Working Paper: CEPR ID: DP6634
Authors: Gilles Duranton
Abstract: This paper reviews the evidence about the effects of urbanisation and cities on productivity and economic growth in developing countries using a consistent theoretical framework. Just like in developed economies, there is strong evidence that cities in developing countries bolster productive efficiency. Regarding whether cities promote self-sustained growth, the evidence is suggestive but ultimately inconclusive. These findings imply that the traditional agenda of aiming to raise within-city efficiency should be continued. Furthermore, reducing the obstacles to the reallocation of factors and activities, and more generally promoting the movement of human capital and goods across cities may have significant positive dynamic effects as well static ones.
Keywords: cities in developing countries; growth; urbanisation
JEL Codes: O18; R11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| urbanization (R11) | increased economic efficiency (D61) |
| reduced barriers (F12) | enhanced economic outcomes (O57) |
| effective urban policies (R28) | better economic outcomes (P17) |
| largest city growth (R11) | economic growth (O49) |