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The World City Hypothesis
   Journal   of    Urban   Economics   98   (2017)   1–5   Contents   lists   available   at   ScienceDirect    Journal   of    Urban   Economics    journal   homepage:   www.elsevier.com/locate/jue   Urban   economics   for   the   developing   World:   An   introduction   Edward   Glaeser   a   ,    J.   Vernon   Henderson   b   ,   ∗ a   Fred   and   Eleanor    Glimp   Professor    of    Economics,   Harvard   University,   USA   b   School   Professor    of    Economic    Geography,   Houghton   Street,   London   School   of    Economics   and   Political   Science,   WC2A2AE,   UK    a   r   t   i   c   l   e   i   n   f   o    Article   history:   Received   29    July   2016   Revised   15    January   2017   Available   online   27    January   2017    JEL   classification:   O   R    H7   O18   P3   Keywords:   Urban   economics   Development   economics   a   b   s   t   r   a   c   t   This   is   an   introduction   to   the   special   issue   of    the    Journal   of    Urban   Economics   on   “Urbanization   in   De-   veloping   Countries:   Past   and   Present”.   We   argue   that   the   rapid   urbanization   and   the   rise   of    cities   in   the   developing   world   demand   new   avenues   of    research   and   much   more   research   to   deal   with   the   urban   is-   sues   facing   billions   of    people   across   the   world   that   current   work   barely   covers.   This   issue   contains   papers   which   move   in   that   direction   and   signals   a   commitment   by   the    journal   to   pursue   this   agenda.   © 2017   Elsevier   Inc.   All   rights   reserved.   1.   Introduction   From   the   dawn   of    humanity   to   1950,   the   world’s   urban   popu-   lation   grew   by   less   than   750   million   people.   According   to   the   U.N.,   the   world’s   urban   population   will   increase   by   more   than   750   mil-   lion   between   2010   and   2020.   In   1899,   Adna   Weber   wrote   that   “the   most   remarkable   phenomenon   of    the   present   century   is   the   con-   centration   of    people   in   cities.” This   claim   seems   even   more   appli-   cable   to   the   21st   century   than   for   the   19th   century.   Yet   21st   century   urbanization   is   different,   most   obviously   be-   cause   of    the   accelerated   growth   of    cities   in   the   world’s   poorer   ar-   eas.   Between   20   0   0   and   2020,   the   United   Nations   projects   a   total   increase   in   urban   population   of    1.48   billion,   and   of    that   1.35   billion   will   come   from   “less   developed   regions.” In   1950,   Europe   and   the   U.S.   together   accounted   for   51.4%   per   of    the   world’s   urban   popula-   tion.   By   2010,   Europe   and   the   U.S.   account   for   22%   of    the   world’s   urban   population.   Yet   the   pages   of    this    journal,   which   reflect   the   interests   of    the   wider   community   of    urban   economists,   have   been   overwhelmingly   dedicated   to   the   cities   of    Europe   and   especially   the   United   States   for   more   than   40   years.   In   a   sense,   the   geographic   focus   of    ur-   ban   economics   has   been   profoundly   backward-looking   focusing   on   the   cities   that   were   dominant   at   the   end   of    World   War   II,   rather   than   the   cities   the   will   come   to   dominate   the   21st   century.   We   ∗ Corresponding   author.   E-mail   address:    j.v.henderson@lse.ac.uk   (J.V.   Henderson).   do   not   mean   to   minimize   the   contributions   of    early   authors   who   focused   on   urban   issues   in   developing   countries   like   Harris   and   To-   daro   (1970),   Malpezzi   (1999)   or   many   others.   1   But   no   one   can   deny   the   overwhelming   orientation   of    our   field   towards   western   cities.   The   focus   of    urban   economists   on   wealthy   world   cities   has   cre-   ated   a   knowledge   gap.   We   know   a   great   deal   about   rich   urban   areas   but   far   too   little   about   poor   urban   areas,   where   the   policy   problems   can   be   far   more   severe.   We   do   not   want   this    journal   to   publish   papers   that   are   targeted   only   at   the   one-fifth   of    the   world’s   urbanites   who   live   in   Europe   and   the   U.S.   This   special   issue   on   cities   in   the   developing   world   signals   a   commitment   of    this    journal   to   publish   research   on   urban   issues   worldwide.   We   note   with   plea-   sure   that   we   were   able   to   assemble   13   very   high   quality   papers   on   “Urbanization   in   Developing   Countries:   Past   and   Present.” We   em-   phasize   that   all   of    the   papers   were   refereed   and   went   through   the   same   evaluation   process   as   other   papers   appearing   in   the    journal.   2.    What’s   different   about   developing     world   cities?   The   need   for   developing   world   urban   economics   is   significantly   reduced   if    we   believe   that   models   and   facts   established   in   the   developed   world   also   hold   in   poorer   places,   and   in   many   cases,   we   think   that   is   likely   to   be   true.   For   example,   the   Alonso-Muth-   1   http://www.sciencedirect.com/science/article/pii/S01660462980   0   0210   .   Glaeser   also   wishes   to   emphasize   that   his   co-author   was   a   particularly   early   advocate   and   practitioner   of    urban   economics   in   the   developing   world   (e.g.   Henderson,   1988   ).   http://dx.doi.org/10.1016/j.jue.2017.01.003   0094-1190/© 2017 Elsevier Inc. All rights reserved.    2   E.   Glaeser,    J.V.   Henderson    /     Journal   of    Urban   Economics   98   (2017)   1–5             0  .          2  .          4  .          6  .          8          1 $0-1000$1000-2000$2000-3000$3000-4000$4000-5000 Source: World Bank  Share of Countries over 1/3 Urbanized, by GDP per Capita (2012 $)1960 and 2010 19602010 Fig.   1.   Share   of    Countries   by   Income   over   1/3   Urbanized   in   1960   and   2010.   Mills   model   seems   no   less   relevant   in   a   mono-centric   Latin   Amer-   ican   city   than   in   a   mono-centric   North   American   city   and   the   Fujita   and   Ogawa   (1982)   model   of    multi-centered   cities   and   dis-   persed   work   places   may   have   special   relevance   in   certain   devel-   oping   country   cities   with   transport   infrastructure.   And   for   national   economies,   transportation-cost   based   models   of    urban   agglomer-   ation   (e.g.   Krugman,   1991   )   seem   more   relevant   in   sub-Saharan   Africa   than   in   the   U.S.,   because   transportation   costs   are   so   much   higher.   Yet   there   are   many   reasons   to   believe   that   the   new   urbaniza-   tion   is   different   from   the   old   urbanization,   primarily   because   of    the   related   problems   of    extreme   poverty   and   poor   governance.   Fig.   1   illustrates   how   different   21st   century   urbanization   is   from   urban-   ization   in   the   past.   Each   bar   captures   the   share   of    countries   that   is   more   than   one-   third   urbanized   within   each   income   bracket,   where   incomes   have   been   corrected   for   inflation.   The   one-third   mark   was   chosen   as   a   rough   indicator   of    whether   the   nation   has   moved   significantly   down   the   urbanization   path.   The   wealthier   countries   in   this   group   have   shown   little   change   over   this   time   period.   For   example,   ap-   proximately   80   percent   of    countries   with   per   capita   incomes   be-   tween   four   and   five   thousand   dollars   were   more   than   one-third   ur-   ban   both   in   1960   and   2010.   The   large   gap   occurs   in   countries   with   per   capita   incomes   that   are   less   than   $20   0   0.   One-fifth   of    countries   with   incomes   between   one   and   two   thousand   dollars   were   more   than   one   third   urbanized   in   1960   but   more   than   one-half    are   sig-   nificantly   urbanized   today.   Today,   more   than   40   percent   of    coun-   tries   with   per   capita   incomes   below   $10   0   0   are   one-third   urban-   ized.   In   1960,   no   country   that   poor   was   significantly   urban.   Indeed,   throughout   all   of    history,   poor   countries   were   predominantly   rural.   Today,   great   metropolises,   like   Kinshasa   or   Nairobi,   have   grown   up   in   places   of    desperate   poverty.   Moreover,   the   few   historic   mega-cities   of    their   time   that   existed   in   nations   with   low   per   capita   incomes   were   all   capitals   of    large   empires,   such   as   Rome,   Abbasid   Baghdad,   and   Kaifeng.   These   cities   may   not   have   been   rich   by   modern   standards,   but   they   were   the   seats   of    great   empires   precisely   because   their   governments   were   the   most   effective   of    their   era.   Consequently,    Julius   Caesar   could   address   traffic   congestion   by   banning   wheeled   vehicles   from   Rome   during   daylight   hours   and   Cato   the   Elder   could   effectively   protect   the   public   water   supply.   One   can   visit   a   more   typical   city   of    the   Roman   Empire   at   its   height,   Pompeii,   and   see   the   imposed   regu-   larity   of    city   layout,   infrastructure   provision,   and   traffic   flows.   It   is   hard   to   imagine   Kinshasa’s   rulers   being   so   effective   today,   and   they   also   have   to   deal   with   much   larger   populations.   The   great   challenge   of    21st   century   poor   mega-cities   is   that   they   must   fulfill   the   requirements   of    connectivity   in   production   for   businesses   and   address   the   negative   externalities   for   consumers   of    density   with   extremely   limited   financial   resources   and   public   capacity.   Cities   may   be   dense   but   employment   can   be   dispersed   with   insufficient   clustering.   Congestion   can   be   so   extreme   with   no   public   transport,   that   walking   is   the   dominant   mode   of    consumer   trips,   over   70%   in   Dar   Es   Salaam   for   example   (   IAPT,   2010   ).   While   this   may   in   part   reflect   the   problem   of    urbanization   under   such   limited   financial   resources,   there   are   other   problems.   Corruption   is   endemic.   In   some   countries,   both   in   Africa   and   in   Latin   America,   the   state   does   not   enjoy   a   monopoly   on   violence.   And   urban   in-   stitutions   are   weak:   property   rights   are   often   unclear   and   poorly   established.   In   the   key   slums   in   Nairobi,   the   majority   of    housing   is   controlled   by   landlords   who   have   no   legal   claim   to   the   land   but   are   major   political   figures.   Not   only   do   they   earn   high   economic   rents,   but   they   block   redevelopment   and   formalization   of    the   land   to   which   they   have   no   legitimate   claim   (   Henderson   et   al.,   2016   ).   Yet   amidst   these   challenges,   key   leaders   in   certain   developing   world   mega-cities   are   trying   to   address   congestion,   contagious   dis-   ease,   crime   and   high   housing   costs.   In   many   cases,   the   experience   of    the   modern   west   may   be   irrelevant   and   even   misleading   for   them.   Some   experts   argue   that   exporting   western   institutions   to   the   poorer   world   has   caused   great   harm.   For   example,   Bold,   Collier   and   Zeitlin   (2009)   argue   that   embracing   the   post-war   European   model   of    direct   state   provision   of    services   was   a   mistake   in   sub-   Saharan   Africa.   Brueckner   and   Lall   (2015)   remind   us   that   extremely   large   minimum   lot   sizes   in   parts   of    sub-Saharan   Africa   are   of-   ten   “an   overhang   of    colonial   planning,   notably   the   1947   British   Town   and   Country   Planning   Act,” despite   “the   fact   that   African   per   capita   incomes   are   less   than   five   percent   of    British   incomes.” Over   90%   of    dwelling   units   in   Dar   Es   Salaam   fall   below   the   minimum   footprint   regulation.   While   that   might   suggest   that   sometimes   bad  
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