Transcript The Future of the American City

Cities in the Developing
World
Edward L. Glaeser
Harvard University
Outline of Talk
The Importance of Cities
Understanding Agglomeration
Cities and the Economy
Cities and Politics
Outline, Continued
Cities and Transportation
Cities and the Environment
Cities and Society
Reflections on Policy
The Importance of Cities
Currently, almost one-half of the world’s
population lives in cities.
Productivity and Cities appear to go
together
Over the next 75 years almost the entire
world will become urbanized
The Challenge of Cities
It’s all about agglomeration– so nothing is likely
to be first best
Cities require massive infrastructure which
poses a huge problem for governments
Urbanization changes politics and cities are
themselves shaped by politics
Cities pose huge environment challenges (think
about when all of China drives)
Cities reform society and break down traditional
social structures.
Urban Economics: Core Idea
Cities are defined as the absence of
physical space between people and firms.
As such, the advantage of cities comes
exclusively from eliminating transportation
costs for GOODS, PEOPLE and IDEAS.
The Cost of Cities comes from this same
proximity and lack of access to land.
Three Core Comparative Statics
The Demand for Cities is always fueled by
the demand for interaction
As agriculture is land-intensive, it is nonurban and the rise of cities requires food.
Urban form and location is driven by
transportation technologies.
Moving Goods
Cities initially formed for protection (the
original agglomeration economy and to
reduce the costs of moving goods.
Seaports and railroad hubs.
Then the self-reinforcing growth of industry
in commercial towns.
But Transport Costs for Goods have
plummeted
The Decline of the Costs of Moving
Goods
Dollars per Ton Mile (Real)
.185063
.02323
1890
2000
year
Railroad Revenue per Ton Mile
Consequence #1: The Rise of the
Consumer City
Population Change 1980-2000
.
.656821
-.160386
2.2
72.6
avg. daily january temp. (F), 19
January Temperature and MSA Growth
Other Consequences
Decline of Natural Resource Rich Areas
within the United States
Decline of Manufacturing Towns
Manufacturing no longer locates near its
suppliers/consumers.
Rise of Manufacturing Outside of
Developed World
Cities do exist to facilitate human
contact: moving people
In the workplace, services and social
connection.
Business services are the heart of most
cities today.
Large labor markets provide insurance for
workers, and allow for job-hopping.
Social contact may be as important as
work contact.
Moving People
The Major Cost of Moving Most People is
Time.
As such, over the 20th century, the cost of
moving people has increased, not fallen,
and probably will continue to rise.
But the car has revolutionized the way that
we move people.
Edge Cities
(An attempt to be controversial): Edge
Cities are actually misnamed.
The important thing about edge cities is
not that they are on the edge, but rather
that they are built around the car.
As such, car cities would be a better
phrase.
Why Cars?
“Experts” often dislike them because they
pollute, cause congestion and can kill.
However, the average commute time in
the U.S. by car is 23 minutes, by pt 47
minutes
Big issue is the fixed cost (15-18 minutes)
involved in trains or buses.
Cutoff point is somewhere around 10
dollars per hour (China???)
Public Transport Use and
Commute Times across U.S. Cities
average travel time to work (mi
Fitted values
36.8513
New Y ork
Chicago
Philadel
Los Ange
17
Newark c
Oakland Baltimor
San Jose
Anaheim
Long Bea
Houston Detroit
Santa An
Atlanta
Dallas c
Miami ciNew Orle
Arlingto
Phoenix
Virginia
Mesa
cit
Clev elan
St. Loui Seattle
San Anto
Honolulu
Jacksonv
Charlott
Cincinna
Pittsbur
FortIndianap
Wor
Memphis
er c
Las
Vega
Norf
olkDenv
Kansas
C Portland
Birmingh
San
Dieg
Nashv
Columbus
ill
Milwauke
ElSacramen
Paso
Tucson c Louisv il
Minneapo
Oklahoma
Tampa
ci c
Austin
Buf f alo
Corpus C
St. Paul
Albuquer
Colorado
Fresno c
Toledo c
Omaha ci
Tulsa
Wichitaci
Washingt
San Fran
Boston c
.2
53.4
% using public transportation 19
The Europeans and their Trains
Fact # 1: In rich European cities, people
now drive just like in the U.S.
Fact # 2: In many cities where people
rarely drive, commute times are very high:




Moscow 10% drive, 62 minute commute.
Athens 36% drive, 53 minute commute.
Paris 60% drive, 35 minute commute.
US average is 24 minutes.
Cars and Travel Time
Internationally
mean travel time to work (mins)
Fitted values
Buchares
78
Tbilisi
Moscow
Prague
Y erev an
Athens
Rio de J
Brasilia
La Haban
Recif
Budapest
e
Santiago
NizhnyBelgrade
N
Sof ia
Bratisla
New Y ork
Almaty
Stockhol
Amman
Camaguey
Nov gorodCuritiba
Ry azanBrazzav
Vilnius
i
Nis
Chisinau
Kostroma
Zagreb
Nov i Sad
Gaborone
Copenhag
Maribor
Riga
Hertf ord
Bandar S
Melbourn
Toronto
Amsterda
Bordeaux
Dunkerqu
Djibouti
Ljubljan
Birkirka
Strasbou
14
Paris
Dubai
Sao Tome
Rennes
2
Koper
81
% wrk trips by private car
Cars Totally Change Urban Form
Cities can be built at much lower densities
The centralization of public transportation
is replaced by places without a CBD
Space requirements in transport explode
and congestion becomes a huge issue.
Cars and Space: U.S. Data
Population Density
Fitted values
23705.3
-1038.24
.6
2
avg. vehicles available per hhol
Cars and Space: International Data
floor area (m2/pers)
Fitted values
Melbourn
55
Copenhag
Toronto
Stockhol
Hamilton
Auckland
Amsterda
Wiesbade
Koeln
Hertf ord
Bedf ords
Freiburg
Budapest
Athens
Leipzig
Erf urt
Duisburg
Paris
Prague
12.25
Bratisla
Nov i SadZagreb
Curitiba
Moscow
Nis
Belgrade
Rio de J
Camaguey
Kostroma
Nizhny N
Sof ia
Nov
gorod
Ry
Tbilisi
azan
Vilnius
La Haban
ChisinauSantiago
Brazzav i
Y erev an
Buchares
Gaborone Librev il
Tehran
Riga
Cardif f
Brasilia
Recif e
Almaty
Amman
Djibouti
Sao Tome
2
81
% wrk trips by private car
Car Cities in the 1990s:
Is there a New Urbanism?
growth
Fitted values
.852277
-.129964
.6
2.3
avg. vehicles available per hhol
The Flow of Ideas
The third major ingredient to cities is the
flow of ideas.

Ideas require some face to face transmission.
New innovations are created in urban
areas.

Evidence on patent cities.
People get access to new ideas.
People learn in cities.

Evidence on urban wages.
Ideas and Urban Success
Heavy idea oriented industries are still
overconcentrated in city centers.

Think Wall Street.
Increasing importance of ideas makes this
a potent force for urban rebound.
The remarkable turnaround of Boston.
The connection between human capital
and growth (proxy for ideas).
Sun, Sprawl and SKILLS
growth
Fitted values
Plano ci
.725001
Laredo c
Austin c
Charlott
Chesapea
-.129964
Durham c
Raleigh Ov erland
WinstonArlingto
Irv ing c
Sioux
Fa
Mesquite
San Anto
Greensbo
Hialeah
Houston
Garland
PasadenaFort Way Fort Wor
Dallas
c
Lincoln
Jacksonv Omaha ci
Lexingto
Holly woo Oklahoma
Wichita
Orlando
Columbus
Nashv
ill
Cedar
Ra
Amarillo
cit Abilene
Elizabet ElWaco
Hampton
Paso
New YVirginia
ork
Tampa
ci
Stamf ord
Prov
iden
Springf
i
Corpus
C
Rockf
ord
Montgome
Lubbock
Tulsa
Indianap
Memphis
Paterson
Newport
Springf
i ci
Sterling
Atlanta
Paul
Knoxv
ill St.
Jersey
Grand
RaC
Y
onkers
Little
Columbus
St.
Chicago
Pete
Minneapo
Baton
Ro Rc
Des
Moin
Boston
South
Be
Fort
Topeka
Lau
c
Lowell
cShrev
Worceste
Allentow
Kansas
Mobile
cC
Miami
ci Chattano
Independ
epoLiv
oniac
Peoria
Newark Bridgepo
c Waterbur Beaumont
Huntsv il
Kansas C
New
Orle
Richmond
Akron
ci
Springf
i
Portsmou
Ev
ansv
il
Philadel
Sav
annah
cErie
citLouisv
il
Milwauke
Rocheste
New
Hav
e Washingt
ClevWarren
elan
Albany
c
Toledo
cLansing
Jackson
Detroit
Day ton
Birmingh
c
Macon
ci Pittsbur
Cincinna
Norf
olk Sy racuse
Buf
f alo
Baltimor
GaryFlint
cit ci Hartf
St.
Loui
ord
Tallahas
Alexandr
Madison
7.3
Ann Arbo
64.2
% persons 25+ with BA or higher,
Cities and Productivity
Increases in Density are almost always
associated with increases in wealth, most
of this is because of the move from
agriculture up the productivity ladder.
Cities and GDP
% population urban 1998, WDI200
Fitted values
HongSingapor
Kon
Belgium
100
Iceland
Bahrain Israel Malta
Luxembou
United
K
Argentin
Netherla
Bahamas,
Germany
,
Venezuel
New
Zeal
Chile
Denmark
United
A
Australi
Saudi Ar
Sweden
Korea
Brazil
Gabon
Japan
Spain Canada
United S
France
Norway
Mexico
Trinidad
Jordan Peru Colombia
Turkey
ItalySwitzerl
Finland
Austria
Tunisia PolandHungary
Ecuador Dominica
Boliv
ia
Portugal
Congo
Iran, I.
Greece
Algeria
Ireland
Philippi
Cy prus
Jamaica Panama Malay sia
MauritanNicaragu Morocco
Sy ria Paraguay
South af
Honduras
Botswana
Fiji Costa Ri
Cameroon
Senegal
Cote d'I
Egy pt El Salv a
Nigeria
Mauritiu
BeninCentral
Zambia
Guatemal
Indonesi
Mozambiq
Ghana
Guy ana
Pakistan
Sierra L
Haiti
Sudan Angola Zimbabwe
Togo Guinea
Keny a Comoros
Gambia
China
Tanzania
Mali Zaire
Madagasc
LesothoIndia
Swazilan
Y emen,Chad
N
Banglade
Sri Lank
Guinea-B
Malawi
Western Thailand
Niger
Papua Ne
Ethiopia
Uganda
Nepal
Burundi
Uruguay
50
0
6
8
Log of GDP 1998
10
Density and Median Income across
U.S. Counties
Median Income in 1989
.
60000
40000
20000
0
-1.83904
11.0787
Log of Density in 1990
0
20
40
60
80
100
GDP and Income in 1960
4
5
6
Log of GDP in 1960
% population urban 1960, WDI2000
7
Fitted values
8
1
2
3
4
Growth and Urbanization
0
20
40
60
% population urban 1960, WDI2000
GDP Growth 1960-1998
80
Fitted values
100
-.4
-.2
0
.2
.4
.6
No matter what you’ve heard–
cities and happiness
0
20
60
40
% population urban 1960, WDI2000
self-reported happiness, std-dev from mean (WVS)
80
100
Fitted values
Development and Urbanization
Development eventually always means
urbanization, but this does not suggest
that urbanization brings development
The goal must be to manage urban
growth, not necessarily to force it.
But there is a basic question of whether
development economists are too
agricultural in their orientation.
Paths to Progress
Traditional View– Move up along the product
ladder– agricultural revolution first, then
manufacturing revolution
This is certainly how the west grew rich
In a closed economy– it is necessary to increase
agricultural productivity before people leave the
farms (Bairoch vs. Jacobs)
But is this approach right for
today’s developing world?
With lower transport costs, countries no
longer need to feed themselves.
Four New World Countries appear to have
a comparative advantage at most forms of
basic agriculture (grains, etc.).
These commodities require land and
technology, but not all that much labor.
Cities vs. Farms Continued
Many developing countries started off poor because their
soil was bad
Furthermore, transportation costs for many agricultural
goods are quite high.
Furthermore, the developed world has enacted a set of
policies which deeply penalize farmers in the developing
world.
As a result– it may make sense to skip over agriculture
altogether.
Manufacturing, Services and
Agriculture
Some boutique agriculture should be done
in the developing world (flowers, some
vegetables)
For some commodities (coffee) the
developing world has a clear comparative
advantage
But I suspect that the long run depends on
non-agricultural goods– which means
fixing cities.
Cities and Politics
In the developing world– urbanization
influences politics– sometimes to a
remarkable degree
At the same time– politics shapes cities.
Presumably, this is often problematic.
Cities and their influence on politics
Cities facilitate the flow of information
among organizers
The labor movement grows in cities in
Europe and the U.S.
The American Revolution is born in Boston
(again information flows)
Putting down revolutions is harder in cities
than in the countryside (think Haussman)
Urbanization Changes Politics
Urbanized countries have more riots–
especially when ethnically fragmented
Urbanized countries appear harder for
dictators to run– strong correlation
between urbanization and democracy
The ability to ignore poverty becomes
harder in urban areas
Political Sources of Mega-Cities
Only stable democracies tend to protect
the rights of people in the hinterland
Otherwise political influence decays with
proximity to power (riots or lobbying)
As a result, regimes without rules, tend to
favor the capital city (pro-export policies)
Dictatorship, Instability and
Primacy
Primacy=Share of Urbanized Population in
Largest City– Data from 1970-1985 (Ades
and Glaeser, 1995)
Dictatorship is Gastil above 3
Unstable is Revolutions and Coups above
Worldwide Mean
Politics and Primacy Continued
Stable Democracies 23% (N=23)
Stable Dictatorships 30% (N=16)
Unstable Democracies 35% (N=6)
Unstable Dictatorships 37% (N=39)
Legal Origin and Sprawl
Differences across the world in car use is
closely correlated with differences across
the world in density (see above)
Differences in car use are driven by gas
taxes and subsidy of public transportation
Regulated societies tax gas much more
highly.
French legal origin societies tax gas much
more highly
Legal Origin and Cities
French legal origin countries have 50
percent higher gas prices.
French legal origin countries have fewer
cars per capita.
French legal origin countries have denser
urban areas. (Glaeser and Kahn, 2003).
Cities and Transportation
As I have argued throughout
transportation dictates where cities are
and what they look like.
Big questions:




How many roads to build?
How much to tax gasoline?
How much public transportation to build?
How much to subsidize other infrastructure?
Kain’s Law
None of these questions area easy to
answer and externalities abound, but one
law appears to always hold within cities:
BUS GOOD --- TRAIN BAD
John Kain, who just died, spent much of
his life documenting this simple fact.
Trains in the Developing World
Fixed Costs of Subways or other people
moving rail are huge.
Anything you can do with a subway, you
can do with a bus running through a
tunnel.
But people are enamored of large scale
people-moving trains.
This is something worth fighting.
Cities and the Environment
Urban production often creates
environmental challenges (although
agriculture does too)
Transportation is particularly rife with
environmental consequences
Cramming people together has its own
problems– health and waste
A Basic Claim
The answer to this is not to stymie cities or
to stop the rise of the car
But likewise the answer is not the
unfettered free market either– think of
catalytic converters
Get rid of old cars and pave streets
Remember the gdp/infant mortality
relationship is strong– stopping growth to
save the environment does cost lives.
Cities and Society
Basic Idea: City air makes you free and
this is both good and bad.
Traditional social structures are
maintained with community sanctions, and
the ultimate threat is expulsion.
In cities, flight is easy, there is always
another community to join, and traditional
norms break down.
Hence the Connection between
City Size and Disorder
Across city sizes within the U.S., crimes
rises powerfully with city size.
Within the U.S. metropolitan areas have
300 percent more violent crime than rural
areas.
Out of wedlock births rise with city size.
Some forms of religious activity declines in
cities.
As a result, cities pose challenges
Rule of law is a complement for
urbanization
Official justice should compensate for the
lack of effective private justice
Moreover, urban extremes of inequality
create added problems
As does the elimination of distance
between victims and criminals