The Global Pattern of Urbanization and Economic Growth: Evidence from the Last Three Decades

TLDR

The relationship between urbanization and economic growth has been perplexing. The study identifies global patterns of urbanization and its correlation with economic growth using cross‑sectional, panel estimation, and GIS methods. The analysis covers the globe over the past 30 years, employing cross‑sectional, panel estimation, and GIS techniques. Urbanization levels have risen markedly over the past 30 years, and although they correlate with GDP per capita, there is no global link between urbanization speed and economic growth rate, indicating that accelerated, especially government‑led, urbanization does not guarantee economic benefits and requires a comprehensive assessment.

Abstract

The relationship between urbanization and economic growth has been perplexing. In this paper, we identify the pattern of global change and the correlation of urbanization and economic growth, using cross-sectional, panel estimation and geographic information systems (GIS) methods. The analysis has been carried out on a global geographical scale, while the timescale of the study spans the last 30 years. The data shows that urbanization levels have changed substantially during these three decades. Empirical findings from cross-sectional data and panel data support the general notion of close links between urbanization levels and GDP per capita. However, we also present significant evidence that there is no correlation between urbanization speed and economic growth rate at the global level. Hence, we conclude that a given country cannot obtain the expected economic benefits from accelerated urbanization, especially if it takes the form of government-led urbanization. In addition, only when all facets are taken into consideration can we fully assess the urbanization process.