WHY are SA’s policy makers so ambivalent about urbanisation? Take, for example, the election manifesto of the African National Congress, which devoted considerable space to promises of rural development, but barely mentioned cities beyond the recognition that housing policies need to be fine-tuned. Nor is this silence confined to a manifesto intended, surely, to secure rural votes. The National Development Plan also devotes insufficient attention to the important role cities could play in transforming SA’s economy and prospects, concentrating more on local government than urbanisation and urban growth.
One of the defining features of apartheid was its commitment to keeping black people out of the cities, so this ambivalence is surprising. It is all the more so because our cities are the best platform for accelerated economic growth that SA is likely to find. Cities are the most powerful engine for economic growth ever devised.
For thousands of years, human labour generated value of the equivalent of about $2 a day. Today, income of this level would be regarded as extreme poverty. In many countries nowadays, human labour generates a hundred times this value and more every day. This is what Oxford’s Paul Collier describes as “the miracle of productivity”, directly linked to the rise of cities.
Big cities generate dramatic improvements in residents’ productivity because the concentration of large numbers of people allows firms to achieve economies of scale, and enables specialisation in the production of goods and services. The results explain why per capita incomes are almost four times higher in