Uncertainty Social Capital and Community Governance: The City as a Milieu

In a condition of dynamic uncertainty, the adoption of a cognitive approach in regional science, considering the procedures through which decisions are taken at the micro-individual level, would greatly help throwing new light on territorial processes and phenomena of a macro character. Proximity space and above all the territory of local relations may be interpreted as powerful operators for reducing uncertainty and, through this, as tools for reducing the use costs of the market and the risks associated to future-oriented decision making. In this chapter, this approach is followed in order to give an economic interpretation, and not only a geographical one, to the most important archetype of territorial organisation, namely the city, intended at the same time as a production system and a governance system. Two concepts are utilised: the concept of “innovative milieu”, developed by the GREMI group and the concept of relational capital, similar to the social capital concept developed recently in political science. The thesis of this chapter is that, within the vast category of agglomeration economies which justify the existence of cities, the most interesting elements refer not only to indivisibilities or pecuniary externalities, but to “technological externalities” of a dynamic character and to elements such as synergies, interpersonal and inter-institutional relationships, collective action and shared development visions. All these externalities help actors in coping with an uncertain and globalising context.