Early May I was invited to speak on the same topic to two rather different audiences: Luxembourg’s urban geography as a small-but-global artefact, determined by its journey in becoming one of the most important financial centres in Europe and among the top twenty across the globe. The talks were dealing with the urban implications of this status, and I also discussed how policy, planning and governance were, and still are, used to respond to the stunning economic growth rates.
One audience was global: “Fingeo”, the Regional Studies Association’s network of urban and regional scholars studying financial networks and their particular geographies. The other audience was local: the “Biergerkommitee Luxembourg 2050”, a group of citizens who accompany the government’s competitive process towards designing a future “Luxembourg in Transition”.
Similar stuff, different people
The main contentions of the two presentations were as follows: Firstly, as a small state being subject to rapid, small-but-global urbanization, Luxembourg faces huge challenges for urban development – simply due to its size, as it lacks sufficient space and hinterland to absorb the enormous development pressure of the country’s economy. De-synchronized velocities of development on the one hand, and inertia in the institutional responses of policy and planning on the other hand contribute to spatial mismatch and fragmentation.(1) Also, the rush to become a services capital has provided a huge globalisation dividend to local land owners, which goes at the cost of the society as a whole. This trend is increasing recently and tends to divide the previously consensus-oriented society. Both phenomena, economic growth and local property rents, have been driving the extraordinary degree of wealth in Luxembourg. This also makes the case rather distinct from other financial capitals studied within Fingeo so far, where the impression is that local property markets are becoming generally occupied by foreign capital, and much of the revenues may go somewhere else.
Secondly, the general agenda of the citizens’ committee and the government’s approach is to find ways to support the country’s transition to a post-fossil future. This concept is particularly driven by sustainability metrics: more precisely, the attempt to envisage an optimal or necessary level of carbon consumption through transforming the natural and the built environment, sustainable pathways for water, food, energy and mobility, and also niches for alternative economic practices. My talk began with the high level of resource consumption and carbon emissions in the Grand Duchy (13.2 tons per capita and year, see 2). This ‘first-order problem’ is understood as an immediate outcome of the state’s relational constitution as a global services exporter and resources and fossil fuels importer – the preferred economic model of the global financial capital thus being the ‘second-order problem’. The way institutions, state and communes have dealt with development and planning issues was considered the ‘third-order problem’. My argument was that the ecological transition that Luxembourg is required to meet over the next thirty years (down to 1.6 tons per capita and year, according to my colleagues’ calculations) would need to solve these inter-related dimensions of cause, problem and outcome. Otherwise it would be unlikely to be effective.
Comments made by the audiences
Both interventions had spurred a range of commentaries and questions, unfortunately the time for debate was limited in either case. Fingeo-colleagues were obviously interested in the foundation of city and country as a relational construct, the path-development of its making, and particularly the relations to its hinterland. This is not a hinterland in the classical sense of a gateway city, but a rather distinct case of transnational borderland, subject to a sort of global leapfrogging. Hence the geo-political field of how economic success and its implications for urban geography and planning create tension, and how this is balanced across borders, if at all, provoked the most interest among the audience. Another issue was the comparative view of Luxembourg: about specificity and uniqueness on the one hand, and universal patterns on the other hand. Such patterns can indeed be detected in a range of other cities as well, such as Frankfurt, Germany, or Dublin, Ireland. Somehow new to me was the term “governance capture”, raised by a colleague from the UK, pointing to how corporate interests have nested in Luxembourg’s government and (more broadly) governance arrangements that have ‘produced’ the financial market place. This straightforwardly appears to be the case in Luxembourg, evident not only in the terms of the liberal attitude with which this country is ruled. It also reflects the key role corporate strategy advice (for example by representatives of the ‘Big Four’) plays for policy formulation and implementation particularly at the national level.(3)
The first issue discussed with the citizens’ committee was the role of informal practices in planning, contrasting the rather complex rules and regulations that are formally codified in the national planning laws and ordinances; a subject that we currently explore in more detail. During my talk, I didn’t say that informality would be a phenomenon exclusive to the Grand Duchy’s planning practice; this certainly happens everywhere and every day when plans are on their way to implementation (or even earlier, in the plan-making process). What makes the case of a small state indeed distinct from others is the high degree to which informality has become a usual practice at all levels and stages – and it may have flourished exactly in the shadow of overly dense formal regulation. Informal practice is probably enhanced by the fact that almost everybody knows everybody, via shortcuts to the officials in charge of political affairs, and by the habitual understanding of the nation as being independent and sovereign, a true seedbed of self-governance.
The key role of investors in bringing urban projects to the fore was mentioned, and questioned, by committee members as well. This is a rather common phenomenon which nevertheless has only found recognition among the broader public recently. Ownership concentration, speculation and the power to steer the dynamics of development are main factors here. However, the question of why this group of players enjoys such a prominent role in planning and development (and sometimes with a certain gusto) remains unanswered; authorities may know the reason. The neglect of citizens’ voices when it comes to real planning was also a topic of concern. Several comments raised the question of why citizens have effectively little to say when it comes to urban projects. Even though there are indeed some promising cases of public participation currently ongoing in parts of the country, there seems to be a striking mismatch between official rhetoric and planning practice in this respect.
According to one participant, a common experience would be that school teachers consider Luxembourg’s urban practice as pretty well organised, things are “tip-top” also when compared to others. Surprise, surprise, there are contrasting views available as well. In fact, there is a wide-spread perception that the country is paying a high price for wealth and growth when it comes to the built environment, particularly as concerns built heritage. This is also a matter of debate in the citizens’ committee. Without saying that related sentiments would already be representative of the city or the country as a whole, this seems to be the second mismatch between the public mind about the state of urbanism in the Grand Duchy on the one hand, and the praise and PR from members of the governing bodies on urban issues on the other. The latter still believe their practice is not only appropriate, but also consider ‘Made in Luxembourg’ a template for other cities or countries to follow. I have my doubts that we reached that particular zenith.
These were two extremely inspiring talks and debates – thanks to the organisers for setting them up. If variety is the spice of life, then switching between different audiences that listen to the researcher’s perspective on the same topic is enormously fruitful. It could also contribute to two particular commitments of science and research in the public domain: the first is making the interested public sensitive to the rich vocabulary and explanatory power of current theories and concepts in geography and spatial planning; the second would be confronting these concepts with robust empirical evidence, the real-world problems that are providing the food-for-thought for any underlying or overarching scientific problem. Theoria cum praxi, as it were.
1) See for a short overview: M. Hesse (2019), Metropolisierung oder die zweite Häutung der Stadt. forum 397, 29-31. The research paper with more background: Hesse, M. & Wong, C. (2020). Cities seen through a relational lens. Exploring niche-economic strategies and related urban development trajectories of Geneva (Switzerland), Luxembourg & Singapore. Geographische Zeitschrift (GZ), 105, 78-92.
2) Hertweck, F. et al. (2021), Luxembourg 2050 – Prospects for a Regenerative City-Landscape. Report Phase 1.
3) The role of Luxembourg as a place that suits for the hidden handling of financial resources (cf. Luxleaks, Panama Papers, recently Openlux) was not mentioned in our debate, but popped up in some chats among the participants. It is relevant here that there seems to be a direct link between the corporate headquarter function and tax evasion policies (see most recent research on the "Amazon Method").