EADI: Chance2Sustain Opinion Paper "Agglomeration Externalities and Fast Growing Cities of the South"

The awarding of the 2008 Nobel Memorial Prize in Economic Sciences to Paul Krugman, the doyen of the so-called New Economic Geographers, heralded the revival of spatially oriented analytical tools that had for some time lain dormant in the economic policy mainstream. The subsequent publication of the 2009 World Development Report titled, Reshaping Economic Geography (World Bank, 2009), witnessed a variety of analytical and policy tools being proposed to help explore and inform dynamics around regional economic concentrations as well as the absence of such concentrations around the world.

The Report stated, with a level of confidence that is characteristic of the Bretton Woods Institutions, that, “Rising concentrations of economic production are compatible with geographic convergence in living standards and the market forces of agglomeration, migration, and specialization can, if combined with progressive policies, yield both a concentration of economic production and a convergence of living standards.” (World Bank, 2009: 2) The concept of agglomeration is often central to the discourse of economic geographers, and increasingly to other observers of the dynamics of regional and locality interactions. It is also used far more widely and loosely in popular discourses to describe urban spaces as in “urban agglomerations”. However, this discussion is more interested in the specific application of the term in light of its implications for thinking about the interaction between economic processes and urban spaces. Read more

By Glen Robbins

Opinion Paper No. 4 – October 2011