Reshaping Economic Geography in East Asia

Reshaping economic geography in East Asia (English). Abstract. Reshaping economic geography in East Asia illustrates how extensively.
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While many elements were involved in the crisis that has rocked the world over the last two years, it should be clear from this description that urban processes played a key role.

Reshaping Economic Geography In East Asia

The so-called sub-prime foreclosure crisis was in fact an urban crisis. If, therefore, the roots of the crisis lie in urban malformation then the solutions must also surely lie, in part if not in whole, in urban re-formations.

It was therefore with great anticipation that I turned to the World Development Report which seeks to investigate the relations between macro- economic growth and the reshaping of economic geography in general and regional development and urbanization in particular. I was not only curious as to where World Bank thinking was on this question: On this last question, the Report is, unfortunately, not only lamentably silent, but deeply complicit with the kinds of policies that got us into this mess.

We are told p. Since the deregulation of financial systems in the second half of the s, market-based housing financing has expanded rapidly. Residential mortgage markets are now equivalent to more than 40 percent of gross domestic product GDP in developed countries, but those in developing countries are much smaller, averaging less than 10 percent of GDP. The public role should be to stimulate well-regulated private involvement…. Establishing the legal foundations for simple, enforceable, and prudent mortgage contracts is a good start. People who own their house or who have secure tenure have a larger stake in their community and thus are more likely to lobby for less crime, stronger governance, and better local environmental conditions.

Now it might be plausible for the authors to maintain that they, along with everyone else including Alan Greenspan , have been blindsided by recent events and that they could not be expected to have anticipated anything troubling about the rosy scenario they painted. Did they not notice that the crisis of capitalism that began in originated in a global property market crash that brought down several banks? Where were the authors when all this was going on?

Reshaping Economic Geography In East Asia – leondumoulin.nl

There have been hundreds of financial crises since compared to very few prior to that and many of them have been property or urban development led. Something is going on here that requires careful analysis and attention.

But this Report ignores this empirically obvious connection between urbanization and macro-economic development entirely. Of course, the authors all economists could also claim that this sort of thing has nothing to do with their concept of what geography is and should be about. If so, then their conception of geography is radically different from mine and bears no relation to the work done by political-economic geographers over the last three decades.

So what, then, is their concept of economic geography all about? The basic idea is that proper spatial ordering can improve efficiency, lower transaction costs and thereby liberate growth. The Report provides general guidelines to policy makers and seeks to define optimal policy mixes which, when combined with spontaneous entrepreneurial activity in the private sector, will contribute to overall growth. The central theme of the Report is that not only is uneven geographical development inevitable but that, properly managed, it can be a primary vehicle for stimulating growth.

Attempts to level out development across space inevitably backfire and hinder the ultimate achievement of higher and more equal per capita incomes for everyone. If only the Chinese had not restricted migration and urbanization processes they would have grown even faster than the 10 per cent they have achieved until recently! The authors note a pervasive historical- geographical pattern to development, in which economic activity tends initially to concentrate geographically, thus producing spatial inequalities in income.

Over time, as an economy matures, the spatial inequalities flatten out, even as the distinction between geographical concentrations of economic activity and a more geographically dispersed well-being for the population remain. But no matter what scale is involved, the general and, I have to say, remarkably conventional approach is clear:.

Governments can do better by promoting the market forces that deliver both the concentration of economic production and the convergence of living standards, and augment them with policies to ensure affordable basic services everywhere. They can do this by helping people and entrepreneurs take advantage of opportunities, wherever they arise. The market forces that help most are agglomeration, migration and specialization. The Report concentrates on the economic benefits that can arise from such an approach.

Many, including me, will find these exclusions seriously damaging. The slums which they describe as problem areas that will surely one day disappear if only the correct policies are put in place, are viewed as unfortunate residuals produced by rapid migration to the cities, along with lack of development partly caused, in the case of Mumbai, by wrong-headed government interference in land markets which would otherwise have led to a far more efficient allocation of land to uses rather than contemporaneous creations of primitive accumulation in rural zones and processes of exclusion and marginalization of a disposable reserve army of labour and productive capacity in urban areas.

But let me be generous and set all this aside to see what the Report actually does say for there is, in fact, much that is useful and interesting to reflect upon here. There is something important to be gained from a careful and critical reading of both the theoretical framework and even more importantly the empirical examples of historical-geographical dynamics drawn from all around the globe. On the empirical side the report is a mine of information which, when reformulated, provides a huge base of evidence and information for thinking more clearly about the role of uneven geographical development in the reproduction of capitalism and for this I am extremely grateful.

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Researchers interested in that question will have a field day with the data assembled here. It is also laudable to have the question of scale introduced at least in principle, since this is a generally neglected arena in economic thinking. Unfortunately the arbitrary and fixed distinction between local, national and international scales does not work very well.

In the geographical literature, scale is defined by processes and not determined a priori. The spatial externality effects observable in housing markets are differently scaled from those generated by airports or sulfur dioxide emissions from power stations.

And space is not necessarily continuous.

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High educational attainments in India have externality effects in the Seattle labour market. While the authors may be correct to suggest that erroneous spatial planning practices in the Soviet Union that curbed urban concentrations and attempted to industrialize Siberia had something to do with the inefficiencies that led to the downfall of communism, they might also want to consider how the increasing porosity of state boundaries including the iron curtain after or so to the spatial movement of cultural images and influences also played a role.

They might even one day want to study self-reflexively the spatial effects of the spread of neoclassical and increasingly neoliberal economic doctrines around the world, followed by their rejection in much of Latin America and even more startlingly by some mainstream economists in the United States in recent times. The authors make a laudable and by and large successful attempt to reduce what I know only too well to be complicated questions of geography into a comprehensive and comprehensible structure of exposition.

They do so around three fundamental facts of density of populations and economic activity , distance flows over space of people, goods and capital and division of labour as well as religious and cultural divisions within populations. These correspond, they argue, to fundamental processes of agglomeration, migration and regional specialization which require distinctive policy responses at the local urban , national territorial development and international regional integration levels. The authors are careful throughout to keep their terminology consistent and in their empirical work note a number of interesting tendencies.

The reduction of artificial spatial barriers such as tariffs and border restrictions, for example, increases regional integration rather than long distance trade. Each one of these configurations deserves critical but, I would hope, constructive engagement. While the framework set up in the Report is not perfect, it is certainly able to illuminate many aspects of spatial dynamics, but the big questions are those of interpretation and of policy responses rather than of framing.

On this point the Report contains not a word of criticism for how the market works, only finger-wagging at all those who seek to restrain it. For purposes of illustration, consider how the Report handles the theme of density, agglomeration and urbanization. Increasing density, the authors argue, with the help of abundant empirical examples, is conducive to economic development and rising incomes in particular places in such a way that proximity and accessibility to that density later become crucial to the economic development of proximate areas.

The policy conclusion is not to be fearful of increasing density and open migration of people and economic activity something I tend to agree with but to go with the flow of market forces and let concentrations increase until increasing congestion costs counteract the benefits that accrue from increasing economies of scale through agglomeration.

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For this to happen requires that planners stop worrying about inequalities something I definitely disagree with. Successful cities have relaxed zoning laws to allow higher-value users to bid for the valuable land — and have adopted land use regulations to adapt to their changing roles over time.

Often, much of this is concentrated in one major city: Other major centers such as Guangzhou, Jakarta, Seoul, Shanghai, and Tokyo are seen as driving their economies. East Asian cities have been able to deliver the agglomeration benefits required for growth and are now exceptionally well connected to the global economy. The region, excluding Japan, is home to 16 of the largest 25 seaports in the world and 14 of the largest 25 container ports. Without this improved connectivity, the region's rapid expansion in trade volumes will not have been possible.

This collection of studies is organized in four sections. The first section comprises chapters dealing with the 'context and concepts' for this volume. The third deals with Northeast Asia: China and the Republic of Korea, and the fourth section provide an overview of lessons learned. The time perspective for most of the studies spans several decades; in many cases, outcomes and policies can be traced back half a century or more. Policy and human Resource Development;economic geography;per capita income growth;early stage of development;economies of scale;factor of production;household consumption