Urbanization and (In)Formalization

Two of the great stylized predictions of development theory, and two of the great expectations of policy makers as indicators of progress in development, are inexorable urbanization and inexorable formalization. Urbanization is indeed happening, be...

Full description

Bibliographic Details
Main Authors:	Ghani, Ejaz, Kanbur, Ravi
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2013
Subjects:	AGGLOMERATION ECONOMIES BASIC SERVICES CONCERN OF POLICY MAKERS CREATING JOBS DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY EARNING ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMICS ECOSYSTEM EDUCATED MIGRANTS EMPLOYMENT GROWTH EMPLOYMENT MEASURE EMPLOYMENT SHARE EXTERNALITIES FIRM SIZE FORMAL SECTOR WAGE INCIDENCE OF POVERTY INCOME INDUSTRIALIZATION INFORMAL ECONOMY INFORMAL EMPLOYMENT INFORMAL SECTOR INFRASTRUCTURE SERVICES INNOVATION INTENSIVE INDUSTRIES JOB CREATION JOBLESS GROWTH JOBS LABOR COSTS LABOR FORCE LABOR LAWS LABOR MARKET LABOR MARKET RIGIDITIES LABOR MARKETS LABOR PRODUCTIVITY LABOR PRODUCTIVITY GROWTH LABOR REGULATIONS LABOUR LABOUR FORCE LAND USE LAND USE REGULATIONS LARGE CITIES LARGE POPULATION LEVELS OF PRODUCTIVITY LIVING CONDITIONS LOCAL INFRASTRUCTURE LOCAL POPULATION LOCATION DECISIONS MANUFACTURING INDUSTRIES MANUFACTURING INDUSTRY METROPOLITAN AREAS MIGRANTS MINIMUM WAGE MODERNIZATION NATIONAL AUTHORITIES NEWSLETTER OCCUPATIONS OUTPUTS PACE OF URBANIZATION PAYING JOBS PERMANENT SETTLEMENT PLANT PRODUCTIVITY POLICY DISCUSSIONS POLICY IMPLICATIONS POLICY MAKERS POLICY RESEARCH POLICY RESEARCH WORKING PAPER POLICY RESPONSE POPULATION DENSITY POPULATION INCREASES PRODUCTIVITY CONVERGENCE PRODUCTIVITY GAINS PRODUCTIVITY GROWTH PRODUCTIVITY GROWTH RATE PRODUCTIVITY LEVELS PROGRESS PROPERTY RIGHTS RENTS ROADS RURAL AREAS RURAL DEVELOPMENT RURAL EMPLOYMENT RURAL POPULATION RURAL POVERTY SAFETY SAFETY NET SANITATION SELF EMPLOYED SERVICE DELIVERY SKILLED WORKERS SLUMS SMALL ENTERPRISES SOCIAL COHESION SOCIAL POLICY SOCIAL PROGRAMS STEEL FACTORY SUPPLIERS TAXATION TOTAL FACTOR PRODUCTIVITY TRANSPORTATION UNEMPLOYED UNEMPLOYMENT URBAN URBAN AREA URBAN AREAS URBAN EMPLOYMENT URBAN INFRASTRUCTURE URBAN MIGRATION URBAN POLICIES URBAN POPULATION URBAN POPULATIONS URBAN POVERTY URBAN SECTOR URBAN SERVICES URBAN SETTLEMENTS URBAN UNEMPLOYMENT URBANIZATION VULNERABILITY WAGES WORKER WORKFORCE YOUNG MEN
Online Access:	http://documents.worldbank.org/curated/en/2013/02/17386378/urbanization-informalization http://hdl.handle.net/10986/13157

Description
Summary:	Two of the great stylized predictions of development theory, and two of the great expectations of policy makers as indicators of progress in development, are inexorable urbanization and inexorable formalization. Urbanization is indeed happening, beyond the "tipping point" where half the world's population is now urban. However, formalization has slowed down significantly in the past quarter century. Indeed, informality has been increasing. This disconnect raises a number of questions for development analysis and development policy. Is the link between urbanization and formalization more complex than what had been thought? What does this mean for policy? The first core section of this paper asks what exactly is meant by formality and informality. The second core section turns to processes of urbanization and asks how these processes intersect with and interact with the incentives to formalize. The paper examines why cities attract the informal sector and the role that urbanization plays in growth and job creation through both the formal and informal sectors. Cities generate agglomeration benefits in the informal sector, perhaps more so than for the formal sector. The third core section is devoted to policy. At the current conjuncture, agglomeration benefits make a strong case for urbanization as an integral part of development strategy, but concerns about jobless growth and about urban poverty require a focus on the informal sector.

Urbanization and (In)Formalization

Similar Items