Urbanization in Developing Countries

The rapid urbanization in many
developing countries over the past half century seems to
have been accompanied by excessively high levels of
concentration of the urban population in very large cities.
Some degree of urban concentration may be desirable
initially to reduce inter- and intraregional infrastructure
expenditures. But in a mature system of cities, economic
activity is more spread out. Standardized manufacturing
production tends to be de-concentrated into smaller and
medium-size metropolitan areas, whereas production in large
metropolitan areas focuses on services, research and
development, and non-standardized manufacturing. The costs
of excessive concentration (traffic accidents, health costs
from exposure to high levels of air and water pollution, and
time lost to long commutes) stem from the large size of
megacities and underdeveloped institutions and human
resources for urban planning and management. Alleviating
excessively high urban concentration requires investments in
interregional transport and telecommunications to facilitate
de-concentration of industry. It also requires fiscal
de-concentration, so that interior cities can raise the
fiscal resources and provide the services needed to compete
with primate cities for industry and population.