A literature review of long-term urban economics points out the economic dimensions that urban design must address to serve as an instrument for long-term development. Conversely, two econometric analyses of the impact of urbanization on human development (using UNDP’s 1970-2005 database for 111 countries) supports the key role of urbanization for development. The first is a short-term analysis, an innovative, fully instrumented, clustered error growth regression using both levels and changes of independent variables to predict quinquennial changes in income, health, education and urbanization. The second is a long-term analysis, a fully instrumented quantile estimate of levels on levels of the same variables. Explanatory variables include indicators of trade, FDI, institutions and physical geography, regarded as fundamental causes of growth by some researchers. The results show that urbanization is a significant cause of growth with a smaller short-term but a larger long-term impact than trade, institutions and FDI flows. Urban planning and design can therefore have a high impact on long-term economic development.
|Keywords:||Urban Planning, Economic Growth, Human Development, Long-term Urban Design, Fundamental Causes of Growth|
Research Professor, División de Economía, CIDE, Mexico, DF, Mexico