URBANIZATION AND RURAL

DEVELOPMENT
GROUP 3
 MIGRATION AND
URBANIZATION DILLEMA

Focuses on one of the most complex and nuanced dilemmas of the development
process: the phenomenon of massive and historically unprecedented movements
of people from the rural countryside to the burgeoning cities of Africa, Asia, and
earlier in Latin America.

Two kinds of Urbanisation:

1. Development-leading city - a productive city featuring rapid productivity gains and
dynamic knowledge spillovers, that at the same time offers many amenities to its
residents.
2. Development-diverting city
which has been termed a “consumption city,” though many of its inhabitants find the
experience to be more of a survival city.
the rapid expansion is natural, which means urban population growth comes from
continued relatively high numbers of births per woman among urban households.
URBANISATION: TRENDS AND
LIVING CONDITIONS
People are increasingly living in cities. UN Population
Division data show that the world’s urban population
grew from 751 million in 1950 to 4.2 billion in 2018.
Just under half of these live in cities of 500,000
people or fewer; but 1 in 8 live in 33 megacities with
a population of 10 million people or more. The
number of megacities is growing, and, by 2030 there
will be 43 megacities, most located in developing
countries, according to UN projections.
 Urban bias - the notion that most governments in
developing countries favor the urban sector in their
development policies, thereby creating a widening gap
between the urban and rural economies.
Rural–urban migration - The movement of people from
rural villages, towns, and farms to urban centers (cities) in
search of jobs.

Rapid urban growth and accelerated rural–urban migration

will undoubtedly continue to be one of the most important
development and demographic issues of the coming
decades.
THE ROLE OF CITIES AND URBAN
GIANTISM PROBLEM
1. The Role of Cities
Urbanization is strongly associated with
development due to the cost advantages it offers to
producers and consumers through agglomeration
economies.
Urbanization economies: Benefits that come from
the overall growth of a concentrated geographic
region.
Localization economies: Benefits specific to
particular sectors within a region, such as finance or
automobiles.
2. Industrial districts
An economic definition of a city emphasizes high population density and closely related
activities.
This clustering creates agglomeration economies, highlighted by Alfred Marshall's
"industrial districts" and Michael Porter's "clusters" theory. Firms in these clusters can
easily contract out work, gaining "flexible specialization," and enjoy marketing advantages
due to their location.
Industrial districts may arise due to historical accidents
Industrial clusters are increasingly common in developing countries and vary widely in
their dynamism.
Clusters can evolve from traditional to more developed forms, requiring sufficient
financing for larger-scale capital goods.

3. Efficient Urban Scale

Localisation economies refer to productivity benefits that arise when closely related
industries cluster together in urban areas.
Two prominent theories of city size are discussed: the urban hierarchy model and the
differentiated plane model. The urban hierarchy model explains city sizes based on
economies of scale, transportation costs, and demand for land. It suggests that larger
cities serve activities with broader market radii, while smaller cities cater to activities
with shorter radii. In contrast, the differentiated plane model focuses on urban
concentrations at transportation nodes, influenced by the industrial mix and available
transportation routes.
4. Understanding Urban Giants: Causes and Consequences
In developing countries, transportation networks often reflect colonial legacies, designed
for resource extraction and military control, with capitals typically located at coastal
outlets. This hub-and-spoke system can stifle regional development and exacerbate
congestion in major cities like Lima and Buenos Aires, where a significant portion of the
population resides.

5. First-City Biases
"First-city bias" refers to the disproportionate allocation of public and private investment
towards a country's largest or first city, leading to inefficiencies in resource distribution.

6. The Political Economy of Urban Giants

Urban giantism in developing countries, where the largest city vastly outgrows others, is
primarily driven by historical factors like colonial-era infrastructure and political
dynamics. Hub-and-spoke transportation systems inherited from colonial times centralize
economic activities in the largest city, while political incentives, such as rent-seeking and
government spending biases, further concentrate resources in the capital.
7. The Urban Informal Sector
The dualistic nature of developing country economies highlights the coexistence of a
formal urban sector, characterized by modern, capital-intensive production, and an
informal sector, which is unregulated, largely unregistered, and diverse in its activities.

8. Policies for the Urban Informal Sector

The informal sector in developing countries is intricately linked to both the rural and
formal urban sectors.
The informal sector provides cheap inputs and services to the formal sector and relies on
its growth for income. Despite rural-urban migration, informal sector incomes are higher
than in the poorest rural areas, reflecting higher productivity. Development theory has
evolved to recognize the constructive role of cities and their informal sectors in
economic development, challenging the earlier anti-urban bias. Agencies like UN-Habitat
and the World Bank now emphasize urban development's importance, focusing on making
cities growth engines and livable environments.
The informal sector, which absorbs about half of the urban workforce in many developing
countries, plays a crucial role in providing employment and income opportunities.

9. Woman in the Informal Sector

Many women run small, low-capital microenterprises in the informal sector. Studies show
that when women have access to credit, they have high repayment rates and high returns
on investment. However, institutional credit primarily serves the formal sector, leaving
many women ineligible for loans.
MIGRATION AND DEVELOPMENT
Migration worsens rural–urban structural imbalances in two direct ways.

on the supply side, internal migration disproportionately

increases the growth rate of urban job seekers relative to
urban population growth, which itself is at historically
unprecedented levels because of the high proportion of
well-educated young people in the migrant system.

on the demand side, urban job creation is generally more

difficult and costly to accomplish than rural job creation
because of the need for substantial complementary
resource inputs for most jobs in the industrial sector.
 MIGRATION PATTERNS
ARE COMPLEX

Rural–urban migration is most important because the

population share of cities is growing, despite the fact that
fertility is much lower in urban areas, and the difference is
accounted for by rural–urban migration.

Urban–rural migration is important to understand because it

usually occurs when hard times in cities coincide with increases in
output prices from the country’s cash crops, as occurred in Ghana
not long ago.
The composition of
internal migration for
several countries is
shown
WHAT IS THE REASON
THEY GO TO THAT
PLACE?
INTERVIEW QUESTION
 WHAT ARE THE
CHALLENGES OF BEING
AN IMMIGRANT?
INTERVIEW QUESTION
 MEMBERS

Candelario, Campos, De Guzman, Delano, Dumdum,

Jane Rose Marliza Christine Jane Aaron James Sharmaine
Reporter, Content,
Content Powerpoint Content Reporter
Interviewer
Creator
THANK YOU GROUP 3

FOR
LISTENING!!