CHAPTER 4 Urbanization , Agglomeration , and Economic Development

In 2007 the United Nations Population Fund released a report forecasting rapidly rising levels of urbanization over the next two decades, especially in the developing world. It noted that for the fi rst time in history, more than half the world’s population resides in urban areas. The same year UNHABITAT issued a report highlighting the slums and deplorable living conditions in cities in developing countries. That report (UN-HABITAT 2007) estimated that by the end of 2007 there would be more than 1 billion slum dwellers, most of them living in developing countries. It claims that in many cases the economic circumstances of urban migrants are worse than those of rural peasants. In 2003 the United Nations surveyed member governments eliciting their attitudes toward urbanization. It found that the “vast majority” of these governments would have liked to shift populations back to rural areas and to stem the tide of urbanization. Is urbanization actually bad for development? If life in urban areas were worse for urban dwellers than the life they left behind, presumably they would leave the city. So why all the fuss about urbanization and development?