Urbanization is a blessing - why fight it?
By Lykke E. Andersen, La Paz, 12 June 2006

“The bourgeoisie has subjected the country to the rule of the towns. It has created enormous cities, has greatly increased the urban population compared to the rural, and has thus rescued a considerable part of the population from the idiocy of rural life.”

 Karl Marx, The Communist Manifesto, 1848

All over the world, development and economic growth has gone hand in hand with increased urbanization. Not a single country in the world has managed to reach middle or high income levels without at least half of the population moving into cities, although quite a lot has managed to urbanize heavily without achieving economic growth – see Figure 1 below. It thus seems that urbanization is a necessary, but not sufficient, condition for development.

Source: World Development Indicators of the World Bank.

Despite the fact that urbanization is a natural process that all developed countries have gone through, the aid community in Bolivia dedicates substantial resources to delaying this process. Between 1998 and 2002, donors spent around 500 million dollars on rural development in Bolivia, with the explicit or implicit objective of reducing rural-urban migration by making rural areas more attractive. This is more than they spent on education, health, and urban infrastructure together during the same period (1).

Rather than having one mega-city that absorbs virtually all rural-urban migration, Bolivia is fortunate to have three important urban centers (La Paz – El Alto, Cochabamba, and Santa Cruz de la Sierra), which makes urban immigration much more manageable than in most other Latin American Countries. Research shows that the typical urbanization problems of crime, pollution and congestion are quite limited in Bolivia, and that rural-urban migrants do quite well at their destinations (2).

Donors often assume that rural-urban migrants end up unemployed and miserable in the cities, but this is not confirmed by the data. According to data on rural-urban migrants from the 1990 MECOVI survey, 18% of them moved in order to look for work, and apparently they were very successful at that, since at the time of the survey, less than 5% of them were still looking for work. The average monthly salary for those migrants that did work was Bs. 1080, which is almost the same as the average for all urban workers (Bs. 1092). This is quite impressive, considering that the migrants were considerably less educated than the average urban work force. None of the migrants had a university degree, while 14% of all urban workers did. Even though most of the jobs were informal, they were relatively well paid compared to urban workers in general, and they were more than 4 times better paid than rural workers (2).

Even the least promising types of rural-urban migrants – those who were forced to move for family reasons, are relatively old, have little or no education, and do not have a job – do substantially better than the average rural dweller, even better than the average Bolivian, in terms of average per capita household income (2).

Current public policy tends to spend more money per person in poor rural areas than in richer urban areas under the philosophy that the former have greater needs. However, it seems to me that the urban centers absorbing tens of thousands of migrants every year have much greater needs for new public infrastructure than remote rural areas that are slowly getting depopulated because they cannot sustain a population above subsistence level.

If the money spent on trying to keep rural populations in the place where they happened to be born were instead spent on improving the cities’ capacity to absorb migrants in an orderly fashion, the impact would likely be less poverty, less infant mortality, more education and a much larger variety of opportunities for the young people. An additional benefit would be a systematic increase in the tax-base, which would help Bolivia become less dependent on aid.

So, next time you want to help the poor, think about supporting the fringes of the big cities, which are full of people who have shown substantial personal initiative towards improving the lives for themselves and their children, but who tends to get punished by the distorted priorities of public policy and foreign aid.

(1) See “The Effectiveness of Foreign Aid in Bolivia”.
(2) See “Rural-Urban Migration in Bolivia: Advantages and Disadvantages.”

Ó Institute for Advanced Development Studies 2006.

If you would like to receive the Monday Morning Development Newsletter by e-mail, please fill in your information here: