The Return of Cities: A Structural Shift in Global Urban Development from the OECD Agenda

Scanning the OECD website’s list of topics, urban development is not the most prominent section, but it sits alongside regional and rural development under the dedicated category of “Regions, Rural and Urban Development.” In cross-cutting themes, cities also appear under issues such as climate change, digitalization, the environment, and infrastructure. This classification is itself a signal: cities are no longer the exclusive concern of any single department, but a fundamental unit of contemporary policy thinking.

As an economic cooperation organization centered on developed countries, the OECD has long focused on growth, trade, and governance at the national level. The growing prominence of urban issues is not merely a “website redesign,” but rather an adaptation of its policy framework to changes in the real world. Over the past decades, global economic restructuring has fundamentally changed the strategic significance of cities. Production networks have descended into urban regions, innovation activity has clustered in a few metropolises, and social conflicts have increasingly unfolded within urban space. If national policy lacks an urban dimension, it can neither capture the true engine of growth nor touch the real breeding ground of risk.

Cities: The Frontline of Transnational Challenges

Cities enter the OECD’s field of vision, first of all, because they are both the source of problems and the site of solutions. Take climate change: cities are at once concentrated zones of high carbon emissions and the most feasible testing ground for energy-efficient buildings, low-carbon transport, and circular economies. Under its “Environment” theme, the OECD has specifically listed “Greening Countries, Regions and Cities,” acknowledging a shift in the scale of climate action: countries set targets, but action happens in cities. Likewise, in digital transformation, much of the practice of smart cities, digital government, and data governance occurs at the urban level. The impact of artificial intelligence on urban public space, employment structures, and governance capacity will also become visible over the coming decades.

The rise of urban issues on the agendas of international organizations therefore reflects a consensus: we live in an “urban century.” But the urban century does not mean cities hold all power; rather, it means that nearly all global challenges take concrete form in cities. Countries cannot discuss inclusive growth, climate resilience, or public safety without going through cities.

From the National Container to the City Network: Repositioning the Unit of Governance

Traditional international politics takes the state as its basic unit. Organizations such as the OECD are composed of sovereign states. Yet when it engages deeply with cities, it is effectively building a new interface between states and subnational actors. This shift carries profound institutional implications: cities are becoming the “intermediate layer” for international norms and policy learning.A typical example is infrastructure. The OECD treats infrastructure as a standalone theme and includes a sub-item on “subnational finance and investment.” This means that infrastructure is no longer seen merely as a national project, but as a key variable in the competitiveness of city-regions. High-speed rail, airports, digital networks, and energy systems—these infrastructures are often planned across administrative boundaries, connecting urban clusters. The connections between cities are redrawing the map of economic geography. In this sense, the urban development agenda is actually a response to spatial inequality within countries: national growth does not automatically bring regional balance; policies and investments specifically targeting cities are needed to correct spatial imbalances.

More importantly, the OECD’s “peer review” and “good practice” mechanisms constitute a global network for the diffusion of urban policy. When a city’s experience is distilled by the OECD into a case, it becomes a template for other cities to learn from. This knowledge diffusion bypasses national borders, giving rise to so-called “policy transfer” or “policy travel.” For example, inclusive growth, smart city strategies, and climate adaptation planning all circulate within transnational city networks. Cities are thus not only administrative units, but also policy laboratories.

Urban Power and a New Agenda for the Global South

The OECD’s membership is dominated by wealthy countries, but its urban development agenda is not limited to Northern countries. Under the “development” theme, the OECD specifically lists “urbanization, infrastructure, and development,” pointing to infrastructure deficits, informal settlements, climate vulnerability, and inadequate governance capacity in rapidly urbanizing regions of the Global South. Cities of the Global South are becoming key nodes for the next round of global economic growth and global stability.

But there is a structural tension here. When international organizations learn from the experiences of advanced cities in the North, Southern cities are often placed in a “catching-up” position. However, the challenges currently faced by Southern cities—such as extreme climate, rapid urbanization, and informal economies—may not necessarily find answers in the experience of the North. On this point, the OECD has in fact remained rather cautious: it combines urban development with development cooperation, emphasizing financing, governance, and capacity building rather than simple transplantation. This reminds us that the global urban agenda must embrace diverse urban forms and cannot be measured by the single standard of “global cities” or “innovative metropolises.”

Future: AI, Climate, and Urban Long-termismFrom the perspective of long-term trends, future urban development faces three intertwined variables. The first is artificial intelligence. AI will transform the skill structure of the urban workforce and also change the way urban services are organized, such as autonomous driving, predictive maintenance, and automated government services. City governments will need to make trade-offs among ethics, privacy, and public safety. The second is climate risk. Global warming means that coastal cities and low-lying areas face systemic risks, and urban infrastructure planning must take into account decades of climate change rather than past weather patterns. The third is fiscal sustainability. Cities are taking on more and more responsibilities, but without reforming local taxation and transfer payments, they will face fiscal gaps.

This is precisely where organizations like the OECD can play a role. It does not build cities directly, but through data, standards, and policy tools, it helps governments find a balance between long-term goals and short-term constraints. Cities need long-termism, but political cycles often create short-termism. The function of international organizations is precisely to alleviate this contradiction by creating sustainable policy discourse.