A MODEL OF SUSTAINABLE URBAN DEVELOPMENT FORMATION

1. INTRODUCTION

Sustainable urban development has various approaches and different priorities in different countries. It is not surprising that there are widely divergent views and interpretations the various countries, with marked differences between countries that have a developed market economies, those with transition economies and in developing countries. Not all countries with one of theses three development levels, understands sustainable urban development in the same way and so have different strategies.

For example, developing countries have other environmental systems than most developed countries. Climatic circumstances and geographic conditions have a distinct impact on the features of ecosystems. Many developing countries possess highly diversified but fragile ecosystems. Moreover, developing countries are still predominantly rural, whereas the developed world is largely urbanized. Socio-economic systems in developing countries also differ from those in developed countries. Successful strategies for sustainable urban development should be more-or-less compatible with political, economic, social, cultural, institutional, technological, environmental, legal/ regulatory and educational situations in the country under consideration. A varied spectrum of strategies can be launched, while keeping in mind that the mix of influencing factors and the relative emphasis is on one or other of the factors and overall will depend on local conditions.

The best sustainable urban development strategy of another country cannot just be copied. Strategies may only be adapted into a real economic, social, political, legislation/regulation and the provisional situation of the existing state. There is no such thing as a single sustainable urban development strategy to suit all societies that could be applied to all countries.

The model of sustainable urban development formation suggested by this research is based on the presumption that the efficiency of sustainable urban development depends on many micro, meso and macro-level variables. The presence of specific micro, meso and macro-level variable factors immediately imposes objective limitations for efficient sustainable urban development. Sustainable urban development, in the presence of these objective limitations, tries to perform its functions within their bounds with the utmost efficiency. This research aims at producing a model of the sustainable urban development formation by undertaking a complex analysis of micro, meso and macro environment factors affecting it and to present recommendations on the increase of its competitive ability.

2. IMPACT OF MICRO, MESO AND MACRO ENVIRONMENT ON SUSTAINABLE URBAN DEVELOPMENT

Micro, meso and macro environments have a direct impact on sustainable urban development opportunities. This may facilitate sustainable urban development or, on the contrary, it may create constraints. Until recently, researchers were unable to reach a unanimous conclusion as to the structure of factors of micro, meso and macro environments and therefore several variations can be found in articles and books on this subject.

Microeconomics deals with individuals and firms that are profitable in a market of scarcity. Further, it explains how the actions of all buyers and sellers determine prices and how prices influence the decisions and actions of individual buyers and sellers (Perloff, 2001). The microenvironment (households, firms, projects, labor skill's level, sources of finance, types of contracts, equipment, etc.) has a direct impact on sustainable urban development. Microenvironment is an aggregate of external forces. While trying to achieve its goals a city may influence these forces and vice versa and these forces may have an impact on the city.

Mesoeconomics is the intermediate level (in Greek, meso means "median") between the microeconomic one and the macroeconomic one (Holland, 1987). The mesoeconomic approach may be considered as a supplement and not a replacement to the traditional analysis of micro- and macro-economics (Preston, 1984). Mesoeconomics deal with entire sector economies and puts a focus on industrial structures in developed economies as well as the political dimensions of economic development and its policy formation (Preston, 1984). The efficiency of sustainable urban development depends on the following meso variable factors:

* Urban regulations,

* Urban size,

* Urban infrastructure,

* Urban landscape,

* Urban regeneration,

* Quality of the urban environment,

* Affordable and qualified housing,

* Housing needs,

* Inhabitants attitudes,

* Energy use,

* Land use,

* Social inclusion,

* Natural heritage resources,

* Built heritage resources,

* Viable city,

* City institutional structure, etc.

For example, according to Carassus (1999), construction's mesosystem is mediated by a large number of institutional regulations. These regulations may concern the structures (building permits, construction codes, product and service certification), the firms (firms standards, labor management, prices) and the firm's environment (procurement methods, funding, tax, R&D support, education and training). These are defined and applied by a complex system of public institutions (international, national, regional, local) and private institutions (industrial, unions, consumer organizations).

Macroeconomics operates at a national economy level and deals with relations between average prices, employment, income, production, and the effects of taxes, government spending and budget etc. (Parkin, 2000).

The macro environment has an indirect effect on sustainable urban development. Macro environmental research is conducted in order to prepare an urban strategy and select urban strategy implementation measures. Such research makes it possible to determine the possibilities and shortcomings of sustainable urban development. This also makes it possible to see the positive aspects and the things that need to be changed in order to achieve better results. The success of sustainable urban development is directly linked to the level of the realization of goals of urban residents and enterprises.

The level of efficiency and the scope of activities of the sustainable urban development depend on the following macro-level variable factors:

* Employment,

* Income,

* Taxes,

* Interest rates,

* Inflation,

* The unofficial economy,

* Economic development,

* Economic prosperity,

* Globalization,

* Demographic changes,

* Education,

* Climate changes,

* Politics,

* The social sphere,

* Culture,

* Environmental issues,

* Poverty,

* Legislation,

* Demand and supply,

* The government's intervention,

* Etc.

The following short analysis illustrates how several macro environmental (economic, political and legal, technological, social-cultural and natural environment) factors influence sustainable urban development.

When analyzing the influence of economic environment on sustainable urban development (SUD) several patterns and trends may be singled out. The purchasing power and, consequently, demand is to a large extent determined by economic conditions, first of all by the level of income and savings of natural and legal persons, the level of prices, and the lending conditions. The main indicators illustrating the economic development are the cyclic nature of economic development, inflation and unemployment. They cause changes to other indicators, i.e. the increase or decrease in the level of GDP, buyers' income, level of accumulation, price of goods and the availability of credit facilities, etc. Inflation is a very important economic phenomenon and is characterized by an increase in the price level and a decrease in the purchasing power. Some researchers emphasize the importance of investment environment that is best described by the level of interest rates. Sometimes, unfavorable economic characteristics make it impossible to carry out successful SUD activities or necessitate an introduction of changes related to the sphere of activities.

The political and legal SUD environments consist of a legal basis of a city, the city's administrators and interested groups that influence and restrict the activities of various organizations and persons. Governmental and management institutions may issue legal acts creating more favorable conditions for certain types of enterprises or persons, encouraging investments or prohibiting or restricting certain activities. The government, by way of tax and social security systems, decides how to distribute national revenues and its assets. The government may influence the level of corporate expenditures by introducing indirect taxes (thereby causing a decrease in demand) and by granting subsidies (thereby causing a decrease in supply). It is up to the state to decide which branch of the industry will be encouraged or restricted by adopting the above-mentioned measures. The city's government may also introduce various measures encouraging or restricting foreign investment. Such measures may be introduced in the form of rights and guarantees that are provided for foreign investors and local tax systems.

The level of technology shows the potential of the city's market, the level of infrastructure development and the degree of urbanization. The level of technological development determines the qualification of personnel and a users' view on science and innovations. Technological environment is probably the most important factor that forms the future of cities. Huge investments are needed in order to carry out scientific research and create new technologies.

Urban social and cultural environment means institutions and other factors that help to form and perceive the main social values, views and behavioral norms. Human personality matures in a certain society and that determines his or her main values and beliefs. A later outlook on the life of a human being's influence his or her relations with other people. Cultural peculiarities influence the adoption of business decisions. Each society has its own set of values and beliefs. Most of these values and beliefs are strongly rooted in each person and these values influence our behavior and views in everyday life.

The natural environment (climatic conditions, natural resources, environment protection) also has an impact on the SUD. Many cities of the world suffer from a high level of air pollution and in some countries the shortage of water has become a major problem. Forests and other renewable resources are not used in a rational way in some part of the world. The level of air and water pollution in many cities of the world has reached dangerous levels. Also, the world is concerned about the depletion of the ozone layer and by the greenhouse effect, i.e. dangerous climate warming caused by the ozone hole. Many enterprises in transition countries, especially those that generate huge amounts of production waste, complain that it is too expensive for them to meet their obligations with regard to ecological requirements and to introduce new, environmentally friendly production technologies. Other enterprises address a public concern over environmental problems and have started to produce environmentally friendly products, have started using recyclable or biodegradable materials for their packaging and have modernized treatment facilities and introduced energy saving measures. However, at the time when some cities take decisive steps in order to protect their environment, other cities (usually the poorer ones) hardly do anything to solve these problems. The reason for this is usually a shortage of funds or the absence of political will.

3. STAKEHOLDERS AND THE EFFICIENCY OF ALTERNATIVES

It has been found that the more alternative versions that are investigated before making a final decision, then the greater the possibility to achieve a more rational end result. It is further possible to form many various SUD alternatives such as the following:

* Alternatives for social cohesion (ecologically sound, economically efficient and socially cohesive settlements, caring society, no poverty);

* Alternatives for the quality of life (more comfort, time, money; happy people, more pleasure, less work, reconstruction of settlement structure, revitalization of street spaces, confidence);

* Alternatives for the environment (a peaceful, cultural society; safe, pollution free, green environment; surroundings, public transport);

* Alternatives for the economy (full employment, innovative);

* Alternatives for the knowledge society (user driven integrated tools, equal access, e-democratization);

* Alternatives for decision-making (cooperation between authorities, access to information, participation, assessment tools);

* Alternatives of safety/security, etc.

The diversity of available solutions contributes to a more accurate evaluation of political, economic, social, cultural, institutional, technological, environmental, legal/regulatory, education and other perspectives, as well as making the sustainable urban development process cheaper. This also leads to a better satisfaction of the needs of all the involved parties in the sustainable urban development process.

Stakeholders' decisions (urban planners, city administrators, elected representatives, architects, public or corporate owners of flats, etc.) can increase or decrease the efficiency of SUD alternatives. Therefore, the developed sustainable urban development model should integrate multiple points of view and make possible the collaboration of the different stakeholders that are involved in this process.

One of the main tasks of the efficient implementation of sustainable urban development is multiple criteria optimization of its life-cycle process with the aim to maximum the purpose satisfaction of all interested parties involved in the process. The interested parties and their aspired goals make up one entity. However, there are some potential conflicts among the interested parties: e.g. speed versus waste, cost versus quality, present capital cost versus the after operational efficiency, aesthetics and comfort versus cost and environment versus user needs, etc. It has been found that the greater the scope of the realization of the pursued goals (taking into account their significance) the greater (in the opinion of interested parties) the total efficiency of the sustainable urban development. In other words, the total efficiency of sustainable urban development is directly proportional to the entity of its realized goals.

The problem is how to define an efficient sustainable urban development process when many various parties are involved and because the alternative versions are in the thousands and the efficiency changes with alterations to the micro, meso and macro- environment conditions and the constituent parts of the process. Moreover, the realization of some objectives seems more rational from the economic perspective though from other perspectives (i.e. technological, comfort, space, administrative, technical, etc.) they have various different significances. Therefore, it is considered that the efficiency of a sustainable urban development process depends on the rationality of its stages as well as on the ability to satisfy the needs of the interested parties and the rational character of micro, meso and macro-level environments' conditions.

4. DECISION MAKING IN SUSTAINABLE URBAN DEVELOPMENT

A thorough sustainable urban development evaluation is quite difficult to undertake, because a city and its environment are complex systems (compatible with political, economic, social, cultural, institutional, technological, environmental, legal/regulatory, education situation, etc.) where all sub-systems influence the total efficiency of performance and where the interdependence between sub-systems play a significant role.

Many decision making models and methods (multicriteria (Nijkamp and Vreeker, 2000), a cost-benefit appraisal (Gallez, 2000), input-output analysis (Ferng, 2002), forecasting, quantitative and qualitative models and methods (Rotmans et al., 2000), etc.) have been used globally for solving different sustainability assessment problems. For example, in Peters' (1981) opinion, microeconomics can be analyzed by using demand, cost and production, market and price, competition and distribution of income theories; mesoeconomics - economic structure and change, regional economics, environmental economics, groups and associations, economic and political theories; macroeconomics - national economic accounts, economic stability and growth, monetary, international trade and macroeconomic distribution theories.

The efficiency of a sustainable urban development variant is often determined by taking into account many different factors. These factors include an account of the political, economic, social, cultural, institutional, technological, environmental, legal/regulatory, education situation in country and other factors. The models should enable a decision-maker to do a comprehensive analysis of the available variants and to make a proper choice. In order effectively analyze alternatives of sustainable urban development and to prepare recommendations for cities under consideration, it is essential to find the best research methods and analysis tools. In this model, the aim was to direct the research methods and analysis tools (Multiple Criteria Analysis, Life Cycle Analysis, etc.) for assessing and implementing the goals of sustainable urban development.

5. MODEL FOR SUSTAINABLE URBAN DEVELOPMENT FORMATION

The level of efficiency and the scope of the activities in the sustainable urban development (SUD) depend on the many micro, meso and macro-level variable factors and all these variable factors can be optimized. The main objective of this model is to analyze the best experience in the field of SUD, to compare it to the present situation in a particular city and consequently to present particular recommendations.

This research included the following six stages.

Stage I. Identification and description of the sustainable urban development in developed countries and particular city:

* Determining a system of criteria characterizing the efficiency of sustainable urban development;

* Giving (based on a system of criteria) a description of the present state of sustainable urban development of developed countries and particular city in conceptual (textual, graphical, numerical, etc.) and quantitative forms.

Stage II. Execution an efficient analysis of the gathered information and determination the best decisions of sustainable development in particular city using a multiple criteria decision making methods developed by authors (Zavadskas et al, 1994, 1999; Zavadskas and Kaklauskas, 2000; Kaklauskas, 1996):

Stage III. A comparison of the sustainable urban development in developed countries and particular city:

* Identifying the global development trends (general regularities) of the sustainable urban development (see Appendix 1);

* Identifying sustainable urban development differences between developed countries and particular city;

* Determining pluses and minuses of these differences for particular city today and in the future;

* Determining the best practice for sustainable urban development for particular city as based on the actual conditions.

Stage IV. A multiple criteria analysis of the sustainable urban development's components and selection the most efficient versions. Incorporation the received compatible and rational components of a sustainable urban development into the full sustainable urban development process.

Stage V. Development of some general recommendations as how to improve the efficiency level of sustainability for particular city.

6. CONCLUSIONS

Model for sustainable urban development formation developed at Vilnius Gediminas Technical University enables a decision-maker to develop alternatives and to make a comprehensive analysis of the available variants so as to make a proper/best choice.

The more alternative versions that are investigated before making a final decision, the greater the possibility to achieve a more rational end result.

By basing oneself on the collected information it is possible to perform a multiple criteria analysis of the sustainable urban development's components (e.g. by increasing the international competitiveness of city, developing a new economy, creating an advanced society, developing of transportation infrastructure, etc.) and to select the most efficient versions.

Having performed a multiple criteria analysis of the full sustainable urban development process in this way, one can then select the most efficient versions.

A formalized presentation of the research shows how changes in the environment and the extent to which the goals pursued by various interested parties are satisfied, cause corresponding changes in the value and utility degree of the sustainable urban development process. With this in mind, it is possible to solve the problem of optimization concerning the satisfaction of the needs and with reasonable expenditures. This requires an analysis of the sustainable urban development process versions that allow one to find an optimal combination of the pursued goals and the available finances.