Urban Infrastructure and Industrialization

Abstract

Public infrastructure in Third World cities is generally in a fairly poor condition. The quality of infrastructure services is further eroded by the rapid population growth in most of these cities. Poor infrastructure reduces the profitability of modern sector manufacturing and may therefore inhibit industrialization. The present analysis demonstrates that there may arise situations with stable, multiple equilibria: a high-income equilibrium involving modern manufacturing and a low-income equilibrium involving traditional manufacturing. Copyright 2000 Academic Press.

Keywords: Industrialization, Urban Infrastructure, Migration