Transcript presentation

Reshaping
Economic Geography
Three prosperous places
• Tokyo—the biggest city in the world
 35 million out of 120 million Japanese, packed into 4
percent of Japan’s land area
• USA—the most mobile country
 More than 35 million out of 300 million changed
residence in 2006; 8 million people changed states
• West Europe—the most integrated continent
 About 35 percent of its GDP is traded, almost two
thirds within the region
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Packing in Tokyo’s subways
Tokyo’s “trainpackers” crush commuters into metrorail carriages
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Economic density—why the
Japanese agglomerate
Japan’s economic mass is concentrated in the Tokyo-Yokohama area
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In Belgium, too
The economic landscape is bumpy, even in a small, developed,
Western European nation
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Going home in the US
Planes in the air on the Tuesday before Thanksgiving in the US
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Economic distance—what Americans
reduce by migrating
Economic mass is concentrated in a few parts of a big country
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The fruits of specialization
Airbus parts are made, moved, and assembled all over Western Europe
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Low economic divisions—what
allows Europe to specialize
Thin borders in Europe, thick in Africa
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Made possible by common
institutions
Growing institutional integration in Western Europe
Source: Dorrucci et. al. (2002, 2004)
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The result?
The US, EU-15, and Japan cover much of the economic globe
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Three prospering places
• Mumbai—the most densely populated city
 About 30,000 people per sq. km.; already twice the population
density of Seoul, Shanghai, and Bogotá
• China—the most mobile developing country
 60 million migrant workers traveled from home on the last day of
Chinese New Year holidays in 2006
 200 million travelers were stranded due to snow storms days
before Chinese New Year in 2008
• Southeast Asia—the most rapidly integrating
developing region
 Trade is a big part of GDP
 More than 25 percent of its trade is within Southeast Asia; more
than 50 percent if Northeast Asia is included
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Trainpackers needed
People die every day on Mumbai’s trains
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Why Mumbai attracts migrants
Economic density is high in and near Mumbai
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Going home in China
Guangzhou railway station during Chinese New Year, 2008
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Where Chinese workers migrate
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Specialization and trade in East
Asia
Computer parts are made and assembled all over East Asia
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Exploiting economies of scale in
East Asia, to access world markets
Vigorous trade flows in East Asia, anchored by China and Japan
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The result?
China, India and Southeast Asia can again be recognized on a map of the
world’s economic geography
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Geographic transformations
needed for progress
• Higher Densities
 Few countries have grown to high income
without large cities
• Shorter Distances
 Growth seldom comes without mobile people
• Fewer Divisions
 Growth seldom comes to a country that is
isolated from others
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WDR 2009 structure
The report can be read by part or by policy
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WDR 2009 messages
• Growth will be unbalanced—concentration is the
rule
– Trying to spread out economic production amounts to
fighting the forces of economic growth
• Development can still be inclusive—convergence
is the objective
– Persistent spatial disparities in basic living standards are
neither desirable nor inevitable
• Geographic transformations are needed for
combining unbalanced growth with inclusive
development—integration is the answer
– Don’t focus narrowly on places that are not doing well, focus
instead on their economic interactions with places that are
doing better
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Policy makers tend to focus on
spatial targeting first, and foremost
The debates on urbanization, decentralization and globalization tend
to focus narrowly on lagging places, and on targeted interventions
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Policy makers should use all
instruments of integration
Common institutions and connective infrastructure are the most
potent instruments for economic integration
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Geographic scales
The report examines policy issues at the local, national and
international geographic scales
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Integration gets harder…
…. as urbanization advances, and more policy instruments are needed
Institutions to encourage
density in Popayan,
Colombia
Institutions and infrastructure
to encourage density and
reduce distance in
Bucaramanga, Colombia
Institutions, infrastructure and
interventions to encourage
density, reduce distance, and
lower divisions in Bogota
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Urban settlements provide different
services
Human settlements do different things
1. Towns facilitate internal scale economies
2. Cities encourage localization economies
3. Metropolises generate urbanization economies
Popayan, Colombia
Bucaramanga, Colombia
Bogota, Colombia
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The importance of land markets
A simple framework for tailoring urbanization policies to the economic geography
of places
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Seoul in the 1950s
Cheonggye river, and the biggest slum in Seoul
Source: Aving,network
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Seoul in the 1970s
A highway is built on the river, through and over the slums
Source: Aving,network
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Seoul in the 1980s
More infrastructure and new businesses next to Cheonggye-cheon, the slums
were moved to other parts of the city
Source: Aving,network
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Seoul in 2009
Cheonggyecheon in 2005: Mayor Lee Myungbak, the current president of South
Korea, removed the highway and recovered the riverfront
Source:
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Territorial development policies—when
lagging areas have high poverty rates,
but most poor are in leading areas
A 1-D problem of national economic integration in China:
The dimension—economic distance; the instrument—institutions that unify
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Territorial development policies—
when lagging areas have high
poverty rates and many of the poor
A 2-D problem of national economic integration in Brazil:
The dimensions—economic distance and misplaced population density; the
instruments—institutions, and infrastructure to connect leading and lagging areas
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Territorial development policies—when
lagging areas have high poverty rates and
many poor people, who face internal barriers
A 3-D problem of national economic integration in India:
Nationally, the dimensions—economic distances, misplaced densities, and domestic
divisions; the instruments—institutions, infrastructure, and interventions that target
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The importance of mobility
and migration
A simple framework for tailoring territorial development policies to the economic
geography of places
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Migration—the equalizer of
income levels, not economic mass
Massive movements from East to West Germany, and convergence of income
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Division impedes market access
in the developing world
Borders are thicker in the developing world
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Thick borders hurt small
economies more
Borders are thicker in the Balkans
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Market access helps to classify the
developing world’s neighborhoods
Market access depends both on geography and policies
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Macedonians have good
market access
Market access is better in the European Union
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Integrating with world markets is
not the most difficult in the Balkans
Density, distance, and division can be used to characterize the difficulty of
international integration for countries in different regions of the world
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The importance of having the
same institutions as the EU
A simple framework for tailoring international integration policies to the economic
geography of places
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Economic density in Skopje
appears to be impressive
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Economic density in the
Balkans is low
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Economic density is relatively
high in Moscow and Istanbul
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Moscow is unimpressive compared
with cities in Germany and Japan
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The importance of integration
with nearby EU markets
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Calibrating integration policies—
“An I for a D”
A rule of thumb for tailoring policies to the economic geography of places
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Lessons for FYR Macedonia?
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Unleash the market forces that promote
economic concentration
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Markets for land, labor and intermediate inputs
Calibrate policies to economic
geography to ensure inclusive
development
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“Institutions” which unify, “Infrastructure” to connect
“Interventions” that target
Sharpen urban, territorial development,
and international integration strategies
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Economic concentration, in and around Skopje
Mobile people, internally and internationally
Deep integration, with European Union
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For more information
• www.worldbank.org/wdr2009
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[email protected]
[email protected]
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