The urban-rural dimension in national economic development.

Abstract

Urban growth should be evaluated less as good or bad in itself than in terms of whether it promotes the efficient and equitable performance of vital economic functions within a nation. Much urban growth in developing nations both reflects national growth and promotes it. Cities are sources of economic growth, which is their dominant characteristic. There is a strong tendency for large cities and their surrounding core regions to be the most active, rapidly growing areas of developing nations. Certain economic functions tend to be found only in cities and tend to cluster into certain cities because it is economically efficient. 3 mechanisms which make cities economically efficient are 1) internal economies of scale, 2) localization economies, and 3) agglomeration economies. Urban areas can provide support functions for rural areas and, in turn, their growth depends on the support of an agricultural base. Urban areas also provide alternative employment and income opportunities for the rural surplus population. There are 4 prominent questions often raised about possible negative effects of urbanization on national growth and development. One question is urban growth and urban bias, which the authors argue is overemphasized. Another question is diseconomies of scale in large cities; this, the authors suggest, is not a matter of size as much as operating efficiently. Third is urbanization and regional dualism, which the authors argue can be maintained through a strategy of changing a nation's mix and location of urban activity. Fourth is the question of cities and rural outmigration. The authors argue that although most people who leave rural areas are younger, more motivated, and better educated than those left behind, their departures are economically favorable. Getting economic activity located correctly along an urban-rural spectrum is important to the growth of developing countries. 6 rules that illustrate how to do this are 1) be guided by local circumstances, not theoretical models; 2) promote better management of major urban areas; 3) avoid direct controls on migration and location; 4) understand the reluctance of industry to locate outside core regions; 5) develop secondary cities with an eye to economic eficiency; and 6) be cautious about "new town" developments. The authors conclude that 1) both host governments and those involved in development assistance should realize that urban growth is a natural process; and 2) when they do intervene in the process, they should do so in ways designed to build upon economic forces already at work.