Urbanization as a Fundamental Cause of Development

David Mayer-Foulkes

No DTE 501, Working Papers from CIDE, División de Economía

Abstract: I review the current theoretical and econometric literature on the economic dynamics of urbanization and its relation to economic growth. I then report research results on the short- and long-term impacts of urbanization on human development, using Gray and Purser's 1970-2005 database on human development indicators for 111 countries. The short-term analysis is an innovative fully instrumented clustered error growth regression using both levels and changes of independent variables to predict quinquennial changes in income, health, education and urbanization. The long-term analysis is a fully instrumented quantile estimate of levels on levels of the same variables. Explanatory variables include indicators of trade, FDI, institutions and physical geography. The results show urbanization is a significant cause of growth in the short term, but with a smaller magnitude than trade, institutions and FDI flows. However, in the long-term urbanization is a stronger cause of development than trade, FDI and institutional indicators. Urbanization policies must be a centerpiece of long-term economic development policies.

Keywords: Urbanization; Development; Urbanization policy (search for similar items in EconPapers)
JEL-codes: O18 R11 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2011-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.economiamexicana.cide.edu/RePEc/emc/pdf/DTE/DTE501.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:emc:wpaper:dte501

Access Statistics for this paper

More papers in Working Papers from CIDE, División de Economía Contact information at EDIRC.
Bibliographic data for series maintained by Mateo Hoyos ().