Day 1: Framework Session – Cities

Professor Tony Venables (Professor of Economics, University of Oxford) presented the first IGC framework session which aimed to lay out the primary challenges facing cities in developing countries. His talk focussed on the “urban form” – how residential housing, businesses and infrastructure come together to produce a city that is both liveable and productive, the overarching objectives of cities. He began by discussing the basic monocentric city model where jobs and housing are disproportionately concentrated in the CBD which leads to increases in productivity. Yet this model doesn’t hold for African cities such as Dar es Salaam and Nairobi which 1) aren’t very dense, 2) have a center but also a large flat area and 3) have a large population mass which live over 10km from the city center. This means that the bulk of the labour force has to travel to the CBD, often on insufficient public transport.

Venables then went on to discuss the three parts of the “urban form”. Firstly, housing matters, particularly as it leads to employment and forms the bulk of the asset base in cities. However, you need a number of things in place for housing to be effective including good property rights, financial regulation, local infrastructure, building regulations and a construction sector.

Secondly, Venables focused on jobs and production. As already stated, cities allow for a concentration of economic and social activity which increases productivity – indeed doubling the size of a city increases productivity by 3 – 8% (Rosenthal & Strange survey). Yet most people in developing country cities are employed in non-tradeable services which leads to decreasing returns on labour. There is therefore the possibility for these cities to get stuck in a low level trap – “urbanisation without industrialisation”.

Lastly, he looked at issues of infrastructure, particularly the financing and selection of infrastructure projects. This flowed in to some policy recommendations to developing country cities: 1) improve central area transport, 2) encourage city density and 3) focus on building secondary cities.

Comments were then provided by Professor Wahiduddin Mahmud (Country Advisor, IGC Bangladesh; Professor of Economics, University of Dhaka). He began by stating that Bangladesh is among the top 10 fastest growing countries in terms of GDP in the last 20 years and its capital, Dhaka, is one of the fastest growing cities in the last 30 years. Yet in Dhaka, and in other developing country cities, there is more income inequality than in rural areas. This leads to increasing urbanisation and urban poverty. He concluded by focussing on issues of transport – most movement is done by poor people on foot, while investment tends to be for rich people driving cars.

Finally, Professor Nava Ashraf (Lead Academic, IGC Zambia; Associate Professor, Harvard Business School) discussed her project with the Zambian government on the National Urban Plan, with a particular focus on Lusaka. Ashraf used the ideas of reducing “bad contagion” e.g. water and sanitation, transport and corruption issues and enabling “good contagion” e.g. information sharing.

There were a number of interesting questions and comments, particularly surrounding the issue of secondary cities. The session was chaired by Claudio Frischtak (Country Director, IGC Mozambique; President, Inter. B – Consultoria Internacional de Negocios).

By Helen Sims, Communications Coordinator, IGC London Hub.