Journal of Urban Affairs

ISSN: 0735-2166 (Print) 1467-9906 (Online) Journal homepage: https://www.tandfonline.com/loi/ujua20

Multilevel governance as a strategy to build

capacity in cities: Evidence from Sweden

Jon Pierre

To cite this article: Jon Pierre (2019) Multilevel governance as a strategy to build
capacity in cities: Evidence from Sweden, Journal of Urban Affairs, 41:1, 103-116, DOI:
10.1080/07352166.2017.1310532

To link to this article: https://doi.org/10.1080/07352166.2017.1310532

Published online: 16 May 2017.

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JOURNAL OF URBAN AFFAIRS
2019, VOL. 41, NO. 1, 103–116
https://doi.org/10.1080/07352166.2017.1310532

Multilevel governance as a strategy to build capacity in cities:

Evidence from Sweden
Jon Pierre
University of Gothenburg

ABSTRACT
Multilevel governance has opened up important new transnational spaces
for cities in their pursuit of policy learning and knowledge building.
Knowledge and expertise as elements of urban capacity building are
becoming more important as cities are now expected to address increas-
ingly complex issues. Drawing on a case study of the policy internationali-
zation of the city of Gothenburg in Sweden, the article argues that joining
international projects has provided the city access to networks where
knowledge and expertise on complex technical issues are shared among
cities through learning and replication. The article draws on analyses of
documents from the European Union (EU) and the city of Gothenburg and
also on a series of interviews during 2015 with staff at the City of
Gothenburg Office and the city’s European Office in Brussels.

This article reports a case study on how a European city engages international networks and
European Union (EU)–sponsored projects in order to enhance its governing capacity—its knowledge
and expertise on complex, technological issues—in the area of urban sustainability while at the same
time sharing its know-how with other cities. We are particularly interested in the processes through
which cities in Europe use these networks to increase their capacity to address climate change and
sustainability issues (see Wang, Hawkins, Lebredo, & Berman, 2012). We will argue that many local
governments in Sweden and elsewhere increasingly use internationalization as a means of building
capacity to address these and other issues that are salient at the urban level.
The city of Gothenburg, Sweden, which is our empirical case, seeks to enhance its governing
capacity in the area of environmental sustainability and to bolster its competitive strength, its
“brand recognition,” and its reputation as a knowledgeable and credible network partner. These
qualities are essential to cities that aspire to become part of European city networks and to
secure EU funding for their environmental projects. The purpose of the article, against this
backdrop, is to explore to what extent transnational networks allow cities to acquire capacity to
address issues related to sustainability and climate change. The research questions we will
address are the following: What are the key incentives driving cities to join these collaborative
projects? How do they balance the need for collaboration with the competitive nature of EU
policy vis-à-vis cities and regions? How congruent are transnational, national, and subnational
policy objectives in the EU model of multilevel governance?
Urban sustainability is in vogue, not least in Europe. Many national governments implement
programs to aid cities seeking to address issues related to climate change. In addition, the EU
employs a variety of instruments such as regulation and funding to address issues related to the
environment. The availability of funds provides incentives to cities to commit themselves to
sustainability programs, although there seems to be significant variation in terms of which cities

CONTACT Jon Pierre jon.pierre@pol.gu.se Department of Political Science, University of Gothenburg, P.O. Box 711, SE-40530
Gothenburg, Sweden.
© 2017 Urban Affairs Association
104 J. PIERRE

follow that path and those that are less active in this policy area. There is also variation among cities
in terms of the credibility of such commitments (Krause, 2010; Wang et al., 2012; Zemmering, 2014a;
see also Pagano & O’M. Bowman, 1997). As Eric Zeemering (2014a, p. 2) points out, “Some cities
will use urban sustainability as a buzz word to trumpet scattered environmental initiatives, but cities
truly working to be more sustainable will use the concept as a strategy to guide policymaking,
growth, and community development.” Though there is political and electoral support to be
harvested from a posture of environmental awareness, a serious, long-term engagement in these
issues requires know-how, expertise, funding, and political commitment. This raises the question of
which strategies cities employ to build capacity on these issues.
The article first discusses multilevel governance in the EU space and the opportunities that this
governance arrangement offers to cities in terms of capacity building in areas such as sustainability
and climate change. We then turn to our empirical case—the city of Gothenburg. This analysis first
reviews recent surveys of urban internationalization in Sweden before it looks more specifically at
the international strategies pursued by the city of Gothenburg. We study how the city maneuvers the
complex EU multilevel governance context, particularly its involvement in an EU-sponsored climate
change program, “Smart Cities and Communities” (European Union, 2016).

Multilevel governance and the logic of international urban collective action

The past couple of decades have seen a gradual transformation in the domestic institutional
hierarchies of the EU member states. These hierarchies have evolved into a more complex multilevel
governance system where EU institutions and subnational structures engage each other directly
while central government prioritizes regulatory and monitoring roles. As a result, intergovernmental
relations are becoming more negotiated (Peters & Pierre, 2004); cities and regions are increasingly
expected to be more self-reliant and less dependent on central government support; and top-down
hierarchical control is evolving into a division of labor between cities, regions, and central govern-
ment (Bache & Flinders, 2004; Hooghe & Marks, 2003; Le Galès & Lequesne, 1998; Piattoni, 2010;
Pierre & Stoker, 2000).
Though these developments challenge institutions on all levels of the political system, perhaps
their strongest impact has been on the city level. The emerging institutional arrangement incenti-
vizes cities and regions to explore international arenas and collaborative arrangements in order to
support a shrinking domestic revenue base (Le Galès & Lequesne, 1998; Peters & Pierre, 2001; Pierre,
2013; van der Heiden, 2010). When the EU gained increasing importance for coordination, regula-
tion, and funding, multilevel governance emerged as a governance paradigm integrating the EU’s
consolidation with the institutional change in its member states (Bickerton, Holson, & Puetter, 2015;
Newman, 2000; Piattoni, 2010; Pierre & Stoker, 2000).
Multilevel governance with its relaxed vertical governance has engendered new forms of collective
action among cities. The institutional collective action (ICA) framework elaborates how collabora-
tion among autonomous actors can generate outcomes that are more advantageous to individual
actors than had they not collaborated (Feiock, 2007, 2009, 2013). Such collective action is usually
seen as situated in a finite geographical space like a metropolitan region where the involvement of all
actors is required to solve collective action problems and deliver governance in the absence of a
higher level authority (Feiock, 2007, 2009). For instance, by collaborating in public service delivery,
geographically integrated local authorities can generate economies of scale. Feiock (2013) argues that
such arrangements are sustained by mechanisms such as embedded networks, mutually binding
contracts or agreements, delegated authority, or imposed authority.
Feiock (2013) also points out that ICA has not just horizontal but also vertical and—particularly
relevant to the present analysis—functional manifestations; “functional collective action problems
are defined by the connectedness of services, policies, and resource systems as externalities occur
between functional areas and policy arenas as well as governmental units” (p. 398). This aspect of
collective action speaks directly to the present analysis because collaboration in the EU-sponsored
 JOURNAL OF URBAN AFFAIRS 105

networks is functionally, not geographically, defined. Thus, different forms of collective action draw
on different types of incentives. In metropolitan governance, collaboration emerges among neigh-
boring municipalities with a view of cutting costs by creating an economy of scale; for example, in
emergency services, secondary education, water and sewage systems maintenance, or services
requiring highly qualified staff (for instance, child psychologists) where municipalities need to
collaborate to provide service. In Feiock’s (2013) “functional collective action,” cities have incentives
to cooperate, not because they are located in the same metropolitan region but because they are
facing similar problems.
In order to reduce transaction costs, functional collective action requires venues where cities can
share information about the specific challenges they face in service delivery or development. For
example, the cities of Gothenburg, Amsterdam, and Copenhagen share very similar problems with
rising sea levels due to global warming, but they need a venue where they can inform each other
about the nature of the problems they are facing, the technology they have developed to address
those problems, and the efficiency of those technologies. EU-sponsored networks can help facilitate
functional collective action by providing such venues. True, there is delineation roughly equal to the
EU space, but the key deciding factor whether cities seek to become involved in the EU-sponsored
networks seems to be the degree to which the issues that the networks address and the technologies
they seek to disseminate are also relevant to the city in question.
The ICA framework predicts that choices regarding whether a city should join a network are
based in the expected costs and benefits of such collaboration while containing free rider problems.
We will return to this issue when we present our case study.
Alongside the vertical modes of interaction, specialized international networks provide horizontal
collaboration among cities (Betsill & Bulkeley, 2006; Bulkeley & Betsill, 2003, 2005; Bulkeley et al.,
2003; Kern & Bulkeley, 2009). Many cities in Europe have a long tradition of international exchange
and collaboration, as we will discuss later. However, multilevel governance has helped open up
international arenas to cities in a new and more strategic way. A large number of European cities—
not all—have embarked on a strategy toward internationalization, including joining networks
specialized in addressing climate change and sustainability issues, exploring partnerships and export
markets for local businesses, joining strategic networks and formal organizations to lobby the EU
and other transnational institutions for resources, and strengthening local professional expertise and
capacity to address salient issues in urban governance.
EU governance in the environmental policy and sustainability sector is a textbook case of
multilevel governance. Such governance arrangements emerged already in conjunction with the
Agenda 21 initiative and the Kyoto Protocol in the 1990s but has since then been further elaborated
(Jasanoff & Martello, 2004; Lafferty & Eckerberg, 1998). For instance, in the Covenant of Mayors
initiative, cities could commit themselves to go beyond the environmental protection targets in the
EU’s 2020 goals. In this process, the EU targeted the cities directly, not the member state govern-
ments. Though multilevel governance can be seen in conventional processes developing regulation, it
is particularly evident in projects that the EU organizes, inviting cities and regions to compete for
funding toward specific outcomes. Cities are becoming an increasingly important level of environ-
mental protection and climate change issues because, as an interviewee (G2) put it, “It is here that
you find both the problems and the solutions.”
In Europe, the emergence of multilevel governance is often related to the continuing integration
of the EU (Hooghe & Marks, 2003; Piattoni, 2010). But that is only part of the story. Cities both
within and outside the EU are increasingly pursuing their interests in international forums and
arenas. Thus, though the EU multilevel governance incentivizes cities to position themselves inter-
nationally, similar incentives are present in jurisdictions outside the EU. The literature identifies
different explanations to this pattern, including a growing emphasis on “urban competitiveness”
(Gordon & Buck, 2005; Parkinson & Judd, 1998); corporate pressures on the city to help identify
overseas markets; intercity collaboration aimed at mobilizing financial resources from international
organizations; and cross-border collaboration between cities to stimulate trade (Aldecoa &
106 J. PIERRE

Keating,1999; Alger, 1998; Beauregard, 1995; Beauregard & Pierre, 2000; Clarke, 2003; Marcuse &
van Kempen, 2000; Sassen, 1996; Savitch & Kantor, 2002; specifically on the United States, see Fry,
1998; Hobbs, 1994; Jesuit & Sych, 2012; Wang et al., 2012; Zeemering, 2014b; on Japan, Sweden, and
the United States, see Pierre, 2013).

Urban capacity building through multilevel governance

A general trend in urban governance is the growing disjuncture between the increasing need for
advanced knowledge and information on the one hand and the capacity of the local state to create
and sustain such expertise on the other. The demand for specialized knowledge is increasing; it is not
an exaggeration to argue that local government is going increasingly high-tech. The days when cities
and municipalities were mainly concerned with water and sewage systems maintenance, waste
collection, and street maintenance are long gone; today they are asked to address issues related to
climate change such as renewable energy processes, district heating systems, and recycling systems.
Cities are also deeply involved in developing systems for service delivery that are sustainable,
digitalized, and user friendly.
However, maintaining specialized expertise in a wide range of fields accommodated in-house
would not be cost efficient; hence, there is a need to acquire information, knowledge, and
expertise either from the market or from other cities. There is also a management problem
present in this development; as cities become more specialized, they also tend to become more
organizationally fragmented.
Thus, contemporary cities are facing a steep learning curve where knowledge and expertise are in
high demand. This is the backdrop against we can understand the increasing tendency in Europe
toward developing cross-national networks of cities addressing complex issues associated with
climate change and sustainability. We conceive of the acquisition of knowledge, expertise, and
information as integral elements of urban capacity building (Wang et al., 2012; Zeemering,
2014b). These networks provide excellent opportunities for cities’ capacity building through emula-
tion, learning, exchanges of experiences, and replication (Betsill & Bulkeley, 2006; Bulkeley & Betsill,
2003, 2005; Bulkeley et al., 2003; Kern & Bulkeley, 2009).
Like multilevel governance, these networks are sometimes associated with the EU, but their logic
and functionality are quite different from such governance. If multilevel governance represents a
new model for organizing the vertical relationship between cities, nation-states, and transnational
institutions, these networks structure horizontal relationships among cities. Thus, intermunicipal
networks are not incompatible with multilevel governance. To the contrary, they seem to thrive in
environments where institutional hierarchies are relaxed and actors create forums where knowledge
and specialized expertise are shared (see Haas, 1992).
Multilevel governance and intermunicipal networks have created an arena for cities that is both
competitive and collaborative, as we will discuss later. Indeed, in the EU system of supporting the
development of new technological concepts in key policy areas, cities have to collaborate in order to
become competitive as a collective. As instruments of ICA, such collaboration can be supported by
“embedded networks” of autonomous actors in the pursuit of collective goals (Feiock, 2013).

Blurring institutional boundaries and roles

The EU plays a key role in facilitating and—on a competitive basis—funding intercity networks and
collaborative projects bringing together practitioners and researchers. This governance arrangement
thus ties together the supranational and the subnational levels of governing (see Adger, Arnell, &
Tompkins, 2005). The significance of this arrangement is that policy and governance evolves not
from agency at any particular institutional level but rather through negotiated interactions among
actors and institutions on two or more levels of the state and transnational actors (Torfing, Peters,
Pierre, & Sörensen, 2012).
 JOURNAL OF URBAN AFFAIRS 107

We see similar patterns of interlocal collaboration across national boundaries elsewhere, too. For
instance, subnational internationalization has been an important component of the consolidation of
the East Asian region for the past 15–20 years (Pempel, 2005). This development has not been
opposed but rather encouraged and supported by central government (Pierre, 2013). Domestic
policies encouraging competition among cities (Gordon & Buck, 2005; Parkinson & Judd, 1998)
are consistent with this development, as are the cutbacks in central government subsidies to
subnational government in many countries (Pierre, 2013).
At the same time, however, cities are competitors in the EU sphere and constantly have to weigh
the expected returns of collective, collaborative strategies against their own, individual advantage and
edge. Indeed, a number of cities have set up their own offices in Brussels to monitor the EU,
especially the European Commission. For instance, the “House of Cities, Municipalities and
Regions” in Brussels, inaugurated in 2006, hosts the local and regional associations of 17 countries
and officies for seven cities. In addition, a number of cities (Gothenburg being one) have set up their
own independent offices.

Collective action in the EU multilevel governance context

Cities in the EU have found a way of combining competition for EU funds with functional collective
action (Feiock, 2013). Subnational governments act collectively in different networks and organiza-
tions; for instance, the Eurocities network, set up by six cities in 1986 but today hosting 130
members; Eurotowns, created in 1991 to organize medium-sized cities; and the Council of
European Municipalities and Regions, created already in 1951. The Council of European
Municipalities and Regions works mainly as a lobby organization in Brussels. In addition, there
are a number of more specialized networks for cities in the union; for example, the “Polis” network,
which is a forum for the management of public transport issues, or “Reves,” which brings together
cities and regions with an interest in “social economy.”
The consolidation of intermunicipal networks is related to the continuing integration among the
EU member states and institutions. Interestingly, continuing integration of the union after the
Maastricht Treaty was signed in 1992 has been built primarily on compliance, consensus, and the
empowerment of new institutions and only to a very limited extent on increasing the strength of
supranational institutions. This “new intergovernmentalism” (Bickerton et al., 2015, p. viii) emerged
because “policy-makers remain willing to pursue collective solutions to shared problems but they
have become more reluctant to delegate new powers to supranational institutions along traditional
lines.” Thus, because institutionalized collaboration is viewed with some skepticism, the continuing
saliency of “shared problems” drives the development of other, less coercive, forms of ICA.
Observed from the city level, this argument makes very much sense. Cities are keen to learn from
each other and to “pursue collective solutions,” as Bickerton et al. (2015) put it, but they appear to
prefer a form of collaboration that builds on voluntarism, consensus, and incentives rather than
formal-legal coercion. Through this process, cities develop knowledge about the efficiency of various
policy instruments and approaches; for instance, in policy areas such as the environment or public
transport, which is then shared among cities and regions within the EU and beyond. Unlike many
other types of resources, knowledge and information can be shared without depreciation, which aids
the collaborative process. In addition to a top-down implementation process, we are witnessing the
production of knowledge among cities, with the EU Commission playing the role of facilitator and
funder rather than that of a regulator.
Thus, EU policymakers and the EU Commission have had to develop alternative and more subtle
regulatory strategies. Developing venues and arenas for the exchange of ideas, knowledge, expertise,
and technological solutions has been a key element of that strategy. In the Smart Cities program, the
EU plays an essential role in funding projects to encourage replication; cities should not reinvent the
proverbial wheel but instead learn from other cities how they have addressed similar problems.
Perhaps more important, these projects are a way for the EU to shape behavior on the ground in a
108 J. PIERRE

context where they have some, but not full, regulatory authority. As one Gothenburg city official
commented, “These projects are an important strategy for the EU in its pursuit of the “20-20-20
goals” (G3).1 Because the EU does not have full regulatory power on issues such as district heating,
the union incentivizes cities to consider such infrastructure investments and foster networks so that
cities whose remote heating projects are still in their infancy can learn from cities with more
developed systems (see Andrews et al., 2012). That having been said, the EU exercises real regulatory
influence by issuing directives in the environmental protection area; for example, the 2012 Energy
Efficiency Directive (2012/27/EU) and the Packaging and Packaging Waste Directive (94/62/EC)
issued in 1994 to provide regulation.

Building policy capacity from international collaboration: The case of Gothenburg

We will now observe the EU multilevel governance and collaborative project strategy from the
vantage point of the city of Gothenburg in Sweden. This case offers a good illustration of the
challenges and opportunities that the practice of multilevel governance offers to European cities. We
will first briefly discuss the Swedish institutional and policy context related to subnational govern-
ment, after which we describe the strategy pursued by those governments in relationship to the EU.
The third section of the case study is focused on the city’s activities in EU networks for local
governments, particularly the Smart Cities program, and the fourth section discusses the extent to
which the city builds policy capacity through its strategy in the EU multilevel governance and
international networks.

Institutional context
Founded in the 17th century, Gothenburg is by European standards a young city. The population in
2016 was about 550,000 in the city proper and 975,000 in the metropolitan area. Internationalization
has been high on the city’s agenda for a long time. After the Second World War, sister-city
agreements were signed with Bergen, Norway; Turku, Finland; and Aarhus, Denmark. These sister-
city contacts have gradually decreased in scope and intensity. Instead, a network of partner cities
(Lyon, France; Shanghai, China; Chicago; and Nelson Mandela Bay Municipality, South Africa) was
created during the 1980s and 1990s with a view to help develop the local business community and to
facilitate the exchange of knowledge and experiences in areas such as air quality, energy, and
integration.
Sweden has been described as a decentralized unitary state (Ansell & Gingrich, 2003; Feltenius,
2015; Loughlin, 2000) where intergovernmental relationships have historically been characterized by
a strong central government coupled with an extensive autonomy of cities and regions. Local and
regional government have been integral to the implementation of extensive welfare-state programs
defined by central government. Thus, although nominally autonomous, subnational governments
have seen some three quarters of their budget stemming from transfers from central government in
return for their delivery of social and other central government programs. Furthermore, central
government has for several decades implemented programs aiming at ensuring balance and equal
standards of public service across the territory.
This fairly stable and functional institutional arrangement characterized much of the postwar
period. The 1990s would, however, witness the emergence of two developments that over time drove
a process of institutional transformation. One was a gradually increasing level of competition among
cities and regions in Sweden. Around 1990, central government declared that the state was reassessing
its regional policy and that henceforth each region should “develop according to its own precondi-
tions” (see Johansson, 1991). The subtext to this policy was that local and regional governments would
henceforth witness decreasing subsidies from central government and therefore would have to develop
strategies to mobilize their respective territories and to explore alternative sources of funding.
 JOURNAL OF URBAN AFFAIRS 109

The other major development was the Swedish EU membership, which came into effect in 1996.
Though joining the union and engaging the process of transnational integration and regulatory harmoni-
zation is a challenge to any state, it may well have been particularly difficult for Swedish institutions. As we
will see below, Swedish bureaucrats are not always comfortable with the more limited transparency and
contextual design of decision-making processes that characterize the union’s handling of many projects.

Internationalization and Europeanization

The decrease in central government subsidies to local and regional governments and the EU
membership provided strong incentives to cities and regions to explore EU arenas. In 1999, a
third of the Swedish local governments claimed to be highly active in relationship to the EU.
Seven years later, close to 50% saw themselves as highly active vis-à-vis the EU (Berg & Lindahl,
2007). Local and regional governments along the Swedish west coast (Gothenburg being the biggest
local government in that region) had had some previous experience in establishing contacts with the
EU through a joint representation office (Berg & Lindahl, 2003), although the EU membership was
obviously critical in opening up new channels into the EU.
More recently, Pierre (2013) reported a survey among city managers in all Swedish local authorities
on the significance of internationalization to their respective cities. The survey shows that 53% of the
city managers agree that building partnerships with local governments in other countries has become
more important over the past decade. Another 7% state that creating such partnerships has always
been important. Thus, it is fair to say that internationalization is now a prioritized activity for many
local authorities in Sweden. That said, Pierre’s (2013) survey also shows that 32% of the local
authorities indicate that cross-national partnerships were “never important” to them and 6% think
that internationalization is irrelevant to them. The surveys by Berg and Lindahl (2003, 2007) and Pierre
(2013) thus substantiate the argument that though international involvement is considered important
by many cities, a fair number apparently see few gains to be made from overseas activities or little need
to acquire the capacity that such activities might generate.
If the sister-city network arrangements drew on Scandinavian cultural affinity, the partner-city
network is more strategic and geared toward economic development and the exchange of knowledge
and experiences in a wide variety of areas, including social issues, economic development, integra-
tion, environmental issues, etc. However, this arrangement, too, is now fading in importance; “We
do not sign this type of agreements any more. Today, we are only interested in project collaboration
with fixed starting and ending dates” (G3).
Such projects are mainly conducted under the auspices of the EU. Gothenburg significantly
strengthened its channels to the EU when the City of Gothenburg European Office was opened in
Brussels in 2008. The office identifies issues of significance to the city of Gothenburg. The key
mission of the office is to closely monitor developments in the EU sphere (“monitoring the
environment” or in Swedish omvärldsanalys) and to identify emerging important issues and appro-
priate targets in the EU administration for the pursuit of those issues. This involves careful strategic
planning and selecting issues that could be promoted. A current example is the “Fairtrade Town”
concept. A Fairtrade Town certification first appeared in Britain in 2001. Today there are some 1,700
Fairtrade Towns around the world. The Gothenburg European Office is promoting the idea that the
EU should establish a prize for Fairtrade Towns in the EU.
The main target of the Office is the EU Commission. They also monitor the European Parliament,
particularly early signs of legislation that will be important to Gothenburg. Lead time is essential and so it is
crucial to conduct analyses of the institutional environment early, before information has been posted
online. It is important to know when early memos are released, “to find and understand the informa-
tion” (G1).
The EU’s nonhierarchical, contextually defined multilevel governance arrangements are ripe
with opportunities for political and bureaucratic entrepreneurship. A senior official at the City of
Gothenburg European Office provides an intriguing account of how a skillful actor can play one
110 J. PIERRE

against the other and align with other actors—at times even your competitors—in the pursuit of
his objectives:
Member states are very difficult to work with. However, you can drive some issues together with national
government against the EU. Other issues you can drive together with the EU against the national government.
The objective is that we should have sufficient consensus in Sweden so that we can influence the EU but
sometimes you have to work the other way. Other cities can be partners in that process. (G1)

For similar strategies of playing EU institutions against central government in Spain, see Dudek (2005).
The same official notes that working only for the city of Gothenburg is much easier compared to
the previous arrangement, the so-called West Sweden joint representation office that had 72 local
governments as members, all wanting information and attention (Berg & Lindahl, 2003). Today the
Västra Götaland region has its own office. Still, “cooperation and the sharing of information are
essential” (G1).
Navigating the EU multilevel policy environment seems to come easier to actors from some
administrative cultures than others. The Swedish administrative tradition that emphasizes equal
treatment, predictability, and due process does not correlate very strongly with the competitive and
negotiated nature of EU multilevel governance; in the words of a senior Gothenburg office working
with international issues,
Old, reactive [as opposed to proactive] institutions like Swedish local governments have problems with the EU.
We are not used to playing a game, of thinking of ourselves as pit in a competitive context, or of marketing
ourselves in order to be attractive to other cities. … The competitive application process is suboptimal. I do not
trust the process. It is not a transparent process. Factors like good contacts and lobbying are extremely influential
in deciding who gets funded and who does not. If you are well connected you will have access to vital information
earlier than your competitors. It is all very … what’s the word I am looking for … un-Swedish. (G2)

A similar philosophy is also articulated with regard to the need to enhance the international visibility
of the city in the international arena:
We believe it is extremely important to be visible as a city. We have not been very good at showing what we do.
We need to present ourselves as an attractive city. Visibility helps make us attractive as partners. At the same
time it is important to know what it is that you want to achieve and prioritize so that you do not try to get
involved in all sorts of projects. (G2)

Again, this need for marketing the city and its pursuit of environmentally friendly strategies of
development is in many ways alien to the traditional Scandinavian way of thinking about public
organizations whose main concern to deliver services to the citizens of the city. That having been
said, there are also positive aspects of the EU competition model. “Everything is connected. A strong
environmental profile is good for local businesses and for tourism” (G2).
Teaming up with colleagues from other cities specializing in issues similar to those that a city
employee is assigned to address can be rewarding in terms of sharing ideas and experiences. The
problem with this strategy is that it is at odds with the conventional modus operandi, which is to
either wait for signals from central government (or the national association of local and regional
government) regarding what to do, and how to do it, or approach any of these institutions and
request advice. Going international to some extent means violating the protocol on how to gather
information and advice on how to address various issues. Public servants have to subscribe to a
different discourse on the role of public organization and, indeed, on the city as a public space as the
city becomes involved in international networks and EU multilevel governance. Though the city
remains committed to providing services to its citizens, it also finds itself incentivized to respond to
cues and signals from overseas networks.
There is a similar issue related to the cost-benefit assessments of internationalization projects.
Though the costs are immediate and seemingly easy to estimate, the benefits are more diffuse and
often long term. This makes the funding of these projects a sensitive issue as other items in a city’s
budget deal with more immediate, tangible, and socially urgent projects (Beauregard & Pierre, 2000).
 JOURNAL OF URBAN AFFAIRS 111

The costs for international networking are obviously opportunity costs; the same money could have
been spent on services supported by strong social constituencies. This may explain why internatio-
nalization projects often tend to be funded by discretionary funds controlled by the city executive
rather than as outcomes of city council budget debate (van der Heiden, 2010).
There are a couple of additional complicating factors in the cost-benefit analysis of internatio-
nalization projects. First, as a city official (G2) argues, “Projects can often be justified by pointing out
that they intend to do things that the city would have done anyway.” This being the case, the actual
costs for participating in international networks are marginal. Secondly, the same official also
suggests that “a cost-benefit analysis also fails to account for knowledge and networks which are
hard to put a price on” (G2). Both of these arguments suggest that though there is a strong awareness
of the cost-benefit aspect of internationalization, there are major problems associated with assessing
benefits of building networks of contacts across Europe or of acquiring knowledge that otherwise
would have had to be generated by the city itself. Though it is difficult to assess the significance of
these complexities, they do provide the internationalization advocates with an argument against
cutbacks in the projects’ budgets.

The Smart Cities program and projects

The Smart Cities program is a good example of the project paradigm in EU programs. The program aims
at supporting the development toward fossil-free, low-energy-consuming cities in Europe. Cities con-
sume 70% of all energy and account for 75% of all greenhouse gas emissions in the EU. With the
continuing urbanization in Europe, transforming and modernizing the cities’ energy systems is a key
objective if the EU as a whole is to reach its “20-20-20” environmental and climate policy targets; that is, a
reduction of greenhouse gas emissions by 20%; at least 20% of all energy should be renewable; and energy
efficiency should increase by 20%, all targets to be reached by 2020 (European Union, 2010).
Disseminating modern technologies for heating, cooling, and heat production is integral to the
program because the level of technology varies considerably among the EU member states. For
instance, in the case of district heating, 63% of the Danish population is served by district heating.
Other Scandinavian countries such as Sweden (52%) and Finland (50%) also have extensive district
heating systems. In France, by contrast, 7% are served by district heating and in the UK only 2% are
served by district heating (data from 2013; www.euroheat.org). The potential for modernization is
thus immense; hence the need for the EU to facilitate venues and networks where the laggards in
district heating development can learn from cities that have more extensive district heating systems.
The Smart Cities program seeks to bring urban public actors, applied research, and the market
together in order to develop and disseminate ideas and concepts among cities. The program is, in
fact, geared specifically at “smart” cities; that is, cities that, for instance, utilize information and
communication technology to improve energy systems or traffic planning. As mentioned earlier, the
EU’s aim with this and similar programs is to facilitate replication of successful concepts and
technologies so that cities that have developed an expertise in, for instance, remote heating can
communicate that concept to other cities. More specifically, the program aims at facilitating
innovation and dissemination to reduce climate impact. At the same time, these programs are a
strategy for the EU to incentivize behavior in areas where it has limited regulatory authority.
Smart Cities is organized in a number of “action clusters” and specific projects. Gothenburg has a
Smart Cities project (“Celsius”), funded by the Seventh Framework Programme, together with
London, Genoa, Rotterdam, and Cologne. Celsius aims at promoting district heating and cooling.
Gothenburg also participates in two other projects: Step Up (promoting energy and environmental
issues in urban planning) and EU-Gugle (aiming at reducing energy consumption in existing
housing; www.goteborg.se).
Gothenburg’s participation in the Smart Cities projects is driven by several strategic objectives.
One is to acquire new ideas and strategies in the environmental work; that is, to “import” knowledge
and expertise. Another important objective is to “export” knowledge in areas where the city has
112 J. PIERRE

developed cutting-edge knowledge; for instance, in the district heating sector. Gothenburg’s corpo-
rate community hosts a number of companies in the “green technology” sector—for instance, in
waste management, transport, and energy—and the city administration can use networks to promote
local companies in the European market.
Thirdly, city officials also point out that
we want to increase the city’s visibility, learn more about working in projects and to build international
networks. … Innovation is a major theme but truth is we do not have a solid definition of that concept. Just five
years ago no one talked very much about innovation. Today it is a major theme in international and domestic
collaboration. (G2)

Innovation requires access to cutting edge technology and expertise, areas where the city is clearly
competitive. Equally important, innovation has a commercial element and, again, the city works
closely with the local business community to find international markets. The city thus draws on, and
incorporates, the business sector in developing its policy capacity on sustainability issues. Such
capacity building would most likely not have happened, had it not been for the city’s insertion in
international networks of cities committed to sustainability programs where those businesses can
find a market.

Building policy capacity through multilevel governance

Throughout the article we study how the Gothenburg administration pursues international net-
works. The EU system of multilevel governance has enabled the city of Gothenburg to build its
policy capacity in several different ways. In a knowledge-intensive sector like urban sustainability,
access to information and expertise is a key prerequisite for building policy capacity. Indeed, the
development of policy capacity in the environmental sustainability sector—that is, defining policy
objectives and the means to pursue those objectives—is directly related to the development of green
technology; that is, the means available to attain goals in that sector. Furthermore, joining the EU-
sponsored networks appears to have strengthened the interaction between the city administration
and private businesses in the green technology sector. Sustainability is a high-tech sector where
Swedish, and not least Gothenburg, businesses have proliferated over the past decade or so (www.
greengothenburg.se). The city’s insertion into networks and projects is in part aimed at strengthen-
ing local businesses in that sector.
Secondly, the city has considerably strengthened its governing capacity by launching its office in
Brussels. Opened in 2008, this office is a gateway into the EU bureaucracy and to the information
and funding sources it controls.
Third, and more important, the Smart Cities program and the projects it supports has helped
connect Gothenburg’s city staff with their functional equivalents in other cities, thus facilitating both
the export and import of knowledge on sustainability issues. Again, policy capacity in a knowledge-
intensive policy sector requires expertise and knowledge.
Fourth, in addition to facilitating learning and disseminating technologies developed by the city,
the strategy pursued by the city aims at enhancing its international visibility. Though visibility per se
does not build policy capacity, it is a strategic requirement for being invited to future joint ventures,
projects, and networks and to be eligible for EU funding. It also serves to support the internatio-
nalization of local businesses in the green technology sector.
Fifth, given its expertise and cutting-edge knowledge on issues that are essential to the EU’s
climate change policy, the city is also an important contributor the larger collective project toward
increased sustainability of cities in the EU. Thus, the Gothenburg process of policy capacity building
is closely related to other objectives sustaining the internationalization effort, such as marketing the
city overseas, supporting the local business community, and promoting collective action and learning
in the EU toward the union’s environmental policy targets, the 20/20/20 climate change strategy. In
terms of urban policy capacity, Smart Cities and other similar programs—the competitive and
 JOURNAL OF URBAN AFFAIRS 113

prestigious European Green Capital Award is a case in point—facilitate the dissemination and
replication of strategies and technologies to address climate change issues. In Feiock’s (2013)
terminology, the process can be described as collective action toward collective learning; by sharing
knowledge about climate-smart solutions in collective heating systems, waste disposal and recycling,
and public transport, these programs significantly help build and reproduce urban capacity in terms
of providing specialized expertise and knowledge. Furthermore, these dissemination processes mean
that cities do not have to make investments in research and development of these concepts because
they can be emulated on systems that have proven successful elsewhere.

Concluding discussion
We began this article by discussing the emergence of multilevel governance in the EU and the
gradual transformation of domestic institutional hierarchies. From there we analyzed how cities use
transnational networks to build capacity in the area of sustainability and climate change and
environmental protection issues such as knowledge and expertise on complex issues like district
heating, heating storage, recycling, biogas, public transport modernization, and sustainable com-
muting patterns. We specifically asked what the incentives are for cities to join these networks; how
cities balance such collaboration against the competitive EU policy toward cities and regions and
how collective action problems are resolved; and how the international involvement of cities impacts
domestic policy coordination across institutional levels.
Most of the EU’s programs in the area of sustainability and climate change target cities and regions
more than the member state government. The EU’s funds, coupled with the cities’ needs to build
governing capacity to deliver sustainable programs, incentivize cities to pursue international networks
in the urban sustainability policy sector as a means of developing know-how. Such initiatives are,
however, predicated on urban policy choice and resources; some cities are more strongly committed
to sustainability and environmental protection than others, just as some cities are more willing to make
the necessary financial commitment to embark on internationalization projects than others.
These incentives pit cities in both competition and collaboration with other cities. The EU invites, on a
competitive basis, cities to create networks to foster these exchanges of technologies and processes to
address climate change–related issues; a city’s competitiveness is determined to a large extent by its
capacity to collaborate with other cities in the preparation of bids for EU funds. In the process, the EU
incentivizes the adoption of new technologies in an era where it has some, but not full, regulatory
authority. Thus, the union solves collective action problems in urban knowledge formation by encoura-
ging cities to collaborate in order to avoid duplication in research and development and at the same time
encouraging duplication in the application of new technologies. The process thus combines elements of
both multilevel governance and new intergovernmentalism. Both models indicate ad hoc, contextualized
arrangements for the EU to provide governance of subnational institutions.
For the participating cities, this collaborative strategy offers access to substantive policy capacity
and funding from the EU. For instance, the networks facilitate the sharing of knowledge-intensive
and applied technologies that will help the cities reduce CO2 emissions to curb climate change. These
are capacities that cities that take sustainability seriously need the most. They are also the capacities
that are the most costly to develop in-house or acquire from the market.
There are three sets of issues that raise questions about the rationale of internationalization
strategies. One problem is related to potential fragmentation of the city administration, which we
discussed earlier. Public servants may experience conflicting loyalty between the city they work for
and the international networks where they engage colleagues from other cities sharing their
specialized interests. As a result, cities engaging in international networks may experience fragmen-
tation and decreased organizational coordination as segments of the administration take their policy
cues—and funding—from overseas sources.
In order to join EU-initiated networks, and in the face of not always very favorable odds, cities
must commit significant funds to prepare competitive bids. There are obvious opportunity costs
114 J. PIERRE

involved here, making these projects politically vulnerable. Furthermore, though participating in the
EU programs and inter-municipal networks does provide the city with capacity in specialized and
knowledge-intensive sectors of public service, there are other areas of the city’s public service
commitment that are not enjoying the same influx of external knowledge. Thus, the internationa-
lization strategy may favor some areas of local public service at the expense of other sectors.
Another problem has to do with the degree of congruence and consistency of sustainability and
climate change policies across domestic institutional levels and among cities. As the survey data
suggest, there is large variation in cities’ inclination to join overseas networks, and this asymmetry in
information complicates collective action on the domestic arena. Networked cities have few incen-
tives to share the knowledge acquired through international collaboration and the costs that are
entailed with free-riding cities that did not make a similar investment.
A third issue is related to the degree to which cities’ involvement in international networks disturbs
the policy congruence between central and local government. This problem is triggered by the
tendency in multilevel governance for entrepreneurial actors to play institutions at one level against
those at other levels, as we saw in the case of Gothenburg. Our interviewees in the City of Gothenburg
Office in Brussels insisted that they invariably work to promote Swedish interests in EU arenas, but far
from all issues are such that they can be used to promote the interests of both the Swedish central
government and the city of Gothenburg. Thus, the more cities strengthen their capacity in Brussels, the
more autonomous will they be in relationship to their domestic central government.
We should also reflect on what we can learn from the Gothenburg experience. The EU version of
multilevel governance is far more complicated to monitor and manage than conventional institu-
tional hierarchies. Multilevel governance offers more opportunities and rewards entrepreneurialism
to a larger extent than conventional institutional arrangements. The EU seeks to develop direct
interactions with cities and regions, sometimes leaving central governments in a marginalized
position. In that scenario, coordinating policy across the nation’s territory becomes a major
challenge, and there is a very real risk of a loss of coordination.
In closing, we must remind ourselves that Gothenburg is one of the more active European cities
in the areas of urban sustainability, climate change, and environmental protection. These issues are
high on the city’s political agenda and the international initiatives are supported by the city’s political
and administrative leadership. Not all cities have made a similar choice, whether for political or
economic reasons. The EU and central government can impose baseline standards, but the addi-
tional entrepreneurial strategy toward urban sustainability remains optional. Meanwhile, many of
the specific issues in this policy field are not place bound but global. Here lies an intriguing
disjuncture between policy problems and the agency to address those problems.

Note
1. G1, G2, and G3 refer to three different interviewees in the city of Gothenburg administration and its affiliates.
Interviews were conducted between February and October 2015. The 20-20-20 goal, defined in the Energy
Efficiency Directive, refers to attaining 20% energy efficiency by 2020.

Acknowledgment
I thank Maja Högvik at the City of Gothenburg’s International Office for help with arranging interviews and
comments on early drafts of the article.

Funding
The author acknowledges the support of the New Urban Governance Project by LSE Cities at the London School
of Economics and the John D. and Catherine T. MacArthur Foundation. The findings, interpretation, and
conclusions presented in this article are entirely those of the author and should not be attributed in any manner
to any of these entities.
 JOURNAL OF URBAN AFFAIRS 115

About the author

Jon Pierre is Professor of Political Science at the University of Gothenburg, Sweden, and Professor of Public
Governance, Melbourne School of Government, University of Melbourne. He is also Adjunct Professor at the
University of Pittsburgh. He has published extensively on governance, urban politics, and public administration.
His most recent books in English include Governing the Embedded State (Oxford University Press, 2015; with Bengt
Jacobsson and Göran Sundström); The Relevance of Political Science (co-editor with Gerry Stoker and B. Guy Peters;
Palgrave, 2015); The Oxford Handbook of Swedish Politics (editors; Oxford University Press, 2015); and Comparative
Governance (Cambridge University Press, 2017; with B. Guy Peters).

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