Public Disclosure Authorized UNDERSTANDING THE DEVELOPING METROPOLIS Lessonsfromthe City Study of Bogotaand Cali, Colombia Public Disclosure Authorized Rakesh Mohan Public Disclosure Authorized Public Disclosure Authorized A WoorIdBank Ilook Understanding the Developing Metropolis Lessons from the City Study of Bogoti and Cali, Colombia Understanding the Developing Metropolis Lessons from the City Study of Bogota and Cali, Colombia Rakesh Mohan Published for The lWorldBank Oxford Universitvy Press Oxford Universitv Press OXFORD NEW YORK TORONTO DELHI BOMBAY (.kLCUTTA MADRAS KARARCHI KUALA LUMIPLIRSINClAPORE HON(; KONG TOKYO NAIROBI DAR ES SAI-,AlAM(1APETOWN MELBOURNE AUCKlAND and associated companiies in BERLIN IBADAN C 1994 by The International Bank for Reconstruction and Development / THE WORLD BANK 1818 H Street, N.W., Washington, D.C. 20433 Publishied by Oxford University Press, Inc. 200 Madison Avenue, New York, N.Y 10016 Oxford is a registered trademark of Oxford University Press All rights reserved. No part of this publicationi may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recordinig, or otherwise, wvithout the prior permission of Oxford Universitv Press. Manufactured in the United States of America First printing April 1994 The findings, interpretations, and concilisions expressed in this study are entirely those of the author and should not be attributed in anv manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. The bounidlaries, colors, denominiaiolns, and other informationi shown on any map in this volume do not imply on the part of the World Bank Giroup any judgment on the legal statuis of anly terr-itorv or the endorsemenit or acceptance of stich boundarics. Library of Congress Cataloging-in-Publication Dala Mohan, Rakesh, 1948- Understanding the developing metropolis: lessons from the city study of Bogota and Cali, Colombia / Rakesh Mohan. p. cm. Includes bibliographical references and index. ISBN 0-19-520882-X 1. Bogota (Colombia)-Economic conditions. 2. Cali (Colombia)- Economic conditions. 3. Urban policy-Developing counltries. l. Title. HC198.1B5M633 1994 333.9861'48-dc2O 93-41140 CIP Contents Foreword xi Preface and Acknowledgments xiii 1. Introduction I City Selection 4 The Macroeconomic Setting: Were the 1970s Exceptional? 8 Overview 14 Notes 17 2. The Spatial Structure of Cities in Developing Countries 18 The Emergence of Cities 18 Growth and Decentralization 21 Citv Characteristics: Ecidence from Different Countries 26 The Consequences of Growth and Decentralization 34 Notes 37 3. Growth and the Changing Structure of Bogota and Cali 38 Growth and the Spatial Distribution of Population and Income 43 The Evolution of Land Values and Population) and Employment Densities 55 The Changing Structure of Bogota: Some Wrinkles 63 Summary 69 Notes 72 4. Poverty, Distribtition of Income, and Growth 73 Distributioni of Income in Bogota and Cali 1973-78 76 Distribution and Characteristics of the Poor 83 Summary 91 Notes 95 5. Workers and Their Earnings 96 The Benefits of Education and Experience 103 How Segmented Is the Bogota Labor Market? 108 v vi CONTENTS Operation of the Urban Labor Market: What Have We Learned? 117 Notes 119 6. Firms and Their Location Behavior 121 Trends in the Location of Employvment 123 Patterns of Employment Location in Manufacturing 128 Factors Influencirng the Location of Manufacturing Firms 132 Modeling the Intra-Urbain Location Behavior of Manufacturing Firms 134 Trade and Service Employment Patterns 139 Implications for Location Policv 141 Notes 144 7. Shelter in a Growing City 146 HoIsillg in Bogota: The Instittional Setting 147 Bogota's Unregulated Housing Market: The Myths and Realities of Incremental Development 152 Mobility and Tenure Choice 161 Modeling Housing Demand 171 Pirala Developments and Housinig Demand: Some Lessons for Housing Programs and Policies 180 Notes 183 8. Autos, Taxis, Buses, and Busetas: The Importance of Choice in Urban Trarnsport 185 The Stipplv of Transportation Services in Bogota 189 The Regtilation of Supplv: Control, Suibsidies, and Incentives 191 The Impact of Govern inent Regulationi, Taxes, and Subsidies 198 Travel Patterns in Bogota 201 Modeling Travel Demand 215 Lessons for a Developing Metropolis 221 Appendix: Theoretical Background for Mlodeling the Choice of Transport Mode 225 Notes 232 9. Urban Government and Finances 233 Urban Government in Bogota 234 The Structure of Revenue 239 The Structure of Expenditures 255 The Public Serxice Enterprises of Bogota 259 Lessons for a Developing Metropolis: An Evaluative Summary 266 Notes 271 10. Coping with City Growth 272 Understaniding Behavior 275 Understandiig City Structure 278 Encouraging Endogenous Institutional Responses to Rapid Growth 281 Appendix: The Data 288 CONTENTS vii Bibliography 301 Index 317 Tables Chapter I 1-1 Economic Growth in Colombia, 1950-86 10 1-2 Prices and Wages in Colombia 12 Chapter 2 2-1 Population and Population Growth in Selected Latin American and U.S. Metropolitan Areas 28 2-2 Population Density in Central and Peripheral Areas of Selected Latin American and U.S. Cities 29 2-3 Population Densitv Gradients in Selected Latin American and U.S. Cities 30 2-4 Population Densitv Gradients Per Kilometer in Selected Cities Worldwide by Decade, 1880-1960 33 2-5 Populationi Densitv Gradients Per Kilometer in Selected Cities Worldwide, 1950, 1960, 1965, and 1970 34 2-6 Central City Shares of Residential Population and Employment, Selected Latin Americani Cities 35 Chapter 3 3-1 Population and Intercenisal Population Growth in Colombia 39 3-2 Gross and Per Capita Domestic Product, Colombia and Bogota 39 3-3 Average Anntial Growth in Domestic Product, Colombia and Bogota 40 34 Area. Poptilationi, Population Growth, and Density in Bogoti and Cali 41 3-5 Growth in Population and Densitv in Bogota 50 3-6 Spatial Distributioni of Monthlv lncome and Population in Bogota 54 3-7 Change in Population) Density by Ring, BogotA and Cali 56 3-8 Evolutioni of Land Values by Ring, Bogota and Cali 58 ,-9 Employment Density in BogotA 61 3-10 Distributioni and Density of Workers' Residences and W'orkplaces, Bogota 62 3-11 I.and Value and Population Densitv Gradients in BogotA and Cali, bv Sector 66 3-12 Spatial Patterni of Housinig in Bogota, 1978 67 Chapter 4 4-1 Distribution of Inconme in Bogota and Cali 78 4-2 Spatial Distribution of Income in Bogota and Cali 80 4-3 Spatial Inequality in Bogota and Cali: Individuals Ranked by tItNC(AP 82 vi i CONTENTS 4-4 Mappinig MalnTitritionl into Income Deciles in Bogota. 1978 86 415 Spatial Distribution of Malnutrition) bv Age Group in Bogoti, 1978 88 4-6 Unemployment in Bogota by Incomile Decile and Sex 92 Chapter 5 5-1 Changes in Labor Use in Colornbia, 1951-78 98 5-2 Emplovmenit Chanige in Colombia, 1973-78 98 5-3 Distribution of Workers by Sex and Education Level 10 5-4 Mean Incomc Ratios for W orkers bv Sex and( Education Level 10o Chapter 6 6-1 Employmenit bv Firm Size and Major Industry Group, 1978 124 6-2 Employment Distribution by Ring. Firm Size, and Major Industry Group, 1978 125 6-3 Employmenit Distribution in Bogota by Radial Sector. Firm Size. and Major Industry Group, 1978 126 6-4 Employment Location in Bogota, 1972 and 1978 127 6-5 Distributioll of Manufactuting Employmenit by Ring: BogotA and Cali, 1970-75 130 6-6 Changes in Manufacturing Employmenit, bv Ring: BogotS, 1970-75 131 Chapter 7 7-1 Average Data for Pirala aid .i 'orrnas ifinima5Subdivisions, Mid-1970s o58 7-2 Fiiianicinlg of Infiastructure in frafta Subdivisionis 159 7-3 Alternative Average Nominial Rates of' Return to Subdividers 161 7-4 Movinig Rates by Tenure Choice. Time Spent in Previous Residenice, andi Age of Household Head 164 7-5 Probability of Moving: Coniparison of (Oh-sand 1.0(.1 Elasticities 165 7-6 Mobility Rates in U.S. Metropolitani Areas by Selected Household Characteristics 166 7-7 Moves of Hlouseholds from One Ring to Another (Recent Movers) 167 7-8 Moves of Households from One Sector to Another (Recent Movers) 168 7-9 Tenure Choice by Household Income 169 7-10 Tenure Choice by Recencv of'Household Head's Migration 169 7-11 Elasticities for Tenure Choice Model Comparison of ots and t.oC Ir Specifications 170 7-12 Interinational Comilpar-isonis of' Owner-ship Status Elasticities 171 7-13 Character-istics of' Residences b Work Zone. Bogotul 175 7-14 Analysis of Variance: Hedonic Price Equations 176 7-15 Hotisinig Demand Equationis: Estimated Elasticities for BogotA 177 7-16 Raniges of'Hotising Demanid Elasticities fronm Various Counitries 178 CONTENTS ix Chapter 8 8-1 Transportatioin in Bogota 190 8-2 Vehicle Stock in Colombia, 1970-80 191 8-3 Vehicle Stock in Bogota, Cali, and All of Colombia, December 1977 192 8-4 Bus Subsidies in Colombian Cities, 1977 and 1978 195 8-5 Adjusted C(osts,Adjusted Income, and Capital Return for Buses, October 1980 196 8-6 Formal and Actual Governmenit Interventioni in the Transpor t Sector. (Colombia, 1980 199 8-7 Vehicle Taxation Incidenice in BogotA, 1978 200 8-8 Fuel Policv Incidenice in BogotA, 1980 201 8-9 Tranisport Tax and Subsi(ly Policy Incidenice: BogotA, 1978--S0 202 8-10 Work Trip Travel Time by Income Level: BogotA. 1972 and 1978, and Cali. 1978 205 8-11 Wor-kTrip Travel Time by Transportation Mode: Bogota, 1972 and 1978, and Cali, 1978 205 8-12 Ring of Resiclentce and Ring of Emploviyment:BogotA, 1972 and 1978 206 8-13 Average ComimiiutingDistance by Zone of Work, Tvpe of Worker. and Occupationi: Bogota. 1972 iand1978 208 8-14 Average Nuliber of Trips Per Person and Average Number of Trips Per Hotusehold: Selected Cities 211 8-15 Trip Generationi Characteristics of All Travelers: BogotA., 1972 212 8-16 Trip) Generation Equatiorls: BogotA, 1972 213 8-17 Work Trip by Mode of Transportation: Bogota, 1972 and 1978, and Cali, 1978 217 8-18 Change in Work T'rip Modal Shares-Direct Elasticities: BogotA, 1972 and 1978, and Cali.