I POLICY RESEARCH WORKING PAPER 2412

# Summary findings

To find out why African countries' experience with urbanization and sustained growth appeared to differ from that of other countries, Fay and Opal investigated the determinants of urbanization across countries over 40 years.

Rather than studying individuals' decisions to migrate, they relied on macroeconomic data and cross-country comparisons. A central hypothesis of their study: that individuals move (with varying degrees of ease) in response to economic incentives and opportunities. If location incentives are distorted, so is growth.

The authors find that urbanization levels are closely correlated with levels of income. But urbanization continues even during periods of negative growth, carried by its own momentum, largely a function of the level of urbanization. From that viewpoint, Africa's urbanization without growth is not a puzzle.

Factors other than income that help predict differences in _levels_ of urbanization across countries include:

- Income structure.

- Education.

- Rural-urban wage differentials.

- Ethnic tensions.

* Civil disturbances.

In addition, the relationship between economic incentives and urbanization is weaker in countries with fewer civil or political liberties.

Factors other than initial urbanization level that help explain the _speed_ of urbanization include:

* The sector from which income growth is derived.

- Ethnic tensions.

* Civil disturbances and democracy (these two slow the pace of urbanization if all else is constant).

* Rural-urban wage differentials, whether they represent an urban bias or simply lower productivity in agriculture relative to other sectors.

The weak relationship that this study shows between urbanization and traditionally accepted migration factors suggests that in Africa economists are overlooking part of the urbanization story. The fact that the informal sector appears to provide a significant source of income for urban migrants, coupled with the overlap between rural and urban activities, may shed light on the nature of urbanization in Africa.

This paper-a product of the Urban Development and Transportation Division, Private Sector and Infrastructure Vice Presidency-is part of a larger effort in the Bank to develop its urban economics and strategy work program. Copies of the paper are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contact Awatif Abuzeid, room F4K-332, telephone 202-473-3348, email address aabuzeid@worldbank.org. Policy Research Working Papers are also posted on the Web at www.worldbank.org/research/workingpapers. Marianne Fay may be contacted at mfay@worldbank.org. August 2000. (31 pages) _The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even_ **_if_** _the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represen_ **_t_** _he view of the World Bank, its Executive Directors, or the countries they represent._ Produced by the Policy Research Dissemination Center