Shortage, Priority and Urban Growth: Towards a Theory of Urbanisation under Central Planning

Abstract

Extending previous work on urbanisation under central planning, this paper sets out from the economics of shortage to develop a model of urban growth in socialist societies. Implying a focus on the effects of investments on employment and hence urban growth, this model also takes the propensity of producers to hoard labour into account. Such behaviour, it is argued, generates continued employment expansions over and above that created by the original decision to invest. Furthermore, and unlike earlier work in this tradition, an attempt is made to account for regionally differentiated outcomes within individual economies. To this end, the notion of priority is introduced. The resulting model-delineating archetypal 'landscapes of priority'—not only captures the typical sequence of urbanisation experienced by many, if not most, of the former socialist states of Europe and Asia, but also indicates from where the economies in transition from central planning have to proceed.