World Development Report 1984

development in areas already settled, on improve- interest loans to promote capital-intensive indusments
in urban policies and management, on elim- try, for example-may also exacerbate urban
ination of price distortions (such as keeping food problems by encouraging rural-urban migration
prices low) that encourage urban population without creating enough new urban jobs.
growth, and on development of effective family Whatever the cause, the drift from countryside
planning programs to reduce rates of natural pop- to city is a concern to governments. A 1983 UN
ulation increase. survey of 126 governments of developing coun-
Projections of urban growth (which were shown tries found that only 3 considered the distribution
in Table 4.3) are not meant to predict what will of their populations "appropriate." Moreover, all
actually happen-merely what would happen if three were governments of small island nations:
historical trends continued. As such, projections Barbados, Malta, and Nauru. Concern was greatare
sensitive to small changes in trends. There is est in Africa, the Middle East, and low-income
evidence that the rate of urban growth in develop- Asia: virtually all governments in these regions
ing countries slowed slightly after 1973 in response considered population distribution either "partito
the world economic slowdown. That decrease ally appropriate" or "inappropriate." As a remcould
produce a much smaller urban population edy, more than three-quarters of all respondents
than shown by the projections. Though this would stated that they were pursuing policies to slow
make urban growth easier to cope with, it would down or reverse internal migration.
(without a compensating decline in the overall Between 1925 and 1950 at least 100 million peopopulation
growth rate) imply faster rural growth. ple in the developing countries-about 10 percent
of their rural population in 1925-migrated from
The benefits and costs of urbanization the countryside to towns and cities. During the
following twenty-five years, the numbers rose to
Urban growth gives rise to economies of scale. an estimated 330 million, equivalent to almost a
Industries benefit from concentrations of suppliers quarter of the rural population of the developing
and consumers, which allow savings in communi- countries in 1950. Population movements within
cations and transport costs. Large cities also pro- rural and urban areas, and temporary migration,
vide big, differentiated labor markets and may have undoubtedly involved even more people,
help to accelerate the pace of technological innova- although their numbers are not reliably known.
tion. They also allow economies of scale for such
services as water supply and electric power to be The role of internal migration
exploited. Evidence from India suggests that substantial
economies of scale are found in cities of up Current high rates of urban growth in developing
to 150,000 inhabitants. The point at which dis- countries are only partly due to rural-urban migraeconomies
creep in, because cities are too big, has tion. Natural population increase is estimated to
not been clearly demonstrated. account for 60 percent of the rise in urban popula-
Against these benefits, unemployment tends to tions, according to a UN sample of twenty-nine
be higher in urban than rural areas. In a survey of developing countries. Perhaps another 8 to 15 perfourteen
developing countries, only one (the cent is attributable to the reclassification of rural
Islamic Republic of Iran) had a higher rural unem- areas to urban status. Additional evidence from
ployment than urban unemployment rate; in six India, Kenya, and several West African countries
countries the urban unemployment rate was more confirms this pattern.
than twice the rural rate. Surveys confirm that air Although fertility rates are on average lower in
pollution, congestion, social disturbances, crime, urban than in rural areas, differences within counand
similar problems also increase disproportion- tries between urban and rural fertility tend to be
ately with city size. But these problems are often small (see Chapter 6). Thus the effect of urbanizaaggravated
by poor urban management. Typically, tion on aggregate fertility is limited in the short
governments reduce the absorptive capacity of cit- run, especially because migrants tend to be of
ies by intervening in labor markets (for instance, childbearing age, raising the number of births in
through minimum wage legislation, and licensing cities even when the rate of fertility is lower. Naturequirements
and restrictions on small busi- ral increase in urban areas is therefore substantial.
nesses), and by pursuing inappropriate pricing Migration then puts even greater strain on the
policies for public services. National economic pol- capacity of cities to cope with rapidly growing
icies-which provide fiscal incentives and low- numbers. In broad perspective, the shift of people
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