Chapter8-9

Urban bias

The notion that most governments in develop- ing countries favor the urban sector in their development policies

Rural-urban migration

The movement of people from rural villages

Agglomeration economies

Cost advantages to producers and consumers from location in cities and towns

Urbanization economies

Agglomeration effects associ- ated with the general growth of a concentrated geographic region.

Localization economies

Agglomeration effects cap- tured by particular sectors of the economy

Social capital

The productive value of a set of social institu- tions and norms

Congestion

An action taken by one agent that decreases the incentives for other agents to take similar actions. Com- pare to the opposite effect of a complementarity

Informal sector

The part of the urban economy of developing countries charac- terized by small competitive individual or family firms

Todaro migration model

A theory that explains rural-urban migration as an economically rational process despite high urban unemployment. Migrants calculate (present value of) urban expected income (or its equivalent) and move if this exceeds average rural income.

Harris-Todaro model

An equilibrium version of the Todaro migration model that predicts that expected incomes will be equated across rural and urban sec- tors when taking into account informal-sector activities and outright unemployment.

Present value

The discounted value at the present time of a sum of money to be received in the future.

Labor turnover

Worker separations from employers

Efficiency wage

The notion that modern-sector urban employers pay a higher wage than the equilibrium wage rate in order to attract and retain a higher-quality work- force or to obtain higher pro- ductivity on the job.

Induced migration

Process in which the creation of urban jobs raises expected incomes and induces more people to migrate from rural areas

Wage subsidy

A government financial incentive to private employers to hire more workers

city

an area with relatively high population density that contains a set of closely related activities.

Kofi Annan

He mentioned that cities will increasingly become the main players in the global economy.

Sub-Saharan Africa

It is the world's most rapidly urbanizing region

Hermine weijland

She found out in her study that it needs only a few fortunate years of market expansion to create gains frog externalities and joint action.

walter isard

He noted that agglomeration economies come in two forms.

Dorothy McCormick

She concluded from a study of six representative clusters in Africa that "groundwork clusters prepare the way

industrializing clusters begin the process of specialization

differentiation

and complex industrial clusters produce competitively for wider markets.

Khalid Nadri and Hubert Schmitz

They argue that clustering enables entrepreneurs to focus on selected stages of the production process

Black Hole effect

The effect if costs of transportation of finished goods are high and consumers wish to be located in the largest city to avoid paying those transportation costs as much as possible

Urban Hierarchy Model

Model in which the larger the economies of scale in production and the lower the transportation costs

Differentiated Plane Model

The model predicts urban concentrations at the points where the scarce transportation routes cross

First City Bias

form of urban bias wherein the country's largest or first city receives a disproportionately large share of public investment and incentives for private investment in relation to the country's second-largest city and other smaller cities.

Paul Krugman

He featured one argument in his work which stresses under import substitution industrialization

Arthur Lewis

He viewed traditional-sector workers

Rural Urban Migration

It is important to understand because it usually occurs when hard times in cities coincide with increases in output prices from the country's cash crops.

Rural-Urban Migration

It is most important type of migration because population share of cities is growing