Working Paper: NBER ID: w26390
Authors: Gharad Bryan; Edward Glaeser; Nick Tsivanidis
Abstract: The fast and often chaotic urbanization of the developing world generates both economic opportunity and challenges, like contagious disease and congestion, because proximity increases both positive and negative externalities. In this paper, we review the expanding body of economic research on developing world cities. One strand of this literature emphasizes the economic benefits of urban connection, typically finding that agglomeration benefits are at least as high in poor countries as they are in rich countries. Yet there remains an ongoing debate about whether slums provide a path to prosperity or an economic dead end. A second strand analyzes the negative externalities associated with urban density, and the challenges of building and maintaining infrastructure to moderate those harms. Researchers are just beginning to understand the links between institutions (such as Public Private Partnerships), incentives (such as congestion pricing) and the effectiveness of urban infrastructure spending. A third line of research addresses the spatial structure of cities directly with formal, structural models. These structural models seem particularly valuable when analyzing land use and transportation systems in the far more fluid cities of the developing world.
Keywords: urbanization; developing countries; agglomeration; economic opportunity; urban productivity
JEL Codes: H23; J61; O10; R11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| urbanization (R11) | poverty (I32) |
| urbanization (R11) | crime rates (K42) |
| urban density (R11) | health issues (I12) |
| public-private partnerships (H44) | negative externalities (D62) |
| urban infrastructure spending (R42) | urban livability (R23) |
| structural models (E10) | policy impacts (F68) |
| urbanization (R11) | productivity (O49) |
| urban density (R11) | earnings (J31) |