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Impact Of Urbanization On Third World Countries

Paper Type: Free Essay Subject: Economics
Wordcount: 3033 words Published: 1st Jan 2015

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This paper intends to trace the roots of differential levels of economic prosperity in the developed, developing and less-developed countries in the backdrop of industrialization and study how the accompanying urbanization is affecting poverty levels in the third-world countries.


It is interesting to note that the gap between the rich and the poor is only a very recent phenomenon, in fact as recent as industrialization itself (Sachs, 2006). Two hundred years ago, just about everyone was poor except for the small minority of rulers and large landowners. Life was as hard in Europe as it was in subcontinent of China. According to Angus Madison, a leading economic historian, average per person income in Western Europe in 1820 was around 90 percent of the average income of Africa today. For thousands of years there had been no sustained economic growth in the world and only gradual increases in the human population. The world population had risen gradually from 230 million people at around 1st century to around 270 million by the first millennium, and 900 million people by 18th century (Sachs, 2006).

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The same can be said of living standards. According to Madison, there was no significant rise in living standards in the first millennium and only a 50 percent increase in per capita income in the eight-hundred-year period from AD 1000 to AD 1800, thanks largely to Renaissance in Europe. Compare this with the last two hundred years where population increased more than six fold to reach over 6 billion mark and world’s average per capita income increasing by around nine times. But these figures are only on the average. US per capita income increased twenty-five-fold and Western Europe’s increased fifteen-fold. Average annual GDP growth rate of Western Europe since 1820 till 1998 is 1.5%, US and Canada 1.7%, Eastern Europe 1.2%, Latin America 1.2%, Japan 1.9%, Asia and Africa only 0.9% and 0.7% respectively (Sachs, 2006). These differences many seem trivial but over a period of 180 years a small difference in annual growth leads to massive differences in income lives. Africa’s initial income (roughly $400 per capita) increased by a little more than three-fold to roughly $1300 per capita as of the year 1998 (Sachs, 2006). On the other hand, United States enjoyed a twenty-fold increase in living standards with per capita incomes rinsing from around $12 per person in 1820 to around $30000 today. In 1820, the gap between the world’s leading economy (UK) and the world’s poorest region, Africa was a ratio of four to one in per capita income. In 1998, the gap between the richest economy, the US and the poorest region Africa, had widened to twenty to one (Sachs, 2006).

Successful Urbanization – How did it occur?

The differentiating success factor for rich regions has been their ability to achieve long-term increase in their total yield to heights never imagined before, while the poor regions stagnated in this concern. Technological advancement by the rich played a major role for the rich countries as new machinery, methods and techniques allowed greater level of production. The developing countries are playing a catch up game with the developed world and still lag far behind.

Today’s prosperous regions achieved their well-being simultaneously. Social exchange of resources, cultural capital and trade in north-western Europe and North America allowed the First World to grow together. Commonalities of stability, infrastructure, expertise and geographical favorability tipped the balance of wealth in their favor (UN-Habitat, 2010). The initiation of technological edge began in the western world, especially UK and they have maintained the first-mover advantage to continuously dominate in this domain. Food yields rose with improvements in agricultural practice, including management of soil nutrients through improved crop rotation. With mobilization of new forms of energy for production, spark for industrial revolution was created. Invention of steam engine mobilized fossil fuel to allow mass production of goods and services on a level which was never imaginable before. This engendered industry and modernized agriculture fuel energy was used to produce chemical fertilizers which in turn made prodigious amounts of food production possible. Fossil fuel energy started being used to create vast powerhouses of steel, logistics infrastructure, chemical, textile, pharmaceuticals and other modern manufacturing sectors (Harris, 2003). Ocean steamers and projects like Suez Canal and Panama Canal reduced trade time hence; efficient trade routes were made for sale of newly manufactured industrial goods. The subsequent evolution of service industries, communication and information technologies was made possible by electrification which itself was a breakthrough of fossil-fuel age. Its precedent in nineteenth century was the rail and more significantly the telegraph, which allowed information sharing on a big scale for the first time (Woude, 1995).

Social construction of Technology explains why technological innovation is more easily achievable for some and an uphill task for others. Technology has to be viewed in social context and not independently. Human actions determine technology and not otherwise. Steam engine was invented at a time when innovation in industrial methods was in full swing so the social context motivated the invention and it later revolutionized modes of transport. As will be mentioned again in the text, Britain was forerunner of inventions in the modern age because it could anticipate economic progress through new inventions and trade opportunities.

There are some factors that made northern Europe, especially Britain more favorable for the industrial revolution as compared to other countries of the world. Firstly, Britain was the hub of scientific revolution in Europe. Significant advances in speculative scientific thinking gave the opportunity to thrive which stimulated an explosion of scientific discovery. Without scientific revolution, industrial revolution would not have been possible. Secondly, stronger institutions of political liberty and traditions of open and free speech for progressive debate gave a very strong impetus for development of new ideas. Thirdly, Protection of private property encouraged entrepreneurial and innovative initiatives. Fourthly, dogmatic social orders of feudal era had given way to an individualistic and socially mobile society. Fifthly, geographic advantages of fertile land, ample rainfall, availability of raw materials for industry, natural sea coast also contributed to North-western Europe’s proclivity for industrial revolution. Being an island nation, Britain also faced lesser risk of invasion, which obviated expenditure of resources on war.

Poverty in Urban Areas of Developing & Under-Developed Nations

The developing and under-developed countries have started to latch on to these advantages very recently. So the developed world stands way ahead on the path of prosperity while the third-world is trying to catch up with all the accoutrements of social, economic, political and governance ills. Consequences of developmental efforts like urbanization in the wake of economic progress, actually take the poor countries a couple of step backwards. These countries, for example Pakistan, India, Brazil, etc. do not have the infrastructure to absorb their population overgrowth with any decent income-generation means for them. Third-world countries are trying to gain the same advantages as the first-world but multifold malaise balks their ambition to imitate industrial-revolution-like circumstances of north and Western Europe. Many poor countries like Zambia are stuck in poverty traps. They do not have enough means to even survive, let alone develop (Moser, n.d.). Countries with unfavorable geography like Ethiopia, Bolivia and Kyrgyzstan disallow high margins on trade owing to high transportation costs. Sub-Saharan Africa has the right rainfall and temperature for blooming of mosquitoes, making it the epicenter of malaria and a host of other diseases. This renders the population economically unproductive as resources now have to be diverted for remedy of diseased people (even these resources are not available and millions are dying every year). Fiscal impotence of the poor countries incapacitates their ability to build infrastructure for development. For this they have to rely on IMF loans which leave them in a debt overhang in the long-run and subservient to foreign-policy whims of the developed world. Bad governance and corruption are also hugely responsible for anti-development and poverty of the developing countries. Dictatorship, corruption and civil war in countries like Sudan, Pakistan and Ethiopia have obstructed the flow of funds to the uplift of the poor. Cultural progressivism that underpinned industrial revolution and continues to be part of developed world’s agenda is missing in the poor countries. There is lack of innovation, flexibility in adherence to age-old social norms, and independent women are normally looked down upon (Masika, 2007). Population overgrowth is seriously hampering development. Developing and poor countries are adding 100 million to the population every year, further denting efforts to curb poverty. The social construction of high fertility rates is indigenous to the poor regions-a preference for a high number of children is based on the idea that there will be more to contribute to the income of the household but that incapacitates the income-generating ability because of lack of proper conditions for achieving high income.

As part of efforts to modernize, poor and developing countries have been able to establish major cities but they lack the vibrant thrust needed for development. The world’s poorest countries have 80 percent of their urban populations living in slums (Gilbert, 2008). There has been upward social mobility from rural to urban areas not because of economic opportunity but lack of farming lands, bad soil, civil war etc. there is not enough employment opportunity in the cities as economies lack on infrastructure, training, innovation, capital and expertise. This has been witnessed in countries like Uganda, Zimbabwe, Botswana, Tanzania and other poor countries of Africa and Asia. According to World Bank estimates, 30 percent of poor people live in urban areas. By 2035, half of world poor people are projected to live in urban areas (Ravallion, 2002). So it is evident that people are moving to urban areas but there is no industry, employment or education that could absorb them. Poor people are also shifting from rural areas to escape diseases like HIV, malaria, river blindness etc but this is not always effective as many diseases are contagious in nature and spread everywhere the victims go (Ravallion, 2002). Relative deprivation theory acutely points out that poverty in urban areas can have far more damaging effects on the social fabric than rural areas. The poor in the urban areas have direct exposure to the relatively well off hence, first-hand ingredients for material comparisons and the resulting sense of deprivation. It is common news items in Pakistan to have a poor laborer kill his family and himself because of not being able to make ends meet.

Agricultural land is either lacking fertilizer like in Kenya or it is plundered and looted in civil wars like in Sudan. Nearly 1 billion people are slum dwellers, and in 30 years’ time that number is likely to double if no serious action is taken. The report’s figures for the developing world are even starker: 43 per cent of the urban population of all developing countries combined live in slums, and over 78 per cent of the urban population in the Least Developed Countries live in slums (UN-Habitat, 2010). Most cities in developing and poor countries lack proper urban planning. Most of the land occupied of urban slums is illegally occupied and hardly ever has any kind of documentation. Efforts to remove these slums have been without any support plans for the affected poor people. Land mafia and political gambits also dot the slum areas besides all sorts of other illicit activities taking root owing to lack of employment, basic amenities, food and shelter. Slums in India have become touch points of drug trade, human trafficking and petty criminal gangs. Urban areas of poor and war-torn countries in Africa have become hubs for weapons trade & criminal asylums (Mary, 1999).

Poverty is the leading reason for political and social unrest. Collective behaviour, social processes and events not conforming to any norm but happening in a spontaneous way, may take any haphazard direction owing to non-meeting of basic needs. Political upheavals, law and order instability and governance failures have very strong correlations with incidences of poverty (Moser, n.d.). Urban poverty is even more detrimental to aforementioned ills as it becomes easier to manipulate lower strata of the society when abysmal conditions continue for extended periods.


For improvement of the situation in urban poverty, donor agencies and NGOs need to help people with basic farming tools and techniques so that wasted land in rural areas can be brought into good use and burden on urban areas could ease out (Sachs, 2006) to disentangle the debt-ridden countries of third-world, donor agencies need to allow some level of debt-cancellation so that resources can be employed to building infrastructure rather than servicing loans (Sachs, 2006). Population growth needs to be clamped because at the current rate of expansion, number of poor in urban areas will soar to 5 billion by 2030 which is alarming (Ravallion, 2007). Plans of simultaneous growth and development in complementing sectors of the economy will result in overall improvement of the poorer countries. Reforms of governance, corruption control, education, industry and farming, along with actions for infrastructure development and disease will have to be implemented simultaneously to see improvement in the condition of the poor.

Annotated Bibliography

Mary, G.M. 1999. Urban poverty in Africa: selected countries experiences. UN-HABITAT

This work delineates causes, conditions and reform suggestions for poor people in urban centers of Africa like Gaborone, Harare and Nairobi. Every city is treated as a separate case study and a thorough diagnosis of poverty problem in the given cities is done.

Ravallion, M.R, Chen, S.C and Sangraula, P.S. 2007. New evidence on the urbanization of global poverty. World Bank – Development Research Group.

The authors provide new evidence on the extent to which absolute poverty has now come under the purview of urbanization in the developing world, and the role that population urbanization has played in overall poverty reduction.

Gilber, A.G and Gugler, J.G. 2008. Cities, Poverty and development: Urbanization in the Third World. Oxford University Press.

In this book, the author highlights migration trends towards urban centres and the reasons for it. Political association of migrants and the effect it has on political stability is also laid out.

UN-Habitat. 2010. State of the World’s Cities: Bridging the Urban Divide. UN-Habitat.

The book explores the demographic switch from rural to urban areas and how it affects the complex dynamics of economic, social and cultural phenomenon.

International Labor Organisation. 2008, Promotion of Rural Employment for Poverty Reduction. International Labor Organization.

This book explores ways of promoting employment in rural areas by inspecting auxiliary issues of rights, protection and social dialogue. These methods can prove to bring relief to urban centers.

Ravallion, M.R. 2002. On the Urbanization of Poverty, Journal of Development Economics, 2(68), pp 435-442.

This explores the conditions in which the poor urbanize faster. Data from 39 countries confirms this and the study also predicts that urban poverty rate rises slower than rural poverty rate.

Woude, A.V.D.W. 1995. Urbanization in History: A process of Dynamic Interactions. Oxford University Press

This paper explores major contributions to the progression of urbanization. While proposing new topics of research, it also gives clear discussion of concepts, processes and measurement problems. .

Moser, n.d. Urban Social Policy and Poverty Reduction. Sage Publications (online). Available at [Accessed 21 December 2010]

This explains difference in understanding of poverty in economic and social policies. It also highlights how economic policy ignores key dimensions of poverty which renders it ineffective. It also explains the limitations of current poverty reduction strategies.

Masika, R.M, Haan, A.D.H and Baden, S.B, 1997. Urbanization and Urban Poverty: A Gender Analysis. Gender Equality Unit, SIDCA.

This explores how differing attitude towards genders in the developing world affect the situation of the poor. It sees how urbanization and changing role of females can gel in for the purpose of uplift of the poor.

Sachs, J.S, 2006. The End of Poverty: Economic Possibilities of Our Time. Penguin Books

The author draws a conceptual framework whereby economies of the world are classified in relative levels of poverty and clinical methods are presented to thrust the poorest one-sixth of humanity on the first rung of development ladder.

Harris, P.M.G.H, 2003. The History of Human Populations: Migration, Urbanization and Structural Change.

The work reviews population distribution patterns and the factors influencing it through phenomenon of forced and long-distance migration. This is connected with how demographic responses to external factors alter the canvass of urban centers.


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