The Political Economy of Urban Primacy: A Reconsideration
Date
2013-08
Authors
Turner, Sidney Carl
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Abstract
This dissertation analyzes the political economy of urban primacy both theoretically and empirically. Research on urbanization in the developing countries has consistently found a pattern of high levels of concentration of urban populations in the largest and/or capital cities relative to developed countries. This regularity has typically been explained by noting that these countries' institutions are often autocratic and/or centralized. This mechanism, the lack of constraint on government leads to the redistribution of resources from the politically weak hinterland to the politically strong capital through differences in levels of taxation, public goods provision, or regulation. As demonstrated through two simple models of public goods provision, this explanation may have limited salience in for many developing countries because it does not take into account the weak capacity that characterizes these governments. In states, which have difficulty enforcing their rent-extracting policies over substantial distances, it is likely that rent-payers as well as rent-seekers will be highly concentrated in the capital or primate city. This hypothesis is tested using cross-country macro level and micro level data relating to experiences and perceptions of government effectiveness and corruption, country leadership turnover, as well as regional level indicators of government quality. Consistent with the hypothesis of this dissertation, the empirical analysis finds that an exogenous increase in percentage of a country's population residing in the capital city is associated with a real or perceived decrease in perceived government effectiveness. In addition, a micro-level analysis drawing on cross-country survey data finds that firms located in primate or capital cities of low and middle income countries are more likely to pay bribes and perceive corruption as a substantial impediment to business than firms located outside the capital. A panel data analysis of country leadership turnover also finds that greater urban primacy is associated with greater political instability, especially during negative economic downturns, consistent with urban concentration facilitating rent-seeking by governments.
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Keywords
Economics, Geography, Political Science, Capital Cities, Corruption, Institutions, Urban Primacy