Local empowerment is not a utopian ideal. In Switzerland, citizens speak three different national languages and a quarter of the population is foreign-born. Many decisions are passed from the center to 26 administrative subdivisions, or cantons, or even further down to the 3,000 or so municipalities, based on the principle of “subsidiarity.” This requires that governmental decisions be delegated to the lowest level capable of considering them effectively. For example, the Swiss federal government is responsible for institutes of technology; the cantons are responsible for high schools; and the municipalities control primary schools and kindergartens.

Image Raghuram G. Rajan Credit... John Zich

Decentralization and more democratic engagement do not solve everything. Switzerland makes its share of decisions that are poorly informed or unfair to local minorities. But there are legal checks and balances to guard against egregious errors. Moreover, the right to decide — and even to make mistakes — gives the community ownership of its decisions, and with it an incentive to do better.

Freedom in No-Strings Funding

Communities in economic decline may have limited ability to raise new taxes. Financial support from the regional or national government or from private philanthropies, if free from constraints, can help to seed local projects.

As a community revives, local assets become more valuable, allowing for continued financing if the community can maintain ownership. In Denmark in the 1990s, Copenhagen sold land for private development and used the proceeds to construct a metro system. This enhanced the value of the land it still owned in the vicinity of the new metro, which could then be sold to expand it further.

Infrastructure: Rethink and Refurbish

New infrastructure — a refurbished downtown, an accessible waterfront, inviting new parks or trails, enhanced digital connectivity — can turn a community around. Sometimes, simply reconfiguring the existing infrastructure can make it more useful. A study published by the Federal Reserve Bank of Philadelphia in 2018 found that for residents of a neighborhood at the midpoint between two counties in northern Pennsylvania, only 12 percent of suitable jobs were reachable by bus within an hour, even though 73 percent of those jobs were within a 15-minute walking distance from a bus stop. Why? Because most regional transit systems take passengers first to a central hub, regardless of their destination. Bus routes that link residential areas directly to work locations would help low-income workers get there quickly, a key to coping with household emergencies while holding a job. Community input in matters like configuring local transportation is essential.

Healthy communities are more than economic necessities. In many countries, national populism can inflame the majority with fears that the established culture is being diluted, urging a return to tradition and new checks on immigration. There is an alternative: celebrating culture within the community itself rather than striving for an impossible national homogeneity. Some will choose monocultures. Others will choose multicultures. Any choice should be respected, as long as all are united under shared national values and no one is deliberately left out. National governments can help, by acting to prevent rejuvenated communities from becoming segregated, and enforcing laws against discrimination.

Rather than looking to politically fractured national capitals for answers, we should grant communities the ability to exercise more powers locally. This might just be the way we make technological change and globalization work for all.