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Preview: Oxford Review of Economic Policy - current issue

Oxford Review of Economic Policy Current Issue





Published: Thu, 06 Jul 2017 00:00:00 GMT

Last Build Date: Thu, 06 Jul 2017 03:46:28 GMT

 



Table of Contents

2017-07-06




Urbanization in developing economies: the assessment

2017-07-06

Abstract
Urbanization is an inherent part of economic development, yet its success in delivering jobs, productivity, and liveability varies widely. This issue of the Oxford Review of Economic Policy compares the experience of different countries and analyses the causes of their different performance. Cities are policy intensive, requiring public provision of infrastructure, regulation, and coordination. This in turn requires authorizing environments with a sufficiently broad span of control, and correspondingly powerful checks and balances to prevent abuse.



Urban productivity in the developing world

2017-07-06

Abstract
Africa is urbanizing rapidly, and this creates both opportunities and challenges. Labour productivity appears to be much higher in developing-world cities than in rural areas, and historically urbanization is strongly correlated with economic growth. Education seems to be a strong complement to urbanization, and entrepreneurial human capital correlates strongly with urban success. Immigrants provide a natural source of entrepreneurship, both in the US and in Africa, which suggests that making African cities more livable can generate economic benefits by attracting talent. Reducing the negative externalities of urban life requires a combination of infrastructure, incentives, and institutions. Appropriate institutions can mean independent public authorities, public–private partnerships, and non-profit entities, depending on the setting.



African urbanization: an analytic policy guide

2017-07-06

Abstract
Africa is rapidly urbanizing: it is the most important structural transformation under way in the region. By 2050, almost regardless of government policies, its urban population will have tripled. But the consequences are critically dependent upon policy choices: successful urbanization requires active and far-sighted government. At its best, urbanization can be the essential motor of economic development, rapidly lifting societies out of mass poverty. At its worst, it results in concentrations of squalor and disaffection which ferment political fragility. To date, African urbanization has been dysfunctional, the key indication being that cities have not generated enough productive jobs. If urban policies remain unchanged, future urbanization is likely to result in similar outcomes. This paper sets out how changed policies can unlock the potential of urbanization for prosperity. Primarily, it sets out the economic forces underlying this potential, and the specific policy actions they require. But policy actions do not just happen: they are generated by political processes that confer authority and capacity on public institutions. The paper concludes with a discussion of how politically urban policy-making might be improved.



Functional dysfunction: Mumbai’s political economy of rent sharing

2017-07-06

Abstract
This paper presents a conceptual account of urban governance in Mumbai as a rent-sharing system based fundamentally on control over urban space. We use rents in the economic sense, of returns that exceed what would be available in a competitive market. Formal rules and policies, which are ‘flexibly’ enforced, form the underlying basis for the generation of rents. Rent creation and sharing is not solely concerned with corruption or patronage. We rather argue that the system is functional for Mumbai—it does work in the organization of economic and social life in the city. This includes areas where no formal market exists, such as the use of pavements for street vending. The system also helps address commitment problems in the multifarious transactions, many of which are informal, that underpin the economy of the city, by providing a measure of stability and predictability in an uncertain legal environment. However, while the system is both resilient and functional, it thwarts prospects for transformative change.



Managing a mega-city: learning the lessons from Lagos

2017-07-06

Abstract
Africa is urbanizing at a remarkable rate, generating a host of new challenges for those in charge of its towns and cities. This paper assesses the potential for local and regional governments to implement innovative solutions to the demands of managing urban spaces through a case study of the much talked about case of Lagos state in Nigeria. Drawing on over 100 elite interviews and a representative panel survey of Lagosians, we explain how political leaders at the sub-national level were able to embark on a process of impressive statebuilding and institutional transformation. More specifically, the article develops a comparative analysis of the tax and transport sectors to identify the conditions required for sub-national innovation, demonstrating how federal democracy, strong economic potential, political competition, the ability to mobilize public support, and elite commitment to build a functional mega-city combined to enable state-level politicians to overcome a number of potential barriers to reform. While this suggests that empowering regional and local actors can facilitate more responsive and effective government, we argue that the necessary conditions for sub-national statebuilding are rare and can only be found in a small number of African states. As a result, the lessons from Lagos cannot easily be applied elsewhere.



Alternatives to African commodity-backed urbanization: the case of China in Angola

2017-07-06

Abstract
With the collapse of oil prices through 2014 to 2016 the Angolan state budget has been drastically reduced, and the government will be unlikely to be able to provide investment and subsidies to continue building new housing and urban infrastructure at the rate of the previous decade. Since the end of the civil war in 2002, the government of Angola has used Chinese credit facilities backed by petroleum-based guarantees to build prestige urban projects. The private sector, both international and local, has been a major beneficiary of state construction subsidies. The private sector, however, has been reluctant to provide its own financing and invest in real estate due to weak land tenure and the lack of legislative reforms to make a functional land market. Solving the problems around land may be a way to stimulate the engagement of private-sector participation in providing financing for housing. The successes and failures of ‘land-value capture’, a method that provided financing for the growth of Chinese cities, should be studied and could be adapted to finance the large backlog in urban upgrading of basic service infrastructure and housing for the poor for cities like Luanda.



Life in a slum: understanding living conditions in Nairobi’s slums across time and space

2017-07-06

Abstract
This paper overviews the role of slums in urban Africa, focusing on Nairobi. It reveals the characteristics of slums and how these have changed over time. Spatially disaggregated data show that slum areas are very dense with poor-quality buildings, lacking access to key services such as sewage disposal and electricity. However, improvements to building quality, public-service provision, and socio-economic characteristics are mostly outpacing those seen in the formal sector. Measures such as child health and school attendance have caught up or are on pace to catch up in the near future with the formal sector, while improvements in building quality and service provision are advancing more slowly. We find significant heterogeneity across the city, and in particular that central slums look to be ‘stuck’ with low-quality buildings and poor service provision, though not with low socio-economic indicators. We explore potential explanations for why slums located on highly prized land near the centre may be stuck with poor infrastructure.



Renewing expectations about Africa’s cities

2017-07-06

Abstract
Built with great expectations to connect Africa with growing global trade in the nineteenth century, many of Africa’s cities today have economies that are predominantly local—not regional or global in their reach. At the same time, Africa’s cities are experiencing rapid population growth, with the urban population predicted to exceed 1 billion by 2040. Why have Africa’s urban economies not been able to keep pace with their burgeoning populations and get into the production of regionally and globally tradable goods and services? And what should policy-makers focus on to renew expectations about Africa’s cities? This paper makes the case that as long as African cities lack functioning land markets and regulations and early, coordinated infrastructure investments, they will remain local cities: closed to regional and global markets, trapped into producing only locally traded goods and services, and limited in their economic growth.