cannot easily be imposed from the top down" (Pollitt 2003).
[11] "Meta-governance" emphasises the important position of government in governance, but it is not equivalent to the traditional "state centralism". Te positioning of government in "meta-governance" does not focus on power but on responsibility. The government is more like what Jessop calls "the elder among equals", with the responsibility of institutional design, normative construction, relationship coordination and identity cultivation, rather than the superior and dominant executor. The main task of the government is not to participate in the governance practice, but to promote the initiative of the governance factors and coordinate diferent governance models and guide the direction of governance and maintain the effective implementation of governance" (Xiaohu-Menglong 2019). "Meta-governance" is the response to governance crises of western countries. It is established on the basis of developed market, mature civil society and perfect political structure of western countries. Lack of these necessary conditions is bound to affect the effective implementation of "meta-governance". Imitation is not the right way to deal with "meta-governance". Based on the local conditions, to form a "meta-governance" mode, which conforms to the actual governance of the country, it can help solve the governance problems of the country.
[12] Ashworth-Voogd 1990.
[13] Ashworth-Page 2011.
[14] Green et al. 2016.
[15] Ashworth-Kayaratzis 2007.
[16] Precedo Ledo et al. 2010.
[17] Prats 2001: 103.
[18] Ornés Vásquez 2014: 161.
[19] Cabrera-Jara 2019a; 2019b.
[20] Doing Business ranking 2019/19.
[21] UNCTAD 2019.
Lábjegyzetek:
[1] The author is PhD student, University of Public Service, Doctoral School of Public Administration, stefy220@hotmail.com.
Visszaugrás
