The reasons for the dramatic population growth that has occurred in the cities of the developing world since the 1950s are explored. The authors develop a Computable General Equilibrium Model using data from 40 developing countries and test it for the period 1960 to 1973-1974 in order to evaluate the importance of the various factors contributing to this urban growth. The model is also used to examine the impact of the OPEC-induced fuel scarcity and other changes that affected the slowdown in urban growth in the late 1970s and to predict that most third world urban transition will peak before the year 2000. The authors suggest that earlier studies exaggerated the effects of rural land scarcity foreign capital inflows and population growth on third world urbanization. They conclude that imbalances of productivity advance across sectors and terms of trade between primary products and manufacturers were more critical.
No takes yet. Share an insight, caveat, or question.
Cobbe et al. (1986) studied this question.