The Paul Cadario interview: sustainability, innovation, place, and technology

To meet the UN’s 2030 Sustainable Development Goals, society must adopt bold new models, mindsets and ways of working that allow us to innovate at speed without causing harm to people and the planet.

Paul Cadario is the University of Toronto’s Distinguished Fellow in Global Innovation at the Munk School of Global Affairs & Public Policy and the Faculty of Applied Science & Engineering. During his 37 years at World Bank, Paul played a key role in strengthening governance, accountability and trust with the Bank, particularly in the management of large-scale funding and donor relationships. He began his academic career in civil engineering at the University of Toronto, where he pursued studies in environmental, urban and transport subjects. Paul has worked with Inuit communities in the far north of Canada, gaining valuable on-the-ground experience, and has been a Rhodes Scholar at the University of Oxford.

In the latest of our Sustainable Futures Expert Interview series, Paul discusses what makes cities work, the importance of transparent decision-making and why digital technologies are adding another layer of complexity to city systems.

What does a well-functioning city look like?

I’d be cautious about pointing to any one city or region as a model, because cities are far more complicated than people often assume. From my time at the World Bank, we were always operating in slightly uncertain territory when working with cities, because it’s very difficult for an external organisation to fully understand how they actually function. You’re not just dealing with a single authority, you’ve got councils, districts, different layers of government, citizen groups, and all sorts of competing pressures on decision-makers.

One of the things I saw repeatedly was a gap between what was agreed at the top and what happened on the ground. The World Bank might have an agreement with a ministry or a senior official, but the people responsible for implementing those decisions at a local level either didn’t know about them or weren’t in a position to act. That coordination challenge exists at national level, but it’s even more pronounced in cities, where responsibilities are more fragmented.

Then there’s the political reality. A mayor, for example, doesn’t have absolute control. They’re constrained by council, higher levels of government, and the broader political environment. Even when there’s a good idea, getting it through all those layers, and keeping it intact, is no small task. At the same time, you have citizen participation, which is absolutely essential, particularly in democratic contexts, but it does add another layer of complexity. People quite rightly expect to be heard, and that shapes how decisions are made and how quickly things can move.

For me, it’s more about recognising what makes systems work: capable institutions, good civil servants, and strong relationships between different parts of government and the public. The cities that function well tend to be the ones that can manage those relationships effectively, be open, stay coordinated, and adapt to their particular circumstances rather than trying to follow a blueprint.

Urban policy is often shaped by short-term political cycles. What are the limitations of short-term thinking?

Cities need a broad, shared vision of what they are trying to become over the next 10, 20 and 40 years. The difficulty is that political cycles and day-to-day pressures tend to crowd that out. Elected officials are understandably focused on immediate concerns – snow removal, waste collection, potholes – because that’s what citizens experience most directly. But without a longer-term framework, it’s very hard to make coherent decisions.

That long-term thinking has to sit on a strong technical foundation within the city. You can’t treat things like transport, density, utilities and land use in isolation, they all have to be planned together. If you increase density, for example, you need to know whether there is sufficient water, energy and transport capacity to support it. Without that kind of integrated planning, even sensible ideas won’t be deliverable.

Financing is another critical constraint. Cities often have limited powers to raise revenue or borrow, and they depend heavily on higher levels of government. That makes long-term investment difficult, particularly when funding arrangements can shift with political priorities. At the same time, raising taxes is politically sensitive, especially if citizens feel they are not receiving adequate services at present.

And of course, there’s the challenge of public acceptance and local politics. Even well-founded, long-term improvements, such as increasing density around transport hubs, can face strong local resistance. Cities therefore need design and governance approaches that can balance immediate concerns with long-term goals, align incentives across different stakeholder groups, and engage citizens constructively in shaping change over time. No city can just be frozen.

You’ve worked extensively on transparency and accountability. Why is this so important when working with cities?

Transparency and accountability are fundamental, but they work best when they are embedded into how cities already operate. In Western democratic contexts, there is often an established way of doing business, where decision-makers understand who needs to be involved, how to build consensus, and how to navigate institutional processes.

A key part of this is having informed and engaged citizens – without overwhelming them with information. Good governance depends not just on formal structures, but on people who understand what is happening and can hold decision-makers to account. When citizens are informed and when governments actively listen to them, you tend to get better, more legitimate outcomes.

However, there can be an imbalance in how public voices are expressed. Those who oppose change are often more organised and effective at stopping developments, while those in favour of positive change are less coordinated. This can slow or block necessary urban improvements, even when they align with long-term sustainability goals.

Ultimately, I’ve found that transparency and accountability help to build trust, improve decision-making and ensure that urban development reflects both public interest and practical realities. But they require active and honest participation throughout the process, not just formal mechanisms.

The best way to improve any level of government is to engage informed citizens – without overwhelming them with information. What matters is that decision-makers understand who to consult before taking actions that affect communities directly, or that may set precedents for other neighbourhoods, wards, or districts.

When approaching sustainable urban development, how do you balance the needs and expectations of different stakeholders?

You’ve got to establish a good working relationship so that you can anticipate what the public might like and also move swiftly when something is not going well. This is particularly important with all the construction that goes on in cities; the public’s acceptance of why we need to build infrastructure for the future may be limited, particularly if it needs to be built where they live and may disrupt their lives. 

Then when it comes to the development, you have to make sure that what you’re going to build will generate enough revenue to pay for the services that are needed to make that neighbourhood or area successful. This only works when everything is integrated, such as with density. If you don’t, no developer is going to touch it. You have to provide the incentives for the developer and you have to think holistically.

When I was at World Bank, we would work with other potential funding sources right from the beginning to ensure everyone understood clearly what the project will and won’t do. That avoided situations where someone would arrive in Brussels to report on what was happening in Paris, only for a development partner to respond, ‘Oh, is that what’s supposed to be happening?’ There was often a lot of turnover among co-financing partners too, so questions would arise such as, ‘Did we actually agree to this?’ 

At the time, we had cross-effectiveness and cross-default clauses. So if the Bank withdrew from a project, other development partners would usually conclude that it was too risky to continue on their own. In that sense, working with the World Bank was considered a positive thing because the Bank was expected to ‘do the needful’ – to provide oversight, supervision, and credibility. 

Having overseen large-scale global funding mechanisms, what are the main financial, governance and social challenges in achieving sustainable urban development?

The starting point is clarity about who pays for what across different levels of government. Without that, it’s very difficult to plan or finance urban development effectively. Cities rely heavily on transfers and constraints from higher levels of government, which can limit their ability to invest in long-term, sustainable infrastructure.

A second challenge is prioritisation, deciding which areas of a city receive investment, particularly when upgrades are disruptive and the benefits may not be immediate or felt by residents. Public acceptance is often limited when people are asked to tolerate short-term inconvenience for long-term gain, especially if they feel their current needs are already being met.

There is also a broader issue of resistance to change. Sustainable urban development often requires increasing density, upgrading infrastructure and reshaping neighbourhoods, but this can be slowed by local opposition and lengthy approval processes. Cities cannot remain static; they need to evolve, but that requires political will, public engagement and patience.

In that context, there’s no substitute for getting the fundamentals right: clear governance, aligned incentives, and the capacity to make and implement long-term decisions. That said, there has been growing momentum around impact investing since my time at the World Bank, particularly approaches that seek to mobilise private capital for public good outcomes, including sustainable urban development. The Bank and its affiliates, such as the International Finance Corporation (IFC), have increasingly focused on blended finance models, using public funds to de-risk investments and attract private investors into areas like affordable housing, infrastructure and climate resilience. 

These approaches aim to prioritise both financial returns and measurable social and environmental impact. They are promising, but their effectiveness still depends on strong local governance, clear project design and the ability to ensure that equity and long-term public value are not secondary to financial considerations.

Digital technologies are rapidly changing the way we experience cities. What are the risks if we do not innovate with care?

The inherent complexity of cities is further intensified by the proliferation of digital technologies embedded across urban environments and adopted by local governments, businesses, elected officials, citizens and other stakeholders. Sidewalk Toronto here in Canada is a prime example of how quickly things can go wrong. The initiative, led by Google’s Sidewalk Labs, was initially positioned as a pioneering model for intelligent and sustainable urban design. However, after approximately three years, in 2020 it stopped.

One of the key issues was public concern about governance and control. Many Torontonians were uncomfortable with Google playing such a central role in shaping the city’s infrastructure and data ecosystems. There was a clear preference for democratically elected institutions and officials to retain oversight and act as the coordinating authority for urban innovation in the city.

For other democratically elected Western nations, this case highlights several important lessons. First, technological innovation in cities should be underpinned by strong, transparent and accountable governance structures. Second, public trust is critical. Citizens need to be confident about how their data is managed, know who holds power and how their interests are being served. Finally, innovation should not be driven solely by technological capability, but aligned with civic values, public benefit, and democratic legitimacy.

In 2026, the rapid emergence of generative AI introduces a new layer of complexity for city ecosystems. Many of the concerns raised by Sidewalk Toronto are equally, if not more, pertinent in this context. Cities will need to carefully consider a raft of issues such as who is developing and deploying these systems, how data is sourced and governed, what accountability mechanisms are in place when generative AI is used in decision-making or service delivery, and much more. 

There is also a risk of over-reliance on opaque, proprietary models that may not align with public values or democratic oversight. As such, I feel that the adoption of the latest advanced AI in cities should be approached in an informed way, ensuring all systems support civic goals and remain subject to robust public scrutiny and institutional control.

Looking ahead, what capabilities or mindsets do you believe future urban leaders will need to navigate uncertainty and deliver resilient, sustainable cities?

The first thing future urban leaders need is a strong grounding in financial realism. Any development they’re planning has to generate sufficient revenue through property taxes, sales taxes or other mechanisms, to pay for the services and infrastructure that make a place work. That includes understanding when borrowing is appropriate, and ensuring there is a credible long-term plan to repay those investments.

They also need to think in longer time horizons. Urban development is not just about what a neighbourhood looks like when a project is completed, but how it performs decades down the line. That requires a mindset that balances immediate disruption with long-term value, recognising that well-designed infrastructure and development will ultimately improve quality of life, even if the benefits are not immediate.

Another critical capability is systems thinking: understanding how transport, housing, utilities and services all fit together. Leaders need to anticipate these interdependencies and plan accordingly, rather than treating each element in isolation.

Finally, whilst we are living in truly uncertain times, there is a need for some predictability and coordination. Developers, investors and communities all need confidence in the rules of the system, be they zoning, taxation, infrastructure planning and so on, so that decisions can be made and implemented effectively. This also requires better integration across institutions, ensuring that different parts of the system such as transport agencies, utilities and planning departments, are aligned in delivering sustainable, resilient urban outcomes.

 

Thank you Paul for your sharing your extensive experience, practical approaches and insights into delivering positive impacts through urban development.

 

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