10 Urban Policy Lessons Edward Glaeser Can Teach Us

Harvard economist Edward Glaeser is arguably the best urban thinker in the world. Glaeser thinks that cities have made us richer, healthier and smarter. Urbanisation has also made the world greener. These are controversial views, though most urban economists agree with many of these arguments. India is rapidly urbanising, but much of India still lives in villages. In his classic, The Triumph Of The City, he argues that poor Indians have more of an incentive to move to cities. In developing countries like India, the advantages of moving to cities are higher. Here are 10 urban policy lessons we can learn from Edward Glaeser.

Cities make us richer

People earn much higher wages in cities, even if we adjust for IQ, credentials and other traits that influence the productivity of workers. This should not be surprising because working close to each other allows people to learn from each other and trade with each other. It raises morale, and eliminates many barriers to communication. Firms find it much easier  to hire employees, and employees find it much easier to get another job. The number of jobs accessible within a reasonable distance is higher. So is the number of potential employees closer to firms.  There is also greater communication between firms. Workers become incomparably more productive when they work closer with more productive workers. Workers learn complementary skills by moving from firm to firm. The catchment area of firms and retail outlets is much higher. In 2010, the weekly wage of workers in Manhattan was 170 per cent higher than the national average. The wages in Manhattan was also 45 per cent higher than in the Silicon Valley where wages were next only to Manhattan. In Indian cities such as Mumbai, workers are paid about 60 per cent higher than the national average. For many Indians, this makes the difference between life and death. Family ties and informal assistance in rural India is a major factor that prevents urbanisation in India. In other words, Indians will be far more productive when traditional values weaken.

Cities make us healthier

Life expectancy in Mumbai is much lower than the national average. Congested Indian cities do not seem to be good places to live in. But, life expectancy in cities was lower throughout the world before cities became prosperous. In 1901, life expectancy in New York was lower than in the rest of the United States.  But today, New Yorkers are healthier than typical Americans. In the long run, Indian cities will have more healthier citizens than the countryside.

Cities make the world greener

Cities are seen as concrete jungles. Few would even consider that cities make us greener. But by allowing urban activity to be concentrated, cities free up more space. Cities also allow greater sharing of appliances and consequently, energy. People are more likely to walk or bicycle to work in dense urban areas.

Cities make us smarter

Ideological and art movements often cluster in time and place. This is true of firms too, even today. For example, the best software firms in the world are clustered in the Silicon Valley. A large segment of the population in Manhattan work in the financial sector. People are more likely to be intellectually productive in cities. This is true of even scientists and intellectuals who tend to be cited more by other thinker and scientists who live in the same city.  

India's soul does not live in villages

A popular saying is that India's soul lives in villages. But the most productive and creative Indians live in cities. They are also more likely to find like-minded people in cities. For example, in a dense areas with many skyscrapers, you are more likely to find people who are interested in subjects you are interested in. As Glaeser would put it, the nation's genius is fully expressed in Indian cities like Mumbai and Bengaluru.

Cities do not make people poor. Cities attract poor people

Affluence and poverty coexist in large Indian cities like Mumbai and Bengaluru because prosperous cities attract poor people. Indian cities are not unique here. Even thousands of years ago, this was true. It is true that there is great inequality within cities. But, the difference between wealthy urban Indians and the rural poor is much greater. In any case, the living standards or urban poor are much better than that of rural Indians.

The problems Indian cities face will soon become history

All major cities of the world have faced the problems that urban Indians confront today. High infant mortality and low life expectancy was common throughout the world, for much of the human history. Cities throughout the world are congested, but affluence makes them less congested. Crime in the heart of cities decline too, when cities learn how to handle such problems. Water supply and sanitation standards have radically improved in every major city in the past hundred years, though New York and London were as bad as Delhi or Mumbai over 100 years ago.

Skyscrapers make housing cheaper

Apartments in tall residential buildings may be more expensive, but this does not prove that skyscrapers make housing expensive. Real estate developers build tall buildings when land is expensive. But if cities allow developers to build as tall as possible, housing supply will increase, and housing will become cheaper. Glaeser points out that Indians inherited the British antipathy toward height, and that building height restrictions sow greater destruction in Indian cities like Mumbai which are far more dense than London or Paris. Glaeser rightly argues that housing in prosperous Shanghai is cheaper than in Mumbai because supply has kept pace with demand.

Cars make low density, spacious houses affordable

Without greater car ownership, many middle-income Americans would not have been able to afford spacious houses in the suburbs. Cars allow people to reach greater distances in a shorter period of time. This effectively raises the radius of cities, and lowers the price of valuable urban land. Cars made life faster. But cars also made houses larger.

Governments that can't provide clean water should not be in the business of regulating film dialogues

The Indian government and various state governments and urban local bodies meddle too much in the lives of people. Governments engage in regulating film dialogues and financial markets when they are not even able to provide clean water to people. When governments have too many responsibilities, there is very little accountability.