Urbanization

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Urbanization
Indermit Gill and Chor-Ching Goh
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Three places

• Sriperumbudur. A town of about 100 thousand on
  the Chennai-Bangalore highway
• In 1991, a village where Indias prime minister
  was assassinated.
• By 2006, Hyundai had produced one million cars
  there.
• Shenzhen. A city of 7 million near Guangzhou and
  Hong Kong
• In 1980, not much more than a fishing village
• By 2006, its port shipped exports greater than
  all of Indias.
• Seoul. A metropolis of 12 million, for many years
  mainland Asias most prosperous city
• In 1970, a squalid slum-ridden place.
• By 2006, the largest originator of patents after
  the US, Germany, Japan and Taiwan (China).

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Sriperumbudur in 1991
Just a small village where Prime Minister Rajiv
Gandhi was assassinated
Sources http//
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Sriperumbudur today
The home of Hyundai and others on the
Chennai-Bangalore Highway
Sources http//
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Shenzhen in 1980
A fishing village of several thousand near
Guangzhou
Source http//4.bp.blogspot.com/_Kp1mQeobrgo/SZvX
BdJBxlI/AAAAAAAAAJU/U7clXduYE9E/s1600-h/shenzhenf
arm.jpg
Source http//www.newsgd.com/specials/30yearsrefo
rm/achievments/content/images/attachement/jpg/site
26/20081126/0010dc53fa040a9730a527.jpg
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Shenzhen today
A city of 7 million, specializing in electronic
manufacturing
Source http//www.littleredbook.cn/wp-content/upl
oads/2009/02/littleredbook_dot_cn_city-snapshot_sh
enzhen.jpg
Source http//al.china-embassy.org/eng/zggk/W0200
81223055375525157.jpg
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Seoul in 1925
Gwanghwa Gate, the main entrance of Gyeongbokgung
palace
Sources http//
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Seoul in 1962
Sejong-Ro Same location, same street
Sources http//
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Seoul today
Same streetSejong-Rothe busiest in downtown
Seoul
Sources http//
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Sriperumbudur and India
Economic density in India, a country still
ambivalent about urbanization
www.worldbank.org/wdr2009
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Shenzhenand China
Economic density in China, a country in the midst
of an aggressive urbanization
www.worldbank.org/wdr2009
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Seoul and South Korea
Economic density in South Korea, a country that
has seen the fastest urbanization of all time
www.worldbank.org/wdr2009
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Economic Density
Clip Economic Density
Full Documentary at www.worldbank.org/wdr2009
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The 2009 WDR
Chapters 1, 4 and 7 develop an Urbanization
Strategy
www.worldbank.org/wdr2009
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An Urbanization Strategy

• Should be realistic
• Must recognize some stylized facts observed for
  early, recent, and late urbanizers
• Should be rigorous
• Must be informed by economic analysis that
  identifies the drivers of these changes
• Should be implementable
• Must identify a sequenced set of public policies
  for places at different stages of urbanization

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The Elements of an Urbanization Strategy

• Recognize stylized facts
• A summary of Chapter 1 Density.
• Utilize insights from analysis
• A summary of Chapter 4 Scale Economies and
  Agglomeration.
• Identify practical policies
• A summary of Chapter 7 Policies for an Inclusive
  Urbanization.

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The Facts

• Urbanization is fastest at low income levels.
• Because the sectoral transformation from
  agriculture to industry happens early.
• Todays urbanization is not unprecedented.
• The pace and pattern of urbanization is similar
  for early, middle, and late developers.
• Portfolios of settlements tend to be stable.
• Metropolises, cities, and towns appear to serve
  fundamental economic functions.

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Urbanization happens early
Much of urbanization happens before countries get
to 5,000 per capita
Source WDR 2009.
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The pace of urbanization has not changed much
Urbanizations speed is not different from that
in the 19th century
Source WDR 2009, Chapter 1.
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Nor has its distribution
The relative size distribution of urban
settlements is stable over time
Source WDR 2009, Chapter 1.
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Primate cities are similar
A rapid rise in size, then a leveling off
Source WDR 2009, Chapter 1.
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What is different? Size
The absolute size of the worlds largest cities
is much larger today
Source WDR 2009.
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What is not? Slums
Early, middle, and later urbanizers all had slums
The houses are poky and ugly, and insanitary and
comfortless distributed in incredibly filthy
slums in London. --George Orwell
The first encampments of Baltimores poor were
at the waters edge. Time and again, outbreaks
of yellow fever, malaria, cholera, typhoid fever
swept the town. By the 1890s, Polish immigrants
had supplanted the Irish and Germans, creating a
ghetto of a new dimension.
In the 15 years between 1930 and the end of the
war, the population of Singapore doubled to a
million people. The physical condition of much
of the existing housing was dismal.
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Slums have precedents
Early, middle, and later urbanizers all had slums
Although this is a hugely expensive area in
Paris to live today, in Victor Hugos day it was
a slum area, close to the Bastille Prison.
Katajanokkas transformation from a low-income
housing area of Helsinki. A former slum had
become a prestigious residential area for the
privileged classes.
Melbourne's most infamous slum, Little Bourke
Street, by the 1880s was completely filled up
with all kinds of filth comprising garbage tips,
putrid liquid, straw rags, and other rubbish
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Urbanization is messy, but necessary
Clip The Industrial Revolution and Cities
Full Documentary at www.worldbank.org/wdr2009
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Full Documentary at www.worldbank.org/wdr2009
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The Analysis

• Human settlements serve market needs.
• Just as firms and farms provide goods and
  services, settlements provide services too.
• Urban settlements are complements, not
  substitutes.
• Most countries need a full complement of
  settlements.
• Policies should address function, not size, of
  settlements.
• Manage the full portfolio of places.

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Settlements serve different market needs

• Towns and small cities allow firms and farms to
  exploit internal scale economies, which are low
  in light and high in heavy industries.
• Medium-sized cities facilitate localization
  economies which arise from sharing inputs and
  close competition among firms within the
  industry.
• Metropolises facilitate urbanization economies
  which come from industrial and cultural diversity
  that fosters innovation.

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Towns internal economies
Towns facilitate internal scale economies which
come from large plant sizes and are high in heavy
industries, and low in light industries
Source http//
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Cities localization economies
Cities facilitate localization economies that
come from sharing inputs and infrastructure, and
competition among firms in the industry
Sources http//
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Metropolises urbanization economies
Metropolises facilitate urbanization economies
which come from industrial and cultural diversity
that fosters innovation
Sources http//
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The Policies

• Recognizing complementary functions of places
  helps to make urbanization inclusive.
• Principle maximize agglomeration economies
  through economic integration.
• Policies become complex as urbanization advances.
• Principle More policy instruments are needed in
  places where urbanization is advanced than where
  it has just begun.
• Prioritization helps to facilitate inclusive
  urbanization at all stages of development.
• Principle Start with common institutions, then
  also connective infrastructure, and only then
  targeted interventions.

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Integration gets harder
. as urbanization advances, and more policy
instruments are needed
Institutions to encourage density in Popayan,
Colombia
Institutions and infrastructure to encourage
density and reduce distance in Bucaramanga,
Colombia
Institutions, infrastructure and interventions to
encourage density, reduce distance, and lower
divisions in Bogota
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An Urban Strategy
For areas of incipient urbanization

• Indicator Urban shares of 25 to 50 percent
• Priority Neutrality between rural and urban
  areas
• Instrument Spatially blind institutions
• Provide basic social services such as schooling,
  sanitation, streets and security
• Ensure functional rural and urban land markets
• Principal responsibility Central government.

Areas in Korea
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An Urban Strategy
For areas with intermediate urbanization

• Indicator Urban shares of between 50 to 75
  percent
• Priority Connectivity between urban and rural
  areas, and within urban areas.
• Instruments Institutions, and spatially
  connective infrastructure
• Provide basic social services
• Ensure functional land markets
• Invest in rural-urban and inter-urban
  infrastructure
• Principal responsibilities Central and state
  governments

Changsha in China
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An Urban Strategy
For areas with advanced urbanization

• Indicator Urban shares of gt75 percent
• Priority Livability of urban areas.
• Instruments Institutions, infrastructure, and
  spatially targeted interventions
• Institute basic social services and ensure
  functional land markets
• Invest in rural-urban and inter-urban
  infrastructure
• Intervene to integrate slums and improve the
  environment
• Principal responsibilities Central, state, and
  local governments

Bogota in Colombia
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Calibrating policies
An I for a DAn instrument per dimension of
urbanizations difficulty
Stages Incipient Intermediate Advanced
Goals Build density Build density Reduce distance Build density Reduce distance Eliminate division
Instruments 1 2 3
Institutions ? ? ?
Infrastructure ? ?
Interventions ?
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Institutions
Land tenure security and property rights

• England 16th century enclosure movement in 1500
  Enclosure Act 1604
• Denmark 18th century Abolition of villenage
  in 1760 communal to private land holdings
• USA 19th century 1862 Homestead Act the
  foundation of property rights

Frihedsstøtten (the pillar of freedom) in
Copenhagen, commemorating the abolition of
villenage
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Institutions
Ease of land use conversion, basic services

• England 18th-19th century Land Enquiry
  Commission 1832 Reform Acts Land valuation
  decrees
• Sweden, 1960s-70s Royal Housing Commission in
  1945 Million Homes Programme
• Hong Kong, 1930s-70s 1935 Housing Commission and
  Town Planning Ordinances first land-use strategy
  Zoning Plan in 1963
• Republic of Korea, 1980s-90s basic amenities and
  property rights

Frihedsstøtten today
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Institutions and Infrastructure
Land markets, transportation

• Greater London, 18th-19th century Land valuation
  decrees underground The Housing of the Working
  Classes Act 1890 and Cheap Trains for London
  Workers Bill 1890
• New York Area, 19th-20th century 1916 zoning
  resolution 1938 City Planning Commission 1961
  zoning law.
• Hong Kong, 1930s-80s 1935 Housing Commission and
  Town Planning Ordinance (amended overtime) 1963
  first land-use strategy Zoning Plan.
• Bangkok Metro Area, 2000s zoning and parking
  spaces traffic demand controls.

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Institutions, Infrastructure and Interventions
Land use conversion, transport, housing

• London, 19th century ease of conversion rules,
  expansive transport infrastructure, affordable
  housing near London.
• New York, 19th-20th century zoning rules which
  respond to market needs, integrated transport
  networks.
• Hong Kong ,1930s-80s responsive land market
  institutions evolving Town Planning Ordinances
  amended over time to address transport and
  housing needs.
• Singapore, 1960s-80s responsive zoning laws
  (reflected in rising floor-area ratios),
  expanding transport links, public housing
  programs.
• Seoul, 1980s-90s universal basic amenities
  property rights and credit for slum dwellers to
  become home owners.

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Conclusion 3 stories

• India fighting urbanization.
• The story of Mumbai since 1980.
• China facilitating urbanization.
• The story of Shenzhen since 1980.
• South Korea successful urbanization.
• The story of Seoul since 1950.

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Fighting Urbanization
Clip Mumbais Slums
Full Documentary at www.worldbank.org/wdr2009
Full Documentary at www.worldbank.org/wdr2009
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Facilitating Urbanization
Clip Shenzhen and China
Full Documentary at www.worldbank.org/wdr2009
Full Documentary at www.worldbank.org/wdr2009
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Seoul in the 1950s
Cheonggye river, and the biggest slum in Seoul
Source Aving,network
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Seoul in the 1970s
A highway is built on the river, through and over
the slums
Source Aving,network
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Seoul in the 1980s
More infrastructure and new businesses next to
Cheonggye-cheon, the slums were moved to other
parts of the city
Source Aving,network
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Seoul in 2009
Cheonggyecheon in 2005 Mayor Lee Myungbak, the
current president of South Korea, removed the
highway and recovered the riverfront
Source
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Prioritization An I for a D
Calibrating the Policy Response
Stages Incipient Intermediate Advanced
Institutions ? ? ?
Infrastructure ? ?
Interventions ?
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An Urbanization Strategy
Must recognize stylized facts

• A large part of urbanization is over by the time
  a country reaches upper middle incomeviz.,
  levels of per capita income of about 3,500.
• The relationship between income and urbanization
  is not different for early and later developers.
• The relative size of urban settlements within a
  country is similar for countries at different
  levels of income, and so is stable over time.

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An Urbanization Strategy
Must be based on rigorous analysis

• Towns like Sriperumbudur enable firms and farms
  to exploit the advantages that come with size
  internal scale economies
• Cities like Shenzhen allow firms in similar
  industries to localize and become
  efficientlocalization economies
• Metropolises like Seoul encourage learning and
  innovation that comes from industrial
  diversityurbanization economies

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An Urbanization Strategy
Must identify policy priorities

• Incipient urbanizers should lay the institutional
  groundwork for the provision of basic and social
  services and to ensure functional land markets,
  in both rural and urban areas.
• Intermediate stages of urbanization require, in
  addition, investments in connective
  infrastructure to widen access to advantages of
  growing economic density.
• Advanced urbanization often requiresin addition
  to institutions and infrastructureplace-based
  interventions such as slum development programs.

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Conclusion

• Recognize that urbanization is necessary.
• Dont fight, facilitate.
• Recognize that urbanization becomes more complex
  as it advances.
• First the institutions, then the infrastructure,
  then targeted interventions where necessary.
• Recognize that urbanization will not be clean and
  orderly.
• The goal should be an inclusive urbanization.

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For more information

• World Development Report 2009 Reshaping Economic
  Geography
• www.worldbank.org/wdr2009
• World Bank Urban Strategy 2009
• www.wburbanstrategy.org
• Chorching Goh
• cgoh_at_worldbank.org

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