Study: Urbanization Not a Silver Bullet for Economic Growth

Alex Theg writes of a new study by researchers in China and published in PLOS ONE that complicates the conventional thinking that leads to national governments and international development agencies to pursue accelerated urbanization in the hopes of spurring economic growth. "Simply attract people into the cities, the thinking goes, and then cash in on the forthcoming economic benefits of a largely urban population."

The study, titled "The Global Pattern of Urbanization and Economic Growth: Evidence from the Last Three Decades," found no correlation between the rates of urbanization and economic growth. "In other words, fast urban growth doesn’t always translate into fast GDP growth, as witnessed by the graph below," explains Theg.

"The authors of the study argue that GDP growth may create conditions that organically drive migration from rural to urban areas, but the assumption that urbanization will necessarily drive strong economic growth may be false."

So if urbanization doesn't correlate to urbanization, what does? "Citing other work, the authors suggest that instead of trying to move people into cities, governments and development agencies should focus on creating a mobile workforce, ensuring broad access to goods and markets, implementing government policies that support commerce, and investing in infrastructure."