Managing the City Economy: Challenges and Strategies in Developing Countries

313 Pages·2015·1.193 MB·English

by  Le-Yin Zhang

Managing the City Economy
In a world increasingly organized as networks of cities, this book offers the first
full-length treatment of the subject of managing the city economy. It explores key
challenges and strategies, particularly in developing countries where developmental
deficits are greatest and almost all urban growth will take place between now and
2050. International in scope, this book is unique in its focus as it connects theory with
practice.
Through an interdisciplinary and strategic approach, this book explores the chal-
lenges and options in managing the contemporary city economy. It aims to illustrate
the extent to which appropriate policy interventions in the city economy could offer
effective solutions to some of the most difficult social and environmental challenges
facing cities. The book comprises five main parts. Part I sets the scene by examining
contemporary processes that affect cities and explaining the challenges these processes
pose for city managers. Part II presents a selection of conceptual frameworks com-
monly used in urban economic analysis. Part III examines the management of secto-
ral growth, covering manufacturing, exports of services, transport and logistics, and
real estate. Part IV addresses urban poverty, low-carbon transition and the informal
economy. Part V focuses on laying the foundation for long-term city development,
exploring the roles of city development strategies, municipal finance, investment in
people and appropriate infrastructure.
This book is designed for graduate courses in urban economic development, urban
planning, urban policy and public administration, and for professionals who are
involved in the management of city economies and/or conducting research, consul-
tancy or policy advocacy for cities. Through critical review of relevant debates and a
dozen case studies, this book will equip city managers with the knowledge required
to strengthen the performance of their city economy while delivering authentic and
sustainable development.
Le-Yin Zhang is a Senior Lecturer with the Development Planning Unit at University
College London, UK.
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Managing the City Economy
Challenges and strategies in developing
countries
Le-Yin Zhang
First published 2015
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
711 Third Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2015 Le-Yin Zhang
The right of Le-Yin Zhang to be identified as author of this work has been
asserted in accordance with the Copyright, Designs and Patent Act 1988.
The right of the editor to be identified as the author of the editorial
material, and of the authors for their individual chapters, has been asserted
in accordance with sections 77 and 78 of the Copyright, Designs and
Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or
utilised in any form or by any electronic, mechanical, or other means, now
known or hereafter invented, including photocopying and recording, or in
any information storage or retrieval system, without permission in writing
from the publishers.
Trademark notice: Product or corporate names may be trademarks or
registered trademarks, and are used only for identification and explanation
without intent to infringe.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Zhang, Le-Yin.
Managing the city economy: challenges and strategies in developing
countries/Le-Yin Zhang.
Includes bibliographical references and index.
1. Urban economics. 2. Urbanization—Developing countries. 3. Economic
development—Developing countries. 4. Regional economics—Developing
countries. I. Title.
HT321.Z42 2015
338.9009173′2—dc23
2014036822
ISBN: 978-0-415-66175-1 (hbk)
ISBN: 978-0-415-66176-8 (pbk)
ISBN: 978-0-203-07326-1 (ebk)
Typeset in Sabon LT Std
by Swales & Willis Ltd, Exeter, Devon, UK
Contents
List of figures vii
List of tables viii
List of boxes x
Acknowledgements xi
List of acronyms and abbreviations xiii
Introduction xvi
PART 1
Contexts: Understanding the field 1
1 Cities in a contemporary context 3
2 The purpose of managing the city economy 26
3 The developmental challenge for city managers 41
PART 2
Theory: Conceptualizing realities 63
4 The nature of the city economy 65
5 The rationale and scope for city-level public interventions 80
6 Frequently used conceptual and theoretical frameworks 98
PART 3
Practice: Managing sectoral growth 113
7 Making manufacturing work 115
8 Promoting exports of services 130
9 Exploring the potential of cities as transport junctions
and logistics centres 145
10 Managing urban real estate 159
vi Contents
PART 4
Practice: Managing cross-cutting issues 173
11 Tackling urban poverty 175
12 Exploiting a low-carbon transition 192
13 Dealing with the informal urban economy 206
PART 5
Practice: Laying the foundation for long-term development 223
14 Formulating and evaluating a city development strategy 225
15 Safeguarding municipal finance 238
16 Investing in people 252
17 Developing appropriate infrastructure 264
18 Conclusion 277
Index 281
Figures
1.1 Growth of urban population in major regions 6
1.2 Past and projected rates of urbanization 8
2.1 Dimensions of well-being 30
3.1 Incidences of slums and ‘$1/day’ poverty 44
3.2 Incidence of slums and ‘$2.15/day’ poverty 45
3.3 ‘The Planner’s Triangle’ 53
4.1 Stylized structural change of an economy 75
5.1 A typology of market failures 83
5.2 Three types of governance structures 88
6.1 Determinants of national competitive advantage 107
9.1 Decreases in relative transport costs 147
9.2 International seaborne trade, by cargo type 149
9.3 Illustrative map of Durban 156
11.1 The virtuous cycle of economic growth and poverty reduction 182
11.2 Sustainable livelihoods framework 186
12.1 An illustration of a typical technological transition 197
13.1 Slow urbanization and de-industrialization in Ethiopia 216
14.1 The process of CDS 230
Tables
1.1 Annual growth rate of urban population in major
areas and countries 7
1.2 World urban population distribution by urban agglomerations
of different sizes 9
1.3 Estimated urban slum population and proportion in
developing countries, 1990, 2000 and 2010. 10
1.4 Regional capital inflows in 2012 and changes (2007–2012) 14
1.5 Increased importance of developing countries in world
trade and capital flows 15
2.1 Estimated total wealth and distribution in the world, 2000 38
3.1 Urban and rural ‘$1 a day’ poverty measures worldwide
for 1993 and 2002 43
3.2 Urban poverty measures using a poverty line of $1.08/day
(in 1993 PPP), 1993 and 2002 43
3.3 Urban poverty measures using a poverty line of $2.15/day
(in 1993 PPP), 1993 and 2002 43
3.4 Urban externalities 46
4.1 Growth in population (in 10,000s) of English cities according
to function (1700–1850) 67
4.2 Change in cropping labour productivity in China, 1978–1987 71
4.3 Peasants’ sales (retail and wholesale) to non-agricultural
population in China, 1980–1987 71
5.1 Typology of possible economic roles of the state 90
6.1 Potential frameworks for analysis 100
6.2 An illustration of the principle of comparative advantage 103
6.3 Stages of competitive advantage and its sources 108
7.1 Pattern of World Trade, 2012: Exports 117
7.2 Manufactured exports by developed and developing countries 119
8.1 Composition of commercial service exports (%) 134
8.2 Value, growth and composition of ‘other commercial services’
(%) for 1998, 2006 and 2012 134
8.3 Share of developing countries in global exports 135
8.4 Gross district income composition in Bangalore 140
8.5 Economic growth in Bangalore 140
8.6 Bangalore’s export performance 141
8.7 Population growth in Bangalore urban agglomeration area 141
Tables ix
10.1 Who owns the city of London? 165
10.2 Changes in key baseline indicator in the Docklands UDA 169
11.1 Regional trends of poverty reduction 178
11.2 Unemployment and working poor throughout the world 180
11.3 Productivity and wage growth in Bangladesh 181
11.4 Growth, inequality and poverty reduction in Brazil, China and India 183
11.5 Categorization of poverty reduction approaches 184
12.1 Growth of selected renewable energy companies in Baoding
and Europe 202
13.1 Changes to the size of informal employment in selected
countries between 2002 and 2012 surveys 208
13.2 Different schools of thought regarding the informal economy 211
13.3 Manufacturing size distribution in Ethiopia (2007/08) 218
15.1 Comparative fiscal role of local government in different regions 240
15.2 Distribution of municipal expenditure in selected
developing countries 242
15.3 Distribution of municipal revenues in selected developing countries 243
17.1 Uneven distribution of unreliable infrastructure among world regions 264