Rural roads and urban agglomeration economies: Benefits for town and country?

Clive Bell

No wp-2018-73, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: Do urban agglomeration economies enhance the social profitability of rural roads? When all goods are traded at parametric world prices, lower transport costs benefit villagers. Urban activities and welfare are unaffected if labour is immobile, but their levels fall when rural workers move freely to take up urban jobs while remaining members of their extended families. In a closed, two-good economy with mobile labour, the effects of agglomeration economies depend on the substitutability of rural and urban goods.

Keywords: Agglomeration; Benefit programmes; Transportation cost; Rural roads (search for similar items in EconPapers)
Date: 2018
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