With a gross national income (GNI) per capita of $1,450 in 2013, Côte d’Ivoire seeks a development strategy to reach middle-income status—a daunting challenge. It will take an annual growth rate of 10 percent over 13 years to reach a GNI per capita of $4,100, that of a middle-income country. Further, to report middle-income metrics—if we take the average performance of current middle-income countries—Côte d’Ivoire would have to:2
cut extreme poverty from 24 to 17 percent.
raise the share of the population with access to electricity from 59 to 92 percent.
keep the share of the urban population with access to water at 97 percent.
increase the share of the rural population with access to water from 74 to 80 percent.
nearly double the share of the urban population with access to sanitation services from 46 to 87 percent.
more than double the share of the rural population with access to sanitation services from 29 to 65 percent.
The country needs a structural transformation seen in the increasing role of urbanization in economic performance. The experience of developed and emerging economies shows that gross domestic product (GDP) per capita has risen with increasing urbanization (figure 1). According to the 2009 World Development Report: Reshaping Economic Geography, growing economic concentration, diminishing distance to economic density, and lowering cross-border barriers to trade are inherent to the development process as a country moves from an economy based on agriculture, to industry, to services. This spatial transformation leads to the rise of cities and towns that are the natural manifestations of agglomeration economies. This is corroborated by the fact that the top 600 cities of the world contribute just over one-fifth of its population but over half of its production (figure 2). Obviously, some of these cities are in Sub-Saharan Africa. However, aggregate numbers indicate that the correlation between urbanization and per capita GDP in Africa is weak (figure 3). Additionally, while countries in other continents passed the 40 percent urbanization marker with GDP per capita above $1,800, Sub-Saharan African countries, including Côte d’Ivoire, passed it at just $1,000 (figure 4). This highlights the limited fiscal and associated administrative capabilities of governments to lay in the investments in housing, infrastructure, and services in tandem with growth of urban settlements. This also makes the case for greater efficiency in public resource allocation to make “every franc count.”
Economic theory suggests that the link between urbanization and economic performance is through the interaction between three forces: scale economies, factor mobility, and reduction in transport costs. Scale economies encourage firms, cities, or countries to produce more of some goods and services and thus reduce unit production costs and make them more productive and competitive. The mobility of factors allows their use in the most productive firm, city, or country. Decreasing transport costs allows the specialization of firms, cities, and countries, which fosters trade according to comparative advantage. At country level, these three forces interact to foster the emergence of a diversified urbanization with places at incipient, intermediate, or advanced stages.
Urbanization is not just about development of a single city within a country. In fact, a country’s cities can be treated as a portfolio of assets, each differentiated by characteristics that include size, location, and density of settlement. Three decades of research worldwide highlight that businesses and people can exploit economies of scale and agglomeration if their urban settlements perform their intended functions.3 Small cities at incipient urbanization level facilitate internal scale economies, such as hosting a large firm transforming local agricultural products. Secondary cities at intermediate urbanization level facilitate localization economies through competition between firms operating in the same sector. Large cities at advanced urbanization level facilitate urbanization economies through a diverse economic base favoring innovation.
Côte d’Ivoire has a portfolio of places made of a combination of three types of cities. Drawing on the findings of the World Development Report 2009 applied to the Ivorian context, we identify three types of cities in the country: Global Connector cities generating urbanization economies needed for innovation, increasing return to scale activities and global competitiveness; Regional Connector cities generating localization economies needed for efficient regional trade and transport; and Domestic Connector cities generating internal scale economies needed to unleash the agricultural potential of their regions. We then make the case that to support growth and job creation, policy makers at the central, regional, and municipal levels need to coordinate their actions so as to promote a diversified urbanization through better planning, better connecting, greening, and finding ways to finance the growing development needs of these cities.
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