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Cities in the Developing World

  • Henry Overman
  • Anthony J. Venables

Rapid urbanisation is a major feature of developing countries. Some 2 billion more people are likely to become city residents in the next 30 years, yet urbanisation has received little attention in the modern development economics literature. This paper reviews theoretical and empirical work on the determinants and effects of urbanisation. This suggests that there are substantial productivity benefits from cities, although unregulated outcomes may well lead to excessive primacy as externalities and coordination failures inhibit decentralisation of economic activity. Policy should operate both by identifying and addressing these market failures, and by seeking to remove institutional obstacles to decentralisation.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0695.

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Date of creation: Jul 2005
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Handle: RePEc:cep:cepdps:dp0695
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