Benefits of urbanisation in Asia


What benefits does urbanisation bring for poverty reduction in Asia? Identify lessons learned and potential roles for donors.


This report reviews selected literature on urbanisation in East, South and South-East Asia, and draws out its developmental benefits and lessons for donors. There is a strong evidence base on urbanisation and urban poverty, but mostly looking at the development challenges of increasing urbanisation. Since the literature largely takes a negative or problem-solving approach to urbanisation, it is more difficult to find evidence on benefits it brings.

The strongest positive derived from urbanisation is that it is highly effective for economic growth, as it produces economies of scale for businesses, fosters an innovative environment, and pays higher wages and dividends.

The literature consistently identifies local government as the most important institution in urban policy and development. These actors have close connections to their environs and are likely to make appropriate decisions.

It is unclear what role donors can play in this largely internally-driven process. There are no widely agreed approaches for donors, but there is some suggestion that it would be appropriate to fund community-driven projects, and to provide research and capacity training.