World Development Report 2009: Reshaping Economic Geography

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Receive exclusive offers and updates from Oxford Academic. Related articles in Web of Science Google Scholar. Citing articles via Web of Science On the empirical side the report is a mine of information which, when reformulated, provides a huge base of evidence and information for thinking more clearly about the role of uneven geographical development in the reproduction of capitalism and for this I am extremely grateful. Researchers interested in that question will have a field day with the data assembled here.

It is also laudable to have the question of scale introduced at least in principle, since this is a generally neglected arena in economic thinking. Unfortunately the arbitrary and fixed distinction between local, national and international scales does not work very well. In the geographical literature, scale is defined by processes and not determined a priori. The spatial externality effects observable in housing markets are differently scaled from those generated by airports or sulfur dioxide emissions from power stations.

And space is not necessarily continuous.

High educational attainments in India have externality effects in the Seattle labour market. While the authors may be correct to suggest that erroneous spatial planning practices in the Soviet Union that curbed urban concentrations and attempted to industrialize Siberia had something to do with the inefficiencies that led to the downfall of communism, they might also want to consider how the increasing porosity of state boundaries including the iron curtain after or so to the spatial movement of cultural images and influences also played a role.

They might even one day want to study self-reflexively the spatial effects of the spread of neoclassical and increasingly neoliberal economic doctrines around the world, followed by their rejection in much of Latin America and even more startlingly by some mainstream economists in the United States in recent times. The authors make a laudable and by and large successful attempt to reduce what I know only too well to be complicated questions of geography into a comprehensive and comprehensible structure of exposition.

They do so around three fundamental facts of density of populations and economic activity , distance flows over space of people, goods and capital and division of labour as well as religious and cultural divisions within populations.

These correspond, they argue, to fundamental processes of agglomeration, migration and regional specialization which require distinctive policy responses at the local urban , national territorial development and international regional integration levels. The authors are careful throughout to keep their terminology consistent and in their empirical work note a number of interesting tendencies.

The reduction of artificial spatial barriers such as tariffs and border restrictions, for example, increases regional integration rather than long distance trade. Each one of these configurations deserves critical but, I would hope, constructive engagement. While the framework set up in the Report is not perfect, it is certainly able to illuminate many aspects of spatial dynamics, but the big questions are those of interpretation and of policy responses rather than of framing.

On this point the Report contains not a word of criticism for how the market works, only finger-wagging at all those who seek to restrain it.

World Development Report 2009 : Reshaping Economic Geography

For purposes of illustration, consider how the Report handles the theme of density, agglomeration and urbanization. Increasing density, the authors argue, with the help of abundant empirical examples, is conducive to economic development and rising incomes in particular places in such a way that proximity and accessibility to that density later become crucial to the economic development of proximate areas. The policy conclusion is not to be fearful of increasing density and open migration of people and economic activity something I tend to agree with but to go with the flow of market forces and let concentrations increase until increasing congestion costs counteract the benefits that accrue from increasing economies of scale through agglomeration.

For this to happen requires that planners stop worrying about inequalities something I definitely disagree with. Successful cities have relaxed zoning laws to allow higher-value users to bid for the valuable land — and have adopted land use regulations to adapt to their changing roles over time.

World Development Report 2009: Reshaping Economic Geography

But land is not, as Polanyi following Marx long ago insisted, a commodity in the ordinary sense. It has fictitious value based on expectations of future rents and this is by definition always speculative. This is precisely the kind of activity that has driven low- or even moderate-income households out of Manhattan and central London over the last few years, with catastrophic effects on class disparities and well-being.

This is what is putting such intense pressure on the high-value land of Dharavi in Mumbai a so-called slum that the Report correctly depicts as a productive human ecosystem even though it is both informal and environmentally challenged.

The Report advocates the kind of free-market fundamentalism that has spawned urban social movements of opposition to gentrification, neighbourhood destruction and the use of eminent domain to evict residents to make way for higher value land uses. In other words, the Report favours speculative capital and not people. Social movements of this sort have no place, although by implication their objectives fly in the face of the superior economic rationality that the Report relentlessly advocates.

The idea that a city can do well while its people do badly is never examined. But there is something else very curious here. We are told that economists have in the past favoured competitive models and presumably given pol- icy makers bad advice instead of emphasizing the market forces that create agglomeration economies.

We are then told that recent hard work by economists has remedied this mistake. This is a strange assertion be- cause the economic geography courses I taught in Bristol back in the s were full of references to the significance of agglomeration, along with the Myrdal notion of circular and cumulative causation, gravity models, geographical inertia, and all the rest of it, that are here cited as if they are new.

The materials assembled in this report were, for me, like a trip down memory lane. And my understandings came from reading economists like E. Hoover , Benjamin Chinitz and Alfred Marshall Marshall and Paley, on industrial production districts, as well as reading the conventional literature in economic geography including a wonderful piece on agglomeration economies in the nineteenth century jewellery and gun trades in Birmingham by the geographer Michael Wise, , while mulling over the significance of the different location theories of von Thunen , Alfred Weber cost-minimizing and August Lo?

So it seems that economists abandoned the question of space and agglomeration in favour of purely competitive and largely a-spatial models. The question is why? I am no expert in the history of economic thought but I suspect this happened because, as Chamberlin followed by Lo? So economists, in spite of the noble efforts of Walter Isard in founding the Regional Science Association and its journal in the s, gave up on agglomeration because they could not mathematically model it.

All this began to change in the s as Paul Krugman and others began to find the mathematics at least partially satisfactory for this purpose.

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This was just as well because during those years economic geographers along with the few urban and regional economists left like Bennett Harrison, were writing reams and reams about the ravages and social costs of deindustrialization in the traditional heart- lands of industrial capitalism, from the Sheffield steel industry to the textile mills of Mumbai a phenomenon not mentioned in this report as well as the rise of industrial production districts like the Third Italy, Bavaria and Silicon Valley that were cultivating agglomeration economies like mad.

But the consequence of the theoretical work was that the Ricardian doctrine of comparative advantage in trade had to be junked as well as a whole slew of other favoured nostrums of the neoliberal canon. As a result of intellectual inertia it has taken the World Bank economists until now to get us back to where we were in the s, but this time backed by mathematical models that tell us once more how capitalist space should be organized so as to produce more capital in the hope that one day this will redound to the benefit of all.

The idea that free markets really benefit the capitalist class and only incidentally do something for the well-being of the people is never, of course, considered. The concept of class inequalities of power as well as of wealth and incomes never enters into the analysis. Only monadic individual entrepreneurs including migrants and diasporas figure. Sadly, this Report plays the same old capitalist game while promoting a spatial version of the old neoliberal ideology: What Marx showed, and what has empirically happened over the last thirty years of neoliberalism, is that the closer we get to free market situations the more the rich get richer and the poor get poorer.

Billionaires have erupted all over the place including in India and Mexico. The idea that market-led neoliberalism produces uneven geographical development is clear, but what the authors of this Report do not consider is how neoliberalism uses uneven geographical development as a means to promote the universality of its own world project, which has nothing to do with the well-being of the whole of humanity but everything to do with the enhancement of dominant forms of class power.

One of the ways in which the rich get richer, for example, is through speculation in asset values. One kind of asset that works beautifully to that purpose is precisely the increasingly deregulated land and property markets that have underpinned so many financial excesses over the years viz. Markets of this sort have a Ponzi-like character: Meanwhile the poor become homeless and affordable housing disappears. While the reintroduction of the production of space, place and environment into the analysis is surely as welcome as it is absolutely necessary, the grounding of this Report in conventional neoclassical and neoliberal nostrums unfortunately renders it useless for confronting the difficulties we face in these tumultuous times.

Regrettably, the hegemony of the ways of thinking portrayed in this Report is part of the problem rather than a template for solutions. It does not, after all, take a mathematically sophisticated economist to recognize the fundamental irrationality of escalating homelessness and the emergence of tent cities in the United States in the midst of a landscape of innumerable foreclosed upon and abandoned houses.

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