Cities As Corporations? The Privatization of Cities and the Automation of Local Law

Editor’s Note: See also Machines as BureaucratsPreparing for Cyberdelegation and Its RisksThe Surprising Use of Automation by Regulatory Agencies and Deciding Whether Software Will Eat the Bureaucracy, all by Justice Mariano-Florentino Cuéllar, Supreme Court of California.

From: Oxford Business Law Blog via Admin Law log

SOFIA RANCHORDÁS

Cities throughout the world are becoming smarter thanks to AI, big data, Internet of Things (‘IoT’), and, more recently, blockchain.[1] Smart cities automate administrative decision-making with algorithms that decide, for instance, on building permits or social welfare applications.[2] Sensors spread throughout cities manage traffic congestion, cameras and algorithms control large crowds and try to detect suspicious actions.[3] As always, smart and innovative initiatives that result in a more efficient management of resources are highly appreciated. The smarter, the better. However, thus far scholars have overlooked an important element in this equation: private actors are often behind these innovative technologies and projects. Public-private partnerships or large technology companies develop smart solutions, assist civil servants with the collection and processing of data, shape the data analysis process, and, sometimes, fund new digital projects. [4] Nevertheless, the growing outsourcing of public services and the reliance on technology provided and controlled by private parties are currently in effect converting citizens into clients, cities into hybrid corporations, and private companies into their managers.[5]

In this article, I discuss the privatization of cities in the context of data-driven regulation and governance—that is, regulations and policies that draw directly or indirectly on big data and predictive analytics, including different types of AI, algorithms and cloud computing.[6]  I address three central issues raised by the implementation of disruptive technology in smart cities: first, the misalignment of interests between private actors behind smart technology and the public values that cities ought to protect; second, the privatization of citizenship; and third, the risks of employing private data-driven technology to nudge citizens.[7]

  1. Cities and Technology

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