Trade and Circuses: Explaining Urban Giants
Using theory, case studies, and cross-country evidence, the authors investigate the factors behind the concentration of a nation's urban population in a single city. High tariffs, high costs of internal trade, and low levels of international trade increase the degree of concentration. Even more clearly, politics (such as the degree of instability) determines urban primacy. Dictatorships have central cities that are, on average, 50 percent larger than their democratic counterparts. Using information about the timing of city growth and a series of instruments, the authors conclude that the predominant causality is from political factors to urban concentration, not from concentration to political change. Copyright 1995, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
Volume (Year): 110 (1995)
Issue (Month): 1 (February)
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- Krugman, Paul, 1991.
"Increasing Returns and Economic Geography,"
Journal of Political Economy,
University of Chicago Press, vol. 99(3), pages 483-99, June.
- Krugman, Paul & Elizondo, Raul Livas, 1996.
"Trade policy and the Third World metropolis,"
Journal of Development Economics,
Elsevier, vol. 49(1), pages 137-150, April.
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