What accounts for failure of LAC cities to reach global frontier?
Today, almost three-quarters of the population of Latin America and the Caribbean (LAC) - 433 million people - live in 719 cities in the region.
In modern economies, cities can be great productivity and economic drivers increase. By bringing people and companies together in close geographical proximity, cities facilitate production, innovation. Historically, urbanization has accompanied the productive transformation saving, with the decrease in low productivity agricultural employment and the increase of high productivity manufacturing And services
Transportation drop costs, by facilitating trade by cities, both between them and with rural areas accelerated this process, stimulating even more both urbanization and development.
Today, almost three-quarters of the population of Latin America and the Caribbean (LAC) - 433 million people - live in 719 cities in the region. Some are megalopolis, like São Paulo and Mexico, each boasting populations of around 20 million.
The productivity of the cities of LAC is compared to the world average, but behind the world productivity frontier, where policymakers in LAC want their cities to be.
What accounts for the failure of LAC cities to reach the global frontier? World Banks's publication on Raising the Bar For Productive Cities in Latin American and the Caribbean suggests as firsts, even if the cities of the LAC region benefit strong effects of positive agglomeration associated with skills, may lack the "enabling environment" needed to make the most of the broader benefits of the agglomeration and mitigate congestion costs.
Therefore, the urban infrastructure urban planning and management may not be enough to stop the congestion of roads, basic urban services, and land housing markets associated with high-urban density in most countries of Latin America and the Caribbean. Include in this coordination is insufficient through local governments within the fragmented metropolis areas.
Second, a lack of integration between cities within countries is associated with underinvestment in national transport networks, opening wide productivity gaps in cities and undermining the global contribution cities to national productivity.
The evidence also shows that human capital is a source of fundamental productivity in cities throughout the Latin American region but that the art man, who forms a smaller part of the labor that, for example, in the United States, they are also very concentrated in the bigger cities. This makes it a priority to close the scarcity of skills in the region compared to developed countries and to make sure that small and large cities can be attractive places for people qualified to live and work.
To invest in infrastructure, transportation and human capital in cities of all sizes, as well as effective development local government institutions, it is crucial to raise the level of productivity in the cities of the region, and finally the countries of the region.