Edward Glaeser: Cities as an Engine for Growth and Prosperity - What are the Levers?

Summary

Edward Glaeser argues that cities can be powerful routes out of poverty, but realizing this promise depends on managing the costs of dense living.

Urbanization and prosperity

• In 1960, none of the countries with per-capita incomes below $1,000 were more than one-third urbanized. Over time, urbanization spread into poorer countries.
• Across countries, urbanization remains strongly associated with higher incomes. Glaeser also points to a positive relationship between a country’s initial urbanization and its subsequent growth over the following 50 years. He presents these as relationships, not as a case for forcing people to move.
• Poor people often move to cities seeking economic opportunity and stronger social safety nets. Glaeser argues that governments should not respond to urban crowding by trying to keep poor people on farms: rural poverty offers no reliable path to prosperity.
• Happiness data, he says, show substantial urban–rural differences in some poor countries, with city residents reporting greater happiness. In rich countries, the difference is less clear.
• Cities also concentrate poverty and inequality, creating serious demands on urban government. Their success depends on addressing the harms of density as well as enabling its benefits.

Three foundations of a successful city

Glaeser describes cities as resting on three interconnected elements:

1. Human interaction: Density supports collaboration, creativity, ordinary exchange, and entrepreneurship. The value of cities lies primarily in the people and connections they bring together—not just their buildings.
2. Physical infrastructure: Roads, water, sewers, and other systems are essential. Planning and engineering must be matched with institutions capable of delivering and maintaining services.
3. Public management of density’s costs: Government must address problems such as crime, contagious disease, high housing costs, and congestion.

Lessons for urban policy

• Pair infrastructure with incentives and workable institutions. New York’s history illustrates why building infrastructure alone is insufficient. The Croton Aqueduct brought clean water to the city, but many poor residents did not connect to it, and disease continued. Wider access followed later, when connection requirements and incentives helped address the “last-mile” problem.
• Treat property as carrying obligations as well as rights. Clear ownership can make it possible to require landowners to meet public-health standards, such as eliminating unsafe pit latrines. But unclear land ownership makes such requirements difficult to enforce.
• Price the costs of road use. Glaeser cites the “fundamental law of highway traffic”: when road capacity expands, vehicle travel tends to increase as well. Congestion pricing can make drivers face more of the social costs they impose. Where a new road can be tolled, he recommends introducing the charge from the start.
• Choose technologies to fit the problem. Cities should not assume that expensive, high-capacity systems are always best. In some cases, such as replacing pit latrines with sewers, moving to more advanced infrastructure may be the goal. For public transport, lower-cost options—including bus rapid transit—may be more appropriate than building expensive rail systems everywhere. Better communications can also help upgrade existing services.
• Consider how markets shape crime. Glaeser contrasts a “supermarket” model of drug sales, where buyers gather at a fixed location, with a “dentist” model, where customers have an established provider. Competition over fixed locations can produce violent turf conflicts; individualized relationships may reduce that incentive.
• Avoid two extremes in building policy. Glaeser calls excessive opposition to development “NIMBYism,” while “monumentalism” means prioritizing grand structures over residents’ needs. He cites Mumbai as an example of restrictive building rules and parts of China as an example of large-scale construction poorly suited to local residents. His preferred approach is to allow private builders room to provide the kinds of buildings people want, while targeting infrastructure to actual needs.

Glaeser concludes that making developing-world cities livable, humane, and full of opportunity is a major public challenge—and an especially important one.

Speakers and sources mentioned

• Speaker: Edward Glaeser, the sole speaker in the subtitles.
• People and ideas referenced: Alfred Marshall (the “mysteries of the trade” being “in the air” in dense clusters); Eduardo Engel (public–private partnerships); Nikhil Naik (research using street imagery); Gilles Duranton and Matthew Turner (the fundamental law of highway traffic); Mahatma Gandhi (as an example of anti-urban thinking); and Eleanor Roosevelt (in a remark about roads not being a universal right).
• Evidence and data sources discussed: Cross-country urbanization and income comparisons; happiness data; New York City mortality history; Google Street View imagery combined with income and GPS survey data; and private transaction or communications data, including M-Pesa.