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Report n°1: The new constraints of urban development

Governance and urban development

The advantages of cities are, however, merely potential and contingent on their proper administration, which brings us to classic misconceptions as to the optimum size of cities. This size should be determined by the largest difference between costs due to an excessive population and advantages relating to a concentration of productivity.

These curves are closely tied to the policies of the cities, which can cause variations in their optimum size. Africa serves as a good example, where a city of 200,000 inhabitants is far too large for local administrative capacities compared with Tokyo, a well-administered agglomeration of 30 million inhabitants.

This effective administration is reflected in a quality environment, good public transport and control of urban sprawl.

A study conducted in 23 French cities and three Korean cities enabled the factors governing the productivity of cities to be determined. To this end, the notion of the effective size of the employment market is used. This is defined as being the number of jobs accessible in n minutes (60 for instance), on average, by an employee. To make this calculation, the city is divided into zones and for each zone a calculation is made of the number of zones which can be reached in less than n minutes and the number of jobs available there. Subsequently, an average is calculated weighted by the number of workers in each zone.

This enables calculation of the effective size of the job market from the worker's viewpoint but the same calculation can be made to determine the effective size of the employment market from the company's viewpoint. Productivity is demonstrated by the effective size of the employment market with an elasticity of 0,2%. This signifies that by increasing the effective size of the employment market by 10%, productivity is increased by 2%.

Next, the effective size of the employment market is demonstrated by the total size of the employment market and therefore the size of the city, with an elasticity of 1%, then by the rapidity of access with an elasticity of 1.6% and finally inversely by the sprawl with an elasticity of -1.2%.

In conclusion, in a context of effective management, the urban phenomenon proves positive from an economic viewpoint since it leads to improved productivity and therefore higher incomes per inhabitant. However, other constraints of an environmental and social nature can lead to a degradation in the quality of life in cities with repercussions on production capacities. Only effective governance make it possible to avoid the traps inherent to all urban growth and turn the constraints generated by demographical change and/or the effects of uncontrolled urban sprawl into benefits.