The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

City and Economic Development

  • J. Vernon Henderson
Reference work entry


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.


City in economic development Congestion Core-periphery models Democracy Endogenous growth Human capital Korea Land tax Regional models Rent seeking Rural-urban migration Spatial convergence Two-sector models Urban agglomeration Urbanization 

JEL Classification

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • J. Vernon Henderson
    • 1
  1. 1.