For predicting and managing future urban growth, it is essential to understand the effects of development policies on location patterns of employment
The rapid urbanization in developing countries has generated enormous pressure for policymakers to control or direct urban growth and to expand public services. In the middle-income countries of Latin America and East Asia (including Brazil, Mexico, Venezuela, the Philippines, and the Republic of Korea) and in a number of countries in Africa and South Asia (such as Egypt, Nigeria, India, and Pakistan), policymakers have used many approaches to cope with the rapid growth of cities. Often the governments of these countries have initiated specific policies to decentralize economic activity and move it to the periphery of metropolitan areas.
Managing large municipalities is a complex and difficult task, mainly because the process of rapid growth and its effects on the functioning of large cities are not well understood. To deal efficiently with the problems of a rapidly growing city requires a policy framework that links a sound urban development strategy with appropriate investment programs. Such a policy framework, in turn, requires a solid understanding of the trends in urban development and how the workings of the land and labor markets and the location choices of individual households and firms contribute to such trends. Government policies and programs tend to be inefficient and costly if they attempt to reverse observed trends and behavior.
This article is based on the author’s book, The Location of Jobs in a Developing Metropolis: Patterns of Growth in Bogota and Cali, Colombia, published for the World Bank by Oxford University Press, 1989. $18.95.
Many urban policies aim to influence the location pattern of employment. This is not surprising since urbanization and the concentration of economic activities in most developing and developed countries are dependent on the location of employment opportunities. Contributing to the location of jobs are the nature and pattern of industrialization, the pace of agricultural development, and the growth of transportation and communication networks.
In most countries, employment location policies for cities have taken various forms: strict zoning regulations, outright prohibition of certain economic activities in particular areas, and various fiscal and financial incentives to induce industries and population to particular areas. The impact of these policy measures is uncertain mainly because of the lack of information on trends of employment location patterns within developing cities and the lack of understanding of how individual firms respond to market forces in selecting their locations.