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WDR 2009: Today's biggest development challenges

World Development Report Archives

World Development Report 2009

1 billion slum dwellers in the developing world's cities

1 billion people in remote lagging areas

1 billion people at the bottom of the global hierarchy of nations

How can nations help

Reshaping Economic Geography

A billion slum dwellers in the developing world’s cities, a billion people in fragile lagging areas within countries, a billion at the bottom of the global hierarchy of nations—these overlapping populations pose today’s biggest development challenges. Seemingly disparate, they share a fundamental feature: at different spatial scales, they are the most visible manifestation of economic geography’s importance for development.

The biggest development challenge

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Concern for these intersecting 3 billion sometimes comes with the prescription that economic growth must be made more spatially balanced. The growth of cities must be controlled. Rural-urban gaps in wealth must be reduced quickly. Lagging areas and provinces distant from domestic and world markets must be sustained through territorial development programs that bring jobs to the people living there. And growing gaps between the developed and developing world must be addressed through interventions to protect enterprises in developing countries until they are ready to compete.

World Development Report 2009 has a different message: economic growth is seldom balanced. Efforts to spread it prematurely will jeopardize progress. Two centuries of economic development show that spatial disparities in income and production are inevitable. A generation of economic research confirms this: there is no good reason to expect economic growth to spread smoothly across space.

The experience of successful developers shows that production becomes more concentrated spatially. The most successful nations also institute policies that make basic living standards more uniform across space. Economic production concentrates, while living standards converge.

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