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Session Three – Public Services at the 4th Urbanization Conference

This is the fourth in a four-part series of blog posts recapping the 2017 Urbanization and Poverty Reduction Research Conference and the presentations of its speakers.

Infrastructure used to transport people within and between cities – bus systems, subways, and roadways, for example – seems like the most obvious area to focus on when developing a city. However, other public services such as urban sanitation and education are also critically important factors in reducing illness, death, and poverty in urban areas, thus making cities more accessible and productive. Lack of sanitation is said to contribute to 700,000 childhood deaths worldwide, making access to safe water, adequate sanitation, and hygiene education imperative to the reduction of life-threatening illnesses.

Such measures also have a large economic benefit, allowing a large population the opportunity to become educated, reach adulthood, and become key parts of their city’s workforce. Sanitation and innumerable other public services that robust cities provide are inherently connected to human capital, producing benefits that are economic, social, and political in nature, as Rémi Jedwab argued while opening the Public Services session of the Urbanization and Poverty Reduction Conference.

Healthier and cleaner urban societies have the potential to open opportunities to more citizens and boost human capital. The diverse spectrum of benefits that improved public services provide can also be used to convince policymakers to invest in sanitation infrastructure. When local governments make these investments, healthy adults have more time and motivation to develop skills, the number of citizens able to enter the workforce increases, and there is an increased demand for housing. Child mortality also drops, allowing for healthier children and a population of women that are in turn able to enter the workforce. Sanitation also has direct spillover effects for family members of the urban sick as less workers are forced to take time away from their employment to care for ill relatives.

Taking an historical perspective, Robert Buckley’s research looked back at the innovation and effects of sewer systems in the 19th century. The installation and financing of sewer systems across Europe and the US transformed the way cities work, providing the basis for industrialization and making strides in public health. However, these large systems cost more than the annual budget and did not yield remuneration.

Buckley chose to investigate Berlin, Hamburg, London, Paris, New York, and Chicago during this time period because these case studies may be relevant to Sub-Saharan African cities today, as only 5 percent of the urban population in Africa has access to sewers, with open defecation being a deadly challenge. Buckley did conclude, however, that sanitation investment did not always have positive results, so the type of financing that builds this infrastructure is vitally important to ensuring its effectiveness.

Financing sanitation and sewage is a large, complex investment decision, particularly for developing cities with competing priorities. Maisy Wong, Assistant Professor of Real Estate at the University of Pennsylvania, served as discussant for the panel exploring public service topics. With special attention paid to policy makers balancing large fixed costs and externalities, she emphasized the importance of institutional frictions within the political process. Overall, as Wong and the session’s presenters mentioned, there is a need for more data and methodologies that survey households and firms, market transactions, and satellite imagery to inform policy and financing decisions.

The availability of public services has wide-ranging impacts on people, cities, and growth and can often be a “price” when individuals make migration decisions. As more individuals are moving from rural to urban areas, services that are standard for developed nations must be prioritized in the developing world – where even sewage infrastructure is scarce – despite few resources and political barriers to institutional change.

About

The Institute for International Economic Policy (IIEP), which is located within the Elliott School of International Affairs, serves as a catalyst for high quality, multi-disciplinary, and non-partisan research on policy issues surrounding economic globalization. The Institute research program helps develop effective policy options and academic analysis in a time of growing controversies about international economic integration in many countries around the world. The institute's work also encompasses policy responses for those who face continued poverty and financial crises despite worldwide economic growth. Affiliated faculty have appointments in the departments of economics, history, and political science as well as the law and business schools.

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