For Egypt, a Fresh Start, With Cities (New York Times)
CGD research by senior fellow Michael Clemens and non-resident fellow Lant Pritchett was mentioned, and non-resident fellow Paul Romer was quoted in a New York Times article on Egypt's urban stagnation.
From the Article:
It would be easy to look at the images coming out of Cairo over the last few weeks and think of Egypt as a highly urbanized society. It would also be wrong.
When Hosni Mubarak took power in 1981, Egypt was indeed more urban than the rest of the world. About 44 percent of its population lived in cities. In East Asia, by comparison, only 26 percent of people lived in cities.
Since then, the cities of Asia have expanded rapidly, drawing in millions of peasant farmers looking for a better life — and, more often than not, finding it. Almost 50 percent of East Asians now live in cities. And Egypt? It is the only large country to have become less urban in the last 30 years, according to the World Bank. About 43 percent of Egyptians are city dwellers today.
This urban stagnation helps explain Egypt’s broader stagnation. As tough as city life in poor countries can be, it’s also fertile ground for economic growth. Nearly everything can be done more efficiently in a well-run city, be it plumbing, transportation or the generation of new ideas and businesses. “Being around other people,” says Paul Romer, the economist and growth expert, “helps make us smarter.”
Edward Glaeser, a Harvard economist (and weekly contributor to the Times’s Economix blog), has just published a book, “The Triumph of the City, making the case that cities are humanity’s greatest invention. Countries that become more urban tend to become far more productive, Mr. Glaeser writes. The effect is even bigger for poor countries than rich ones.
Egypt, however, has been saddled with an almost ancient geographic structure. Like many dictatorships, it is dominated by a huge capital city, where people and businesses come to live off the government. Egypt has nothing like China’s Shenzhen, India’s Bangalore, South Korea’s Busan or, to go back further in time, our own Chicago — striving cities that have spawned thousands of new companies.
Those cities become giant incubators for economic growth. They are the places where people learn to collaborate and to compete, where they can take advantage of the skills they already have and learn new ones, too.
There is no magic formula for economic growth, unfortunately. Strategies that have worked in one place sometimes fail in another. But if the last few decades offer any economic lesson to Egypt’s next government, it’s that countries maximize their chances of success by giving their workers skills and forcing them to compete.
Egypt, along with much of the Arab world, has not done enough of either.
The lack of skill development is obvious. Among the 48 countries that participated in a recent standardized math test for eighth graders, Qatar finished dead last. The bottom dozen also included, in ascending order, Saudi Arabia, Kuwait, Palestine, Oman, Algeria, Egypt and Syria. (The United States placed ninth.)
The top five were all from Asia, led by Taiwan, South Korea and Singapore. Not coincidentally, those countries have grown much faster than Egypt and the rest of the Arab world since the 1980s.
Just as important as the skills deficit, however, is the trouble that many Egyptians have using their skills in the country’s sclerotic economy. Three researchers — Michael Clemens, Lant Pritchett and Claudio Montenegro — recently found a novel way to measure how well various countries use the workers they have. The three compared the wages of immigrants to the United States with the wages of similar workers from the same country who remained home.
