Urbanization in Africa: Research confronts Reality Hugh Wenban-Smith

My Project Motivation Urbanisation is proceeding rapidly in Tanzania It does not seem to be acting as the ‘engine of growth’ it is supposed to be (cf. Asia) Why not? Is this down to Economic Fundamentals or Institutions? IGC project focuses mainly on economic fundamentals (but institutions may also matter)

Urbanisation: General approach Not enough to look just at growth of towns and cities Urban areas are embedded in the wider economy and form an urban system Need to look at dynamics – e.g. effect of population growth, conditions in rural areas, rural-urban migration and relations between large and small towns Regional differences may help to identify causes

Recap of Phase 1 Key findings: – Mainland urban popn up 18 times to 12.7m; – Mainland rural popn up 3 times to 31m - i.e. Big increase in pressure on land and other natural resources despite rapid urbanisation Analytical tools: – Propensity for rural out-migration (Prom) – Propensity for regional in-migration (Prim) – Propensity for urban in-migration (Puim) Big differences between regions: Why?

Regional propensities

Aims in Phase 2 To relate indicators found in Phase 1 to developments in Tanzanian economy and economic policies To provide a narrative analysis of urbanisation since Independence – A. At the national level – B. At the regional level Hope understanding of this narrative will assist in development of policies for urbanisation to maximise its contribution to growth and welfare

Tanzania: Urban growth

A crude specification

Regression results: Prom Period LandDens (b) Rainfall (c) LnUrbPop (d) DistDar (e) Mining (dummy) R2R * (0.68) 16.9* (5.73) (2.39) -8.45* (3.85) 1.78 (3.88) * (0.77) (7.15) (3.71) -20.6* (6.37) (6.87) (2.39) 2.98 (7.52) 2.47 (3.77) -19.5* (7.24) 6.13 (7.28) 0.65

Is there a better approach? Yes: better would be a general equilibrium model which could take fuller account of rural/urban interactions (e.g. Adam et al, 2014) Also attractive might be dynamic modelling Beyond resources of this project (also would need to overcome data limitations) A challenge for the next generation of urban researchers in Tanzania?

What have we learned? Census-based database on migration and urbanisation established – help yourself! Some evidence for ‘Rural Push’ in and ; pressure of population on land and other resources a cause for concern A large urban population favours regional in-migration Greater distance from Dar discourages out-migration But methods not robust enough to be very confident More case studies needed to help identify drivers of migration and urbanisation in Tanzania – Regional Annexes provide a starting point

Wider lessons Census data useful for economic as well as demographic research Regional studies as valuable as cross-country studies More NEG insights needed Rapid population growth is a problem Role of government (incl. local govt) matters Strengthening role of Africa’s urban areas as engines of growth remains a major challenge Research can make a contribution but focus needs increasingly to be on appropriate urban policies and the mobilisation of resources in support of those policies.

Ed Glaeser to the Rescue? “Cities, Agglomeration and Spatial equilibrium” (2008) Urban economists’ bible (takes us under the bonnet) But … how applicable to developing countries? Equilibrium?

People and Firms People choose location to equalise utility. Plausible but in developing countries … – i. Severe frictions; and – ii. Rapid population growth Firms locate to trade off cost of inputs against market access. OK for modern firms but … – i. What about subsistence farmers? – ii. … and the informal sector?

Builders and Governments Builders build houses where they are needed up to point where MC = MR. But … – i. Formal housing market poorly developed; – ii. What about informal settlements? Governments: No role! – Where does infrastructure come from? So, considerable extension and adaptation needed to achieve a reliable theoretical guide to urbanisation in Africa. That’s the challenge for us all …