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From cities to productivity and growth in developing countries

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  • Gilles Duranton

Abstract

This paper reviews the evidence about the effects of urbanisation and cities on productivity and economic growth in developing countries using a consistent theoretical framework. Just like in developed economies, there is strong evidence that cities in developing countries bolster productive efficiency. Regarding whether cities promote self-sustained growth, the evidence is suggestive but ultimately inconclusive. These findings imply that the traditional agenda of aiming to raise within-city efficiency should be continued. Furthermore, reducing the obstacles to the reallocation of factors and activities, and more generally promoting the movement of human capital and goods across cities may have significant positive dynamic effects as well static ones.

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Bibliographic Info

Paper provided by University of Toronto, Department of Economics in its series Working Papers with number tecipa-306.

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Length: 49 pages
Date of creation: 19 Dec 2007
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Handle: RePEc:tor:tecipa:tecipa-306

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Keywords: Cities in developing countries; growth; urbanisation;

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Cited by:
  1. Marius BRÜLHART & Federica SBERGAMI, 2008. "Agglomeration and Growth : Cross-Country Evidence," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP), Université de Lausanne, Faculté des HEC, DEEP 08.04, Université de Lausanne, Faculté des HEC, DEEP.
  2. Steven Poelhekke & Frederick van der Ploeg, 2008. "Growth, Foreign Direct Investment and Urban Concentration: Unbundling Spatial Lags," DNB Working Papers, Netherlands Central Bank, Research Department 195, Netherlands Central Bank, Research Department.
  3. Marius Brülhart, 2011. "The spatial effects of trade openness: a survey," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 147(1), pages 59-83, April.
  4. Jan K. Brueckner & Harris Selod, 2009. "A Theory of Urban Squatting and Land-Tenure Formalization in Developing Countries," American Economic Journal: Economic Policy, American Economic Association, American Economic Association, vol. 1(1), pages 28-51, February.
  5. Richard Arnott, 2008. "Housing policy in developing countries. The importance of the informal economy," Working Papers 200801, University of California at Riverside, Department of Economics, revised Jan 2008.
  6. Brückner, Markus, 2012. "Economic growth, size of the agricultural sector, and urbanization in Africa," Journal of Urban Economics, Elsevier, vol. 71(1), pages 26-36.

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