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CHAPTER 1 Density M ostly off the world’s radar, on a dusty plain in West Africa, is a city of 1.6 million people. Bisected by the River Niger, its two halves— with about 800,000 people each—are linked Despite its industriousness, Bamako is one of the sleepier cities in West Africa. Many of the manufactured staples come 1,184 kilometers by road from one of the region’s metropolises, Abidjan, which has by only two bridges. The pressure of move- more than twice Bamako’s population. ment is so strong that every morning one of Abidjan seems small beside Lagos, where these bridges is dedicated to incoming traf- activity is so concentrated that its residents ﬁc: minibuses, bicycles, motorbikes, pedes- speak of living in a pressure-cooker. Some trians, and occasionally private cars. In the families rent rooms to sleep for six hours evenings, to leave the center means joining and then turn them over to another fam- an exodus of people toward the minibus ily that takes their place. Shopping does depots. Green vans loaded with passengers not necessarily require travel: goods are ﬁle out to residential neighborhoods as far brought on foot and cart to drivers stuck in as 20 kilometers away. This is Bamako, Mali. Lagos’s interminable trafﬁc jams. To some, It contracts into its center every morning like the authors of Lagos’s 1980 master plan and breathes out again in the evening. written when the city had just 2.5 million With each breath Bamako grows bigger. residents, the continuing growth of the city It happens to be one of the fastest-growing is “undisciplined.”2 What can possibly be so cities in the world. Natural demographic attractive about living in Lagos that, despite growth is supplemented by migration from its congestion and crime, it continues to the countryside and other Malian cities. Its draw migrants? population in 2008 is 50 percent larger than The short answer: economic density. 10 years ago, making it the same size as Lagos is not the most economically dense Budapest, Dubai, or Warsaw. It has 10 times city in the world, nor even the most densely more inhabitants than the next biggest populated. Those distinctions belong to Malian city and accommodates 70 percent Central London and Mumbai, respec- of the country’s industrial establishments.1 tively. Even so, Nigeria’s economic future New neighborhoods—quartiers—formerly and Lagos’s growth are as inextricably villages, become consolidated with the rest tied as Britain’s economy is with London’s of the city, toward the south, east, and west. growth. No country has developed with- Some of Bamako’s people are now moving out the growth of its cities. As countries out into surrounding neighborhoods in become richer, economic activity becomes search of cheaper land and some tranquil- more densely packed into towns, cities, ity, but they remain within reach of the city and metropolises. This geographic trans- because it provides their livelihoods. formation of economies seems so natural 48 Density 49 that—at an impersonal aggregate level—it nomic density continues to increase in is taken for granted. But moving to eco- a postindustrial economy because ser- nomic density is a pathway out of poverty vices are even more densely packed than both for those who travel on it and, ulti- industry. mately, for those left behind. Jane Jacobs, • Rural-urban and within-urban dispar- the noted urbanist, did not have Bamako ities in welfare narrow with develop- and Lagos in mind when she wrote, “A met- ment. In the early stages of development, ropolitan economy, if it’s working well, is geographic disparities in welfare are constantly transforming many poor people large. With development, these gaps into middle-class people, many illiterates may increase initially. Rural-urban gaps into skilled people, many greenhorns into in income, poverty, and living standards competent citizens. Cities don’t lure the begin to converge as economies grow, middle class. They create it.”3 She might faster for access to social services, and as well have written: as Lagos and Bamako faster in areas of more vibrant growth. grow, they will ﬁ ll in West Africa’s missing Within-city gaps in welfare and hous- middle. ing—most obvious in informal settle- This chapter introduces density, the ﬁrst ments or slums—persist for much of the geographic dimensions of develop- longer, and narrow only at later stages of ment, deﬁned as the economic mass or out- development. put generated on a unit of land. Surveying the evolution of density with development, • Neither the pace of urbanization nor its association with economic growth the chapter presents stylized facts about is unprecedented. Today’s developing how density in a country rises with urban- countries are sailing in waters charted by ization, rapidly at ﬁ rst, and then more developed nations, which experienced a slowly. These changes are associated ini- similar rush to towns and cities. The tially with a divergence of living standards speed is similar, and the routes are the between places with economic density and same. What is different today is the size those without, later with a convergence. of the ship: the absolute numbers of peo- Living standards thus eventually converge ple being added every year to the urban between areas of different density, such as populations of today’s developing coun- urban and rural. Even within cities, densely tries are much larger than for even the populated slums amid formal settlements, most recent industrializers such as the the differences slowly disappear with devel- Republic of Korea and Taiwan, China. opment. But this convergence does not hap- Later chapters of this report investigate pen by itself. It requires the institutions to the policy implications of these similari- manage land markets, investments in infra- ties and differences. structure, and well-timed and executed interventions. Defining density The main ﬁndings: Density refers to the economic mass per unit • The concentration of economic activ- of land area, or the geographic compactness ity rises with development. The world’s of economic activity. It is shorthand for the densest areas or settlements are in devel- level of output produced—and thus the oped countries. But the path to these lev- income generated—per unit of land area. It els, “urbanization” in this Report, is not can, for example, be measured as the value linear. The share of a country’s popula- added or gross domestic product (GDP) tion settled in towns and cities rises rap- generated per square kilometer of land. idly during its transformation from an Given that high density requires the geo- agrarian to an industrial economy, which graphic concentration of labor and capital, generally coincides with its development it is highly correlated with both employment from low to middle income. The pace of and population density. Density is the deﬁn- urbanization slows after that, but eco- ing characteristic of urban settlements. 50 WO R L D D E V E LO P M E N T R E P O RT 2 0 0 9 The economic world is not ﬂat This density contrasts markedly with The geographic distribution of economic the agricultural areas of Belgium. In the activity, at any resolution, is uneven. No Flemish Flanders (Vlaams Gewest) area, matter the geographic scale examined, be 6,323 square kilometers of land are used for it the country or a subnational area such as agriculture. Its area is almost 40 times that a province or district, there is a hierarchy of Brussels, but its employment is just 13 of density. At the top is the primary city, percent of Brussels and its GDP a mere 4.5 and at the bottom are agricultural lands or percent, translating into employment and rural areas. Between them is a continuum GDP densities of only seven workers and of settlements of varying density. €330,000 per square kilometer. The ratio of The geographic unevenness of economic output density between Brussels and Flan- mass, or bumpiness, tends to increase ders is 1,000 to 1. In between metropolitan with a country’s land area. But even the Brussels and rural Flanders is a range of set- economic geography of small countries is tlements, each with a different density (see bumpy. The Belgian city of Brussels has map 1.1). The cities of Antwerp, Brugge, a land area of 161 square kilometers, of Gent, and Leuven have an average output which 159 square kilometers are used for of €22 million and employment density of nonagricultural purposes. On this small 342 workers per square kilometer.5 area, a GDP of €55 billion is generated by In both developed and developing about 350,000 workers—that is, the aver- countries, then, the economic landscape is age square kilometer of land has more than bumpy. But the topography does not corre- 2,000 workers annually producing almost spond to a simple urban-rural dichotomy. €350 million of services and goods. Brus- A continuum of density gives rise to a port- sels not only has high densities of GDP and folio of places. At the head is a country’s employment; it also has the highest popu- leading, primary, or largest city. Below the lation density of any European (EU27) primary city is a spectrum of settlements— area classiﬁed as NUTS1 (Nomenclature secondary cities, small urban centers, of Territorial Units for Statistics)—more towns, and villages (see ﬁgure 1.1). In some than 6,000 people per square kilometer, countries, such as France and Mexico, the 18 times the average for Belgium.4 For the size difference between the top two cities is sake of comparison, the population den- phenomenal. With a population of 10 mil- sity of London and Madrid is about 5,000 lion, Paris dwarfs second-ranked Marseille people per square kilometer. with just 1.5 million. And with a population Map 1.1 The landscape of economic mass is bumpy, even in a small country like Belgium Brussels BELGIUM Antwerp FLANDERS Gent WALLONIA Leuven Brugge Source: WDR 2009 team and World Bank Development Research Group, based on subnational GDP estimates for 2005. See also Nordhaus 2006. Density 51 of 22 million, Mexico City is more than four Figure 1.1 From dichotomy to continuum: a portfolio of places times as populous as Guadalajara, Mexico’s The simplified area economy and a more realistic representation second city. Conversely, in India and the United States, the size difference between Urban the two biggest cities is relatively small. With Metropolis populations of more than 22 million people, Rural Urban Rural Towns Large city Mumbai and New Delhi stand shoulder to Secondary cities Villages shoulder. New York has a population of 22 million, Los Angeles 18 million.6, 7 Source: WDR 2009 team. An evolving portfolio of places Although the growth of cities appears chaotic, the underlying patterns have a primacy” notwithstanding, the “portfolio of remarkable order (see ﬁgure 1.2). A coun- places” is an enduring feature of economic try’s urban hierarchy is characterized by development. two robust regularities: Settlements of different sizes complement one another. Metropolises, secondary cit- • The “rank-size rule”—the rank of a city in ies, market towns, and villages are all linked the hierarchy and its population are lin- early related. through their complementary functions (see box 1.2). The primary city is often but not • Gibrat’s law—a city’s rate of population always the national administrative center and growth tends to be independent of its the seat of political power: Cambodia’s Phnom size. Penh, Cameroon’s Yaounde, and Colombia’s According to a special case of the rank- Bogotá. A country’s leading city also tends to size rule, known as Zipf’s law, the popula- be its most diversiﬁed, both in the provision of tion of any city is equal to the population of goods and services and in cultural and other the largest city, divided by the rank of the amenities. For the cultural amenities, think of city in question within the country’s urban Broadway in New York City, the Opera House hierarchy (see box 1.1).8 As early as 1682, in Sydney, and the Louvre in Paris. But think Alexandre Le Maître observed a systematic also of Trinidad and Tobago’s Port of Spain, pattern in the size of cities in France.9 For famous for the annual carnival that attracts all classes of country, the relative size dis- large numbers of visitors. tribution has remained stable over time, Just as a primary city forms the core of even as incomes and populations grew a country’s metropolitan area with other (see ﬁgure 1.2). Concerns about “urban adjacent cities, other large urban centers or Figure 1.2 Almost a law: relative size distributions of settlements remain stable over time Low-income countries Middle-income countries High-income countries Log of rank Log of rank Log of rank 6 6 6 5 5 5 4 4 4 3 3 3 2 2 2 1 1 1 1950 1980 2005 1950 1980 2005 1950 1980 2005 0 0 0 2 4 6 8 10 2 4 6 8 10 2 4 6 8 10 Log of population Log of population Log of population Source: United Nations 2006c. Note: Each data point represents an agglomeration area of population size of 750,000 or more. 52 WO R L D D E V E LO P M E N T R E P O RT 2 0 0 9 B OX 1.1 Two laws and a rule: the empirical regularities of a country’s city-size distribution The rank-size rule, discovered in 1913, can U.S. city sizes is more even—and that the path can have important long-term be expressed as the rank r associated with rule fails to hold at the extremes of the U.S. repercussions for the welfare of a city’s a city of size S is proportional to S to some city-size distribution, a common finding inhabitants. On whether the power in the negative power. The special case in which for many countries.b Moreover, the rank- rank-size rule equals –1, so that Zipf’s law the estimated power equals –1 is known as size rule also holds for countries as diverse holds, many researchers seem to agree Zipf’s law, named after a linguist, George as Kazakhstan and Morocco, providing that, in general, it does not. Zipf. Evidence on the pervasiveness of the further evidence of its universality (see the The robust message from the rank-size rank-size rule comes not only from large figure below). rule is that, for a given country or area, a cities belonging to countries of different Whether the rank-size rule is really a wide range of city sizes coexists. Even the income classes, but also from the experi- rule with underlying theoretical structure most developed countries have a portfolio ence of individual countries. The remark- is still under debate. It can be shown to of settlements of different sizes, ranging able westward and southward expansion follow from Gibrat’s law, which implies from the small to the large, as opposed to of the U.S. urban hierarchy notwithstand- that cities grow in parallel.c This is consis- a single megacity or a collection of cities, ing, the rule provides a good description tent with the absence of any systematic all of similar size. Agglomeration is a bal- of the size distribution of U.S. cities for growth differences between cities. But ancing act between centripetal and cen- every decade between 1790 and 1950.a this does not imply that policy is inca- trifugal forces. The balancing point differs Indeed, even today, the rank-size rule con- pable of influencing a city’s size and depending on the sector, the economic tinues to describe well the size distribution economic performance. Cities can and activities, and the type of industries. of U.S. cities (see figure below). This is so do move up and down their national Contributed by Mark Roberts. despite evidence that the shape of the rule urban hierarchies as a result of good a. Madden 1956, cited in Kim and Margo 2004. has changed over time, becoming slightly and bad policy choices. And even transi- b. Gabaix and Ioannides 2004, p. 14. flatter so that the overall distribution of tory departures from a parallel growth c. Gabaix and Ioannides 2004, pp. 16–17. The rank-size rule, for nations as diverse as the United States, Morocco, and Kazakhstan United States 2000 Morocco 1993 Kazakhstan 1993 Log of rank Log of rank Log of rank 6 3.0 4.0 4 3.0 2.0 2.0 2 1.0 1.0 0 0.0 0.0 13 15 17 11.5 12.5 13.5 14.5 15.5 11.5 12.5 13.5 14.5 Log of population Log of population Log of population Sources: The graph for the United States is from Rose (2005); the graphs for Kazakhstan and Morocco are based on data for cities and urban agglomerations from Brak- man, Garretson, and Marrewijk (2001). secondary cities act as regional foci for both private medical colleges, is a seat of learning the economy and society. For example, they in southern India. are the local centers for the ﬁnancial sector, These large regional cities are connected which serve the areas around them. Düs- to smaller cities or major towns. The Ruhr seldorf, Hamburg, Hanover, and Munich area of Germany, the Randstadt area of the are all home to regional stock exchanges, as Netherlands, and the Padang-Medan hub in well as local concentrations of venture capi- Indonesia’s Sumatra represent alliances of cit- tal ﬁrms.10 Dallas and Atlanta emerged as ies. Smaller cities within these areas consti- regional centers of commerce and ﬁ nance tute more specialized urban centers, typically in the lower South of the United States, focusing on manufacturing and the produc- and both host regional ofﬁces of the Fed- tion of traditional and standardized items. eral Reserve Bank.11 Large urban centers Symbiosis is the ruling order: just as the larger and secondary cities also act as local politi- cities help to serve the smaller cities, so the cal centers, and provide advanced public reverse is true. For instance, the larger cities health, education, and cultural facilities. depend on the smaller ones for the daily pro- Hyderabad, the state capital of Andhra vision of workers through commuting.12 Pradesh, with numerous universities, lead- Just as there are mutually beneﬁcial links ing institutes for technical education, and between larger and smaller cities, the same is Density 53 B OX 1.2 The Republic of Korea’s portfolio of places Illustrating a well-developed portfolio manufacturing, especially standardized At the bottom of the hierarchy, of places are seven settlements in the manufacturing, than cities farther up the Jeongeup and Sunchang, both in the Republic of Korea’s urban hierarchy: hierarchy. Although both cities serve as Jeonbuk province, are close to the inter- Seoul, Pusan, Daegu, Ansan, Gumi, Jeon- manufacturing centers, they differ in their face between rural and urban. So while geup, and Sunchang. specializations. Gumi is heavily specialized Jeongeup has a relatively large popula- Seoul is at the pinnacle of the hierarchy. in the radio, television, and communica- tion (129,050), one in four of its inhabit- Located 50 kilometers from the Republic tion equipment industry, which by itself ants is a farmer. Likewise, Sunchang is a of Korea’s border with the Democratic accounts for more than 50 percent of local rural town: half of the 32,012 residents are Republic of Korea in the Han River basin, manufacturing employment. Ansan is farmers. To the extent that they exhibit it is the country’s capital and home to specialized in such high-tech industries as any specialization in manufacturing, it a quarter of its population (that is, 9.76 electrical machinery and computers and is either in traditional resource-related million people). It serves as the nation’s office machinery. It also has agglomera- industries, as in Jeongeup, or in the man- political center and cultural heart. Also tions in several heavy industries: almost ufacture of food and beverage products, typical is its specialization in business 14,000 workers, or 14.7 percent of the local as in Sunchang. services, finance, insurance, real estate, manufacturing workforce, are employed in and wholesaling and retailing. Overall, the fabricated metal products industry. Contributed by Park Sam Ock. services account for 60 percent of the local economy. Seoul is also highly specialized Seoul heads the hierarchary of settlements in the Republic of Korea in publishing and printing and in fashion design and high-end apparel, with the two industries employing more than half the city’s 465,000 manufacturing workforce. Next in the urban hierarchy are Pusan and Daegu. With a population of 3.7 Seoul REPUBLIC million, Pusan is the Republic of Korea’s OF KOREA second largest city. In the southeastern Ansan corner of the Korean Peninsula, its sea- port, one of the world’s largest, handles more than 6.5 million container ships a year. Daegu is a metropolitan area of 2.5 million, dominated by textile and cloth- Gumi ing manufacturing and automotive parts manufacturing and assembly. Since 1970, Daegu the Gyeongbu Expressway has connected Jeongeup Pusan to Seoul through Daegu. About 20 Sunchang flights operate daily between Seoul and Pusan Daegu, and since 2001, the two cities have been linked by a high-speed train. Population, 2007 Much farther down the hierarchy, Ansan (thousands) and Gumi are secondary cities, with popu- > 4,000 1,000–4,000 lations of around 679,000 and 375,000, 500–1,000 150–500 respectively. In Gyunngi province, Ansan < 150 belongs to the Seoul National Capital Area, as part of Seoul’s suburban area. Gumi is in Gyungbok province, in the southeast. As tends to be the case with secondary cities, Ansan and Gumi are more specialized in Sources: WDR 2009 team, using data from the National Statistical Office of the Republic of Korea. true for smaller cities and towns, and towns scale in postsecondary education and health and rural areas. Towns are the connective tis- care services. Symbiosis is again the rule. sue between rural and urban areas. They act Towns draw sustenance from the agricultural as market centers for agricultural and rural activity of rural areas, but their prosperity output, as stimulators of rural nonfarm activ- also spills over to villages by providing non- ity, as places for seasonal job opportunities for farm employment opportunities. Farmers in farmers, and as facilitators of economies of Vietnam migrate seasonally to work in urban 54 WO R L D D E V E LO P M E N T R E P O RT 2 0 0 9 construction, returning to invest the money interchangeably, agglomeration, density, earned in their farms.13 Farmers in Makueni, or geographic concentration of economic Kenya, use nonfarm income to invest in ter- activity—across countries. racing, planting trees, clearing bush, building The index identiﬁes an area of 1 square houses, and educating their children. Farm- kilometer as urban, agglomerated, or dense ers in the semiarid Diourbel region of Senegal if it satisﬁes the following three conditions: have responded to growing urban demand for meat by diversifying away from groundnut • Its population density exceeds a thresh- old (150 persons per square kilometer). production into animal husbandry.14 • It has access to a sizable settlement within some reasonable travel time (60 minutes Measuring density by road). Measures of gross product at a reﬁned spa- tial scale, such as a district or a city, are • The settlement it has access to is large in that it meets a population threshold difﬁcult to come by. Even for developed (more than 50,000 inhabitants). countries, output estimates tend to be available only for rather broadly deﬁ ned Box 1.3 summarizes the rationale and subnational areas (ﬁ rst level and adminis- methodology underpinning the index. trative units, such as provinces or states). At One advantage of the agglomeration this level, important variations in economic index is that it incorporates both density density are likely to average out. Fortunately and the local distance to density. Based on though, as illustrated earlier for Belgium, the criteria of population density and acces- output and population density are closely sibility to a sizable market, the index also correlated. Reliable population estimates comes closer to providing an economic deﬁ- are more easily available, even for villages nition of an area that can both beneﬁt from or townships, because in most countries, a and contribute to agglomeration economies. population census is taken every decade. Although economic density is both a cause The strong correlation between popula- and a consequence of agglomeration econo- tion density and economic mass is consistent mies, accessibility to this economic mass with urban areas being a conglomeration of from the outer parts of the city facilitates the consumers and producers, of buyers and sell- exploitation of such beneﬁts to proximity. ers, and of ﬁrms and workers. For a typical This is especially true in the service sector metropolitan area, the gradient of popula- in which face-to-face interactions are often tion density for distance from the city center necessary. By reducing the need to allocate is similar to the corresponding gradient for valuable land area to residential uses in and employment density.15 As implied above, the near urban centers, transport infrastructure extent to which a country’s population lives facilitates economic density. in urban areas bears a strong relationship to Going to work by car or by high-speed how “bumpy” its economic geography is. public transportation is a luxury that devel- Density goes from smoothly spread out to oped country commuters do not always quite uneven as a country develops. Urban- share with their counterparts in developing ization is thus synonymous with a tendency countries. For any given geographic dis- toward greater agglomeration within a coun- tance, therefore, accessibility to a city tends try. A country’s urban share is a good proxy to be lower in developing countries because for the proportion of its population living in of the need to rely on alternative, more time- areas of high density and, therefore, for the intensive modes of transportation, such as “bumpiness” in its economic geography. walking, cycling, or inefﬁcient public trans- This Report proposes the use of an portation operating on poor-quality roads. agglomeration index computed using geo- In Mumbai, India, 44 percent of people walk graphic information systems as a measure to work,16 and in Hefei City, China, more of density. Measures of urbanization are than 70 percent either walk or cycle.17 nonuniform across countries, which makes Such variations in accessibility deter- comparability and aggregation a challenge. mine both the shape and form of a city. The index allows for a more consistent com- When most people walk to work, a city is parison of the level of urbanization—or, more likely to be monocentric and densely Density 55 B OX 1.3 Computing the agglomeration index The United Nations maintains the World adjusted for purchasing power differ- settlement center is calculated based Urbanization Prospects database, a trea- ences between countries—is that it on the maximum travel time to the sure trove of information. It provides allows international comparisons and center. urban shares and population data for calculations that aggregate poverty for • Create population density grids. These 229 countries stretching back to 1950. regions and the world. The agglomera- are created at a 1-kilometer spatial But these data are based on country tion index allows the same comparisons resolution using two global grid-based definitions, which can be quite different. and aggregation. population data sources, GRUMP and This Report proposes a new measure of The methodology underlying the cal- LandScan.b agglomeration, based on a uniform defi- culation of the agglomeration index can • Identify the areas. Identify the grid cells nition of what constitutes an “urban” or be summarized as follows: that satisfy thresholds for all three criteria. agglomerated area, using the technique • Specify thresholds. To be classified as • Aggregate grid cell populations. The outlined in Chomitz and others (2007) and “urban” using the agglomeration index, result is analogous to urban popula- elaborated in Uchida and Nelson (2008). an area must satisfy three criteria based tion. The proportion of this number to This should not be read as implying on (1) minimum population size used that country’s total population is the that World Urbanization Prospects data to define a sizable settlement, (2) mini- agglomeration index, a summary mea- are flawed. A better interpretation is to mum population density, and (3) maxi- sure of the proportion of the popula- see the challenge of measuring urbaniza- mum travel time, by road, to the sizable tion living in areas of high density. tion as analogous to the measurement settlement. of poverty. Each country has its own In calculating the index, this Report uses poverty line and criteria to track changes • Locate the centers of sizable settlements. a base case set of thresholds of 50,000 for in national poverty rates. But these mea- This mapping is done for cities that minimum population size of a settlement, sures do not allow reliable comparisons meet the minimum population size 150 people per square kilometer for pop- of poverty between countries, and they criterion using data from the Global ulation density, and 60 minutes for travel cannot be used to aggregate poverty Rural-Urban Mapping Project (GRUMP) time to the nearest large city. for groups of countries. The merit of human settlements database.a The density and travel time thresh- a uniform poverty measure—such as • Determine the sizable settlement’s bor- olds are those employed in Chomitz, those living below US$1 or US$2 a day, der. The border surrounding a sizable Buys, and Thomas (2005). The density threshold is the same as the one used by the Organisation for Economic Co- The internationally comparable agglomeration index can yield different urban shares than those operation and Development (OECD). The from country-specific definitions threshold of 50,000 for a sizable settle- Urban share (%) ment is reasonable for developing and 100 developed countries. Many developing Country definition nations have more than 10 percent of 90 80 their total population in urban centers Agglomeration Index of between 50,000 and 200,000. Some 70 examples include Chile in 2002, Brazil 60 in 2000, and Malaysia in 2000, all with 50 around 17 percent of their national 40 population living in urban centers of 30 50,000–200,000 inhabitants. Of India’s 20 urban population in 2001, 20 percent 10 lived in settlements of this size. 0 According to the World Urbanization Prospects database, the worldwide urban a il a a sh a a a m of sia n y az ke tin ol nd nk di in tio na de p. ni g In Ch Br share in 2000 was 47 percent. Using the r La en a ra An et Re Tu Tu la Ug de g Vi i ng Sr Ar ab Fe base case criteria, this ratio is 52 percent, Ba Ar n ia t, but using 100,000 as the minimal settle- yp ss Eg Ru ment size, it is 44 percent, according to Sources: Chomitz, Buys, and Thomas 2005; Nelson 2008; Satterthwaite 2007; United Nations 2006c. the agglomeration index. But country a. The GRUMP human settlements database was developed by the Center for International Earth Science Information Network (CIESIN) at Columbia University (http://sedac.ciesin. columbia.edu/gpw/index.jsp). level estimates can be further apart (see b. LandScan was developed by Oak Ridge National Laboratory (http://www.ornl.gov/sci/landscan/). figure at left). populated at its core. In Mumbai, half of all agglomeration in industrial districts, work- workers commute less than 2 kilometers, ers in nineteenth-century Britain had to live implying that they live close to their places of nearby. The centers of industrial towns were work. Similarly, to obtain the advantages of densely populated, and overcrowded housing 56 WO R L D D E V E LO P M E N T R E P O RT 2 0 0 9 was common. Not until the electric tram was redeﬁ ned as 15,000 (Nigeria and Syria, introduced did this change. for example, have cutoffs of 20,000), that In determining accessibility, and thus the share would drop to 67 percent. shape and form of cities, features of physical • Mauritius. In 2000 about a quarter of geography can also be important. Manhattan Mauritius’s population lived in settle- Island in New York City is difﬁcult to get to, ments with between 5,000 and 20,000 simply because of geography, so it has sky- inhabitants. Some of these settlements scrapers and a classic monocentric structure, are district capitals, but none of them with half its employment within a three-mile are classiﬁed as urban. If they were, the radius of Wall Street. By contrast, in Los urban share would have been more than Angeles, one has to widen the area to a radius two-thirds rather than less than half. of 11 miles from the center to ﬁnd as large a share of employment.18 The implication: At a regional level, according to World economic density in New York City is $1.44 Urbanization Prospects data, South Asia billion of gross product per square kilometer, poses the paradox of being the least urban- in Los Angeles it is $0.49 billion.19 ized region (27 percent urban) in the world In the United Kingdom, Stevenage, Basil- while also the most densely populated. Using don, and Crawley are commuter towns that the agglomeration index, South Asia’s urban serve London. About 11 percent of Lon- share in 2000 was 42 percent, making it more don’s GDP is generated by commuters from urbanized than both Sub-Saharan Africa suburban areas.20 Similarly, in the United and East Asia and the Paciﬁc (ﬁgure 1.3). States, a daily tide of workers commute into The World Urbanization Prospects also pose Washington, D.C., from the neighboring a puzzle for Latin America and the Carib- states of Maryland and Virginia. In 2005 the bean. The urban share in this region in 2000 net contribution of commuters from these was greater than that in Eastern Europe and two states to Washington, D.C.’s output Central Asia and almost on par with the was $36.4 billion. Maryland’s Montgomery OECD’s. The OECD has an average GDP per County—within easy commutable distance capita more than six times that of the aver- of the district—alone contributed $6.4 bil- age Latin American country. More reason- lion to Washington’s gross product.21 ably, the agglomeration index indicates that The biggest advantage of the agglomera- Latin America and the Caribbean’s urban tion index is its comparability across coun- share in 2000 was similar to that of Eastern tries. Here the index has an advantage over Europe and Central Asia, and 15 percentage the United Nations’ World Urbanization points lower than that of the OECD. Prospects database, which contains the “de Despite these drawbacks, the World facto population living in areas classiﬁed Urbanization Prospects data are the only avail- as urban according to the criteria used by able information for comparisons over time. each area or country.”22 The heterogeneity The agglomeration index is available only for across countries can makes cross-country 2000, because time-series data on road net- comparisons misleading. A few examples: works, necessary to estimate travel time, are not readily available. So, the agglomeration • India. With the criterion for an urban index and World Urbanization Prospects data- area used by Zambia or Saudi Arabia, base should be considered as complementary deﬁned as settlements with populations data sources for examining urbanization of 5,000 or more, the share of India’s and density, and this Report uses both the population in urban areas in 1991 would agglomeration index and the World Urbaniza- be 39 percent instead of the ofﬁcial ﬁgure tion Prospects data.23 Calculating comparable of 26 percent. This is because 113 mil- urban share measures for at least some coun- lion inhabitants of 13,376 villages would tries in the past is possible; going forward, it be reclassiﬁed as urban. should be a priority for all countries. • Mexico. Based on Mexico’s ofﬁcial cri- terion of settlements of 2,500 or more Economic concentration— as urban, the country’s urban share in the richer, the denser 2000 was 74.4 percent. But if the settle- In the early stages of development, when an ment population threshold were to be economy is primarily agrarian, people live Density 57 spread out on farmland. Even the largest Figure 1.3 The agglomeration index helps to compare urbanization across regions towns and cities are small. Urban settlements Urban share (%) are likely to be small port cities and market 100 towns, serving the rural needs and trading 90 surpluses of agriculture. Industrialization 80 brings with it a rapid process of urbaniza- 70 tion—new cities are born, and existing cities Agglomeration Index 60 expand. As people crowd into these cities at 50 a faster rate than their boundaries expand, United Nations 40 population and economic density increase. Quite early in a country’s development, this 30 leads to a hierarchy of places. 20 So, two transitions characterize eco- 10 nomic development. The first involves 0 Sub-Saharan South East Asia Middle East Latin Europe & Other OECD the movement from a primarily agrarian Africa Asia & Pacific & North America & Central high-income countries economy to a much more manufacturing- Africa Caribbean Asia economies oriented economy. The second transition, Sources: Chomitz, Buys, and Thomas 2005; Nelson 2008; Satterthwaite 2007; United Nations 2006c. taking place at a much higher level of devel- opment, involves the transformation to a for disproportionate shares of their national service-oriented economy. The ﬁrst phase GDP. In 2005, Mexico City contributed 30 of urbanization, which occurs at a faster percent of Mexico’s GDP despite occupying rate, coincides with the transition from only 0.1 percent of its land. Luanda contrib- a rural to an urban economy. The second uted a similar share of Angola’s GDP, while phase of urbanization, at a slower rate and a occupying 0.2 percent of its land. Like- much higher level of development, is linked wise, the largest cities in Hungary, Kenya, to a within-urban evolution. In most coun- Morocco, Nigeria, and Saudi Arabia— tries, these transformations happen at the Budapest, Nairobi, Casablanca, Lagos, and same time but in different areas. Riyadh—contributed about 20 percent of To measure concentration, we have to their country’s total GDP while taking up deﬁ ne an area. The policy debate often less than 1 percent of land.25 involves a discussion of urban primacy, Density, deﬁned as GDP in purchasing such as whether developing country cities power parities per square kilometer, rises are too big or too small. More academic with the level of development, and the dens- discussions use a purer geographic notion est places in the world are in the richest coun- of space. This chapter uses both spatial tries. Dublin, London, Paris, Singapore, and units—primary cities and the densest grid Vienna ranked at the top, in 2005, with more cell of 1° longitude by 1° latitude of a coun- than $200 million in gross product per square try—to measure concentration. kilometer. Likewise, Tokyo-Kanagawa, New York–New Jersey, Oslo–Akershus-Vestfold, Historically, rapidly rising and Vienna-Mödling were the densest grid concentration, then a leveling off cells of 1° longitude by 1° latitude, generating By one deﬁnition, a city is a geographic area more than $30 million of gross product per characterized by a concentration of eco- square kilometer (ﬁgure 1.4). nomic actors.24 Globally, the top 30 cities, A century of data on aggregate urban ranked by GDP, generated around 16 per- shares, and two centuries of population cent of the world’s output in 2005, while the estimates for primary cities, suggest that top 100 generated almost 25 percent. The urbanization is initially rapid before slowing. urban agglomerations of Tokyo and New Developing countries—especially those in York have estimated GDPs (in purchasing Africa and Asia—are at phases during which power parity) broadly similar to those of urban shares increase sharply. People in Canada and Spain, respectively, whereas Western Europe and North America, which London has a higher estimated GDP than went through the same phase a century ago, either Sweden or Switzerland. Similarly, pri- have understandably forgotten. Emerging mary cities in developing countries account economies such as the Republic of Korea that 58 WO R L D D E V E LO P M E N T R E P O RT 2 0 0 9 Figure 1.4 The richer a country, the more concentrated its economic mass a. Primary city b. Area of 1° longitude by 1° latitude Gross product (US$ millions) per km2 Gross product (US$ millions) per km2 300 London Singapore 90 250 Seoul Madrid Dublin 70 Tokyo-Kanagawa 200 Vienna 150 Paris 50 New York–New Jersey Ontario Oslo–Akershus-Vestfold 100 30 Vienna-Mödling 50 10 0 0 5 10 15 20 25 30 –10 GDP per capita (constant US$, thousands) 0 10 20 30 40 50 GDP per capita (constant PPP US$, thousands) Sources: WDR team estimates based on World Bank (2007j), and databases from www.citymayor.com and www.gecon.yale.edu. Figure 1.5 Developing countries have a pace of urbanization similar to that of early developed rapidly provide the best case stud- developers ies for understanding the pace and pattern of a. At magnified scale: GDP per capita < $10,000 geographic concentration. Their experience Urban share (%) 100 traces the initially rapid and the more grad- 90 ual growth of today’s wealthiest nations. 80 At the aggregate level, using the popula- 70 tion shares in urban areas, the urbanization 60 pattern of developing countries in Asia, Africa, Middle East, and Latin America 50 over the last 50 years closely tracks the ﬁrst 40 part of the historic path earlier traversed by 30 OECD countries between 1900 and 2000 20 (ﬁgure 1.5). The urbanization in Asia mir- 10 rors the rapid phase of urbanization that 0 0 1 2 3 4 5 6 7 8 9 10 OECD countries experienced in the nine- GDP per capita (1990 int’l Geary-Khamis $, thousands) teenth century. Likewise, the geographic transformations in Latin America and the b. Full range of GDP per capita Urban share (%) Caribbean, in Eastern Europe and Central 100 Asia, and in the Middle East and North 90 Africa are qualitatively similar to those 80 experienced by the OECD in the ﬁrst phase 70 of urbanization. Quantitatively, the urban 60 shares for Latin America and the Carib- 50 bean and for Eastern Europe and Central 40 Asia regions are higher than those for the 30 OECD Middle East & North Africa OECD at comparable incomes. 20 East Asia & Pacific Latin America & Caribbean This may, however, be an artifact of the South Asia Eastern Europe & Central Asia data. Data from the World Urbanization 10 Sub-Saharan Africa 0 Prospects database systematically overstate— 0 5 10 15 20 25 purely as a deﬁnitional matter—the urban GDP per capita (constant int’l Geary-Khamis $, thousands) shares of Latin America and the Caribbean, Sources: Maddison 2006; United Nations 1969; United Nations 1949; United Nations 1952; Historical Database Eastern Europe and Central Asia, and Sub- of the Global Environment; United Nations 2006c. Saharan Africa. The safest conclusion may be that the pattern of urbanization—the Density 59 B OX 1.4 Africa’s urbanization reﬂects industrialization Between 1970 and 1995, the urban popula- rate population estimates, a population of at in total GDP—a doubling of their tions in Sub-Saharan Africa were growing least 1 million in 1995, and data on sectoral economies—also witnessed the fastest at 5.2 percent a year while their GDP per value added for 1970 and 1995. growth in urban population—a four- capita was shrinking at 0.66 percent a year. This whittles the sample down to just 10 fold increase. The leaders in the sample Since the work by Fay and Opal (2000), countries: Benin, Botswana, Central Afri- were Benin and Zimbabwe. many have argued that urbanization does can Republic, Ghana, Mauritania, Niger, • The pace of urbanization was positively not necessarily accompany development, Rwanda, Senegal, Zambia, and Zimbabwe. correlated with growth in industries with Sub-Saharan Africa in mind (Com- Of these 10 countries, five experienced and services, activities predominant in mission for Africa 2005). But Satterthwaite conflict at least once, and the other five urban areas. (2007) questions the validity of the urban were peaceful throughout the period. The population numbers in most studies. Since results do not appear to differ systemati- These patterns do not support the claim many were based on projections, some cally between these two sets of countries. of African urbanization without growth. may have been grossly overestimated. The main findings follow: In contrast, countries with higher GDP The problem is the lack of regular popula- growth experienced faster urbanization, tion censuses. For Chad and Eritrea the pop- • Except for Botswana, the countries and rapid urbanization came hand-in- ulation projections spanning 1950 through experienced on average a doubling hand with higher growth in industries 2030 were based on one population census. of population, but only 60 percent and services. A counterfactual of an Africa Those for the Democratic Republic of Congo cumulative growth in GDP. Population without urbanization is one with even were derived from two observations, the growth outpaced increases in gross slower economic growth, greater GDP per most recent for 1984. It is thus reasonable value added, and GDP per capita fell. capita losses, and increases in poverty. to consider only countries with at least • Urban population growth and total two censuses during the period examined GDP growth are positively correlated. Sources: Fay and Opal 2000; Satterthwaite (1970–95), a census post-2000 for more accu- Countries with the fastest growth 2007; United Nations 2006c. relationship between economic growth and At a disaggregated level, the primary urbanization—is not unprecedented. Even city’s population share of a country dis- in Sub-Saharan Africa, faster urbanization plays a similar, nonlinear pattern of initially between 1970 and 1995, albeit with negative rapidly rising concentration, followed by a GDP per capita growth, was associated with subsequent leveling (ﬁgure 1.6). This inten- higher total GDP growth. Urbanization also siﬁcation of economic mass within a coun- came hand-in-hand with rapid growth in try’s largest cities is seen for a wide range industries and services (see box 1.4). of incomes, from Budapest, Cairo, Kuala Figure 1.6 Density intensifies rapidly in the early phase of urbanization before leveling off % city population to % city population to national population national population Santiago, 1800–2000 35 35 Athens, 1800–2000 30 30 Vienna, 1800–2000 Lisbon, 1800–2000 25 25 Dublin, 1800–2000 Seoul, 1800–2000 20 20 Sydney, 1800–2000 Budapest, 1850–2000 Toronto, 1800–2000 15 15 Cairo, 1800–2000 Zurich, 1800–2000 10 São Paolo, 1850–2000 10 Brussels, 1800–2000 Kuala Lumpur, 1900–2000 5 5 Warsaw, 1850–2000 0 0 0 5 10 15 0 5 10 15 20 25 GDP per capita (constant int’l $, thousands) GDP per capita (constant int’l $, thousands) Sources: WDR 2009 team estimates, based on the Staff City Population Database, Human Settlements Group, International Institute for Environment and Development (IIED). Data from 1950 to the present, primarily from United Nations (2006c); data before 1950, primarily from Chandler and Fox (1974), Chandler (1987), and Showers (1979). Latin America drew on a review of 194 published censuses. 60 WO R L D D E V E LO P M E N T R E P O RT 2 0 0 9 Lumpur, and Warsaw to Athens, Lisbon, urban share and development holds until Santiago, and Seoul. These evolutions have a GDP per capita of around $10,000. This also been observed in Brussels, Dublin, Syd- incipient urbanization is associated with a ney, Toronto, Vienna, and Zurich over the rapid shift in the number of people moving two centuries since 1800. from rural to urban areas. Subsequently, the pace of urbanization slows and density Again today, rapidly rising levels off as the urban share surpasses 60 concentration, then a leveling off percent, and the level of GDP per capita A similarly shaped pattern reappears in con- surpasses $10,000. With only a handful of temporary comparisons between a country’s exceptions, countries with GDPs per capita level of development and the concentration of above $25,000 have an agglomeration index density. During 2000–05, the average urban above 70 percent. population growth for low-income countries Administratively deﬁned areas. Tak- was 3 percent a year—faster than upper- ing individual cities as the geographic middle-income countries at 1.3 percent and unit, a positive concave relationship exists high-income countries at 0.9 percent. The between a country’s level of development relationship is robust. It holds for a variety and its primacy—the share of urban popu- of concentration measures, ranging from the lation living in the country’s primary city, a agglomeration index, to population, gross widely used concentration measure. Similar product, and household consumption den- to the relationship between agglomerations sity. It is robust to geographic scale: an area and the level of development, primacy also of 1 square kilometer, a city, a grid cell of 1° rises rapidly before stabilizing during the longitude by 1° latitude, and an aggregated latter stages of urbanization (see ﬁgure 1.8, urban sector. panel a). Population and output density are Local 1-square kilometer areas. Esti- highly correlated, but population density mated agglomeration indexes produce a understates the geographic concentration pattern similar to the historical time series: of economic mass. Agglomeration econo- rapidly rising density for countries during mies, the beneﬁts that ﬁ rms and workers the early phase of urbanization (ﬁgure 1.7). enjoy as a result of proximity, make it likely This strong positive relationship between that output density will increase more than proportionately with employment or popu- lation density. Figure 1.7 Shares of population living in urban agglomerations rise with the level of 1° longitude by 1° latitude. Using the development terrestrial grid cells to estimate concentra- Agglomeration index tion as the share of the densest cell’s gross 1.0 product in the country’s GDP, concentra- Egypt, Arab Rep. of Japan tion of economic mass rises rapidly among 0.8 Korea, Rep. of United States countries with a GDP per capita of less than $15,000, and then stabilizes and tapers off among higher-income countries (see ﬁgure 0.6 1.8, panel b). Brazil India Urban areas of countries. Concentra- South Africa 0.4 Norway tion measured by consumption, rather than by population or GDP, suggests the China same concave relationship with the level of 0.2 development. For instance, the urban shares Ethiopia of household consumption in Malawi and Cameroon at GDPs per capita of $150 and 0 0 5 10 15 20 25 30 35 40 $700, respectively, are 36 percent and 48 GDP per capita (PPP, constant 2000 US$, thousands) percent. At about 63 percent, the shares are Sources: Calculated by WDR 2009 team using Nelson (2008) and World Bank (2006g). higher for Jordan and the Arab Republic of Note: The size of each circle indicates the population size of that country. PPP = purchasing power parity. The Egypt with GDP per capita of around $1,600, agglomeration index uses the following criteria: density of 150 persons per kilometer or more, access time of 60 minutes or less to a sizable settlement, defined as one that has a population of more than 50,000. and rise to 80 percent in Panama and Poland Density 61 Figure 1.8 Geographic concentration of population, gross product, and household consumption rises sharply with development, then levels off Cross-country evidence, late 1990s and 2000s a. Population b. Economic mass c. Consumption Spatial unit: city Spatial unit: grid cell of 1° longitude by 1° latitude Spatial unit: aggregated urban areas Gross product in densest area Urban share (%) of % urban population in largest city as % of country’s total GDP household consumption 50 50 100 40 40 80 30 30 60 20 20 40 10 10 20 0 0 0 0 10 20 30 40 0 10 20 30 40 0 1 2 3 4 5 6 7 GDP per capita (constant US$, thousands) GDP per capita (constant US$, thousands) GDP per capita (constant US$, thousands) Sources: WDR 2009 team estimates, based on World Bank (2007j), Nordhaus (2006), and more than 120 household surveys for more than 75 countries. with GDPs per capita of $3,500 and $5,000, will approximate a 50/50 urban-rural split. respectively (see ﬁgure 1.8, panel c).26 During more advanced urbanization—now a within-urban transformation in a postin- A portfolio of bigger and denser places dustrial area—the distribution of popula- It follows from these stylized facts of geo- tion can be approximated as 75 percent graphic transformation that high-income urban and 25 percent rural. countries have a portfolio of places with a This generalization corresponds well to higher proportion of large settlements and the experience of the United States. In 1690, a lower proportion of small settlements when the average GDP per capita was a mere than do middle-income countries. And the $500 (1990 international dollars),27 the pri- middle-income countries have a signiﬁ- mary city in colonial British America was cantly higher proportion of medium-size Boston. With a population of 7,000, how- settlements than do low-income countries. ever, Boston was by modern-day standards In low-income countries, about three- little bigger than a small town. In the urban quarters of the population live in small hierarchy, only three other cities had popu- settlements of less than 20,000 people, lations greater than 2,500, two of them New and only 10 percent live in urban agglom- York and Philadelphia. The early phase of erations of more than 1 million people. In American industrialization brought with it high-income countries, the opposite is true. an increase in the urban share from 7 per- Less than a quarter of the population live in cent in 1820 to 20 percent in 1860, as GDPs small settlements of less than 20,000 peo- per capita rose from $1,257 to $2,170 (1990 ple, and about half of the population live in international dollars). During this time, the settlements of more than 1 million people population of the primary city, now New (see table 1.1). York, expanded from 123,706 to 805,651. Its At an incipient stage of urbanization, rapid growth allowed the urban hierarchy the portfolio of places in a small country to expand and stretch out. or part of a larger country, such as a prov- ince or even a large district, can be approxi- Table 1.1 The size of urban settlements grows with development mated as 75 percent rural and 25 percent Low-income Middle-income High-income urban, all settlements of relatively low den- Population size countries (%) countries (%) countries(%) sity. As urbanization accelerates—still pre- Small settlements: less than 20,000 73 55 22 dominantly a rural-urban transformation Medium settlements: 20,000 to 1 million 16 25 26 driven by industrialization—and the area or province grows toward a GDP per capita Large settlements: more than 1 million 11 20 52 of $10,000, its distribution of settlements Source: World Bank 2007j. 62 WO R L D D E V E LO P M E N T R E P O RT 2 0 0 9 The number of cities with a population and public health facilities in urban areas. greater than 1 million increased from just Along with diverging wages, this promotes one, New York, in 1820 to nine in 1860. All divergence in more basic measures of wel- these cities were in the Northeast, where fare between urban and rural areas.30 But industrialization began. As the geographic rural-urban disparities begin to narrow as transformation wore on, and the United the urbanization process slows, and gov- States completed its transition to a mature ernments become more capable. The exo- industrial economy, population density in a dus of people and workers from rural areas consistent sample of U.S. cities with popu- to towns and cities reduces surplus labor lations greater than 25,000 increased from from the land in agriculture—and reduces 7,230 persons per square mile to 8,876 per competition between workers in rural labor square mile. The average land area of a city markets. And labor-saving technological increased from about 19 square miles to 40 progress releases labor for migration to square miles.28 Cities became more packed urban areas and improves productivity. In and more sprawling at the same time. time, investments and ﬁscal redistributions give rural residents better local access to Convergence—rural-urban and basic amenities, such as a clean daily source within cities of running water, sanitation, and electricity, A “bumpy” economic geography distributing as well as schooling and health care. Indeed, production and people unevenly across the with development and the passage of time, space in a country is a natural feature of the a country’s economic geography approxi- working of a market economy. This bumpi- mates a “natural” balance that equalizes ness tends to become more pronounced as a welfare between urban and rural residents. country develops. The question often asked In this situation, people choose to live where is: what does this do to the geographic distri- they expect to be best off in material and bution of poverty, consumption, and other nonmaterial well-being. The Islamic Repub- living standards? The answer can determine lic of Iran illustrates this rural-urban con- the political and social sustainability of the vergence (see box 1.5). process of concentration. Evidence from today’s industrial coun- tries suggests that development has largely Rural-urban disparities in well-being— eliminated rural-urban disparities. High ﬁrst wide, then narrow urban shares and concentrated economic Rural-urban disparities in productivity, density go hand in hand with small differ- wages, and well-being can be expected to be ences in rural-urban well-being on a range large and increasing in the earlier stages of of indicators. The 15 countries that joined development. With the rapidly increasing the European Union (EU) before 2004, all concentration of economic mass in a coun- with GDPs per capita in excess of $13,000 try’s towns and cities in the earlier stages of (1990 international dollars), consider the development, signiﬁcant disparities in pro- unemployment rate an important policy ductivity, wages, and basic welfare occur target.31 But rural-urban unemployment between urban and rural areas. The agglom- differences should not be a concern. The eration of capital, consumers, and workers unemployment rates are 10.1 percent for quickly brings production advantages, and urban areas, and 9.9 percent for rural areas. transport costs restrict the beneﬁts to the This is also evident for youth: 19.4 percent locality. These larger local markets enable in urban areas compared with 18.7 per- ﬁrms to spread the ﬁxed costs of production cent in rural areas. The rates of labor force across a wider number of consumers, pro- participation in urban and rural areas are ducing cost and productivity advantages.29 68.3 and 69.4 percent, respectively.32 For This means higher wages in towns and cities, England, the high degree of rural-urban and greater availability of a more diversiﬁed equality in well-being is reﬂected in similar range of goods and services. disposable incomes: indeed, at £522, weekly The concentration of mass also helps to disposable income in villages is 10 percent ensure a better supply of basic infrastructure higher than the £476 in cities.33 Density 63 B OX 1.5 Urbanization and narrowing rural-urban disparities in the Islamic Republic of Iran Rural-urban disparities have narrowed • First, the share of the urban population the lagging provinces. Between 1976 in the Islamic Republic of Iran. In 1976, has increased from 49 to 67 percent and 1996, the female literacy rate rose on the eve of the Iranian revolution, the between 1979 and 2005. This is a con- from 17 to 62 percent, while for urban mean per capita household income in tinuation of a longer-term trend: the women it rose from 56 to 82 percent. rural areas was 44 percent of that in urban urban population had grown by 5.4 During 1994–2000, infant mortality areas. By 2005, it had increased to 63 percent per year (and in Tehran by 6 and under-5 mortality fell fastest in the percent. percent) between 1966 and 1976. poorest provinces. The Shah’s government favored cities • Finally, overall poverty has fallen. The • Second, the rural-urban gap in house- over the countryside. Price controls for national poverty rate was at 8.1 percent hold incomes has narrowed. Between essential foods depressed agricultural in 2005, with relatively modest differ- 1976 and 1984, agricultural value added incomes. High tariffs, import bans, and ences in rural and urban poverty of 10 grew by 31 percent, twice the rate of licensing for industrial goods propped and 7.1 percent, respectively. But pov- the nonoil economy. One reason for this up prices of manufactured goods and erty rates still vary a lot between prov- growth was that farmgate prices rose 55 depressed farmers’ purchasing power. inces, ranging from 1.4 to 23.3 percent. percent. Another reason was that more An inward-looking development strategy was spent on projects to increase the The political commitment to spatial oriented toward final domestic demand productivity of small and medium-size equity has produced mixed outcomes amplified internal migration to Tehran farms. Growth could also be attributed during the last 30 years: overall poverty and a few other large cities. For every to the fact that agricultural production in declines and a convergence in rural- indicator of development, the center per- the Islamic Republic of Iran is dominated urban standards of living, but persistent formed far better than the periphery. In by the private sector, whereas large differences in interprovincial living stan- 1973, the poverty rate was 23 percent in industrial enterprises and service provid- dards. the central region and 42 percent for the ers were nationalized after the revolu- country. This spatial inequality matched tion, which hindered their efficiency. the nation’s ethnic map, fueling tensions. What has happened since the commit- • Third, rural and urban human devel- Based on a contribution by Anton Dobro- ment in 1979 to address spatial disparities? opment indicators improved, even in nogov, Alexander Kremer, and others. For 21 of the 30 OECD countries, the three times higher. But for OECD countries higher the GDP per capita in 2003, 34 the with average GDPs per capita above $10,000, lower the ratio of GDP per capita in predom- the ratio is between one and two (except for inantly urban areas to that in rural areas Norway). Given the well-developed ﬁscal (see ﬁgure 1.9).35 For the Czech Republic, redistribution mechanisms in OECD coun- Hungary, Poland, the Slovak Republic, and tries, and differences in age-demographic Turkey, with an average GDP per capita proﬁ les between urban and rural areas, below $10,000 (1990 international dollars), these disparities in GDP per capita will GDP per capita in urban areas is two to overstate rural-urban differences in, say, Figure 1.9 Rural-urban disparities in GDP per capita tend to be smaller in richer OECD countries Ratio of urban to rural GDP per capita Ratio of urban to rural GDP per capita 3.50 3.50 3.00 3.00 2.50 2.50 2.00 2.00 1.50 1.50 1.00 1.00 0.50 0.50 0.00 0.00 5 10 15 20 25 30 40 50 60 70 80 90 100 GDP per capita (constant 1990 int’l $, thousands) Agglomeration Index, 2000 (%) Source: WDR 2009 team, based on data from OECD (2007), pp. 1–256. 64 WO R L D D E V E LO P M E N T R E P O RT 2 0 0 9 Table 1.2 Rural-urban disparities in earnings, wealth, and consumption characterize development over the last two centuries Rural-urban Country (year) disparity (%) Description and country sample Sweden (1805) 221.0 Wealth per male adult in urban and rural areas. Finland (1805) 146.0 Wealth per male adult in urban and rural areas. England (1830s) 73.2 Urban wages are wages per laborer in the building trades, and rural wages are for agricultural laborers. France (1882) 29.0 Urban wages are for unskilled wages in the regional capital city (department chef lieu), and rural wages are France (1911) 51.0 based on average farm wages . United States (1925) 28.0 Urban earnings are manufacturing earnings, and rural earnings are agricultural earnings. United States (1935) 75.0 Developing countries 51.2 Urban wages are for unskilled general laborers, and rural wages are agricultural wages, including payments (nineteenth century) in kind. The countries included are Argentina 1872; Australia 1887; Denmark 1872; France 1892, 1801; Hungary 1865; Japan 1887; and the United States 1820–29, 1890. Developing countries 41.4 Urban wages are based on wages for unskilled construction workers, and rural wages are agricultural cash (twentieth century) wages. There are 19 countries (1960–70) underlying this average: Argentina, Cameroon, Chile, Costa Rica, Côte d’Ivoire, Guatemala, Kenya, Pakistan, Malawi, Malaysia, Mexico, Morocco, Panama, Sri Lanka, Tanzania, Trinidad and Tobago, Tunisia, Uruguay, and R. B. de Venezuela. Developing countries 42.0 Based on per capita household consumption, after controlling for household characteristics. There are 72 (twenty-ﬁrst century) countries (2000–05) underlying this average disparity: Armenia, Angola, Bangladesh, Belize, Benin, Bhutan, Bolivia, Brazil, Burkina Faso, Burundi, Bulgaria, Cambodia, Cameroon, Chad, Chile, Colombia, Dem. Rep. of Congo, Costa Rica, Côte d’Ivoire, Croatia, Djibouti, Ecuador, Arab Rep. of Egypt, El Salvador, Ethiopia, The Gambia, Georgia, Ghana, Guatemala, Guinea, Guyana, Honduras, Hungary, India, Indonesia, Jamaica, Jordan, Kyrgyz Republic, Madagascar, Malawi, Maldives, Mali, Mauritania, Mexico, Moldova, Mongolia, Morocco, Mozambique, Nepal, Nicaragua, Nigeria, Pakistan, Panama, Paraguay, Peru, Philippines, Poland, Romania, Russian Federation, Rwanda, Senegal, South Africa, Sri Lanka, Swaziland, Tajikistan, Tanzania, Thailand, Timor-Leste, Uganda, Ukraine, Vietnam, and Zambia. Sources: Sweden and Finland 1805: Soltow 1989, table 1, p. 48; England 1830s: Williamson 1987, table 3, p. 652; France 1882, 1911: Sicsic 1992, table 2, p. 685; United States 1925, 1935: Alston and Hatton 1991, table 3, p. 93; Developing countries (nineteenth century): Clark 1957, table II pp. 526–31; Developing countries (twentieth century): Squire 1981, table 30, p. 102; Developing countries (twenty-ﬁrst century): WDR 2009 team estimates based on individual country’s household survey for 72 countries; the data set is described in detail in Montenegro and Hirn (2008). Note: Rural-urban disparity (in nominal terms) is computed as the difference in wages, earnings, wealth, or consumption between urban and rural areas relative to the rural averages. average levels of personal disposable income disparities in productivity and income. and consumption. The agglomeration index For a sample of developing countries in the produces the same qualitative pattern. 1960s—among them Malaysia, Mexico, Rural-urban disparities in these countries and Trinidad and Tobago, which have since were wide throughout the nineteenth and reached upper-middle-income or high-in- early twentieth centuries. Wealth per male come status—urban wages exceeded rural adult in nineteenth century Sweden was more wages by more than 40 percent. Similar gaps than 200 percent higher in urban areas than can be observed in per capita consumption in rural areas, and 150 percent higher in Fin- between urban and rural areas for a recent land (see table 1.2). Meanwhile, for rapidly sample of 72 developing countries. urbanizing England, urban wages were more The rural-urban discrepancy between than 70 percent higher than rural wages in economic mass and population distributions the 1830s. France and the United States saw diminishes with urbanization. Another way big increases in the urban wage premium to examine consumption disparities between from 1882 to 1911 and from 1925 to 1935. urban and rural areas is to look at the popu- Indeed, in the United States, the premium lation share of a country’s urban areas and increased almost threefold in a decade.36 For compare it with the share of consumption developing countries in the nineteenth cen- in these areas. If this ratio is greater than tury, including Australia, Denmark, France, one, consumption per capita is, on average, Japan, and the United States, urban nominal higher in urban areas than in rural areas, wages were 50 percent higher. while the converse is true if the ratio is less Today’s developing countries are still than one. in the first phase of urbanization and, Rural-urban disparities in consump- not surprisingly, have large rural-urban tion fall with density in today’s developing Density 65 Figure 1.10 Rural-urban gaps in per capita points. For countries where urbanization is consumption become smaller with urbanization advanced and the urban share is approach- Ratio of urban consumption share ing its natural maximum, almost no differ- to urban population share ence exists between urban and rural areas 4.0 in access to basic services. Equalization of 3.5 access to basic services can be expected to 3.0 promote a corresponding convergence in 2.5 nonmaterial indicators of welfare and liv- 2.0 ing standards (see table 1.3). 1.5 Narrowing rural-urban disparities is 1.0 important, but the progress in absolute 0.5 measures of basic welfare in the rural areas 0 0 20 40 60 80 100 of the world’s poorest countries is even more Urban population share (%) important. Rising rural-urban disparities are Source: WDR 2009 team estimates from more than 120 house- consistent with an absolute improvement in hold surveys for more than 75 countries. basic welfare in both rural and urban areas. The overall evidence is encouraging. Over countries (see ﬁgure 1.10).37 In Malawi and the past decade, most low- and middle-in- Sri Lanka the ratio is around two: urban come countries have experienced absolute areas account for about 10 percent of the improvements on a range of basic welfare population but 20 percent of consumption. indicators, including infant and under-5 For countries with higher levels of urbaniza- mortality rates, malnutrition, immuniza- tion, the spatial distribution of population tion, and school participation in rural and more closely resembles that of production. urban areas. Of 32 low-income countries, Madagascar and Tanzania have urban popu- three-quarters reduced infant and under-5 lation shares of around 20 to 25 percent and mortality rates and the incidence of severe urban consumption shares of about 30 to stunting and severe underweight, especially 35 percent. By the time a country enters an in rural areas.40 And since 1990, school advanced stage of urbanization, population attendance rose in four-fifths of these is more or less proportionately distributed countries, especially in rural areas.41 Both with economic mass, so that the ratio is close to one. In Chile 85 percent of the popula- Table 1.3 Rural-urban disparity in basic services narrows with development tion reside in urban areas, and these urban Disparity in Disparity in access residents account for 92 percent of national Urban population access to clean to sanitation consumption. In Brazil 80 percent of people share (mean GDP water (percentage (percentage Examples of countries in per capita) points) points) the sample live in urban settlements, and these 80 per- cent are responsible for 85 percent of con- 75% or higher 8 8 United States, Norway, (mean GDP per Switzerland, Spain, sumption. As development progresses and capita: $21,602) Germany, Canada, Mexico, the concentration of economic activity in Chile, Brazil, Argentina, areas of high density increases, rural-urban Gabon, R. B. de Venezuela, Djibouti, Lebanon, Jordan, disparities narrow. A downward sloping line United Kingdom at all levels of urbanization is a good omen: 50%–70% 15 20 Estonia, Panama, Turkey, most developing countries may have passed (mean GDP per Hungary, Ecuador, the peak in their rural-urban disparities.38 capita: $9,672) Colombia, Malaysia, Syria, What is true for private consumption is Azerbaijan, South Africa, Rep. of Congo, Algeria, true for basic amenities. Among low-income Tunisia, Bolivia countries with urban population shares of 25% or lower 24 26 India, Rep. of Yemen, less than 25 percent, access to water and (mean GDP per Madagascar, Chad, sanitation in towns and cities is around capita: $2,585) Tajikistan, Bangladesh, 25 percentage points higher than in rural Tanzania, Kenya, Nepal, Cambodia, Malawi, Uganda, areas.39 But for more urbanized countries, Sri Lanka, Bhutan such as Algeria, Colombia, and South Africa, Source: World Bank 2007j. the disparity in access is 15 to 20 percentage Note: Disparity refers to the percentage point difference between urban and rural areas. 66 WO R L D D E V E LO P M E N T R E P O RT 2 0 0 9 Figure 1.11 Even at the subnational level, rural-urban disparities fall as density increases Philippines, 2000 China, 1999 and 2006 India, 1983 and 1994 Ratio of urban to Ratio of urban disposable income Disparity in life expectancy rural incomes to rural net income urban-rural ratio (by state) 4.0 6 1.25 3.5 5 3.0 1.20 2.5 4 1.15 2.0 3 1983 1.5 2006 1.10 2 1.0 1999 1994 1 1.05 0.5 0.0 0 0 0 20 40 60 80 100 0 20 40 60 80 100 0 0.1 0.2 0.3 0.4 0.5 Urban share (%) Urban population share (%) State-specific urban share (%) Sources: Balisacan, Hill, and Piza forthcoming; Yao forthcoming; Cali 2008. urban and rural areas in these nations have and deprivation. Disparities within cities achieved progress toward the Millennium can be large. In Nairobi poverty is high in Development Goals. the inner city but much lower in the rest of Rural-urban convergence takes place the city and the suburbs (see ﬁgure 1.12). In sooner in more urbanized subnational Mombasa, Kenya’s second-most-populous areas. In both China and the Philippines, city, marked geographic divisions in the urbanized provinces exhibit lower internal poverty rate are evident (see map 1.2). South urban-rural disparities in incomes (see ﬁg- African cities also show internal disparities ure 1.11). In China the entire relationship in the poverty rate. Cape Town has a low has shifted upward over the past decade poverty rate in the coastal areas, but a higher so that, in general, rural-urban disparities poverty rate in the interior of the city. Simi- have increased over time, consistent with larly, both Johannesburg-Pretoria-Tshwane China’s early stage of development, which and Durban have visible divisions. But the is marked by rapid urbanization. In India geography of poverty in Durban is different rural-urban gaps in life expectancy were from that in Cape Town and Johannesburg: smaller in the more urbanized states in the poverty rate is, in general, higher outside both 1983 and 1994. But the entire relation- the city boundaries than inside. ship has shifted downward over time. The most obvious sign of divisions within cities is slums. Slums have chronically over- Slums—divergence and convergence crowded dwellings of poor quality in under- within cities served areas. The reason for the lack of basic In poor countries, higher average living public services and infrastructure is the standards in cities do not rule out poverty inability or unwillingness of many urban Figure 1.12 Slums grow with the pace of urbanization, and fall with its level Annual growth of slum population (%) Percentage of slums 20 120 15 100 10 80 5 60 0 40 –5 20 –10 0 –2 0 2 4 6 8 10 –20 0 20 40 60 80 100 120 Annual growth of urban population (%) Urban share of a country (%) Source: Kilroy 2008. Density 67 Map 1.2 Local divisions—spatial disparities within urban settlements can be large Poverty rates in African cities KENYA SOUTH AFRICA Nairobi Johannesburg and Pretoria Poverty rate: Poverty rate: Mombasa Proportion of Proportion of poor (%) poor (%) 0–11 17–42 11–25 42–48 25–40 48–58 40–57 57–92 Durban 58–63 63–84 Cape Town No data No data Source: The Poverty Mapping Project, Columbia University, using data from Alderman and others (2002); Statistics South Africa; the Central Bureau of Statistics, Kenya; and the Ministry of Planning and National Development, Kenya. governments, utilities, and service provid- Slums are part of rapid urbanization, and ers to operate in slums, generally because of it is not uncommon for a ﬁfth to a third of the informality and illegality of such settle- a city’s population in a contemporary devel- ments.42 So living standards, especially oping country to reside in slums (see ﬁgure health, security, and sanitation, are lower in 1.12).44 Goiâna, the capital of the Brazilian slums than in formal settlements close by. state of Goiàs, a medium-size city of 40,000 Mumbai’s Dharavi, believed to be Asia’s big- in 1950, is today a city of more than 1 mil- gest slum, has “maybe a million residents . . . lion, with much of the population increase crammed into a square mile of low rise wood, accommodated in slums.45 Since 1950, concrete and rusted iron . . . a family of 12 liv- Delhi’s population has risen more than ing in a 90-square-foot room.” In Shiva Shakti tenfold, from 1.4 million to 15.6 million,46 Nagar, again in Mumbai, each community accompanied by an increase in the number tap is shared by roughly 100 people.43 of slum clusters from 200 to 1,160. The growth of slums in major cities “A dirtier or more wretched place he is characteristic of rapid urbanization. had never seen. The street was narrow and Because rapid population growth cannot muddy, and the air was impregnated with be satisfactorily accommodated, slums and ﬁ lthy odors. . . . Covered ways and yards, shantytowns grow bigger and more visible. which here and there diverged from the This contributes to wide and increasing main street, disclosed little knots of houses, geographic divisions in well-being within where drunken men and women were posi- urban areas. Development—both economic tively wallowing in ﬁlth.” A contemporary and institutional—and better infrastruc- description of a developing country slum ture, combined with focused interventions, such as Nairobi’s Kibera or Huruma, Abi- eventually bring about a convergence in liv- djan’s Washington, Delhi’s Majboor Nagar or ing standards in urban areas. Kanchan Puri, Buenos Aires’s San Fernando, 68 WO R L D D E V E LO P M E N T R E P O RT 2 0 0 9 in multistory tenements arranged along nar- B OX 1.6 Slums, then and now row, unlit foot passages. This “housing was hopelessly inadequate in all respects—in The term “slum,” probably originating reached out beyond the working quantity, in quality and environmental from an old English or German word class, finally motivating strong politi- amenities, if needs as basic as clean water meaning a poorly drained or muddy cal action. But rather than attempting and safe sewage disposal can be described as place, was applied to housing in the to stop more workers from coming, early Industrial Revolution in the or clearing out these areas of disease amenities.”47 Apart from the obvious mis- United Kingdom before the railways and poverty, the government in the ery, slums were prone to deadly outbreaks of were in place, when canals trans- 1870s passed legislation for strict measles and scarlet fever and high rates of ported heavy goods along the length building regulations, prescribing the mortality attributable to diarrheal diseases, and breadth of the country. During dimensions of streets and houses, and typhus, and respiratory diseases.48 Britain’s rapid industrialization, most making it mandatory that all dwell- Yesterday’s slums are today’s world-class factories were built beside canals, the ings be connected to newly built cities. Britain is not the only industrial coun- main channel for transporting coal sewerage systems. Major municipal for their steam engines and other investments in water works, sewage try to suffer from slums and wide intracity inputs of production. facilities, and public health dramati- divisions in welfare during the earlier phases Poor workers, migrating to cities cally reduced mortality in Britain’s of development and rapid urbanization (see for factory jobs, could ill afford to cities between 1874 and 1907. box 1.7). The stylized pattern of divergence walk long distances to and from their Despite atrocious and filthy con- followed by convergence is a hallmark of places of work. Before electric trams, ditions, millions of migrants keep other modern-day developed countries as other forms of transport were expen- leaving rural areas for the teeming well. Slums for these cities are now much a sive. So workers settled close to fac- economic opportunity offered in the tories. Cheap housing grew around cities of poor and middle-income thing of the past. Aided by improving land these factories in low-lying, poorly countries. Even though health hazards markets, investments in infrastructure, and drained areas. Housing was over- and mortality rates are far worse in the targeted incentives, within-city welfare dis- crowded. Sanitation was inadequate shanties around many cities in Africa, parities tend to narrow, but only in the more and in most cases nonexistent. And people there are trading, working, and advanced stages of urbanization. Indeed, for air quality was poor, with soot and sending large sums of money home. “world” cities such as London, New York, other pollutants. Sickness was com- The challenge facing policy makers Paris, Singapore, and Tokyo, slums can, with monplace. Diarrhea, typhus, respira- today is similar to that faced by the tory diseases, measles, and scarlet Victorians in London: how to nurture the beneﬁt of hindsight, be viewed as part of fever cut the life expectancy of those these agglomerations with functional their “growing pains.” Britain cleaned up its born in cities by 12 years compared land markets, better transport, and Dark Satanic Mills over a century, and if it with those born in rural areas. public health infrastructure to capture had started the cleanup sooner, the working The growing public health hazards the benefits of economic growth. class would have suffered from slower wage in Britain’s urban slums exacted a Sources: Satterthwaite and others 2007; growth and lower consumption.49 terrible health toll that eventually Crafts 2008; The Economist 2007a. The emergence and growth of slums in the early and intermediate stages of a coun- try’s development can be explained by the or Rio de Janeiro’s Rocinha? No, this is an interaction of functioning labor markets excerpt from Charles Dickens’s Parish Boy’s with dysfunctional land markets. In the Progress, published in 1838, describing the rapid phase of urbanization, the labor mar- rapidly expanding city of London in the ket signals higher labor demand in urban nineteenth century (see box 1.6). areas, the higher demand that arises from London was by no means the only city growth in industries and services. Labor or urban area in nineteenth century Britain responds by moving to towns and cities. with large slum settlements. Chronically As a reﬂection of this, slum dwellers in overcrowded and inadequately serviced developing countries are often productively housing was a common feature of British engaged, taking advantage of the economic cities and industrial towns of the time. In opportunities the city offers. Mumbai’s Edinburgh rapid population growth and a Dharavi has 15,000 “hutment” factories, ﬁrst wave of suburbanization by the then- and “the clothes, pots, toys and recycled rising middle classes meant that by the materials its residents produce earn the fac- 1860s, the core of the city had a large slum tories millions of dollars a year.” Many slum area with population densities as high as 600 residents started businesses after the state persons per acre. Residents in this area lived government provided them with limited Density 69 B OX 1.7 Many of today’s world-class cities were littered with slums “In Antwerp and in most Belgian towns the “Here the background embraces the tal soldier turned milkman, Vergniaud. basic problem in matters of working class pauper burial-ground, the station of the There the Colonel lives in a single room housing was . . . no individual sanitation or Liverpool and Leeds railway, and, in the with a dirt floor and a straw bed.” individual water supply. . . . The three heavy rear of this, the Workhouse, the “Poor-Law “Between 1815 and 1851 France’s popula- cholera epidemics of the 19th century had Bastille” of Manchester, which, . . . looks tion grew from 29 to 36 million . . . it was terrific effects in these slums . . . “ threateningly upon the working-people’s the cities that absorbed the thousands of quarter below. . . . Passing along a rough “The first encampments of Baltimore’s migrants unable to find work in the country- bank, among stakes and washing-lines, poor were at the water’s edge. Time and side. . . . But there were simply not enough one penetrates into this chaos of small again, outbreaks of yellow fever, malaria, jobs. Unemployment and overcrowding cre- one-storied, one-roomed huts, in most of cholera, typhoid fever swept the town. ated appalling living conditions. Only one in which there is no artificial floor; kitchen, These epidemics seemed peculiarly asso- five houses had running water. In 1832 chol- living and sleeping-room all in one. In ciated with the low-lying encampments era wiped out some 20,000 Parisians.” such a hole, scarcely five feet long by six of the poor. The yellow fever epidemic of broad, I found two beds—and such bed- “Like so many other European cities, 1797, for example, was said to have begun steads and beds!—which, with a staircase Paris suffered from chronic post-war in the stagnant waters of the Fells Point and chimney-place, exactly filled the housing shortages. Of the 17 slum areas cove and to have spread . . . to the huts room.” designed for clearance, most were still and hovels on the banks of the Jones Falls intact in the 1950s.” and thence on to the shacks and shanties “Melbourne’s most infamous slum, at the foot of Federal Hill.” Little Bourke Street, . . . by the 1880s . . . was “One of the worst outrages of indus- crowded, bustling and growing. . . . The trialism in China against humanity is the “By the 1890s, Polish immigrants had lane is completely filled up with all kinds of herding of these workers in noisome supplanted the Irish and Germans, creat- filth comprising garbage tips, putrid liquid, slums in the factory districts, . . . so foul ing a ghetto of a new dimension. Single straw rags, and other rubbish. A most dis- and revolting . . . in Shanghai. . . . There dwellings housed from six to eight families, agreeable odor arose from this offensive are no sanitary provisions of any kind, and one [family] to a room. . . . Fells Point was mass . . . the loathsome mass . . . exposed the passages between the rows of houses described by a health official as an Augean and allowed to rot and spread its contami- are practically open latrines. Overcrowd- stable . . . a mass of nuisance . . . Open nating influences.” ing exists to a distressing extent. The drains, great lots filled with high weeds, many children who are reared in these ashes and garbage accumulated in the “About 200 years ago, Lower Manhat- filthy quarters are covered with running alleyways, cellars filled with black water, tan was adorned by a pretty five-acre sores from dirt and bodily neglect.” houses that are total strangers to the lake known as the Collect. . . . By the mid- touch of whitewash or scrubbing brush, 1700s, however, the Collect was already “In the 15 years between 1930 and the human bodies that have been strangers rimmed with slaughterhouses and tan- end of the war, the population of Singa- for months to soap and water . . . that’s neries. The effusions from these bloody pore doubled to a million people. The Pigtown.” businesses were poured directly into the population explosion had generated a lake and more industries, more trash, housing shortage of epidemic propor- “The slums of Dublin were among the quickly followed. By 1800 the Collect was tions. Small shophouses gave shelter to worst in Europe, rivaled only by Glas- a reeking cesspool. By 1813 it had been as many as 100 people. The average living gow. Tall town houses, originally built as entirely filled in and by 1825 something space was 9 feet by 9 feet, about the size elegant homes for the rich in the eigh- entirely new stood on the site—America’s of a prison cell.” teenth century, fell into the Tomae hands first real slum, the Five Points.” of avaricious and pitiless landlords who “All of the ghettos of the 1920s within filled them to bursting point with the “Although this is a hugely expensive the city of Tokyo were products of Tokyo’s desperate and impoverished urban poor. area in Paris to live today, in Victor Hugo’s urban development and Japan’s modern Conditions were often unspeakably vile, day it was a slum area, close to the Bastille economic growth. . . . The sheer size of these with massive over- crowding and utterly Prison.” ghettos was astonishing. . . . Poverty pockets inadequate sanitation.” re-emerged in all parts of the metropolis of “[T]he lawyer Derville ventures into the Tokyo after the Second World War, even in “Katajanokka’s transformation in its slums of Saint Marceau, the poorest sec- the midst of the old city of Tokyo.” entirety from a low-income housing area tion at the outskirts of Paris. Taking his to an enclave for the city’s civil service coach through the filthy rutted lanes, he Sources: Belgium: Lis; Baltimore: Garrett elite and bourgeoisie represented an arrives at a broken-down building, made 2002; Dublin: Kearns 2006; Helsinki: Mäki- nen; Manchester: Engels 1987; Melbourne: urban growth pattern that emerged for entirely of second-hand materials and Mountford; Manhattan: Baker 2001; Paris: the first time in the history of Helsinki. poorly built, where Colonel Chabert is Sanderson, Villon 2000, The Economist; A former slum had become a prestigious lodged with the cows, goats, rabbits and Shanghai: Schwenning 1927; Singapore: residential area for the privileged classes.” impoverished family of a former regimen- Baker 1999; Tokyo: Koji 1969. 70 WO R L D D E V E LO P M E N T R E P O RT 2 0 0 9 rights over their dwellings in 1976 and began European countries lived in urban settle- to supply water and power to parts of the ments of 5,000 inhabitants or more.52 In this settlement. Because Dharavi is sandwiched respect, at least, little had changed from the between the city’s two main railway lines previous ﬁve centuries. So the takeoff into and is surrounded by six stations, it also acts urbanization over the next century broke as Mumbai’s transportation hub.50 In short, dramatically from the past. slums arise in many developing countries as low-income households take advantage of The pace and pattern of urbanization spatially concentrated employment oppor- is similar tunities and as businesses take advantage of It started in Great Britain. In 1800 Britain’s their location in a land-constrained envi- urban share stood at 19.2 percent, about ronment. Consistent with today’s industrial twice the European average. But in the ﬁrst countries, the correct response is not to two decades of the century, the number of slow, stop, or reverse urbanization. It is to people living in urban areas doubled. By tackle dysfunctional land markets. 1820 the urban share was 40 percent. By the The interplay of such market forces and close of the century, seven of every 10 Brit- responses from rational market actors can ons were living in urban settlements. Britain also be seen in many Sub-Saharan African was joined in its headlong rush into urban- countries. But inefficient land markets, ization by other early European industrial- often thanks to misguided urban plan- izers. By the second half of the nineteenth ning and zoning, produce only a limited century, urbanization spread beyond the and unresponsive supply of affordable, legal Old World to the United States and Canada. land sites for building housing to keep pace By World War I, four of every 10 Americans with the demand.51 were living in urban settlements with popu- lations of 5,000 or greater; just 60 years ear- What’s different for today’s lier, the ratio was one in 20. developers? So if anything is different for today’s At the beginning of the nineteenth century, developers, it is certainly not the pace of one person in every 10 in today’s developed urbanization. Indeed, the average pace of Figure 1.13 Urbanization’s speed has precedents Percentage point difference in urban population, 1985–2005 (except where specified) 35 30 Canada, 1880–1900 25 United Kingdom, Germany, 1830–1850 20 1880–1900 Denmark and United States, respectively, 1880–1900 15 Switzerland, Mean of high-income 1880–1900 countries, 1880–1900 Mean of developing 10 countries, 1985–2005 Median of developing countries,1985–2005 5 0 All countries Sources: WDR 2009 team calculations based on data from the United Nations (2006c); historical data for Canada, the United King- dom, and industrial countries’ averages are from Bairoch and Goertz (1986) and Dumke (1994). Density 71 urbanization for developing countries over Between 1985 and 2005, China added 1985–2005 is remarkably similar to the 225 million people to its towns and cities, average for European and North Ameri- almost the entire population of the United can countries53 between 1880 and 1900 (see States. Yet China for the same time period, ﬁgure 1.13).54 For the early developers the ranked only ﬁfteenth in its absolute increase average absolute increase in the urban share in urban share. In India the number of peo- over the 20 years was 7.7 percentage points, ple in towns and cities rose by 137.8 million, and for current developers the respec- adding a Germany and an Italy to its urban tive median and mean absolute increases areas in just two decades. were 7.1 and 8.0 percentage points. The Today’s developing countries had an pace of urbanization among most of the average increase in their urban popula- early developers in the last two decades of tion of 8.3 million over 1985–2005, almost the nineteenth century ranked in the top three times the increase for many of today’s quartile of the contemporary distribution high-income European and North Ameri- of urbanization speeds. can countries between 1880 and 1900. But when China and India are excluded from The volume of urbanization is greater the group, the average urban population for today’s developers increase in recent decades has only been What then is different? One difference is the 4.4 million, about 50 percent more than unprecedented absolute increases in urban the average for the early developers during populations in many developing countries 1880–1900 (see ﬁgure 1.14).57 in recent decades. Today’s developing coun- Correspondingly, megacities in devel- tries simply have larger populations than oping countries are unprecedented in their the industrializing countries of the nine- size. Through the nineteenth century the teenth and early twentieth centuries. The world’s largest city was London. But its urban population today, estimated at 3.3 1900 population of 6.6 million was only billion, is far greater than the world’s total a third that of modern-day Mumbai or population as recently as 1960. It took more New Delhi, the largest cities in low-income than 10,000 years for the urban population countries. The London of 1900 and, indeed, to reach 1 billion in 1960, 25 years to add even the London of today are also smaller the second billion, and only 18 to add the than modern-day Shanghai (10 million), third.55 According to the UN projection, it the largest city in lower-middle-income will take just 15 years to add the fourth.56 In countries, and several others (Cairo, East Asia alone, 500 million people will join Jakarta, and Manila) among the more suc- today’s 750 million urbanites over the next cessful developers. With more than 22 mil- 25 years, essentially adding another Paris or lion people, Mexico City, the largest city in Kuala Lumpur every month. upper-middle-income countries, is three Figure 1.14 The population increment in urban areas of today’s developing countries is much larger Change in urban population (thousands), 1985–2005 Change in urban population (thousands), 1985–2005 30,000 140,000 United States, 1880–1900 25,000 120,000 100,000 20,000 80,000 United States, 1880–1900 15,000 60,000 Average for developing countries (excluding Average for developing countries, 1985–2005 10,000 China and India), 1985–2005 40,000 Average for developed countries, 1880–1900 Average for developed countries, 1880 –1900 5,000 20,000 0 0 All countries including China and India All countries excluding China and India Sources: WDR team calculations based on data for 1985–2005 from the United Nations (2006c) plus historical data from Bairoch and Goertz (1986). 72 WO R L D D E V E LO P M E N T R E P O RT 2 0 0 9 times the size of London at the start of the workers in London earned an urban real twentieth century. wage premium of 67 percent, a large part of this premium was compensation for the evi- Urbanites today enjoy both higher dent health hazards of city living.64 private earnings and better public In Germany during the second half of the services nineteenth century, infant mortality rates Cities now do better than rural areas in both in rural areas were about 150 per 1,000 live income and nonincome indicators of well- births. But expanding Berlin had the high- being. In 2000 the infant mortality rate in est infant mortality in the Kaiserreich era, rural Malawi was 117 per 1,000 live births, hovering around 300 per 1,000 live births in in urban Malawi it was 83. Urban Benin the 1860s, and peaking at 410 per 1,000 live did much better than rural Benin in low- births in the 1870s. The rural-urban gap in ering under-5 mortality rates and reducing physical well-being remained for decades diarrhea and acute respiratory infections.58 during the nineteenth century.65 Urban Ugandan women were less likely to As the U.S. economy industrialized and suffer from anemia or malnutrition. Supe- urbanized, people living in high-density rior health indicators are repeated in urban areas at the turn of the twentieth century areas throughout the developing world— were exposed to infectious and parasitic from Chad and Cameroon in Sub-Saharan diseases. In 1880 urban mortality for adults Africa, to Nepal in South Asia, Kazakhstan was 50 percent higher than rural mortality, in Central Asia, and Nicaragua in Latin and two decades later, the urban mortality America, and to Morocco and Egypt in rate was still 18 percent higher. The rural- North Africa and Middle East.59 urban mortality difference was even greater But the opposite was true for the devel- for infants and young children. For infants, opers of the nineteenth and early twentieth excess urban mortality was 63 percent in centuries. Migrants to cities could expect 1890 and 49 percent in 1900, and for young better material standards of living, offset by children ages one to four, the respective ﬁg- poorer health and shorter lives for them and ures were 107 percent and 97 percent. In 1900 their children. In 1881–91 life expectancy at male life expectancy was 10 years shorter in birth was 51 years in English and Welsh vil- urban areas than in rural areas.66 lages, but only 44 years in London and 39 That the cities and towns of modern- years in large towns.60 In 1850s Britain the day developing countries do better than infant mortality rate in cities with popula- villages on indicators of health, while the tions greater than 100,000 was, at 196 per opposite was true for the developed coun- 1,000 live births, far higher than the 138 per tries at similar incomes in the nineteenth 1,000 live births in rural communities.61 century, reﬂects advances in public health Even as late as 1937, George Orwell saw it and medicine, and improvements in sewers ﬁt to characterize industrial towns and cit- and water systems. It also reﬂects the pub- ies as places where “one always feels that the lic beneﬁts that today’s cities in developing smoke and ﬁlth must go on for ever and that countries confer. So the advantages of high no part of the earth’s surface can ever escape density are not limited to income genera- them.”62 It is perhaps no surprise, then, that tion and wealth creation—they also include the absence of respiratory diseases attribut- social services. able to poor air quality in the cities would With these differences in private and have resulted in life expectancies 4.7 years public sources of well-being, it should longer in the England and Wales of 1861–70. hardly be a surprise that cities and towns in In the absence of cholera, diarrhea, dysen- the developing world are growing rapidly. tery, and typhus, life expectancy might The surprise is that this move to density is have been 1.7 years longer, and the absence not faster. And the policy implication? Any of measles and scarlet fever, common in strategy for a less desperate and more delib- the cities, would have added 2.3 years to erate urbanization must include efforts to life expectancy.63 Thus in the 1830s, while improve public services in rural areas.
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