Global Cities, Geography, and Economic Development

Notes and links for Houston World Affairs Council Workshop, February 22, 2011, and for NYC Junto talk on April 7.

Notes

1. Edward Glaeser in Triumph of the City outlines the advantages cities offer both in the developed and developing worlds. He argues it is generally better, in China, India, and Africa, to be poor in the city than to be poor in the countryside.

 
• New York Times review, Feb. 11, 2011

• Economix (NYT) interview with Glaeser, Feb. 15, 2011

• Segment on the Daily Show with Glaeser discussing book

Manhattan Institute: "Glaeser travels through history and around the globe to reveal the hidden workings of cities and how they bring out the best in humankind. Even the worst cities—Kinshasa, Kolkata, Lagos—confer surprising benefits on the people who flock to them, including better health and more jobs than the rural areas that surround them." (continues...)

"...TRIUMPH OF THE CITY is a masterpiece. Seamlessly combining economics and history, he explains why cities are 'our species' greatest invention.'This beautifully written book makes clear how cities have not only survived but thrived, even as modern technology has seemingly made one's physical location less important." — Steven D. Levitt, co-author of FREAKONOMICS and SUPERFREAKONOMICS; professor of economic at the University of Chicago

2. Paul Romer argues that Charter Cities could be developed on vacant land to allow rule of law institutions that encourage investment, create jobs, and improve options. (link to CharterCities.org) Economic prosperity from technology and rules. Douglas North and Mancur Olsen on institutions. 

• GlobalEnvision.org page with link to TED talk

• Atlantic Monthly article on Paul Romer ("Politically Incorrect Guide to Ending Poverty")

• AidWatchers.com page on Charter Cities (AidsWatch is William Easterly's site and very skeptical of traditional foreign aid programs). AidWatchers interview with Paul Romer.

• WSJ video segment on Paul Romer and plan for Charter City in Honduras...

3. Hernando de Soto in Globalization at the Crossroads notes that Western Europe and America experienced similar migrations to cities over the last two centuries, and these migrations “broke the back of The Old Order” bringing legal reforms and economic growth.

• Law develops from everyday local commerce, and governments try to overwrite these “natural” laws with top-down legislation and regulation.

• GlobalEnvision page on DeSoto's Mystery of Capital.

• DeSoto's recent WSJ article on Egypt is behind paywall. Post about it in The Atlantic is here.

• Also, DeSoto's PBS documentary, The Road to Prosperity is available here.

• Waking Dead Capital (Forbes article on Mystery of Capital from 2000)

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Notes on revent events in the Lybia, Egypt and Middle East in general

• Insightful article on economic and geographical background of events in Egypt in The Freeman

• Economist article on Timur Kuran's important book The Long Divergence: How Islamic Law Held Back the Middle East.

• Long Divergence Facebook page with notes and links to other reviews.

3.5. Nick Shultz and Arnold Kling, From Poverty to Prosperity. Interview below.

• First pages available on Amazon.com here.

• Here is one-page handout with first four pages of Chap. 1. (pdf)

Our Intangible Riches, a Reason magazine article:

Oil, soil, copper, and forests are forms of wealth. So are factories, houses, and roads. But according to a 2005 study by the World Bank, such solid goods amount to only about 20 percent of the wealth of rich nations and 40 percent of the wealth of poor countries.

So what accounts for the majority? World Bank environmental economist Kirk Hamilton and his team in the bank's environment department have found that most of humanity's wealth isn't made of physical stuff. It is intangible. In their extraordinary but vastly underappreciated report, Where Is The Wealth Of Nations?: Measuring Capital for the 21st Century, Hamilton's team found that "human capital and the value of institutions (as measured by rule of law) constitute the largest share of wealth in virtually all countries."

Click here for full article

4. What are the advantages of density?  Specialization, concentration of knowledge, increased scope of trade, reduced transportation costs for workers, goods, and services, more choices for consumers, and for employers, workers and entrepreneurs. Plus environmental benefits as increase agricultural productivity means less farmland.

5. Long-delayed economic growth finally arriving in some of the booming cities of Africa and Latin America. Lima, Peru and Santiago, Chile and Sao Paulo, Brazil are examples in Latin America.

• BBC article here from 2007 on economic growth in Africa.

• Economist article on African economic growth ("Spread the Wealth")

6. Notes on Africa and India

• June Arunga's presentation at Economist magazine conference (link to page with video)

• Economic Thinking Africa page with links to many articles and online videos.

• Africa: Resources, Conflict and Freedom Study Guide, 8-pages, (pdf file)

7. Notes on China

• Instant Cities and the Rise of China article (pdf) (includes lots of recommended movies)

• Direct link to China's Instant Cities article on National Geographic site.

• See also the discussion in Atlantic article on Paul Romer how Hong Kong and early China reforms fit the charter cities model.

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Global Cities, Geography, and Economic Development

Notes and links for Houston World Affairs Council Workshop, February 22, 2011

Second Session Notes and links.

Charter Cities Modern, Ancient, Medieval (and Modern-Medieval)

1. Basic economics, division of labor, specialization, and the scope of trade. Rivers and ports play a central role in providing low transportation costs for goods and people. So cities usually developed along rivers or near deep-water ports.

2. The geography of development in the ancient world. Greek colonies as the competitive Charter Cities of the ancient world. Greek institutions favored commerce. (Further discussion in "Property Rights and Law Among the Ancient Greeks"). Greek ocean trade led to trading posts and then cities around the Mediterranean and Black Seas. Most were originally colonies with constitutions or charters from their parent city. This created institutional competition among city-states and colonies, and allowed for successes to be copied (and fairlures avoided).

Transportation and trading networks are essential to economic development. Expanding the scope of trade over inexpensive sea and river routes encouraged competition and division of labor, specialization, investment, and knowledge flows. Each Greek colony city was trading with tribes in their region, and both absorbing and disbursing knowledge.

3. Fast forward a thousand years..."Trans-national" monasteries through the Middle Ages (which weren't so "Dark" after the 8th Century).  At its height, 37,000 Benedictine monasteries and: "Every Benedictine monastery was an agricultural college for the whole region in which it was located."  742 Cistercian Monasteries transferring factory and agricultural knowledge technology across western Europe.  Trade around and between monasteries, along rivers and ports. (Jean Gimpel, The medieval machine: the industrial revolution of the Middle Ages). Also on economic development through the "Dark Ages," this review of Rodney Stark's Victory of Reason.

4. The geography of development in the Medieval world.  Italian city states and the Hanseatic League as similar to Charter Cities.  Novgorod the Great vs. Moscow (The Fall of Novgorod the Great). (Economic Thinking Russia page) European cities of the Hanseatic League gained charters to protect their commerce from local princes, allowing self-rule, and contract and property law.

• Leonard Liggio article (from talk) on the Hanseatic League)

5. Amsterdam became a global city through religious tolerance, open trade, investment, and migration. "The Causes of Economic Growth" article by Beuven Brenner (pdf here). "The histories of Hamburg, Hong Kong, Singapore, Taiwan, and West Germany have much in common with Amsterdam’s, but shared religion is not a factor. In each of those places, the state provided an umbrella of law and order, exacted relatively low taxes, and gave people a stake in what the business soci- ety was doing—thereby attracting immigrants and entrepreneurs from around the world."

6. Some Medieval cities survived the Middle ages. Rick Steves "Little Europe: Five Microcountries": Andorra, Liechtenstein, Monaco, San Marino. (video on Hulu here)  Microcountries or Charter Cities?

6.5 The recent success of Estonia. Story of Estonia's escape from Soviet control in The Singing Revolution (website with trailer and educational materials). First (modern) Estonian Prime Minister on economic reforms that led to rapid development: "The Estonian Economic Miracle". Mart Laar blog.

7. New city-states from regional conflicts from the fall of the USSR, might succeed (and might not):  Albania, Moldova, Georgia, Crimea.