city and economic development

J. Vernon Henderson
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by Steven N. Durlauf and Lawrence E. Blume
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Abstract

As countries develop they urbanize, with resources shifting from labour-intensive agricultural production to manufacturing and services, which are located in cities because of agglomeration economies. This entry discusses the economic determinants of this process. But urbanization also moves populations from traditional rural environments with informal political and economic institutions to the relative anonymity and more formal institutions of urban settings. A major issue in the development process is development of institutions and national policies which allow cities to operate in markets that are well structured and conducive to good urban outcomes.
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How to cite this article

Vernon Henderson, J. "city and economic development." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 24 October 2014 <http://www.dictionaryofeconomics.com/article?id=pde2008_T000191> doi:10.1057/9780230226203.0237

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