World Development Report 2009: Reshaping economic geography

Economic growth is inevitably unbalanced, and attempts to spread it out could jeopardise development. This is the key argument of the 2009 World Development Report on reshaping economic geography.

The report argues that central to economic development is a geographic transformation along three dimensions:

• density – harness market forces to encourage concentration and promote convergence in living standards between villages and towns and cities
• distance –help and workers reduce their distance from density, or urban areas
• division – reduce barriers to development posed by borders and differences in currencies and regulations
  

Key strategies that enable changes to these three dimensions and promote markets that deliver both concentration and convergence include:

• efficient and inclusive urbanisation since no country has grown to middle income without industrialising and urbanising
• area (territorial) development policies that integrate nations, as some parts of a country are better suited for agriculture, others for industry, and still others for services
• regional integration to increase access to global markets
  

Policy instruments for promoting economic integration to reduce spatial disparities include:

• policies that are spatially blind in their design and should be universal in their coverage, such as regulations affecting land, labour, and international trade
• policies and investments that facilitate the movement of goods, services, people, and ideas locally, nationally, and internationally
• spatially targeted programs such as slum clearance programs or preferential trade access for poor countries in developed country markets