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In 2007, for the first time in human history, more people lived in urban areas than in the countryside. According to the United Nations, the urban share of the world population had reached 50 per cent, and demographers project that by 2050 nearly 70 per cent of humanity will reside in towns and cities. The transformation is especially rapid in Africa and Asia, which together are expected to absorb almost all of the global population increase forecast for the next three decades, largely through the expansion of existing urban centres rather than the creation of entirely new ones.
Economists explain urban concentration mainly through the search for higher productivity and income. When agriculture modernises, it requires fewer workers, and the labour released from rural areas tends to move towards manufacturing and services, which are disproportionately located in cities. Surveys in several developing countries show that urban wages for comparable work can exceed rural wages by 50 per cent or more, and this gap persists even after differences in the cost of living are taken into account.
A second body of research stresses what economists call agglomeration economies. Firms cluster together because proximity reduces transport costs, deepens labour markets and accelerates the spread of ideas. Workers in large metropolitan areas learn faster from one another, and employers find it easier to match specialised skills with specialised jobs. Empirical studies suggest that doubling the size of a city is associated with productivity gains of between three and eight per cent, a relationship that appears remarkably stable across countries and time periods.
Yet concentration carries heavy costs. Housing absorbs a rising share of household budgets as demand outstrips supply; in some fast-growing cities, rents have climbed two or three times faster than average earnings. Congestion imposes further penalties: one widely cited study estimated that traffic delays in a single large metropolis can consume the equivalent of two per cent of regional income each year. Air pollution, noise and long commuting times add burdens that fall hardest on low-income residents pushed to the urban fringe.
The most visible symptom of strained urban growth is the informal settlement. Roughly one billion people, about one in four urban residents worldwide, live in slums or similar conditions, lacking secure tenure, reliable water supplies or adequate sanitation. Contrary to the assumption that such districts would shrink as economies grow, their absolute numbers have continued to rise, because formal housing markets and public investment have failed to keep pace with migration. Upgrading such settlements, rather than clearing them, has gradually become the preferred approach of agencies such as UN-Habitat, because eviction simply pushes poverty elsewhere.
Geographers have also drawn attention to urban primacy, the tendency for one city to dominate a national economy. Primate cities such as Bangkok, Lima and Lagos concentrate a disproportionate share of industry, administration and higher education. This can create virtuous circles of investment and talent, but it also leaves national economies vulnerable to shocks affecting a single location and can drain secondary towns of their most ambitious young people. Measuring primacy is straightforward: researchers compare the population or output of the largest city with that of the second city, and the resulting ratio is often startling.
Governments have attempted to counter concentration in several ways. Some have built planned new towns or relocated their capitals, with mixed results: Brasilia and Canberra succeeded as administrative centres but took decades to develop diversified economies, while other schemes attracted few residents at all. More recent strategies favour investing in transport links between mid-sized cities and their metropolitan neighbours, so that workers can access big-city labour markets without bearing big-city housing costs.
Whether urban concentration proves to be an asset or a liability therefore depends less on its scale than on the quality of governance that accompanies it. Cities that combine density with functioning land markets, public transport and basic services convert concentration into prosperity. Those that fail to plan for growth discover that the same forces which draw people in can trap them in poverty, congestion and environmental degradation.