International growth spillovers, geography and infrastructure

There is significant academic evidence that growth in one country tends to have a positive impact on growth in neighboring countries. This paper contributes to this literature by assessing whether growth spillovers tend to vary significantly across world regions and by investigating the contribution of transport and communication infrastructure in promoting neighborhood effects. The study is global, but the main interest is on Sub-Saharan Africa. The authors define neighborhoods both in geographic terms and by membership in the same regional trade association. The analysis finds significant evidence for heterogeneity in growth spillovers, which are strong between OECD countries and essentially absent in Sub-Saharan Africa. The analysis further finds strong interaction between infrastructure and being a landlocked country. This suggests that growth spillovers from regional"success stories"in Sub-Saharan Africa and other lagging world regions will depend on first strengthening the channels through which such spillovers can spread -- most importantly infrastructure endowments.Achieving Shared Growth,Transport Economics Policy&Planning,Economic Growth,Economic Theory&Research,Country Strategy&Performance

Urban and regional dynamics in Poland

In this exploration of urban and regional dynamics in Poland after the transition, the authors find that the degree of urbanization, and primacy remains low in Poland. The largest cities are not growing at the rate that would be expected if post-transition adjustments were operating freely. As a result, Poland is not fully realizing external economies from urban agglomeration. Internal migration decreased significantly in the 1990s, with rural-to-urban migration declining dramatically. Current population levels everywhere seem frozen at a degree of urbanization that is low by international standards. Migration levels do not respond to unemployment differentials, perhaps because Poland's continuing housing shortage, deters migration. Housing construction, which was already low, fell by half in the 1990s, and has only recently begun a slight recovery. A significant number of mostly young, and educated temporary migrants leave Poland annually, many to find employment abroad. This may reduce pressure on the Polish labor market, but also keeps dynamic actors our of the domestic labor force, reducing growth in urban businesses and industry. Employment in manufacturing and agriculture is relatively concentrated, but specialization seems to have declined in recent years, perhaps reflecting barriers to labor mobility - which could limit growth. That employment in the manufacturing sector is quite concentrated, is to be expected in a formerly planned economy. But employment in the service sector, is also quite concentrated. A geographic divergence of service activities is not explained by dominant growth in specialized financial, and business services in the capital alone. Poland's policymakers should find a way to provide housing, thereby reducing barriers to labor mobility, and growth.Health Monitoring&Evaluation,Municipal Financial Management,Housing&Human Habitats,Public Health Promotion,Banks&Banking Reform,National Urban Development Policies&Strategies,Urban Housing and Land Settlements,Municipal Financial Management,Health Monitoring&Evaluation,Housing&Human Habitats

Fiscal and distributional implications of property tax reforms in Indian cities.

The property tax is an important local revenue source in many countries, but it is often underused as a source for financing local expenditures. In India, many local governments have initiated administrative and valuation reforms to increase the yield from property taxes. In this paper, we examine the fiscal and distributional implication of the ongoing and potential assessment reforms in two Indian cities - Bangalore and Pune. While our findings are specific to these two cases, the reform efforts and underlying problems are epresentative of most urban local governments. Our main finding is that reform efforts that bring assessment of the property tax base closer to market values have significant positive impacts on revenue generation, and do not have adverse consequences in terms of the tax burden faced by the poor. Further, regulations such as rent control significantly impinge on the growth of revenues from the property tax and in fact do not serve the interests of the poor. While current assessment reforms are a good first step towards increasing the performance of the property tax, structural issues such as improved valuation, increasing buoyancy of the tax, and building taxpayer confidence need to be addressed to make these reforms sustainable.Property tax

Are you satisfied? citizen feedback and delivery of urban services

Citizen feedback is considered an effective means for improving the performance of public utilities. But how well does such information reflect the actual quality of service delivery? Do so-called scorecards or report cards measure public service delivery accurately, or do personal and community characteristics have a significant impact on residents'assessment of service quality? Deichmann and Lall investigate these questions using newly available household survey data on access to and satisfaction with selected public services in two Indian cities-Bangalore and Jaipur. They develop a framework where actual levels of services received, as well as expectations about service performance, influence a household's satisfaction with service delivery. The authors find that satisfaction increases with improvements in the household's own service status, a finding that supports the use of scorecard initiatives. But the results also suggest that a household's satisfaction is influenced by how service quality compares with that of its neighbors or peers and by household level characteristics such as welfare and tenure status. This implies that responses in satisfaction surveys are at least in part determined by factors that are unrelated to the service performance experienced by the household.Health Economics&Finance,Environmental Economics&Policies,Enterprise Development&Reform,Decentralization,Water and Industry,Water Supply and Sanitation Governance and Institutions,Environmental Economics&Policies,Town Water Supply and Sanitation,Governance Indicators,Health Economics&Finance

Density and disasters: economics of urban hazard risk

Today, 370 million people live in cities in earthquake prone areas and 310 million in cities with high probability of tropical cyclones. By 2050, these numbers are likely to more than double. Mortality risk therefore is highly concentrated in many of the world’s cities and economic risk even more so. This paper discusses what sets hazard risk in urban areas apart, provides estimates of valuation of hazard risk, and discusses implications for individual mitigation and public policy. The main conclusions are that urban agglomeration economies change the cost-benefit calculation of hazard mitigation, that good hazard management is first and foremost good general urban management, and that the public sector must perform better in generating and disseminating credible information on hazard risk in cities.Banks&Banking Reform,Environmental Economics&Policies,Hazard Risk Management,Urban Housing,Labor Policies

Urbanization and productivity : evidence from Turkish provinces over the period 1980-2000

Since the early 1980s, Turkey has been going through a rapid urbanization process at a pace beyond the World average. This paper aims at assessing the impact of this rapid urbanization process on the country's sector productivity. The authors built a database combining two-digit manufacturing data and some geographical, infrastructural, and socio-economic data collected at the provincial level by the Turkish State Institute of Statistics. The paper develops a parsimonious econometric relation linking sector productivity to accessibility, localization, and urbanization economies, proxying variables in the tradition of the New Economic Geography literature. The estimation results suggest that both localization and urbanization economies, as well as market accessibility, are productivity-enhancing factors in Turkey, although the causation link between productivity and these agglomeration measures is not clearly established. The sector-by-sector estimation confirms this result, although the localization economies effect is negative for the non-oil mineral sector, and the urbanization economies effect is weak for natural-resource-based sectors such as the wood and metal industry. Although the data cover the period up to 2000 and thus ignore the financial crisis that hit Turkey in 2001, the current structural transformation of the country away from the agricultural sector gives room to use the insights of these results as a preliminary step to understand the new challenges faced by the Turkish manufacturing sector. The results provide a discussion base to revisit the policy agenda on the improvement of the accessibility to markets, the improvement of the business environment to ease the creation and development of new firms, and a well-managed urbanization process to tap in the economic potential of cities.E-Business,Population Policies,Municipal Financial Management,Economic Theory&Research,

On the road to prosperity? The economic geography of China's national expressway network

Over the past two decades, China has embarked on an ambitious program of expressway network expansion. By facilitating market integration, this program aims both to promote efficiency at the national level and to contribute to the catch-up of lagging inland regions with prosperous Eastern ones. This paper evaluates the aggregate and spatial economic impacts of China's newly constructed National Expressway Network, focussing, in particular, on its short-run impacts. To achieve this aim, the authors adopt a counterfactual approach based on the estimation and simulation of a structural "new economic geography" model. Overall, they find that aggregate Chinese real income was approximately 6 percent higher than it would have been in 2007 had the expressway network not been built. Although there is considerable heterogeneity in the results, the authors do not find evidence of a significant reduction in disparities across prefectural level regions or of a reduction in urban-rural disparities. If anything, the expressway network appears to have reinforced existing patterns of spatial inequality, although, over time, these will likely be reduced by enhanced migration

Spatial specialization and farm-nonfarm linkages

Using individual level employment data from Bangladesh, this paper presents empirical evidence on the relative importance of farm and urban linkages for rural nonfarm employment. The econometric results indicate that high return wage work and self-employment in nonfarm activities cluster around major urban centers. The negative effects of isolation on high return wage work and on self-employment are magnified in locations with higher agricultural potential. The low return nonfarm activities respond primarily to local demand displaying no significant spatial variation. The empirical results highlight the need for improved connectivity of regions with higher agricultural potential to urban centers for nonfarm development in Bangladesh.Transport Economics Policy&Planning,Rural Poverty Reduction,Crops&Crop Management Systems,Labor Policies

Road network upgrading and overland trade expansion in Sub-Saharan Africa

Recent research suggests that isolation from regional and international markets has contributed significantly to poverty in many Sub-Saharan African countries. Numerous empirical studies identify poor transport infrastructure and border restrictions as significant deterrents to trade expansion. In response, the African Development Bank has proposed an integrated network of functional roads for the subcontinent. Drawing on new econometric results, the authors quantify the trade-expansion potential and costs of such a network. They use spatial network analysis techniques to identify a network of primary roads connecting allSub-Saharan capitals and other cities with populations over 500,000. The authors estimate current overland trade flows in the network using econometrically-estimated gravity model parameters, road transport quality indicators, actual road distances, and estimates of economic scale for cities in the network. Then they simulate the effect of feasible continental upgrading by setting network transport quality at a level that is functional, but less highly developed than existing roads in countries like South Africa and Botswana. The authors assess the costs of upgrading with econometric evidence from a large World Bank database of road project costs in Africa. Using a standard approach to forecast error estimation, they derive a range of potential benefits and costs. Their baseline results indicate that continental network upgrading would expand overland trade by about $250 billion over 15 years, with major direct and indirect benefits for the rural poor. Financing the program would require about$20 billion for initial upgrading and $1 billion annually for maintenance. The authors conclude with a discussion of supporting institutional arrangements and the potential cost of implementing them.Transport Economics Policy&Planning,Common Carriers Industry,Rural Roads&Transport,Transport and Trade Logistics,Economic Theory&Research