NOTES ON URBANIZATION IN DEVELOPING SOCIETIES
by Róbinson Rojas Sandford (October 1997)
"Nineteenth-century colonial society consisted of a two-tier dominant-
subordinate relationship of colonizers and colonized and it is
important to appreciate that its cities were organized around the
control of the economy rather than around the production process
itself. There was only limited manufacturing in nineteenth-century
colonial cities: production was usually confined to rural agriculture
or concentrated mining locations. The occupational structure within
the cities therefore reflected this political and economic relationship,
with a small, metropolitan administrative elite and a large supportive
population engaged in the tertiary sector, the production and
distribution of consumer goods and services. As the colonial elite also
controlled the municipal government, the city could be shaped according
to the wishes of a small proportion of its total residents."
( D. Drakakis-Smith, "The Third World City, Routledge, 1992, p.17)
In contemporary times, the same process is in place, and still, the
same international connections are present, with a general picture
of overurbanization, urban inequality, poverty, squatter settlements,
and informal economic activity in less developed societies huge main
cities.
"The informal sector -a vast network of activities articulated with,
but no limited to ramaining subsistence enclaves- has implications
that go beyond the peripheral countries. Direct subsidies to
consumption provided by informal to formal sector workers within a
particular peripheral country are also indirect subsidies to core-
nation workers, and, hence, means to maintain the rate of profits.
Thus, through a series of mechanisms well-hidden from public view,
the apparently isolated labor of shantytown workers can be registered
in the financial houses of New York and London".
(A. Portes, "The informal sector and the world economy: notes on the
structure of subsidised labour", in M. Timberlake (ed.),
URBANIZATION IN THE WORLD-ECONOMY, Academic Press, 1985)
Most of modern literature on third world urbanization rejects the
"overurbanization, lack of planning" thesis which prevailed in the
early sixties, and adopted the structuralist point of view, arguing
that much of the main patterns of urbanization in Africa, Asia and
Latin America is in direct relation with pattern of industrialization,
which are driven by rich-poor countries patterns of trade and
international production.
One approach of the last kind is the so-called dependency/world-system
approach (see sources at the end, especially Armstrong and McGee).
Seven assumptions are made to explain urbanization
in less developed societies:
First: there are different developmental dynamics in 3 groups of
countries occupying distinct structural strata in the
international system:
the core,
the semiperiphery,
the periphery
Second: like other macrostructural changes, urban growth in less
developing societies is closely associated with capitalist
penetration and expansion
Third: dependent urbanization, as opposed to city growth in
industrialized areas, must be understood as the expression of
the colonial/neo colonial social dynamic of human settlements
Fourth: because dependent capitalism is characterised by high levels
of urban unemployment, 'marginality' and material inequalities,
urban poverty will be a feature of urban growth in less
developed societies
Fifth: the general premise of all dependency/world-system analysis is
that such social processes as urbanization, migration, and
economic growth in developing societies must be understood in
their international context as interacting with the nature of
the colonial and neocolonial relationship which resulted in
FRACTURED ECONOMIC AND SOCIAL STRUCTURES IN DEPENDENT AREAS
Sixth: urbanization, like other aspects of change in developing
societies, is driven by the outward orientation of less developed
economies and their skewed class structures, dominated by elites
allied with foreign interests
Seventh: in Africa, Asia, and Latin America patterns of urbanization are
internationally dependents and the existence of
"overurbanization" is related to international investment
dependence in the periphery.
POLITICAL-ECONOMIC ASPECTS
Of course, city growth is a demographic process, but analysing it purely
in terms of flows of people from place to place with implicit
equilibrium models in mind is insufficient. The political economy of
urbanization in developing societies is necessary:
- urban bias and urbanization are tied to concentration of wealth and
power
- urban elites (which are, most of the time, also rural elites) have
an interest in maintaining cities as centers of conspicous consumption
and islands of material wealth
- the above political force leads to what has been called "internal
colonialism", with an urban core and a rural periphery, which is very
much the case of West Africa and Latin America, where rural areas
are expropriated of scarce surplus to feed urban growth
- evidence on many developing societies indicates that the interests
of developing societies urban elites and various forms of
international capital do overlap. Is usually in the economic interest
of less developed societies elites to maintain their societies' close
linkages with the world economy, even when those ties lead to further
national dependence, unequal exchange and high levels of social
inequality.
- evidence on many developing societies points toward the formation
of developing societies elites within a triple alliance which
relates local businnes to political leaders and international capital.
(see R. Rojas, "The Murder of Allende, and the end of the Chilean
way to socialism", Harper & Row, New York, 1975)
Viewed in the above context, policies affecting urban concentration
and growth are likely to reflect strategies for facilitating and
subsidizing the profit making activities (as well as the consumption
patterns) of the political elites and their partners, transnational
corporations...
...the state is likely to actively promote patterns of urbanization,
migration, and structured inequality that are ECONOMICALLY
FUNCTIONAL for this powerful alliance and that work to maintain
peripheral capitalism...
THE ECONOMIC DIMENSION
The most important role that the periphery plays in the global system
of division of labour is to specialize in exports for industrialized
countries of goods containing a high share of cheap labour:
-metallic and non-metallic minerals
-cash crops
-component parts of high-technology manufactured goods
-natural resource-intensive and labour-intensive manufactured goods
What is common to all these goods is cheap labour which makes possible
extra maximization of profits for local capital and international
capital.
What are the implications for urban policies?
Rural-urban migration has two main components: the push factor and
the pull factor.
The push factor is driven by rural population becoming landless and
unable to make a living in the rural areas.
The pull factor is driven by poverty in the rural areas and the hope
that in the cities there is some better way of survival.
THE INFORMAL SECTOR
Large cities attract migrants, despite all their problems, because they
provide for more economic opportunities than the miserable conditions
in the countryside.
In the cities high levels of urban inequality, poverty, unemployment and
underemployment ARE INNEFICIENT IN TERMS OF SOCIAL WELFARE but they are
VERY EFFICIENT TO MEET THE NEEDS OF BOTH LOCAL AND TRANSNATIONAL
INDUSTRIALISTS SEEKING RELATIVELY CHEAP LABOUR.
Thus, dependent urbanization appears as having a POSITIVE CAPITALIST
ECONOMIC FUNCTION. And that function is mainly performed by the
so-called urban 'informal' sector or 'marginalized labour force'.
Main features:
"casual work" in
temporary jobs
street vendors
work in family enterprises
and the so-called "socially useless jobs" in
begging
prostitution
service people:
gardeners
house cleaners
house servants
stree scavengers
Probably begging and prostituting generate very little material output,
but each of the other types of apparent underemployment and
'misemployment' can be conceptualized as
PERFORMING SOCIALLY USEFUL BUT VERY INEXPENSIVE WORK
They are labour-intensive and they avoid formal state superivision.
The above leads to:
a) labourers work long hours
b) utilization of friends and family
c) avoidance of all tax, wage, and social security regulations
Which means that the cost of labour in the informal sector is much less
than wages paid in formally regulated business which keeps in place a
large supply of labour in case of economic expansion.
Lower wage costs mean that goods and services produced in the informal
sector can be purchased by formal sector workers and business for less.
The above, in turn, lowers labour and material costs for these formal
capitalist enterprises, allowing the manufacturers of the underdeveloped
country to be highly competitive in the world market.
C. Birbeck (1978) found that the scavengers of the Cali garbage dump
by recycling discarded material at very little reclamation cost, are
providing a direct subsidy to Colombian industry. He wrote:
"Rather than view the garbage picker as a vagrant who should really
be working in a factory, we should see him as a worker who is
already part of the industrial system".
S. Sethuranam (1977) found similar 'efficient' economic conections for
the informal sector and the formal economy in urban Africa.
AGRIBUSINESS
Many developing societies still are connected to the world economy
as exporters of large quantities of relatively inexpensive agricultural
commodities.
Murdoch (1980) examines the interconnections that economic dependency
has on Third World agriculture and, because of that, in patterns of
rural-urban migration.
a) the legacy of colonialism: extreme levels of inequality, particularly
in ownership of land. Thus, the rural people is either landless or
living on small plots of land for engaging in subsistence farming.
Thus, long-standing inequality institutionalizes agrarian power
structures which are resistant to change, and food production remains
in the hand of a few.
b) the introduction of agribusiness in developing countries.
International capital brings large-scale, capital intensive
agribusiness, using expensive equipment for mass-producing crops.
This adds to rural poverty and dislocation because large tracts of
land are needed. Those large tracts of land often were formerly
used by many peasants for subsistence farming. Capital-intensive
agribusiness needs less labourers than the total amount pushed
away from the land. Also, agribusiness has developed the system
of subcontracting small peasants for crops. Although this can raise
agriculture output in terms of GDP growth, it ends up deteriorating
production of food for internal consumption.
"The power of these distortiond to suppress food production is most
starkly illustrated in Africa...Food production in most African
countries has been inadequate and virtually stagnant since the 1950s.
Indeed, per capita food production has probably declined recently.
Yet in the midst of this tragedy is an amazing paradox: "A CONTINENT
UNABLE TO PRODUCE SUFFICIENT FOOD TO PROVIDE A MAJORITY OF ITS CITIZENS
WITH EVEN A BARELY MINIMAL DIET HAS BEEN ABLE TO RECORD SHARP INCREASES
IN ITS ANNUAL PRODUCTION OF AGRICULTURAL GOODS DESTINED FOR EXTERNAL
MARKETS"." (Murdoch (1980) quoting Lofchie (1976))
Evidence show that developing countries areas that are dominated by
highly mechanized, export-oriented, large-scale agribusiness have a
tendency to expel more people (push effect) than do areas of
subsistence farming.
Therefore, overurbanization is very much helped by the process of
"rural modernization" and then, "urban modernization", both using
capital-intensive labour-saving technologies in order to maximize
profits selling to industrial countries' markets.
The result, a "floating" population, surplus labour contingent, which
create cheap goods and services for the formal sector through
producing in the formal sector.
The same driving forces make possible to reduce the costs of urban
service provision. There is no need of servicing shanty towns, which,
at the same time means that the urban quarters where wealthy people
live can finance first-class urban service provision. In a sense,
like in the world economy, "poor people" is subsidising "rich people".
Thus, poverty, inhuman standard of living, and lack of running water
and preventive health services for million of people living in shanty
towns in developing societies big cities ARE AN EFFICIENT COMPONENT
PART OF THE DOMESTIC AND WORLD ECONOMY REDUCING COSTS IN MAINTAING
AN ADEQUATE SUPPLY OF LABOUR.
The overall rate of city in contemporary developing societies has been
considerably higher in the second half of the twentieth century than
the rate of urbanization in Europe between 1850 and 1880 -when those
societies were at comparable levels of economic development. The reasons
were explored above.
One dimension of the demographic pressures on today's urban settlements
in developing societies is given by the following table:
TABLE 1.- The impact of industrialization in developed and developing
countries
----------------------------------------------------------------------
Value added (%) Labour force (%)
------------------------------------------------
Developed Developing Developed Developing
countries countries countries countries
1880 1960 1880 1960
----------------------------------------------------------------------
Agriculture 33.0 38.4 56.2(0.4) 70.7(1.1)
Industry 24.2 22.8 24.1(2.1) 11.5(3.8)
Mining/quarrying 1.7 0.6
Manufacturing 18.8 8.9
Construction 5.0 2.0
Services 42.7 38.8 19.5(2.1) 17.8(3.9)
------------------------------------------------------------------------
Note: Figures in brackets refer to rates of growth 1880-1900, 1960-70.
Source: L. Squires, "Employment Policy in Developing Countries",
Washington DC, World Bank, 1981
------------------------------------------------------------------------
------------------------------------------------------------------------
TABLE 2.- Formal and informal sector characteristics
------------------------------------------------------------------------
Informal Sector Formal sector
------------------------------------------------------------------------
Ease of entry Difficult entry
Indigenous inputs predominate Overseas inputs
Family property predominates Corporate property
Small scale of activity Large scale of activity
Labour-intensive Capital-intensive
Adapted technology Imported technology
Skills from outside school system Formally acquired (often expatriate)
skills
Unregulated/competitive market Protected markets (e.g. tariffs,
quotas, licensing arrangements)
------------------------------------------------------------------------
Source: C. Rogerson, "The First Decade of Informal Sector Studies",
Environmental Studies 25, 1985
------------------------------------------------------------------------
------------------------------------------------------------------------
W. Armstrong and T.G. McGee, THEATRES OF ACCUMULATION: STUDIES IN ASIAN
AND LATIN AMERICAN URBANIZATION, Methuen, 1985
M. F. Lofchie, "Political and economic origins of African hunger",
Journal of Modern African Studies, vol. 13, 1976
W. Murdoch, THE POVERTY OF NATIONS: THE POLITICAL ECONOMY OF HUNGER AND
POPULATION, John Hopkins University Press, 1980
C. Ake, "The congruence of political economies and ideologies in
Africa", in P. Gutkind and I. Wallerstein (eds.), THE POLITICAL
ECONOMY OF CONTEMPORARY AFRICA, Sage, 1976
R. Sklar, "The nature of class domination in Africa", Journal of Modern
African Studies, Vol.17, No.4, 1979
P. Evans, DEPENDENT DEVELOPMENT, Princeton University Press, 1979
M. Castells, "The urban question: a Marxist approach", Massachussets
Institute of Technology Press, 1977
V. Bornschier and C. Chase-Dunn, TRANSNATIONAL CORPORATIONS AND
UNDERDEVELOPMENT, Praeger, 1985
D. Drakakis-Smith, URBANIZATION, HOUSING AND THE DEVELOPMENT PROCESS,
Croom Helm, 1981
M. Smith and J. Feagin (eds.), THE CITY IN THE NEW INTERNATIONAL
DIVISION OF LABOUR, Basil Blackwell, 1987
A. Portes, "The urban informal sector: definition, controversy, and
relation to development", Review, No. 7, 1983
C. Birbeck, "Garbage, industry and the "vultures" of Cali, Colombia",
in R. Bromley and C. Gerry (eds.), CASUAL WORK AND POVERTY
IN THE THIRD WORLD CITIES, John Wiley, 1978
S. Sethuranam, "The urban informal sector in Africa", INTERNATIONAL
LABOR REVIEW, Vol 116, No 3, 1977
D. Drakakis-Smith, THE THIRD WORLD CITY, Routledge, 1992
______________________________________________________________________
------------------------------------------------------------------------
From WORLD DEVELOPMENT REPORT 1978, The World Bank, 1978
Chapter 2: The Development Experience, 1950-75
Urbanization
Rapid urbanization has been one of the major features of the past
twenty-five years, as the difference in economic opportunities between
urban and rural areas has widened.
Urban populations in most developing countries have expanded more
rapidly than total population. This is only partly because of the
increase in industrial activity: many biases in policy have created
strong incentives to expand economic activity in urabn rather than
rural areas, and have thus encouraged people to move to urban areas in
the expectation of higher paid jobs and better access to services.
Far more people have migrated to urban areas than could be absorbed,
and despite large investments in urban infrastructure, the result has
been a severe strain on urban services and labour markets.
In most developing countries, this strain is reflected in highly
dualistic urban systems, where islands of high income "modernity"
coexist with shanty towns and slums. The permanence of the new
peripheral urban settlements has not been adequately recognized, and
municipal financing and management have not received the attention they
need. As a result, little has been done either to deal with the
appalling inadequacy of essential services, such as sanitation, in
these settlements, or to assist the large part of the urban economy
that consists of small-scale and informal production activities, which
operate at low levels of productivity.
7. DEVELOPING COUNTRIES: URBAN POPULATION, 1960-75
Percentage Average
of Total Annual
Population Growth Rate
1960 1975 1960-75
Sub-Saharan Africa 14 19 5.0
North Africa and
Middle East 32 44 5.0
Latin America 49 61 4.3
Asia 17 22 4.0
Southern Europe 40 51 3.2
----------------------------------------------------
Source: Selected World Demographic Indicators by
Countries, 1950-2000 (New York: United Nations, 1975)
While the problems are easily apparent, solutions are not. Urban
growth requires large investments in infrastructure and these
compete with alternative uses of scarce investable resources.
---------------------------end WDR 1978---------------------------------
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