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Table of Contents
Front Cover
Contents
Foreword
Preface
Acknowledgments
About the Authors
Abbreviations
Executive Summary
1. Place, Productivity, and Prosperity: An Introduction
Introduction
The Attraction of Place-Based Policies
Three Forces Shaping the Economic Landscape
Lagging Places, Left-Behind People-and Perhaps, Missed Opportunities
Notes
References
2. Agglomeration Economies, Productivity, and the Persistence of Place
Introduction
A Virtuous Cycle of Economic Concentration, Higher Productivity, and More Prosperity
The Developing Country Urban Productivity Puzzle
Changing Drivers of Spatial Activity: The Future Isn't What It Used to Be
Unpacking the Association of Density with Productivity
Measuring the Benefits of Spatial Concentration
Measuring the Full Costs of Agglomeration: Accounting for the Extra Expense of Working in Developing Country Cities
Conclusion
Annex 2A. Estimating Productivity, Marginal Cost, and Markups
Notes
References
3. The Promise of Labor Mobility Introduction
Introduction
The Evidence on Internal Migration
The Barriers to Internal Migration
Conclusion
Notes
References
4. Globalization and Digital Development: Bridging Distances within Countries
Introduction
Globalization and Regional Growth within Countries
How Trade Costs, Infrastructure, and Institutions Affect Growth within Countries
The Role of Digital Connectivity in Narrowing Disparities between Regions
Conclusion
Notes
References
5. Lagging Places: Missed Opportunities, Left-Behind People
Introduction
Two Tales of Cities: Not Every Place Has Potential for Growth
Why Is a Region Not Thriving Already?
Three Arguments Often Used to Support Place-Based Policies for Nonviable Regions
Complementarities, Silver Bullets, and Big Pushes.
Conclusion
Notes
References
6. A Framework for Appraising Place-Based Policies
Introduction
Principles for Appraising Place-Based Policies
Dealing with Challenges in Fully Appraising Policies: Using the Framework as a Heuristic Tool
Lessons from World Bank Evaluations of Projects to Enhance Agglomeration
Conclusion
Notes
References
7. The Framework in Action: Appraising Transport Corridors, Economic Clusters, and Interventions to Manage Urban Congestion
Introduction
Corridors and Long-Distance Transport Improvements
Spatial Economic Clusters and Special Economic Zones
Interventions to Manage Urban Congestion
Conclusion
Annex 7A. Using Spatial General Equilibrium Models to Quantify the Indirect Effects of Highway Corridors in Africa
Notes
References
8. Local Economic Development Policies
Introduction
Entrepreneurship: The Lifeblood of Local Economic Development
Strengthening the Enabling Environment for Entrepreneurship
Promoting the Capabilities of Entrepreneurs
Improving Fiscal Incentives
Conclusion
Annex 8A. Clear Rationales for Certain Regional Development Projects in Europe
Annex 8B. New York's Innovation Ecosystem to Support Start-Ups
Notes
References
9. Conclusion Concluding Remarks
Concluding Remarks
Reference
Boxes
Box 2.1 The Persistent Effects of Colonial Railroads on Regional Development in Kenya
Box 3.1 The Central Role of Migration in Long-Term Economic Growth
Box 3.2 How Caste Boundaries Act as a Barrier to Migration in India
Box 4.1 The Role of Complementary Conditions in Connecting People and Regions Digitally during the COVID-19 Pandemic
Box 4.2 Digital Technologies May Exacerbate the Differences across Regions as They Cope with the COVID-19 Pandemic.
Box 5.1 Insights on Migration and Nonviable Regions from a Mining Boom Town: The Case of Kolmanskop, Namibia
Box 5.2 Managing the Closure of Coal Mines: Achieving a Just Transition for All
Box 5.3 Limited Policy Options for Lagging Regions When Migration Is Challenging: The Case of Colombia
Box 5.4 Not All Places Are Equal: The Coexistence of a Low and a High Equilibrium in the Context of Regional Development
Box 6.1 Lessons from an Analysis of Spatial Public Expenditures in the Middle East and North Africa
Box 6.2 A Proposal for Spatial Public Expenditure Reviews
Box 6.3 How Is the World Bank Group Assessing Place-Based Interventions?
Box 8.1 The Positive Externalities from Improvements in Human Capital
Box 8.2 The Persistence of Education over Time: From Jesuit Education to Production of Genetically Engineered Soy in Brazil
Box 8.3 Strengthening a Regional Entrepreneurial and Innovation System for a Midsize City: Scale Up Manizales (Manizales Más) in Colombia
Box 8.4 Fiscal Incentives to Overcome First-Mover Coordination Problems: The Case of Hawassa Industrial Park in Ethiopia
Box 8.5 Applying the Duranton-Venables Framework to Design a Project to Support Businesses in Mozambique
Figures
Figure 1.1 Spatial Income Inequalities Are Higher in Low-Income and Middle-Income Countries
Figure 1.2 Special Economic Zones Have Increased Six-Fold over the Past Two Decades
Figure 2.1 Economic Activity Is Highly Concentrated, Even in the Lowest-Income Countries
Figure 2.2 Establishments, Employment, and Value Added Are Concentrated in Densely Populated Areas
Figure 2.3 Urbanization, Economic Growth, and the Transition from Slow to Fast Growth Occur Together
Figure 2.4 The Rise of Cities and Structural Transformation Have Gone Hand in Hand in Asia.
Figure 2.5 Urbanization and Economic Transformation Have Not Gone Hand in Hand in Africa
Figure 2.6 Cities and Departments That Were the Most Densely Populated in 1500 Are among the Wealthiest Now in Colombia
Figure 2.7 Agglomeration Elasticity Is a Composite of Agglomeration Benefits and Costs
Figure 2.8 Urban Density Is Associated with Higher Firm Entry
Figure 2.9 Meta-Analysis: Raw Elasticities Suggest Strong Agglomeration Economies in Developing Countries
Figure 2.10 Estimated Elasticity in Developing Countries Is Lower in Services and When Using Total Factor Productivity Data
Figure 2.11 The Agglomeration Premiums on Labor Productivity Nearly Disappear after Controlling for Urban Costs
Figure 2.12 Efficiency Gains from Agglomeration Disappear Altogether or Become Negative after Controlling for Output Prices
Figure 2.13 Evidence of Sterile Agglomeration: Physical Measures of Total Factor Productivity Decline with Population Density, While Costs Rise in Lower-Income Countries
Figure 2.14 Urban Costs Are Higher in Developing Countries than in Advanced Economies
Figure 3.1 Internal Migration Increases with Economic Development
Figure 3.2 Migration Could Significantly Increase Consumption Potential in the Middle East and North Africa
Figure 3.3 Denser Areas Have Better Access to Safe Drinking Water and Electricity
Figure 3.4 Frictions in Labor Mobility Are Associated with Lesser Changes in Lifetime Utility and Fewer Job Options in Other Job Markets Following an Export Shock in Brazil
Figure 3.5 The Value of Labor Reallocation between Agriculture and Modern Sector Jobs Is Contingent on Initial Productivity
Figure 4.1 Participation in Technology or Knowledge-Intensive Global Value Chains Is Associated with Higher Spatial Concentration.
Figure 4.2 Trade Liberalization Is Associated with Changes in Activity in Secondary Regions but Has No Effect on Interior Regions in India
Figure 4.3 The Impact of Improved Domestic Connectivity Is Contingent on Proximity to Ports in India
Figure 4.4 The Distant Northeast Region in India Faces an Outsized Share of Loss in Shipment Value Following the COVID-19 Lockdown
Figure 4.5 Trade Volume Influences Trade Costs
Figure 4.6 Upgrades of the Golden Quadrilateral Highway Improved Plant Dynamics, but Only for Young and Productive Plants in India
Figure 4.7 Reductions in Transport Costs When Combined with Complementary Conditions Improve Welfare in Central Asia
Figure 4.8 The Use of E-commerce Is Positively Associated with Higher Skills and Education in Japan
Figure B4.1.1 Fewer Jobs in Developing Countries Can Be Performed Remotely
Figure B4.1.2 Network Equipment in Developing Countries Is Subject to Higher Tariffs
Figure B4.2.1 Firms in Capital or Business Cities Are More Likely to Digitalize during the COVID-19 Crisis
Figure 4.9 Local Demand (Population) Critically Determines the Location and Size of a Data Center
Figure 5.1 Towns along Fall Lines Evolved Very Differently than Mining Towns
Figure 5.2 Some Small Island Countries Are Very Far Away from Markets
Figure 5.3 The Payoff (Multiplier) for Creating Jobs in the Tradable Sector is Higher for Developing Countries
Figure 6.1 A Framework for Appraising Place-Based Policies
Figure B6.1.1 Expenditures on Spatially Distortive Policies in the Middle East and North Africa Vary Greatly from Those of Benchmark Countries
Figure B6.2.1 Functional Analysis of National versus Regional Innovation Programs in Poland
Figure 7.1 While the Direct Effects of Transport Investments Are Important, the Indirect Effects Are Likely to Matter More.
Figure 7.2 The Average Accessibility to Jobs Is Quite Low in Many African Cities.
Contents
Foreword
Preface
Acknowledgments
About the Authors
Abbreviations
Executive Summary
1. Place, Productivity, and Prosperity: An Introduction
Introduction
The Attraction of Place-Based Policies
Three Forces Shaping the Economic Landscape
Lagging Places, Left-Behind People-and Perhaps, Missed Opportunities
Notes
References
2. Agglomeration Economies, Productivity, and the Persistence of Place
Introduction
A Virtuous Cycle of Economic Concentration, Higher Productivity, and More Prosperity
The Developing Country Urban Productivity Puzzle
Changing Drivers of Spatial Activity: The Future Isn't What It Used to Be
Unpacking the Association of Density with Productivity
Measuring the Benefits of Spatial Concentration
Measuring the Full Costs of Agglomeration: Accounting for the Extra Expense of Working in Developing Country Cities
Conclusion
Annex 2A. Estimating Productivity, Marginal Cost, and Markups
Notes
References
3. The Promise of Labor Mobility Introduction
Introduction
The Evidence on Internal Migration
The Barriers to Internal Migration
Conclusion
Notes
References
4. Globalization and Digital Development: Bridging Distances within Countries
Introduction
Globalization and Regional Growth within Countries
How Trade Costs, Infrastructure, and Institutions Affect Growth within Countries
The Role of Digital Connectivity in Narrowing Disparities between Regions
Conclusion
Notes
References
5. Lagging Places: Missed Opportunities, Left-Behind People
Introduction
Two Tales of Cities: Not Every Place Has Potential for Growth
Why Is a Region Not Thriving Already?
Three Arguments Often Used to Support Place-Based Policies for Nonviable Regions
Complementarities, Silver Bullets, and Big Pushes.
Conclusion
Notes
References
6. A Framework for Appraising Place-Based Policies
Introduction
Principles for Appraising Place-Based Policies
Dealing with Challenges in Fully Appraising Policies: Using the Framework as a Heuristic Tool
Lessons from World Bank Evaluations of Projects to Enhance Agglomeration
Conclusion
Notes
References
7. The Framework in Action: Appraising Transport Corridors, Economic Clusters, and Interventions to Manage Urban Congestion
Introduction
Corridors and Long-Distance Transport Improvements
Spatial Economic Clusters and Special Economic Zones
Interventions to Manage Urban Congestion
Conclusion
Annex 7A. Using Spatial General Equilibrium Models to Quantify the Indirect Effects of Highway Corridors in Africa
Notes
References
8. Local Economic Development Policies
Introduction
Entrepreneurship: The Lifeblood of Local Economic Development
Strengthening the Enabling Environment for Entrepreneurship
Promoting the Capabilities of Entrepreneurs
Improving Fiscal Incentives
Conclusion
Annex 8A. Clear Rationales for Certain Regional Development Projects in Europe
Annex 8B. New York's Innovation Ecosystem to Support Start-Ups
Notes
References
9. Conclusion Concluding Remarks
Concluding Remarks
Reference
Boxes
Box 2.1 The Persistent Effects of Colonial Railroads on Regional Development in Kenya
Box 3.1 The Central Role of Migration in Long-Term Economic Growth
Box 3.2 How Caste Boundaries Act as a Barrier to Migration in India
Box 4.1 The Role of Complementary Conditions in Connecting People and Regions Digitally during the COVID-19 Pandemic
Box 4.2 Digital Technologies May Exacerbate the Differences across Regions as They Cope with the COVID-19 Pandemic.
Box 5.1 Insights on Migration and Nonviable Regions from a Mining Boom Town: The Case of Kolmanskop, Namibia
Box 5.2 Managing the Closure of Coal Mines: Achieving a Just Transition for All
Box 5.3 Limited Policy Options for Lagging Regions When Migration Is Challenging: The Case of Colombia
Box 5.4 Not All Places Are Equal: The Coexistence of a Low and a High Equilibrium in the Context of Regional Development
Box 6.1 Lessons from an Analysis of Spatial Public Expenditures in the Middle East and North Africa
Box 6.2 A Proposal for Spatial Public Expenditure Reviews
Box 6.3 How Is the World Bank Group Assessing Place-Based Interventions?
Box 8.1 The Positive Externalities from Improvements in Human Capital
Box 8.2 The Persistence of Education over Time: From Jesuit Education to Production of Genetically Engineered Soy in Brazil
Box 8.3 Strengthening a Regional Entrepreneurial and Innovation System for a Midsize City: Scale Up Manizales (Manizales Más) in Colombia
Box 8.4 Fiscal Incentives to Overcome First-Mover Coordination Problems: The Case of Hawassa Industrial Park in Ethiopia
Box 8.5 Applying the Duranton-Venables Framework to Design a Project to Support Businesses in Mozambique
Figures
Figure 1.1 Spatial Income Inequalities Are Higher in Low-Income and Middle-Income Countries
Figure 1.2 Special Economic Zones Have Increased Six-Fold over the Past Two Decades
Figure 2.1 Economic Activity Is Highly Concentrated, Even in the Lowest-Income Countries
Figure 2.2 Establishments, Employment, and Value Added Are Concentrated in Densely Populated Areas
Figure 2.3 Urbanization, Economic Growth, and the Transition from Slow to Fast Growth Occur Together
Figure 2.4 The Rise of Cities and Structural Transformation Have Gone Hand in Hand in Asia.
Figure 2.5 Urbanization and Economic Transformation Have Not Gone Hand in Hand in Africa
Figure 2.6 Cities and Departments That Were the Most Densely Populated in 1500 Are among the Wealthiest Now in Colombia
Figure 2.7 Agglomeration Elasticity Is a Composite of Agglomeration Benefits and Costs
Figure 2.8 Urban Density Is Associated with Higher Firm Entry
Figure 2.9 Meta-Analysis: Raw Elasticities Suggest Strong Agglomeration Economies in Developing Countries
Figure 2.10 Estimated Elasticity in Developing Countries Is Lower in Services and When Using Total Factor Productivity Data
Figure 2.11 The Agglomeration Premiums on Labor Productivity Nearly Disappear after Controlling for Urban Costs
Figure 2.12 Efficiency Gains from Agglomeration Disappear Altogether or Become Negative after Controlling for Output Prices
Figure 2.13 Evidence of Sterile Agglomeration: Physical Measures of Total Factor Productivity Decline with Population Density, While Costs Rise in Lower-Income Countries
Figure 2.14 Urban Costs Are Higher in Developing Countries than in Advanced Economies
Figure 3.1 Internal Migration Increases with Economic Development
Figure 3.2 Migration Could Significantly Increase Consumption Potential in the Middle East and North Africa
Figure 3.3 Denser Areas Have Better Access to Safe Drinking Water and Electricity
Figure 3.4 Frictions in Labor Mobility Are Associated with Lesser Changes in Lifetime Utility and Fewer Job Options in Other Job Markets Following an Export Shock in Brazil
Figure 3.5 The Value of Labor Reallocation between Agriculture and Modern Sector Jobs Is Contingent on Initial Productivity
Figure 4.1 Participation in Technology or Knowledge-Intensive Global Value Chains Is Associated with Higher Spatial Concentration.
Figure 4.2 Trade Liberalization Is Associated with Changes in Activity in Secondary Regions but Has No Effect on Interior Regions in India
Figure 4.3 The Impact of Improved Domestic Connectivity Is Contingent on Proximity to Ports in India
Figure 4.4 The Distant Northeast Region in India Faces an Outsized Share of Loss in Shipment Value Following the COVID-19 Lockdown
Figure 4.5 Trade Volume Influences Trade Costs
Figure 4.6 Upgrades of the Golden Quadrilateral Highway Improved Plant Dynamics, but Only for Young and Productive Plants in India
Figure 4.7 Reductions in Transport Costs When Combined with Complementary Conditions Improve Welfare in Central Asia
Figure 4.8 The Use of E-commerce Is Positively Associated with Higher Skills and Education in Japan
Figure B4.1.1 Fewer Jobs in Developing Countries Can Be Performed Remotely
Figure B4.1.2 Network Equipment in Developing Countries Is Subject to Higher Tariffs
Figure B4.2.1 Firms in Capital or Business Cities Are More Likely to Digitalize during the COVID-19 Crisis
Figure 4.9 Local Demand (Population) Critically Determines the Location and Size of a Data Center
Figure 5.1 Towns along Fall Lines Evolved Very Differently than Mining Towns
Figure 5.2 Some Small Island Countries Are Very Far Away from Markets
Figure 5.3 The Payoff (Multiplier) for Creating Jobs in the Tradable Sector is Higher for Developing Countries
Figure 6.1 A Framework for Appraising Place-Based Policies
Figure B6.1.1 Expenditures on Spatially Distortive Policies in the Middle East and North Africa Vary Greatly from Those of Benchmark Countries
Figure B6.2.1 Functional Analysis of National versus Regional Innovation Programs in Poland
Figure 7.1 While the Direct Effects of Transport Investments Are Important, the Indirect Effects Are Likely to Matter More.
Figure 7.2 The Average Accessibility to Jobs Is Quite Low in Many African Cities.