Growth brief: Contagion, crime, and congestion – overcoming the downsides of density
With rapid urbanisation in the developing world comes contagion, crime, and congestion. Overcoming these is one of the great policy challenges of the 21st century.
This brief outlines why these issues are so important to the prosperity of cities and discusses ways to tackle them, providing useful lessons for policymakers. It also identifies opportunities for economists to get engaged in the field of urbanisation studies in developing countries.
1) Cities and urbanisation encourage economic growth in the developing world
The relationship between urbanisation and income is stronger today than it was in 1960, reflecting the positive effect that increased density can have on cities worldwide. In addition, cities encourage national economic growth and improved governance.
2) Contagion, crime, and congestion are important challenges, yet they are often poorly managed and understood
However, cities cannot avoid the downsides that come from density – contagion, crime, and congestion. Public investments in these areas are costly and hard to manage, especially as urban governments are often under-resourced and plagued by inefficiencies. There is therefore a need for economists to closely study these issues in developing countries.
3) We also need to understand and encourage one of the benefits of urbanisation – upward mobility out of city slums
On the contrary, upward mobility is the the potential of urbanisation to lift people out of poverty by delivering higher earnings and a better quality of life, especially when compared with the rural alternative. It is important to understand how cities deliver prosperity by gathering data and by testing low-cost interventions to encourage upward mobility.