The Evolution of Urban Concentration around the World: a Panel Approach

The views and interpretations in this document are those of the authors and should not be attributed to the Inter-American Development Bank, or to any individual acting on its behalf. The Research Department (RES) publishes the Latin American Economic Policies Newsletter, as well as working papers and books, on diverse economic issues. To obtain a complete list of RES publications and read or download them please visit our web site at: Abstract * In this paper, we use a panel approach to study population growth in major cities around the world. We find that major cities grow faster in relatively backward economies and in more volatile, faster-growing economies. We also find that the effects of trade policy on the growth of major cities hinge heavily on geography. While population growth in major cities located at or near ports does not change after an upsurge of trade flows, population growth in landlocked major cities tends to slow down after the same event. On the other hand, we do not find any effect of political regime on the population growth of major cities. Finally, we find some evidence that, other things being equal, larger cities tend to grow at smaller rates. * We thank Ricardo Fuentes and Jessica Seddon for excellent research assistance and Francisco Rodríguez and Miguel Szekely for very valuable comments.