Size matters when it comes to urban development

Two studies from the London School of Economics suggest that bigger isn’t necessarily better when it comes to city size. Developing countries would experience greater economic development and growth with smaller cities.

The studies by Susanne A. Frick and Andrés Rodríguez-Pose of the London School of Economics examine the connection between city size and nationwide performance. They found that while advanced nations benefit from having larger cities, developing nations do not.

“Advanced nations experience a 0.7 per cent increase in economic growth for every 100,000 in average population among its large cities over a five-year period. But for developing nations, the addition of 100,000 people in large cities is associated with a 2.3 per cent decrease in economic growth over a five-year period,” according to an article in CityLab on the two studies.

The studies found that developing countries see the most economic benefit when a larger proportion of their urban population live in cities of 500,000 people or less. The researchers compensated for variables such as national population size, physical land area, education levels and economic openness.

According to the CityLab article, there are several reasons why megacities fail to spur significant growth in the rapidly urbanizing world. For one, much of today’s urbanization comes from massive migrations of people fleeing war, civil conflict or natural disasters, rather than from purely economic forces like increased demand for labour.

History has also created a false expectation that urbanization is always equated with prosperity. The places that urbanized a century or so ago were in the richest and most developed countries. This is no longer the case today. What’s more, in today’s globally interconnected economy, the raw materials that flowed from the countryside to the city can now all be inexpensively imported from other parts of the world.

“The result is that the connection between large cities and growth has now become much more tenuous, producing a troubling new pattern of ‘urbanization without growth’.”

As the author argues, developing countries need cities, just not necessarily megacities. The two LSE studies are a reminder “that there is no one-size-fits-all pattern for urban and economic development”.


Image credit: UN Photo/Kibae Park

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