Past Event

City Size & Public Service Access: Brazil, India & Indonesia

November 10, 2021
12:30 PM - 1:45 PM

According to U.N. projections, the bulk of population growth over the next two decades will occur in small and medium-sized cities in low and middle-income countries. To understand the implications of rapid urbanization in the Global South, it is therefore crucial to examine how city size affects public goods provision. The fiscal federalism and decentralization literatures suggest that larger cities often deliver better public goods more effectively because of scale economies.  Yet small cities exhibit higher rates of access to basic health and education services in Brazil, India, and Indonesia according to data analysis we present here. Why is this the case? Building on modernization theory and models from urban economics, we argue that citizens in smaller cities prioritize investments in basic health and education facilities because there are few low-cost substitutes for government offerings, and because they face few characteristically “urban” problems, such as congestion and insecurity.  Residents of larger cities, in contrast, prioritize investment in a wider set of policy areas because they experience more negative externalities from urban growth and can turn to a larger supply of non-state providers of basic social services.  Moreover, public officials in smaller cities find it easier to earn political returns for investments in “divisible” infrastructure for service delivery, such as schools and clinics, because they can coordinate lobbying and credit-claiming more effectively than politicians in larger cities. We illustrate the mechanisms underlying these differences across policy areas through cross-sectional data analysis and paired comparison of cities of different sizes in Brazil, and with shadow cases from Indonesia. Our analysis underscores how non-state service provision affects the governmental provision of local public goods.  

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