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World Bank Document City Size and National Spatial Strategies in Developing Countries Public Disclosure Authorized SWP252 World Bank Staff Working Paper No. 252 Y April 1977 Public Disclosure Authorized Public Disclosure Authorized This paper is prepared for stafl use. The views expressed are those of the p author and not necessarily those of the World Bank. Prepared by: Hairy W. Richardson (Consultant) Public Disclosure Authorized Urban and Regional Economic:s Division 1 Q1j PUB Development Economics Department 3881H 5 Development Policy Staff .W57 W67 no.252 This paper is prepared for staff use. The views are those of the author and not necessarily those of the Bank. THE WORLD BANK Staff Working Paper No. 252 April 1977 CITY SIZE AND NATIONAL SPATIAL STRATEGIES 'EN DEVELOPING COUNTRIES Harry W. Richardson (Consultant) Urban and Regional Economics Division Development Economics Department Development Policy Staff ABSTRACT The evidence on the size, structure and functions of LDC cities is evaluated, with the findings used for other suggestions on the scope and feasibility of national spatial strategies. Neither the concept of optimal city size nor that of an optimal urban hierarchy (based upon naive notions about relative interurban sizes and distances) is helpful. The idea that spatial agglomeration may give way to dispersion (polarization reversal) is more relevant to policy, but definitive evidence to date is limited. There is no clear relationship between city size and function. Small-scale industry is potentially very important in LDCs because of its labor-intensive character. Manufacturing industry is much more heavily concentrated in the primate city in LDCs than in developed countries, and industrial decentralization is likely to be an important component in any national spatial strategy to extend the national urban hierarchy. However, important institutional constraints such as the nature of the planning system, the form of political and territorial organization (e.g., a federal or unitary system), the location of the power base, the legacy of colonialism, and ethnicity rule out a universal prescription for all LDCs. Devising feasible strategies is handicapped by vague and conflicting goals, the strong but unintentional impacts of non-spatial policies and the weakness of many spatial policy instruments. The availability of jobs rather than of infrastructure and services is the major inducement to migration. The "no policy" strategy deserves serious consideration, particularly as spatial policies have been used as a pretext for evading the key issue of income redistribution. Nevertheless, some spatial strategies are fre- quently justified, if introduced at the right time. These include decon- centration from the metropoLis to congestion-free sites, the promotion of distant counter-magnets, stimulating selected small towns in rural areas, and the development axis approach. Traditional growth center policies may also be relevant in some cases. The focus on national strategies may be inappropriate in certain vercy large or very small countries. In the latter, international cooperation may be necessary to design and implement an effec- tive spatial strategy. On all these issues, however, current knowledge is limited, so that more research is a high priority. NATIONAL SPATIAL STRATEGIES IN DEVELOPING COUNTRIES: CITY SIZE, LOCATION AND FUNCTIONS FOREWORD A major concern of "urban" policy in many LDCs has been with concentration of population in one or a few large urban centers. Most national plans make explicit reference to measures to "decentralize" economic activity and to slow down rural-urban migration. Much of this approach to policy is based on implicit assumptions of "optimal" or "preferred" city size in which a desirable range of economic activities will result. As an element of the program of work proposed by the Urban Poverty Task Force, this report reviews current theories on urban size and economic activity, and then discusses the range of policy options which have been adopted and factors to be considered in making policy choices. As the discussion in the paper makes clear, appropriate policies relate to physical, social, political and economic structure of a country and are therefore peculiar to each. The report does not therefore elaborate specific policy prescriptions, applicable to all countries or to any one country. In the field of spatial policy analysis, as in most others, a number of terms have appeaired in recent literature, with which many readers may not be familiar. In order to avoid excessive footnoting, or lack of clarity or continuity, when such terms are first introduced in the the main text, they are underl:ined and marked with an asterisk. The Appendix contains a glossary of these terms. In revising earlier drafts of this paper, the author has benefitted from suggestions by a number of members of the World Bank, most particularly John English, Bertrand Renaud and Douglas Keare. Responsibility for any remaining errors and omissions rests with the author. CITY SIZE AND NATIONAL SPATIAL STRATEGIES IN DEVELOPING COUNTRIES Table of Contents Page No. INTRODUCTION ....................................... I Chapter I. STATEMENT (IF THE PROBLEM ...... ..................... 3 Chapter II. THEORY ............................................. 12 a. The Optimal City Size Myth .................. .. 12 b. Efficiency and the National Urban Hierarchy ... 15 c. Polarization Reversal (PR) ........ .. .......... 18 Chapter III. STRUCTURE .. 24 a. Size, Function and Location . .24 b. Industrial Location .......... .27 c. Economic Structure of Primate Cities in Developing and Developed Countries 29 d. Institutional Constraints . .31 Chapter IV. STRATEGIES ......................................... 38 a. Goals ......................................... 38 b. Implicit Urban Policies .......... .. ........... 39 c. SpatiaL Policy Instruments ................. ... 41 (i) General Considerations ................ ... 41 (ii) Infrastructure vs. Industrial Subsidies .. 43 (iii) Labor Subsidies ........... ;.# ............ 44 (iv). DiLrect Controls .......................... 45 (v) M:lgration Policies .................... ... 45 d. The "No Policy" Alternative ........ .. ......... 47 e. The Spatial Distribution of Cities and Strategy Guidelines ......... ............ 50 f. Growth Poles ................. ................. 55 g. The Selection of Small and Medium-Size Cities . 59 h. The Timing and Scale of Intervention .. ........ 61 i. Alternatives to National Strategies .... ....... 63 Chapter V. MIAXIMS AND RESEARCH PRIORITIES ......... .. .......... 65 a. Maxims of Spatial Policy ......... .. ........... 65 b. Some Research Priorities ......... .. ........... 70 -2- Appendix 1 TABLES 1. Population Distribution in the Developing World 2. Demographic, Urbanization and Socio-Economic Data: Latin American Countries 3. Urban and Rural Conditions in Six Asian Coiuntries Appendix 2 GLOSSARY OF TERMS BIBLIOGRAPHY a. Cited References b. Other Sources INTRODUCTION 1. Although many of the spatial strategies deployed in LDCs have the goal of controlling the growth of the largest city and promoting a more dispersed national settlement pattern, this report takes no stand on the desirability of these attempts. Instead, it relies on the following arguments. The justification for such a strategy is frequently weak, relying on unsound theory and speculation. Nevertheless, a country's policy objectives may include a major change in the settlement pattern, perhaps on social rather than economic efficiency grounds. Devising appropriate strategies for attaining these goals is difficult, partly because knowledge of the processes at work is very imperfect, partly because most macro and sectoral policies have implicit spatial impacts that are strong in intensity and frequently reinforce patterns of spatial polarization. The timing, scale and type of spatial intervention may be critical to the chances of policy being successful. Thus, the purpose of this report is not to argue t:he case for a particular form of spatial strategy but rather, given that many LDCs are concerned about the trends in their settlement patterns, how might they intervene so as to attain their objectives. Understanding of the dynamics of spatial processes in national economies is so limited that many of the guidelines are negative (what not to do). Yet clearing away what is ill-founded or infeasible may be a necessary prerequisite for determining what strategies might be effective. 2. More particularly, this report focuses on the analysis of city size, structure and function in less developed countries (LDCs), on the distribution of city sizes and on their relevance to the design and implementation of national urban growth strategies. Chapter I outlines the problem, examines the extent to which primacy is the critical issue and presents a summary of the case for a national urban. strategy. In Chapter II some theoretical issues are discussed: the utility cf the concept of optimal city size; whether or not we can identify "efficiency" in the national urban hierarchy; and the pheno- menon of polarization reversal. Chapter III turns to the problem of the economic structure and functions of cities in LDCs, and its implications for policies. Particular attention is given to the interrelationships be- tween size, function and location, the determinants of industrial location in LDCs, a comparison of the economic structure of primate cities in LDCs and developed countries, and the role of institutional
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