Urbanization and Underdevelopment: A Global Study of Modernization, Urban Bias, and Economic Dependency

The causes and effects of 3rd World urbanization have been addressed in theories of modernization urban bias and economic dependency but no single cross-national study has tested the arguments advanced by all 3 theories. This paper uses panel regression analysis to assess the validity of the 3 perspectives in 61 underdeveloped countries between 1960 and 1980. The modernization theory asserts that industrial employment attracts people to urban areas where they work in modern-sector employment that facilitates national economic expansion. The urban bias theory posits that the disparity in welfare between country and city increases rural-to-urban migration and thereby expands both urbanization and service/informal employment. Dependency and world-system arguments assert that foreign investment promotes both urbanization and service/informal labor with foreign investment in agriculture pushing farmers townward and foreign investment in urban manufacturing pulling them there. Results suggest that underdeveloped nations are experiencing a gradual transition from an agrarian to a service and informal economy a transformation that impedes economic expansion. Unfavorable agricultural conditions alone will not push rural citizens to urban areas. 2 theories help explain the relationship between relatives urbanization and economic growth. If future studies of urbanization and underdevelopment are going to be useful then they must transcend current theoretical and ideological particularism.