UrbanizationUrbanizationIndermit 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 India’s 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

India’s.• Seoul. A metropolis of 12 million, for many years

mainland Asia’s 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).

3

Sriperumbudur in 1991

Just a small village where Prime Minister Rajiv Gandhi was assassinated

Source:s http://

4

Sriperumbudur today

The home of Hyundai and others on the Chennai-Bangalore Highway

Source:s http://

5

Source: http://4.bp.blogspot.com/_Kp1mQeobrgo/SZvXBdJBxlI/AAAAAAAAAJU/U7clXduYE9E/s1600-h/shenzhen+farm.jpg

Source: http://www.newsgd.com/specials/30yearsreform/achievments/content/images/attachement/jpg/site26/20081126/0010dc53fa040a9730a527.jpg

Shenzhen in 1980

A fishing village of several thousand near Guangzhou

6

Source: http://www.littleredbook.cn/wp-content/uploads/2009/02/littleredbook_dot_cn_city-snapshot_shenzhen.jpg

Source: http://al.china-embassy.org/eng/zggk/W020081223055375525157.jpg

Shenzhen today

A city of 7 million, specializing in electronic manufacturing

7

Seoul in 1925

Gwanghwa Gate, the main entrance of Gyeongbokgung palace

Source:s http://

8

Seoul in 1962

Sejong-Ro: Same location, same street

Source:s http://

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Seoul today

Same street—Sejong-Ro—the busiest in downtown Seoul

Source:s http://

10

Sriperumbudur and India

Economic density in India, a country still ambivalent about urbanization

www.worldbank.org/wdr2009

11

Shenzhenand China

Economic density in China, a country in the midst of an aggressive urbanization

www.worldbank.org/wdr2009

12

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

1515

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

1. Recognize stylized facts• A summary of Chapter 1: Density.

2. Utilize insights from analysis• A summary of Chapter 4: Scale Economies

and Agglomeration.

3. 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. • Today’s 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.

1919

The pace of urbanization has not changed much

Urbanization’s speed is not different from that in the 19th century

Source: WDR 2009, Chapter 1.

2020

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 world’s largest cities is much larger today

Source: WDR 2009.

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What is not? Slums

“The first encampments of Baltimore’s poor were at the water’s 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.”

“The houses are poky and ugly, and insanitary and comfortless …distributed in incredibly filthy slums” in London. --George Orwell

Early, middle, and later urbanizers all had slums

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Slums have precedents

“Although this is a hugely expensive area in Paris to live today, in Victor Hugo’s day it was a slum area, close to the Bastille Prison.”

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… “

“Katajanokka’s transformation from a low-income housing area of Helsinki. A former slum had become a prestigious residential area for the privileged classes.”

Early, middle, and later urbanizers all had slums

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Urbanization is messy, but necessary

Clip: The Industrial Revolution and Cities

Full Documentary at www.worldbank.org/wdr2009

Full Documentary at www.worldbank.org/wdr2009

2626

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

Source:s http://

3030

Metropolises: urbanization economies

Metropolises facilitate urbanization economies which come from industrial and cultural diversity that fosters innovation

Source:s 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

• Indicator: Urban shares of 25 to 50 percent

• Priority: Neutrality between rural and urban areas

• Instrument: Spatially blind “institutions”

1. Provide basic social services such as schooling, sanitation, streets and security

2. Ensure functional rural and urban land markets

• Principal responsibility: Central government.

For areas of incipient urbanization:

Areas in Korea

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An Urban Strategy

• 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

1. Provide basic social services 2. Ensure functional land markets3. Invest in rural-urban and inter-urban infrastructure

• Principal responsibilities: Central and state governments

For areas with intermediate urbanization:

Changsha in China

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An Urban Strategy

• Indicator: Urban shares of >75 percent• Priority: Livability of urban areas. • Instruments: Institutions, infrastructure,

and spatially targeted interventions1. Institute basic social services and ensure

functional land markets2. Invest in rural-urban and inter-urban

infrastructure3. Intervene to integrate slums and improve the

environment• Principal responsibilities: Central,

state, and local governments

For areas with advanced urbanization:

Bogota in Colombia

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Calibrating policies

Stages: Incipient Intermediate Advanced

Goals: Build density Build densityReduce distance

Build densityReduce distanceEliminate division

Instruments: 1 2 3

Institutions Infrastructure Interventions

An “I for a D”—An instrument per dimension of urbanization’s difficulty

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Institutions

• 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

Land tenure security and property rights

Frihedsstøtten (the pillar of freedom) in Copenhagen, commemorating the abolition of villenage

3838

Institutions

• 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

Ease of land use conversion, basic services

Frihedsstøtten today

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Institutions and Infrastructure

• 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.

Land markets, transportation

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Institutions, Infrastructure and Interventions

• 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.

Land use conversion, transport, housing

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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.

42

Fighting Urbanization

Clip: Mumbai’s Slums

Full Documentary at www.worldbank.org/wdr2009

Full Documentary at www.worldbank.org/wdr2009

43

Facilitating Urbanization

Clip: Shenzhen and China

Full Documentary at www.worldbank.org/wdr2009

Full Documentary at www.worldbank.org/wdr2009

44

Source: Aving,network

Seoul in the 1950s

Cheonggye river, and the biggest slum in Seoul

45

Source: Aving,network

Seoul in the 1970s

A highway is built on the river, through and over the slums

46Source: Aving,network

Seoul in the 1980s

More infrastructure and new businesses next to Cheonggye-cheon, the slums were moved to other parts of the city

47

Source:

Seoul in 2009

Cheonggyecheon in 2005: Mayor Lee Myungbak, the current president of South Korea, removed the highway and recovered the riverfront

4848

Prioritization: An “I for a D”

Stages: Incipient Intermediate Advanced

Institutions Infrastructure Interventions

Calibrating the Policy Response

4949

An Urbanization Strategy

• A large part of urbanization is over by the time a country reaches upper middle income—viz., 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.

Must recognize stylized facts

5050

An Urbanization Strategy

• 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 efficient—”localization economies”

• Metropolises like Seoul encourage learning and innovation that comes from industrial diversity—”urbanization economies”

Must be based on rigorous analysis

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An Urbanization Strategy

• 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 requires—in addition to institutions and infrastructure—place-based interventions such as slum development programs.

Must identify policy priorities

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Conclusion

• Recognize that urbanization is necessary.– Don’t 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@worldbank.org