Historical evidence suggests that urbanization in developing countries will still be rapid at initial phases of economic growth – high of the rise in urban shares comes about before nations arrive at upper-middle incomes. Even so the rising density shall be welcomed when it produces agglomeration economies. The debate mustn’t be mainly about the pace of urbanization, the amount of rural-urban migration, or solutions to eradicate slums with targeted inventions. Instead, it should be regarding the efficiency and inclusiveness on the processes that transform a rural economy into an urban one.
And it also needs to be about precisely how policy can best address that coordination failures that arise at each stage or urbanization. The indegent are gravitating to towns and cities, but faster poverty reduction will most likely call for a faster pace of urbanization, not only a slower one- and development policy makers must facilitate this procedure, not hinder it. And furthermore , as a rural-urban transformation involves the two urban plus the rural, urbanization strategies must include measures to raise rural lives and livelihoods.
The principle: maximize agglomeration economies throughout the portfolio of places. Concentration, connected with rising density brings potential benefits from “thick” markets. Almost all brings congestion and squalor. The primary purpose of urban policy would be to help settlements deliver agglomeration economies while lowering the grime, crime, and time costs that is included in rising concentration. At different stages of urbanization, the binding constraints to promoting concentration while controlling congestion differ, similar to the priorities at each stage of urbanization.
Incipient : Elements of incipient or resource urbanization – with urban shares around 25% are predominantly agricultural or resource based, with low economic density. The priority is simply to facilitate agglomeration forces and to encourage internal economies of scale for plants, mills, and factories in towns. As it would be not yet clear which places will be favored by markets and then for what purposes, neutrality between places work better watch word for policy makers.
Intermediate : As urbanization progresses, economic alliances strengthen within and between urbanized areas. Many firms and plants inside same sector co-locate to take advantage of sharing inputs and knowledge spillovers. Such areas- with urban population shares around 50%- the promotion of localization economies will be the highest priority. Efficiency in production and transport would be the watchword.
Advanced : For highly urbanized areas, productivity and consumption benefits arise from urbanization economies from the diversity and intensity of business activities. While functionality could be the goal for industrial towns and cities, the watchword for postindustrial metropolises, with urban shares approximately 75%, is livability.
The policy rule : sequence and calibrate
The spatial dimensions of density, distance, and division spotlight the protection challenge in each of these varieties of place. In predominantly rural neighborhoods, a policy challenge is but one dimensional and corresponds for the should build density. In areas where urbanization has gathered momentum, the process is two dimensional. It incorporates the necessity to promote density and overcome problems of distance due to congestion. In aspects of advanced urbanization, the challenge is 3 dimensional. For metropolises, again, you will find there’s ought to encourage density and overcome distance. To the must be added the call to eliminate divisions with cities, which segregate poor people in informal slums from the rest, in formally settled parts.
Towns have good growth potential of course , if judiciously developed, could become powerful engines of economic growth. Should use is to identify Spatial Priority Urban Regions (SPURs) and increased investment through these, to ensure that these become Generators and Economic Momentum (GEMs). This tends to prevent migrations because it will assist developing people, wherever they may be and act as shock absorbers.