Abstract

This dissertation focuses on the issue of urban primacy, a characteristic of most developing countries in which one or a few urban agglomerations dominate the urban hierarchy. More specifically, this dissertation examines the relationship between trade openness and urban primacy. Trade openness, as argued by Krugman (1996), can help decrease the degree of urban primacy. Other hypotheses also tested include the effect of transportation and political variables on urban primacy.

The study of urban primacy is important for several reasons. Urban primacy means excessive urban concentration coupled with unbalanced urbanization. Urban concentration is essential for the growth of cities and their economic vitality. However, when concentration is excessive, its cost outweighs its benefit, therefore decreasing the quality of life in urban areas.

The overwhelming pace of urbanization in developing countries and the tendency to concentrate in one or few cities is certainly a source of concern for policy-makers. The primate city diverts nations' resources, which leads to the neglect of other urban centers and rural areas.

The main feature of this research is a multiple regression analysis on pooled data to test the null hypotheses that trade openness and improved transportation reduce urban primacy and that political centralization increases urban primacy. The sample includes all countries for which data are available for the period 1970–1995. The independent variables are well-based in theory and grouped into eight main factors: history, size of the economy and urbanization, geography, trade openness and foreign influence, political variables, level of industrialization, level of economic development, and transportation.

The main findings support the hypothesis that trade openness and increased governmental expenditure in transportation reduces urban primacy. The results also support the hypothesis that centralization of political power increases urban primacy. In addition, the results indicate that the productivity gap between rural and urban areas is one of the most significant determinants of urban primacy. The research is also able to distinguish between urban primacy and urban concentration. The results indicate that, in some cases, variables that positively affect urban concentration have a reverse effect on primacy indices.