2 Urban diplomacy and a new local self

In recent decades, the city has emerged as a proactive site of diplomacy and international engagement. Increasingly, cities operate and self-identify as actors with distinct international profiles – maintaining foreign offices, participating in multilateral fora and cultivating global and transnational (intercity) alliances. As Janne Nijman has noted, cities today exhibit a renewed ‘global consciousness’, actively shaping global norms while engaging with each other as international peers rather than subnational emissaries (Nijman Reference Nijman and Muller2011, p. 214). Chrystie Swiney similarly describes this development as a decisive shift in international relations: cities, she argues, assume the mantle of global governance as traditional state-centric institutions are mired in gridlock and a sense of their waning legitimacy (Swiney Reference Swiney2020).

This shift – anchored in what we might identify as the assertion of a new local self – is evident in the proliferation of transnational municipal networks such as UCLG, C40 Cities, ICLEI and the Global Covenant of Mayors. These networks have moved beyond the symbolic twinning of the past to occupy formal seats at international policy tables (Acuto Reference Acuto, Stone and Moloney2016; Leffel and Acuto Reference Leffel and Acuto2018). This is particularly prevalent in climate diplomacy. At COP21 and COP26, for example, city networks were central to advancing subnational commitments to carbon reduction, sometimes in defiance of national policy inertia (Khan Reference Khan2021). These cities act not as local arms of the state but as norm entrepreneurs, independently asserting their authority in global regimes. As Agnieszka Szpak has shown, such initiatives extend beyond symbolic participation: cities are not merely implementing international law but are increasingly engaged in its making (Szpak Reference Szpak2025, pp. 1–10). Through intercity charters, declarations and transnational municipal agreements – from the European Charter for Safeguarding Human Rights in the City (2000) to the Marrakech Mayors’ Declaration: Cities Working Together for Migrants and Refugees (2018) – cities collectively generate new normative frameworks with tangible legal and political effects. In some instances, as Szpak notes, cities have even implemented international treaties that their states have not ratified, further underscoring their growing capacity as autonomous legal actors within international law (Szpak Reference Szpak2025). Ileana Porras has framed this transformation as the intersection of two developments: the internationalisation of cities and the localisation of global development. This is particularly visible in the spread of Sustainable Development Goal 11 and the Habitat agendas (Porras Reference Porras2009). In this dual movement, cities become conduits for both top-down and bottom-up governance, translating global priorities into local policies and using local innovation to shape international standards (Aust and du Plessis, Reference Aust, du Plessis, Aust and du Plessis2019).

This evolution is most visible in the legal recognition – albeit partial and fragmented – that cities now command. The International Law Association (ILA) Study Group on the Role of Cities in International Law has documented how cities are now more likely to invoke international norms (particularly environmental and human rights law) as the basis for local legislation, thereby bypassing or compensating for national inertia (International Law Association 2022). Drawing on empirical city reports and a rich body of doctrinal and theoretical scholarship, the ILA Study Group shows that cities not only align with international obligations but often act as norm generators, selectively engaging with international law to project their legitimacy and policy preferences. Cities such as Graz, Toruń and Prague have strategically mobilised norms like human rights and heritage preservation to construct distinct international legal identities, while others like Lagos and Arusha have identified themselves as vital hosts for international institutions, contributing to law-making by offering space, visibility and logistical capacity.

The ILA Study Group argues that through these practices cities participate in a new form of law-making that challenges traditional conceptions of international legal subjectivity. Cities now act as both sites and agents of international law, and their engagement is no longer accidental or informal but systematic and increasingly self-conscious. Yishai Blank has described this as a move toward ‘bottom-up international legal personality’, where the city derives its legitimacy in the international sphere from functional participation and normative influence (Blank Reference Blank, Aust and Nijman2021, p. 104). Importantly, the ILA Study Group also notes that cities’ roles vary: while some act directly as legal protagonists through active participation in local governance networks and by generating new governance and development strategies within their own jurisdictions, others serve as nodes within larger global regimes, contributing through infrastructure, soft power or symbolic alignment. In either case, the cumulative effect is a profound reconfiguration of the boundaries and actors of international law.

Yet this rising profile is far from evenly distributed. While cities in the rich world – such as Amsterdam, New York or Seoul – benefit from geopolitical and economic capital that amplifies their global voice, cities in the Global South, though deeply engaged in urban diplomatic initiatives and in setting new urban standards, face significant constraints. These include not only limits in infrastructure and finance but also the persistent framing of Southern cities as sites of governance failure, financial stagnation and developmental deficit. In such contexts, urban diplomacy risks becoming less a practice of empowerment than a performance of agency within structures that remain fundamentally hierarchical.

As we have argued elsewhere, the international legal order continues to position Global South cities within a post-colonial matrix of control, where urban space is re-imagined as a site for implementing globally standardised prescriptions of development and discipline (Eslava and Hill Reference Eslava, Hill, Aust and Nijman2021). Despite the rhetoric of decentralisation and local empowerment, these cities are often treated as laboratories for international norms while remaining embedded in asymmetrical power relations shaped by colonial legacies.

Drawing on our ethnographic work in Istanbul, Bogotá, São Paulo, Cali, Rio de Janeiro and other Global South urban contexts, we have demonstrated how international development and security agendas translate into everyday practices of territorialisation and subjectification that produce new forms of legal and spatial stratification between ‘legal’ and ‘illegal’ and ‘formal’ and ‘informal’ urban zones and subjects (Eslava Reference Eslava2009, Reference Eslava2014, Reference Eslava2015; Eslava and Dias Reference Eslava and Clara Dias2013; Eslava and Buchely Reference Eslava and Buchely2019; Alessandrini et al. Reference Alessandrini, del Pilar Cortes-Nieto, Eslava and Vastardis2022). The language of creditworthiness is instrumental here in framing the ‘legal’ and ‘formal’, compliant urban subject as an aspirational recipient of capital. These arrangements present residents of peripheral neighbourhoods, and informal settlements and urban economies with a false choice between disorder or development. The result is that they are stripped of meaningful political agency and their surroundings subordinated to externally imposed logics of order, productivity and legibility. The supposed autonomy of the local becomes a vector through which global governance operationalises itself indirectly – transforming cities into what Zygmunt Bauman once referred to as ‘glocal’ nodes, through which global agendas are territorialised and contested simultaneously (Bauman Reference Bauman1998; Foster and Swiney Reference Foster, Swiney, Aust and Nijman2021, pp. 368–9). The ensuing logics render local life legible to international capital above all else.

At the heart of this process lies what we have termed a structural ‘out-of-placeness’ – a condition produced and managed by international legal and policy regimes that constantly reclassify life in the Global South according to developmental hierarchies (Eslava Reference Eslava, Chua and Massoud2024, Reference Eslava, Rengifo and Felipe Pinilla2012). In this world-making project, urban law often functions as a mechanism not of inclusion but of sorting: a spatial instrument that legitimises uneven development while offering only the illusion of local empowerment. This process reproduces the broader tendency within international urban governance to conflate local compliance with agency. In reality, it admits Southern urban voices audible only insofar as they echo dominant global agendas.

Taking a cue from Quinn Slobodian’s analysis of the proliferation of special economic zones – including cities – the emergence of the new international city signals a shift away from the state as the sole unit of governance (Slobodian Reference Slobodian2023). Within Slobodian’s account, as in ours, the city appears as a natural and seemingly inevitable candidate for a more active role in the international order (Eslava Reference Eslava2015, pp. 8–23). Slobodian emphasises the Global North’s search for new ‘patchwork’ or microcosmic jurisdictions through which the ostensibly liberating but fundamentally extractive designs of international development and investment can unfold. Cities, defined by their intense concentration of labour, capital and marketable identity, present themselves as ideal sites for such experiments. In the context of the Global South, we extend this analysis by underscoring the persistence of a centuries-old pattern of suitably regulated investment from the Global North that continues to render Southern cities dependent – albeit now under the guise of urban development and modernisation.

Nevertheless, cities across the Global South have carved out spaces of international influence. Durban, for example, has become a prominent actor in climate diplomacy not merely by aligning with mitigation discourses shaped in the Global North but by foregrounding local imperatives such as adaptation and social inclusion. As a participant in city diplomacy platforms like ICLEI and C40, and through its involvement in initiatives like the C40–MMC Global Mayors Task Force, Durban – alongside other African cities such as Accra, Dakar and Freetown – has worked to insert the urban realities of climate-induced displacement and mobility into global forums, including the UNFCCC’s COP processes. These cities advance what Stürner-Siovitz and Morthorst term a ‘glocal role’: drawing on situated expertise to advocate for climate justice while simultaneously demanding access to international policy-making and finance (Stürner-Siovitz and Morthorst Reference Stürner-Siovitz and Juhl Morthorst2024). Their claims are grounded in lived experiences of climate vulnerability – often compounded by informality, poverty and weak state support – and are articulated as both a critique of national inaction and a call for multilevel, inclusive governance. Rather than passively receiving global agendas, these cities mobilise transnational partnerships to demand recognition, resources and voice in shaping the future of climate mobility governance.

Other cities have similarly leveraged transnational municipal networks and strategic alignments to assert international visibility. In Maputo, capital of Mozambique, local authorities and financial actors have sought to embed the city within global infrastructure circuits by experimenting with planning tools and investment regimes that speak the language of financial viability and resilience. Yet, as Jorge’s work demonstrates, these strategies are deeply shaped by everyday inequalities and historical marginalisation, resulting in hybrid governance arrangements where local actors selectively engage global norms to negotiate their own survival and influence (Jorge Reference Jorge2020).

The emergence of a new local self, as we have termed it here, is then both a product and a precondition of the city’s diplomatic turn. Enabled by decentralisation initiatives, which began in the late 1970s and the 1980s as state centralisation became the subject of serious critiques, and legitimised through local electoral mandates, municipal governments in the Global South have increasingly adopted the language of sovereignty (Eslava Reference Eslava2015, pp. 139–73; Eslava and Pahuja Reference Eslava and Pahuja2020). They present themselves as efficient, responsive and globally attuned. These qualities resonate with international institutions seeking local partners to deliver on multilateral goals. This discursive shift has transformed the local self into a strategic subject: a city that governs not only its population but also its international profile (Riegner Reference Riegner, Aust and du Plessis2020).

This new self is subject to new pressures as a result. As we explore in the next section, participation in global diplomacy is frequently conditioned by adherence to fiscal norms, infrastructural expectations and institutional reforms aligned with the preferences of external funders. The performance of sovereignty thus becomes entwined with practices of market readiness. Cities must not only be legible to their constituents but also to international investors, rating agencies and development banks. In this way, the diplomatic agency of the city is constantly negotiated against the disciplining structures of the global economy.

3 The process of urban financialisation

It remains the case then that ‘cities are not free to do whatever they please’ (Frug and Barron Reference Frug and Barron2006, p. 1). While cities increasingly participate in international diplomacy and global policy forums, their expanded presence on the world stage has coincided with deeper entanglements in transnational circuits of finance. International financial institutions, development banks and private lenders now exert considerable influence over urban governance. Rather than liberating cities from the constraints of the nation-state, globalisation has tethered them to a different – yet equally constraining – set of financial disciplines. As we have argued elsewhere, this dynamic constitutes a ‘reinvented brand of localised disciplining’ that echoes the instrumentalisation of cities during the colonial era (Eslava and Hill Reference Eslava, Hill, Aust and Nijman2021).

Within the dominant frameworks of international development, the city has become a central site of intervention. While still framed as a site of demographic concentration and economic productivity, the urban realm is also increasingly cast as a laboratory for experimentation in climate mitigation, resilience finance and decentralised service delivery. This repositioning is codified in Sustainable Development Goal 11 (SDG 11), which calls for cities that are ‘inclusive, safe, resilient, and sustainable’. Notably, the concept of sustainability here extends beyond environmental protection to encompass social and financial dimensions, formalised under the rubric of ‘integrated urban governance’ (Ioan-Franc et al. Reference Ioan-Franc, Ristea and Popescu2015).

The New Urban Agenda, adopted at Habitat III in Quito and endorsed by the United Nations General Assembly in 2016, gives substance to this vision on the basis that urban finance is foundational to global development. Signatory states committed to supporting local governments in determining their own revenue sources and expenditures, as well as to developing financing frameworks, instruments and tools that would strengthen subnational revenue bases and municipal finance systems. As the Agenda states, signatories commit to ‘supporting effective, innovative and sustainable financing frameworks and instruments enabling strengthened municipal finance and local fiscal systems in order to create, sustain and share the value generated by sustainable urban development in an inclusive manner’ (UN-Habitat 2016, p. 8). Fiscal decentralisation is thus recast not as an administrative decision or a technical detail, but as a prerequisite for delivering on global urban development commitments.

This emphasis on fiscal autonomy is echoed in the work of UCLG, whose Global Reports on Decentralisation and Local Democracy repeatedly warn that local autonomy is hollow without meaningful financial capacity (UCLG 2008, 2011). A low level of financial independence, UCLG argues, weakens ‘the ability of local authorities to freely choose the ways they manage their services and administrative structures’ (UCLG 2008, p. 20). UN-Habitat’s World Cities Report 2016 had already reinforced this concern, emphasising that weak revenue generation and retention severely constrain planning and service delivery (UN-Habitat 2016, p. 111). Across these frameworks, and while conceding that access to finance remains highly uneven and that an overreliance on debt or conditional transfers risks reproducing structural inequalities, there is a shared technocratic consensus that fiscal capacity is indispensable to sustainable urban governance.

International financial institutions have reinforced this approach. In 2018, then-World Bank Vice President Mahmoud Mohieldin outlined a reform agenda for strengthening municipal finance systems through enhanced own-source revenue streams, rules-based fiscal transfers and investor-friendly regulatory frameworks (World Bank 2018). These priorities underpin the larger World Bank’s City Creditworthiness Initiative (CCI) and its associated tools. The CCI and its tool, co-funded by the Public-Private Infrastructure Advisory Facility (PPIAF), the Korean Green Growth Partnership, and the Rockefeller Foundation, frame ‘credit readiness’ as essential for unlocking infrastructure finance and enabling urban transformation (World Bank 2014).

The City Creditworthiness Self-Assessment and Planning Toolkit, also known as the City Cred Tool, serves as the cornerstone of this agenda (World Bank 2014). It invites local officials to assess their cities’ financial health across four dimensions: mandates, financial performance, financial management and the enabling environment. This diagnostic exercise generates ranked ‘creditworthiness challenges’ alongside corresponding ‘action items’ for reform. The process culminates in a self-authored action plan intended to guide cities toward greater creditworthiness, positioning them to engage with investors, development banks and credit rating agencies.

Financial proficiency, under this self-disciplining framework, is not a means to an end but a condition of urban survival. As the CCI’s website affirms, the initiative aims to enhance cities’ access to infrastructure finance by embedding ‘creditworthy financial practices and supportive institutional, legal and regulatory environments’ (World Bank 2014). This is operationalised through training academies, technical assistance and knowledge products – complemented by tools such as the Local Government Borrowing Database (CCI-LGBD), which collates data on municipal debt practices in developing countries. The Bank frames this data as a form of ‘global knowledge’ and a ‘public good’, intended to guide policy-making across different scales of government. Yet the overarching emphasis remains clear: urban development is increasingly shaped by logics of financial legibility, risk assessment and debt serviceability.

While presented as a form of capacity-building, these frameworks often reorient urban governance away from immediate local needs and tie it closely to the demands of (international) capital. Rather than empowering municipalities, they foreground creditworthiness as the dominant metric of development, subordinating participatory planning and redistributive goals to investor confidence. As Guironnet, Halbert and Attuyer have noted, this shift reflects the growing and widespread importance of financial actors and financial logics in shaping the production of urban space and the priorities of local governments (Guironnet et al. Reference Guironnet, Attuyer and Halbert2016). In this context, for example, the pursuit of a progressive political agenda aimed at overcoming sociospatial inequalities ‘is likely reduced to the task of mending negative effects ex post rather than their prevention ex ante’ (Halbert and Attuyer Reference Halbert and Attuyer2016, 1358).

The elevation of the city as an international actor has then not yielded its empowerment per se. On the contrary, the globalisation of urban economies has introduced a new set of disciplining mechanisms, most notably sub-sovereign credit rating systems. As Cash and Khan have argued, these systems concentrate evaluative power in a handful of rating agencies, whose standardised methodologies often overlook the material and institutional specificities of cities in the Global South. The result is a form of governance tailored not to citizens but to creditors (Cash and Khan Reference Cash and Khan2024). It is for this very reason that the methodologies and decisions of credit rating agencies ‘have faced growing scrutiny, as their ratings have, at times, exacerbated debt distress or impeded access to necessary private capital’, especially for Global South governments (Cash and Khan Reference Cash and Khan2024, p. 3).

This financialisation of life in the Global South is again sustained through a network of pedagogical and regulatory tools. The World Bank’s City Creditworthiness Initiative, as we have discussed, provides embedded technical support aimed at enhancing municipal credit readiness – but their normative aim is more expansive: to train cities to govern in ways that are intelligible and attractive to investors. Far from neutral, these tools act as manuals of compliance, scripting the behaviours and institutional reforms expected of fiscally responsible cities. As Aust has noted, the global diffusion of the ‘good urban governance’ ideal occurs through such mechanisms, which function not only as frameworks for best practices but also as instruments of behavioural standardisation, shaping how cities define their own priorities and the roles of their inhabitants (Aust Reference Aust, Hohmann and Joyce2018). These regulatory scripts extend beyond the realm of finance: they re-shape urban citizenship itself by privileging entrepreneurialism, managerialism and a supposedly depoliticised notion of social responsibility. In doing so, they obscure the underlying hierarchies and exclusions that continue to structure global urban life.

The implications of this approach are visible in cities across Mexico, for instance, where large-scale housing developments have been implemented under banners of modernisation and global competitiveness. As Reyes has shown, these projects often undermine rather than expand substantive access to housing, while entrenching financialised logics under the guise of development (Reyes Reference Reyes2020). Far from addressing housing needs, they function to stabilise mortgage markets, incentivise speculative construction and produce liquidity for global investors. This is not an exception, but a rule in the systemic transformation of urban governance. As Heeg, Ibarra García and Salinas Arreortua demonstrate, the same metropolitan region of Mexico City has become emblematic of this shift from housing as a social good to housing as a financial instrument, with public institutions reconfigured as financial intermediaries tasked less with redistribution than with sustaining flows of securitised capital (Heeg et al. Reference Heeg, Ibarra García and Salinas Arreortua2020).

These processes are not unique to Mexico. In Phnom Penh, Cambodia, as Fauveaud details, the condominium boom has transformed the city’s landscape into a terrain of speculative investment, marginalising local residents and intensifying spatial inequalities (Fauveaud Reference Fauveaud2020). Similarly, Ergüven traces how in Turkey, housing policy has become a key instrument for financial sector expansion, entrenching pro-cyclical dynamics that link domestic urban development to volatile global markets. In all these cases, the built environment is mobilised not to secure shelter, but to anchor foreign liquidity and manage investor risk (Ergüven Reference Ergüven2020).

Importantly, housing financialisation in the Global South is not a linear transplantation of Northern models, but a subordinated and highly uneven formation. It is shaped by post-colonial monetary hierarchies, dependent macroeconomic frameworks and the mediating role of states that are simultaneously developmental and financialising (Fernandez and Aalbers 2020). The liquidity that fuels mortgage expansion in places like Mexico City, Phnom Penh and Istanbul may originate in transnational capital markets, but its costs – precarity, displacement, infrastructural breakdown – are absorbed locally. These housing regimes, marketed as engines of inclusion and growth, ultimately render urban space more exclusionary, entrenching the calculative and extractive logics of global finance within everyday life.

As Gruffydd Jones has argued in her analysis of African urban agendas, these processes permeate the formal/informal divide of Global South cities (Gruffydd Jones Reference Jones2012). They operate through a global architecture of power that simultaneously financialises informal areas (to eventually formalise them by expanding the frontiers of capital speculation) while moralising its residents as entrepreneurial, bankable subjects. In this setting, the ideal slum-dweller is no longer an object of care or even governance, but a micro-investor – someone capable of participating in capital markets through forms of managed inclusion and mediated risk. This financialised rationality is presented as empowerment, but it actively reinscribes the asymmetries of colonial urban planning through new scripts of compliance, responsibilisation and technocratic participation. In this way, financialisation does not displace older urban inequalities – it updates and secures them within the new moral economy of the global city.

Yet as we insist in the next section, Global South cities and citizens are not passive recipients of these disciplinary forces. Local authorities, community organisations and social movements continue to resist and reinterpret these frameworks, drawing on lived experiences of exclusion to challenge the dominance of speculative urbanism. Such contestations are strategic, not merely mimetic. They highlight the uneven geographies of power and voice that characterise contemporary global urbanism. Cities in the Global South navigate these circuits through both compliance and subversion. Still, as Roodenburg and Stolk caution, global urban imaginaries – driven by branding, investment summits and benchmarking – tend to privilege infrastructural visibility and legal predictability over social justice (Roodenburg and Stolk Reference Roodenburg, Stolk, Stolk and Vos2020). The aspiration to become a ‘global city’ often reproduces elite-centric models of urban modernity.

The notion of creditworthiness is also accompanied by a paternalistic infrastructure in which development banks operate not only as lenders but as tutors, shepherding municipalities through assessment regimes that monitor as much as they mentor. These phenomena, involving instruction on and surveillance over local finances, are exemplary of a more holistic and demanding model of governance being tied up in today’s urban development practices. This model implicitly carries a mandate to both instruct cities and to connect them to the idea that creditworthiness, for example, is a singularly desirable norm, and that in turn access to credit – always difficult to obtain and even more difficult to repay – is the only road to development. In this sense, and as Lin has noted, the push to help cities gain access to international markets is countered by the concern that the World Bank will in this process ‘destroy the diversity of cities in the quest to create social conditions that facilitate global capitalism’ (Lin Reference Lin2018, p. 63).

These shifts carry material consequences. As access to development finance becomes contingent on creditworthiness, cities are increasingly drawn into debt. Between 2010 and 2020, public debt in developing countries rose from 40.2 per cent to 62.3 per cent of GDP, with local governments assuming a growing share (Munevar Reference Munevar2021). In China, municipal debt is now equal to roughly half of the country’s GDP (Bloomberg 2021). At the same time, the financial burden has been devolved to individuals through instruments such as urban taxes and slum-upgrading schemes. The neoliberal premise is clear: development must be funded not through redistribution, but through credit.

This twin process – the localisation and individualisation of debt – signals a deeper transformation in development governance. Cities are cast not only as recipients of capital, but as its custodians and guarantors. If read narrowly, these initiatives may indeed offer pathways to capital. But viewed critically, they point to a more troubling reality: that development finance is becoming a widespread mode of disciplining.

4 Urban activism against financialised governance

The analysis in the previous sections has demonstrated that cities, while increasingly present on international platforms and instrumental in implementing global agendas, continue to be held at arm’s length, operating within the constraints of a borderline international legal personality. But to understand this condition more fully, it is important to move beyond formalistic accounts of legal subjectivity and examine how international personality itself is a historically constructed and variegated status. As Parfitt has argued, international legal personality has never been a neutral threshold or fixed legal category; rather, it has been actively produced through a series of legal and political exclusions shaped by the global history of capitalism (Parfitt Reference Parfitt2019, pp. 16–56). The techniques of recognition, she contends, have not just identified which peoples have legal personality; they also establish which social and economic practices are legitimate, which forms of subjectivity are valued, and what kinds of political life are viable in the international legal order.

Diagnosing the condition of the city as an international legal actor is therefore not simply a juridical exercise; it is an intervention into the forces that have historically allocated authority in international affairs. The city’s ambiguous standing – simultaneously a site of innovation and implementation, but structurally dependent and financially constrained – is symptomatic of the wider reconfiguration of sovereignty and authority under global capitalism (Eslava Reference Eslava2015). As both Brenner, and Smart and Smart, argued at the turn of the twenty-first century, the territorial rescaling of governance in the era of globalisation has seen cities assume enhanced responsibilities, but not necessarily greater autonomy (Brenner Reference Brenner1999; Smart and Smart Reference Smart and Smart2003). Instead, and particularly in the Global South, urban governance has become increasingly enmeshed in the requirements of global finance and capital accumulation, often with little room to manoeuvre around questions of social justice and democratic participation.

To confront this financialisation of local governance, future urban activism must place questions of debt justice, monetary autonomy and institutional reform at the centre of its emancipatory agenda. This requires a deliberate shift in analytic and strategic orientation. Rather than focusing narrowly on inclusion within existing multilateral frameworks or technical forms of capacity building, activism must attend to the ways in which financial logics discipline local political agendas and naturalise austerity, precarity and inequality as inevitable features of urban life.

In terms of debt justice, and as Fernandez and Aalbers have shown, the financialisation of the city is not merely a Northern phenomenon; it is increasingly entrenched in cities across the Global South, often through complex mechanisms such as sub-sovereign bonds, public-private partnerships and financial derivatives (Fernandez and Aalbers Reference Fernandez and Aalbers2020). These instruments not only extend debt relations across municipal systems, but also render local governance subject to transnational metrics of creditworthiness, bankability and fiscal discipline. Concretely, this means that what gets planned, financed and built is shaped not by public need, but by the imperatives of asset valuation and investor confidence.

In a similar vein, Halbert and Attuyer have observed how this new era of urban production is marked by the rise of financial intermediaries whose calculative logics and revenue-generating practices have come to dominate the planning and management of urban infrastructure (Halbert and Attuyer Reference Halbert and Attuyer2016). These logics, often cloaked in technocratic rationality, obscure the profoundly political nature of decisions around what and who gets financed. This renders questions of distribution and accountability secondary to portfolio performance and risk management. The growing role of rating agencies and private consultancies in assessing municipal fiscal health is particularly telling, as we have discussed above. As Guironnet et al. note, such actors mediate the circulation of capital by framing urban space as a financial product, turning cities into nodes of capital accumulation rather than spaces of democratic life (Guironnet et al. Reference Guironnet, Attuyer and Halbert2016).

Confronting this dynamic requires, at the very least, a reclaiming of urban fiscal space. As documented by Theurillat, Vera-Büchel and Crevoisier, different cities negotiate financialisation differently, resulting in what they term the ‘negotiated city’, the ‘entrepreneurial city’ and the ‘financialised city’ (Theurillat et al. Reference Theurillat, Vera-Büchel and Crevoisier2016). Across all three, the underlying issue remains the need to re-anchor capital flows in local priorities and values. This implies both resisting weak forms of capital anchoring, which disembed finance from place-based accountability, and proposing alternatives that allow for democratic allocation of resources within urban spaces. This disembedding replicates at the local level a long history of a similar phenomenon across the national level in the Global South (Eslava forthcoming).

This is where the notion of ‘debt justice’ as such becomes critical. As we have argued elsewhere, the disciplining power of debt is not a side effect but a central feature of the international development project (Eslava et al. Reference Eslava, Murphy, Pahuja, Buchanan, Eslava and Pahuja2023). For cities – particularly those in the Global South which are often under pressure to find new sources of income to cover growing social needs – debt is a mode of subordination that constrains policy space and fixes hierarchies in place (Bahl et al. Reference Bahl, Linn and Wetzel2013; Bahl and Linn Reference Bahl and Linn2014). Debt not only imposes austerity but also naturalises a developmental trajectory where indebtedness becomes both the condition and consequence of urbanisation. It fosters a future that is already mortgaged, reducing the political horizon of urban inhabitants to the narrow parameters of repayment and compliance.

Subnational debt is particularly insidious given the colonial origins of much of national debt across the Global South. As the international campaigning organisation Debt Justice argued in its 2023 report, The Colonial Roots of Global South Debt: A Tale of Plunder, Exploitation and Resistance, ‘debt has increased vulnerability, marginalisation and exploitation, forcing communities to live under increasingly precarious conditions’ (Debt Justice 2023, p. 7). It has drained, at the same time, resources away from ‘vital public services, while economic reforms have further cut public spending, wages, job opportunities and working conditions, disproportionately harming marginalised communities’ (ibid.). This is particularly prescient as developing countries’ external debt reached $11.4 trillion in 2023 – equivalent to 99 per cent of their export earnings – with interest payments surging 26 per cent since 2021 (UNCTAD 2025).

Urban legal architectures and these debt-related concerns go hand in hand. In the Latin American context, Pérez has powerfully illustrated, for example, how legal frameworks governing urban planning are themselves dense, layered and opaque – not simply because of bureaucratic incompetence, but because such opacity enables strategic manoeuvring by private and public elites (Pérez Reference Pérez2016). Paying attention to the concept of ‘juridical archaeology’, Pérez describes how officials and consultants, who themselves use that concept, navigate Bogotá’s intricate legal topographies so that certain urban outcomes are privileged under the guise of technical expertise or excused by legal incoherence. This strategic affirmation of legal complexity compounds the reification of financial expertise in global urban governance, where decisions made in the name of neutrality often reinforce existing power structures. The sum effect is to further the enduring consequences of financial and debt disciplines and conditionalities.

Monetary autonomy has also reemerged as a vital frontier for re-imagining economic life in Global South cities. While full sovereign monetary control remains the prerogative of national governments, a diverse range of subnational actors are testing the limits of what can be done with partial autonomy. From Kenya’s Sarafu Credit network and Brazil’s municipally-backed Mumbuca, to the barter-based systems of Argentina’s crisis-era Redes de Trueque, these initiatives point to a revival of historically grounded yet technologically updated forms of local monetary governance (Zeller Reference Zeller2020; Gómez and Helmsing Reference Gómez and Helmsing2008; University of National and World Economy 2022). By creating complementary currencies, city-run banks and co-operative credit systems, local actors are working to recirculate value, direct credit to historically excluded groups and build economic circuits that are at once solidaristic and resilient (Bollier and Conaty Reference Bollier and Conaty2019). These experiments signal more than just technical fixes – they gesture toward a broader politics of financial self-determination and urban developmental sovereignty, under conditions of deepening inequality and planetary precarity.

Yet such efforts are always fraught with constraint. Legal barriers – like those that shut down Thailand’s Bia Kud Chum – expose the limits of local action in the face of central bank monopolies (Heis Reference Heis2018). Sustainability is equally vexed; many community currencies remain small in scale, suffer from limited trust, generate further community tensions or risk co-optation when incorporated into top-down municipal policy (Ahmed Reference Ahmed2018). Still, for example, the Brazilian model of socio-municipal currencies, anchored in local welfare programmes and backed by public digital infrastructure, shows that municipal governments, in alliance with grass-roots financial institutions, can forge durable architectures of local monetary governance (de Oliveira et al. Reference de Oliveira, Sanches and Gonzalez2022). These efforts offer an invitation to rethink money not as a neutral medium, but as a terrain of struggle – one that, in the absence of national redistribution, may increasingly be fought from the ground up. In this sense, these monetary experiments resonate with Holston’s notion of insurgent citizenship, in that they contest the legitimacy of existing institutional arrangements and propose alternative modes of belonging, allocation and accountability (Holston Reference Holston2008).

It is for these reasons that urban activism must continue pressing for institutional reform. This institutional reform-focused activism should target the need to reforming budgetary processes and expanding participation in planning, as well as restructuring the underlying legal and administrative architectures that render municipalities as risk-bearers in global markets. As we have seen, urban financialisation proceeds through complex mediations – rating agencies, consultants, data regimes and contractual technologies – that must be exposed and contested (Halbert and Attuyer Reference Halbert and Attuyer2016). These actors and instruments translate political choices into financial metrics, thereby re-shaping the field of urban possibility.

In doing so, urban movements must not only seek inclusion within the frameworks of international law but aim to reconfigure its very foundations. As international law has, broadly, co-evolved with the modern state, it has operated as both a disciplining and enabling force – making peripheral political imaginaries legible only when they conform to hegemonic visions of order, development and legality (Eslava and Pahuja Reference Eslava and Pahuja2020). The city, situated within this dynamic, is far from a passive site; it is both an object of international legal intervention and an active agent in reproducing, contesting and potentially transforming global governance. As we have discussed in this article, cities have become key testing grounds for the internationalisation of legal and development norms, where urban law, infrastructure and daily administrative practices work to consolidate international prescriptions through local apparatuses.

Urban governance has increasingly internalised international mandates – from the imperatives of decentralisation to the performative requirements of being bankable and sustainable – thus transforming cities into scaled-down theatres of global normativity. Yet, within this condition lies the possibility of rupture. The task ahead is to reclaim legal subjectivity not through the dichotomy of sovereignty and subordination, but by tracing the dense, everyday entanglements where law, space and resistance intersect. This means engaging with the city not as a bounded jurisdictional site but as a contested terrain where international law is materialised, resisted and re-imagined. To act within and against the financialised scripts that govern urban legality is to insist on the political agency of cities and their inhabitants – not as residual categories of the state or the international, but as generative spaces of alternative world-making.

Goldstein’s work on La Paz offers a compelling ethnographic account of how everyday urban governance has become entangled with security logics, disciplinary performances and mediated spectacles of order – mobilised less in response to actual demands for safety than to anxieties about disorder and otherness (Goldstein Reference Goldstein2004). This shift marks the displacement of democratic engagement by affective economies of fear and containment, where marginalised communities are rendered hyper-visible as threats. These dynamics are similar to those seminally explored by Caldeira in her analysis of ‘fortified enclaves’, which reproduce inequality through spatial insulation in the urban Global South (Caldeira Reference Caldeira1996, Caldeira, Reference Caldeira2000). Yet these transformations and agonies do not entirely eclipse the city’s radical horizon. On the contrary, the intensification of securitised governance has often catalysed counter-movements, particularly from those most exposed to its violence. Women, racialised communities and youth have been at the forefront of neighbourhood organisations, mutual aid networks and insurgent urban practices that challenge the logics of fear with solidarities of care. These actors reclaim the city not merely as a site of governance, but as a terrain of collective struggle and political imagination – what Miraftab has called ‘insurgent planning’, where alternative urban futures are actively rehearsed (Miraftab Reference Miraftab2009). Far from being pacified by securitisation, the urban margins continue to generate transformative potential, refusing the foreclosure of the political and insisting on the right to shape the city otherwise.

In sum, to meet the challenges of our time, urban activism must evolve beyond the frame of service delivery and spatial inclusion. It must become a movement for debt and monetary justice, for institutional transformation and for the reclamation of the urban as a site of political possibility beyond the dictates of capital. This is not simply a matter of better or deeper governance. It is a matter of re-constituting the terms under which cities exist, act and imagine themselves in a global order that continues to marginalise them juridically, financially and politically.

5 Conclusion: reorienting the urban question

We have explored in this article how the contemporary condition of the city, especially within international legal and financial architectures, cannot be understood outside the histories of capitalism, empire and development that animate our present. Rather than reiterating the analytic claims made in previous sections, we conclude by offering a recalibration – a conceptual reorientation of the urban question that avoids the temptations of technocratic closure and invites, instead, a speculative politics of the city.

To begin, we must acknowledge the intensity and the interconnectedness of the global order in which cities are now embedded. This order is not an abstraction operating ‘above’ or ‘outside’ local space (Eslava Reference Eslava2015). It is a dense field of struggle – material, even spectral, often contradictory – in which cities and citizens are simultaneously operationalised as instruments of global governance and sites of situated resistance (Eslava Reference Eslava and Philippopoulos-Mihalopoulos2018). As Quinn Slobodian has also reminded us in his account of ‘crack-up capitalism’, this order is increasingly sustained through the proliferation of zones and enclaves designed to preserve market freedoms while insulating them from democratic demands (Slobodian Reference Slobodian2023). This fractured geography of ‘suitably regulated’ exceptionality, as we have suggested here, reaffirms – rather than dissolves – the structural hierarchies that bind cities, particularly in the Global South, to circuits of dependency and control. The urban, in this sense, is not simply an administrative level. It is a modality of world-making and living: juridically saturated, economically disciplined and affectively mobilised.

What then becomes of urban politics under these conditions? The answer lies not necessarily in perfecting the city’s global performance – its index scores, its resilience frameworks, its investment-readiness – but in displacing these coordinates somehow. It lies in surfacing, highlighting, evidencing, as much as possible, the many forms of urban inhabitation, refusal and negotiation that remain illegible to dominant evaluative regimes or straightforward calls for inclusion into urban development projects or initiatives. As Di Nunzio reminds us, marginality is not merely a location at the edge, but a mode of incorporation that defines the limits of what the urban citizens in need can legitimately expect (Di Nunzio Reference di Nunzio2017). This is a lesson about the violence of inclusion, and about the need to rethink entitlement not as a benevolent offering, but as a terrain of contestation.

In this regard, the work of monetary re-imagination becomes critical. As Guyer and Maurer have long noted, money and associated regimes of valuation, like Gross Domestic Product, are never just about a medium of exchange or accounting (Guyer Reference Guyer2014; Maurer Reference Maurer2006). They are part and parcel of a structure of perception – a grammar through which the possible is coded, policed and sometimes expanded. Cities that experiment with alternative currencies, public banking and co-operative finance, as well as with alternative modes of self-presentation, are not just testing economic or development models. They are performing a different political ontology: one in which value is defined by care, community and collective survival, not by price.

Likewise, any attempt to renew the city’s institutional form must begin with a confrontation of its legal architecture – not as a static apparatus, but as a technique of indirect rule (Eslava Reference Eslava2015). As we have shown in other contexts, contemporary international law remains deeply invested in colonial arrangements of visibility and control. Cities that seek to assert themselves globally must do so with an awareness of how the terms of their participation are, more often than not, scripted in advance; more often than not, through logics that appear emancipatory but that ultimately reinforce subordination (Eslava and Hill Reference Eslava, Hill, Aust and Nijman2021).

We end, then, not with a programme but with an orientation. A call to think of the city not only in relation to its built environment, service infrastructure or governance tools, but as a site where law, capital and imagination collide. This is a call to stay with the urban as a problem-space – to treat it as a speculative, borderline platform for rethinking what law is, what money does and what political life might still become.