5 Overall, the variety of forces can go in opposite ways. Ultimately it is a matter for empirical investigation and resolution. But the investigation cannot begin if we stick with the conventional rural‐ urban dichotomy in the face of the growing importance of small towns in the urbanization story in Africa. The objective of this paper is to provide such an empirical exploration of a range of issues linking migration, small towns, poverty and jobs for one country, Tanzania, mostly drawing on a remarkable database for qualitative and quantitative analysis from Kagera, northwestern Tanzania.

To do so, and given the complexity of the matter, it deliberately draws on different methods. In particular, the paper synthesizes the insights of a body of work that has addressed the question of whether the composition of urbanization matters for poverty reduction in the context of Tanzania from a series of angles (theoretical and empirical, quantitative and qualitative).<sup>4</sup> This is not to say that this multi‐layered approach will “resolve” the question of whether it is at the margin better to invest in towns than in cities to maximize the poverty reduction. Rather, to the extent that the findings from these different approaches point in the same direction, they can at least demonstrate the need for a more disaggregated perspective to the questions of urbanization and development, and draw attention to the notion that secondary towns can be particularly conducive to poverty reduction.

The paper proceeds as follows. Through novel decomposition, drawing on the peculiar features of individual panel data from a shorter national and a longer regional panel in Tanzania, the paper first documents the empirical contributions of towns and cities to growth and poverty reduction among these populations during the periods under study (Section 2). Section 3 then introduces a basic theoretical framework, building on Harris‐Todaro (1979), to help identify some of the potential mechanisms behind the observed contributions, with their empirical relevance illustrated within the context of the regional panel.

In this, rural‐urban migration emerges as an important contributor to growth and poverty reduction, with town migration multiple times more frequent than city migration, despite larger growth and poverty reduction potential per move from moving to the city than to the town. While higher earning potential in cities has been considered a common feature of the urban landscape (Ferré, Ferreira, and Lanjouw, 2012), greater proximity of the rural population to towns than to cities emerges as an important additional factor to understand why many more rural citizens (many of them poor) end up in (nearby) towns rather than in the city. To examine this more rigorously, Section 4 presents the findings of an econometric test of the importance of distance in determining migrant destination choice. The econometric results are then probed further in Section 5 through qualitative analysis (life histories), with a subset of migrants from the Kagera panel. Section 6 concludes.

# 2 Migration, Towns and Poverty Reduction in Tanzania

The forces of agglomeration, congestion, hinterland linkages and migration can go in opposite ways, such that the overall effect of urban composition on growth and poverty is ultimately an empirical matter. What type of exercise might give us an initial handle on the effect of the composition of urbanization? Suppose we had nationally representative panel data at time t and time t+1, which gave

> 4 The different papers on which the paper draws are referenced throughout the paper.