Tuesday, November 6, 2007

The Changing Face of the World’s Poor

Back when development economics was in its infancy, the first economists to study development were agricultural economist back in the 1950s. In part because a large portion of the developing world lived in rural areas and participated in agriculture, however development is increasingly including issues that surround urban areas. Over the summer I was lucky enough to attend a seminar on the relationship between urbanization and poverty in the developing world presented by Martin Ravallion who along with (Shaohua Chen and Prem Sangraula). In the accompanying paper (linked here) the authors find a few key results:

1. “Poverty is clearly becoming more urban, although our results suggest that it will be many decades before a majority of the developing world’s poor live in urban areas.

2. “The poor are urbanizing faster than the population as a whole, reflecting a lower-than average pace of urban poverty reduction.”

The second key result suggests that there may be a greater incentive for the poor to migrate to cities, then the non-poor. If result 2 is true then as the authors suggest we might see an increase in the percentage of the population who is poor in urban areas, as the authors show on pg 5. This might not mean that urbanization is causing poverty, but instead the poor are causing urbanization. Although separating cause and effect is difficult.

With the growth in urban population perhaps it is time for urban economists who specialize in public works, public safety, and large education systems to be like the agricultural economist of the 1950s.

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