In today’s cities, councillors see themselves increasingly confronted with new forms of political steering focusing more on interaction than on hierarchical decision making and blurring the lines between the public and private spheres. By embedding the concept of governance in a new institutionalist framework, the article investigates the implications of new models of urban governance on the identity, the notion of democracy, the perceptions, and the role behavior of city councillors. It tests two rival hypotheses—an optimistic versus a pessimistic perspective on governance and democracy—and thereby draws on multilevel analyses of a comprehensive survey of all city councillors in Switzerland.