Source: SourceOECD Governance, Volume 2007, Number 29, September 2007 , pp. 161-254(94)

Publisher: OECD - Organisation for Economic Co-operation and Development

Abstract:

Madrid has benefited greatly from democracy and globalisation. Once the capital city of an economically and politically isolated country, Madrid has become an important international hub. In terms of economic growth its performance has been among the best within OECD urban regions during the last decade. Madrid has been able to benefit from the overall good performance of the Spanish economy, as is reflected in the production growth figures, and in the level of almost full employment. Ongoing structural macroeconomic reforms, characterised by the streamlining of the regulatory framework, the increased exposure of product and factor markets to international competition, and prudent fiscal and monetary policies, have stimulated a gradual move towards the technological and managerial modernisation of Spanish enterprises in general, and those located in metropolitan regions in particular. In addition, as a capital city, Madrid has also benefited from a relatively large share of the total central government resources that completed regional and local governments' efforts for the improvement of urban infrastructure. In recent years the city has also been an important focal point for the increasing flows of immigration and foreign investment that are occurring in the country. This overall scenario of growth, combined with the cities' capacity to attract immigrants, new investments and firms, have created a positive environment, and a perception amongst policy makers that Madrid is competing with the main cities in Europe. Of course, such a good achievement has generated positive expectations among the local community. The goal of the development strategy implemented by the city government, for instance, is to transform Madrid into the most important metropolitan region in Europe only after Paris and London.

Document Type: Review article

Publication date: 2007-09-01

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