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Good governance, trade and agglomeration

Listed author(s):
  • Fabien Candau

This article presents a model for developing countries that investigates the factors behind agglomeration of activities in urban giants. First we show that market access to external demand tends to attract entrepreneurs. Second we find that the attractive power of the urban giant can be linked to a lack of democracy, in the sense that by reversing the cost of living effect, democracy allows the reduction in spatial inequality and then the tendency of agglomeration. Finally we analyse how the funds embezzled by a corrupt government vary according to internal and external trade liberalisation. We show that a decrease in the disadvantage of the periphery to trade with the external market can limit the funds embezzled under bad governance. Copyright (c) 2008 the author(s). Journal compilation (c) 2008 RSAI.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1435-5957.2008.00169.x
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Article provided by Wiley Blackwell in its journal Papers in Regional Science.

Volume (Year): 87 (2008)
Issue (Month): 4 (November)
Pages: 483-504

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Handle: RePEc:bla:presci:v:87:y:2008:i:4:p:483-504
Contact details of provider: Web page: http://www.blackwellpublishing.com/journal.asp?ref=1056-8190

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  1. Charlot, Sylvie & Gaigné, Carl & Robert-Nicoud, Frédéric & Thisse, Jacques-François, 2004. "Agglomeration and Welfare: The Core-Periphery Model in the Light of Bentham, Kaldor and Rawls," CEPR Discussion Papers 4715, C.E.P.R. Discussion Papers.
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  3. Marius BRÜLHART & Matthieu CROZET & Pamina KOENIG, 2004. "Enlargement and the EU Periphery: The Impact of Changing Market Potential," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 04.02, Université de Lausanne, Faculté des HEC, DEEP.
  4. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 681-712.
  5. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  6. Murata, Yasusada & Thisse, Jacques-Francois, 2005. "A simple model of economic geography a la Helpman-Tabuchi," Journal of Urban Economics, Elsevier, vol. 58(1), pages 137-155, July.
  7. Mauro, Paolo, 1998. "Corruption and the composition of government expenditure," Journal of Public Economics, Elsevier, vol. 69(2), pages 263-279, June.
  8. Forslid, Rikard & Haaland, Jan I. & Midelfart Knarvik, Karen Helene, 2002. "A U-shaped Europe?: A simulation study of industrial location," Journal of International Economics, Elsevier, vol. 57(2), pages 273-297, August.
  9. Tabuchi, Takatoshi, 1998. "Urban Agglomeration and Dispersion: A Synthesis of Alonso and Krugman," Journal of Urban Economics, Elsevier, vol. 44(3), pages 333-351, November.
  10. Raul Livas Elizondo & Paul Krugman, 1992. "Trade Policy and the Third World Metropolis," NBER Working Papers 4238, National Bureau of Economic Research, Inc.
  11. Rikard Forslid & Gianmarco I.P. Ottaviano, 2003. "An analytically solvable core-periphery model," Journal of Economic Geography, Oxford University Press, vol. 3(3), pages 229-240, July.
  12. Alberto F. Ades & Edward L. Glaeser, 1995. "Trade and Circuses: Explaining Urban Giants," The Quarterly Journal of Economics, Oxford University Press, vol. 110(1), pages 195-227.
  13. Matthieu Crozet & Pamina Koenig, 2004. "EU Enlargement and the Internal Geography of Countries," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00096821, HAL.
  14. Elisenda Paluzie Hernandez, 1999. "Trade policy and regional inequalities," Working Papers in Economics 48, Universitat de Barcelona. Espai de Recerca en Economia.
  15. Author-Name: Jeffrey D. Sachs & John W. McArthur & Guido Schmidt-Traub & Margaret Kruk & Chandrika Bahadur & Michael Faye & Gordon McCord, 2004. "Ending Africa's Poverty Trap," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 35(1), pages 117-240.
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