How Urban Concentration Affects Economic Growth
The author explores the issue of urban over-concentration econometrically, using data from a panel of 80 to 100 countries every 5 years from 1960 to 1995. He finds the following: 1) At any level of development there is indeed a best degree or natio...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2000/04/437750/urban-concentration-affects-economic-growth http://hdl.handle.net/10986/18840 |
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okr-10986-188402021-04-23T14:03:46Z How Urban Concentration Affects Economic Growth Henderson, Vernon CAPITAL MARKETS CD CITIES CIVIL LIBERTIES COMPETITIVENESS CONSUMERS CONSUMPTION RATES COUNTRY CHARACTERISTICS CRIME DECENTRALIZATION ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC EFFICIENCY ECONOMIC GEOGRAPHY ECONOMIC GROWTH ECONOMIC REFORMS ECONOMIES OF SCALE EQUILIBRIUM EXCHANGE RATE EXTERNALITIES FREE MARKETS GDP GDP PER CAPITA GROWTH RATE GROWTH RATES HUMAN CAPITAL INCOME INCOME GROWTH INCOME LEVEL INCOME LEVELS INDUSTRIALIZATION INEFFICIENCY INEQUALITY INFLATION INFLATION RATES INSTITUTIONAL ARRANGEMENTS INTERNATIONAL AGENCIES LABOR FORCE LABOR MARKETS LAND MARKETS MARGINAL BENEFITS MARGINAL COSTS NATIONAL POLICIES OPTIMIZATION PER CAPITA INCOME POLICY OUTCOMES POLITICAL ECONOMY POLITICAL INSTITUTIONS POPULATION GROWTH POSITIVE EFFECTS PRIVATE COSTS PRODUCERS PURCHASING POWER PURCHASING POWER PARITY SAVINGS SCALE EFFECTS TELECOMMUNICATIONS TRANSACTIONS COSTS URBAN URBAN AREAS URBAN CONCENTRATION URBAN DEVELOPMENT URBAN ECONOMICS URBAN POPULATION URBANIZATION The author explores the issue of urban over-concentration econometrically, using data from a panel of 80 to 100 countries every 5 years from 1960 to 1995. He finds the following: 1) At any level of development there is indeed a best degree or national urban concentration. It increases sharply as income rises, up to a per capita income of about $ 5,000 (Penn World table purchasing parity income), before declining modestly. The best degree of concentration declines with country scale. Growth losses from significantly non-optimal concentration are large. Those losses tend to rise with level of development, peaking at a very high level (about 1.5 annual percentage points of economic growth). Results are very robust. 2) In a group of 72 countries in 1990, roughly 30 have satisfactory urban concentration, 24 have excessive concentration, and 5 to 16 countries have too little. 3) The list of countries with highly excessive concentration includes Argentina, Chile, Costa Rica, and Panama (in Latin America); the Republic of Korea and Thailand (in Asia); Congo (in Africa); and Greece, Ireland, and Portugal (in Europe). Many of these countries have explicitly unitary governments or federal structures have traditionally been severely constrained. 4) The list of countries with too little urban concentration includes Belgium (a small, split country) and special cases such as Czechoslovakia and the former Yugoslavia. 5) Urban concentration declines with national scale. It initially rises with income, the peaks at a per capita income of about $ 3,000, before declining. If the largest city in a country is a port, increased trade leads to increased urban concentration. Otherwise, increased trade leads to deconcentration as markets i the hinterland open up to trade. But trade effects are modest. 5) Similarly, more political decentralization (or increased federalism) only modestly reduces urban concentration. However, interregional transport infrastructure - especially dense road networks - significantly reduce urban concentration, an effect that rises with income. 2014-06-30T18:39:37Z 2014-06-30T18:39:37Z 2000-04 http://documents.worldbank.org/curated/en/2000/04/437750/urban-concentration-affects-economic-growth http://hdl.handle.net/10986/18840 English en_US Policy Research Working Paper;No. 2326 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
CAPITAL MARKETS CD CITIES CIVIL LIBERTIES COMPETITIVENESS CONSUMERS CONSUMPTION RATES COUNTRY CHARACTERISTICS CRIME DECENTRALIZATION ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC EFFICIENCY ECONOMIC GEOGRAPHY ECONOMIC GROWTH ECONOMIC REFORMS ECONOMIES OF SCALE EQUILIBRIUM EXCHANGE RATE EXTERNALITIES FREE MARKETS GDP GDP PER CAPITA GROWTH RATE GROWTH RATES HUMAN CAPITAL INCOME INCOME GROWTH INCOME LEVEL INCOME LEVELS INDUSTRIALIZATION INEFFICIENCY INEQUALITY INFLATION INFLATION RATES INSTITUTIONAL ARRANGEMENTS INTERNATIONAL AGENCIES LABOR FORCE LABOR MARKETS LAND MARKETS MARGINAL BENEFITS MARGINAL COSTS NATIONAL POLICIES OPTIMIZATION PER CAPITA INCOME POLICY OUTCOMES POLITICAL ECONOMY POLITICAL INSTITUTIONS POPULATION GROWTH POSITIVE EFFECTS PRIVATE COSTS PRODUCERS PURCHASING POWER PURCHASING POWER PARITY SAVINGS SCALE EFFECTS TELECOMMUNICATIONS TRANSACTIONS COSTS URBAN URBAN AREAS URBAN CONCENTRATION URBAN DEVELOPMENT URBAN ECONOMICS URBAN POPULATION URBANIZATION |
| spellingShingle |
CAPITAL MARKETS CD CITIES CIVIL LIBERTIES COMPETITIVENESS CONSUMERS CONSUMPTION RATES COUNTRY CHARACTERISTICS CRIME DECENTRALIZATION ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC EFFICIENCY ECONOMIC GEOGRAPHY ECONOMIC GROWTH ECONOMIC REFORMS ECONOMIES OF SCALE EQUILIBRIUM EXCHANGE RATE EXTERNALITIES FREE MARKETS GDP GDP PER CAPITA GROWTH RATE GROWTH RATES HUMAN CAPITAL INCOME INCOME GROWTH INCOME LEVEL INCOME LEVELS INDUSTRIALIZATION INEFFICIENCY INEQUALITY INFLATION INFLATION RATES INSTITUTIONAL ARRANGEMENTS INTERNATIONAL AGENCIES LABOR FORCE LABOR MARKETS LAND MARKETS MARGINAL BENEFITS MARGINAL COSTS NATIONAL POLICIES OPTIMIZATION PER CAPITA INCOME POLICY OUTCOMES POLITICAL ECONOMY POLITICAL INSTITUTIONS POPULATION GROWTH POSITIVE EFFECTS PRIVATE COSTS PRODUCERS PURCHASING POWER PURCHASING POWER PARITY SAVINGS SCALE EFFECTS TELECOMMUNICATIONS TRANSACTIONS COSTS URBAN URBAN AREAS URBAN CONCENTRATION URBAN DEVELOPMENT URBAN ECONOMICS URBAN POPULATION URBANIZATION Henderson, Vernon How Urban Concentration Affects Economic Growth |
| relation |
Policy Research Working Paper;No. 2326 |
| description |
The author explores the issue of urban
over-concentration econometrically, using data from a panel
of 80 to 100 countries every 5 years from 1960 to 1995. He
finds the following: 1) At any level of development there is
indeed a best degree or national urban concentration. It
increases sharply as income rises, up to a per capita income
of about $ 5,000 (Penn World table purchasing parity
income), before declining modestly. The best degree of
concentration declines with country scale. Growth losses
from significantly non-optimal concentration are large.
Those losses tend to rise with level of development, peaking
at a very high level (about 1.5 annual percentage points of
economic growth). Results are very robust. 2) In a group of
72 countries in 1990, roughly 30 have satisfactory urban
concentration, 24 have excessive concentration, and 5 to 16
countries have too little. 3) The list of countries with
highly excessive concentration includes Argentina, Chile,
Costa Rica, and Panama (in Latin America); the Republic of
Korea and Thailand (in Asia); Congo (in Africa); and Greece,
Ireland, and Portugal (in Europe). Many of these countries
have explicitly unitary governments or federal structures
have traditionally been severely constrained. 4) The list of
countries with too little urban concentration includes
Belgium (a small, split country) and special cases such as
Czechoslovakia and the former Yugoslavia. 5) Urban
concentration declines with national scale. It initially
rises with income, the peaks at a per capita income of about
$ 3,000, before declining. If the largest city in a country
is a port, increased trade leads to increased urban
concentration. Otherwise, increased trade leads to
deconcentration as markets i the hinterland open up to
trade. But trade effects are modest. 5) Similarly, more
political decentralization (or increased federalism) only
modestly reduces urban concentration. However, interregional
transport infrastructure - especially dense road networks -
significantly reduce urban concentration, an effect that
rises with income. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Henderson, Vernon |
| author_facet |
Henderson, Vernon |
| author_sort |
Henderson, Vernon |
| title |
How Urban Concentration Affects Economic Growth |
| title_short |
How Urban Concentration Affects Economic Growth |
| title_full |
How Urban Concentration Affects Economic Growth |
| title_fullStr |
How Urban Concentration Affects Economic Growth |
| title_full_unstemmed |
How Urban Concentration Affects Economic Growth |
| title_sort |
how urban concentration affects economic growth |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2000/04/437750/urban-concentration-affects-economic-growth http://hdl.handle.net/10986/18840 |
| _version_ |
1764441594945077248 |