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Very large urban centers are a conspicuous feature of many developing economies, yet the subject of the size distribution of cities (as opposed to such issues as rural-urban migration) has been neglected by development economists. This article argues that some important insights into urban concentration, especially the tendency of some developing countries to have very large primate cities, can be derived from recent approaches to economic geography. Three approaches are compared: the well-established neoclassical urban systems theory, which emphasizes the tradeoff between agglomeration economies and diseconomies of city size; the new economic geography, which attempts to derive agglomeration effects from the interactions among market size, transportation costs, and increasing returns at the firm level; and a nihilistic view that cities emerge out of a random process in which there are roughly constant returns to city size. The article suggests that Washington consensus policies of reduced government intervention and trade opening may tend to reduce the size of primate cities or at least slow their relative growth.

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Paul Krugman

Paul Krugman is a professor in the Department of Economics and in the Woodrow Wilson School of Public and International Affairs at Princeton University. Over the last 30 years, he has contributed to numerous academic journals as well as to the public discourse on economics and as an op-ed columnist for The New York Times. He is the author of over 20 bestselling books and has written more than 200 papers and articles for various professional journal volumes and newspapers. He is acclaimed in the field of economics for insights into international trade patterns that overturned long-held theories about the global economy. In 2008, he was awarded the Nobel Prize in economics and was recognized for his analysis of trade patterns and location of economic activity.