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    Urbanizing with Equity Consideration

    Wan, Guanghua; Luo, Zhi; Zhang, Xun | January 2017
    Abstract
    Research has not yet been undertaken on the optimal level of urbanization, notwithstanding the pioneering work of Au and Henderson (2006) on optimal urban concentration. This paper develops two-sector general equilibrium models of urbanization, with and without equity consideration, respectively. It is shown that considering equity will result in a higher level of urbanization than otherwise, when urban inequality is sufficiently small or migration costs are sufficiently large. Such a theoretical prediction is confirmed by empirical modeling results using panel data from People’s Republic of China (PRC). Provincial governments that paid attention to the inequality issue are found to have higher urbanization levels than those that did not. Finally, we explore possible equity consideration-to-urbanization transmission channels, and empirically establish that equity consideration in PRC (e.g., government initiatives towards combating rural poverty or the urban-rural gap) is positively correlated with road density, which helps reduce migration costs, and with bank lending to the manufacturing sector, which helps enhance the pulling force of migration. Thus, policymakers in the developing world should reverse their prevailing anti-urbanization attitudes and practices that tend to slow down urbanization or restrict rural-to-urban migration.
    Citation
    Wan, Guanghua; Luo, Zhi; Zhang, Xun. 2017. Urbanizing with Equity Consideration. © Asian Development Bank Institute. http://hdl.handle.net/11540/6781.
    Keywords
    Urban Plans
    Urbanism
    Urban agriculture
    Economic Development
    Rural Urban Migration
    Cities
    Institutional Framework
    Business Management
    Corporate Restructuring
    Urbanization
    Urban Services
    Urban Projects
    Urban Problems
    Urban Poverty
    Urban Policy
    Urban Planning
    Urban Infrastructure
    Urban Health
    Urban Government
    Urban Economic Development
    Urban Development Finance
    Urban Development
    Urban Conditions
    Urban Communities
    Urban Population
    Assessing Corporate Governance
    Corporate Governance Reform
    Governance Models
    Local government
    Urban renewal
    Urban housing
    Urban sociology
    Transit systems
    Rapid transit
    Public transit
    Mass transit
    Personnel management
    Corporate reorganizations
    Intergovernmental cooperation
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    Citable URI
    http://hdl.handle.net/11540/6781
    Metadata
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    adbi-wp642.pdf (660.4Kb)
    Author
    Wan, Guanghua
    Luo, Zhi
    Zhang, Xun
    Theme
    Urban
    Governance
    Labor Migration
     
    Copyright 2016-2021 Asian Development Bank Institute, except as explicitly marked otherwise
    Copyright 2016-2021 Asian Development Bank Institute, except as explicitly marked otherwise