Trade and Circuses: Explaining Urban Giants - Essay Example

Macro & Micro economics Introduction Today, the relationship between areas and rural areas is changing rapidly in all countries across the world. Current changes brought about by globalization has affected many countries especially the developing countries as it has resulted to such issues like relating to economical, social and political context and as result shifting regional development towards urban areas as compared to rural areas. As suggested in the statement, development policy in the initial phase should be urban biased because cities in countries are considered to be engines of economic development. For a country to consider itself successful in its developmental policy there has to be someplace in which the process of developments begins and the best suited places are always urban areas. This essay critically analyses the statement “Development policy, at least in the initial phase, must be urban-biased since labor productivity is significant greater in the urban sector compared to the rural”. Likewise this essay will also critically analyze the statement that urban areas serving as regional centers leads to development of rural areas when development policy at the initial phase are developed in urban areas. Analysis The urban biased theory which solely focuses on most developing countries always proposes that the development process in most third world countries are usually biased against the country side and the second is that the bias is brought about by the political structures present in these kinds of countries. The biasness towards urban areas as compared to rural areas is based on the fact that innovation processes can easily flow faster to other areas of a country when it starts from the urban centers. This is partially true because labor productivity present in urban areas allows for the provision of goods and services which can not be assessed in rural areas. Moreover, rural areas for example may lack the resources needed to accommodate these products and services because in instances of air transport, rural areas are always not in the position to provide major airports as they lack the customer based required to make this a reality. Likewise, this extends to other sectors like the hospital amongst others. Most doctors who are qualified in their vocation always prefer working in urban areas because of the goods and services which are availed by the large labor force present in urban areas (Paci, Serneels & World Bank., 2007). On the contrary as much as this may by true, the urban biased policy on development lives the rural areas underdeveloped hence leading to such things like overpopulation in the urban areas. Moreover, it makes it difficult for such governments to break various barriers on such things like agriculture and primary commodities leading to a decline in the economy against foreign competition because they can not accurately concentrate on the growth of rural areas. A good example is that when a government channels its developmental policy towards rural areas through such things like industrialization then they stand to protect themselves from such things like postwar effects while also ensuring certain issues like crime rate and marginalization are catered for and minimized (World Bank (2003). Urban biased policy also gives authority to most governments to stop and control the market or territories. Today, the population living in urban areas is always greater than those living in the rural areas. Therefore, in controlling their markets or territories, most governments always base on urban statistics because of the large number of population (Ades & Glaeser,1995.). However, this might not be a healthy way of governing a country because as much as the government might be right on its urban statistics for its developmental policy, it brings about marginalization because those living in the rural areas are sidelined in crucial matters because of their few numbers. Moreover, this also causes locks in long run efficiencies. This is because of the fact urban biased policy makes it easy for the government to build all its industries in the urban areas while ignoring the rural areas. Rural areas in most countries are credited for the production of raw materials used in the manufacture of different goods by industries, therefore, when the government lays more interest in urban areas than in rural areas then possibilities of obtaining raw materials from rural areas are reduced because the labor force which is responsible for the production of these raw materials in rural areas shifts to urban areas in search of better pastures for themselves. The long run effects on the government is that it always results in importation of raw materials which is not a good alternative as the cost involved is always too great for both the government and the citizens at large (Breman, 1985). Moreover, urban biased policy also encourages rent seeking behavior which in most cases is always unfair for citizens. When citizens abandon the rural areas to go and seek greener pastures in urban areas, many of them are always forced to seek accommodation in rented apartments and because of the fact that the number of individuals seeking rental houses are always so high for the houses available, certain individuals like apartment owners always tend to increase their apartment fees because of the high demand for their houses by citizens from rural areas (Das, Mourmouras & Rangazas, 2015). On the contrary urban areas are also better equipped for the process of ensuring that development processes reaches rural areas. This is because of the high skills and expertise availed due to the large labor productivity in the region. Different individuals in various fields are always easily accessed in urban areas. A good example is that top doctors, top engineers, top lawyers amongst others are always based in major urban areas. Likewise, key resources like transportation, power and communication are always in plenty in urban areas as compared to rural areas (Das, Mourmouras & Rangazas, 2015). Therefore, this means that certain things like goods and services can only be easily distributed to rural areas because of the resources and facilities which are available in these rural areas and which are essential to the process of devolution. A good example is that when the government is planning on importing machines to be used by various industries from other countries, then such things like big harbor which are available in urban areas may not be present in such areas. Hence the transfer of the machines into the country is made easy and from there, the government may decide some of its resources like roads or rail transport to deliver these goods to rural areas (World Bank , 2003). In addition, the high labor productivity which is greater in urban areas as compared to rural areas because of the urban biased policy has also promoted and led to the development of urban problems which are considered in terms of structural employment, crimes and diseases. This is because most individuals always move from rural areas with the prospects of getting employed in different sector and when this fails, then cases of unemployment arises. Unemployed individuals in urban areas always lack the means of living a descent life therefore resort to living in such areas like slums because of the high fees being charged on rental apartments by apartment owners. To sustain them, these unemployed individuals always resort to such acts like violence and crime as from their perspective they see this as the only way of being able to pay their basic bills like foods and clothing. Moreover, the rise of slums in urban sectors due to neglect of rural areas by the government always make it easy for outbreaks and spread of diseases. An example is that there is an outbreak of an airborne disease, and then individuals living in slums are the ones who are severely hit by the outbreak because of lack of space associated with slum areas (World Bank, 2003). Development policy, at least in the initial phase should also not be urban-biased because it also promotes the transfer of resources from the poor individuals in the society those who are less poor. The policy on urban-biased should also not be applicable because it interferes with human capital found in rural areas. Workers who are educated and healthy but coming from rural areas are always affected because urban biased policy does not provide them with employment opportunities therefore; they are forced to migrate into urban areas in search of employment opportunities. On the other hand, these educated workers from rural areas looking for employment opportunities in urban areas are always extorted while in the city because their skills do not attract more than it would have had they been employed in their own rural areas. Moreover, when urban biased policy are not put into action, then the little revenues placed government towards the development of sectors like agriculture has the potential of ensuring that the human capital present in rural areas are accurately and effectively exploited because human capital in rural areas earn higher returns than when working in urban sectors (Bates, 1988). Conclusion In conclusion, as indicated in the essay, development policy from its initial phase should not be urban biased as compared to rural sectors because of the inequality aspects and the long term associated impacts of urban bias policy. For a country to achieve its development in all sectors, then wealth and resources should be equally distributed as only through this does a country prides itself of achieving economic development. Just like there is high number of employment opportunities in rural areas therefore, similar employment opportunities be spread in rural areas to fairly exploit human capital available in the region while also pushing for different development projects in the region. When wealth and resources are allocated to rural areas then such things or issues like crime and rent behavior of apartment owners in urban areas can be controlled as individuals will not have the pressure of abandoning their rural areas to seek employment in urban areas. Moreover, in the presence of tough economic times, a country which invested in its rural areas has a lot to fall on because the flow of resources and wealth from rural areas will address or neutralize the economic crisis being experienced by the country. Therefore, governments should not emphasize on the point that for growth or development to be achieved, urban areas should act as the base for such growths since when they go beyond the urban bias policy then they will be abler see location issues which are hindrances for the development of rural areas and undertake initiatives which will be productive towards enhancing capabilities in rural areas. References Ades, A., & Glaeser, E. (1995.). Trade and Circuses: Explaining Urban Giants. The Quarterly Journal of Economics, 195-227. Bates, R.H. (1988).Toward a Political Economy of Development, Berkeley: University of California Press. Breman, J. (1985). Of peasants, migrants, and paupers: Rural labour circulation and capitalist production in west India. Delhi: Oxford university press. Paci, P., Serneels, P. M., & World Bank. (2007). Employment and shared growth: Rethinking the role of labor mobility for development. Washington, DC: World Bank. World Bank (2003).Reaching the Rural Poor: A Renewed Strategy for Rural Development Washington DC: World Bank Das, S., Mourmouras, A., & Rangazas, P. (2015). Economic growth and development: A dynamic dual economy approach. Read More